<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended May 31, 1997
------------
Commission File Number 1-8368
------
LAIDLAW ENVIRONMENTAL SERVICES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 51-0228924
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1301 Gervais Street Columbia, South Carolina 29201
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(803) 933-4210
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Rollins Environmental Services, Inc.
One Rollins Plaza, Wilmington, Delaware, September 30
- --------------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of the issuer's common stock outstanding as of
June 27, 1997 was 180,375,811.
Page 1
Exhibit Index on Page 29
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LAIDLAW ENVIRONMENTAL SERVICES, INC.
INDEX
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Balance Sheets as of May 31, 1997 and
August 31, 1996 3
Consolidated Statements of Operations for the Three and
Nine Month Periods Ended May 31, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Nine Month
Periods Ended May 31, 1997 and 1996 5
Pro Forma Combined Statements of Operations for the Nine
Month Periods Ended May 31, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition
and Results of Operations 15
PART II OTHER INFORMATION
Item 1 Legal Proceedings 21
Item 2 Changes in Securities 23
Item 4 Submission of Matters to a Vote of Security Holders 25
Item 5 Other Information 25
Item 6 Exhibits and Reports on Form 8-K 25
Signatures 28
Page 2
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LAIDLAW ENVIRONMENTAL SERVICES, INC. (Note 1)
CONSOLIDATED BALANCE SHEETS
($ in Thousands)
<TABLE>
<CAPTION>
May 31, August 31,
1997 1996
------- ----------
(Unaudited) (Note 2)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 15,393 $ 0
Trade and other accounts receivable, net 198,617 184,626
Inventories 7,461 7,956
Income taxes recoverable 356 5,017
Other current assets 7,617 5,871
---------- ----------
Total current assets 229,444 203,470
Long-term investments 31,049 37,093
Property, plant and equipment, net 1,237,379 1,112,728
Net assets of discontinued operations (Note 9) 0 55,827
Goodwill 71,101 81,579
Deferred charges 18,811 1,467
---------- ----------
Total assets $1,587,784 $1,492,164
========== ==========
LIABILITIES
Current liabilities
Bank indebtedness $ 0 $ 16,094
Accounts payable 62,740 72,712
Accrued liabilities 106,801 66,705
Current portion of long-term debt (Note 4) 10,125 7,282
---------- ----------
Total current liabilities 179,666 162,793
Deferred items
Income taxes 24,231 86,985
Other 183,763 98,183
Long-term debt (Note 4) 525,050 49,426
Subordinated convertible debenture (Note 5) 350,000 0
---------- ----------
Total liabilities 1,262,710 397,387
Commitments and contingencies (Note 6)
STOCKHOLDERS' EQUITY AND NET INVESTMENT
BY LAIDLAW (Note 7)
Common stock 180,376 120,000
Additional paid-in capital 390,027 1,028,309
Accumulated deficit (245,329) (53,532)
---------- ----------
Total stockholders' equity 325,074 1,094,777
---------- ----------
Total liabilities and stockholders' equity $1,587,784 $1,492,164
========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
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LAIDLAW ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
May 31, May 31,
----------------------- -----------------------
1997 1996 1997 1996
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Revenues $ 155,330 $ 153,139 $ 468,522 $ 483,294
Expenses:
Operating 112,699 110,076 338,343 345,144
Depreciation and amortization 9,597 11,704 39,134 36,625
Selling, general and administrative 18,097 18,142 52,040 57,686
Restructuring charge (Note 8) 331,697 0 331,697 0
--------- --------- --------- ---------
472,090 139,922 761,214 439,455
--------- --------- --------- ---------
Operating income (loss) (316,760) 13,217 (292,692) 43,839
Allocated interest expense (Note 2) 7,749 6,498 24,030 29,146
Interest expense 3,544 2,739 5,892 4,349
Other income 217 316 2,129 1,030
--------- --------- --------- ---------
Income (loss) from continuing operations
before income tax (327,836) 4,296 (320,485) 11,374
Income tax expense (benefit) (130,491) 451 (128,934) 1,898
--------- --------- --------- ---------
Income (loss) from continuing operations
before minority interest (197,345) 3,845 (191,551) 9,476
Minority interest 190 (859) (266) (2,335)
--------- --------- --------- ---------
Income (loss) from continuing operations (197,155) 2,986 (191,817) 7,141
Income from discontinued
operations (Note 9) 234 710 20 912
--------- --------- --------- ---------
Net income (loss) $(196,921) $ 3,696 $(191,797) $ 8,053
========= ========= ========= =========
Net income (loss) per share $ (1.501) $ 0.031 $ (1.550) $ 0.067
Weighted average common and common
equivalent shares outstanding (000's) 131,156 120,000 123,760 120,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
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LAIDLAW ENVIRONMENTAL SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
May 31,
-------------------------
1997 1996
--------- --------
<S> <C> <C>
Cash flow from operating activities:
Net Income (loss) $(191,797) $ 8,053
Adjustments to reconcile net income (loss) to net cash
provided by (used in) continuing operations:
Income from discontinued operations (20) (912)
Restructuring charge, net of applicable income taxes (Note 8) 200,000 0
Depreciation and amortization 39,134 36,625
Deferred income taxes 2,763 4,319
Change in accounts receivable 4,146 11,064
Change in accounts payable and accrued liabilities (54,380) (28,699)
Change in other, net 9,141 (31,327)
--------- --------
Net cash provided by (used in) continuing operations 8,987 (877)
Net cash provided by (used in) discontinued operations (357) 857
--------- --------
Net cash provided by (used in) operating activities 8,630 (20)
--------- --------
Cash flow from investing activities:
Cash acquired (expended) on acquisition of business 15,451 (8,000)
Purchase of property and equipment (29,719) (65,959)
Increase in long-term investments (1,977) (2,511)
Proceeds from sales of equipment 3,601 2,660
--------- --------
Net cash used in continuing operations (12,644) (73,810)
Net cash used in discontinued operations (1,887) (2,925)
--------- --------
Net cash used in investing activities (14,531) (76,735)
Cash flows from financing activities:
Issuance of debt under Bank Credit Facility (Note 4) 375,000 0
Bank financing fees and expenses (17,813) 0
Repayment of long-term debt (9,162) (4,832)
Payment to Laidlaw Inc. (Note 1) (349,116) 0
Advances from Laidlaw Inc. (Note 2) 22,385 81,587
--------- --------
Net cash provided by financing activities 21,294 76,755
--------- --------
Net increase in cash and cash equivalents 15,393 0
Cash and cash equivalents at:
Beginning of period 0 0
--------- --------
End of period $ 15,393 $ 0
========= ========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of Rollins (Note 1)
Fair value of assets acquired $ 475,168 $ 0
Fair value of liabilities assumed 309,134 0
--------- --------
Fair value of stock issued (Note 7) $ 166,034 $ 0
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
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LAIDLAW ENVIRONMENTAL SERVICES, INC.
PRO FORMA COMBINED STATEMENTS OF OPERATIONS (NOTE 10)
For the Nine Months Ended May 31
($ in Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Adjustments
Accounting ----------------------- Pro Forma
Acquirer Rollins Dr Cr Combined
------------ ------------ --------- --------- ---------
1997
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 468,522 $150,985 $ 4,099 (a) $ 0 $ 615,408
Expenses:
Operating 338,343 149,791 (a) 4,099 484,035
Depreciation and amortization 39,134 22,606 (b) 6,345 55,395
Selling and administrative 52,040 22,371 74,411
Restructuring charge (Note 8) 331,697 0 331,697
--------- -------- ------- ------- ---------
761,214 194,768 4,099 10,444 945,538
--------- -------- ------- ------- ---------
Operating loss (292,692) (43,783) 4,099 10,444 (330,130)
Allocated interest expense (Note 2) 24,030 0 24,030
Interest expense 5,892 5,856 9,625 (c) 21,373
Other income 2,129 2,129
--------- -------- ------- ------- ---------
Loss from continuing operations
before income tax (320,485) (49,639) 13,724 10,444 (373,404)
Income tax benefits (128,934) (17,460) 3,251 (d) (143,143)
--------- -------- ------- ------- ---------
Loss from continuing operations
before minority interest (191,551) (32,179) 16,975 10,444 (230,261)
Minority interest (266) 0 (266)
--------- -------- ------- ------- ---------
Loss from continuing operations (191,817) (32,179) 16,975 10,444 (230,527)
Income from discontinued
operations (Note 9) 20 0 20
--------- -------- ------- ------- ---------
Net loss (191,797) (32,179) 16,975 10,444 (230,507)
========= ======== ======= ======= =========
Net loss per share $ (1.26)
Weighted average common and
common equivalent shares
outstanding (000's) 182,847
<CAPTION>
1996
-------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Revenues $ 483,294 $181,749 $ 4,258 (a) $ 0 $ 660,785
Expenses:
Operating 345,144 159,248 (a) 4,258 500,134
Depreciation and amortization 36,625 25,067 (b) 6,345 55,347
Selling and administrative 57,686 25,519 83,205
--------- -------- ------- ------- ---------
439,455 209,834 4,258 10,603 638,686
--------- -------- ------- ------- ---------
Operating income (loss) 43,839 (28,085) 4,258 10,603 22,099
Allocated interest expense (Note 2) 29,146 0 29,146
Interest expense 4,349 6,836 6,509 (c) 17,694
Other income 1,030 1,030
--------- -------- ------- ------- ---------
Income (loss) from continuing operations
before income tax 11,374 (34,921) 10,767 10,603 (23,711)
Income tax expense (benefits) 1,898 (12,480) 3,786 (d) (6,796)
--------- -------- ------- ------- ---------
Income (loss) from continuing operations
before minority interest 9,476 (22,441) 14,553 10,603 (16,915)
Minority interest (2,335) 0 (2,335)
--------- -------- ------- ------- ---------
Income (loss) from continuing operations 7,141 (22,441) 14,553 10,603 (19,250)
Income from discontinued
operations (Note 9) 912 0 912
--------- -------- ------- ------- ---------
Net income (loss) $ 8,053 $(22,441) $14,553 $10,603 $ (18,338)
========= ======== ======= ======= =========
Net income (loss) per share $ (0.100)
Weighted average common and
common equivalent shares
outstanding (000's) 182,847
</TABLE>
Page 6
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LAIDLAW ENVIRONMENTAL SERVICES, INC.
Notes to Consolidated Financial Statements
For the Nine Months Ended May 31, 1997
NOTE 1 - BUSINESS COMBINATION
On May 15, 1997, pursuant to a February 6, 1997, stock purchase agreement
(the "Stock Purchase Agreement") between Rollins Environmental Services,
Inc.("Rollins") and Laidlaw Inc. ("Laidlaw"), Rollins acquired the hazardous and
industrial waste operations of Laidlaw ("Old LESI")(the "Transaction"). The
business combination was accounted for as a reverse acquisition using the
purchase method of accounting. Rollins issued 120 million common shares and a
$350 million 5% subordinated convertible debenture, and paid $349.1 million in
cash ($400 million, less debt of $50.9 million assumed), to Laidlaw to
consummate the Transaction. Coincident with the closing of the Transaction, the
continuing legal entity changed its name from Rollins Environmental Services,
Inc. to Laidlaw Environmental Services, Inc. (the "Registrant" or "Company"). As
a result of the Transaction, Laidlaw owns 67% of the issued common shares of the
Company. As a result of the business combination being accounted for as a
reverse acquisition, or the acquisition of Rollins by Old LESI (the "Accounting
Acquirer"), the Company accordingly adopted the Accounting Acquirer's fiscal
year-end of August 31.
The reverse acquisition purchase price is the fair market value of the
Rollins common shares outstanding prior to completion of the Transaction. As the
only remaining conditions to close the Transaction after signing the Stock
Purchase Agreement involved stockholder and regulatory approvals, the date of
signing is the appropriate determination date for the market price of the
Rollins common shares. The average closing market price per share on the NYSE -
Composite Transactions for the five trading days before and after February 6,
1997, was $2.75. Applying this price per share to the 60,375,811 common shares
outstanding on February 6, 1997, resulted in a deemed purchase price of
approximately $166.0 million.
NOTE 2 - HISTORICAL FINANCIAL INFORMATION
As a result of the Transaction described in Note 1, the historical
financial information included in these consolidated financial statements is
that of the Accounting Acquirer, the hazardous and industrial waste operations
of Laidlaw. The results of operations of Rollins have been included from the
date of acquisition, May 15, 1997.
Prior to May 15, 1997, Laidlaw provided the majority of the financing
for the Company's operating and investing activities through a combination of
intercompany equity and debt investments. The total investment in the Company by
Laidlaw is included in stockholders' equity prior to May 15, 1997. Interest
expense associated with this intercompany financing has been allocated to the
Company based on its share of Laidlaw's consolidated net assets.
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NOTE 3 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have
been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and, therefore, do not include all of the disclosures required by
generally accepted accounting principles for annual financial statements. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the interim period results have been included; all such
adjustments are of a normal recurring nature. Operating results for the three
and nine month periods ended May 31, 1997 are not necessarily indicative of the
results that may be expected for the full fiscal year ending August 31, 1997.
These statements should be read in conjunction with the combined financial
statements, including the accounting policies, and notes thereto included in the
Registrant's Definitive Proxy on Form DEF 14A, filed with the Securities and
Exchange Commission on May 1, 1997. Certain prior year amounts in the
accompanying consolidated financial statements have been reclassified to conform
to current year classifications. These reclassifications had no effect on net
earnings or stockholders' equity.
NOTE 4 - LONG-TERM DEBT
The Company financed the cash consideration portion of the Transaction and
certain fees related thereto with proceeds of a bank credit facility (the "Bank
Credit Facility") arranged with Toronto-Dominion Bank (the "Agent"), pursuant to
a credit agreement (the "Credit Agreement") between the Company and a syndicate
of banks and other financial institutions (collectively, the "Lenders"). The
Bank Credit Facility consists of five parts: (i) a $275 million six-year senior
secured revolving credit facility with a $200 million letter of credit sublimit
("Revolving Credit Facility"), (ii) a $165 million six-year senior secured
amortizing term loan, (iii) a $60 million six-year senior secured amortizing
Canadian term loan, (iv) a $75 million minimally amortizing seven-year senior
secured term loan and (v) a $75 million minimally amortizing eight-year senior
secured term loan. Clauses (ii), (iii), (iv) and (v) are collectively referred
to herein as the "Term Loans".
The Term Loans were drawn upon in full May 15, 1997, the closing date of
the Transaction (the "Closing Date"). The Revolving Credit Facility has $200
million available for letters of credit and $100 million available for loans,
subject to the aggregate limit of $275 million.
Interest per annum on the Bank Credit Facility varies depending on the
particular facility and whether the Company chooses to borrow under Eurodollar
or non-Eurodollar loans.
The Bank Credit Facility also contains negative, affirmative and financial
covenants customarily found in credit agreements for financings similar to the
financing provided under the Bank Credit Facility, including covenants
(i)requiring compliance with laws and performance of obligations, (ii)
restricting transactions with affiliates, (iii) requiring satisfactory levels of
cash interest coverage and fixed charge coverage and ratios of
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long-term debt to operating cash flow and total contingent obligations to
operating cash flow, (iv) limiting annual capital expenditures, (v) requiring
periodic reporting of financing information and (vi) restricting debt,
guarantees, liens, mergers and consolidations, sales of assets, changes in the
nature of the business and changes in charter documents and other material
contracts.
The Company's long-term debt as of May 31, 1997 and August 31, 1996, is as
follows:
<TABLE>
<CAPTION>
May 31, August 31,
1997 1996
-------- -------
($ in Thousands)
<S> <C> <C>
Bank Credit Facility:
Term loans, with interest rates
from 6.13% to 9.50% $375,360 $ --
Revolving Credit Facility -- --
Notes due at various dates from 1997 to 2020
with interest rates from 5% to 10% 159,099 $55,474
Capital leases payable, due in 2000
with interest rate of 8.5% 716 1,234
-------- -------
$535,175 $56,708
Less: current portion 10,125 7,282
-------- -------
Total long-term debt $525,050 $49,426
======== =======
</TABLE>
The aggregate amount of minimum payments required on long-term debt in each
of the years indicated is as follows:
<TABLE>
<CAPTION>
($ in Thousands)
<S> <C>
Year ending May 31, 1998 $ 10,125
1999 23,877
2000 34,873
2001 51,011
2002 62,750
Thereafter 352,539
--------
$535,175
========
</TABLE>
NOTE 5 - SUBORDINATED CONVERTIBLE DEBENTURE
Pursuant to the Transaction described in Note 1, the Company issued a $350
million 5% Subordinated Convertible, Pay-In-Kind Debenture("PIK") due May 15,
2009 to Laidlaw.
Interest on the PIK is payable semiannually, on November 15 and May 15
until maturity. Beginning on May 15, 2002, and continuing until maturity, the
PIK is convertible, at the option of the holder into common shares of the
Company based on a conversion price per share of $3.75 (the "Conversion Price").
Beginning on May 15, 2002, and continuing until maturity, the Company has the
option to redeem the PIK in cash if the common shares are trading at a market
price greater than or equal to 120% of the Conversion Price. The PIK ranks
junior in right of payment (principal and interest) to all other long-term
indebtedness, including the Bank Credit Facility.
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Interest payments due during the first two years after issuance of the PIK
are required to be satisfied by the issuance of the Company's common shares,
based on the market price of the common shares at the time the interest
payments are due. At the Company's option, any other interest or principal
payments (other than optional early redemption) may be satisfied by issuing
common shares, based on the market price at the time such payments are due.
NOTE 6 - COMMITMENTS AND CONTINGENCIES
The business of the Company's hazardous and industrial waste services is
continuously regulated by federal, state, provincial and local provisions that
have been enacted or adopted, regulating the discharge of materials into the
environment or primarily for the purpose of protecting the environment. The
nature of the Company's businesses results in its frequently becoming a party to
judicial or administrative proceedings involving all levels of governmental
authorities and other interested parties. The issues that are involved generally
relate to applications for permits and licenses by the Company and their
conformity with legal requirements and alleged technical violations of existing
permits and licenses. The Company does not believe that these matters will be
material to its operations or financial condition.
In the United States, The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") imposes financial liability on
persons who are responsible for the release of hazardous substances into the
environment. Present and past owners and operators of sites, which release
hazardous substances, as well as generators and transporters of the waste
material, are jointly and severally liable for remediation costs and
environmental damage. At May 31, 1997, the Company had been notified that it was
potentially a responsible party in connection with 21 locations in its hazardous
waste management and other businesses. The Company continually reviews its
status with respect to each location, taking into account its alleged connection
to the location and the extent of its alleged contribution to the volume of
waste at the location, the available evidence connecting the Company to that
location and the numbers and financial soundness of other potentially
responsible parties at the location. Based upon presently available information,
the Company does not believe that potential liabilities arising from its
involvement with these locations will be material to the Company's operations or
financial condition.
The consolidated federal income tax returns of Laidlaw Transportation,
Inc. and its U.S. subsidiaries (which until May 15, 1997, included certain of
the subsidiaries of the Company) for the fiscal years ended August 31, 1986,
1987 and 1988, have been under audit by the Internal Revenue Service. In March
1994, the subsidiaries received a statutory notice of deficiency proposing that
the subsidiaries pay additional taxes relating to disallowed deductions in those
income tax returns. The principal issue involved relates to the timing and the
deductibility for tax purposes of interest attributable to loans owing to
related foreign persons. The subsidiaries have petitioned the United States Tax
Court (captioned as Laidlaw Transportation, Inc. & Subsidiaries et al v.
Commissioner of Internal
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Revenue, Docket Nos. 9361-94 and 9362-94) for a redetermination of claimed
deficiencies of approximately $49.6 million (plus interest of approximately
$76.5 million as of May 31, 1997).
In May 1997, the subsidiaries received revenue agents' reports
proposing that the subsidiaries pay additional taxes of approximately $160.7
million (plus interest of approximately $127.4 million as of May 31, 1997)
relating to disallowed deductions in federal income tax returns for
the fiscal years ended August 31, 1989, 1990 and 1991, based on the same
issues. The subsidiaries intend to vigorously contest these claimed
deficiencies. The Company anticipates that the Internal Revenue Service will
propose adjustments for the same issue in subsequent taxation years.
Pursuant to the Stock Purchase Agreement, Laidlaw and Laidlaw
Transportation, Inc. agreed to be responsible for any tax liabilities, including
the costs to defend the subsidiaries, resulting from these matters. Although the
final outcome cannot be predicted with certainty, the Company, based upon a
thorough review of the facts and advice of counsel, believes that the ultimate
disposition of these issues will not have a materially adverse effect upon the
Company's consolidated financial position or results of operations.
NOTE 7 - STOCKHOLDERS' EQUITY AND NET INVESTMENT BY LAIDLAW
Prior to May 15, 1997, the Company's total stockholders' equity was
composed of the intercompany investment by Laidlaw. The 120 million shares of
common stock received by Laidlaw to consummate the Transaction described in Note
1, are deemed, for accounting purposes, to have been issued and outstanding in
all prior periods presented in these consolidated financial statements.
Changes in the components of stockholders' equity since September 1,
1996, are deemed, for accounting purposes, to have been as follows:
<TABLE>
<CAPTION>
Paid-in Capital Total
Common in Excess of Accumulated Stockholders'
Stock Par Deficit Equity
------ --------------- ----------- -------------
($ in Thousands)
<S> <C> <C> <C> <C>
Balance at September 1, 1996 $120,000 $1,028,309 $ (53,532) $1,094,777
Net loss for period (191,797) (191,797)
Issuance of PIK to Laidlaw (350,000) (350,000)
Cash paid to Laidlaw (349,116) (349,116)
Issuance of additional shares 60,376 105,658 166,034
Transfer of JTM Industries, Inc.
to Laidlaw (Note 9) (57,309) (57,309)
Net additional Investment by Laidlaw 12,485 12,485
-------- -------- ---------- ----------
Balance at May 31, 1997 $180,376 $390,027 $ (245,329) $ 325,074
======== ======== ========== ==========
</TABLE>
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Authorized and issued capital stock:
Since the former Rollins is the continuing legal entity, its authorized and
issued capital stock constitutes that of the Company.
The Company is authorized to issue 350 million shares of its $1 par value
common stock and one million shares of its $1 par value preferred stock. The
terms and conditions of each issue of preferred stock are determined by the
Board of Directors.
At May 31, 1997 the Company had issued and outstanding 180,375,811 shares
of its $1 par value common stock. For accounting purposes, 120 million of these
shares were deemed outstanding in all prior periods and 60,375,811 were deemed
to have been issued on May 15, 1997, at $2.75 per share, as consideration
($166,034,000) for the acquisition of the former Rollins by the Company.
No preferred stock has been issued.
Each share of common stock outstanding includes one common stock purchase
right (a "Right") which is non-detachable and non-exercisable until certain
defined events occur, including certain tender offers or the acquisition by a
person or group of affiliated or associated persons of 15% of the Company's
common stock. Upon the occurrence of certain defined events, the Right entitles
the holder to purchase additional stock of the Company or stock of an acquiring
company at a 50% discount. The Right expires on June 30, 1999, unless earlier
redeemed by the Company at a price of $.01 per Right.
Stock option plans:
All outstanding employee stock options granted by the former Rollins, were
fully vested on May 15, 1997, in accordance with the terms of the Stock Purchase
Agreement referred to in Note 1. At May 31, 1997, 1,153,655 options were
outstanding under the former Rollins employee stock option plans at exercise
prices ranging from $2.25 to $12.25.
NOTE 8 - RESTRUCTURING CHARGE
The Company's integration related to the Transaction described in Note 1,
calls for the closure and consolidation of certain operations formerly owned by
Rollins or by Old LESI. Such actions are expected to produce substantial cost
savings.
With respect to the Old LESI operations, the Company recorded a one-time
charge of $331.7 million ($200 million after tax) against earnings in the
quarter ended May 31, 1997, to reflect the closing of certain of the operating
facilities that have become redundant, and an impairment in the carrying value
of certain operating facilities due to lower expected future cash flows, as a
result of the closing of the Transaction.
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NOTE 9 - DISCONTINUED OPERATIONS
On May 1, 1997, in contemplation of the Transaction described in Note 1,
the Company transferred, in a non-cash transaction, JTM Industries, Inc., its
coal combustion by-products management operations to Laidlaw. These operations
were retained by Laidlaw and are not part of the Company's ongoing operations.
The Company has classified these operations as discontinued. Historically
those operations have been included in Laidlaw's Hazardous Waste Services
segment for financial reporting purposes.
Revenue for the discontinued operations for the nine month periods ended
May 31, 1997 and 1996, was $41.5 million and $45.9 million, respectively.
NOTE 10 - PRO FORMA COMBINED FINANCIAL STATEMENTS
The accompanying unaudited pro forma combined statements of operations for
the nine months ended May 31, 1997 and 1996, assumes that the Transaction
discussed in Note 1 herein, took place as of the beginning of each fiscal year,
and combines therefrom the Accounting Acquirer's statement of operations through
May 31, 1997 and 1996, with that of Rollins' through May 15, 1997 and May 31,
1996, respectively.
The accompanying pro forma combined financial statements should be read in
conjunction with the historical financial statements and related notes thereto
included in the Registrant's Definitive Proxy on Form DEF 14A, which is
incorporated by reference as Exhibit 99 (a) to this Quarterly Report.
The following adjustments to the unaudited pro forma combined statements of
operations have been made to reflect the acquisition of Rollins:
(a) To eliminate transactions between combined companies.
(b) To adjust depreciation to reflect the fair value adjustment of property and
equipment and to reflect the effects of the Transaction upon goodwill
amortization.
(c) To adjust expense to reflect financing costs associated with the
Transaction.
(d) To adjust income taxes (benefits) to record the pro forma income taxes
(benefits) as computed under Statement of Financial Accounting Standard No.
109 on pro forma pre-tax income (loss).
NOTE 11 - SUBSEQUENT EVENTS
Effective July 9, 1997, the directors of the Company set aside six million
shares of its $1 par value common stock for issuance under a 1997
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<PAGE> 14
employee stock option plan. All options under this plan are for a term of ten
years from the date of grant and become exercisable with respect to 20% of the
total number of shares subject to the option, one year after the date, and with
respect to an additional 20% at the end of each twelve month period thereafter
on a cumulative basis during the succeeding four years. The plan provides for
the granting of stock options to certain senior employees and officers of the
Company at the discretion of the Board of Directors. The plan will be submitted
to the Company's stockholders for approval at the next annual meeting. All
options are subject to certain conditions of service.
Effective July 9, 1997, the directors of the Company set aside 540,000
shares of its $1 par value common stock for issuance under the directors' stock
option plan. All options under this plan are for a term of ten years from the
date of the grant and become exercisable with respect to 20% of the total number
of shares subject to the option on each of the five successive anniversaries of
the date of the grant. All options are subject to stockholder approval of the
plan and certain conditions of service.
Subject to stockholder approval of the plans, the Board of Directors
granted 1,097,500 shares to employees, and 90,000 shares to directors at an
exercise price of $3.188.
NOTE 12 - RECENT ACCOUNTING DEVELOPMENTS
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128 "Earnings Per Share" ("FAS 128"). This
standard is effective for financial statements issued for periods ending after
December 15, 1997, and will be implemented in the Company's Annual Report on
Form 10-K for the year ended August 31, 1998. The Company does not expect that
FAS 128 will have a material impact on the earnings per share computation.
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<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Results of Operations: Three Months Ended May 31, 1997 compared with
Three Months Ended May 31, 1996
Operating results, before the restructuring charge, are as follows:
<TABLE>
<CAPTION>
Three Months Ended May 31,
------------------------------------------------
1997 1996 1997 1996
------- ------- ------ ------
($ in Millions)
<S> <C> <C> <C> <C>
Revenue $155.3 $153.1 100.0% 100.0%
Operating expense 112.7 110.1 72.5% 71.7%
Depreciation & amortization 9.6 11.7 6.2% 7.6%
Selling, general & administrative 18.1 18.1 11.7% 12.3%
----- ----- ------ -----
Operating results $ 14.9 $ 13.2 9.6% 8.4%
====== ====== ====== =====
</TABLE>
Revenues
Components of Revenue:
<TABLE>
<CAPTION>
Three Months Ended May 31,
--------------------------------------------------------
1997 1996
---- ----
($ in Millions)
<S> <C> <C> <C> <C>
Service Center $ 73.6 40% $ 73.3 41%
Landfill 45.1 25% 44.4 25%
Incinerator 14.9 8% 7.7 4%
Transportation 23.2 13% 21.1 12%
Other 26.5 14% 32.5 18%
------ ---- ------ ----
$183.3 100% $179.0 100%
------ ==== ------ ====
Less: Intercompany eliminations 28.0 25.9
------ ------
Total revenue $155.3 $153.1
====== ======
</TABLE>
Revenues increased $2.2 million, or 1.4%, during the three months ended
May 31, 1997, compared to the three months ended May 31, 1996, supported
primarily by the increase in the incinerator line of business. Revenue for
incinerators increased 94.0% to $14.9 million from $7.7 million during the three
months ended May 31, 1997 and 1996, respectively, reflecting the acquisition of
the Rollins facilities. Transportation revenue of $23.2 million was $2.1
million, or 9.7%, better than the prior year period. Other revenue components
declined $6.1 million, or 18.7%. Processing of intercompany streams during the
current quarter increased $2.1 million, or 8.2%, over the prior year quarter.
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<PAGE> 16
Management's estimates of the components of changes in the Company's
consolidated revenue are as follows:
<TABLE>
<CAPTION>
Percentage Increase (Decrease)
Three Months Ended May 31,
--------------------------
1997 over 1996 1996 over 1995
-------------- --------------
<S> <C> <C>
Expansion of customer base by acquisition 7.3 % 1.7 %
Other, primarily through volume and price changes (5.7)% (7.5)%
Foreign exchange rate changes (.2)% .1 %
---- ----
Total 1.4 % (5.7)%
==== ====
</TABLE>
Growth in revenue in the quarter ended May 31, 1997, was primarily
attributable to the acquisition of Rollins as described in Note 1 of the Notes
to Consolidated Financial Statements in Item 1 (approximately 6.5%). Revenue
from existing operations was lower, primarily due to the event projects having
been completed by the Company's industrial landfill in Utah and by the
Texas/Louisiana Gulf Coast remedial locations in the prior year.
Operating Expenses
Operating expenses increased $2.6 million, or 2.4%, during the three
months ended May 31, 1997, compared to the three months ended May 31, 1996. The
increase was primarily attributable to additional business obtained as part of
the acquisition of Rollins. As a percentage of revenue, operating expense
increased to 72.5% from 71.7% in the comparable prior year period, primarily due
to downward pricing pressure on revenue experienced since the same period last
year.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased $2.1 million, or 17.9%,
during the quarter ended May 31, 1997, compared to the prior year quarter. The
decrease was most directly associated with reduced landfill cell space
consumption rates at the Sarnia, Ontario facility where the approval of
permitted site expansion allowed for a greater overall site life. As a
percentage of revenue, depreciation and amortization expense decreased to 6.2%
from 7.6% in the prior year also due to the decline in landfill cell
amortization rates.
Selling, General and Administrative Expenses
Selling, general and administrative expenses at $18.1 million, remained
level during the three months ended May 31, 1997, versus the prior year quarter.
As a percentage of revenue, selling, general and administrative expenses
decreased to 11.7% from 12.3% in the prior year quarter due to cost reduction
measures.
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<PAGE> 17
Restructuring Charge
The Company's integration related to the Transaction described in Note 1 of
the Notes to Consolidated Financial Statements in Item I, calls for the closure
and consolidation of certain operations formerly owned by Rollins or by Old
LESI. Management expects such actions to produce approximately $72 million of
operating cash savings.
With respect to the Old LESI operations, the Company recorded a one-time
charge of $331.7 million ($200 million after tax) against earnings in the
quarter ended May 31, 1997, to reflect the closing of certain of the operating
facilities that have become redundant, and an impairment in the carrying value
of certain operating facilities due to lower expected future cash flows, as a
result of the closing of the Transaction.
Interest Expense
Interest expense increased $2.1 million, or 22.3% during the three months
ended May 31, 1997, over the prior year period primarily related to the
Transaction. Prior to May 15, 1997, interest expense was allocated to Old LESI
from the parent corporation, Laidlaw. Effective May 15, 1997, interest expense
includes financing costs associated with the Bank Credit Facility, other
long-term debt, and the PIK, as described in Note 4 and Note 5, respectively, of
the Notes to Consolidated Financial Statements in Item 1.
Income Tax Expense (Benefit)
Prior to May 15, 1997, income tax expense was allocated to Old LESI from
the parent corporation. Effective May 15, 1997, the Company is subject to full
federal and state income tax effects.
Earnings Per Share
Net income (loss) per common share is computed by dividing net income
(loss) by the weighted average number of common shares deemed outstanding for
each period presented. Shares of stock issuable pursuant to stock options and
upon conversion of the Subordinated Convertible Pay-In-Kind Debenture, or common
stock equivalents, have not been considered as their effect is immaterial or
antidilutive. Excluding the after-tax restructuring charge of approximately $200
million, or $1.52 per share, earnings per share are $0.024 and $0.031 for the
three months ended May 31, 1997 and 1996, respectively.
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<PAGE> 18
Results of Operations: Nine Months Ended May 31, 1997 compared with
Nine Months Ended May 31, 1996
Operating results, before the restructuring charge, are as follows:
<TABLE>
<CAPTION>
Nine Months Ended May 31,
------------------------------------------------------
1997 1996 1997 1996
---- ---- ---- ----
($ in Millions)
<S> <C> <C> <C> <C>
Revenue $ 468.5 $ 483.3 100.0% 100.0%
Operating expense 338.4 345.2 72.2% 71.2%
Depreciation & amortization 39.1 36.6 8.4% 7.6%
Selling, general & administrative 52.0 57.7 11.1% 12.4%
------- ------- ------ ------
Operating income $ 39.0 $ 43.8 8.3% 8.8%
======= ======= ====== ======
</TABLE>
Revenues
Components of Revenue:
<TABLE>
<CAPTION>
Nine Months Ended May 31,
----------------------------------------------------------
1997 1996
---- ----
($ in Millions)
<S> <C> <C> <C> <C>
Service Center $213.6 39% $217.0 39%
Landfill 135.1 24% 145.9 26%
Incinerator 42.0 8% 23.0 4%
Transportation 69.8 13% 67.9 12%
Other 91.4 16% 105.1 19%
------ ---- ------ ----
$551.9 100% $558.9 100%
==== ====
Less: Intercompany eliminations 83.4 75.6
------ ------
Total revenue $468.5 $483.3
====== ======
</TABLE>
Revenues decreased by $14.8 million, or 3.1% during the nine months
ended May 31, 1997, compared to the nine months ended May 31, 1996. Landfill
revenue decreased by $10.8 million, or 7.4%, and other revenue was $13.7 million
lower during the nine months ended May 31, 1997, versus the comparable prior
year period. These decreases were offset by positive variances in incinerator
revenue, up $19.0 million, or 82.6%, and transportation revenue, up $1.9
million, or 2.8%, in the respective periods. Revenue from processing
intercompany streams increased $7.7 million, or 10.2%, over the prior nine month
fiscal period.
Management's estimates of the components of changes in the Company's
consolidated revenue are as follows:
<TABLE>
<CAPTION>
Percentage Increase (Decrease)
Nine Months Ended May 31,
------------------------------------------
1997 over 1996 1996 over 1995
-------------- --------------
<S> <C> <C>
Expansion of customer base by acquisition 3.2 % 23.0 %
Other, primarily through volume and price changes (6.2)% (9.5)%
Foreign exchange rate changes (0.1)% 0.2 %
------ ------
Total (3.1)% 13.7 %
====== ======
</TABLE>
The comparative decline in revenue for the nine months ended May 31, 1997,
was primarily due to non-recurring event projects performed in the prior year
period by the Company's industrial landfill in Utah, the most significant of
which included management and disposal activities related to
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<PAGE> 19
dredging in the New York/New Jersey harbor area. Revenue contributions from
acquired operations including the acquisition of Rollins and from Greenfield
Services Corporation as of April 1, 1996, provided approximately $15.7 million,
or 3.2%, in additional revenue from the comparable prior year.
Operating Expenses
Operating expenses for the nine months ended May 31, 1997, decreased
$6.8, or 2.0%, from the nine months ended May 31, 1996. The decrease was
primarily attributable to the aforementioned prior year non-recurring activity.
This decrease was somewhat offset by costs incurred at the Clive, Utah
incineration facility as of September 1, 1996. Operating expense, as a
percentage of revenue, increased to 72.2% from 71.2% in the prior year, also due
to relatively lower revenue and the inclusion of expense at the Clive facility.
Depreciation and Amortization Expense
Depreciation and amortization expense increased $2.5 million, or 6.8%,
during the nine months ended May 31, 1997, compared to the nine months ended May
31, 1996. The increase was associated with increased landfill cell consumption
and related amortization during the period as well as the inclusion of the
Clive, Utah incineration facility's depreciation expense as of September 1,
1996. As a percentage of revenue, depreciation and amortization expense
increased to 8.4% from 7.6% during the prior year period due in part to the
higher landfill disposal as a proportion of total revenue and the inclusion of
the Clive facility.
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased $5.6 million, or
9.8%, during the nine months ended May 31, 1997 versus the comparable prior year
period. The decrease was attributable to a number of cost reduction initiatives
implemented and completed during the current period. As a percentage of revenue,
selling, general and administrative expenses decreased to 11.1% from 12.4% in
the prior year, due to the cost reduction measures.
Restructuring Charge
A one-time restructuring charge of $331.7 million ($200 million after tax)
impacted the earnings in the nine months ended May 31, 1997. The charge
reflected the closing of certain of the operating facilities that have become
redundant, and an impairment in the carrying value of certain operating
facilities due to lower expected future cash flows as a result of the
Transaction.
Interest Expense
Interest expense increased by $3.6 million, or 10.7% from the prior nine
month period primarily as a result of recapitalization related to the Rollins
acquisition.
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<PAGE> 20
Income Tax Expense (Benefit)
Prior to May 15, 1997, income tax expense was allocated to Old LESI from
the parent corporation. Effective May 15, 1997, the Company is subject to full
federal and state income tax effects.
FACTORS THAT MAY AFFECT FUTURE RESULTS
This report contains various forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995, including financial,
operating and other projections. These statements are based on current plans and
expectations of the Company and involve risks and uncertainties that could cause
actual future activities and results of operations to be materially different
from those set forth in the forward-looking statements.
Important factors that could cause actual results to differ include, among
others, risks associated with acquisitions, fluctuations in operating results
because of acquisitions and variations in stock prices, changes in applicable
government regulations, competition, and risks associated with the operations
and growth of the newly acquired business of Rollins. As a result of these
factors, the Company's revenue and income could vary significantly from quarter
to quarter, and past financial performance should not be considered a reliable
indicator of future performance.
LIQUIDITY AND CAPITAL RESOURCES
The cash provided by continuing operations during the first nine months of
fiscal 1997 was $9.0 million.
During the first nine months of fiscal 1997, expenditures for property,
plant and equipment were $29.7 million.
The Company's projected capital expenditures for the remainder of fiscal
1997 are approximately $10 million, and are expected to be financed from
available cash resources.
As a direct result of the personnel reductions and facility closures, the
Company anticipates incurring cash severance and closure costs. With respect to
the former Rollins operations, approximately $17 million of severance costs and
$40 million of closure costs related to dismantling, decontamination and
regulatory approval are expected to be incurred. With respect to the Old LESI
operations, approximately $25 million of costs are expected to be incurred. Of
such costs, management expects to incur between $20 million and $25 million
within 12 months of the Transaction.
The Company believes it has adequate liquidity for its ongoing operations
and planned capital needs. For the remainder of fiscal year 1997, the Company
anticipates lower operating cash requirements as it realizes the benefits of
cost reductions and a lower capital spending. The Company's primary sources of
liquidity are cash flows from operations combined with the funding sources
described in Note 4 and Note 5 of the Notes to Consolidated Financial Statements
in Item 1.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The business of the Company's hazardous and industrial waste services
is continuously regulated by federal, state, provincial and local provisions
that have been enacted or adopted, regulating the discharge of materials into
the environment or primarily for the purpose of protecting the environment. The
nature of the Company's businesses results in its frequently becoming a party to
judicial or administrative proceedings involving all levels of governmental
authorities and other interested parties. The issues that are involved generally
relate to applications for permits and licenses by the Company and their
conformity with legal requirements and alleged technical violations of existing
permits and licenses. The Company does not believe that these issues will be
material to the Company's operations or financial condition. At May 31, 1997,
subsidiaries of the Company were involved in three proceedings of the latter
type relating primarily to activities at waste treatment, storage and disposal
facilities where the Company believes sanctions involved in each instance may
exceed $100,000.
In the United States, The Comprehensive Environmental Response
Compensation and Liability Act of 1980 ("CERCLA") imposes financial liability on
persons who are responsible for the release of hazardous substances into the
environment. Present and past owners and operators of sites which release
hazardous substances, as well as generators and transporters of the waste
material, are jointly and severally liable for remediation costs and
environmental damage. At May 31, 1997, the Company had been notified that it was
potentially a responsible party in connection with 21 locations in its hazardous
waste management and other businesses. The Company continually reviews its
status with respect to each location, taking into account its alleged connection
to the location and the extent of its alleged contribution to the volume of
waste at the location, the available evidence connecting the Company to that
location and the numbers and financial soundness of other potentially
responsible parties at the location. Based upon presently available information,
the Company does not believe that potential liabilities arising from its
involvement with these locations will be material to the Company's operations or
financial condition.
A subsidiary of Company, Laidlaw Environmental Services of South
Carolina, Inc. ("LESSC"), owns and operates a hazardous waste landfill near the
Town of Pinewood in Sumter County, South Carolina. South Carolina law requires
that hazardous waste facilities provide evidence of financial assurance for
potential environmental cleanup and restoration in form and amount to be
determined by the South Carolina Department of Health and Environmental Control
("DHEC").
In its order dated May 19, 1994, the Board of DHEC (the "Board")
decided that over a ten year period LESSC must establish a cash funded trust in
the amount of $133 million adjusted for inflation as financial assurance for
potential environmental cleanup and restoration. In August 1994, LESSC paid
approximately $14 million cash into the trust fund as a first installment. The
cash funded trust now stands at approximately $17 million. LESSC appealed to the
South Carolina Circuit Court contesting the legality of the Board's
determination.
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In June 1995, DHEC promulgated, and the South Carolina legislature
approved, regulations governing financial assurance for environmental cleanup
and restoration giving owner/operators of hazardous waste facilities the right
to choose from among six options for providing financial assurance. The options
include insurance, a bond, a letter of credit, a cash trust fund and a corporate
guaranty with a financial test.
In June 1995 under authority of the new regulations, the LESSC
submitted financial assurance for potential environmental cleanup and
restoration composed of a combination of the existing State Permitted Sites Fund
(this is a state of South Carolina fund created by statute and funded by
hazardous waste disposal taxes) in the amount of approximately $8 million and
the balance of a total package of $135 million by way of a corporate guarantee
by Laidlaw Inc. ("Laidlaw") in the amount of approximately $127 million. LESSC
also left in place the existing cash trust fund in the present amount of
approximately $17 million. DHEC accepted LESSC's financial submittal. On
September 15, 1995, DHEC issued a declaratory ruling finding the new regulations
applicable to financial assurance requirements for LESSC. A group of parties
opposed to the ruling appealed the declaratory ruling to the South Carolina
Circuit Court. The opposing parties include Citizens Asking for a Safe
Environment, Energy Research Foundation, County of Sumter, Sierra Club, County
of Clarendon, The Sumter County Legislative Delegation, the South Carolina
Department of Natural Resources and the South Carolina Public Service Authority.
In June 1996, LESSC submitted and DHEC accepted a similar financial assurance
package for the state fiscal year ended June 30, 1997.
LESSC's appeal of the May 19, 1994 DHEC order and the opposing parties'
appeal of the September 15, 1995, DHEC declaratory ruling have been consolidated
and are presently pending a decision of the South Carolina Circuit Court in the
case captioned Laidlaw Environmental Services of South Carolina, Inc., et. al.,
Petitioners vs. South Carolina Department of Health and Environmental Control
and South Carolina Board of Health and Environmental Control, Respondents -
Energy Research Foundation, et. al., Intervenors, Docket Numbers C/A
94-CP-43-175, 94-CP-43-178, 94-CP-40-1412 and 94-CP-40-1859. A decision adverse
to the Company could result in the reinstatement of the May 19, 1994 DHEC order.
The Company believes that the regulations promulgated in June 1995 are legally
valid and applicable to financial assurance requirements for the Pinewood
landfill. Pursuant to the Stock Purchase Agreement, Laidlaw agreed to maintain,
solely at its expense, until the tenth anniversary of the Transaction, as
described in Item I, Note 1 to this report, the required financial assurance for
the Pinewood facility.
While the financial resolution of any of the above described matters
may have an impact on the Company's consolidated financial results for a
particular reporting period, management believes that the ultimate disposition
of these matters will not have a materially adverse effect upon the consolidated
financial position of the Company.
The consolidated federal income tax returns of Laidlaw Transportation,
Inc. and its U.S. subsidiaries (which until May 15, 1997, included certain of
the subsidiaries of the Company) for the fiscal years ended August 31, 1986,
1987 and 1988, have been under audit by the Internal Revenue Service.
Page 22
<PAGE> 23
In March 1994, the subsidiaries received a statutory notice of deficiency
proposing that the subsidiaries pay additional taxes relating to disallowed
deductions in those income tax returns. The principal issue involved relates to
the timing and the deductibility for tax purposes of interest attributable to
loans owing to related foreign persons. The subsidiaries have petitioned the
United States Tax Court (captioned as Laidlaw Transportation, Inc. &
Subsidiaries et al v. Commissioner of Internal Revenue, Docket Nos. 9361-94 and
9362-94) for a redetermination of claimed deficiencies of approximately $49.6
million(plus interest of approximately $76.5 million as of May 31, 1997).
In May 1997, the subsidiaries received revenue agents' reports
proposing that the subsidiaries pay additional taxes of approximately $160.7
million (plus interest of approximately $127.4 million as of May 31, 1997)
relating to disallowed deductions in federal income tax returns for the fiscal
years ended August 31, 1989, 1990 and 1991, based on the same issues. The
subsidiaries intend to vigorously contest these claimed deficiencies. The
Company anticipates that the Internal Revenue Service will propose adjustments
for the same issue in subsequent taxation years. Pursuant to the Stock Purchase
Agreement, Laidlaw and Laidlaw Transportation, Inc. agreed to be responsible for
any tax liabilities resulting from these matters. Although the final outcome
cannot be predicted with certainty, the Company, based upon a thorough review of
the facts and advice of counsel, believes that the ultimate disposition of these
issues will not have a materially adverse effect upon the Company's consolidated
financial position or results of operations.
Other than as herein reported there have been no additional significant
legal proceedings nor any material changes in the legal proceedings reported on
pages 4 and 5 of the Registrant's Annual Report on Form 10-K for the fiscal year
ended September 30, 1996 and the Definitive Proxy Statement on Form DEF 14A as
referenced in Exhibit 99(a).
ITEM 2. CHANGES IN SECURITIES.
(a) At a Special Meeting held on May 13, 1997 the Registrant's stockholders
approved amendments to the Registrant's certificate of incorporation that (i)
increased the number of authorized shares of common stock, par value $1.00 per
share, from 120,000,000 to 350,000,000; (ii) changed the name of Registrant to
Laidlaw Environmental Services, Inc. as of the closing of the Stock Purchase
Agreement dated February 6, 1997 ("SPA") among the Registrant, Laidlaw, and
Laidlaw Transportation, Inc. and (iii) increased the size of the Registrant's
Board of Directors from eight to ten members.
(B) In connection with obtaining the financing necessary to complete the
transaction contemplated by the SPA, certain subsidiaries of the Registrant
entered into a credit agreement (the "Credit Agreement") which restricts the
payment of dividends by the subsidiaries to the Registrant (unless lenders
holding 66 2/3 % of (i) the total outstanding under the Term Loans (as defined
in Note 4 to the Notes to the Consolidated Financial Statements contained in
Item 1 of Part I of this report) and (ii) the total commitments under the
Revolving Credit Facilities (as defined in Note 4 to the Notes to the
Consolidated Financial Statements contained in Item 1 of Part I of this report).
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<PAGE> 24
The Credit Agreement also contains negative, affirmative and financial
covenants customarily found in credit agreements for financings similar to the
financing provided under the Credit Agreement, including covenants (i)requiring
compliance with laws and performance of obligations, (ii) restricting
transactions with affiliates, (iii) requiring satisfactory levels of interest
coverage and fixed charge coverage and ratios of total funded debt to operating
cash flow and total contingent obligations to operating cash flow, (iv) limiting
annual capital expenditures, (v) requiring periodic reporting of financing
information and (vi) restricting debt, guarantees, liens, mergers and
consolidations, sales of assets, changes in the nature of the business and
changes in charter documents and other material contracts.
Among the financial covenants contained in the Credit Agreement are the
following (capitalized terms used hereafter are defined in the Credit
Agreement): (i)the Consolidated Total Leverage Ratio at the end of each fiscal
quarter may not exceed a ratio of 3.50:1.00 in fiscal 1997 and 1998, reducing to
2.00:1.00 by fiscal 2004 and 2005; (ii) the Fixed Charge Coverage Ratio at the
end of each fiscal quarter may not be less than 1.25:1.00 in fiscal 1997-1999,
increasing to 1.50:1.00 in fiscal 2000-2005; (iii)the Interest Coverage Ratio
for any period of four consecutive fiscal quarters shall be not less than
2.00:1.00 for fiscal 1997 and 1998, increasing to 3.00:1.00 for fiscal
2002-2005; (iv) the ratio of Consolidated Contingent Obligations at the end of
any fiscal quarter to Consolidated Operating Cash Flow for the four preceding
fiscal quarters shall not be less than 1.50:1.00 in fiscal 1997-1999, reducing
to 1.20:1.00 for fiscal 2000-2005; and (v) except for specified permitted
indebtedness, including certain working capital lines of credit, the Company may
not incur more than $5,000,000 of new indebtedness.
(c) i) On May 15, 1997, the Registrant issued 120 million shares ("Laidlaw
Stock") of its common stock, par value $1.00 per share, to Laidlaw. In addition
on May 15, 1997, the Registrant issued to Laidlaw a $350,000,000 5% Subordinated
Convertible Pay-In-Kind Debenture (the "Debenture").
ii) These securities were issued in connection with the Transaction
described in Note 1 of the Notes to the Consolidated Financial Statements
included in Item 1 of Part I of this report which is hereby incorporated by
reference in partial response to this question.
iii) The Laidlaw Stock and the Debenture were issued without
registration under the Securities Act of 1933, as amended (the "Act"), pursuant
to the exemption provided by Section (4)(2) of the Act. In determining to issue
the Laidlaw Stock and the Debenture without registration under the Act
management considered the fact that the offering was being made to a single
offeree in connection with the offeree's in substance acquisition of the
Registrant and that the offeree, Laidlaw, had access to all material information
with respect to the Registrant as a result of its extensive due diligence
investigation of the Registrant. In addition in the SPA, Laidlaw represented to
the Registrant that it was acquiring the Laidlaw Stock and the shares of common
stock issuable upon conversion of the Debenture for investment and not with a
view to, or for resale in connection with, any distribution of the Laidlaw Stock
or the shares of common stock issuable upon conversion of the Debenture.
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<PAGE> 25
(iv) The terms of conversion of the Debenture are described in Note 5
of the Notes to the Consolidated Financial Statements included in Item 1 of Part
I of this report which is hereby incorporated by reference in partial response
to this question.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
A special meeting of the stockholders of the Registrant was held on May 13,
1997. The results of the vote of security holders at that meeting previously
reported in Item I of the Current Report on Form 8-K filed with the Securities
and Exchange Commission on May 30, 1997.
ITEM 5. OTHER INFORMATION.
On July 9, 1997, in furtherance of the Registrant's reverse acquisition and
change in control previously disclosed in the Registrant's Current Report on
Form 8-K filed with the Securities and Exchange Commission on May 30, 1997,
Grover C. Wrenn was appointed Director by the Registrant's Board of Directors,
increasing the number of directors to ten. Mr. Wrenn, whose term expires at the
1998 annual meeting, is Chairman and CEO of Better Health Network, Inc.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(3)(a) Restated Certificate of Incorporation of the Company dated May 13, 1997
and Amendment to Certificate of Incorporation dated May 15, 1997.
(3)(b) Bylaws of the Company (filed as Exhibit 3(ii) to the Form 10-Q of the
Company for the Quarter ended March 31, 1997 and incorporated herein by
reference).
(4)(a) Rights Agreement dated as of June 14, 1989 between Rollins
Environmental Services, Inc. and Registrar and Transfer Company, as
Rights Agent (filed as an Exhibit to Form 8-K filed by the Registrant
on June 13, 1995 and incorporated herein by reference).
(4)(b) Amendment No. 1 dated as of March 31, 1995 to Rights Agreement between
Rollins Environmental Services, Inc. and Registrar and Transfer
Company, as Rights Agent (filed as an Exhibit to Form 8-K filed by the
Registrant on June 13, 1995 and incorporated herein by reference).
(4)(c) Credit Agreement among Laidlaw Chem-Waste, Inc., Laidlaw Environmental
Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion Bank, TD Securities (USA) Inc., the Bank of Nova
Scotia, Nationsbank, N.A. and The First National Bank of Chicago and
Nationsbank, N.A. as syndication Agent dated as of May 9, 1997.
Page 25
<PAGE> 26
(4)(d) $350,000,000 5% Subordinated Convertible Pay-In-Kind Debenture due 2009
issued by Registrant on May 15, 1997 to Laidlaw Inc. the form of which
was included as an appendix to the Definitive Proxy Statement on Form
DEF 14A, filed with the Securities and Exchange Commission on May 1,
1997 and incorporated herein by reference.
(4)(e) Registration Rights Agreement dated May 15, 1997 between Registrant,
Laidlaw Transportation, Inc. and Laidlaw Inc. included as an appendix
to the Definitive Proxy Statement on Form DEF 14A, the form of which
was filed with the Securities and Exchange Commission on May 1, 1997
and incorporated herein by reference.
(4)(f) Indenture dated as of May 1, 1993 between the Industrial Development
Board of the Metropolitan Government of Nashville and Davidson County
(Tennessee) and NationsBank of Tennessee, N.A.
(4)(g) Indenture of Trust dated as of February 1, 1995 between Carbon County,
Utah and West One Bank, Utah, now known as U.S. Bank, as Trustee.
(4)(h) Indenture of Trust dated as of August, 1995 between Tooele County, Utah
and West One Bank, Utah, now known as U.S. Bank, as Trustee.
(4)(i) Indenture of Trust dated as of July 1, 1997 between Carbon County, Utah
and U.S. Bank, a national banking association, as Trustee.
(4)(j) Indenture of Trust dated as of July 1, 1997 between Tooele County, Utah
and U.S. Bank, a national banking association, as Trustee.
(4)(k) Indenture of Trust dated as of July 1, 1997 between California
Pollution Control Financing Authority and U.S. Bank, a national banking
association, as Trustee.
(4)(l) Stock Purchase Agreement between Westinghouse Electric Corporation
(Seller) and Rollins Environmental Services, Inc. (Buyer) for National
Electric, Inc. dated March 7, 1995 (filed as an Exhibit to Form 8-K
filed by the Registrant on June 13, 1995 and incorporated herein by
reference).
(4)(m) Second Amendment to Stock Purchase Agreement (as referenced in Exhibit
(4)(l) above) dated May 15, 1997 among Westinghouse Electric
Corporation, Rollins Environmental Services, Inc. and Laidlaw Inc.
(4)(n) Promissory Note dated May 15, 1997 for $60,000,000 from Laidlaw
Environmental Services, Inc. to Westinghouse Electric Corporation.
(4)(o) Guaranty Agreement dated May 15, 1997 by Laidlaw Inc. to Westinghouse
Electric Corporation guaranteeing Promissory Note dated May 15, 1997
(as referenced in Exhibit (4)(n)) from Laidlaw Environmental Services,
Inc. to Westinghouse Electric Corporation.
(10)(a) Rollins Environmental Services, Inc. 1982 Incentive Stock Option Plan
(filed with Amendment No. 1 to the Company's Registration Statement No.
2-84139 on Form S-1 dated June 24, 1983 and incorporated herein by
reference).
Page 26
<PAGE> 27
(10)(b) Rollins Environmental Services, Inc. 1993 Stock Option Plan (filed with
the Company's Proxy Statement for the Annual Meeting of Shareholders
held January 28, 1994 and incorporated herein by reference).
(10)(c) Stock Purchase Agreement dated February 6, 1997 among the Registrant,
Laidlaw Inc., and Laidlaw Transportation, Inc. included as an appendix
to the Definitive Proxy Statement on Form DEF 14A, filed with the
Securities and Exchange Commission on May 1, 1997 and incorporated
herein by reference.
(10)(e) Management Incentive Plan for fiscal year 1996
(27) Financial Data Schedule
(99)(a) Definitive Proxy Statement on Form DEF 14A, filed with the Securities
and Exchange Commission on May 1, 1997 and incorporated herein by
reference.
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K, dated May 30, 1997,
which contained Items 1, 2, 5, 7 and 8 related to the reverse acquisition which
was completed on May 15, 1997.
Page 27
<PAGE> 28
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: July 14, 1997 LAIDLAW ENVIRONMENTAL SERVICES, INC.
-------------- ------------------------------------
(Registrant)
/s/ Kenneth W. Winger
------------------------------------
Kenneth W. Winger
President and Chief Executive Officer
/s/ Paul R. Humphreys
------------------------------------
Paul R. Humphreys
Senior Vice President-Finance and
Chief Financial Officer
(Principal Financial Officer)
Page 28
<PAGE> 29
INDEX TO EXHIBITS
(3)(a) Restated Certificate of Incorporation of the Company dated May 13, 1997
and Amendment to Certificate of Incorporation dated May 15, 1997.
(3)(b) Bylaws of the Company (filed as Exhibit 3(ii) to the Form 10-Q of the
Company for the Quarter ended March 31, 1997 and incorporated herein by
reference).
(4)(a) Rights Agreement dated as of June 14, 1989 between Rollins
Environmental Services, Inc. and Registrar and Transfer Company, as
Rights Agent (filed as an Exhibit to Form 8-K filed by the Registrant
on June 13, 1995 and incorporated herein by reference).
(4)(b) Amendment No. 1 dated as of March 31, 1995 to Rights Agreement between
Rollins Environmental Services, Inc. and Registrar and Transfer
Company, as Rights Agent (filed as an Exhibit to Form 8-K filed by the
Registrant on June 13, 1995 and incorporated herein by reference).
(4)(c) Credit Agreement among Laidlaw Chem-Waste, Inc., Laidlaw Environmental
Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion Bank, TD Securities (USA) Inc., the Bank of Nova
Scotia, Nationsbank, N.A. and The First National Bank of Chicago and
Nationsbank, N.A. as syndication Agent dated as of May 9, 1997.
(4)(d) $350,000,000 5% Subordinated Convertible Pay-In-Kind Debenture due 2009
issued by Registrant on May 15, 1997 to Laidlaw Inc. the form of which
was included as an appendix to the Definitive Proxy Statement on Form
DEF 14A, filed with the Securities and Exchange Commission on May 1,
1997 and incorporated herein by reference.
(4)(e) Registration Rights Agreement dated May 15, 1997 between Registrant,
Laidlaw Transportation, Inc. and Laidlaw Inc. included as an appendix
to the Definitive Proxy Statement on Form DEF 14A, the form of which
was filed with the Securities and Exchange Commission on May 1, 1997
and incorporated herein by reference.
(4)(f) Indenture dated as of May 1, 1993 between the Industrial Development
Board of the Metropolitan Government of Nashville and Davidson County
(Tennessee) and NationsBank of Tennessee, N.A.
(4)(g) Indenture of Trust dated as of February 1, 1995 between Carbon County,
Utah and West One Bank, Utah, now known as U.S. Bank, as Trustee.
(4)(h) Indenture of Trust dated as of August, 1995 between Tooele County, Utah
and West One Bank, Utah, now known as U.S. Bank, as Trustee.
(4)(i) Indenture of Trust dated as of July 1, 1997 between Carbon County, Utah
and U.S. Bank, a national banking association, as Trustee.
(4)(j) Indenture of Trust dated as of July 1, 1997 between Tooele County, Utah
and U.S. Bank, a national banking association, as Trustee.
Page 29
<PAGE> 30
(4)(k) Indenture of Trust dated as of July 1, 1997 between California
Pollution Control Financing Authority and U.S. Bank, a national banking
association, as Trustee.
(4)(l) Stock Purchase Agreement between Westinghouse Electric Corporation
(Seller) and Rollins Environmental Services, Inc. (Buyer) for National
Electric, Inc. dated March 7, 1995 (filed as an Exhibit to Form 8-K
filed by the Registrant on June 13, 1995 and incorporated herein by
reference).
(4)(m) Second Amendment to Stock Purchase Agreement (as referenced in Exhibit
(4)(l) above) dated May 15, 1997 among Westinghouse Electric
Corporation, Rollins Environmental Services, Inc. and Laidlaw Inc.
(4)(n) Promissory Note dated May 15, 1997 for $60,000,000 from Laidlaw
Environmental Services, Inc. to Westinghouse Electric Corporation.
(4)(o) Guaranty Agreement dated May 15, 1997 by Laidlaw Inc. to Westinghouse
Electric Corporation guaranteeing Promissory Note dated May 15, 1997
(as referenced in Exhibit (4)(n)) from Laidlaw Environmental Services,
Inc. to Westinghouse Electric Corporation.
(10)(a) Rollins Environmental Services, Inc. 1982 Incentive Stock Option Plan
(filed with Amendment No. 1 to the Company's Registration Statement No.
2-84139 on Form S-1 dated June 24, 1983 and incorporated herein by
reference).
(10)(b) Rollins Environmental Services, Inc. 1993 Stock Option Plan (filed with
the Company's Proxy Statement for the Annual Meeting of Shareholders
held January 28, 1994 and incorporated herein by reference).
(10)(c) Stock Purchase Agreement dated February 6, 1997 among the Registrant,
Laidlaw Inc., and Laidlaw Transportation, Inc. included as an appendix
to the Definitive Proxy Statement on Form DEF 14A, filed with the
Securities and Exchange Commission on May 1, 1997 and incorporated
herein by reference.
(10)(e) Management Incentive Plan for fiscal year 1996
(27) Financial Data Schedule
(99)(a) Definitive Proxy Statement on Form DEF 14A, filed with the Securities
and Exchange Commission on May 1, 1997 and incorporated herein by
reference.
Page 30
<PAGE> 1
Exhibit 3(A)
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
ROLLINS ENVIRONMENTAL SERVICES, INC.
Adopted in accordance with the provisions
of Section 242 of the General Corporation Law
of the State of Delaware
I, JOHN W. ROLLINS, JR., Senior Vice Chairman of the Board of Rollins
Environmental Services, Inc., a corporation existing under the laws of the
State of Delaware, do hereby certify as follows:
FIRST: That the Restated Certificate of Incorporation of said
corporation be amended as follows:
"FIRST: The name of the Corporation is Laidlaw Environmental
Services, Inc.
SECOND: That such amendment has been duly adopted by the affirmative
vote of the holders of a majority of the stock entitled to vote in accordance
with the provisions of Section 242 of the General Corporation Law of the State
of Delaware.
THIRD: That the effective time of this Certificate of Amendment of
Restated Certificate of Incorporation shall be upon filing with the Secretary
of State of the State of Delaware.
IN WITNESS WHEREOF, I have signed this Certificate this 13th day of
May, 1997.
/s/ John W. Rollins, Jr.
---------------------------------
Senior Vice Chairman of the Board
ATTEST:
/s/ Klaus M. Belehoubek
- ------------------------
Assistant Secretary
<PAGE> 2
RESTATED CERTIFICATE OF INCORPORATION
OF
ROLLINS ENVIRONMENTAL SERVICES, INC.
It is hereby certified that:
1. (a) The present name of the corporation (hereinafter called the
"Corporation") is Rollins Environmental Services, Inc.
(b) The name under which the Corporation was originally
incorporated is Rollins Environmental Services, Inc., and the date of filing the
original Certificate of Incorporation of the Corporation with the Secretary of
the State of Delaware is September 29, 1978.
2. The Restated Certificate of Incorporation of the Corporation is
hereby amended by striking out Article FOURTH and SEVENTH thereof and by
substituting in lieu thereof new Articles which are set forth in the Restated
Certificate of Incorporation hereinafter provided for.
3. The provisions of the Restated Certificate of Incorporation of the
Corporation as heretofore amended and/or supplemented, and as herein amended,
are hereby restated and integrated into the single instrument which is
hereinafter set forth, and which is entitled Restated Certificate of
Incorporation of Rollins Environmental Services, Inc. without any further
amendments other than amendments herein certified and without any discrepancy
between the provisions of the Restated Certificate of Incorporation as
heretofore amended and supplemented and the provisions of the said single
instrument hereinafter set forth.
4. The amendments and the restatement of the Restated Certificate of
Incorporation herein certified have been authorized by the Board of Directors of
the Corporation and duly adopted by the stockholders in accordance with the
provisions of Section 242 and Section 245 of the General Corporation Law of the
State of Delaware.
5. The effective time of the Restated Certificate of Incorporation and
of the amendments herein certified shall be upon filing with the Secretary of
State of the State of Delaware.
6. The Restated Certificate of Incorporation of the Corporation, as
amended and restated herein, shall at the effective time of this Restated
Certificate of Incorporation, read as follows:
RESTATED CERTIFICATE OF INCORPORATION
OF
<PAGE> 3
ROLLINS ENVIRONMENTAL SERVICES, INC.
FIRST: The name of the Corporation is ROLLINS ENVIRONMENTAL SERVICES,
INC.
SECOND: The registered office of the Corporation is to be located at One
Rollins Plaza, 2200 Concord Pike, New Castle County, Wilmington, Delaware 19803.
The name of its registered agent at that address is Rollins Environmental
Services, Inc.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a Corporation may be organized under the General Corporation
Law of Delaware.
FOURTH: The total number of shares of stock which the Corporation is
authorized to issue is three hundred fifty-one million (351,000,000) shares,
divided into two classes. The designation of each class, and the par value of
the shares of each class are as follows:
<TABLE>
<CAPTION>
CLASS NO. OF SHARES PER SHARE PAR VALUE
----- ------------- -------------------
<S> <C> <C>
Common 350,000,000 $1.00 per share
Preferred 1,000,000 $1.00 per share
</TABLE>
All preferred stock authorized for issuance by the Corporation
may be issued in series or without series from time to time
with the designations, preferences, and relative,
participating, optional or other special rights of the class
or series of the class fixed by resolution or resolutions of
the Board of Directors. Such resolutions may also provide for
the convertibility of the preferred stock or any series
thereof into any other classes of stock of the company,
including the common stock, upon such terms and rations as
shall be determined by the Board of Directors.
FIFTH: Special meetings of the stockholders may be called at any time by
the Chairman of the Board of Directors, the President or the Chairman of the
Executive Committee of the Board of Directors and not by any other person. No
action shall be taken by the stockholders except at an annual or special meeting
of stockholders and stockholders may not act by written consent.
SIXTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) Election of directors need not be by ballot unless the by-laws
so provide.
(2) The Board of Directors shall have power without the assent or
vote of the stockholders to make, alter, amend, change, add to or repeal the
by-laws of the
<PAGE> 4
Corporation; to fix and vary the amount to be reserved for any proper purpose;
to authorize and cause to be executed mortgages and liens upon all or any part
of the property of the Corporation; to determine the use and disposition of any
surplus or net profits; and to fix the times for the declaration and payment of
dividends. The stockholders may make, alter or repeal any by-law whether or not
adopted by them, provided however, that any such additional by-laws, alterations
or repeal may be adopted only by the affirmative note of the holders of 75% or
more of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose as one
class), unless such additional by-laws, alterations or repeal shall have been
recommended to the stockholders for adoption by a majority of the Board of
Directors, in which event such additional by-laws, alterations or repeal may be
adopted by the affirmative vote of the holders of a majority of the outstanding
shares of capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class).
(3) The directors in their discretion may submit any contract or act
for approval or ratification at any annual meeting of the stockholders or at any
meeting of the stockholders called for the purpose of considering any such act
or contract, and any contract or act that shall be approved or be ratified by
the vote of the holders of a majority of the stock of the Corporation which is
represented in person or by proxy at such meeting and entitled to vote thereat
(provided that a lawful quorum of stockholders be there represented in person or
be proxy) shall be as valid and as binding upon the Corporation and upon all the
stockholders as though it had been approved or ratified by every stockholder of
the Corporation, whether or not the contract or act would otherwise be open to
legal attack because of directors' interest, or for any other reason.
(4) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised, or
done by the Corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this Certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-laws so made shall
invalidate any prior act of the directors which would have been valid if such
by-laws had not been made.
SEVENTH: The property and business of this corporation shall be managed by
a Board of up to ten (10) directors. The directors shall be divided into three
classes. The first class (Class I) shall consist of four (4) directors and the
term of office of such class shall expire at the Annual Meeting of Stockholders
in 1998. The second class (Class II) shall consist of three (3) directors and
the term of office of such class shall expire at the Annual Meeting of
Stockholders in 1999. The third class (Class III) shall consist of three (3)
directors and the term of office of such class shall expire at the Annual
Meeting of Stockholders in 2000. At each annual election, commencing at the next
Annual Meeting of Stockholders in 1998, the successors of the class of directors
whose term expires at that time shall be elected to hold office for the term of
three years to succeed those whose term expires, so that the term of office of
one class of directors shall expire in each year. Each director shall be elected
and qualified, or until his death or until he shall resign. Directors need not
be stockholders nor residents of the State of Delaware.
<PAGE> 5
Notwithstanding any of the provisions of this Certificate of
Incorporation or the by-laws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by law, this Certificate of
Incorporation or the by-laws of the Corporation), any director or the entire
Board of Directors of the Corporation may be removed at any time, but only for
cause, and only at a meeting of the stockholders called for that purpose by the
affirmative vote of the holders of 75% or more of the shares of the Corporation
entitled to vote at an election of directors.
Nominations for the election of directors may be made by the Board
of Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered or
mailed by first class United States mail, postage prepaid, to the secretary of
the Corporation not less than 14 days nor more than 50 days prior to any meeting
of the stockholders called for the election of directors; provided, however,
that if less than 21 days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Corporation not later than the close of business on the seventh day
following the day on which notice of the meeting was mailed to stockholders.
Notice of nominations which are proposed by the Board of Directors shall be
given by the Chairman on behalf of the Board.
Each such notice shall set forth (i) the name, age, business address
and, if known, residence address of each nominee proposed in such notice, (ii)
the principal occupation or employment of each such nominee and (iii) the number
of shares of stock of the Corporation which are beneficially owned by each such
nominee.
The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with the
foregoing procedure, and, if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
EIGHTH: (a)1. In addition to any affirmative vote required by law, and
except as otherwise expressly provided in sections (b) and (c) of this Article
EIGHTH:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder (as
hereinafter defined) or (ii) any other corporation (whether or not itself an
Interested Stockholder) which, after such merger or consolidation, would be an
Affiliate (as hereinafter defined) of an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions) to or with
an Interested Stockholder, or an Affiliate of any Interested Stockholder, of any
assets of the Corporation or any Subsidiary having an aggregate fair market
value of $5,000,000 or more; or
(C) the issuance or transfer by the Corporation or any Subsidiary
(in one transaction or a series of related transactions) of any securities of
the Corporation to
<PAGE> 6
any Interested Stockholder, or any Affiliate of any Interested Stockholder, in
exchange of cash, securities or other property (or a combination thereof) having
an aggregate fair market value of $5,000,000 or more; or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation; or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any similar transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
which has the effect, directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or convertible securities
of the Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 75% of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article EIGHTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
2. The term "business combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of clauses (A)
through (E) or paragraph 1 of this section (a).
(b) The provisions of section (a) of this Article EIGHTH shall not be
applicable to any particular business combination and such business combination
shall require only such affirmative vote as is required by law and any other
provisions of the Certificate of Incorporation or by-laws if such business
combination has been approved by a majority of the whole Board.
(c) For the purposes of this Article EIGHTH:
1. A "person" shall mean any individual, firm, corporation or other
entity.
2. "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who or
which , as of the record date for the determination of stockholders entitled to
notice of and to vote on such business combination, or immediately prior to the
consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more that 30% of
the Voting Shares; or
(B) is an Affiliate of the Corporation and at any time within two years
prior thereto was the beneficial owner, directly or indirectly, of not less than
20% of the then outstanding Voting Shares; or
<PAGE> 7
(C) is an assignee of or has otherwise succeeded to any shares of
capital stock of the Corporation which were at any time within two years prior
thereto beneficially owned by any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a transaction or series of
transactions not involving a public offering within the meaning of the
Securities Act of 1933.
Provided, however, that no person who on the date of the adoption of this
Article EIGHTH would otherwise by a "Interested Stockholder" as defined in this
subsection 2 shall be deemed to be an "Interested Stockholder".
3. A person shall be "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereinafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or
understanding, or
(C) which are beneficially owned, directly or indirectly, by any other
person with which such first mentioned person or any of its Affiliates of
Associates has any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares of capital stock of the
Corporation.
4. The outstanding Voting Shares shall include shares deemed owned
through application of paragraph 3 above but shall not include any other Voting
Shares which may be issuable pursuant to any agreement, or upon exercise of
conversion rights, warrants or options or otherwise.
5. "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934 as in effect on the date of the adoption of this
provision.
6. "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3all-1 of the General Rules and
Regulations under the Securities Exchange Act of 1934 as in effect on the date
of the adoption of this provision), is owned, directly or indirectly, by the
Corporation; provided, however, that for the purposes of the definition of
Interested Stockholder set forth in paragraph 2 of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation.
(d) A majority of the directors shall have the power and duty to
determine for the purposes of this Article EIGHTH on the basis of information
known to them, (1) the number of Voting Shares beneficially owned by any person,
(2) whether a person is an
<PAGE> 8
Affiliate or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred to in
paragraph 3 of section (c), or (4) whether the assets subject to any business
combination or the consideration received for the issuance or transfer of
securities by the Corporation or any Subsidiary has an aggregate fair market
value of $5,000,000 or more.
(e) Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
NINTH: Notwithstanding anything contained in this Certificate of
Incorporation to the contrary, the affirmative vote of the holders of at least
75% of the shares of the Corporation then entitled to be voted in an election of
directors shall be required to amend or repeal, or to adopt any provision
inconsistent with Articles FIFTH, SIXTH, SEVENTH, EIGHTH or NINTH of this
Certificate of Incorporation, except that only the affirmative vote of the
holders of a simple majority of the shares of the Corporation then entitled to
be voted in an election of directors shall be required to amend or repeal, or to
adopt any provision inconsistent with Articles FIFTH, SIXTH, or SEVENTH of this
Certificate of Incorporation if such amendment, repeal or adoption shall have
been approved by a majority of the members of the Board of Directors.
TENTH: No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director; provided, however that the foregoing clause shall not apply
to any liability of a director (i) for any breach of the director's duty of
loyalty to the Corporation or its shareholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. This Article TENTH shall not eliminate or limit the
liability of a director for any act or omission occurring prior to the time this
Article TENTH became effective."
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed on this 13th day of May, 1997.
Rollins Environmental Services, Inc.
BY: /s/ John W. Rollins, Jr.
--------------------------------------
Senior Vice Chairman of the Board
<PAGE> 1
EXECUTION COPY
- --------------------------------------------------------------------------------
CREDIT AGREEMENT
AMONG
LAIDLAW CHEM-WASTE, INC.
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
TORONTO DOMINION (TEXAS) INC.,
AS GENERAL ADMINISTRATIVE AGENT,
THE TORONTO-DOMINION BANK,
AS CANADIAN ADMINISTRATIVE AGENT,
TD SECURITIES (USA) INC.,
AS ARRANGER,
THE BANK OF NOVA SCOTIA,
NATIONSBANK, N.A.
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS MANAGING AGENTS
AND
NATIONSBANK, N.A.,
AS SYNDICATION AGENT
DATED AS OF MAY 9, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
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SECTION 1. DEFINITIONS........................................................................................ 1
1.1 Defined Terms.................................................................................... 1
1.2 Other Definitional Provisions.................................................................... 28
SECTION 2. AMOUNT AND TERMS OF U.S. COMMITMENTS............................................................... 29
2.1 U.S. Term Loan Commitments....................................................................... 29
2.2 Procedure for U.S. Term Loan Borrowing........................................................... 29
2.3 Repayment of U.S. Term Loans..................................................................... 29
2.4 Revolving Credit Commitments..................................................................... 32
2.5 Procedure for Revolving Credit Borrowing......................................................... 33
2.6 Termination or Reduction of Revolving Credit Commitments......................................... 33
2.7 Evidence of Debt................................................................................. 34
SECTION 3. LETTERS OF CREDIT.................................................................................. 34
3.1 L/C Commitment................................................................................... 34
3.2 Procedure for Issuance of Letter of Credit....................................................... 35
3.3 Commissions, Fees and Other Charges.............................................................. 35
3.4 L/C Participations............................................................................... 36
3.5 Reimbursement Obligation of the Company.......................................................... 37
3.6 Obligations Absolute............................................................................. 37
3.7 Letter of Credit Payments........................................................................ 38
3.8 Applications..................................................................................... 38
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN TERM LOAN
COMMITMENTS........................................................................................ 38
4.1 Canadian Term Loan Commitments................................................................... 38
4.2 Procedure for Canadian Term Loan Borrowing....................................................... 38
4.3 Reduction of Canadian Facility; Repayment of Canadian Term Loans................................. 39
4.4 Evidence of Debt................................................................................ 40
SECTION 5. AMOUNT AND TERMS OF THE ACCEPTANCES ............................................................... 41
5.1 Acceptance Commitments........................................................................... 41
5.2 Creation of Acceptances.......................................................................... 41
5.3 Purchase of Acceptances.......................................................................... 42
5.4 Stamping Fees.................................................................................... 42
5.5 Acceptance Reimbursement Obligations............................................................. 42
5.6 Acceptances to be Allocated in order to be Created Ratably....................................... 44
5.7 Special Provisions Relating to Acceptance Notes.................................................. 44
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS AND
LETTERS OF CREDIT.................................................................................. 45
6.1 Commitment Fees, etc. ........................................................................... 45
6.2 Optional Prepayments............................................................................. 45
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6.3 Mandatory Prepayments and Commitment Reductions.................................................. 46
6.4 Conversion and Continuation Options.............................................................. 49
6.5 Minimum Amounts of Tranches...................................................................... 50
6.6 Interest Rates and Payment Dates................................................................. 50
6.7 Computation of Interest and Fees................................................................. 51
6.8 Inability to Determine Interest Rate............................................................. 52
6.9 Pro Rata Treatment and Payments.................................................................. 52
6.10 Illegality...................................................................................... 54
6.11 Requirements of Law............................................................................. 55
6.12 Taxes........................................................................................... 56
6.13 Indemnity....................................................................................... 57
6.14 Change of Lending Office........................................................................ 57
SECTION 7. REPRESENTATIONS AND WARRANTIES...................................................................... 58
7.1 Financial Condition.............................................................................. 58
7.2 No Change........................................................................................ 59
7.3 Corporate Existence; Compliance with Law......................................................... 59
7.4 Corporate Power; Authorization; Enforceable Obligations.......................................... 59
7.5 No Legal Bar..................................................................................... 60
7.6 No Material Litigation........................................................................... 60
7.7 No Default....................................................................................... 60
7.8 Ownership of Property; Liens..................................................................... 60
7.9 Intellectual Property............................................................................ 60
7.10 No Burdensome Restrictions...................................................................... 60
7.11 Taxes........................................................................................... 60
7.12 Federal Regulations............................................................................. 61
7.13 ERISA........................................................................................... 61
7.14 Canadian Benefit and Pension Plans.............................................................. 61
7.15 Investment Company Act; Other Regulations....................................................... 62
7.16 Subsidiaries.................................................................................... 62
7.17 Purpose of Loans................................................................................ 62
7.18 Environmental Matters........................................................................... 62
7.19 Accuracy of Information, etc.................................................................... 63
7.20 Security Documents.............................................................................. 64
7.21 Solvency........................................................................................ 64
7.22 Regulation H.................................................................................... 64
SECTION 8. CONDITIONS PRECEDENT................................................................................ 65
8.1 Conditions to Initial Extensions of Credit....................................................... 65
8.2 Conditions to Extension of Credit................................................................ 68
SECTION 9. AFFIRMATIVE COVENANTS............................................................................... 69
9.1 Financial Statements............................................................................. 69
9.2 Certificates; Other Information.................................................................. 70
9.3 Payment of Obligations........................................................................... 71
9.4 Conduct of Business and Maintenance of Existence................................................. 71
9.5 Maintenance of Property; Insurance............................................................... 71
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9.6 Inspection of Property; Books and Records; Discussions........................................... 71
9.7 Notices.......................................................................................... 71
9.8 Environmental Laws............................................................................... 72
9.9 Further Assurances............................................................................... 73
9.10 Additional Collateral........................................................................... 73
9.11 Canadian Benefit and Pension Plans.............................................................. 75
9.12 Interest Rate Protection........................................................................ 75
SECTION 10. NEGATIVE COVENANTS................................................................................. 75
10.1 Financial Condition Covenants................................................................... 75
10.2 Limitation on Indebtedness...................................................................... 78
10.3 Limitation on Liens............................................................................. 78
10.4 Limitation on Guarantee Obligations............................................................. 80
10.5 Limitation on Fundamental Changes............................................................... 80
10.6 Limitation on Disposition of Assets............................................................. 80
10.7 Limitation on Dividends......................................................................... 81
10.8 Limitation on Investments, Loans and Advances................................................... 81
10.9 Limitation on Optional Payments and Modifications of Debt Instruments........................... 82
10.10 Limitation on Transactions with Affiliates..................................................... 83
10.11 Limitation on Sales and Leasebacks............................................................. 83
10.12 Limitation on Changes in Fiscal Year........................................................... 83
10.13 Limitation on Negative Pledge Clauses.......................................................... 83
10.14 Limitation on Lines of Business................................................................ 83
10.15 Canadian Benefit and Pension Plans.................................................. 83
10.16 Hedging Agreements............................................................................. 84
SECTION 11. EVENTS OF DEFAULT.................................................................................. 84
SECTION 12. THE ADMINISTRATIVE AGENT........................................................................... 87
12.1 Appointment..................................................................................... 87
12.2 Delegation of Duties............................................................................ 88
12.3 Exculpatory Provisions.......................................................................... 88
12.4 Reliance by Administrative Agents............................................................... 88
12.5 Notice of Default............................................................................... 89
12.6 Non-Reliance on Administrative Agents and Other Lenders......................................... 89
12.7 Indemnification................................................................................. 90
12.8 Agent in Its Individual Capacity................................................................ 90
12.9 Successor Agent................................................................................. 90
12.10 Others......................................................................................... 91
SECTION 13. GUARANTEE.......................................................................................... 91
13.1 Guarantee....................................................................................... 91
13.2 No Subrogation, Contribution, Reimbursement or Indemnity........................................ 92
13.3 Amendments, etc. with respect to the Canadian Borrower Obligations.............................. 92
13.4 Guarantee Absolute and Unconditional............................................................ 93
13.5 Reinstatement................................................................................... 94
13.6 Payments........................................................................................ 94
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SECTION 14. MISCELLANEOUS...................................................................................... 94
14.1 Amendments and Waivers.......................................................................... 94
14.2 Notices......................................................................................... 95
14.3 No Waiver; Cumulative Remedies.................................................................. 96
14.4 Survival of Representations and Warranties...................................................... 96
14.5 Payment of Expenses and Taxes................................................................... 96
14.6 Successors and Assigns; Participations and Assignments.......................................... 97
14.7 Adjustments; Set-off............................................................................100
14.8 Counterparts....................................................................................100
14.9 Severability....................................................................................101
14.10 Integration....................................................................................101
14.11 GOVERNING LAW..................................................................................101
14.12 Submission To Jurisdiction; Waivers............................................................101
14.13 Acknowledgments................................................................................102
14.14 WAIVERS OF JURY TRIAL..........................................................................102
14.15 Judgment.......................................................................................102
14.16 Confidentiality................................................................................103
</TABLE>
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SCHEDULES
1.1A Commitments of U.S. Lenders
1.1B Commitments of Canadian Lenders
2 Properties to be Mortgaged
3 Mortgage Recording Jurisdictions
4 Initial Canadian Collateral Documents
7.9 Intellectual Property Matters
7.16 Subsidiaries
7.20 Canadian Collateral Perfection Procedures
10.2(f) Existing Indebtedness
10.3(f) Existing Liens
10.4 Existing Guarantee Obligations
EXHIBITS
A-1 Form of Draft
A-2 Form of Request for Acceptances
B Form of Guarantee and Collateral Agreement
C Form of Revolving Credit Note
D Form of U.S. Term Note
E Form of Canadian Term Note
F Form of Power of Attorney
G Form of Acceptance Note
H Form of Prepayment Option Notice
I Form of Closing Certificate
J Form of Opinion of U.S. Counsel
K-1 Form of Opinion of Canadian Counsel of the Borrowers
K-2 Form of Opinion of Canadian Counsel of the Lenders
L Form of Assignment and Acceptance
M Form of Seller Consent and Acknowledgment
N Form of Mortgage
O Form of Intercreditor Agreement
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<PAGE> 7
CREDIT AGREEMENT, dated as of May 9, 1997, among LAIDLAW
CHEM-WASTE, INC., a Delaware corporation (the "Company"), LAIDLAW ENVIRONMENTAL
SERVICES (CANADA) LTD., a Canadian corporation and a wholly owned Subsidiary of
the Company (the "Canadian Borrower"; together with the Company, the
"Borrowers"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the "Lenders"), TORONTO DOMINION
(TEXAS), INC., as general administrative agent (as hereinafter defined, the
"General Administrative Agent"), THE TORONTO-DOMINION BANK, as Canadian
administrative agent (as hereinafter defined, the "Canadian Administrative
Agent"), TD SECURITIES (USA) INC., as advisor to the Borrowers and arranger of
the commitments described herein (in such capacities, the "Arranger"), and THE
BANK OF NOVA SCOTIA, NATIONSBANK, N.A. and THE FIRST NATIONAL BANK OF CHICAGO,
as managing agents (each, in such capacity, a "Managing Agent") and NATIONSBANK,
N.A., as syndication agent (in such capacity, the "Syndication Agent").
W I T N E S S E T H
WHEREAS, Laidlaw Environmental Services, Inc. (formerly known
as Rollins Environmental Services, Inc.), a Delaware corporation ("Holdings"),
Laidlaw Inc., a Canadian corporation ("Laidlaw"), and Laidlaw Transportation,
Inc., a Delaware corporation (the "Seller"), are parties to the Stock Purchase
Agreement, dated as of February 6, 1997 (the "Stock Purchase Agreement"),
pursuant to which on the Closing Date (as hereinafter defined) the Seller is
selling to Holdings, and Holdings is purchasing from the Seller (the
"Acquisition"), all of the issued and outstanding common stock of the Company,
which owns all of the Seller's United States and Canada Hazardous and Industrial
Waste Business (as defined in the Stock Purchase Agreement);
WHEREAS, substantially all assets owned by Holdings prior to
the Closing Date will be transferred to the Company or one of its Subsidiaries
on the Closing Date, with the effect that Holdings will be a holding company
whose only substantial asset consists of the common stock of the Company; and
WHEREAS, the Company has requested the Lenders to extend
credit to the Borrowers to finance a portion of the consideration for the
Acquisition and to provide for the Borrowers' ongoing financing needs following
the Acquisition, and the Lenders are willing to extend such credit;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
<PAGE> 8
2
"Acceptance": a Draft drawn by the Canadian Borrower and
accepted by a Canadian Lender which is (a) denominated in Canadian
Dollars, (b) for a term of not less than one month nor more than six
months and which matures prior to the Canadian Facility Termination
Date and (c) issuable and payable only in Canada; provided that to the
extent the context shall require, each Acceptance Note shall be deemed
to be an Acceptance.
"Acceptance Note": as defined in Section 5.7(b).
"Acceptance Purchase Price": in respect of an Acceptance of a
specified maturity, the result (rounded to the nearest whole cent, and
with one-half cent being rounded up) obtained by dividing the face
amount of such Acceptance by the sum of (a) one and (b) the product of
(i) the Reference Discount Rate for Acceptances of the same maturity
expressed as a decimal and (ii) a fraction, the numerator of which is
the term to maturity of such Acceptance and the denominator of which is
equal to 365.
"Acceptance Reimbursement Obligations": the obligation of the
Canadian Borrower to the Canadian Lenders (a) to reimburse the Canadian
Lenders for maturing Acceptances pursuant to Section 5.5 and (b) to
make payments in respect of the Acceptance Notes in accordance with the
terms thereof.
"Acceptance Tranches": the collective reference to Acceptances
all of which were created on the same date and have the same maturity
date.
"Acquisition": as defined in the Recitals to this Agreement.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agents": the collective reference to the
General Administrative Agent and the Canadian Administrative Agent.
"Affiliate": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"Aggregate Canadian Term Loan Outstandings": as at any date of
determination with respect to any Canadian Lender, an amount in
Canadian Dollars equal to the sum of the following, without
duplication: (a) the aggregate unpaid principal amount of such Canadian
Lender's Canadian Term Loans on such date, (b) the aggregate
undiscounted face amount of all outstanding Acceptances of such
Canadian Lender on such date and (c) the aggregate undiscounted face
amount of such Canadian Lender's Acceptance Notes on such date.
<PAGE> 9
3
"Aggregate Commitment Percentage": as to any Lender, the
percentage which such Lender's Aggregate Exposure constitutes of the
Aggregate Exposure of all Lenders.
"Aggregate Exposure": as to any Lender, the sum of such
Lender's Revolving Credit Commitment (or, after termination of the
Revolving Credit Commitments, such Lender's Revolving Extensions of
Credit) and U.S. Term Loans and the U.S. Dollar Equivalent of such
Lender's Aggregate Canadian Term Loan Outstandings.
"Agreement": this Credit Agreement, as amended, supplemented
or otherwise modified from time to time.
"Agreement Currency": as defined in Section 14.15(b).
"Applicable Margin":(a) on any day, for each Type of Revolving
Credit Loan, Tranche A Term Loan and Canadian Term Loan, the rate per
annum determined pursuant to the Pricing Grid; and
(b) for each Type of Tranche B Term Loan and Tranche C Term
Loan, the rate per annum set forth under the relevant column heading
below:
<TABLE>
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Base Rate Loans LIBOR Rate Loans
--------------- ----------------
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Tranche B Term Loans 2.125% 3.125%
Tranche C Term Loans 2.375% 3.375%
</TABLE>
"Application": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing
Lender to issue a Letter of Credit.
"Arranger": as defined in the Preamble to this Agreement.
"Asset Sale": any Disposition of assets or series of related
Dispositions of assets, excluding any Disposition of assets permitted
by clause (a), (c), (d) or (e) of Section 10.6.
"Assignee": as defined in Section 14.6(c).
"Available Revolving Credit Commitment": as to any U.S. Lender
at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment over (b) such Lender's Revolving
Extensions of Credit.
"Bank Act (Canada)": the Bank Act (Canada), as amended from
time to time.
"Base Rate": a rate per annum determined by the General
Administrative Agent on a daily basis, equal to the higher of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus one half of one percent (.50 of 1%) per
annum.
<PAGE> 10
4
"Base Rate Loan": any Loan the rate of interest applicable to
which is based upon the Base Rate.
"Borrowers": as defined in the Preamble to this Agreement.
"Borrowing Date": any Business Day specified in a notice
pursuant to Section 2.2, 2.5., 4.2 or 5.2 as a date on which a Borrower
requests the Lenders to make Loans, create Acceptances, convert
Acceptances into Canadian Term Loans or convert Canadian Term Loans
into Acceptances, as the case may be.
"Business Day": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Houston, Texas are
authorized or required by law to close; provided that (a) when such
term is used in respect of a day on which a Loan in Canadian Dollars is
to be made or an Acceptance is to be created, a payment is to be made
in respect of such Loan or Acceptance, an Exchange Rate is to be set in
respect of Canadian Dollars or any other dealing in Canadian Dollars is
to be carried out pursuant to this Agreement, such term shall mean a
day other than a Saturday, Sunday or other day on which commercial
banks in Toronto, Ontario are authorized or required by law to close
and (b) when such term is used with respect to notices and
determinations in connection with, and payments of principal of, and
interest on, LIBOR Loans, any day which is a Business Day in New York
City and which is also a day on which trading by and between banks in
Dollar deposits may be carried out in the London interbank eurodollar
market.
"Canadian Administrative Agent": The Toronto-Dominion Bank,
together with its affiliates, as the Canadian Administrative Agent for
the Canadian Lenders under this Agreement and the other Loan Documents,
and any successor thereto pursuant to Section 12.9.
"Canadian Benefit Plans": all material employee benefit plans
maintained or contributed to by the Canadian Borrower or a Subsidiary
thereof that are not Canadian Pension Plans including, without
limitation, all profit sharing, savings, supplemental retirement,
retiring allowance, severance, deferred compensation, welfare, bonus,
supplementary unemployment benefit plans or arrangements and all life,
health, dental and disability plans and arrangements in which the
employees or former employees of the Canadian Borrower or a Subsidiary
thereof employed in Canada participate or are eligible to participate
or are eligible to participate.
"Canadian Borrower": as defined in the Preamble to this
Agreement.
"Canadian Borrower Obligations": the unpaid principal of and
interest on (including, without limitation, interest accruing after the
maturity of the Loans and Acceptance Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Canadian Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding)
the Loans and Acceptance
<PAGE> 11
5
Reimbursement Obligation and all other obligations and liabilities of
the Canadian Borrower to the Administrative Agents or to any Lender
(or, in the case of any Hedging Agreements, any affiliate of any
Lender), whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, this Agreement, any other Loan
Document, any Hedging Agreement entered into with any Lender or any
affiliate of any Lender or any other document made, delivered or given
in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of
counsel to the Administrative Agents or to any Lender that are required
to be paid by the Canadian Borrower pursuant hereto) or otherwise.
"Canadian Collateral Documents": the collective reference to
the agreements, instruments and documents delivered from time to time
(both before and after the date of this Agreement) to the General
Administrative Agent, the Canadian Administrative Agent or the Lenders
by the Canadian Borrower or any of its Subsidiaries for the purpose of
establishing, perfecting, reserving or protecting the security of the
Lenders in respect hereof and in respect of amounts owing by the
Canadian Borrower hereunder (including, without limitation, guarantees,
debentures, Bank Act (Canada) assignments, general security agreements,
general assignments of receivables and share pledge agreements). The
Canadian Collateral Documents to be executed and delivered in
connection with the Closing Date are listed on Schedule 4.
"Canadian Dollar Prime Rate": on any day, the higher of (a)
the rate per annum designated by the Canadian Administrative Agent from
time to time (and in effect on such day) as its reference rate for
Canadian Dollar commercial loans made in Canada and (b) the rate per
annum which is .75% above the one month acceptance rate quoted by The
Toronto-Dominion Bank at 10:00 A.M., Toronto time, that appears on the
Reuter's Screen CDOR page on such day as its rate for acceptances in
Canada. The Canadian Dollar Prime Rate is not intended to be the lowest
rate of interest charged by The Toronto-Dominion Bank in connection
with extensions of credit in Canadian Dollars to debtors.
"Canadian Dollars" and "C$": dollars in the lawful currency of
Canada.
"Canadian Facility Amortization Date": as defined in Section
4.3.
"Canadian Facility Maximum Amount": on any date, the maximum
Aggregate Canadian Term Loan Outstandings permitted on such date after
giving effect to payments required to be made pursuant to Section 4.3
or reductions required to be made pursuant to Section 6.3(g), as the
case may be.
"Canadian Facility Termination Date": May 15, 2003.
"Canadian Lenders": each Lender listed on Schedule 1.1B.
<PAGE> 12
6
"Canadian Operating Facility": the C$20,000,000 credit
facility to be evidenced by a loan agreement between the Canadian
Borrower, as borrower, and The Toronto-Dominion Bank, as lender, as the
same may be amended, modified or otherwise supplemented from time to
time.
"Canadian Operating Facility Lender": The Toronto-Dominion
Bank in its capacity as lender under the Canadian Operating Facility.
"Canadian Operating Facility Obligations": all of the
obligations, liabilities and indebtedness of the Canadian Borrower to
the Canadian Operating Facility Lender from time to time, whether
present or future, absolute or contingent, liquidated or unliquidated,
as principal or as surety, alone or with others, of whatsoever nature
or kind, in any currency, under or in respect of agreements or dealings
between the Canadian Borrower and the Canadian Operating Facility
Lender or agreement or dealings between the Canadian Borrower and any
Person by which such lender may be or become in any manner whatsoever a
creditor of the Canadian Borrower, including without limitation under
the Canadian Operating Facility (including, without limitation, all
fees and disbursements of the Canadian Operating Facility Lender or its
counsel or agents incurred in the enforcement of the Canadian Operating
Facility); the amount of the Canadian Operating Facility Obligations
will be determined without regard to any right of set-off or
counterclaim by the Canadian Borrower against the Canadian Operating
Facility Lender.
"Canadian Pension Plan": any plan, program, arrangement or
understanding that is a pension plan for the purposes of any applicable
pension benefit or tax laws of Canada or a province or territory
thereof (whether or not registered under any such laws) which is
maintained, administered or contributed to by (or to which there is or
may be an obligation to contribute by) the Canadian Borrower or a
Subsidiary thereof in respect to any person's past, present or future
employment in Canada or a province or territory thereof with the
Canadian Borrower or a Subsidiary thereof, all related funding
arrangements and all related agreements, arrangements and
understandings in respect of, or related to, any benefits to be
provided thereunder or the effect thereof on any other compensation or
remuneration of any employee.
"Canadian Reference Lenders": the collective reference to the
Schedule 1 Canadian Reference Lenders and the Schedule 2 Canadian
Reference Lenders.
"Canadian Term Loan": as defined in Section 4.1.
"Canadian Term Loan Commitment": as to any Canadian Lender,
the obligation of such Lender to make Canadian Term Loans to, and/or
create and discount Acceptances on behalf of (or, in lieu thereof, to
make loans pursuant to the Acceptance Notes to), the Canadian Borrower,
in an amount not to exceed the amount set forth opposite such Canadian
Lender's name on Schedule 1.1B under the heading "Canadian Term Loan
Commitment". The original aggregate amount of the Canadian
<PAGE> 13
7
Term Loan Commitments is equivalent in Canadian Dollars (determined in
accordance with Section 4.3(b)) of US$60,000,000.
"Canadian Term Loan Commitment Percentage": as to any Canadian
Lender at any time, the percentage which such Canadian Lender's
Canadian Term Loan Commitment then constitutes of the aggregate
Canadian Term Loan Commitments (or, at any time after the Closing Date,
the percentage which the aggregate amount of such Canadian Lender's
Aggregate Canadian Term Loan Outstandings then outstanding constitutes
of the Total Aggregate Canadian Term Loan Outstandings then
outstanding).
"Canadian Term Loan Note": as defined in Section 4.4(d).
"Capital Stock": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"Cash Equivalents": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard and Poor's Rating Group ("S&P") or P-2
by Moody's Investors Service, Inc. ("Moody's"), (e) securities with
maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P or A by Moody's, (f) securities with
maturities of one year or less from the date of acquisition backed by
standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition or (g)
shares of money market mutual or similar funds which invest exclusively
in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"Change of Control": a Change of Control shall be deemed to
occur (a) if on any date a "person" or a "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934) of a larger percentage of the then
outstanding voting stock of Holdings than the percentage owned,
directly or indirectly, by Laidlaw on such date, (b) if at any time
when the Consolidated Total
<PAGE> 14
8
Leverage Ratio is greater than 2.00:1.00, Laidlaw shall not own,
directly or indirectly, at least 25% of the outstanding voting stock of
Holdings, (c) if at any time Holdings shall cease to own 100% of the
outstanding voting stock of the Company or (d) if at any time the
Company shall cease to own 100% of the outstanding voting stock of the
Canadian Borrower.
"Closing Date": the date on which the conditions precedent set
forth in Section 8.1 shall be satisfied, which date shall not be later
than May 30, 1997.
"Code": the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"Commitment": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C Term
Loan Commitment, the Revolving Credit Commitment and Canadian Term Loan
Commitment of such Lender.
"Commitment Fee Rate": on any day, the rate per annum
determined pursuant to the Pricing Grid.
"Commonly Controlled Entity": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"Company": as defined in the Preamble to this Agreement.
"Consolidated Capital Expenditures": for any fiscal period,
the aggregate of all expenditures by Holdings and its Subsidiaries for
the acquisition or leasing (pursuant to a Financing Lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period, but excluding
investments made pursuant to Section 10.8(c)) which should be
capitalized under GAAP on a consolidated balance sheet of Holdings and
its Subsidiaries; provided that for any calculation of Consolidated
Capital Expenditures for any fiscal period ending prior to the last day
of the fourth full fiscal quarter following the Closing Date,
Consolidated Capital Expenditures shall be deemed to be Consolidated
Capital Expenditures from the Closing Date to the last day of such
period multiplied by a fraction the numerator of which is 365 and the
denominator of which is the number of days from the Closing Date to the
last day of such period.
"Consolidated Contingent Obligations": at any date (a) all
obligations of Holdings and its Subsidiaries in respect of performance
bonds, letters of credit in the nature of performance bonds and similar
obligations, and (b) all Guarantee Obligations
<PAGE> 15
9
of Holdings and it Subsidiaries in respect of obligations of the kind
referred to in the foregoing clause (a).
"Consolidated Debt Service": for any fiscal period, the sum,
for Holdings and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of (a) all regularly
scheduled payments of principal of Indebtedness during such period,
including all scheduled payments in respect of the Loans, and, without
duplication, all scheduled reductions in the Canadian Facility Maximum
Amount, during such period plus (b) Consolidated Projected Cash
Interest Expense for such period.
"Consolidated Fixed Charges": for any fiscal period, the sum
for such period of (i) Consolidated Debt Service and (ii) Consolidated
Projected Operating Lease Expense.
"Consolidated Historical Cash Interest Expense": for any
fiscal period, the aggregate amount of interest in respect of
Consolidated Total Funded Debt and in respect of the Seller Note paid
in cash during such period as determined on a consolidated basis in
accordance with GAAP; provided that for any calculation of Consolidated
Historical Cash Interest Expense for any fiscal period ending prior to
the last day of the fourth full fiscal quarter following the Closing
Date, Consolidated Historical Cash Interest Expense shall be deemed to
be Consolidated Historical Cash Interest Expense from the Closing Date
to the last day of such period multiplied by a fraction the numerator
of which is 365 and the denominator of which is the number of days from
the Closing Date to the last day of such period.
"Consolidated Historical Operating Lease Expense": for any
fiscal period, the aggregate lease obligations of Holdings and its
Subsidiaries for which Holdings or any of its Subsidiaries is
contractually committed having a remaining term in excess of twelve
months determined on a consolidated basis payable in respect of such
period under leases of real and/or personal property (net of income
from sub-leases thereof and excluding lease payments on operating
leases which carry a termination payment of less than twelve months of
lease payments, but including taxes, insurance, maintenance and similar
expenses which the lessee is obligated to pay under the terms of said
leases), whether or not such obligations are reflected as liabilities
or commitments on a consolidated balance sheet of Holdings and its
Subsidiaries or in the notes thereto, excluding, however, obligations
under Financing Leases; provided that for any calculation of
Consolidated Historical Operating Lease Expense for any fiscal period
ending prior to the last day of the fourth full fiscal quarter
following the Closing Date, Consolidated Historical Operating Lease
Expense shall be deemed to be Consolidated Historical Operating Lease
Expense from the Closing Date to the last day of such period multiplied
by a fraction the numerator of which is 365 and the denominator of
which is the number of days from the Closing Date to the last day of
such period.
<PAGE> 16
10
"Consolidated Net Income": of any Person for any fiscal
period, net income of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided that for any
calculation of Consolidated Net Income for any fiscal period ending
prior to the last day of the fourth full fiscal quarter following the
Closing Date, Consolidated Net Income shall be deemed to be
Consolidated Net Income from the Closing Date to the last day of such
period multiplied by a fraction the numerator of which is 365 and the
denominator of which is the number of days from the Closing Date to the
last day of such period.
"Consolidated Operating Cash Flow": for any fiscal period,
Consolidated Net Income of Holdings and its Subsidiaries (excluding
without duplication, (w) extraordinary gains and losses in accordance
with GAAP, (x) gains and losses in connection with asset dispositions
whether or not constituting extraordinary gains and losses and (y)
gains or losses on discontinued operations and (z) non-cash investment
income) for such period, plus (i) to the extent deducted in determining
such Consolidated Net Income, interest expense and other financing
costs and expenses (cash and non-cash) for such period, plus (ii) to
the extent deducted in computing such Consolidated Net Income, the sum
of income taxes (whether or not deferred), depreciation and
amortization, and all other non-cash expenses; provided that for any
calculation of Consolidated Operating Cash Flow for any fiscal period
ending prior to the last day of the fourth full fiscal quarter
following the Closing Date, Consolidated Operating Cash Flow shall be
deemed to be Consolidated Operating Cash Flow from the Closing Date to
the last day of such period multiplied by a fraction the numerator of
which is 365 and the denominator of which is the number of days from
the Closing Date to the last day of such period.
"Consolidated Projected Cash Interest Expense": for any fiscal
period, the aggregate amount of interest in respect of Consolidated
Total Funded Debt and in respect of the Seller Note projected to be
payable in cash during such period as determined on a consolidated
basis in accordance with GAAP (such interest expense being calculated
based upon the assumption that interest rates in effect on the date of
calculation will remain in effect for such future fiscal period).
"Consolidated Projected Operating Lease Expense": for any
fiscal period, the aggregate lease obligations of Holdings and its
Subsidiaries for which Holdings or any of its Subsidiaries is
contractually committed having a remaining term in excess of twelve
months determined on a consolidated basis projected to be payable in
respect of such period under leases of real and/or personal property
(net of income from sub-leases thereof and excluding lease payments on
operating leases which carry a termination payment of less than twelve
months of lease payments, but including taxes, insurance, maintenance
and similar expenses which the lessee is obligated to pay under the
terms of said leases), whether or not such obligations would be
reflected as liabilities or commitments on a consolidated balance sheet
of Holdings and its Subsidiaries or in the notes thereto, excluding,
however, obligations under Financing Leases.
<PAGE> 17
11
"Consolidated Total Funded Debt": at any date, all
Indebtedness of Holdings and its Subsidiaries outstanding on such date
for borrowed money or the deferred purchase price of property and all
Guarantee Obligations of the Company and its Subsidiaries in respect of
Indebtedness for borrowed money or the deferred purchase price of
property, in each case determined on a consolidated basis in accordance
with GAAP, including, without limitation, Indebtedness in respect of
Financing Leases, but excluding Indebtedness in respect of the Seller
Note.
"Consolidated Total Leverage Ratio" as at any date of
determination, the ratio of (i) Consolidated Total Funded Debt as at
such date to (ii) Consolidated Operating Cash Flow for the four fiscal
quarters ended on or most recently prior to such date of determination.
"Consolidated Working Capital": of any Person at any date, the
excess of (a) the sum of all amounts (other than cash and cash
equivalents) that would, in accordance with GAAP, be set forth opposite
the caption "total current assets" (or any like caption) on a
consolidated balance sheet of such Person and its Subsidiaries at such
date over (b) all amounts that would, in accordance with GAAP, be set
forth opposite the caption "total current liabilities" (or any like
caption) on a consolidated balance sheet of such Person and its
Subsidiaries on such date (excluding, to the extent it would otherwise
be included under current liabilities, the current portion of any
Consolidated Total Funded Debt).
"Contractual Obligation": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"Default": any of the events specified in Section 11, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Disposition": with respect to any asset, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall
have correlative meanings.
"Domestic Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction within the United States.
"Draft": a draft substantially in the form of Exhibit A-1 or
in such other form as the Canadian Administrative Agent may from time
to time reasonably request (or to the extent the context shall require,
an Acceptance Note, delivered in lieu of a draft), as the same may be
amended, supplemented or otherwise modified from time to time.
"Environmental Laws": any and all laws (including, without
limitation, all common and civil law), rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement of any foreign government,
<PAGE> 18
12
the United States, Canada, or any state, provincial, local, municipal
or other governmental authority, regulating, relating to or imposing
liability or standards of conduct concerning protection of the
environment or of human health, or employee health and safety, as has
been, is now, or may at any time hereafter be, in effect.
"Environmental Permits": any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurocurrency Reserve Requirements": for any day as applied to
a LIBOR Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"Eurodollar Business Day": any day on which banks are open for
dealings in dollar deposits in the London interbank market.
"Event of Default": any of the events specified in Section 11,
provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"Excess Cash Flow": with respect to any Person for any fiscal
year, the excess of (a) the sum, without duplication, of (i)
Consolidated Net Income of such Person and its Subsidiaries for such
fiscal year, (ii) the net decrease, if any, in Consolidated Working
Capital of such Person and its Subsidiaries during such fiscal year,
(iii) to the extent deducted in computing such Consolidated Net Income,
non-cash interest expense and other financing costs and expenses,
depreciation and amortization for such fiscal year, (iv) extraordinary
non-cash losses during such fiscal year subtracted in the determination
of such Consolidated Net Income, (v) deferred income tax expense of
such Person and its Subsidiaries for such fiscal year, (vi) non-cash
losses of such Person and its Subsidiaries for such fiscal year in
connection with asset dispositions whether or not constituting
extraordinary losses, and (vii) non-cash ordinary losses of such Person
and its Subsidiaries for such fiscal year over (b) the sum, without
duplication, of (i) the aggregate amount of permitted cash capital
expenditures made by such Person and its Subsidiaries during such
fiscal year, (ii) the net increase, if any, in Consolidated Working
Capital of such Person and its Subsidiaries during such fiscal year,
(iii) the aggregate amount of (A) scheduled payments of principal in
respect of any Indebtedness of such Person and its Subsidiaries during
such fiscal year, (B) optional prepayments of principal in respect of
any Indebtedness of such Person
<PAGE> 19
13
and its Subsidiaries during such fiscal year (other than, with respect
to Holdings, prepayments in respect of the Revolving Credit Loan not
accompanied by a reduction in Revolving Credit Commitments), (C) with
respect to Holdings for fiscal year 1997 only, repayments of existing
Indebtedness required to be repaid in connection with the Closing Date,
(iv) deferred income tax credit of such Person and its Subsidiaries for
such fiscal year, (v) extraordinary non-cash gains during such fiscal
year added in the determination of Consolidated Net Income of such
Person and its Subsidiaries for such fiscal year, (vi) non-cash gains
of such Person and its Subsidiaries during such fiscal year in
connection with asset dispositions whether or not constituting
extraordinary gains, (vii) non-cash ordinary gains of such Person and
its Subsidiaries during such fiscal year and (viii) cash expenditures
of such Person and its Subsidiaries during such fiscal year on deferred
(including the current portion thereof) long term liabilities (net of
related cash taxes), (ix) to the extent not deducted in determining
Consolidated Net Income of such Person and its Subsidiaries for such
fiscal year, cash expenditures made or committed during such fiscal
year in respect of site closure, related severance costs, financing
fees and other costs incurred in connection with the Acquisition
(provided that amounts deducted in any fiscal year for expenditures
committed, but not made, during such fiscal year shall not be deducted
in the fiscal year in which such expenditures are actually made) and
(x) non-cash investment income of such Person and its Subsidiaries
during such fiscal year.
"Exchange Rate": with respect to Canadian Dollars on any date,
the Bank of Canada noon spot rate on such date for the exchange of
Canadian Dollars into U.S. Dollars.
"Extension of Credit": as to any Lender, the making of a Loan
by such Lender, the issuance (or acquisition of a participating
interest in) any Letter of Credit or the creation of an Acceptance or
Acceptance Note by such Lender. It is expressly understood and agreed
that the following do not constitute Extensions of Credit for purposes
of this Agreement: (a) the conversions and continuations of U.S. Loans
as or to LIBOR Loans or Base Rate Loans pursuant to Section 6.4, (b)
the substitution of maturing Acceptances with new Acceptances, (c) the
conversion of Acceptances to Canadian Term Loans and (d) the conversion
of Canadian Term Loans to Acceptances.
"Facility": each of (a) the Tranche A Term Loan Commitments
and the Tranche A Term Loans made thereunder (the "Tranche A Term Loan
Facility"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "Tranche B Term Loan Facility"), (c)
the Tranche C Term Loan Commitments and the Tranche C Term Loans made
thereunder (the "Tranche C Term Loan Facility"), (d) the Revolving
Credit Commitments and the Revolving Extensions of Credit (the
"Revolving Credit Facility") and (e) the Canadian Term Loan Commitments
and the Canadian Term Loans made, and the Acceptances issued,
thereunder (the "Canadian Term Loan Facility").
"Federal Funds Effective Rate": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System
<PAGE> 20
14
arranged by federal funds brokers as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day) by
the Federal Reserve Bank of New York or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the General
Administrative Agent from three federal funds brokers of recognized
standing selected by it.
"Financing Lease": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"Fixed Charge Coverage Ratio": as at the last day of any
fiscal quarter, the ratio of (i) the sum of Consolidated Operating Cash
Flow and Consolidated Historical Operating Lease Expense for the four
consecutive fiscal quarters ended on such last day to (ii) Consolidated
Fixed Charges for the next succeeding four consecutive fiscal quarters.
"Foreign Currency Protection Agreements": as to any Person,
all foreign exchange contracts, currency swap agreements or other
similar agreements or arrangements entered into by such Person to
protect such Person against fluctuations in currency values.
"Foreign Subsidiary": any Subsidiary of the Company organized
under the laws of any jurisdiction outside the United States of
America.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"General Administrative Agent": Toronto Dominion (Texas) Inc.,
together with its affiliates, as arranger of the Commitments and as
administrative agent for the U.S. Lenders under this Agreement and the
other Loan Documents, and any successor thereto pursuant to Section
12.9.
"Governmental Authority": any nation or government, any state,
provincial or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantee and Collateral Agreement": the Guarantee and
Collateral Agreement to be executed and delivered by the Company and
each Guarantor, substantially in the form of Exhibit B, as the same may
be amended, supplemented or otherwise modified from time to time.
"Guarantee Obligation": as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which obligation the guaranteeing
person has issued a reimbursement, counterindemnity or
<PAGE> 21
15
similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations
(the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether
or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to
advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in
respect thereof; provided, however, that the term Guarantee Obligation
shall not include endorsements of instruments for deposit or collection
in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower
of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is
made and (b) the maximum amount for which such guaranteeing person may
be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated
liability in respect thereof as determined by the Company in good
faith. For avoidance of doubt, Guarantee Obligations will not include
obligations of Holdings and its Subsidiaries incurred in the ordinary
course of business to indemnify customers in connection with disposal
of waste delivered by such customers to Holdings or its Subsidiaries
for disposal.
"Guarantor": each party to the Guarantee and Collateral
Agreement other than the Company, which shall include Holdings and all
wholly owned Domestic Subsidiaries of the Company.
"Hedging Agreement": any Foreign Currency Protection Agreement
or Interest Rate Protection Agreement.
"Historical Laidlaw": Laidlaw Environmental Services, Inc. and
its subsidiaries, Laidlaw Environmental Services Ltd. and its
subsidiaries and Laidlaw Environmental Services de Mexico, S.A. de
C.V., which comprise all of the hazardous and industrial waste
operations of Laidlaw Inc.
"Holdings": as defined in the Recitals to this Agreement.
"Indebtedness": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of
such Person which
<PAGE> 22
16
is evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Financing Leases, (d) all obligations
of such Person, contingent or otherwise, as an account party under
acceptance, letter of credit or similar facilities (other than
obligations in respect of performance bonds and letters of credit in
the nature of performance bonds), (e) all obligations of such Person,
contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock (other than common stock) of such
Person, (f) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (e) above,
(g) all obligations of the kind referred to in clauses (a) through (f)
above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contract rights)
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation and (i) for the purposes of
Section 11(e) only, all obligations of such Person in respect of
Hedging Agreements.
"Insolvency": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intercreditor Agreement": the Intercreditor Agreement,
substantially in the form of Exhibit O, to be entered into by the
Administrative Agents and The Toronto- Dominion Bank, as Canadian
Operating Facility Agent (as defined therein), and NationsBank, N.A.,
in its capacity as a lender providing the credit to the Company
permitted pursuant to Section 10.2(e).
"Interest Coverage Ratio": for any period, the ratio of (i)
Consolidated Operating Cash Flow less Consolidated Capital Expenditures
for such period to (ii) Consolidated Historical Cash Interest Expense
for such period.
"Interest Determination Date": with respect to any Interest
Period for LIBOR Loans, the date which is two Eurodollar Business Days
prior to the first day of such LIBOR Interest Period.
"Interest Payment Date": (a) as to any Base Rate Loan and any
Canadian Term Loan, the last Business Day of each March, June,
September and December, and, in the case of any Canadian Term Loan
converted to an Acceptance pursuant to Section 5.1(b), the Borrowing
Date on which such conversion occurs, (b) as to any LIBOR Loan having
an Interest Period of three months or less, the last day of such
Interest Period, and (c) as to any LIBOR Loan having an Interest Period
longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any LIBOR Loan:
<PAGE> 23
17
(a) initially, the period commencing on the
Borrowing Date or conversion date, as the case may be, with
respect to such LIBOR Loan and ending one, two, three or six
months or (if available to all Lenders under the relevant
Facility) nine or twelve months thereafter, as selected by the
Company in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such LIBOR Loan and ending one, two, three or six months or
(if available to all Lenders under the relevant Facility) nine
or twelve months thereafter, as selected by the Company by
irrevocable notice to the General Administrative Agent not
less than three Business Days prior to the last day of the
then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest
Periods are subject to the following:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period in respect of Revolving
Credit Loans, Tranche A Term Loans, Tranche B Term Loans or
Tranche C Term Loans, as the case may be, that would otherwise
extend beyond the Revolving Credit Termination Date or beyond
the date final payment is due on the Tranche A Term Loans, the
Tranche B Term Loans or the Tranche C Term Loans, as the case
may be, shall end on the Revolving Credit Termination Date or
such due date, as applicable;
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) the Company shall select Interest Periods so as
not to require a payment or prepayment of any LIBOR Loan
during an Interest Period for such Loan.
"Interest Rate Protection Agreements": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against
fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
<PAGE> 24
18
"Issuance Date": any Business Day specified in a notice
pursuant to Section 3.2 as a date on which an Issuing Lender is
requested to issue a Letter of Credit hereunder.
"Issuing Lender": any of The Toronto-Dominion Bank or any
Managing Agent or any Affiliates thereof, as selected by the Company.
"ITA": the Income Tax Act (Canada) and the regulations
promulgated thereunder, as amended or re-enacted from time to time.
"L/C Commitment": at any time, the lesser of (a) $200,000,000
and (b) the aggregate Revolving Credit Commitments then in effect.
"L/C Fee Payment Date": the last day of each March, June,
September and December and the last day of the Revolving Credit
Commitment Period.
"L/C Obligations": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"L/C Participants": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the
relevant Issuing Lender.
"Laidlaw": as defined in the Recitals to this Agreement.
"Letters of Credit": as defined in Section 3.1(a).
"LIBOR Loan": any Loan the rate of interest applicable to
which is based upon the LIBOR Rate.
"LIBOR Rate": with respect to a LIBOR Loan for the relevant
Interest Period, the rate per annum determined by the General
Administrative Agent as follows:
(a) on the Interest Determination Date relating
to such Interest Period, the General Administrative Agent
shall obtain the offered quotation(s) for U.S. Dollar deposits
for a period comparable to such Interest Period that appear on
the Reuter's Screen as of 11:00 a.m., London time. If at least
two such offered quotations appear on the Reuter's Screen, the
LIBOR Rate shall be the arithmetic average (rounded up to the
nearest 1/16th of 1%) of such offered quotations, as
determined by the General Administrative Agent;
(b) if the Reuter's Screen is not available or
has been discontinued, the LIBOR Rate shall be the rate per
annum that the General Administrative Agent determines to be
the arithmetic average (rounded as aforesaid) of the per annum
rates of interest reported to the General Administrative Agent
by each
<PAGE> 25
19
LIBOR Reference Bank (or, if any LIBOR Reference Bank fails to
provide such quotation, on the basis of the rates reported to
the General Administrative Agent by the remaining LIBOR
Reference Banks) as the rate at which deposits in U.S. Dollars
are offered to such Reference Banks in the London interbank
market at 11:00 a.m., London time, on the Interest
Determination Date in the approximate amount of such LIBOR
Reference Bank's relevant LIBOR Loan and having a maturity
approximately equal to the relevant LIBOR Interest Period; and
(c) if the General Administrative Agent is not
able to obtain quotations for the determination of the LIBOR
Rate pursuant to subsection (a) or (b) above, the LIBOR Rate
shall be the rate per annum which the General Administrative
Agent in good faith determines to be the arithmetic average
(rounded as aforesaid) of the offered quotations for U.S.
Dollar deposits in an amount comparable to the General
Administrative Agent's share of the relevant amount in respect
of which the LIBOR Rate is being determined for a period
comparable to the relevant LIBOR Interest Period that leading
banks in New York City selected by the General Administrative
Agent are quoting at 11:00 a.m., New York City time, on the
Interest Determination Date in the New York interbank market
to major international banks.
"LIBOR Reference Banks": The Toronto-Dominion Bank, The Bank
of Nova Scotia, NationsBank, N.A. and The First National Bank of
Chicago.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this
Agreement.
"Loan Documents": the collective reference to this Agreement,
any Notes, the Applications, the Drafts, the Acceptances, the
Acceptance Notes and the Security Documents.
"Loan Parties": the collective reference to the Borrowers and
each Subsidiary of the Company which is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the
holders of more than 66-2/3% of the aggregate unpaid principal amount
of the U.S. Term Loans, the Total Revolving Extensions of Credit or the
Aggregate Canadian Term Loan Outstandings, as the case may be,
outstanding under such Facility (or, in the case of the Revolving
Credit Facility, prior to any termination of the Revolving Credit
<PAGE> 26
20
Commitments, the holders of more than 66-2/3% of the aggregate
Revolving Credit Commitments).
"Mandatory Prepayment Date": as defined in Section 6.3(f).
"Material Adverse Effect": a material adverse effect on (a)
the Acquisition, (b) the business, operations, property, condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole or (c) the validity or enforceability of
this or any of the other Loan Documents or the rights or remedies of
the Administrative Agents or the Lenders hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances or forces of any kind, whether or not any such substance or
force is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liability under any
Environmental Law.
"Mortgages": the collective reference to the Mortgages,
substantially in the form of Exhibit N, to be executed and delivered in
respect of the properties described in Schedule 2, as the same may be
amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NationsBank Line of Credit": the working capital credit
facility to be evidenced by a letter agreement between NationsBank,
N.A., as lender, and the Company, as borrower, as the same may be
amended, modified or otherwise supplemented from time to time.
"Net Cash Proceeds": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to
be payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
<PAGE> 27
21
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"Non-Excluded Taxes": as defined in Section 6.12.
"Notes": the collective reference to the Revolving Credit
Notes, the U.S. Term Notes and the Canadian Term Notes.
"Participant": as defined in Section 14.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Employee Stock Issuances": the issuance by Holdings
of its common stock to employees of Holdings and its Subsidiaries for
aggregate proceeds not exceeding $5,000,000 per fiscal year during
fiscal year 1997, 1998 and 1999 and $10,000,000 per fiscal year
thereafter.
"Person": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Power of Attorney": as defined in Section 5.2(b).
"Prepayment Option Notice": as defined in Section 6.3(f).
"Prepayment Premium Date": as defined in Section 6.2.
"Pricing Grid": the pricing grid attached hereto as Annex A.
"Prime Rate": the prime commercial lending rate of The
Toronto-Dominion Bank as in effect from time to time in New York City
for loans in U.S. Dollars, such rate to be adjusted on and as of the
effective date of any change in the Prime Rate. The Prime Rate is only
one of the bases for computing interest on loans made by the Lenders,
and by basing interest on the unpaid principal amount of the Loans on
the Prime Rate, the Lenders have not committed to charge, and the
Company has not in any way bargained for, interest based on a lower or
the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
"Pro Forma Balance Sheet": as defined in Section 7.1(a).
<PAGE> 28
22
"Recovery Event": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Company or any of its Subsidiaries.
"Reference Discount Rate": on any date with respect to each
Draft requested to be accepted by a Canadian Lender, (a) if such
Canadian Lender is a Schedule 1 Canadian Lender, the arithmetic average
of the discount rates (expressed as a percentage calculated on the
basis of a year of 365 days) quoted by the Toronto offices of each of
the Schedule 1 Canadian Reference Lenders, at 10:00 a.m. (Toronto time)
on the Borrowing Date on which such Draft is to be accepted as the
discount rate at which each such Schedule 1 Canadian Reference Lender
would, in the normal course of its business, purchase on such date
Acceptances having an aggregate face amount and term to maturity as
designated by the Canadian Borrower pursuant to Section 5.2 and (b) if
such Canadian Lender is a Schedule 2 Canadian Lender, the arithmetic
average of the discount rates (expressed as a percentage calculated on
the basis of a year of 365 days) quoted by the Toronto offices of each
of the Schedule 2 Canadian Reference Lenders, at 10:00 a.m. (Toronto
time) on the Borrowing Date on which such Draft is to be accepted as
the discount rate at which each such Schedule 2 Canadian Reference
Lender would, in the normal course of its business, purchase on such
date Acceptances having an aggregate face amount and term to maturity
as designated by the Canadian Borrower pursuant to Section 5.2. The
Canadian Administrative Agent shall advise the Canadian Borrower and
the Canadian Lenders, either in writing or verbally, by 11:00 a.m.
(Toronto time) on each Borrowing Date in respect of Acceptances as to
the applicable Reference Discount Rate and corresponding Acceptance
Purchase Price in respect of Acceptances having the maturities selected
by the Canadian Borrower for such Borrowing Date.
"Register": as defined in Section 14.6(d).
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Reimbursement Obligation": the obligation of the Company to
reimburse the Issuing Lenders pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"Reinvestment Deferred Amount": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by a
Borrower or any of its Subsidiaries in connection therewith which are
not applied to prepayments or reductions pursuant to Section 6.3(c) as
a result of the delivery of a Reinvestment Notice.
"Reinvestment Event": any Recovery Event or Asset Sale in
respect of which the relevant Borrower has delivered a Reinvestment
Notice.
"Reinvestment Notice": a written notice executed by a
Responsible Officer to the General Administrative Agent within 30 days
of the Reinvestment Event to which it relates stating that no Event of
Default has occurred and is continuing and that the
<PAGE> 29
23
relevant Borrower (directly or indirectly through a Subsidiary), in
good faith, intends and expects to use all or a specified portion of
the Net Cash Proceeds of a Recovery Event or an Asset Sale to restore
or replace the assets in respect of which such Recovery Event or Asset
Sale occurred or to purchase other assets used in the existing business
of the Company and its Subsidiaries within twelve months from the date
of receipt of such Net Cash Proceeds (provided that if the affected
assets constituted Collateral, such restored, replacement or other
purchased assets shall also constitute Collateral).
"Reinvestment Prepayment Amount": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount which, prior to the relevant Reinvestment Prepayment
Date, the relevant Borrower or the relevant Subsidiary has spent or has
agreed, pursuant to a binding written contract (under which performance
is in progress) to spend, to restore or replace the assets in respect
of which a Recovery Event or an Asset Sale has occurred or to purchase
other assets used in the existing business of such Borrower or such
Subsidiary.
"Reinvestment Prepayment Date": with respect to any
Reinvestment Event, the earliest of (a) the first date occurring after
such Reinvestment Event on which an Event of Default shall have
occurred, (b) the date occurring twelve months after such Reinvestment
Event and (c) the date on which the relevant Borrower shall have
determined not to, or shall have otherwise ceased to, restore or
replace the assets in respect of which a Recovery Event or an Asset
Sale has occurred or to purchase other assets used in the existing
business of such Borrower or such Subsidiary.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. ss. 2615.
"Request for Acceptances": as defined in Section 5.2(a).
"Required Lenders": the holders of more than 66-2/3% of (a)
until the Closing Date, the Tranche A Term Loan Commitments, the
Tranche B Term Loan Commitments, the Tranche C Term Loan Commitments,
the Revolving Credit Commitments and the U.S. Dollar Equivalent of the
Canadian Term Loan Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the U.S. Term Loans, (ii) the U.S.
Dollar Equivalent of the Aggregate Canadian Facility Term Loan
Outstandings of all Lenders and (iii) the aggregate Revolving Credit
Commitments of all Lenders or, if the Revolving Credit Commitments have
been terminated, the Total Revolving Extensions of Credit.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law,
<PAGE> 30
24
treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any
of its property is subject.
"Responsible Officer": the chief executive officer and the
president of the Company or Holdings, as the case may be, or, with
respect to financial matters, the chief financial officer of the
Company or Holdings, as the case may be.
"Reuter's Screen": the display designated at page "LIBO" on
the Reuter Monitor System or such other display on the Reuter Monitor
System as may replace such page displaying the London interbank bid or
offered rates.
"Revolving Credit Commitment": as to any U.S. Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading "Revolving
Credit Commitment" opposite such Lender's name on Schedule 1.1A, as the
same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Revolving Credit Commitments is
$275,000,000; provided that at no time shall the aggregate principal
amount of all Revolving Credit Loans exceed $100,000,000.
"Revolving Credit Commitment Period": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"Revolving Credit Lender": each U.S. Lender which has a
Revolving Credit Commitment or which has made Revolving Extensions of
Credit.
"Revolving Credit Loans": as defined in Section 2.4.
"Revolving Credit Note": as defined in Section 2.7.
"Revolving Credit Percentage": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Extensions of Credit then
outstanding constitutes of the Total Revolving Extensions of Credit
then outstanding).
"Revolving Credit Termination Date": the earlier of (a) May
15, 2003 and (b) the date on which the Revolving Credit Commitments are
terminated pursuant to Section 11.
"Revolving Extensions of Credit": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Revolving Credit Percentage of the
L/C Obligations then outstanding.
<PAGE> 31
25
"Rollins": Rollins Environmental Services, Inc., before the
Acquisition; upon consummation of the Acquisition, the name of Rollins
is to be changed to "Laidlaw Environmental Services, Inc.".
"Schedule 1 Canadian Lender": each Canadian Lender listed on
Schedule 1 to the Bank Act (Canada).
"Schedule 1 Canadian Reference Lenders": The Toronto-Dominion
Bank and The Bank of Nova Scotia.
"Schedule 2 Canadian Lender": each Canadian Lender which is
not a Schedule 1 Canadian Lender.
"Schedule 2 Canadian Reference Lenders": Credit Lyonnais
Canada and First Chicago NBD Bank, Canada.
"Security Documents": the collective reference to the
Guarantee and Collateral Agreement, the Mortgages, the Canadian
Collateral Documents and all other security documents hereafter
delivered to the General Administrative Agent or the Canadian
Administrative Agent granting a Lien on any property of any Person to
secure the obligations and liabilities of any Loan Party under any Loan
Document.
"Seller": as defined in the Recitals to this Agreement.
Seller Note": the 5% Convertible Subordinated Debenture due
2009 in a principal amount of $350,000,000 to be issued by Holdings to
the Seller on the Closing Date as a portion of the consideration for
the Acquisition.
"Single Employer Plan": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or
<PAGE> 32
26
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.
"Stock Purchase Agreement": as defined in the Recitals to this
Agreement.
"Subsidiary": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.
"Syndication Agent": as defined in the Preamble to this
Agreement.
"Tax Act": the Income Tax Act (Canada), as amended from time
to time.
"Term Loans": the collective references to the Canadian Term
Loans and the U.S. Term Loans.
"Total Aggregate Canadian Term Loan Outstandings": at any
time, the aggregate amount of the Aggregate Canadian Term Loan
Outstandings of the Canadian Lenders at such time.
"Total Revolving Extensions of Credit": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders at such time.
"Tranche": the collective reference to LIBOR Loans under the
same Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Tranche A Term Loan": as defined in Section 2.1.
"Tranche A Term Loan Commitment": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche A Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche A Term Loan Commitments is $165,000,000.
"Tranche A Term Loan Lender": each U.S. Lender which has a
Tranche A Term Loan Commitment or which has made a Tranche A Term Loan.
<PAGE> 33
27
"Tranche A Term Loan Percentage": as to any Tranche A Term
Loan Lender at any time, the percentage which such Lender's Tranche A
Term Loan Commitment then constitutes of the aggregate Tranche A Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"Tranche B Term Loan": as defined in Section 2.1.
"Tranche B Term Loan Commitment": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche B Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche B Term Loan Commitments is $75,000,000.
"Tranche B Term Loan Lender": each U.S. Lender which has a
Tranche B Term Loan Commitment or which has made a Tranche B Term Loan.
"Tranche B Term Loan Percentage": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B
Term Loan Commitment then constitutes of the aggregate Tranche B Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"Tranche C Term Loan": as defined in Section 2.1.
"Tranche C Term Loan Commitment": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche C Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche C Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche C Term Loan Commitments is $75,000,000.
"Tranche C Term Loan Lender": each U.S. Lender which has a
Tranche C Term Loan Commitment or which has made a Tranche C Term Loan.
"Tranche C Term Loan Percentage": as to any Tranche C Term
Loan Lender at any time, the percentage which such Lender's Tranche C
Term Loan Commitment then constitutes of the aggregate Tranche C Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding).
"Transferee": as defined in Section 14.6(f).
"Type": as to any Loan, its nature as a Base Rate Loan or a
LIBOR Loan.
<PAGE> 34
28
"Uniform Customs": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"U.S. Dollar Equivalent": with respect to an amount
denominated in Canadian Dollars, the equivalent in U.S. Dollars of such
amount determined at the Exchange Rate on the Business Day immediately
preceding the date of determination of such equivalent.
"U.S Dollars" and "$": dollars in the lawful currency of the
United States of America.
"U.S. Lenders": the collective reference to the U.S. Term Loan
Lenders and the Revolving Credit Lenders.
"U.S. Loans": the collective reference to the U.S. Term Loans
and the Revolving Credit Loans.
"U.S. Term Loan Lenders": the collective reference to the
Tranche A Term Loan Lenders, the Tranche B Term Loan Lenders and the
Tranche C Term Loan Lenders.
"U.S. Term Loans": the collective reference to the Tranche A
Term Loans, Tranche B Term Loans and Tranche C Term Loans.
"U.S. Term Notes": as defined in Section 2.7.
"Westinghouse Debt": unsecured subordinated indebtedness of
Holdings to Westinghouse Electric Corporation in the initial principal
amount of $60,000,000 evidenced by a promissory note of Holdings, and
guaranteed by Laidlaw Inc.
1.2 Other Definitional Provisions. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP; provided that, if the Company
notifies the General Administrative Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the General Administrative Agent notifies the Company that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then, pending execution and delivery of such
an amendment, such provision shall be
<PAGE> 35
29
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF U.S. COMMITMENTS
2.1 U.S. Term Loan Commitments. Subject to the terms and
conditions hereof, (a) each Tranche A Term Loan Lender severally agrees to make
a term loan (each, a "Tranche A Term Loan") denominated in U.S. Dollars to the
Company on the Closing Date in an amount not to exceed the amount of the Tranche
A Term Loan Commitment of such Lender, (b) each Tranche B Term Loan Lender
severally agrees to make a term loan (each, a "Tranche B Term Loan") denominated
in U.S. Dollars to the Company on the Closing Date in an amount not to exceed
the amount of the Tranche B Term Loan Commitment of such Lender and (c) each
Tranche C Term Loan Lender severally agrees to make a term loan (each, a
"Tranche C Term Loan") denominated in U.S. Dollars to the Company on the Closing
Date in an amount not to exceed the amount of the Tranche C Term Loan Commitment
of such Lender. The U.S. Term Loans may from time to time be LIBOR Loans or Base
Rate Loans, as determined by the Company and notified to the General
Administrative Agent in accordance with Sections 2.2 and 6.4; provided that the
U.S. Term Loans shall initially be made as Base Rate Loans.
2.2 Procedure for U.S. Term Loan Borrowing. The Company shall
give the General Administrative Agent irrevocable written notice (which notice
must be received by the General Administrative Agent prior to 10:00 a.m., New
York City time), requesting that the U.S. Term Loan Lenders make the U.S. Term
Loans on the Closing Date and specifying the amount to be borrowed. Upon receipt
of such notice the General Administrative Agent shall promptly notify each Term
Loan Lender thereof. Not later than 12:00 Noon, New York City time, on the
Closing Date, each U.S. Term Loan Lender shall make available to the General
Administrative Agent at its office specified in Section 14.2 an amount in
immediately available funds equal to the U.S. Term Loan or U.S. Term Loans to be
made by such Lender. The General Administrative Agent shall credit the account
of the Company at the office of The Toronto-Dominion Bank at 909 Fannin Street,
Suite 1700, Houston, TX 77010 with the aggregate of the amounts made available
to the General Administrative Agent by the U.S.
Term Loan Lenders in immediately available funds.
2.3 Repayment of U.S. Term Loans. (a) The Tranche A Term Loan
of each Tranche A Lender shall mature, and the Company unconditionally promises
to pay such
<PAGE> 36
30
Tranche A Term Loan to the General Administrative Agent for the account of such
Tranche A Lender, in 24 consecutive quarterly installments, commencing on
September 30, 1997, each of which shall be in an amount equal to such Lender's
Tranche A Term Loan Percentage multiplied by the amount set forth below opposite
such installment:
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<C> <C>
September 30, 1997 $1,750,000
December 31, 1997 1,750,000
March 31, 1998 1,750,000
June 30, 1998 1,750,000
September 30, 1998 4,750,000
December 31, 1998 4,750,000
March 31, 1999 4,750,000
June 30, 1999 4,750,000
September 30, 1999 6,500,000
December 31, 1999 6,500,000
March 31, 2000 6,500,000
June 30, 2000 6,500,000
September 30, 2000 7,250,000
December 31, 2000 7,250,000
March 31, 2001 7,250,000
June 30, 2001 7,250,000
September 30, 2001 10,000,000
December 31, 2001 10,000,000
March 31, 2002 10,000,000
June 30, 2002 10,000,000
September 30, 2002 11,000,000
December 31, 2002 11,000,000
March 31, 2003 11,000,000
May 15, 2003 11,000,000
</TABLE>
(b) The Tranche B Term Loan of each Tranche B Lender shall
mature, and the Company unconditionally promises to pay such Tranche B Term Loan
to the General Administrative Agent for the account of such Tranche B Lender, in
28 consecutive quarterly installments, commencing on September 30, 1997, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
<PAGE> 37
31
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
September 30, 1997 $187,500
December 31, 1997 187,500
March 31, 1998 187,500
June 30, 1998 187,500
September 30, 1998 187,500
December 31, 1998 187,500
March 31, 1999 187,500
June 30, 1999 187,500
September 30, 1999 187,500
December 31, 1999 187,500
March 31, 2000 187,500
June 30, 2000 187,500
September 30, 2000 187,500
December 31, 2000 187,500
March 31, 2001 187,500
June 30, 2001 187,500
September 30, 2001 187,500
December 31, 2001 187,500
March 31, 2002 187,500
June 30, 2002 187,500
September 30, 2002 187,500
December 31, 2002 187,500
March 31, 2003 187,500
June 30, 2003 187,500
September 30, 2003 17,625,000
December 31, 2003 17,625,000
March 31, 2004 17,625,000
May 15, 2004 17,625,000
</TABLE>
(c) The Tranche C Term Loan of each Tranche C Lender shall
mature, and the Company unconditionally promises to pay such Tranche C Term Loan
to the General Administrative Agent for the account of such Tranche C Lender, in
32 consecutive quarterly installments, commencing on September 30, 1997, each of
which shall be in an amount equal to such Lender's Tranche C Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
<PAGE> 38
32
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
September 30, 1997 $187,500
December 31, 1997 187,500
March 31, 1998 187,500
June 30, 1998 187,500
September 30, 1998 187,500
December 31, 1998 187,500
March 31, 1999 187,500
June 30, 1999 187,500
September 30, 1999 187,500
December 31, 1999 187,500
March 31, 2000 187,500
June 30, 2000 187,500
September 30, 2000 187,500
December 31, 2000 187,500
March 31, 2001 187,500
June 30, 2001 187,500
September 30, 2001 187,500
December 31, 2001 187,500
March 31, 2002 187,500
June 30, 2002 187,500
September 30, 2002 187,500
December 31, 2002 187,500
March 31, 2003 187,500
June 30, 2003 187,500
September 30, 2003 187,500
December 31, 2003 187,500
March 31, 2004 187,500
June 30, 2004 187,500
September 30, 2004 17,437,500
December 31, 2004 17,437,500
March 31, 2005 17,437,500
May 15, 2005 17,437,500
</TABLE>
2.4 Revolving Credit Commitments. (a) Subject to the terms
and conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("Revolving Credit Loans") to the Company from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount such that, after giving effect thereto, the aggregate outstanding
principal amount of such Lender's Revolving Credit Loans will not exceed the
lesser of (i) such Lender's Revolving Credit Commitment less such Lender's
Revolving Credit Percentage of the L/C Obligations then outstanding, and (ii)
such Lender's Revolving Credit Percentage of $100,000,000. During the Revolving
Credit Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be LIBOR
<PAGE> 39
33
Loans or Base Rate Loans, as determined by the Company and notified to the
General Administrative Agent in accordance with Sections 2.5 and 6.4, provided
that no Revolving Credit Loan shall be made as a LIBOR Loan after the day that
is one month prior to the Revolving Credit Termination Date.
(b) The Company unconditionally promises to pay to the
General Administrative Agent for the account of the Revolving Credit Lenders all
outstanding Revolving Credit Loans on the Revolving Credit Termination Date.
2.5 Procedure for Revolving Credit Borrowing. The Company may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, provided that the Company shall give the
General Administrative Agent irrevocable written notice (which notice must be
received by the General Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of LIBOR Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of LIBOR Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a multiple of $500,000 in excess thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of LIBOR Loans, $5,000,000
or a whole multiple of $1,000,000 in excess thereof. Upon receipt of any such
notice from the Company, the General Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will make the
amount of its pro rata share of each borrowing available to the General
Administrative Agent for the account of the Company at the office of the General
Administrative Agent specified in Section 14.2 prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Company in funds immediately
available to the General Administrative Agent. Such borrowing will then be made
available to the Company by the General Administrative Agent crediting the
account of the Company at the office of The Toronto-Dominion Bank at 909 Fannin
Street, Suite 1700, Houston, TX 77010 with the aggregate of the amounts made
available to the General Administrative Agent by the Revolving Credit Lenders
and in like funds as received by the General Administrative Agent.
2.6 Termination or Reduction of Revolving Credit Commitments.
The Company shall have the right, upon not less than three Business Days'
irrevocable written notice to the General Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments without premium or penalty; provided that no such
termination or reduction of Revolving Credit Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Credit Loans
made on the effective date thereof, the Total Revolving Extensions of Credit
would exceed the Revolving Credit Commitments then in effect. Any such reduction
shall be in an amount equal to $5,000,000, or a whole multiple of $1,000,000 in
excess thereof, and shall reduce permanently the Revolving Credit Commitments
then in effect.
<PAGE> 40
34
2.7 Evidence of Debt. (a) Each U.S. Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to such Lender resulting from each U.S. Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(b) The General Administrative Agent shall maintain the
Register pursuant to Section 14.6(d), and a subaccount therein for each U.S.
Lender, in which shall be recorded (i) the amount of each Revolving Credit Loan
and U.S. Term Loan made hereunder, the Type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Company to each U.S. Lender hereunder and
(iii) both the amount of any sum received by the General Administrative Agent
hereunder from the Company and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each
U.S. Lender maintained pursuant to Section 2.7(a) shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure
of any Lender or the General Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the U.S. Loans
made to the Company by such U.S. Lender in accordance with the terms of this
Agreement.
(d) The Company agrees that, upon the request to the General
Administrative Agent by any U.S. Lender, the Company will execute and deliver to
such Lender (i) a promissory note of the Company evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit C with appropriate
insertions as to date and principal amount (a "Revolving Credit Note"), and/or
(ii) a promissory note of the Company evidencing the Tranche A Term Loans,
Tranche B Term Loan or Tranche C Term Loan, as the case may be, of such Lender,
substantially in the form of Exhibit D with appropriate insertions as to date
and principal amount (a "U.S. Term Note").
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters of
credit ("Letters of Credit") for the account of the Company on any Business Day
during the Revolving Credit Commitment Period in such form as may be approved
from time to time by such Issuing Lender; provided that (i) no Issuing Lender
shall issue any Letter of Credit if, after giving effect to such issuance, the
L/C Obligations would exceed the L/C Commitment or the Total Revolving
Extensions of Credit would exceed the Revolving Credit Commitments of all
Lenders and (ii) no Issuing Lender shall issue any Letter of Credit unless it
shall have received notice from the General Administrative Agent that the
issuance of such Letter of Credit will not violate the foregoing clause (i) of
this proviso. Each Letter of Credit shall (i) be denominated in U.S. Dollars and
<PAGE> 41
35
(ii) expire no later than the earlier of (x) the first anniversary of its date
of issuance and (y) the date which is five Business Days prior to the Revolving
Credit Termination Date, provided that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in the foregoing clause (y) of
this proviso).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
3.2 Procedure for Issuance of Letter of Credit. The Company
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may request. Upon receipt of any Application, each Issuing Lender
agrees to process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby (but in no event shall such Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the Company. Each Issuing Lender shall furnish a copy of each
Letter of Credit by it hereunder to the Company promptly following the issuance
thereof. Each Issuing Lender shall promptly furnish to the General
Administrative Agent, which shall in turn promptly furnish to the Revolving
Credit Lenders, notice of the issuance of each Letter of Credit (including the
amount thereof).
3.3 Commissions, Fees and Other Charges. (a) The Company
shall pay to the General Administrative Agent, for the account of the Revolving
Credit Lenders, a letter of credit commission with respect to each Letter of
Credit issued under this Agreement with respect to the period from the Issuance
Date of such Letter of Credit to the expiration or termination of such Letter of
Credit, computed at a per annum rate equal to (i) the Applicable Margin then in
effect with respect to LIBOR Loans under the Revolving Credit Facility less (ii)
1/4 of 1% (the fronting fee referred to in paragraph (b) below) on the average
aggregate amount available to be drawn under such Letter of Credit during the
period for which such fee is calculated. Such commission shall be shared ratably
among the Revolving Credit Lenders and payable quarterly in arrears on each L/C
Fee Payment Date to occur after the respective Issuance Date and on the
Revolving Credit Termination Date and shall be nonrefundable.
(b) The Company shall pay to the relevant Issuing Lender with
respect to each Letter of Credit issued by such Issuing Lender under this
Agreement, for its own account, a fronting fee with respect to the period from
the Issuance Date of such Letter of Credit to the expiration or termination date
of such Letter of Credit, computed at a rate of 1/4 of 1% per annum on the
average aggregate amount available to be drawn under such Letter of Credit
during the period for which such fee is calculated. Such fronting fee shall be
payable
<PAGE> 42
36
in arrears on each L/C Fee Payment Date to occur after the Issuance Date and on
the Revolving Termination Date and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the
Company shall pay or reimburse each Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C Participations. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant (other than such
Issuing Lender), and, to induce such Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from such Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account an
undivided interest equal to such L/C Participant's Revolving Credit Percentage
in such Issuing Lender's obligations and rights under each Letter of Credit
issued hereunder and the amount of each draft paid by such Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
each Issuing Lender that, if a draft is paid under any Letter of Credit for
which such Issuing Lender is not reimbursed in full by the Company in accordance
with the terms of this Agreement, such L/C Participant shall pay to such Issuing
Lender upon demand at such Issuing Lender's address for notices specified herein
an amount equal to such L/C Participant's Revolving Credit Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit
issued by such Issuing Lender is not paid when due but is paid within three
Business Days after the date such payment is due, such L/C Participant shall pay
to such Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to such Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 3.4(a) is not made available to
any Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, such Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility. A certificate of any Issuing Lender submitted to any
L/C Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after any Issuing Lender has made
payment under any Letter of Credit issued by such Issuing Lender and has
received from any L/C Participant its pro rata share of such payment in
accordance with Section 3.4(a), such Issuing Lender receives any payment related
to such Letter of Credit (whether directly from the Company or otherwise,
including proceeds of collateral applied thereto by such Issuing Lender, but
<PAGE> 43
37
excluding payments from L/C Participants), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, however, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such Issuing
Lender, such L/C Participant shall return to such Issuing Lender the portion
thereof previously distributed by such Issuing Lender to it.
3.5 Reimbursement Obligation of the Company. If any draft
shall be presented for payment under any Letter of Credit issued by any Issuing
Lender, such Issuing Lender shall promptly notify the Company of the date and
amount thereof. If any Issuing Lender notifies the Company prior to 10:00 a.m.,
New York City time, on any Business Day, of any drawing under any Letter of
Credit issued by it, the Company shall reimburse such Issuing Lender with
respect to such drawing on the next succeeding Business Day. If any Issuing
Lender notifies the Company after 10:00 a.m., New York City time, on any
Business Day of any drawing under any Letter of Credit issued by it, the Company
shall reimburse such Issuing Lender with respect to such drawing on the second
succeeding Business Day. Interest shall be payable on any and all amounts drawn
under Letters of Credit from the date of such drawing until the date on which
reimbursement of such amount is due pursuant to the two immediately preceding
sentences at the interest rate then applicable to Base Rate Loans made under the
Revolving Credit Facility. In addition, the Company agrees to reimburse each
Issuing Lender for any taxes, fees, charges or other costs or expenses incurred
by such Issuing Lender in connection with any payment under any Letter of Credit
issued by such Issuing Lender. Each payment by the Company pursuant to this
Section 3.5 shall be made to the relevant Issuing Lender at its address for
notices specified herein in U.S. Dollars and in immediately available funds.
3.6 Obligations Absolute. The Company's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Company may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Company also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Company's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Company and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Company against any
beneficiary of such Letter of Credit or any such transferee. No Issuing Lender
shall be liable for any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit, except for errors or omissions found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Lender.
The Company agrees that any action taken or omitted by any Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards or care specified in the Uniform Commercial Code
of the State of New York, shall be binding on the Company and shall not result
in any liability of such Issuing Lender to the Company.
<PAGE> 44
38
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit issued by any Issuing Lender,
such Issuing Lender shall promptly notify the Company of the date and amount
thereof. The responsibility of each Issuing Lender to the Company in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are
substantially in conformity with such Letter of Credit.
3.8 Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3 or any other provision of this Agreement, the provisions of
this Section 3 or such other provisions of this Agreement shall apply.
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN TERM LOAN
COMMITMENTS
4.1 Canadian Term Loan Commitments. (a) Subject to the terms
and conditions hereof, each Canadian Lender severally agrees to make a term loan
(each, a "Canadian Term Loan") in Canadian Dollars to the Canadian Borrower on
the Closing Date in a principal amount not exceeding the Canadian Term Loan
Commitment of such Canadian Lender.
(b) Subject to the terms and conditions hereof, each Canadian
Lender severally agrees from time to time to convert maturing Acceptances
created by it into Canadian Term Loans in a principal amount not to exceed the
face amount of such maturing Acceptances; provided, that no such conversion
shall occur if, after giving effect thereto, the Total Aggregate Canadian Term
Loan Outstandings would exceed the Canadian Facility Maximum Amount at such
time.
4.2 Procedure for Canadian Term Loan Borrowing. The Canadian
Borrower shall give the Canadian Administrative Agent irrevocable written notice
(which notice must be received by the Canadian Administrative Agent prior to
10:00 a.m., Toronto time, at least two Business Days prior to the requested
Borrowing Date) requesting that the Canadian Term Loan Lenders make Canadian
Term Loans (or convert Acceptances into Canadian Term Loans) on a specified
Borrowing Date and specifying the amount to be borrowed or converted. Upon
receipt of such notice, the Canadian Administrative Agent shall promptly notify
each Canadian Lender thereof. In the case of any Canadian Term Loans made on the
Closing Date, not later than 11:00 a.m., Toronto time, on the Closing Date, each
Canadian Term Loan Lender shall make available to the Canadian Administrative
Agent at its office specified in Section 14.2 an amount in Canadian Dollars in
immediately available funds equal to the Canadian Term Loan to be made by such
Canadian Lender. The Canadian Administrative Agent shall on such date credit the
account of the Canadian Borrower at the office of The Toronto-Dominion Bank at
Toronto Dominion Centre Branch, 55 King Street West and Bay Street, Toronto,
Ontario M5K 1A2 with the aggregate of the amounts made
<PAGE> 45
39
available to the Canadian Administrative Agent by the Canadian Lenders in like
funds as received by the Canadian Administrative Agent. In the case of any
Canadian Term Loans resulting from the conversion of Acceptances pursuant to
Section 4.1(b), the proceeds of such Canadian Term Loans made by each Canadian
Lender, together with such additional funds of the Canadian Borrower as may be
necessary, shall be applied by it to repay the maturing Acceptance being
converted into such Canadian Term Loans.
4.3 Reduction of Canadian Facility; Repayment of Canadian
Term Loans. (a) The amount available under the Canadian Term Loans and the
Acceptances and Acceptance Notes shall be permanently reduced in 24 consecutive
quarterly installments, commencing on September 30, 1997, each of which shall be
in an amount equal to the equivalent in Canadian Dollars (determined in
accordance with Section 4.3(b)) of the amount set forth below opposite such
installment date (each, a "Canadian Facility Amortization Date"):
<TABLE>
<CAPTION>
Installment Principal Amount
----------- ----------------
<S> <C>
September 30, 1997 US$750,000
December 31, 1997 750,000
March 31, 1998 750,000
June 30, 1998 750,000
September 30, 1998 1,500,000
December 31, 1998 1,500,000
March 31, 1999 1,500,000
June 30, 1999 1,500,000
September 30, 1999 2,250,000
December 31, 1999 2,250,000
March 31, 2000 2,250,000
June 30, 2000 2,250,000
September 30, 2000 2,750,000
December 31, 2000 2,750,000
March 31, 2001 2,750,000
June 30, 2001 2,750,000
September 30, 2001 3,750,000
December 31, 2001 3,750,000
March 31, 2002 3,750,000
June 30, 2002 3,750,000
September 30, 2002 4,000,000
December 31, 2002 4,000,000
March 31, 2003 4,000,000
May 15, 2003 4,000,000
</TABLE>
Accordingly, on each Canadian Facility Amortization Date, the
Canadian Borrower unconditionally agrees to pay to the Canadian Administrative
Agent, for the account of each Canadian Lender, a principal amount of the
Canadian Term Loans of such Canadian Lender, which, together with the face
amount of Acceptances created by such Canadian
<PAGE> 46
40
Lender that mature and are being repaid on such date (and not replaced with
other Acceptances or converted into Canadian Term Loans), is equal to such
Canadian Lender's Canadian Term Loan Commitment Percentage of the amount set
forth opposite such Canadian Facility Amortization Date above.
(b) Prior to time at which notice of borrowing is given
pursuant to Section 4.2 in respect of the Canadian Term Loans to be made on the
Closing Date, the Canadian Administrative Agent and the Canadian Borrower will
determine, based on then-prevailing market conditions, the exchange rate for
conversion into Canadian Dollars of the U.S. Dollar amount of the Canadian Term
Loan Commitments and the U.S. Dollar amount of each installment set forth in
Section 4.3(a), which determination shall be conclusive and binding on all
parties hereto. The Canadian Administrative Agent will advise the Canadian
Lenders of the results of such determination, and specify the amount in Canadian
Dollars of each Canadian Lender's Canadian Term Loan Commitment, prior to or
concurrently with the notice of borrowing given to the Canadian Lenders pursuant
to Section 4.2.
4.4 Evidence of Debt. (a) Each Canadian Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Canadian Borrower to such Canadian Lender resulting from the
Canadian Term Loans of such Canadian Lender, including the amounts of principal
and interest payable thereon and paid to such Canadian Lender from time to time
under this Agreement.
(b) The Canadian Administrative Agent (and the General
Administrative Agent) shall maintain the Register pursuant to Section 14.6(d),
and a subaccount therein for each Canadian Lender, in which shall be recorded
(i) the amount of each Canadian Term Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Canadian Borrower to each Canadian Lender hereunder in respect of the Canadian
Term Loans and (iii) both the amount of any sum received by the Canadian
Administrative Agent hereunder from the Canadian Borrower in respect of the
Canadian Term Loans and each Canadian Lender's share thereof.
(c) The entries made in the Register and the accounts of each
Canadian Lender maintained pursuant to Section 4.4(a) shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the Canadian Borrower therein recorded; provided,
however, that the failure of any Canadian Lender or the Canadian Administrative
Agent to maintain the Register or any such account, or any error therein, shall
not in any manner affect the obligation of the Canadian Borrower to repay (with
applicable interest) the Canadian Term Loans made to the Canadian Borrower by
such Canadian Lender in accordance with the terms of this Agreement.
(d) The Canadian Borrower agrees that, upon request to the
Canadian Administrative Agent by any Canadian Lender, it will execute and
deliver to such Canadian Lender a promissory note of the Canadian Borrower
evidencing the Canadian Term Loans of such Canadian Lender, substantially in the
form of Exhibit E with appropriate insertions as to date and principal amount
(each, a "Canadian Term Loan Note").
<PAGE> 47
41
SECTION 5. AMOUNT AND TERMS OF THE ACCEPTANCES
5.1 Acceptance Commitments. Subject to the terms and
conditions hereof, each Canadian Lender severally agrees to convert Canadian
Term Loans made by such Canadian Lender to Acceptances in an aggregate face
amount not to exceed the aggregate principal amount of such Canadian Term Loans;
provided, that no such conversion shall occur if, (i) after giving effect to
such conversion and to the repayment of any portion of maturing Acceptances not
being so converted, the Total Aggregate Canadian Term Loan Outstandings would
exceed the Canadian Facility Maximum Amount at such time or (ii) prior to the
maturity of such Acceptances a Canadian Facility Amortization Date will occur
and, after giving effect to the reduction in the Canadian Facility Maximum
Amount on such date, the Total Aggregate Canadian Term Loan Outstandings will
exceed the Canadian Facility Maximum Amount.
5.2 Creation of Acceptances. (a) The Canadian Borrower may
request the creation of Acceptances hereunder by submitting to the Canadian
Administrative Agent at its office in Canada specified in Section 14.2 prior to
11:00 a.m., Toronto time, two Business Days prior to the requested Borrowing
Date, (i) a request for acceptances, substantially in the form of Exhibit A-2
(each, a "Request for Acceptances") completed in a manner and in form and
substance reasonably satisfactory to the Canadian Administrative Agent and
specifying, among other things, the Borrowing Date, maturity and amount of the
Drafts to be accepted and discounted, (ii) to the extent not theretofore
supplied to each Canadian Lender, a sufficient number of Drafts to be drawn on
the Canadian Lenders, to be appropriately completed in accordance with Section
5.2(d) and (iii) such other certificates, documents and other papers and
information as the Canadian Administrative Agent may reasonably request. Upon
receipt of any such Request for Acceptances, the Canadian Administrative Agent
shall promptly notify each Canadian Lender of its receipt thereof.
(b) The Canadian Borrower hereby agrees that it shall deliver
to the Canadian Administrative Agent on or prior to the Closing Date, a Power of
Attorney substantially in the form of Exhibit F (the "Power of Attorney")
authorizing each Canadian Lender to draw Drafts on such Canadian Lender on
behalf of the Canadian Borrower and to complete such Drafts in accordance with
the Requests for Acceptances submitted from time to time pursuant to Section
5.2(a).
(c) Each Request for Acceptances made by or on behalf of the
Canadian Borrower hereunder shall contain a request for Acceptances denominated
in Canadian Dollars and having an aggregate undiscounted face amount equal to
C$5,000,000 or a whole multiple of C$1,000,000 in excess thereof. Each
Acceptance shall be dated the Borrowing Date specified in the Request for
Acceptances with respect thereto and shall be stated to mature on a Business Day
which is not less than one month and not more than six months after the date
thereof; provided, that no Acceptance shall mature after the Canadian Facility
Termination Date.
(d) Not later than 12:00 noon, Toronto time, on the Borrowing
Date specified in the relevant Request for Acceptances, each Canadian Lender
will, in accordance with such
<PAGE> 48
42
Request for Acceptances, (i) sign each Draft on behalf of the Canadian Borrower
pursuant to the Power of Attorney, (ii) complete the date, amount and maturity
of each Draft to be accepted, (iii) accept such Drafts and give notice to the
Canadian Administrative Agent of such acceptance and (iv) upon such acceptance,
purchase such Acceptances to the extent contemplated by Section 5.3.
5.3 Purchase of Acceptances. (a) Each Canadian Lender hereby
agrees, on the terms and subject to the conditions set forth in this Agreement,
to purchase Acceptances created by it on the Borrowing Date with respect thereto
for the applicable Acceptance Purchase Price and to notify the Canadian
Administrative Agent that such Draft has been accepted and purchased by such
accepting Canadian Lender.
(b) In the event that the Canadian Administrative Agent
receives a Request for Acceptances to be created upon conversion of Canadian
Term Loans pursuant to Section 5.1, then the Canadian Borrower shall pay on the
requested Borrowing Date to the Canadian Administrative Agent, for the account
of the Canadian Lenders, the principal amount of the then outstanding Canadian
Term Loans being so converted, and each Canadian Lender shall accept and
purchase the Canadian Borrower's Drafts having an aggregate face amount not
greater than the principal amount of the Canadian Term Loans of such Canadian
Lender which are then being converted (it being understood and agreed that for
the purposes of this Section 5.3(b), such payment by the Canadian Borrower of
such outstanding Canadian Term Loans may be in part from the Acceptance Purchase
Price of such Drafts); provided that, following the occurrence and during the
continuance of a Default or an Event of Default, no Acceptances may be created.
(c) Acceptances purchased by any Canadian Lender may be held
by it for its own account until maturity or sold by it at any time prior thereto
in the relevant market therefor in Canada in such Canadian Lender's sole
discretion.
5.4 Stamping Fees. On the Borrowing Date with respect to each
Acceptance, the Canadian Borrower shall pay to the Canadian Administrative
Agent, for the account of the Canadian Lenders, a stamping fee on the
undiscounted face amount of such Acceptance, computed at a rate per annum equal
to the Applicable Margin in effect on such Borrowing Date for Revolving Credit
Loans that are LIBOR Loans for the period from and including the Borrowing Date
with respect to such Acceptance to but not including the maturity of such
Acceptance.
5.5 Acceptance Reimbursement Obligations. (a) The Canadian
Borrower hereby unconditionally agrees to pay to the Canadian Administrative
Agent for the account of each Canadian Lender, on the maturity date (whether at
stated maturity, by acceleration or otherwise) for each Acceptance created by
such Canadian Lender, the aggregate undiscounted face amount of each such
then-maturing Acceptance.
(b) The obligation of the Canadian Borrower to reimburse the
Canadian Lenders for then-maturing Acceptances may be satisfied by the Canadian
Borrower by:
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(i) paying to the Canadian Administrative Agent, for the
account of the Canadian Lenders, an amount in Canadian Dollars and in
immediately available funds equal to the aggregate undiscounted face
amount of all Acceptances which are then maturing by 12:00 noon,
Toronto time, on such maturity date; provided that the Canadian
Borrower shall have given not less than two Business Days' prior notice
to the Canadian Administrative Agent (which shall promptly notify each
Canadian Lender thereof) of its intent to reimburse the Canadian
Lenders in the manner contemplated by this clause (i); or
(ii) having new Drafts accepted and purchased by the
Canadian Lenders in the manner contemplated by Sections 5.2 and 5.3 in
substitution for the then-maturing Acceptances; provided that (A) the
Canadian Borrower shall have delivered to the Canadian Administrative
Agent (which shall promptly provide a copy thereof to each Canadian
Lender) a duly completed Request for Acceptances not later than 11:00
a.m., Toronto time, two Business Days prior to such maturity date,
together with the documents, instruments, certificates and other papers
and information contemplated by Sections 5.2(a)(ii) and 5.2(a)(iii),
(B) each Canadian Lender shall retain the Acceptance Purchase Price for
the Acceptance created by it and apply such Acceptance Purchase Price
to the Acceptance Reimbursement Obligations of the Canadian Borrower in
respect of the maturing Acceptance created by such Canadian Lender, (C)
when the Acceptance Purchase Price so retained by such Canadian Lender
is less than the undiscounted face amount of the then-maturing
Acceptance, the Canadian Borrower shall have made arrangements
reasonably satisfactory to such Canadian Lender for payment of such
deficiency, (D) if any Default or Event of Default has occurred and is
then continuing, the Request for Acceptances shall be deemed to be a
request to convert such then-maturing Acceptances into Canadian Term
Loans in an aggregate amount equal to the undiscounted face amount of
the Acceptances requested, (E) no such Acceptance shall be created if,
after giving effect thereto, the Aggregate Canadian Term Loan
Outstandings would exceed the Canadian Facility Maximum Amount and (F)
the Canadian Borrower shall request Acceptances in amounts and with
maturity dates such that the Aggregate Canadian Term Loan Outstandings
can be reduced to an amount not greater than the Canadian Facility
Maximum Amount on each Canadian Facility Amortization Date; or
(iii) to the extent that the Canadian Borrower has not given
to the Canadian Administrative Agent a notice contemplated by clause
(i) or (ii) above, then the Canadian Borrower shall be deemed to have
requested a conversion pursuant to Section 4.1(b) of such then-maturing
Acceptances into Canadian Term Loans in an aggregate principal amount
equal to the undiscounted face amount of such then-maturing
Acceptances. The Borrowing Date with respect to such conversion shall
be the maturity date for such Acceptances. Except to the extent that
any of the events contemplated by clause (i) or (ii) of paragraph (f)
of Section 11 with respect to the Canadian Borrower has occurred and is
then continuing (in which case the Canadian Borrower shall be obligated
to pay to each Canadian Lender the undiscounted face amount of the
Acceptances created by such Canadian Lender which are then maturing),
each Canadian Lender shall convert the then-maturing Acceptances into
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44
Canadian Term Loans as contemplated by this Section
5.5(b)(iii) regardless of whether the conditions precedent to
borrowing set forth in this Agreement are then satisfied. The
proceeds of any Canadian Term Loans made pursuant to this
Section 5.5(b)(iii) shall be retained by the Canadian Lenders
and applied by them to the Acceptance Reimbursement
Obligations of the Canadian Borrower in respect of the
then-maturing Acceptances.
(c) In no event shall the Canadian Borrower claim from any
Canadian Lender any grace period with respect to the payment at maturity of any
Acceptances created by such Canadian Lender pursuant to this Agreement.
5.6 Acceptances to be Allocated in order to be Created
Ratably. The Canadian Borrower hereby agrees that each Request for Acceptances,
reimbursement of Acceptances and conversion of Canadian Term Loans to
Acceptances shall be made in a manner so that any such Request for Acceptances,
reimbursement or conversion shall apply ratably to all Canadian Lenders in
accordance with their respective Canadian Term Loan Commitment Percentages. In
the event that the aggregate undiscounted face amount of Acceptances requested
by the Canadian Borrower to be created by all Canadian Lenders hereunder
pursuant to any Request for Acceptances is an amount which, if divided ratably
among the Canadian Lenders in accordance with their respective Canadian Term
Loan Commitment Percentages, would not result in each Canadian Lender accepting
a Draft which has an undiscounted face amount equal to C$100,000 or a whole
multiple of C$100,000 in excess thereof, then the Canadian Administrative Agent
is authorized by the Canadian Borrower and the Canadian Lenders to allocate
among the Canadian Lenders the Acceptances to be issued in such manner and
amounts as the Canadian Administrative Agent may, in its sole discretion, acting
reasonably, consider necessary, rounding up or down, so as to ensure that no
Canadian Lender is required to accept a Draft for a fraction of $100,000 and, in
such event, the Canadian Lenders' ratable share with respect to such Acceptances
shall be adjusted accordingly.
5.7 Special Provisions Relating to Acceptance Notes. (a) The
Canadian Borrower and each Canadian Lender hereby acknowledge and agree that
from time to time certain Canadian Lenders may not be authorized to or may, as a
matter of market availability, elect not to accept Drafts, and the Canadian
Borrower and each Canadian Lender agree that any such Canadian Lender may
purchase Acceptance Notes of the Canadian Borrower in accordance with the
provisions of Section 5.7(b) in lieu of creating Acceptances for its account.
(b) In the event that any Canadian Lender described in Section
5.7(a) above is unable to, or elects as a matter of market availability not to,
create Acceptances hereunder, such Canadian Lender shall not create Acceptances
hereunder, but rather, if the Canadian Borrower requests the creation of such
Acceptances, the Canadian Borrower shall deliver to such Canadian Lender
non-interest bearing promissory notes (each, an "Acceptance Note") of the
Canadian Borrower, substantially in the form of Exhibit G, having the same
maturity as the Acceptances to be created and in an aggregate principal amount
equal to the undiscounted face amount of such Acceptances. Each such Canadian
Lender hereby agrees to purchase
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Acceptance Notes from the Canadian Borrower at a purchase price equal to the
Acceptance Purchase Price which would have been applicable if a Draft in the
same aggregate face amount as the principal amount of its Acceptance Notes had
been accepted by it (less any stamping fee which would have been paid pursuant
to Section 5.4 if such Lender had created an Acceptance) and such Acceptance
Notes shall be governed by the provisions of this Section 5 as if they were
Acceptances.
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS
OF CREDIT
6.1 Commitment Fees, etc. (a) The Company agrees to pay to the
General Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Company agrees to pay to the General Administrative
Agent the fees in the amounts and on the dates previously agreed to in writing
by the Company and the General Administrative Agent.
6.2 Optional Prepayments. (a) The Company may at any time and
from time to time prepay the U.S. Loans, in whole or in part, without premium or
penalty, upon at least three Business Days' irrevocable notice to the General
Administrative Agent, specifying the date and amount of prepayment and whether
the prepayment is of LIBOR Loans or Base Rate Loans, provided, that if a LIBOR
Loan is prepaid on any day other than the last day of the Interest Period
applicable thereto, the Company shall also pay any amounts owing pursuant to
Section 6.13; provided, further, that if the Company shall prepay the Tranche B
Term Loans or the Tranche C Term Loans, in whole or in part, prior to the date
that is eighteen months after the Closing Date (the "Prepayment Premium Date"),
any such prepayment amount shall be equal to 102% of the principal amount to be
repaid if such payment is being made on or prior to the one year anniversary of
the Closing Date or 101% of the principal amount to be prepaid if such payment
is being made after the one year anniversary of the Closing Date but prior to
the Prepayment Premium Date. Upon receipt of any such notice, the General
Administrative Agent shall promptly notify each relevant U.S. Lender thereof. If
any such notice is given, the amount specified in such notice shall be due and
payable on the date specified therein, together with any amounts payable
pursuant to Section 6.13 and, in the case of prepayments of the U.S Term Loans
only, accrued interest to such date on the amount prepaid. Amounts prepaid on
account of the U.S. Term Loans may not be reborrowed. Partial prepayments of
U.S. Loans shall be in an aggregate principal amount of not less than $5,000,000
and whole multiples of $1,000,000 in excess thereof.
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46
(b) Subject to Section 6.2(a), the amount of each optional
prepayment of the U.S. Term Loans under any Facility shall be applied to reduce
the then remaining installments of the U.S. Term Loans under such Facility, pro
rata based upon the then remaining number of installments thereof, after giving
effect to all prior reductions thereto (i.e., each then remaining installment of
the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, shall be reduced by an amount equal to the aggregate amount to be
applied to the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans, as the case may be, divided by the number of the then remaining
installments for such Tranche A Term Loans, Tranche B Term Loans or Tranche C
Term Loans); provided, that if the amount to be so applied to any installment
would exceed the then remaining amount of such installment, then an amount equal
to such excess shall be applied to the next succeeding installment after giving
effect to all prior reductions thereto (including the amount of prepayments
theretofore allocated pursuant to the preceding portion of this sentence).
(c) The Canadian Borrower may at any time and from time to
time prepay the Canadian Term Loans, in whole or in part, without premium or
penalty, upon at least four Business Days' irrevocable notice to the Canadian
Administrative Agent, specifying the date and amount of prepayment. Upon receipt
of any such notice, the Canadian Administrative Agent shall promptly notify the
General Administrative Agent and each Canadian Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Amounts prepaid on account of the Canadian Term Loans may not be
reborrowed except as provided in Section 5. Partial prepayments of Canadian Term
Loans shall be in an aggregate principal amount of not less than C$5,000,000 and
whole multiples of C$1,000,000 in excess thereof.
(d) The amount of each optional prepayment of the Canadian
Term Loans shall be applied to reduce the then remaining installments of the
Canadian Term Loans pro rata based upon the then remaining number of
installments thereof, after giving effect to all prior reductions thereto (i.e.,
each then remaining installment of the Canadian Term Loans shall be reduced by
an amount equal to the aggregate amount to be applied to the Canadian Term Loans
divided by the number of the then remaining installments for such Canadian Term
Loans); provided, that if the amount to be so applied to any installment would
exceed the then remaining amount of such installment, then an amount equal to
such excess shall be applied to the next succeeding installment after giving
effect to all prior reductions thereto (including the amount of prepayments
theretofore allocated pursuant to the preceding portion of this sentence).
6.3 Mandatory Prepayments and Commitment Reductions. (a) If
after the Closing Date any Capital Stock shall be sold or issued by Holdings,
the Company or any of its Subsidiaries (including, without limitation, any sales
pursuant to the exercise of warrants, but excluding (i) any issuance of common
stock in payment of interest under the Seller Note and (ii) any Permitted
Employee Stock Issuances, to the extent the proceeds of such Permitted Employee
Stock Issuances are contributed by Holdings to the Company), an amount equal to
50% of the Net Cash Proceeds thereof shall be applied within three Business Days
after the
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date of receipt of such Net Cash Proceeds toward the prepayment of the Term
Loans and Acceptances and the reduction of the Revolving Credit Commitments as
set forth in Section 6.3(e).
(b) If after the Closing Date any Indebtedness shall be issued
or incurred by Holdings, the Company or any of its Subsidiaries (excluding any
Indebtedness incurred in accordance with Section 10.2 as in effect on the date
of this Agreement), an amount equal to 100% of the Net Cash Proceeds thereof
shall be applied within three Business Days after the date of such issuance or
incurrence toward the prepayment of the Term Loans and the Acceptances and the
reduction of the Revolving Credit Commitments as set forth in Section 6.3(e).
(c) If after the Closing Date the Company or any of its
Subsidiaries (other than the Canadian Borrower or any of its Subsidiaries) shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event, an amount equal
to 100% of such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Term Loans and the reduction of the Revolving Credit
Commitments as set forth in Section 6.3(f). If after the Closing Date the
Canadian Borrower or any of its Subsidiaries shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event, an amount equal to 100% of such Net Cash
Proceeds shall be applied on such date toward the prepayment of the Total
Aggregate Canadian Term Loan Outstandings and the permanent reduction of the
Canadian Facility Maximum Amount as set forth in Section 6.3(g). Notwithstanding
the foregoing, (i) no such prepayment or reduction shall be required in respect
of Asset Sales for which the Net Cash Proceeds in any fiscal year aggregate up
to $2,000,000 and (ii) no such prepayment or reduction shall be required in
respect of any Asset Sales (other than those described in the foregoing clause
(i)) or any Recovery Event if the Company delivers a Reinvestment Notice in
respect of each such Asset Sale and Recovery Event; provided, that, on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayments and reductions required by Section 6.3 (f) or 6.3 (g), as
applicable.
(d) If, for any fiscal year of Holdings commencing with the
fiscal year ending August 31, 1998, Holdings shall have Excess Cash Flow
(calculated without taking into account the Canadian Borrower and its
Subsidiaries), the Company shall, on the relevant Excess Cash Flow Application
Date, apply 75% of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
6.3(f). If, for any fiscal year of the Canadian Borrower commencing with the
fiscal year ending August 31, 1998, the Canadian Borrower shall have Excess Cash
Flow, the Canadian Borrower shall, on the relevant Excess Cash Flow Application
Date, apply 75% of such Excess Cash Flow toward the prepayment of the Total
Aggregate Canadian Term Loan Outstandings and the permanent reduction of the
Canadian Facility Maximum Amount as set forth in Section 6.3(g). Each such
prepayment and reduction shall be made on a date (an "Excess Cash Flow
Application Date") no later than five days after the earlier of (i) the date on
which the financial statements of Holdings referred to in Section 9.1(a), for
the fiscal year with respect to which such prepayment is made, are required to
be delivered to the Lenders and (ii) the date such financial statements are
actually delivered. Notwithstanding the
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48
foregoing, if for any fiscal year the Excess Cash Flow of one of the Canadian
Borrower or Holdings (calculated without taking into account the Canadian
Borrower and its Subsidiaries), as the case may be, is a negative number, and
the Excess Cash Flow of the other such Person is a positive number, the amount
of the prepayment and reduction required by this Section 6.3(d) in respect of
the Company (if Holdings is the Person having positive Excess Cash Flow) or the
Canadian Borrower (if the Canadian Borrower is the Person having positive Excess
Cash Flow) for such fiscal year shall be reduced by the amount of the negative
Excess Cash Flow of the other such Person for such fiscal year.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 6.3(a) or 6.3(b) shall be
applied, first, to the prepayment of the U.S. Term Loans and Total Aggregate
Canadian Term Loan Outstandings, ratably in accordance with the outstanding
amount of each Facility and, second, to reduce permanently the Revolving Credit
Commitments. Any such reduction of the Revolving Credit Commitments shall be
accompanied by prepayment of the Revolving Credit Loans to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the aggregate
Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Company shall not be required to reduce any outstanding Letters of Credit.
The application of any such prepayment of U.S. Term Loans shall be made first to
Base Rate Loans and second to LIBOR Loans. The application of any such
prepayment to Total Aggregate Canadian Term Loan Outstandings shall be made
first to Canadian Term Loans and second (but only on the maturity date thereof)
to Acceptances. Each such prepayment of the Loans (except in the case of
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(f) Amounts to be applied in connection with prepayments and
reductions made pursuant to the first sentence of Section 6.3(c) or the first
sentence of Section 6.3(d) shall be applied, first, to the prepayment of the
U.S. Term Loans and, second, to reduce permanently the Revolving Credit
Commitments. Any such reduction of the Revolving Credit Commitments shall be
accompanied by prepayment of the Revolving Credit Loans to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the aggregate
Revolving Credit Commitments as so reduced, provided that if the aggregate
principal amount of Revolving Credit Loans then outstanding is less than the
amount of such excess (because L/C Obligations constitute a portion thereof),
the Company shall not be required to reduce any outstanding Letters of Credit.
The application of any such prepayment of U.S. Term Loans shall be made first to
Base Rate Loans and second to LIBOR Loans. Each such prepayment of the Loans
(except in the case of Revolving Credit Loans that are Base Rate Loans) shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
(g) Amounts to be applied in connection with prepayments and
reductions made pursuant to the second sentence of Section 6.3(c) or the second
sentence of Section 6.3(d) shall be applied to the reduction of the Total
Aggregate Canadian Term Loan Outstandings and the simultaneous and automatic
reduction in an equal amount of the
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Canadian Facility Maximum Amount. The application of any such prepayment to
Total Aggregate Canadian Term Loan Outstandings shall be made first to Canadian
Term Loans and second (but only on the maturity date thereof) to Acceptances.
Each such prepayment of the Canadian Term Loans shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
(h) The amount of each prepayment of the Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans or Canadian Term Loans, as the case
may be, required pursuant to this Section 6.3 shall be applied to reduce the
then remaining installments of the Term Loans under the relevant Facility, pro
rata based upon the then remaining outstanding principal amount of such
installments.
(i) Notwithstanding anything in Section 6.3(e) or Section
6.3(f) to the contrary and provided that there are Tranche A Term Loans and/or
Total Aggregate Canadian Term Loan Outstandings then outstanding, with respect
to the amount of any mandatory prepayment described in Section 6.3 that is
allocated to the Tranche B Term Loans or Tranche C Term Loans (such amounts, the
"Tranche B Prepayment Amount" and the "Tranche C Prepayment Amount",
respectively), the Company will, in lieu of applying such amount to the
prepayment of Tranche B Term Loans and Tranche C Term Loans, respectively, as
provided in paragraph (e) and (f) above, on the date specified in Section 6.3
for such prepayment, give the General Administrative Agent telephonic notice
(promptly confirmed in writing) requesting that the General Administrative Agent
prepare and provide to each Tranche B Lender and Tranche C Lender a notice
(each, a "Prepayment Option Notice") as described below. As promptly as
practicable after receiving such notice from the Company, the General
Administrative Agent will send to each Tranche B Lender and Tranche C Lender a
notice (a "Prepayment Option Notice"), which shall be in the form of Exhibit H,
and shall include an offer by the Company to prepay on the date (each a
"Mandatory Prepayment Date") that is 15 days after the date of the Prepayment
Option Notice, the Tranche B Term Loans or Tranche C Term Loans, as the case may
be, of such Lender by an amount equal to the portion of the Tranche B Prepayment
Amount or Tranche C Prepayment Amount indicated in such Lender's Prepayment
Option Notice as being applicable to such Lender's Tranche B Term Loans or
Tranche C Term Loans, as the case may be. On the Mandatory Prepayment Date, (A)
the Company shall pay to the General Administrative Agent the aggregate amount
necessary to prepay that portion of the outstanding Tranche B Term Loans or
Tranche C Term Loans, as the case may be, in respect of which Tranche B Lenders
and Tranche C Lenders have accepted prepayment as described above (such Lenders,
the "Accepting Lenders"), and such amount shall be applied to reduce the Tranche
B Prepayment Amount and Tranche C Prepayment Amount, as applicable, with respect
to each Accepting Lender and (B) the Company shall pay to the General
Administrative Agent an amount equal to 100% of the portion of the Tranche B
Prepayment Amount and Tranche C Prepayment Amount not accepted by the Accepting
Lenders, and such amount shall be applied in the manner specified in paragraph
(e) or (f) above, as applicable.
6.4 Conversion and Continuation Options. (a) The Company may
elect from time to time to convert LIBOR Loans to Base Rate Loans, by giving the
General Administrative Agent at least two Business Days' prior irrevocable
notice of such election;
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provided that any such conversion of LIBOR Loans may only be made on the last
day of an Interest Period with respect thereto. The Company may elect from time
to time to convert Base Rate Loans to LIBOR Loans by giving the General
Administrative Agent at least three Business Days' prior irrevocable notice of
such election. Any such notice of conversion to LIBOR Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon receipt
of any such notice the General Administrative Agent shall promptly notify each
affected Lender thereof. All or any part of outstanding LIBOR Loans and Base
Rate Loans may be converted as provided herein, provided that (i) no Base Rate
Loan under a particular Facility may be converted into a LIBOR Loan when any
Event of Default has occurred and is continuing and the General Administrative
Agent has or the Majority Facility Lenders in respect of such Facility have
determined in its or their sole discretion that such a conversion is not
appropriate and (ii) no Loan may be converted into a LIBOR Loan after the date
that is one month prior to the final maturity date of such Facility.
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving notice to the General Administrative Agent, in accordance with
the applicable provisions of the term "Interest Period" set forth in Section
1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no LIBOR Loan under a particular Facility may be continued as such
(i) when any Event of Default has occurred and is continuing and the General
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the final maturity date of such Facility and provided, further, that if the
Company shall fail to give such notice or if such continuation is not permitted
such Loans shall be automatically converted to Base Rate Loans on the last day
of such then expiring Interest Period. Upon receipt of any such notice the
General Administrative Agent shall promptly notify each relevant Lender thereof.
6.5 Minimum Amounts of Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
LIBOR Loans hereunder and all selections of Interest Periods hereunder shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the LIBOR Loans comprising
each Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof.
6.6 Interest Rates and Payment Dates. (a) Each LIBOR Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the LIBOR Rate determined for such day plus
the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) Each Canadian Term Loan shall bear interest at a rate per
annum equal to the Canadian Dollar Prime Rate plus the Applicable Margin.
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(d) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any Reimbursement
Obligation or Acceptance Reimbursement Obligation or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans, the Reimbursement
Obligations or Acceptance Reimbursement Obligation and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (w) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection plus
2% or, if higher, (x) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Credit Facility plus 2%, (y)
in the case of Acceptance Reimbursement Obligations, the rate applicable to
Revolving Credit Loans that are LIBOR Loans plus 2% or (z) in the case of any
such overdue interest, commitment fee or other amount, the rate described in
paragraph (b) of this subsection (paragraph (c) in the case of interest on
Canadian Term Loans) plus 2%, in each case from the date of such non-payment
until such overdue principal, interest, commitment fee or other amount is paid
in full (as well after as before judgment).
(e) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing pursuant to paragraph (d) of this
Section 6.6 shall be payable from time to time on demand.
6.7 Computation of Interest and Fees. (a) Commitment fees,
Acceptance stamping fees and, whenever it is calculated on the basis of the
Prime Rate or the Canadian Dollar Prime Rate, interest shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest and letter of credit commissions and fronting
fees shall be calculated on the basis of a 360-day year for the actual days
elapsed. The General Administrative Agent shall as soon as practicable notify
the Company and the U.S. Lenders of each determination of a LIBOR Rate. Any
change in the interest rate on a Loan resulting from a change in the Base Rate,
the Canadian Dollar Prime Rate or the Eurocurrency Reserve Requirements shall
become effective as of the opening of business on the day on which such change
becomes effective. The General Administrative Agent shall as soon as practicable
notify the Company and the U.S. Lenders of the effective date and the amount of
each such change in the Base Rate. For purposes of the Interest Act (Canada),
whenever any interest under this Agreement is calculated using an annual rate
based on a period which is less than the actual number of days in a year (the
"Lesser Period"), such rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (i) the applicable rate based on
such Lesser Period, (ii) multiplied by the actual number of days in the calendar
year in which the period for which such interest is payable ends, and (iii)
divided by the number of days in such Lesser Period. The rates of interest
specified in this Agreement are nominal rates and all interest payments and
computations are to be made without allowance or deduction for deemed
reinvestment of interest.
(b) Each determination of an interest rate by the General
Administrative Agent or the Canadian Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrowers and
the Lenders in the absence of manifest error.
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(c) If any Canadian Reference Lender shall for any reason no
longer have a Canadian Loan Commitment or any Canadian Term Loans, such Canadian
Reference Lender shall thereupon cease to be a Canadian Reference Lender, and
if, as a result, there shall only be one Schedule 1 Canadian Reference Lender or
Schedule 2 Canadian Reference Lender (as the case may be) remaining, the
Canadian Administrative Agent (after consultation with the Canadian Borrower and
the Schedule 1 Canadian Lender or the Schedule 2 Canadian Lender, as applicable)
shall, by notice to the Canadian Borrower and the Canadian Lenders, designate
another Schedule 1 Canadian Lender or Schedule 2 Canadian Lender, as applicable,
as a Schedule 1 Canadian Reference Lender or a Schedule 2 Canadian Reference
Lender, as applicable, so that there shall at all times be at least two Schedule
1 Canadian Reference Lenders and two Schedule 2 Canadian Reference Lenders.
(d) Each Canadian Reference Lender shall use its best efforts
to furnish quotations of rates to the Canadian Administrative Agent as
contemplated hereby. If any of the Canadian Reference Lenders shall be unable or
shall otherwise fail to supply such rates to the Canadian Administrative Agent
upon its request, the rate of interest shall, subject to the provisions of
Section 6.8, be determined on the basis of the quotations of the remaining
Canadian Reference Lenders or Reference Lender.
6.8 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the General Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the Company)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBOR
Rate for such Interest Period, or
(b) the General Administrative Agent shall have received
notice from the Majority Facility Lenders in respect of the relevant
Facility that the LIBOR Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the General Administrative Agent shall give telecopy or telephonic notice
thereof to the Company and the relevant U.S. Lenders as soon as practicable
thereafter. If such notice is given (x) any LIBOR Loans under the relevant
Facility requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans under the relevant Facility that were to
have been converted on the first day of such Interest Period to LIBOR Loans
shall be continued as Base Rate Loans and (z) any outstanding LIBOR Loans under
the relevant Facility shall be converted, on the first day of such Interest
Period, to Base Rate Loans. Until such notice has been withdrawn by the General
Administrative Agent, no further LIBOR Loans under the relevant Facility shall
be made or continued as such, nor shall the Company have the right to convert
Loans under the relevant Facility to LIBOR Loans.
6.9 Pro Rata Treatment and Payments. (a) Each borrowing by the
Company from the Lenders hereunder shall be made pro rata according to the
respective Tranche A
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Term Loan Percentages, Tranche B Term Loan Percentages, Tranche C Term Loan
Percentages, Canadian Term Loan Commitment Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders. Each payment by the
Company on account of any commitment fee and letter of credit commission and any
reduction of the Revolving Credit Commitments shall be made pro rata according
to the respective Revolving Credit Percentages of the Lenders.
(b) Each payment (including each prepayment) by the Company on
account of principal of and interest on the U.S. Term Loans under any Facility
shall be made pro rata according to the respective outstanding principal amounts
of the U.S. Term Loans under such Facility then held by the U.S. Term Loan
Lenders.
(c) Each payment (including each prepayment) by the Canadian
Borrower on account of principal of and interest on the Canadian Term Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Canadian Term Loans then held by the Canadian Lenders.
(d) Each payment (including each prepayment) by the Company on
account of principal of and interest on the Revolving Credit Loans shall be made
pro rata according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(e) All payments (including prepayments) to be made by the
Company hereunder, whether on account of principal, interest, fees or otherwise
(other than payments under Section 13 in respect of the Canadian Borrower
Obligations and the Canadian Operating Facility Obligations), shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the General Administrative Agent, for the
account of the Lenders, at the General Administrative Agent's office specified
in Section 14.2, in Dollars and in immediately available funds. The General
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment by the Company hereunder
(other than payments on the LIBOR Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a LIBOR Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(f) All payments (including prepayments) to be made by the
Canadian Borrower hereunder (or by the Company under Section 13 in respect of
the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations), whether on account of principal, interest, fees or otherwise,
shall be made without setoff or counterclaim and shall be made prior to 12:00
Noon, Toronto time, on the due date thereof to the Canadian Administrative
Agent, for the account of the Lenders, at the Canadian Administrative Agent's
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office specified in Section 14.2, in Canadian Dollars and in immediately
available funds. The Canadian Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment by the Canadian Borrower hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. In the case of any extension of any payment of principal pursuant
to the preceding sentence, interest thereon shall be payable at the then
applicable rate during such extension.
(g) Unless the applicable Administrative Agent shall have been
notified in writing by any Lender prior to a Borrowing Date that such Lender
will not make available to such Administrative Agent the amount that would
constitute its share of the Loans or Acceptance Purchase Price to be disbursed
to a Borrower on such Borrowing Date, such Administrative Agent may assume that
such Lender is making such amount available to such Administrative Agent, and
such Administrative Agent may, in reliance upon such assumption, make available
to applicable Borrower a corresponding amount. If such amount is not made
available to the such Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to such Administrative Agent, on demand,
such amount with interest thereon at a rate equal to (i) in the case of amounts
to be made available in U.S. Dollars, the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the General Administrative Agent and (ii) in the case of amounts to be made
available in Canadian Dollars, the Canadian Administrative Agent's reasonable
estimate of its average daily cost of funds. A certificate of the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
submitted to any Lender with respect to any amounts owing under this Section
6.9(g) shall be conclusive in the absence of manifest error. If such Lender's
share of such amount is not made available to such Administrative Agent by such
Lender within three Business Days of such Borrowing Date, such Administrative
Agent shall also be entitled to recover such amount from the relevant Borrower
on demand with interest thereon at the rate per annum applicable to Base Rate
Loans under the relevant Facility (in the case of amounts to be made available
in U.S. Dollars), or Canadian Term Loans (in the case of amounts to be made
available in Canadian Dollars).
6.10 Illegality. (a) Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBOR Loans as contemplated by this Agreement, (i) the
commitment of such U.S. Lender hereunder to make LIBOR Loans, continue LIBOR
Loans as such and convert Base Rate Loans to LIBOR Loans shall forthwith be
cancelled and (ii) such U.S. Lender's Loans then outstanding as LIBOR Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a LIBOR Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Company shall pay to such Lender such amounts, if any,
as may be required pursuant to Section 6.13.
(b) Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it
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unlawful for any Canadian Lender to create or maintain Acceptances as
contemplated by this Agreement, (i) the commitment of such Canadian Lender
hereunder to accept Drafts, purchase Acceptances, continue Acceptances as such
and convert Canadian Term Loans to Acceptances shall forthwith be cancelled
until such time as it shall no longer be unlawful for such Canadian Lender to
create or maintain Acceptances and (ii) such Canadian Lender's then outstanding
Acceptances, if any, shall be converted automatically to Canadian Term Loans on
the respective maturities thereof or within such earlier period as may be
required by law.
6.11 Requirements of Law. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law, but with which similarly-situated entities generally comply)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit or any
LIBOR Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered
by Section 6.12 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or for the
account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Lender any other condition,
the cost of which is not otherwise included in the determination of the
LIBOR Rate;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or Acceptances or issuing or participating
in Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the applicable Borrower shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law, but with which
similarly-situated entities generally comply) from any Governmental Authority
made subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then
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56
from time to time, the applicable Borrower shall promptly pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the applicable
Borrower (with a copy to the General Administrative Agent and, if applicable,
the Canadian Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to such Borrower (with a copy to the General
Administrative Agent and, if applicable, the Canadian Administrative Agent)
shall be conclusive in the absence of manifest error. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans, the Acceptance Reimbursement Obligations, the Acceptance Notes and all
other amounts payable hereunder.
6.12 Taxes. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on either Administrative Agent or any
Lender as a result of a present or former connection between such Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from such Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
payable to such Administrative Agent, or any Lender hereunder or under any Note,
the amounts so payable to such Administrative Agent or such Lender shall be
increased to the extent necessary to yield to such Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Company shall not be required to increase
any such amounts payable to any U.S. Lender if such U.S. Lender fails to comply
with the requirements of paragraph (b) of this Section. Whenever any
Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter
such Borrower shall send to the applicable Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower showing payment
thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the applicable Administrative
Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify such Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by either
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans, the Acceptance Reimbursement Obligations, the
Acceptance Notes and all other amounts payable hereunder.
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(b) Each U.S. Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) deliver to the Company and the General
Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, and (B) an Internal Revenue Service Form W-8
or W-9, or successor applicable form, as the case may be;
(ii) deliver to the Company and the General
Administrative Agent two further copies of any such form or
certification on or before the date that any such form or certification
expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it
to the Company; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be requested by
the Company or the General Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Company and the General
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to Section 14.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
6.13 Indemnity. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of, conversion into or continuation of LIBOR Loans after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by such Borrower in making any prepayment after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of LIBOR Loans on a day which is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
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Applicable Margin included therein, if any) over (ii) the amount of interest (as
reasonably determined by such U.S. Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
6.14 Change of Lending Office. Each Lender agrees that if it
makes any demand for payment under Section 6.11 or 6.12(a), or if any adoption
or change of the type described in Section 6.10 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrowers to make payments under Section 6.11 or
6.12(a), or would eliminate or reduce the effect of any adoption or change
described in Section 6.10; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and provided,
further, that nothing in this Section 6.14 shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section 6.11
or 6.12(a).
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agents and the Lenders to enter
into this Agreement and to make the Loans and the other extension of credit
hereunder, each of the Company and the Canadian Borrower (to the extent
applicable to the Canadian Borrower) hereby represents and warrants to each
Administrative Agent and each Lender that:
7.1 Financial Condition. (a) The unaudited pro forma combined
balance sheet of Holdings and its consolidated Subsidiaries as at December 31,
1996 (including the notes thereto) (the "Pro Forma Balance Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Loans to be made and the Seller Note to be issued on
the Closing Date and the use of proceeds thereof and (iii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheet has
been prepared based on the best information available to the Company as of the
date of delivery thereof, and presents fairly on a pro forma basis the estimated
combined financial position of Holdings and its consolidated Subsidiaries as at
the Closing Date, assuming that the events specified in the preceding sentence
had actually occurred at such date.
(b) The audited consolidated balance sheet of Rollins as of
September 30, 1996 and the related consolidated statements of income and of cash
flows for the fiscal year ended on such date, reported on by and accompanied by
an unqualified report from KPMG Peat Marwick LLP, present fairly the
consolidated financial condition of Rollins as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended. All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout
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the periods involved (except as approved by the relevant firm of accountants and
disclosed therein). The balance sheet referred to above reflects any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, and any
long-term leases and unusual forward or long-term commitments, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, in each case as of
the date of such balance sheets. During the period from September 30, 1996 to
and including the date hereof there has been no Disposition by Rollins or any of
its Subsidiaries of any material part of its business or property.
(c) The audited consolidated balance sheet of Historical
Laidlaw as at August 31, 1996, and the related consolidated statements of income
and of cash flows for the fiscal year ended on such date, reported on by and
accompanied by an unqualified report from Coopers & Lybrand, present fairly the
consolidated financial condition of Historical Laidlaw as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
respective fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
relevant firm of accountants and disclosed therein). The balance sheet referred
to above reflects any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, and any long-term leases and unusual forward or long-term
commitments, including, without limitation, any interest rate or foreign
currency swap or exchange transaction or other obligation in respect of
derivatives, in each case as of the date of such balance sheets. During the
period from August 31, 1996 to and including the date hereof there has been no
Disposition by Historical Laidlaw or any of its Subsidiaries of any material
part of its business or property, except for the sale of JTM Industries, Inc.
7.2 No Change. Since December 31, 1996 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
7.3 Corporate Existence; Compliance with Law. Each of the
Company and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.4 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of each Borrower, to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and any Notes and to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. No consent or authorization of, filing
with, notice to or other act by or in respect of, any Governmental
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Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery, performance, validity or
enforceability of the Loan Documents. This Agreement has been, and each other
Loan Document to which it is a party will be, duly executed and delivered on
behalf of each Loan Party which is a party thereto. This Agreement constitutes,
and each other Loan Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of the Loan Party which
is a party thereto enforceable against such Loan Party in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
7.5 No Legal Bar. The execution, delivery and performance of
the Loan Documents, the issuance of Letters of Credit, the borrowings hereunder
and the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Company or of any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation (other than the Liens created by the Security
Documents).
7.6 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Company, threatened by or against the Company or any of
its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
7.7 No Default. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
7.8 Ownership of Property; Liens. Each of the Company and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 10.3.
7.9 Intellectual Property. Each of the Company and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted (the "Intellectual Property"). Except as set
forth in Schedule 7.9, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does the
Company know of any valid basis for any such claim. The use of such Intellectual
Property by the Company and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material
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Adverse Effect. An adverse determination of any or all of the matters set forth
on Schedule 7.9 could not reasonably be expected to have a Material Adverse
Effect.
7.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of the Company or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
7.11 Taxes. Each of the Company and its Subsidiaries has filed
or caused to be filed all tax returns which, to the knowledge of the Company,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Company or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Company, no claim is being asserted,
with respect to any such tax, fee or other charge.
7.12 Federal Regulations. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect. If requested by any Lender or the General
Administrative Agent, the Company will furnish to the General Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-1 or FR Form U-1 referred to in said Regulation G or
Regulation U, as the case may be.
7.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits. Neither Borrower nor any Commonly Controlled Entity has
had a complete or partial withdrawal from any Multiemployer Plan, and neither of
the Borrowers nor any Commonly Controlled Entity would become subject to any
liability under ERISA if the Borrowers or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent. The
present value (determined using actuarial and other assumptions which are
reasonable in respect of the benefits provided and the employees participating)
of the liability of the Borrowers and each Commonly Controlled Entity for post
retirement benefits to be provided to their current
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and former employees under Plans which are welfare benefit plans (as defined in
Section 3(1) of ERISA) does not, in the aggregate, exceed the assets under all
such Plans allocable to such benefits by an amount in excess of $2,000,000.
7.14 Canadian Benefit and Pension Plans. The Canadian Pension
Plans are duly registered under the provisions of the ITA and any other
Requirements of Law and no event has occurred which is reasonably likely to
cause the loss of such registered status. The Canadian Pension Plans and the
Canadian Benefits Plans have been administered in accordance with the ITA and
all other Requirements of Law. All material obligations of each of the Canadian
Borrower or any Subsidiary thereof (including fiduciary and funding obligations)
required to be performed in connection with the Canadian Pension Plans have been
performed. No promises of benefit improvements under the Canadian Pension Plans
or the Canadian Benefit Plans have been made except where such improvement could
not have a Material Adverse Effect. There have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans or the Canadian Benefit
Plans. As of the most current evaluation date, each of the Canadian Pension
Plans and the Canadian Benefit Plans is fully funded and there exist no going
concern unfunded actuarial liabilities or solvency deficiencies in respect of
such plans.
7.15 Investment Company Act; Other Regulations. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
7.16 Subsidiaries. Schedule 7.16 sets forth a complete list of
all the Subsidiaries of the Company on the Closing Date after giving effect to
the Acquisition.
7.17 Purpose of Loans. The proceeds of the Loans and
Acceptances shall be used to finance a portion of the Acquisition and the fees
and expenses associated therewith and to repay certain of Indebtedness of the
Borrowers outstanding on the Closing Date. The proceeds of the Loans and
Acceptances also shall be used to finance the ongoing working capital needs of
the Borrowers and their Subsidiaries in the ordinary course of business, capital
expenditures and acquisitions permitted by Section 10.8.
7.18 Environmental Matters.
Other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect:
(a) The Company and each of its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been,
in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current or intended operations or for any
property owned, leased, or otherwise operated by any of them; (iii)
are, and within the
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period of all applicable statutes of limitation have been, in
compliance with all of their Environmental Permits; and (iv) reasonably
believe that: each of their Environmental Permits will be timely
renewed and complied with, without material expense; any additional
Environmental Permits that may be required of any of them will be
timely obtained and complied with, without material expense; and
compliance with any Environmental Law that is or is expected to become
applicable to it will be timely attained and maintained, without
material expense.
(b) Materials of Environmental Concern have not been
transported, disposed of, emitted, discharged, or otherwise released or
threatened to be released, to or at any real property now or formerly
owned, leased or operated by the Company or any of its Subsidiaries or
at any other location, which could reasonably be expected to (i) give
rise to liability of the Company or any of its Subsidiaries under any
applicable Environmental Law, (ii) interfere with the continued
operations of the Company or any of its Subsidiaries, or (iii) impair
the fair saleable value of any real property owned or leased by the
Company or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Company or any
of its Subsidiaries is, or to the knowledge of the Company or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened.
(d) Neither the Company nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. ss.ss. 9601 et. seq., or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.
(e) Neither the Company nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, nor is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum, relating to compliance with or liability under any Environmental
Law.
(f) Neither the Company nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Materials of Environmental
Concern.
7.19 Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished to the Administrative Agents or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not
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misleading. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of such Loan Party to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. The Company has
provided to the General Administrative Agent a true and complete copy of the
Stock Purchase Agreement (including all exhibits and schedules thereto and
financial statements referred to therein). As of the date hereof, the
representations and warranties contained in the Stock Purchase Agreement are
true and correct in all material respects. There is no fact known to any Loan
Party that could reasonably be expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan Documents or in any
other documents, certificates and statements furnished to the Administrative
Agents and the Lenders for use in connection with the transactions contemplated
hereby and by the other Loan Documents.
7.20 Security Documents. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the General Administrative Agent,
for the benefit of the Lenders, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the General
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 3 to the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person other than as permitted by
the Guarantee and Collateral Agreement.
(b) Each of the Canadian Collateral Documents is effective to
create in favor of the Canadian Administrative Agent, for the benefit of the
Canadian Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. Upon completion of the
actions set forth on Schedule 7.20, the Canadian Collateral Documents shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Canadian Borrower Obligations, in each case prior and superior
in right to any other Person other than as permitted by the Canadian Collateral
Documents.
(c) Each of the Mortgages is effective to create in favor of
the General Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable Lien on the mortgaged properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
3, each such Mortgage shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such mortgaged
properties and the proceeds thereof, as security for the Obligations (as
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defined in the relevant Mortgage), in each case prior and superior in right to
any other Person.
7.21 Solvency. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
7.22 Regulation H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to Initial Extensions of Credit. The agreement
of each Lender to make the initial Extension of Credit requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such Extension of Credit on the Closing Date, of the following
conditions precedent:
(a) Loan Documents. The General Administrative Agent shall
have received (i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower, with a counterpart for each
Lender, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the parties thereto, with a
counterpart or a conformed copy for each Lender, (iii) each of the
Mortgages, each executed and delivered by a duly authorized officer of
the party thereto, with a counterpart or a conformed copy for each
Lender, (iv) each Canadian Collateral Document, executed and delivered
by a duly authorized officer of the parties thereto, with a counterpart
or a conformed copy for each Lender and (v) the Intercreditor
Agreement, executed and delivered by a duly authorized officer of the
parties thereto.
(b) Acquisition, Seller Note, etc. The following transactions
shall have been consummated:
(i) the Acquisition shall have been consummated in
accordance with the Stock Purchase Agreement;
(ii) the Seller Note shall have been issued on terms
and conditions satisfactory to the General Administrative
Agent; and
(iii) the capital and legal structure of each Loan
Party after the Acquisition shall be satisfactory in all
respects.
(c) Pro Forma Balance Sheet; Financial Statements. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) the audited
consolidated financial statements described in Section 7.1 and (iii)
unaudited interim consolidated financial
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statements of Holdings and Historical Laidlaw for the most recent
fiscal quarterly period ended subsequent to the date of the latest
applicable financial statement delivered pursuant to clause (ii) of
this paragraph as to which such financial statements have been made
publicly available.
(d) Approvals, Authorizations, etc. All governmental and third
party approvals (including landlords' and other consents),
authorizations, notices and filings necessary or advisable in
connection with the Acquisition, the continuing operations of the
Company and its Subsidiaries and the transactions contemplated hereby
shall have been obtained or made and be in full force and effect, and
all applicable waiting periods shall have expired without any action
being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the
Acquisition or the financing thereof or any other financing
contemplated hereby.
(e) Business Plan. The Lenders shall have received a business
plan for the Company and its Subsidiaries for the 1997 fiscal year and
a written analysis of the business and prospects of the Company of its
Subsidiaries for the period from the Closing Date through the final
maturity of the Term Loans, in each case as set forth in the
Confidential Information Memorandum dated March 1997.
(f) Environmental Reports. The General Administrative Agent
shall have received reports prepared by Dames & Moore and ENVIRON with
respect to environmental matters relating to the Company and an
environmental report prepared by Beak Consultants Limited with respect
to environmental matters relating to the Canadian Borrower, in each
case in form and substance satisfactory to the Lenders.
(g) Solvency Certificate. The General Administrative Agent
shall have received a solvency certificate of the Company, in form,
scope and substance satisfactory to the General Administrative Agent
and its legal counsel.
(h) Closing Certificate. The Administrative Agents shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit I, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agents, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of such party.
(i) Fees. The Administrative Agents shall have received the
fees to be received on the Closing Date referred to in Sections 3.3 and
6.1.
(j) Legal Opinions. The Administrative Agents shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
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(i) the executed legal opinion of Katten, Muchin &
Zavis, U.S. counsel to the Company and the other Loan Parties,
substantially in the form of Exhibit J;
(ii) the executed legal opinion of Ivan R. Cairns,
general counsel to Laidlaw, the Canadian Borrower and its
Subsidiaries, substantially in the form of Exhibit K-1;
(iii) the executed legal opinion of Tory Tory
DesLauriers & Binnington, Canadian counsel to the Lenders,
substantially in the form of Exhibit K-2; and
(iv) the executed legal opinion of South Carolina
counsel to the Borrowers, in form and substance reasonably
satisfactory to the General Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agents may reasonably require.
(k) Pledged Stock; Stock Powers; Pledged Notes. The General
Administrative Agent shall have received the certificates representing
the shares pledged pursuant to the Guarantee and Collateral Agreement,
and the Canadian Administrative Agent shall have received the
certificates representing the shares pledged pursuant to the Canadian
Collateral Documents, together, in each case, with an undated stock
power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof, and the note[s] pledged pursuant to the
Guarantee and Collateral Agreement and the Canadian Collateral
Documents, each endorsed in blank by a duly authorized officer of the
pledgor thereof.
(l) Actions to Perfect Liens. The General Administrative Agent
shall have received evidence in form and substance satisfactory to it
that all filings, recordings, registrations and other actions,
including, without limitation, the filing of duly executed financing
statements on form UCC-1, necessary or, in the opinion of the General
Administrative Agent, desirable to perfect the Liens created by the
Security Documents shall have been completed.
(m) Surveys. The General Administrative Agent shall have
received, and the title insurance company issuing the policy referred
to in Section 8.1(n) (the "Title Insurance Company") shall have
received, maps or plats of an as-built survey of the sites of the
property covered by each Mortgage certified to the General
Administrative Agent and the Title Insurance Company in a manner
satisfactory to them, dated a date satisfactory to the General
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor satisfactory to the Administrative
Agent and the Title Insurance Company, which maps or plats and the
surveys on which they are based shall be made in accordance with the
Minimum Standard Detail Requirements for Land Title Surveys jointly
established and adopted by the American
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Land Title Association and the American Congress on Surveying and
Mapping in 1962, and, without limiting the generality of the foregoing,
there shall be surveyed and shown on such maps, plats or surveys the
following: (i) the locations on such sites of all the buildings,
structures and other improvements and the established building setback
lines; (ii) the lines of streets abutting the sites and width thereof;
(iii) all access and other easements appurtenant to the sites or
necessary or desirable to use the sites; (iv) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (v) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (vi) if the site
is described as being on a filed map, a legend relating the survey to
said map.
(n) Title Insurance Policy. The General Administrative Agent
shall have received in respect of each parcel covered by each Mortgage
a mortgagee's title policy (or policies) or marked up unconditional
binder for such insurance dated the Closing Date. Each such policy
shall (i) be in an amount satisfactory to the General Administrative
Agent; (ii) be issued at ordinary rates; (iii) insure that the Mortgage
insured thereby creates a valid first Lien on such parcel free and
clear of all defects and encumbrances, except such as may be approved
by the General Administrative Agent; (iv) name the General
Administrative Agent for the benefit of the Lenders as the insured
thereunder; (v) be in the form of ALTA Loan Policy - 1970 (Amended
10/17/70); (vi) contain such endorsements and affirmative coverage as
the General Administrative Agent may request and (vii) be issued by
title companies satisfactory to the General Administrative Agent
(including any such title companies acting as co-insurers or
reinsurers, at the option of the General Administrative Agent). The
General Administrative Agent shall have received evidence satisfactory
to it that all premiums in respect of each such policy, and all charges
for mortgage recording tax, if any, have been paid.
(o) Copies of Documents. The General Administrative Agent
shall have received a copy of all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred
to in Section 8.1(n) and a copy, certified by such parties as the
General Administrative Agent may deem appropriate, of all other
documents affecting the property covered by each Mortgage.
(p) Lien Searches. The General Administrative Agent shall have
received the results of a recent search by a Person satisfactory to the
General Administrative Agent, of the Uniform Commercial Code, judgement
and tax lien filings which may have been filed with respect to personal
property of the Loan Parties, and the results of such search shall be
satisfactory to the General Administrative Agent.
(q) Insurance. The General Administrative Agent shall have
received evidence in form and substance satisfactory to it that all of
the requirements of Section 9.5 of this Agreement and Section 5.3 of
the Guarantee and Collateral Agreement shall have been satisfied.
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(r) Seller Consent and Acknowledgment. The General
Administrative Agent shall have received, with a counterpart for each
Lender, a consent and acknowledgment of the Seller and Laidlaw, dated
the Closing Date, substantially in the form of Exhibit M, executed by
the President or a Senior Vice President of each of the Seller and of
Laidlaw.
8.2 Conditions to Extension of Credit. The agreement of each
Lender to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Extension of Credit) is subject to
the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and the Acquisition Agreement shall be satisfactory in form
and substance to the General Administrative Agent, and the General
Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
Each request by a Borrower for an Extension of Credit hereunder shall constitute
a representation and warranty by each Borrower as of the date thereof that the
conditions contained in this subsection have been satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Reimbursement Obligation, Acceptance Reimbursement
Obligation, Acceptance Note or Letter of Credit remains outstanding or any
amount is owing to any Lender, the General Administrative Agent or the Canadian
Administrative Agent hereunder or under any other Loan Document, the Company
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
9.1 Financial Statements. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Holdings, a copy of the
consolidated and consolidating balance sheets of
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Holdings and its consolidated Subsidiaries as at the end of such year
and the related consolidated and consolidating statements of income and
retained earnings and of cash flows for such year, setting forth in
each case in comparative form the figures for the previous year,
reported on (in the case of such consolidated statements and balance
sheet) without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by Coopers &
Lybrand or other independent certified public accountants of nationally
recognized standing, and certified (in the case of such consolidating
statements and balance sheet) by a Responsible Officer as being fairly
stated in all material respects; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of Holdings, the unaudited consolidated and consolidating
balance sheets of Holdings and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash
flows of Holdings and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
9.2 Certificates; Other Information. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 9.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 9.1(a) and (b), a certificate of a Responsible
Officer stating that, to the best of such Responsible Officer's
knowledge, during such period the Company has observed or performed all
of its covenants and other agreements, and satisfied every condition,
contained in this Agreement and the other Loan Documents to be
observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate;
(c) prior to the end of each fiscal year of the Company, a
copy of the projections by the Company of the operating budget and cash
flow budget of the Company and its Subsidiaries for the succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such
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projections have been prepared on the basis of sound financial planning
practice and that such Responsible Officer has no reason to believe
they are incorrect or misleading in any material respect;
(d) within five days after the same are sent, copies of all
financial statements and reports which the Company or Holdings sends to
its stockholders, and within five days after the same are filed, copies
of all financial statements and reports which the Company or Holdings
may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority; and
(e) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
9.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company or its Subsidiaries, as the case may be.
9.4 Conduct of Business and Maintenance of Existence. Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 10.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
9.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
same or a similar business (including, but not limited to, general liability
insurance in an amount of at least $100,000,000 and a deductible of not more
than $500,000 per occurrence).
9.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Administrative Agents (or, with the coordination of the
Administrative Agents, the Lenders) to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants.
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9.7 Notices. Promptly give notice to the Administrative Agents
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Company or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of,
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the PBGC or the Company or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan;
(e) the occurrence or expected occurrence of any event that is
reasonably likely to result in the Company or any of its Subsidiaries
being unable to obtain, renew, or comply with any Environmental Permit
the absence of which could have a Material Adverse Effect, or being
unable to comply with any Environmental Law in a manner that could have
a Material Adverse Effect; and
(f) any material adverse change in the business, operations,
property, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
9.8 Environmental Laws. (a) (i) Comply with all Environmental
Laws applicable to it, and obtain, comply with and maintain any and all
Environmental Permits necessary for its operations as conducted and as planned;
and (ii) take all reasonable efforts to ensure that all of its tenants,
subtenants, contractors, subcontractors, and invitees comply with all
Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could adversely affect the Company or any
Subsidiary. For purposes of this
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Section 9.8(a), noncompliance by the Company and any of its Subsidiaries with
any applicable Environmental Law or Environmental Permit shall be deemed not to
constitute a breach of this covenant; provided that, upon learning of any actual
or suspected noncompliance, the Company and its Subsidiaries shall promptly
undertake all reasonable efforts to achieve compliance; and provided further
that, in any case, such non-compliance, and any other noncompliance with any
Environmental Law, individually or in the aggregate, could not reasonably be
expected to give rise to a Material Adverse Effect.
(b) Promptly comply with all orders and directives of all
Governmental Authorities regarding Environmental Laws, other than such orders
and directives as to which an appeal has been timely and properly taken in good
faith and provided that the pendency of any and all such appeals does not give
rise to a Material Adverse Effect.
(c) Prior to acquiring any ownership or leasehold interest in
real property for which a permit would be required for operation as a hazardous
waste facility, or any other real property or other interest in any real
property that could give rise to the Company or any of its Subsidiaries being
found to be subject to potential liability under any Environmental Law: (i)
obtain a written report by a reputable environmental consultant of the
environmental consultant's assessment of the presence or potential presence of
significant levels of any Materials of Environmental Concern on, under, in, or
about the property, or of other conditions or operations that could give rise to
potentially significant liability under or violations of Environmental Law
relating to such acquisition; and (ii) inform the General Administrative Agent
of its plans to acquire such interest in real property and, upon the General
Administrative Agent's request, afford the General Administrative Agent a
reasonable opportunity to review and discuss the contents of such report with
the environmental consultant who prepared it and a knowledgeable representative
of the Company.
(d) Promptly upon the General Administrative Agent's request
if there has been an Event of Default which has not been fully and timely cured,
permit an environmental consultant whom the General Administrative Agent in its
discretion designates to perform an environmental assessment (including, without
limitation: reviewing documents; interviewing knowledgeable persons; and
sampling and analyzing soil, air, surface water, groundwater, building
materials, and/or other media or substances) in or about property owned or
leased by the Company or any of its Subsidiaries, or on which operations of the
Company or any of its Subsidiaries otherwise take place. Such environmental
assessment shall be in form, scope, and substance satisfactory to the General
Administrative Agent. The Company and its Subsidiaries shall cooperate fully in
the conduct of such environmental assessment, and shall pay the costs of such
environmental assessment immediately upon written demand by the General
Administrative Agent. Pursuant to this Section 9.8(d), the General
Administrative Agent shall have the right, but shall not have any duty, to
request and/or obtain any such environmental assessment.
9.9 Further Assurances. Upon the request of the General
Administrative Agent, promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all documents (including, without
limitation, financing statements and continuation statements) for filing under
the provisions of the Uniform Commercial Code or
<PAGE> 80
74
any other Requirement of Law which are necessary or advisable to maintain in
favor of the General Administrative Agent or the Canadian Administrative Agent,
as the case may be, for the benefit of the Lenders, Liens on the Collateral that
are duly perfected in accordance with all applicable Requirements of Law.
9.10 Additional Collateral. (a) With respect to any assets
acquired after the Closing Date by the Company or any of its Subsidiaries that
are intended to be subject to the Lien created by any of the Security Documents
but which are not so subject (other than any assets described in paragraph (b)
or (c) of this Section), promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the General Administrative
Agent or the Canadian Administrative Agent, as the case may be, such amendments
to the relevant Security Documents or such other documents as the General
Administrative Agent shall deem necessary or advisable to grant to the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
for the benefit of the Lenders, a Lien on such assets, (ii) take all actions
necessary or advisable to cause such Lien to be duly perfected in accordance
with all applicable Requirements of Law, including, without limitation, the
filing of financing statements in such jurisdictions as may be requested by the
General Administrative Agent or the Canadian Administrative Agent, as the case
may be, and (iii) if requested by the General Administrative Agent, deliver to
the General Administrative Agent legal opinions relating to the matters
described in clauses (i) and (ii) immediately preceding, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the General
Administrative Agent.
(b) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary (other than a Subsidiary of the Canadian Borrower),
promptly upon the request of the General Administrative Agent: (i) execute and
deliver to the General Administrative Agent, for the benefit of the Lenders, a
new pledge agreement or such amendments to the Guarantee and Collateral
Agreement as the General Administrative Agent shall deem necessary or advisable
to grant to the General Administrative Agent, for the benefit of the Lenders, a
Lien on the Capital Stock of such Subsidiary which is owned by the Company or
any of its Subsidiaries, (ii) deliver to the General Administrative Agent the
certificates representing such Capital Stock, together with undated stock powers
executed and delivered in blank by a duly authorized officer of the Company or
such Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to
become a party to the Guarantee and Collateral Agreement, and (B) to take all
actions necessary or advisable to cause the Lien created by the Guarantee and
Collateral Agreement to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the General
Administrative Agent and (iv) if requested by the General Administrative Agent,
deliver to the General Administrative Agent legal opinions relating to the
matters described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the General Administrative Agent.
(c) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary of the Canadian Borrower, promptly upon the request
of the General Administrative Agent: (i) execute and deliver to the Canadian
Administrative Agent a new
<PAGE> 81
75
pledge agreement or such amendments to the Canadian Collateral Documents as the
General Administrative Agent shall deem necessary or advisable to grant to the
Canadian Administrative Agent, for the benefit of the Canadian Lenders, a Lien
on the Capital Stock of such Subsidiary which is owned by the Canadian Borrower
or any of its Subsidiaries, (ii) deliver to the Canadian Administrative Agent
any certificates representing such Capital Stock, together with undated stock
powers executed and delivered in blank by a duly authorized officer of the
Canadian Borrower or such Subsidiary, as the case may be, and take or cause to
be taken all such other actions under the law of the jurisdiction of
organization of such Subsidiary as may be necessary or advisable to perfect such
Lien on such Capital Stock, (iii) cause such Subsidiary to become a guarantor
under the Canadian Collateral Documents and to grant security interests in its
personal property assets and (iv) if requested by the General Administrative
Agent, deliver to the General Administrative Agent legal opinions relating to
the matters described in clauses (i), (ii) and (iii) immediately preceding,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the General Administrative Agent.
9.11 Canadian Benefit and Pension Plans. (a) For each existing
Canadian Pension Plan and Canadian Benefit Plan and for any Canadian Pension
Plan or Canadian Benefit Plan hereafter adopted, the Canadian Borrower and its
Subsidiaries shall in a timely fashion perform all obligations (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with such plan and the funding media therefor in
accordance with the terms of such plan and all Requirements of Law.
(b) Each of the Canadian Borrower and its Subsidiaries shall
deliver to the General Administrative Agent (A) if requested by the Canadian
Administrative Agent, acting reasonably, promptly after the filing thereof by
the Canadian Borrower or such Subsidiary with any applicable Governmental
Authority, copies of each annual and other return, report or valuation with
respect to each Canadian Pension Plan, copies of any actuarial report with
respect to each Canadian Pension Plan (whether or not required by any
Governmental Authority) and (B) promptly after receipt thereof, a copy of any
direction, notice or other communication (i) in respect of any breach of
Applicable Law, (ii) which would have the effect of increasing the funding
obligation in respect of each such plan, or (iii) which could result in the
imposition of any Lien on any of the properties or assets of the Canadian
Borrower or such Subsidiary, and any order or ruling that the Canadian Borrower
or such Subsidiary may receive from any applicable Governmental Authority with
respect to any Canadian Pension Plan.
9.12 Interest Rate Protection. Within 90 days after the
Closing Date, obtain interest rate protection for a period through May 31, 1999
for a notional amount at least equal to 50% of Consolidated Total Funded Debt on
terms and conditions satisfactory to the General Administrative Agent.
SECTION 10. NEGATIVE COVENANTS
<PAGE> 82
76
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Reimbursement Obligation, Acceptance Reimbursement
Obligation, Acceptance Note or Letter of Credit remains outstanding or any
amount is owing to any Lender or either Administrative Agent hereunder or under
any other Loan Document, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
10.1 Financial Condition Covenants.
(a) Consolidated Total Leverage Ratio. Permit the Consolidated
Total Leverage Ratio as at the last day of any fiscal quarter of the Company
ending during any fiscal year set forth below, commencing with the fiscal
quarter ending August 31, 1997, to exceed the ratio set forth below opposite
such fiscal year:
<TABLE>
<CAPTION>
Consolidated Total
Fiscal Year Leverage Ratio
----------- --------------
<S> <C>
1997 3.50:1.00
1998 3.50:1.00
1999 3.25:1.00
2000 2.75:1.00
2001 2.50:1.00
2002 2.50:1.00
2003 2.25:1.00
2004 2.00:1.00
2005 2.00:1.00
</TABLE>
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio as at the last day of any fiscal quarter ending during any fiscal
year set forth below, commencing with the fiscal quarter ending August 31, 1997,
to be less than the ratio set forth below opposite such fiscal year:
<TABLE>
<CAPTION>
Fixed
Fiscal Year Charge Coverage Ratio
----------- ---------------------
<S> <C>
1997 1.25:1.00
1998 1.25:1.00
1999 1.25:1.00
2000 1.50:1.00
2001 1.50:1.00
2002 1.50:1.00
2003 1.50:1.00
2004 1.50:1.00
2005 1.50:1.00
</TABLE>
(c) Interest Coverage Ratio. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Company (or, if
less, the number of full fiscal quarters ending subsequent to the Closing Date)
ending with any fiscal quarter ending during
<PAGE> 83
77
any fiscal year set forth below, commencing with the fiscal quarter ending
August 31, 1997, to be less than the ratio set forth below opposite such fiscal
year:
<TABLE>
<CAPTION>
Interest
Fiscal Year Coverage Ratio
----------- -----------------
<S> <C>
1997 2.00:1.00
1998 2.00:1.00
1999 2.25:1.00
2000 2.25:1.00
2001 2.50:1.00
2002 3.00:1.00
2003 3.00:1.00
2004 3.00:1.00
2005 3.00:1.00
</TABLE>
(d) Maximum Ratio of Contingent Obligations to Operating Cash
Flow. Permit the ratio of (i) Consolidated Contingent Obligations on the last
day of any fiscal quarter ending during any fiscal year set forth below,
commencing with the fiscal quarter ending August 31, 1997, to (ii) Consolidated
Operating Cash Flow for the period of four consecutive fiscal quarters ending on
such last day to be less than the ratio set forth below opposite such fiscal
year:
<TABLE>
<CAPTION>
Ratio of Consolidated Contingent Obligations
Fiscal Year to Consolidated Operating Cash Flow
----------- --------------------------------------------
<S> <C>
1997 1.50:1.00
1998 1.50:1.00
1999 1.50:1.00
2000 1.20:1.00
2001 1.20:1.00
2002 1.20:1.00
2003 1.20:1.00
2004 1.20:1.00
2005 1.20:1.00
</TABLE>
For purposes of calculating the foregoing covenants of this Section 10.1 for any
period of four full fiscal quarters, the applicable income statement items for
any Person acquired by the Company or its Subsidiaries during such period shall
be included on a pro forma basis for such period of four full fiscal quarters
(assuming the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period of four full fiscal quarters and assuming only such cost
reductions as are related to such acquisition and are immediately realizable as
of the date of such acquisition) if (i) the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and stockholders' equity and of cash flows for such period have been
reported on without a qualification arising out of the scope of the audit (other
than a "going concern" or like qualification or exception) by independent
certified
<PAGE> 84
78
public accountants of nationally recognized standing and (ii) such audited
consolidated financial statements have been previously provided to the General
Administrative Agent and the Lenders.
10.2 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Indebtedness of the Company to any Subsidiary and of any
Subsidiary to the Company or any other Subsidiary;
(c) Indebtedness of the Company and any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) in an aggregate
principal amount not exceeding as to the Company and its Subsidiaries
$20,000,000 at any one time outstanding;
(d) Indebtedness of the Canadian Borrower under the Canadian
Operating Facility incurred for working capital purposes in an
aggregate principal amount not exceeding C$20,000,000 at any one time
outstanding;
(e) Indebtedness of the Company under the NationsBank Line of
Credit incurred for working capital purposes in an aggregate principal
amount not exceeding $10,000,000 at any one time outstanding;
(f) Indebtedness outstanding on the date hereof and listed on
Schedule 10.2(f) and any refinancings, refundings, renewals or
extensions thereof;
(g) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof, provided that (i) such indebtedness existed at
the time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such corporation by the Company no Default or Event of
Default shall have occurred and be continuing; and
(h) additional Indebtedness of the Company not exceeding
$5,000,000 in aggregate principal amount at any one time outstanding.
10.3 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate
reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries, as the case may be, in conformity with
GAAP;
<PAGE> 85
79
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
10.3(f), securing Indebtedness permitted by Section 10.2(f), provided
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries permitted by Section 10.2(c) incurred to finance the
acquisition of fixed or capital assets, provided that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any
such Lien shall at no time exceed 90% of the original purchase price of
such property at the time it was acquired;
(h) Liens on assets of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary permitted by Section 10.2(f);
(i) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by Section 10.2(g), provided that (i) such Liens existed at
the time such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary, and (iii) the amount of Indebtedness secured
thereby is not increased;
<PAGE> 86
80
(j) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding; and
(k) Liens created pursuant to the Security Documents.
10.4 Limitation on Guarantee Obligations. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 10.4;
(b) Guarantee Obligations of the Company or any of its
Subsidiaries in respect of Indebtedness and other Obligations of
Subsidiaries which are permitted to be incurred by such Subsidiaries
hereunder;
(c) Guarantee Obligations in respect of, or in the nature of,
performance bonds or performance letters of credit or similar
obligations incurred in the ordinary course of business;
(d) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed (i) $25,000,000 at any one time
outstanding for the Company and its Domestic Subsidiaries and (ii)
$10,000,000 at any one time outstanding for the Company's Foreign
Subsidiaries; and
(e) the Guarantee Obligations under this Agreement or any
Security Document.
10.5 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Company (other than the Canadian
Borrower) may be merged or consolidated with or into the Company
(provided that the Company shall be the continuing or surviving
corporation) or with or into any one or more wholly owned Subsidiaries
of the Company (provided that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation); and
(b) any wholly owned Subsidiary (other than the Canadian
Borrower) may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Company
or any other wholly owned Subsidiary of the Company.
<PAGE> 87
81
10.6 Limitation on Disposition of Assets. Dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person other than the Company or any wholly owned Subsidiary, except:
(a) the sale or other Disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other Disposition of any property (other than
inventory), provided that the aggregate book value of all assets so
sold or disposed of in any period of twelve consecutive months shall
not exceed 5% of consolidated total assets of the Company and its
Subsidiaries as at the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof; and
(e) as permitted by Section 10.5(b).
10.7 Limitation on Dividends. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Company or any of its Subsidiaries or any warrants or options to purchase
any such Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Company or any Subsidiary (such
declarations, payments, setting apart, purchases, redemptions, defeasances,
retirements, acquisitions and distributions being herein called "Restricted
Payments"), except that any Subsidiary may make Restricted Payments to the
Company or any wholly owned Subsidiary of the Company and so long as, on the
date of such Restricted Payment, both before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing (a) the
Company may make Restricted Payments to Holdings to service the Seller Note and
the Westinghouse Debt, provided that (i) each such Restricted Payment shall be
made on the date on which a cash payment of interest under the Seller Note or of
principal or interest under the Westinghouse Debt is due and shall be in an
amount not greater than the amount of such cash payment, and such cash payment
in respect of such Indebtedness shall be made by Holdings on such date and (b)
the Company may make Restricted Payments to Holdings to provide for payment in
the ordinary course of business of taxes, directors' fees, stock exchange fees,
and other costs and expenses of its operations as a public company permitted by
the Guarantee and Collateral Agreement.
10.8 Limitation on Investments, Loans and Advances. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes,
<PAGE> 88
82
debentures or other securities of or any assets constituting a business unit of,
or make any other investment in, any Person, except :
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) acquisitions of interests in any Persons engaged in the
hazardous and industrial waste management services industry, provided
that (i) the aggregate amount of cash expended and Indebtedness assumed
in connection with all such investments does not exceed $50,000,000
during the term of this Agreement and (ii) after giving pro forma
effect to any such investment, no Default or Event of Default shall
have occurred and be continuing (including, without limitation,
pursuant to Section 10.1, with compliance with Section 10.1 being
determined on a pro forma basis as determined in the manner described
in the last paragraph of Section 10.1);
(d) loans to officers of the Company listed on Schedule 10.8
in aggregate principal amounts outstanding not to exceed the respective
amounts set forth for such officers on said Schedule;
(e) loans and advances to employees of the Company or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Company and
its Subsidiaries not to exceed $1,000,000 at any one time outstanding;
(f) investments by the Company and its Subsidiaries in the
Subsidiaries of the Company that are parties to the Guarantee and
Collateral Agreement;
(g) investments by the Company and its Domestic Subsidiaries
in the Canadian Borrower, the proceeds of which are used solely to
repay the Canadian Borrower Obligations, and additional investments by
the Company and its Domestic Subsidiaries in the Canadian Borrower in
an amount not exceeding $15,000,000 in the aggregate during the term of
this Agreement;
(h) investments by the Canadian Borrower in any of its
Subsidiaries that have guaranteed the Canadian Borrower Obligations;
(i) loans by the Company to its employees in connection with
management incentive plans in an aggregate amount not to exceed
$1,000,000.
10.9 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption or
purchase of any Indebtedness (other than Indebtedness under this Agreement), (b)
amend, modify or change, or consent or agree to any amendment, modification or
change to any of the terms relating to the payment or prepayment or principal of
or interest on any such Indebtedness (other than any such amendment,
modification or change which would extend the maturity or reduce the
<PAGE> 89
83
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon), or (c) amend the subordination
provisions of the Seller Note.
10.10 Limitation on Transactions with Affiliates. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
10.11 Limitation on Sales and Leasebacks. Enter into any
arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
security of such property or rental obligations of the Company or such
Subsidiary.
10.12 Limitation on Changes in Fiscal Year. Permit the fiscal
year of the Company to end on a day other than August 31, unless the Company
shall have provided to the General Administrative Agent evidence satisfactory to
it that such change will have no effect on the calculation of, or compliance by
the Company with, the covenants set forth in Section 10.1; or permit the fiscal
years of the Company and Holdings to end on different days.
10.13 Limitation on Negative Pledge Clauses. Enter into with
any Person any agreement, other than (a) this Agreement and (b) any industrial
revenue bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed thereby), which prohibits or limits the ability of
the Company or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired.
10.14 Limitation on Lines of Business. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Company and its Subsidiaries are engaged on the date of this
Agreement or which are directly related thereto.
10.15 Canadian Benefit and Pension Plans. Permit the Canadian
Borrower or any of its Subsidiaries to directly, or indirectly, (a) terminate or
cause to terminate, in whole or in part, or initiate the termination of, in
whole or in part, any Canadian Pension Plan so as to result in any liability to
any of them which could have a Material Adverse Effect, (b) permit to exist any
event or condition in respect of any Canadian Pension Plan which presents the
risk of liability of the Canadian Borrower or any of its Subsidiaries which
could have a Material Adverse Effect, (c) enter into any new Canadian Pension
Plan or Canadian Benefit Plan or modify any such existing plans so as to
increase its obligations thereunder which could result in any liability to any
of them and which could have a Material Adverse Effect;
<PAGE> 90
84
(d) permit the greater of the going concern unfunded liability or the solvency
deficiency under Canadian Pension Plans, but only to the extent they are
permitted to remain unfunded under Requirements of Law, to exceed (in the
aggregate, taking into account all Canadian Pension Plans of the Canadian
Borrower and its Subsidiaries) C$5,000,000, (e) fail to make minimum required
contributions to amortize any funding deficiencies under a Canadian Pension Plan
within the time period set out in any Requirements of Law, (f) fail to make a
required contribution under any Canadian Pension Plan or Canadian Benefit Plan
which could result in the imposition of a Lien upon the assets of any of the
Canadian Borrower or any of its Subsidiaries within 30 days after the date such
payment becomes due, unless such payment is being contested pursuant to Section
9.3; (g) make any improper withdrawals or applications of assets of a Canadian
Pension Plan or Canadian Benefit Plan or (h) accept payment of any amount from
any Canadian Pension Plan.
10.16 Hedging Agreements. Enter into any Hedging Agreement
outside the ordinary course of business or for speculative purposes.
SECTION 11. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or either
Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Company or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 10 of
this Agreement or Section 5 of the Guarantee and Collateral Agreement;
or
(d) The Company or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) Holdings, the Company or any of its Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness
(other than the Loans) or in the payment of any Guarantee Obligation,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness
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or Guarantee Obligation was created; or (ii) default in the observance
or performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable; provided, however, that
no Default or Event of Default shall exist under this paragraph unless
the aggregate amount of Indebtedness and/or Guarantee Obligations in
respect of which any default or other event or condition referred to in
this paragraph shall have occurred shall be equal to at least
$5,000,000; or
(f) (i) Holdings, the Company or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Holdings, the Company or any of its Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Holdings, the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Company or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdings, the Company or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Holdings, the Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Company or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate,
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any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion
of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Company or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
the Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $10,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or either Borrower or any other
Loan Party which is a party to any of the Security Documents shall so
assert or (ii) the Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) The Guarantee and Collateral Agreement shall cease, for
any reason, to be in full force and effect or any Guarantor shall so
assert; or
(k) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Company or the Canadian Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement (including, without limitation,
all Acceptance Reimbursement Obligations, regardless of whether or not such
Acceptance Reimbursement Obligations are then due and payable) and the other
Loan Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Majority
Facility Lenders under the Revolving Credit Facility, the General Administrative
Agent may, or upon the request of the Majority Facility Lenders under the
Revolving Credit Facility, the General Administrative Agent shall, by notice to
the Company declare the Revolving Credit Commitments to be terminated forthwith,
whereupon such commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the General Administrative Agent may, or upon
the request of the Required Lenders, the General Administrative Agent shall, by
notice to the Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (including,
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without limitation, all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder, and all Acceptance Reimbursement Obligations,
regardless of whether or not such Acceptance Reimbursement Obligations are then
due and payable) and the other Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Company shall at such time deposit in a
cash collateral account opened by the General Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
General Administrative Agent to the payment of drafts drawn under such Letters
of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Company hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Company hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Company (or such other Person as may be lawfully entitled thereto).
With respect to all outstanding Acceptance Reimbursement
Obligations in respect of Acceptances which have not matured at the time of an
acceleration pursuant to the paragraph above, the Canadian Borrower shall at
such time deposit in a cash collateral account opened by and maintained by the
Canadian Administrative Agent an amount equal to the aggregate undiscounted face
amount of all such unmatured Acceptances. Amounts held in such cash collateral
account shall be applied by the Canadian Administrative Agent to the payment of
maturing Acceptances, and any balance in such account shall be applied to repay
other obligations of the Canadian Borrower hereunder and under any Notes. After
all Acceptance Reimbursement Obligations shall have been satisfied and all other
obligations of the Canadian Borrower hereunder and under any Notes shall have
been paid in full, the balance, if any, in such cash collateral account shall be
returned to the Canadian Borrower.
Except as otherwise expressly provided above in this Section
11, the Borrowers waive presentment, demand, protest or other notice of any
kind.
SECTION 12. THE ADMINISTRATIVE AGENTS; OTHERS
12.1 Appointment. Each Lender hereby irrevocably designates
and appoints Toronto Dominion (Texas), Inc. as the General Administrative Agent
and The Toronto-Dominion Bank as the Canadian Administrative Agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the General Administrative Agent and the Canadian
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the General Administrative
Agent and the Canadian Administrative Agent, respectively, by the terms of this
Agreement
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and the other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agents shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against either
Administrative Agent.
Each Issuing Lender shall act on behalf of the Lenders with
respect to Letters of Credit issued by it under this Agreement and the documents
associated therewith. It is understood and agreed that each Issuing Lender (a)
shall have all of the benefits and immunities (i) provided to an Administrative
Agent in this Section 12 with respect to acts taken or omissions suffered by
such Issuing Lender in connection with Letters of Credit issued by it under this
Agreement and the documents associated therewith as fully as if the term
"General Administrative Agent", "Canadian Administrative Agent" or
"Administrative Agent", as used in this Section 12, included such Issuing Lender
with respect to such acts or omissions and (ii) as additionally provided in this
Agreement and (b) shall have all of the benefits of the provisions of Section
12.7 as fully as if the term "General Administrative Agent", "Canadian
Administrative Agent" or "Administrative Agent", as used in Section 12.7,
included such Issuing Lender.
Each Lender authorizes and directs the Administrative Agents
to execute and deliver the Intercreditor Agreement.
12.2 Delegation of Duties. Each Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Neither Administrative
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
12.3 Exculpatory Provisions. Neither Administrative Agent nor
any of its respective officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by such Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Company to perform its obligations hereunder
or thereunder. Neither Administrative Agent shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of either Borrower.
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12.4 Reliance by Administrative Agents. Each Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrowers),
independent accountants and other experts selected by such Administrative Agent.
Each Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with such Administrative Agent. Each
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders or Majority Facility
Lenders, as applicable, as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Each Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, in any case
where this Agreement specifically requires the consent of the Majority Facility
Lenders under any Facility, such Majority Facility Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
12.5 Notice of Default. Neither Administrative Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Administrative Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that an Administrative Agent receives such a notice, such Administrative
Agent shall give notice thereof to the Lenders. Each Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders or Majority Facility Lenders, as
applicable; provided that unless and until the Administrative Agents shall have
received such directions, the Administrative Agents may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
12.6 Non-Reliance on Administrative Agents and Other Lenders.
(a) Each Lender expressly acknowledges that neither Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
either Administrative Agent hereinafter taken, including any review of the
affairs of the Company or the Canadian Borrower, shall be deemed to constitute
any representation or warranty by such Administrative Agent to any Lender. Each
Lender represents to each Administrative Agent that it has, independently and
without reliance upon such Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without
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reliance upon either Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Company. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by such Administrative Agent hereunder, each
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
the Company or the Canadian Borrower which may come into the possession of such
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by either Administrative Agent or the
Company to such Lender prior to the Closing Date, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
12.7 Indemnification. The Lenders agree to indemnify each
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Aggregate Commitment Percentages in effect
on the date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Administrative Agent under or in connection with any of the
foregoing; provided that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
12.8 Agent in Its Individual Capacity. Each Administrative
Agent and its respective Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers as though such
Administrative Agent were not an Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, each Administrative Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Administrative Agent, and the terms "Lender" and "Lenders" shall include such
Administrative Agent in its individual capacity.
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12.9 Successor Agent. Either Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders. If either
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Company), shall succeed to the rights,
powers and duties of such Administrative Agent hereunder. Effective upon such
appointment and approval, the term "General Administrative Agent" or "Canadian
Administrative Agent", as the case may be, shall mean such successor agent, and
such former Administrative Agent's rights, powers and duties as General
Administrative Agent or Canadian Administrative Agent, as the case may be, shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
an Administrative Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
12.10 Others. Neither the Arranger, the Syndication Agent nor
any Managing Agent, in such respective capacities, shall have any duties or
responsibilities, or incur any liabilities, under this Agreement or the other
Loan Documents.
SECTION 13. GUARANTEE
13.1 Guarantee. In order to induce the Administrative Agents
and the Lenders to execute and deliver this Agreement and to make or maintain
Extensions of Credit to the Canadian Borrower hereunder, and to induce the
Canadian Operating Facility Lender to enter into the Canadian Operating Facility
and to make loans to the Canadian Borrower thereunder, and in consideration
thereof, the Company hereby unconditionally and irrevocably guarantees to the
Administrative Agents, for the ratable benefit of the Lenders to which Canadian
Borrower Obligations are owed and to the Canadian Operating Facility Lender, the
prompt and complete payment and performance by the Canadian Borrower when due
(whether at stated maturity, by acceleration or otherwise) of the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations,
respectively, and the Company further agrees to pay any and all expenses
(including, without limitation, all reasonable fees, charges and disbursements
of counsel) which may be paid or incurred by either Administrative Agent, the
Lenders or the Canadian Operating Facility Lender in enforcing, or obtaining
advice of counsel in respect of, any of their rights under the guarantee
contained in this Section 13. The guarantee contained in this Section 13,
subject to Section 13.5, shall remain in full force and effect until the
Canadian Borrower Obligations and the Canadian Operating Facility Obligations
are paid in full, the Commitments are terminated, no Extensions of Credit are
outstanding and the Canadian Operating Facility is terminated, notwithstanding
that from time to time prior thereto the Canadian Borrower may be free from any
obligations or liabilities under this Agreement or the Canadian Operating
Facility.
The Company agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agents, any Lender or the
Canadian Operating Facility Lender on account of its liability under this
Section 13, it will notify the
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Administrative Agents and such lender in writing that such payment is made under
the guarantee contained in this Section 13 for such purpose. No payment or
payments made by the Canadian Borrower or any other Person or received or
collected by either Administrative Agent, any Lender or the Canadian Operating
Facility Lender from the Canadian Borrower or any other Person by virtue of any
action or proceeding or any setoff or appropriation or application, at any time
or from time to time, in reduction of or in payment of the Canadian Borrower
Obligations or the Canadian Operating Facility Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of the Company under
this Section 13 which, notwithstanding any such payment or payments, shall
remain liable for the Canadian Borrower Obligations or the Canadian Operating
Facility Obligations, as the case may be, until, subject to Section 13.5, the
Canadian Borrower Obligations are paid in full, the Canadian Term Loan
Commitments are terminated and no Letters of Credit are outstanding, the
Canadian Operating Facility Obligations are paid in full and the Canadian
Operating Facility is terminated.
13.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 13, the Company hereby
irrevocably waives all rights which may have arisen in connection with the
guarantee contained in this Section 13 to be subrogated to any of the rights
(whether contractual, under the United States Bankruptcy Code (or similar action
under any successor law or under any comparable law), including Section 509
thereof, under common law or otherwise) of the Administrative Agents, any Lender
or the Canadian Operating Facility Lender against the Canadian Borrower or
against either Administrative Agent or any such lender for the payment of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations,
until all the Canadian Borrower Obligations and Canadian Operating Facility
Obligations shall have been paid in full and each of the Canadian Term Loan
Commitments and the Canadian Operating Facility shall have been terminated. The
Company hereby further irrevocably waives all contractual, common law, statutory
and other rights of reimbursement, contribution, exoneration or indemnity (or
any similar right) from or against the Canadian Borrower or any other Person
which may have arisen in connection with the guarantee contained in this Section
13, until the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations shall have been paid in full and the Canadian Term Loan Commitments
and the Canadian Operating Facility shall have been terminated. So long as the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations
remain outstanding, if any amount shall be paid by or on behalf of the Canadian
Borrower to the Company on account of any of the rights waived in this Section
13.2, such amount shall be held by the Company in trust, segregated from other
funds of the Company, and shall, forthwith upon receipt by the Company, be
turned over to the Canadian Administrative Agent in the exact form received by
the Company (duly indorsed by the Company to the Canadian Administrative Agent,
if required), to be applied against the Canadian Borrower Obligations and the
Canadian Operating Facility Obligations, whether matured or unmatured, in such
order as the Canadian Administrative Agent may determine. The provisions of this
Section 13.2 shall survive the term of the guarantee contained in this Section
13 and the payment in full of the Canadian Borrower Obligations and the Canadian
Operating Facility Obligations and the termination of the Canadian Term Loan
Commitments and the Canadian Operating Facility.
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13.3 Amendments, etc. with respect to the Canadian Borrower
Obligations. The Company shall remain obligated under this Section 13
notwithstanding that, without any reservation of rights against the Company, and
without notice to or further assent by the Company, any demand for payment of or
reduction in the principal amount of any of the Canadian Borrower Obligations or
the Canadian Operating Facility Obligations made by either Administrative Agent,
any Lender or the Canadian Operating Facility Lender may be rescinded by such
Administrative Agent or such lender, and any of the Canadian Borrower
Obligations or the Canadian Operating Facility Obligations, as the case may be,
continued, and the Canadian Borrower Obligations or the Canadian Operating
Facility Obligations, as the case may be, or the liability of any other party
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by such Administrative Agent, any Lender or the Canadian
Operating Facility Lender, and this Agreement, any other Loan Document, and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lenders (or
the Required Lenders, as the case may be) may deem advisable (or in the case of
the Canadian Operating Facility Obligations, as the Canadian Operating Facility
Lender may deem advisable) from time to time, and any collateral security,
guarantee or right of offset at any time held by either Administrative Agent,
any Lender or the Canadian Operating Facility for the payment of the Canadian
Borrower Obligations or the Canadian Operating Facility may be sold, exchanged,
waived, surrendered or released. Neither Administrative Agents nor any Lender or
the Canadian Operating Facility Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Canadian Borrower Obligations, the Canadian Operating Facility Obligations or
for the guarantee contained in this Section 13 or any property subject thereto.
13.4 Guarantee Absolute and Unconditional. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations and
notice of or proof of reliance by either Administrative Agent, any Lender or the
Canadian Operating Facility Lender upon the guarantee contained in this Section
13 or acceptance of the guarantee contained in this Section 13; the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 13; and all dealings between the Canadian Borrower or
the Company, on the one hand, and either Administrative Agent, the Lenders
and/or the Canadian Operating Facility Lender, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 13. The Company waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Canadian Borrower or the Company with respect to the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations. The
guarantee contained in this Section 13 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement or any other Loan Document or the
Canadian Operating Facility, any of the Canadian Borrower Obligations or the
Canadian Operating Facility Obligations or any collateral security therefor
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or guarantee or right of offset with respect thereto at any time or from time to
time held by either Administrative Agent, any Lender or the Canadian Operating
Facility Lender, (b) any defense, setoff or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted
by the Borrowers against either Administrative Agent, any Lender or the Canadian
Operating Facility Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Canadian Borrower or the Company) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Canadian Borrower for the Canadian Borrower Obligations or the
Canadian Operating Facility Obligations, or of the Company under the guarantee
contained in this Section 13, in bankruptcy or in any other instance. When
either Administrative Agent, any Lender or the Canadian Operating Facility
Lender is pursuing its rights and remedies under this Section 13 against the
Company, such Administrative Agent or any such lender may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the
Canadian Borrower or any other Person or against any collateral security or
guarantee for the Canadian Borrower Obligations or the Canadian Operating
Facility Obligations or any right of offset with respect thereto, and any
failure by such Administrative Agent or any such lender to pursue such other
rights or remedies or to collect any payments from the Canadian Borrower or any
such other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Canadian Borrower
or any such other Person or of any such collateral security, guarantee or right
of offset, shall not relieve the Company of any liability under this Section 13,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agents, the Lenders and
the Canadian Operating Facility Lender against the Company.
13.5 Reinstatement. The guarantee contained in this Section 13
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Canadian Borrower Obligations
or the Canadian Operating Facility Obligations is rescinded or must otherwise be
restored or returned by either Administrative Agent, any Lender or the Canadian
Operating Facility Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Canadian Borrower or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Canadian Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
13.6 Payments. The Company hereby agrees that any payments in
respect of the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations pursuant to this Section 13 will be paid to the Canadian
Administrative Agent without setoff or counterclaim in Canadian Dollars, at the
office of the Canadian Administrative Agent specified in Section 14.2.
SECTION 14. MISCELLANEOUS
14.1 Amendments and Waivers. Neither this Agreement, the
Intercreditor Agreement nor any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section. The
<PAGE> 101
95
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agents may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Loan
Documents or the Intercreditor Agreement for the purpose of adding any
provisions to this Agreement, the other Loan Documents or the Intercreditor
Agreement or changing in any manner the rights of the Lenders or of the
Borrowers hereunder or thereunder or (b) waive, on such terms and conditions as
the Required Lenders or the Administrative Agents, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or the
other Loan Documents or the Intercreditor Agreement or any Default or Event of
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall (i) reduce the amount or extend the
scheduled date of maturity of any Loan or of any installment thereof, or reduce
the stated rate of any interest or fee payable hereunder or extend the scheduled
date of any payment thereof or increase the amount or extend the expiration date
of any Lender's Commitments or extend the expiry date of any Letter of Credit
beyond the date referred to in Section 3.1(a), or modify the provisions of
Section 6.9, in each case without the consent of each Lender affected thereby,
or (ii) amend, modify or waive any provision of this Section or reduce the
percentage specified in the definition of Required Lenders or Majority Facility
Lenders, or consent to the assignment or transfer by either Borrower of any of
its rights and obligations under this Agreement and the other Loan Documents or
release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their obligations under the Guarantee
and Collateral Agreement, in each case without the written consent of all the
Lenders, (iii) amend, modify or waive any provision of Section 4 or 5 without
the consent of the Majority Facility Lenders under the Canadian Term Loan
Facility, (iv) amend, modify or waive any provision of Section 12 without the
written consent of the Administrative Agents, (v) amend, modify or waive any
provision of Section 3 without the written consent of each Issuing Lender, (vi)
amend, modify or waive any provision of Section 13 without the consent of all
the Canadian Lenders or (vii) amend, modify or waive any provision of Section
6.3 without the consent of the Majority Facility Lenders under each Facility.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrowers, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Borrowers, the Lenders and the Agents shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
14.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrowers, the General Administrative Agent and the
Canadian Administrative Agent, and as set forth in Schedule 1 in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:
<PAGE> 102
96
The Company: Laidlaw Chem-Waste, Inc.
1301 Gervais Street, 3rd Floor
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: (803) 933-4346
The Canadian Borrower: Laidlaw Environmental (Canada) Ltd.
c/o Laidlaw Chem-Waste, Inc.
1301 Gervais Street, 3rd Floor
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: (803) 933-4346
The General Administrative Agent: Toronto Dominion (Texas), Inc.
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Fax: (703) 951-9921
The Canadian Administrative Agent: The Toronto-Dominion Bank
8th Floor, Toronto Dominion Bank Tower
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attention: Manager Agency
Fax: (416) 982-5535
provided that any notice, request or demand to or upon the General
Administrative Agent, the Canadian Administrative Agent or the Lenders pursuant
to Section 2.2, 2.4, 2.6, 4.2, 5.2, 5.5, 6.2, 6.3 and 6.4 shall not be effective
until received.
14.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of either Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
14.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
14.5 Payment of Expenses and Taxes. The Company agrees (a) to
pay or reimburse each Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment,
<PAGE> 103
97
supplement or modification to, this Agreement and the other Loan Documents and
any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby, including, without limitation, the reasonable fees and disbursements of
counsel to such Administrative Agent (b) to pay or reimburse each Lender, the
General Administrative Agent and the Canadian Administrative Agent for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the fees and disbursements of counsel
to each Lender and of counsel to such Administrative Agent, (c) to pay,
indemnify, and hold each Lender and each Administrative Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify, and hold each
Lender and each Administrative Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Company or any of its Subsidiaries or any of the facilities or
properties owned, leased or operated by the Company or any of its Subsidiaries
(all the foregoing in this clause (d), collectively, the "indemnified
liabilities"), provided that the Borrowers shall have no obligation hereunder to
any person seeking indemnification with respect to indemnified liabilities
arising from the gross negligence or willful misconduct of such person. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Company agrees, and shall cause each of its Subsidiaries to agree, not to
assert, and hereby waives and agrees to cause each of its Subsidiaries to waive,
all rights for contribution or any other rights of recovery with respect to all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of whatever kind or nature whatsoever, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against each Lender and each Administrative Agent. The agreements in
this Section shall survive repayment of the Loans and all other amounts payable
hereunder.
14.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Administrative Agents, all future holders of the
Loans, the Reimbursement Obligations and the Acceptance Reimbursement
Obligations and their respective successors and assigns, except that no Borrower
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking or institutional financial business and in accordance with applicable
law, at any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to
<PAGE> 104
98
such Lender, any Commitment of such Lender or any other interest of such Lender
hereunder and under the other Loan Documents; provided that, in the case of
participations in any Canadian Term Loan granted by a Canadian Lender, such
Participant must be a resident of Canada for purposes of the Tax Act unless such
participation is granted pursuant to Section 14.7. In the event of any such sale
by a Lender of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan or
other interest for all purposes under this Agreement and the other Loan
Documents, and the Borrowers and the Administrative Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. No
Lender shall be entitled to create in favor of any Participant, in the
participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to Section 14.1. Each
of the Borrowers agrees that if amounts outstanding under this Agreement are due
or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 14.7(a) as
fully as if it were a Lender hereunder. Each of the Borrowers also agrees that
each Participant shall be entitled to the benefits of Sections 6.11, 6.12 and
6.13 with respect to its participation in the Commitments and the Loans and
other amounts outstanding from time to time as if it was a Lender; provided
that, in the case of Section 6.12, such Participant shall have complied with the
requirements of said Section and provided, further, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking or institutional financial business and in accordance with applicable
law, at any time and from time to time assign to any Lender or any affiliate
thereof or, with the consent of the Company and the General Administrative Agent
(which in each case shall not be unreasonably withheld or delayed), to an
additional bank, financial institution or mutual fund (an "Assignee") all or any
part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit L, executed by such Assignee, such assigning Lender (and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Company
and the General Administrative Agent) and delivered to the Administrative Agent
for its acceptance and recording in the Register, provided that no such
assignment to an Assignee (other than any Lender or any affiliate thereof) shall
be in an aggregate principal amount of less than $5,000,000 (other than in the
case of an assignment of all of a Lender's interests under this Agreement),
unless otherwise agreed by the Company and the General Administrative Agent. Any
such assignment need
<PAGE> 105
99
not be ratable as among the Facilities. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's rights and obligations under this
Agreement, such assigning Lender shall cease to be a party hereto).
Notwithstanding any provision of this paragraph (c) and paragraph (e) of this
Section, the consent of the Company shall not be required, and, unless requested
by the Assignee and/or the assigning Lender, new Notes shall not be required to
be executed and delivered by any Borrower, for any assignment which occurs at
any time when any Event of Default shall have occurred and be continuing.
(d) The General Administrative Agent, on behalf of the
Borrowers, shall maintain at the address of the General Administrative Agent
referred to in Section 14.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "Register") for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amounts of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agents and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender or an affiliate thereof, by the Company and the General
Administrative Agent) together with payment to the General Administrative Agent
of a registration and processing fee of $3,500, the General Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the relevant Borrower.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee,
subject to the provisions of Section 14.16, any and all financial information in
such Lender's possession concerning the Borrowers and their Affiliates which has
been delivered to such Lender by or on behalf of the Borrowers pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to
<PAGE> 106
100
absolute assignments and that such provisions do not prohibit assignments
creating security interests, including, without limitation, any pledge or
assignment by a Lender of any Loan or Note to any Federal Reserve Bank in
accordance with applicable law.
14.7 Adjustments; Set-off. (a) If any Lender (a "benefitted
Lender") (i) shall at any time prior to any date on which the Commitments are
terminated and the Loans become due and payable pursuant to Section 11 (an
"Acceleration") receive any payment of all or part of its Extensions of Credit
made by it to any Borrower, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Extensions of Credit
made by it to such Borrower, or interest thereon (in each case except to the
extent that this Agreement provides for payments to be allocated to the Lenders
under a particular Facility) or (ii) shall at any time after an Acceleration
receive any payment of all or part of the aggregate amount of the Extensions of
Credit made by such benefitted Lender to all Borrowers, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 11(f), or
otherwise), in a greater proportion than any such payment or collateral received
by any other Lender, if any, in respect by the aggregate amount of the
Extensions of Credit made by such Lender to all Borrowers, or interest thereon,
then, in each case described in the foregoing clauses (i) and (ii), such
benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Extensions of Credit, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefitted Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders (to the extent required by the foregoing clause (i) or (ii),
as applicable); provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by a
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch, agency or
Affiliate thereof to or for the credit or the account of the Borrower. Each
Lender agrees promptly to notify the Borrowers and the Administrative Agents
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
14.8 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one
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101
and the same instrument. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Company and the each Administrative Agent.
14.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agents, and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agents or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
14.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
14.12 Submission To Jurisdiction; Waivers. (a) Each Borrower
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgement in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in Section 14.2 or
at such other address of which each Administrative Agent shall have
been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
<PAGE> 108
102
(v) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
(b) The Canadian Borrower hereby irrevocably appoints the
Company as its agent for service of process in any proceeding referred to in
Section 14.2(a) and agrees that service of process in any such proceeding may be
made by mailing or delivering a copy thereof to it care of the Company at its
address for notice set forth in Section 14.2(a).
14.13 Acknowledgments. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agents and Lenders, on one
hand, and such Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among such Borrower and the
Lenders.
14.14 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS,
THE ADMINISTRATIVE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
14.15 Judgment. (a) If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the General Administrative Agent could
purchase the first currency with such other currency in the city in which it
normally conducts its foreign exchange operation for the first currency on the
Business Day preceding the day on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due
from it to any Lender hereunder shall, notwithstanding any judgment in a
currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
"Agreement Currency"), be discharged only to the extent that on the Business Day
following receipt by such Lender of any sum adjudged to be so due in the
Judgment Currency such Lender may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency; if the amount of
Agreement Currency so purchased is less than the sum originally due to such
Lender in the
<PAGE> 109
103
Agreement Currency, such Borrower agrees notwithstanding any such judgment to
indemnify such Lender against such loss, and if the amount of the Agreement
Currency so purchased exceeds the sum originally due to any Lender, such Lender
agrees to remit to such Borrower such excess.
14.16 Confidentiality. Each Lender agrees to keep confidential
all non-public information provided to it by the Company pursuant to this
Agreement that is designated by the Company in writing as confidential; provided
that nothing herein shall prevent any Lender from disclosing any such
information (i) to its affiliates, the Administrative Agents or any other
Lender, (ii) to any Transferee which agrees to comply with the provisions of
this subsection, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, or to direct or indirect
contractual counterparts in swap agreements relating to swaps with a Borrower or
such contractual counterparties' professional advisors provided that any such
contractual counterparty or its professional advisors shall agree to keep such
confidential information confidential, (iv) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender, (v) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vi) which has been publicly
disclosed other than in breach of this Agreement, or is currently publicly
available or is in the possession of a Lender on a nonconfidential basis or is
disclosed to a Lender on a nonconfidential basis by a person who in so doing has
not violated a duty of confidentiality owing to the Company (vii) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (viii) in connection with the exercise of any remedy
hereunder.
<PAGE> 110
104
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
LAIDLAW CHEM-WASTE, INC.
By:/s/ Paul Humphreys
-----------------------------------
Title: Senior Vice President
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:/s/ Paul Humphreys
-----------------------------------
Title: Senior Vice President
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent and Lender
By:/s/ Clark Terriff
-----------------------------------
Title: Director, Attorney in Fact
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent and Lender
By:/s/ Bruce Chambers
-----------------------------------
Title: Manager
By:/s/ David Pankhurst
-----------------------------------
Title: Manager
TD SECURITIES (USA) INC.,
as Arranger
By:/s/ Brendan J. O'Halloran
-----------------------------------
Title: Managing Director
<PAGE> 111
105
THE BANK OF NOVA SCOTIA,
as Managing Agent and Lender
By:/s/ William E. Zarrett
---------------------------------------
Title: Senior Relationship Manager
THE FIRST NATIONAL BANK OF CHICAGO,
as Managing Agent and Lender
By:/s/ Courtney R. Wood
---------------------------------------
Title: Vice President
NATIONSBANK, N.A.,
as Syndication Agent, Managing Agent and
Lender
By:/s/ David F. Sachenmaier, Jr.
---------------------------------------
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By:/s/ Linda M. Pace
---------------------------------------
Title: Vice President
By:/s/ Thomas Scifo
---------------------------------------
Title: Assistant Vice President
COMERICA BANK
By:/s/ Marian L. Enright
---------------------------------------
Title: Vice President
<PAGE> 112
106
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By:/s/ Takuya Honjo
--------------------------------------
Title: Senior Vice President
LTCB TRUST COMPANY
By:/s/ John J. Sullivan
--------------------------------------
Title: Executive Vice President
BANK OF SCOTLAND
By:/s/ Annie Chin Fat
--------------------------------------
Title: Assistant Vice President
CITIBANK N.A., NEW YORK
By:/s/ Thomas Bolin
--------------------------------------
Title: Attorney in Fact
CREDIT LYONNAIS ATLANTA AGENCY
By:/s/ David M. Cawrse
--------------------------------------
Title: First Vive President & Manager
LEHMAN COMMERCIAL PAPER INC.
By:/s/ Dennis J. Dee
--------------------------------------
Title: Vice President
<PAGE> 113
107
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By:/s/ Hachiro Hosoda
---------------------------------------
Title: Senior Vice President
MORGAN STANLEY SENIOR FUNDING, INC.
By:/s/ Christopher Pucillo
---------------------------------------
Title: Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:/s/ Thomas Dawe
---------------------------------------
Title: Vice President
By:/s/ Ian Reece
---------------------------------------
Title: Senior Credit Officer
SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By:/s/ Charles D. Martorano
---------------------------------------
Title: Senior Vice President
BANK OF MONTREAL
By:/s/ Rebecca D. Kuntz
---------------------------------------
Title: Director
<PAGE> 114
108
THE BANK OF TOKYO-MITSUBISHI,
LIMITED
By:/s/ Nicholas J. Cambell
---------------------------------------
Title: Attorney in Fact
BANK OF TOKYO-MITSUBISHI (CANADA)
By:/s/ Ted Vanderlaan
---------------------------------------
Title: Vice-President
FLEET NATIONAL BANK
By:/s/ Robert Rubino
---------------------------------------
Title: Vice President
HELLER FINANCIAL, INC.
By:/s/ Joann L. Holman
---------------------------------------
Title: Assistant Vice President
IMPERIAL BANK, A CALIFORNIA BANKING
CORPORATION
By:/s/ Ray Valdalma
---------------------------------------
Title: Senior Vice President
THE SANWA BANK LIMITED
ATLANTA AGENCY
By:/s/ Andrew N. Hammond
---------------------------------------
Title: Vice President
<PAGE> 115
109
SOCIETE GENERALE
By:/s/ Ralph Saheb
---------------------------------------
Title: Vice President & Manager
THE SUMITOMO BANK, LIMITED
By:/s/ Masayuki Fukushima
---------------------------------------
Title: Joint General Manager
THE SUMITOMO TRUST & BANKING CO.,
LTD., NEW YORK BRANCH
By:/s/ Suraj Bhatia
---------------------------------------
Title: Senior Vice President
WACHOVIA BANK OF SOUTH CAROLINA,
N.A.
By:/s/ Gina W. Lesslie
---------------------------------------
Title: Vice President
ALLSTATE INSURANCE COMPANY
By:/s/ Patricia W. Wilson
---------------------------------------
Title: Authorized Signatory
By:/s/ Ronald A. Mendel
---------------------------------------
Title: Authorized Signatory
THOROUGHBRED LIMITED PARTNERSHIP I
(APPALOOSA)
By:/s/ James Bolin
---------------------------------------
Title: Vice President
<PAGE> 116
110
ING CAPITAL ADVISORS, INC.
By:/s/ Michael P. McAdams
---------------------------------------
Title: Managing Director
KZH HOLDING CORPORATION II
By:/s/ Virginia Conway
---------------------------------------
Title: Authorized Agent
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By:/s/ Anthony R. Clemente
---------------------------------------
Title: Authorized Signatory
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (A UNIT OF THE CHASE
MANHATTAN BANK)
By:/s/ Joyce C. Delucca
---------------------------------------
Title: Managing Director
PARIBAS CAPITAL FUNDING LLC
By:/s/ Eric A. Greene
---------------------------------------
Title: Director
PILGRIM AMERICA PRIME RATE TRUST
By:/s/ Daniel A. Norman
---------------------------------------
Title: Senior Vice President
<PAGE> 117
111
PPM AMERICA, INC.
By:/s/ Michael DiRe
---------------------------------------
Title: Manager Director
KZH HOLDING CORPORATION
(SUNAMERICA)
By:/s/ Virginia Conway
---------------------------------------
Title: Authorized Agent
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By:/s/ Kathleen A. Zarn
---------------------------------------
Title: Vice President
FIRST CHICAGO NBD BANK, CANADA
By:/s/ James W. McNamee II
---------------------------------------
Title: Chairman
THE INDUSTRIAL BANK OF JAPAN
(CANADA)
By:/s/ Campbell McLeish
---------------------------------------
Title: Senior Vice President
CREDIT LYONNAIS CANADA
By:/s/ Glenn J. Hubert
---------------------------------------
Title: Manager, Corporate Banking
By:/s/ Caroline M. Stade
---------------------------------------
Title: Vice President, Corporate Banking
<PAGE> 118
112
SANWA BANK CANADA
By:/s/ Andrew N. Hammond
---------------------------------------
Title: Attorney in Fact
THE SUMITOMO BANK OF CANADA
By:/s/ Alfred Lee
---------------------------------------
Title: Vice President
INTEGON LIFE INSURANCE CORPORATION
By: TCW Asset Management Company
By:/s/ Mark Gold
-----------------------------------
Title: Attorney in Fact
UNITED COMPANIES LIFE INSURANCE
COMPANY
By: TCW Asset Management Corporation
By:/s/ Mark Gold
-----------------------------------
Title: Attorney in Fact
CRESCENT/MACH I, L.P.
By: TCW Asset Management Corporation,
its Investment Manager
By:/s/ Mark Gold
-----------------------------------
Title: Attorney in Fact
<PAGE> 119
Annex A
PRICING GRID
<TABLE>
<CAPTION>
===============================================================================================================================
Applicable Applicable Applicable
Margin Margin for Margin for
Consolidated Total Leverage for LIBOR Base Rate Canadian Commitment
Ratio Loans Loans Term Loans Fee Rate
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Greater than or equal to
3.00:1.00 2.375% 1.375% 1.375% 0.500%
- -------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to
2.75:1.00, but less than
3.00:1.00 2.000% 1.000% 1.000% 0.500%
- -------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to
2.25:1.00, but less than
2.75:1.00 1.625% 0.625% 0.625% 0.375%
- -------------------------------------------------------------------------------------------------------------------------------
Greater than or equal to
1.50:1.00, but less than
2.25:1.00 1.250% 0.250% 0.250% 0.375%
- -------------------------------------------------------------------------------------------------------------------------------
Less than 1.50:1.00 1.000% 0% 0.000% 0.250%
===============================================================================================================================
</TABLE>
Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Leverage Ratio shall become effective on the date
(the "Adjustment Date") on which financial statements are received by the
General Administrative Agent pursuant to Section 9.1(a) or 9.1(b) (but in any
event not later than the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 90th day after the end of each
fiscal year, as the case may be) and shall remain in effect until the next
change to be effected pursuant to this paragraph. If any financial statements
referred to above are not delivered within the time periods specified above,
then, until such financial statements are delivered, the Consolidated Total
Leverage Ratio as at the end of the fiscal period that would have been covered
thereby shall for the purposes of this definition be deemed to be greater than
3.00 to 1.00. Each determination of the Consolidated Total Leverage Ratio
pursuant to this definition shall be made with respect to the period of four
consecutive fiscal quarters of the Company ending at the end of the period
covered by the relevant financial statements.
Notwithstanding the foregoing, until the first Adjustment Date occurring
following the end of the first full fiscal quarter to be completed after the
Closing Date, the Applicable Margins and Commitment Fee Rate will be as set
forth above opposite Consolidated Total Leverage Ratio greater than or equal to
3.00:1:00.
<PAGE> 120
Schedule 1.1A
U.S. LENDER COMMITMENTS
<TABLE>
<CAPTION>
TRANCHE A TERM TRANCHE B TERM TRANCHE C TERM REVOLVING
U.S. LENDER LOAN COMMITMENT LOAN COMMITMENT LOAN COMMITMENT CREDIT C MMITMENT
- ----------- --------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Toronto Dominion (Texas), Inc...... US$15,032,813 US$27,500,000 US$27,500,000 US$25,054,688
The Bank of Nova Scotia............ 5,625,000 9,375,000
The First National Bank of
Chicago........................... 6,562,500 2,500,000 2,500,000 10,937,500
NationsBank, N.A................... 9,375,000 15,625,000
BHF-Bank Aktiengesellschaft........ 8,437,500 14,062,500
Comerica Bank...................... 8,437,500 14,062,500
The Industrial Bank of Japan,
Limited........................... 6,562,500 10,937,500
LTCB Trust Company................. 8,437,500 14,062,500
Bank of Scotland................... 5,625,000 9,375,000
Citibank N.A., New York............ 6,562,500 10,937,500
Credit Lyonnais Atlanta Agency..... 3,750,000 6,250,000
Lehman Commercial Paper Inc........ 6,562,500 10,937,500
The Mitsubishi Trust and
Banking Corporation............... 6,562,500 10,937,500
Morgan Stanley Senior Funding,
Inc............................... 6,562,500 3,500,000 3,500,000 10,937,500
Cooperatieve Centrale
Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland",
New York Branch................... 6,562,500 10,937,500
Southern Pacific Thrift and Loan
Association....................... 6,562,500 10,937,500
Bank of Montreal................... 5,156,250 8,593,750
The Bank of Tokyo-Mitsubishi,
Limited........................... 3,867,187 6,445,312
Fleet National Bank................ 5,156,250 8,593,750
Heller Financial, Inc.............. 5,156,250 8,593,750
Imperial Bank, a California
Banking Corporation............... 5,156,250 8,593,750
The Sanwa Bank Limited
Atlanta Agency.................... 3,281,250 5,468,750
Societe Generale................... 5,156,250 8,593,750
The Sumitomo Bank, Limited......... 4,537,500 7,562,500
Sumitomo Trust & Banking Co.,
Ltd., New York Branch............. 5,156,250 8,593,750
Wachovia Bank of South
Carolina, N.A..................... 5,156,250 8,593,750
Allstate Insurance Company......... 3,500,000 3,500,000
Thoroughbred Limited
Partnership I..................... 3,500,000 3,500,000
ING Capital Senior Secured......... 1,750,000 1,750,000
KZH Holding Corporation II......... 1,750,000 1,750,000
Merrill Lynch Senior Floating
Rate Fund, Inc.................... 2,500,000 2,500,000
</TABLE>
<PAGE> 121
2
<TABLE>
<CAPTION>
TRANCHE A TERM TRANCHE B TERM TRANCHE C TERM REVOLVING
U.S. LENDER LOAN COMMITMENT LOAN COMMITMENT LOAN COMMITMENT CREDIT C MMITMENT
- ----------- --------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Octogon Credit Investors Loan
Portfolio......................... 3,500,000 3,500,000
Paribas Capital Funding LLC........ 1,500,000 1,500,000
Pilgrim America Prime Rate
Trust............................. 5,000,000 5,000,000
PPM America, Inc................... 3,500,000 3,500,000
KZH Holding Corporation............ 3,500,000 3,500,000
Crescent/Mach I Partners, L.P...... 2,000,000 2,000,000
Integon Life Insurance
Corporation....................... 1,000,000 1,000,000
United Companies Life
Insurance Company................. 1,000,000 1,000,000
Van Kampen America Capital
Prime Rate Income Trust........... 7,500,000 7,500,000
-------------- ------------- ------------- --------------
US$165,000,000 US$75,000,000 US$75,000,000 US$275,000,000
============== ============= ============= ==============
</TABLE>
<PAGE> 122
Schedule 1.1B
CANADIAN LENDER COMMITMENTS
<TABLE>
<CAPTION>
CANADIAN LENDER COMMITMENT
--------------- ----------
<S> <C>
The Toronto-Dominion Bank ................... US$19,912,500
The Bank of Nova Scotia ..................... 10,000,000
First Chicago NBD Bank, Canada .............. 7,500,000
The Industrial Bank of Japan (Canada) ....... 5,000,000
Credit Lyonnais Canada ...................... 7,500,000
Bank of Tokyo-Mitsubishi (Canada) ........... 3,437,500
Sanwa Bank Canada ........................... 5,000,000
The Sumitomo Bank of Canada ................. 1,650,000
-------------
US$60,000,000
=============
</TABLE>
<PAGE> 123
Schedule 2
Properties to be Mortgaged
1. Lot 18, Research Park, as recorded in Liber 15 of Plats, pages 56-57,
Washtenaw County Records, commonly known as 3985 Research Park Drive,
Ann Arbor, Michigan.
2. Lot 15, Research Park, as recorded in Liber 15 of Plats, pages 56-57,
Washtenaw County Records, commonly known as 3965 Research Park Drive,
Ann Arbor, Michigan.
3. Approximately 3,685 Acres in 11 parcels of land located
seven miles east of Mojave in Kern County, California.
<PAGE> 124
Schedule 3
Mortgage Recording Jurisdictions
1. Mortgage to be recorded in Washtenaw County, Michigan
2. Deed of Trust to be recorded in Kern County, California
<PAGE> 125
SCHEDULE 4
INITIAL CANADIAN COLLATERAL DOCUMENTS
DOCUMENTS RELATING TO THE CANADIAN BORROWER
1. Share Pledge Agreement of the U.S. Borrower in respect of 35% of shares
held in the Canadian Borrower;
2. General Security Agreement of the Canadian Borrower;
3. Share Pledge Agreement of the Canadian Borrower in respect of all shares
held in Laidlaw Environmental Services Ltd.
DOCUMENTS RELATING TO THE CANADIAN SUBSIDIARIES
4. Guarantees of each of the following Canadian Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
(c) I.W.M. Disposal Inc.
(d) Laidlaw Environmental Services (Sarnia) Ltd.
(e) 1197296 Ontario Inc.
(f) Laidlaw Environmental Services (Ryley) Ltd.
(g) Laidlaw Environmental Services (Atlantic) Ltd.
(h) PPM Canada Inc.;
5. Limited Guarantees of each of the Quebec incorporated Canadian
Subsidiaries:
(a) Laidlaw Environmental Services (Quebec) Ltd.
(b) Les Enterprises D'Incineration Industrielle Tricil Inc.
(c) Laidlaw Environmental Services (Mercier) Ltd.;
6. General Security Agreement of each of the following Canadian
Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
<PAGE> 126
-2-
(c) I.W.M. Disposal Inc.
(d) Laidlaw Environmental Services (Sarnia) Ltd.
(e) 1197296 Ontario Inc.
(f) Laidlaw Environmental Services (Ryley) Ltd.
(g) Laidlaw Environmental Services (Atlantic) Ltd.
(h) PPM Canada Inc.,
7. Hypothec of each of the Quebec incorporated Canadian Subsidiaries:
(a) Laidlaw Environmental Services (Quebec) Ltd.
(b) Les Enterprises D'Incineration Industrielle Tricil Inc.
(c) Laidlaw Environmental Services (Mercier) Ltd.
8. Fixed and Floating Charge Debentures of each of the following Canadian
Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (Atlantic) Ltd.
(c) PPM Canada Inc.,
9. General Assignments of Receivables of each of the following Canadian
Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (Atlantic) Ltd.
(c) PPM Canada Inc.;
10. Share Pledge Agreement of each of the following Canadian Subsidiaries
in respect of all shares held in other Canadian Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
(c) Laidlaw Environmental Services (Sarnia) Ltd.
(d) Laidlaw Environmental Services (Quebec) Ltd.
<PAGE> 127
CREDIT AGREEMENT
Schedule 7.9
1. Lawsuit styled Douglas K. Dieter v. The Regents of The University of
California, et al. (including Solvent Services, Inc. "SSI") filed in the United
States District Court for The Eastern District of California (Case No.:
CIV-S-95-686 DFL GGH) relative to patent rights in an in-situ, steam injection,
remedial technology patent claimed by Plaintiff, a former employee of SSI while
a student at the University of California at Berkeley.
2. Lawsuit styled Frank Manchak, Jr. v. Chemical Waste Management, Inc. et
al. (including Laidlaw Environmental Services, Inc. and Rollins Environmental
Services (TX) Inc.) filed in the U.S. District Court for the District of
Delaware (Case No.: 95-709) relative to patent rights claimed by the Plaintiff
in a stabilization process involving the combination of sludge and a calcium
oxide containing material through a mixer.
3. Letter to USPCI dated 2/14/97 from Harding, Earley, Follmer & Frailey
representing Nittany Tarp, owner of US Patent No. 4,948,193, claiming that USPCI
is infringing upon the patent, offering opportunity to enter into licensing
agreement. Responded that letter was routed to our supplier. Supplier's
attorney, Laubscher & Laubscher responded by letter dated 3/26/97 denying
infringement, declining offer for license, stated that matter considered closed.
4. Letter to Laidlaw Environmental Services, Inc. ("LESI") dated April 12,
1996 from McBride Baker & Coles, representing Software Publishers Association
("SPA") claiming that LESI is utilizing unlicensed copies of software on
personal computers. Various correspondence has ensued. Latest correspondence
from LESI dated 10/9/96 offering to settle claims on a reasonable basis. No
response from SPA attorney.
5. Letter to LESI dated May 1, 1996 from Donahue, Gallagher, Woods & Wood
representing Business Software Alliance, alleging that LESI may have installed
more copies of software programs on its personal computers than it is
authorized to use. Various correspondence has ensued. Last correspondence
dated 4/9/97 from BSA attorney suggesting resolution of matter, LESI conducting
further research before responding.
<PAGE> 128
<TABLE>
<CAPTION>
Schedule 7.16
-------------
<S> <C>
Delaware
Laidlaw Environmental Services, Inc.* Delaware
Laidlaw Environmental Services of Illinois, Inc. Illinois
GSX Chemical Services of Ohio, Inc. Ohio
Laidlaw Environmental Services (BDT), Inc. New York
Laidlaw Environmental Services (FS), Inc. (87%) Delaware
Laidlaw Environmental Services (GS), Inc. Tennessee
Laidlaw Environmental Services of Chattanooga, Inc. Tennessee
Laidlaw Environmental Services of White Castle, Inc. Colorado
Laidlaw Environmental Services (Recovery), Inc. Louisiana
Laidlaw Environmental Services (TS), Inc. Delaware
Laidlaw Environmental Services (Imperial Valley), Inc. (50%) California
Laidlaw Environmental Services (Lokern), Inc. (23%) California
Laidlaw Environmental Services of California, Inc. California
Laidlaw Environmental Services (Imperial Valley), Inc. (50%) California
Laidlaw Environmental Services (Lokern), Inc. (77%) California
Laidlaw Environmental Services of South Carolina, Inc. South Carolina
Laidlaw Environmental Services (North East), Inc. New Hampshire
Corsan Trucking, Inc. (75%) Louisiana
Laidlaw Environmental Services (TES), Inc. Texas
Corsan Trucking, Inc. (25%) Louisiana
Laidlaw Chemical Services, Inc. Massachusetts
Laidlaw Environmental Services (TOC), Inc. South Carolina
Laidlaw Environmental Services (TG), Inc. Delaware
Redox, Inc. Delaware
Laidlaw Environmental Services (Altair), Inc. Texas
Laidlaw Environmental Services (FS), Inc. (13%) Delaware
Laidlaw Environmental Services (WT), Inc. Ohio
Laidlaw Environmental Services of Bartow, Inc. Florida
Laidlaw Environmental Services (Thermal Treatment), Inc. Delaware
LEMC, Inc. Delaware
Laidlaw Osco Holdlings, Inc. Delaware
Bryson Industrial Services, Inc. South Carolina
OSCO Treatment Systems of Mississippi, Inc. (50%) Tennessee
Laidlaw Environmental Services of Nashville, Inc. Tennessee
OSCO Environmental Services, Inc. Tennessee
Master Wash Products, Inc. California
USPCI Clive Incineration Facility, Inc. Oklahoma
Greenfield Services Corporation California
UPC Holding Corp. Delaware
USPCI, Inc. Delaware
United States Pollution Control, Inc. Oklahoma
Hydrocarbon Recyclers, Inc. Oklahoma
Hydrocarbon Recyclers, Inc. of San Antonio Texas
Hydrocarbon Recyclers, Inc. of Wichita Kansas
USPCI of Mississippi, Inc. (50%) Mississippi
Northeastern Remedial Corporation Delaware
ECDC Environmental, L.C. (80%) Utah
USPCI, Inc. of Georgia Delaware
Solvent Service Co., Inc. California
Municipal Services Corporation Oklahoma
Chemclear, Inc. of Los Angeles Delaware
Minnesota Industrial Containment Facility, Inc. Minnesota
USPCI of Pennsylvania, Inc. Pennsylvania
McDuffie County Environmental Facility, Inc. Delaware
East Carbon Development Financial Partners, Inc. Utah
PPM, Inc. of Georgia Georgia
Ninth Street Properties, Inc. Missouri
Laidlaw Environmental Services (Canada), Ltd. Canada
Laidlaw Environmental Services Ltd. Ontario
Laidlaw Environmental Services (B.C.) Ltd. Canada
I.W.M. Disposal, Inc. British Columbia
Laidlaw Environmental Services (Sarnia) Ltd. Ontario
1197296 Ontario Inc. Ontario
Laidlaw Environmental Services (Quebec) Ltd. Quebec
Les Enterprises D'Incineration Industrielle Tricil, Inc. Quebec
Laidlaw Environmental Services (Mercier) Ltd. Quebec
Laidlaw Environmental Services (Ryley) Ltd. Alberta
Laidlaw Environmental Services (Atlantic) Ltd. Nova Scotia
PPM Canada Inc. Ontario
Laidlaw Environmental Services de Mexico, S.A. de C.V. (80%) Mexico
Laidlaw Environmental Services (Puerto Rico) Puerto Rico
Allworth of Tennessee, Inc. Tennessee
Highway 36 Land Development Company Colorado
National Electric, Inc. Minnesota
Aptus, Inc. Delaware
Rollins O.P.C. Inc. California
Rollins Environmental Services (LA) Inc. Delaware
Rollins Environmental Services of Louisiana, Inc. Delaware
Rollins Environmental Services (NJ) Inc. Delaware
Rollins Environmental Services (TX) Inc. Delaware
Tipton Environmental Technology, Inc. Delaware
Rollins Environmental, Inc. Delaware
Sussex Contractors, Inc. Delaware
Gloucester County Construction Company Delaware
Custom Environmental Transport, Inc. Delaware
</TABLE>
The Chief Executive Office for each of the companies listed herein is 1301
Gervais Street, Suite 300, Columbia, South Carolina 29201.
* Prior to closing the name of this subsidiary will be changed.
<PAGE> 129
EXISTING INDEBTEDNESS SCHEDULE 10.2(f)
<TABLE>
<S> <C>
Tax exempt bonds -
Hazardous Waste Disposal Revenue Bonds,
Tooele County, Utah
Due August 1, 2010 $10,000,000
Industrial Development Revenue
Refunding and Improvement Bonds,
The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson
County (Tennessee)
Due May 1, 2003 $15,700,000
Solid Waste Disposal Refunding Revenue Bonds,
Carbon County, Utah
Due February 1, 2010 $23,000,000
Pollution Control Revenue Bonds,
California Pollution Control Financing Authority
Due May 1, 2002 $19,500,000
Solid Waste Disposal Revenue Bonds,
Carbon County, Utah
Due July 1, 2012 $8,000,000
Solid Waste Disposal Revenue Bonds,
Carbon County, Utah
Due July 1, 1997 $300,000
Hazardous Waste Treatment Revenue Bonds,
Tooele County, Utah
Due June 1, 2020 $45,700,000
Solid Waste Disposal Revenue Bonds,
Carbon County, Utah
Due November 1, 1997 $20,000,000
------------
Total $142,200,000
============
Amounts held in Trust relating to above tax exempt bonds-
Hazardous Waste Disposal Revenue Bonds,
Tooele County, Utah
Due August 1, 2010 $1,349,317
Industrial Development Revenue
Refunding and Improvement Bonds,
The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson
County (Tennessee)
Due May 1, 2003 $8,859,230
Solid Waste Disposal Revenue Bonds,
Carbon County, Utah
Due November 1, 1997 $20,000,000
-----------
$30,008,547
===========
Capital leases -
GE Capital $796,393
-----------
Vendor notes -
ABCO $150,000
DCSI (Steve Hogg) $550,000
Grassy Mountain (Kosrow Semnani) $177,671
-----------
$877,671
===========
</TABLE>
<PAGE> 130
EXISTING LIENS
SCHEDULE 10.3(f)
1. The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County has a lien on all machinery, equipment,
furniture and similar property of Laidlaw Environmental Services of
Nashville, Inc., by agreement dated May 1, 1993.
2. Carbon County, UT has a lien on certain machinery, equipment and landfill
site improvements of ECDC Environmental L.C., in connection with the
$8,000,000 Solid Waste Disposal Revenue Bond due July 1, 2012.
<PAGE> 131
EXISTING GUARANTEE OBLIGATIONS
SCHEDULE 10.4
Guaranty by Laidlaw Environmental Services, Inc.* guaranteeing performance of
JTM Industries, Inc. obligations pursuant to Master Equipment Lease with
Cargill Leasing Corporation; lease is dated 9/18/93; guaranty dated 1/19/96.
Second lease dated April 22, 1997; guaranty dated April 22, 1997.
Guaranty dated March 2, 1992 by USPCI, Inc. to Union Camp Corporation to
guaranty JTM's obligations under a contract for the purpose of sale of
marketable by-products generated by Union Camp Corporation.
Guaranty by Laidlaw Environmental Services, Inc.* of certain debts and
obligations of ViroGroup, Inc. up to a maximum of $3 million.
* Prior to closing, the name of this subsidiary will be changed.
<PAGE> 132
SCHEDULE 7.20
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
ACT(S) DOCUMENT
JURISDICTION DOCUMENT(S) FILED FILED UNDER FILING AUTHORITY
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Northwest Territories Debenture and Companies Act Companies Registry
Affidavits of Bona (Northwest and Documents
Fides and Execution Territories) and Registry
Corporation
Securities
Registration Act
(Northwest
Territories)
General Assignment Assignment of Book
of Accounts Debts Act (Northwest
Receivables and Territories)
Affidavit of Bona
Fides
- -----------------------------------------------------------------------------------------------------------------------------
Newfoundland Debenture and Registration of Deeds Registry of Deeds
Affidavit of Act (Newfoundland) and Registry of
Execution Assignment of Book
Debts
General Assignment Assignment of Book
of Accounts Debts Act
Receivables and (Newfoundland)
Affidavit of
Execution
- -----------------------------------------------------------------------------------------------------------------------------
Prince Edward Island Debenture and Corporations Registry office,
Affidavits of Bona Securities Act (PEI) Charlottetown
Fides and Execution
General Assignment Assignment of Book
of Accounts Debts Act (PEI)
Receivables and
Affidavit of Bona
Fide
- -----------------------------------------------------------------------------------------------------------------------------
Nova Scotia Debenture and Corporations Registry office,
Affidavits of Bona Securities Act (Nova Halifax
Fides and Execution Scotia)
General Assignment Assignment of Book
of Accounts Debts Act (Nova
Receivables and Scotia)
Affidavit of Bona
Fides
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 133
2
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
ACT(S) DOCUMENT
JURISDICTION DOCUMENT(S) FILED FILED UNDER FILING AUTHORITY
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
New Brunswick Financing Statement Personal Property Personal Property
Security Act (New Registry
Brunswick)
- -----------------------------------------------------------------------------------------------------------------------------
Quebec Hypothec Civil Code of Quebec Register of Personal
and Movable Real
Rights
- -----------------------------------------------------------------------------------------------------------------------------
Ontario Financing Statement Personal Property Personal Property
Security Act (Ontario) Registry
- -----------------------------------------------------------------------------------------------------------------------------
Manitoba Financial Statement Personal Property Personal Property
Security Act Registry
(Manitoba)
- -----------------------------------------------------------------------------------------------------------------------------
Saskatchewan Financing Statement Personal Property Personal Property
Security Act, 1993 Registry
(Saskatchewan)
- -----------------------------------------------------------------------------------------------------------------------------
Alberta Financing Statement Personal Property Personal Property
Security Act (Alberta) Registry
- -----------------------------------------------------------------------------------------------------------------------------
British Columbia Financing Statement Personal Property Personal Property
Security Act (British Registry
Columbia)
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 134
EXHIBIT A-2
FORM OF REQUEST FOR ACCEPTANCES
Date:___________________
The Toronto-Dominion Bank,
as Canadian Administrative Agent
8th Floor, Toronto Dominion Bank Tower
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attn: Manager Agency
Dear Sirs:
We refer to the Credit Agreement, dated as of May __, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders from time to time parties thereto, Toronto Dominion
(Texas) Inc., as General Administrative Agent, The Toronto-Dominion Bank, as
Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger, and The
Bank of Nova Scotia, NationsBank, N.A. and The First National Bank of Chicago,
as Managing Agents. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
We request the creation and purchase of the following
Acceptances:
Total Face Value: _____________________________
Date of Issue:.________________________________
Maturity Date: _______________________________
Resulting Term in Days: _______________________
Please debit our account at The Toronto-Dominion Bank, Toronto
Dominion Centre Branch, Toronto #______________ for the difference between (i)
the face amount of maturing Acceptances/the Canadian Term Loan balance (as
applicable) and (ii) the Acceptance Purchase Price plus the stamping fee on the
Acceptances to be created.
Very truly yours,
LAIDLAW ENVIRONMENTAL SERVICES (CANADA)
LTD.
By:
------------------------------------
Title:
<PAGE> 135
EXHIBIT B
- --------------------------------------------------------------------------------
GUARANTEE AND COLLATERAL AGREEMENT
made by
LAIDLAW ENVIRONMENTAL SERVICES, INC.
LAIDLAW CHEM-WASTE, INC.
and certain of its Subsidiaries
in favor of
TORONTO DOMINION (TEXAS), INC.
as General Administrative Agent
Dated as of May 15, 1997
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<PAGE> 136
TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS.............................................................................. 2
1.1 Definitions.............................................................................. 2
1.2 Other Definitional Provisions............................................................ 6
SECTION 2. GUARANTEE.................................................................................. 6
2.1 Guarantee................................................................................ 6
2.2 Right of Contribution.................................................................... 7
2.3 No Subrogation........................................................................... 7
2.4 Amendments, etc. with respect to the Borrower Obligations................................ 7
2.5 Guarantee Absolute and Unconditional..................................................... 8
2.6 Reinstatement............................................................................ 9
2.7 Payments................................................................................. 9
SECTION 3. GRANT OF SECURITY INTEREST................................................................. 9
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................. 10
4.1 Representations in Credit Agreement; Holdings Representations............................ 10
4.2 Title; No Other Liens.................................................................... 11
4.3 Perfected First Priority Liens........................................................... 11
4.4 Chief Executive Office................................................................... 11
4.5 Inventory and Equipment.................................................................. 11
4.6 Farm Products............................................................................ 11
4.7 Pledged Securities....................................................................... 11
4.8 Receivables.............................................................................. 12
4.9 Contracts................................................................................ 12
4.10 Intellectual Property................................................................... 13
SECTION 5. COVENANTS.................................................................................. 13
5.1 Covenants in Credit Agreement............................................................ 13
5.2 Delivery of Instruments and Chattel Paper................................................ 13
5.3 Maintenance of Insurance................................................................. 13
5.4 Payment of Obligations................................................................... 14
5.5 Maintenance of Perfected Security Interest; Further Documentation........................ 14
5.6 Changes in Locations, Name, etc. ........................................................ 14
5.7 Notices.................................................................................. 15
5.8 Pledged Securities....................................................................... 15
5.9 Receivables.............................................................................. 16
5.10 Contracts............................................................................... 17
5.11 Intellectual Property................................................................... 17
5.12 Special Covenants of Holdings........................................................... 18
SECTION 6. REMEDIAL PROVISIONS........................................................................ 19
6.1 Certain Matters Relating to Receivables.................................................. 19
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<PAGE> 137
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6.2 Communications with Obligors; Grantors Remain Liable..................................... 20
6.3 Pledged Stock............................................................................ 20
6.4 Proceeds to be Turned Over To General Administrative Agent............................... 21
6.5 Application of Proceeds.................................................................. 21
6.6 Code and Other Remedies.................................................................. 22
6.7 Registration Rights...................................................................... 22
6.8 Waiver; Deficiency....................................................................... 23
SECTION 7. THE GENERAL ADMINISTRATIVE AGENT........................................................... 24
7.1 General Administrative Agent's Appointment as Attorney-in-Fact, etc. .................... 24
7.2 Duty of General Administrative Agent..................................................... 25
7.3 Execution of Financing Statements........................................................ 26
7.4 Authority of General Administrative Agent................................................ 26
SECTION 8. MISCELLANEOUS.............................................................................. 26
8.1 Amendments in Writing.................................................................... 26
8.2 Notices.................................................................................. 26
8.3 No Waiver by Course of Conduct; Cumulative Remedies...................................... 26
8.4 Enforcement Expenses; Indemnification.................................................... 26
8.5 Successors and Assigns................................................................... 27
8.6 Set-Off.................................................................................. 27
8.7 Counterparts............................................................................. 28
8.8 Severability............................................................................. 28
8.9 Section Headings......................................................................... 28
8.10 Integration............................................................................. 28
8.11 GOVERNING LAW........................................................................... 28
8.12 Submission To Jurisdiction; Waivers..................................................... 28
8.13 Acknowledgements........................................................................ 29
8.14 WAIVER OF JURY TRIAL.................................................................... 29
8.15 Additional Grantors..................................................................... 29
8.16 Releases................................................................................ 29
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ii
<PAGE> 138
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of May 15, 1997,
made by each of the signatories hereto (together with any other entity that may
become a party hereto as provided herein, the "Grantors"), in favor of TORONTO
DOMINION (TEXAS), INC., as General Administrative Agent (in such capacity, the
"General Administrative Agent") for the banks and other financial institutions
or entities (the "Lenders") from time to time parties to the Credit Agreement,
dated as of May 9, 1997 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among LAIDLAW CHEM-WASTE, INC., a
Delaware corporation (the "Company"), LAIDLAW ENVIRONMENTAL SERVICES (CANADA)
LTD. (the "Canadian Borrower"; together with the Company, the "Borrowers"), the
Lenders, the General Administrative Agent, The Toronto-Dominion Bank, as
Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
NationsBank, N.A., as Syndication Agent, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as Managing Agents.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrowers upon the terms
and subject to the conditions set forth therein;
WHEREAS, the Borrowers are members of an affiliated group of
companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the
Credit Agreement will be used in part to enable the Borrowers to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;
WHEREAS, the Borrowers and the other Grantors are engaged in
related businesses, and each Grantor will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrowers under the
Credit Agreement, and for the Working Capital Lender to make extensions of
credit to the Company under the Working Capital Facility (as hereinafter
defined), that the Grantors shall have executed and delivered this Agreement to
the General Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce
the General Administrative Agent and the Lenders to enter into the Credit
Agreement and the Working Capital Lender to enter into the Working Capital
Facility and to induce the Lenders and the Working Capital Lender to make their
respective extensions of credit to the Borrowers thereunder, each Grantor hereby
agrees with the General Administrative Agent, for the ratable benefit of the
Lenders, as follows:
<PAGE> 139
2
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the
same may be amended, supplemented or otherwise modified from time to
time.
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans, Reimbursement Obligations,
Acceptance Reimbursement Obligations and Acceptance Notes, the
Company's guarantee obligations under Section 13 of the Credit
Agreement and all other obligations and liabilities of the Borrowers
(including, without limitation, interest accruing at the then
applicable rate provided in the Credit Agreement after the maturity of
the Loans, Reimbursement Obligations, Acceptance Reimbursement
Obligations and Acceptance Notes and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Borrower, whether or
not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the General Administrative Agent or any Lender (or,
in the case of any Hedging Agreement referred to below, any Affiliate
of any Lender), whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, the Credit Agreement, this
Agreement, the other Loan Documents, any Letter of Credit or any
Hedging Agreement entered into by any Borrower with any Person which,
at the time such Hedging Agreement is entered into, is a Lender (or any
Affiliate of any Lender) or any other document made, delivered or given
in connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, guarantee obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the General
Administrative Agent or to the Lenders that are required to be paid by
any Borrower pursuant to the terms of any of the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by
the General Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts": the contracts and agreements listed in Schedule
7, as the same may be amended, supplemented or otherwise modified from
time to time, including, without limitation, (i) all rights of any
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of any Grantor to damages arising
thereunder and (iii) all rights of any Grantor to perform and to
exercise all remedies thereunder.
<PAGE> 140
3
"Copyrights": (i) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof,
whether registered or unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6), all
registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any Grantor
as licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
"General Intangibles": all "general intangibles" as such term
is defined in Section 9- 106 of the Uniform Commercial Code in effect
in the State of New York on the date hereof and, in any event,
including, without limitation, with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or
any property of such Grantor is subject, as the same may from time to
time be amended, supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys due and to
become due to it thereunder or in connection therewith, (ii) all rights
of such Grantor to damages arising thereunder and (iii) all rights of
such Grantor to perform and to exercise all remedies thereunder, in
each case to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and interest in
such contract, agreement, instrument or indenture is not prohibited by
such contract, agreement, instrument or indenture without the consent
of any other party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to terminate its
obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing shall
not be deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a security interest
pursuant to this Agreement in any Receivable or any money or other
amounts due or to become due under any such contract, agreement,
instrument or indenture.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations, (ii) the Working
Capital Obligations and (iii) all obligations and liabilities of such
Guarantor which may arise under or in connection with this Agreement or
any other Loan Document to which such Guarantor is a party, in each
case whether on account of guarantee obligations, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the General Administrative Agent or to the Lenders that are required
to be paid by such Guarantor pursuant to the terms of this Agreement or
any other Loan Document).
"Guarantors": the collective reference to each Grantor other
than the Company.
"Holdings": Laidlaw Environmental Services, Inc. (formerly
known as Rollins Environmental Services, Inc.), a Delaware corporation.
<PAGE> 141
4
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Intercompany Note": any promissory note evidencing loans made
by any Grantor to Holdings or any of its Subsidiaries.
"Issuers": the collective reference to each issuer of a
Pledged Security.
"Lenders": as defined in the preambles to this Agreement and
including, unless the context otherwise requires, each Affiliate of any
Lender that has entered into any Hedging Agreement with either
Borrower.
"New York UCC": the Uniform Commercial Code as from time to
time in effect in the State of New York.
"Obligations": (i) in the case of the Company, the Borrower
Obligations and the Working Capital Obligations, and (ii) in the case
of each Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United States, any
other country or any political subdivision thereof, all reissues and
extensions thereof, including, without limitation, any of the foregoing
referred to in Schedule 6, (ii) all applications for letters patent of
the United States or any other country and all divisions, continuations
and continuations-in-part thereof, including, without limitation, any
of the foregoing referred to in Schedule 6, and (iii) all rights to
obtain any reissues or extensions of the foregoing.
"Patent License": all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to
manufacture, use or sell any invention covered in whole or in part by a
Patent, including, without limitation, any of the foregoing referred to
in Schedule 6.
"Pledged Notes": all promissory notes listed on Schedule 2,
all Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than
promissory notes issued in connection with extensions of trade credit
by any Grantor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock certificates, options
or rights of any nature whatsoever in respect of the Capital Stock of
any Person that may be issued or granted to, or held by, any Grantor
while this Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event,
<PAGE> 142
5
shall include, without limitation, all dividends or other income from
the Pledged Securities, collections thereon or distributions or
payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Securities Act": the Securities Act of 1933, as amended.
"Subsidiary Guarantor": each of the Guarantors other than
Holdings.
"Trademarks": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals thereof.
"Trademark License": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.
"Westinghouse Debt Agreement": the collective reference to (i)
the Promissory Note, dated May 15, 1997 made by Holdings to
Westinghouse Electric Corporation in the initial principal amount of
$60,000,000 and (ii) the Stock Purchase Agreement, dated as of March 7,
1990, as amended, between Holdings and Westinghouse Electric
Corporation.
"Working Capital Facility": the working capital credit
facility evidenced by the letter agreement, dated as of May 9, 1997,
between NationsBank, N.A., as lender, and the Company, as borrower, as
the same may be amended, modified, supplemented, restated or replaced
from time to time; provided that, after giving effect to each such
amendment, modification, supplement, restatement or replacement, such
working capital credit facility shall be permitted under the Credit
Agreement.
"Working Capital Lender": NationsBank, N.A., as lender, under
the Working Capital Facility, and any Person that is a Lender under the
Credit Agreement and that replaces Nationsbank, N.A. under the Working
Capital Facility.
"Working Capital Obligations": all of the obligations,
liabilities and indebtedness of the Company (including, without
limitation, interest accruing at the then applicable rate provided in
the Working Capital Facility after the maturity of the extensions of
credit thereunder and interest accruing at the then applicable rate
provided in the Working Capital Facility after the filing of any
petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or
not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Working Capital Lender whether direct or
indirect, absolute or contingent, due or to become due, or now existing
or
<PAGE> 143
6
hereafter incurred, which may arise under, out of, or in connection
with, the Working Capital Facility or any other document made,
delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, guarantee
obligations, fees, indemnities, costs, expenses or otherwise
(including, without limitation, all fees and disbursements of counsel
to the Working Capital Lender that are required to be paid by any
Borrower pursuant to the terms of any of the foregoing agreements).
1.2 Other Definitional Provisions. (a) The words "hereof",
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Grantor, shall refer
to such Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the General
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, indorsees, transferees and assigns, the prompt and
complete payment and performance by the Borrowers when due (whether at the
stated maturity, by acceleration or otherwise) of the Borrower Obligations and
the Working Capital Obligations.
(b) Anything herein or in any other Loan Document to the
contrary notwithstanding, the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating to
the insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations or the
Working Capital Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
the General Administrative Agent or any Lender hereunder.
(d) The guarantee contained in this Section 2 shall remain in
full force and effect until all the Borrower Obligations and the Working Capital
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrowers may be free from any Borrower Obligations or the Working Capital
Obligations.
(e) No payment made by either Borrower, any of the Guarantors,
any other guarantor or any other Person or received or collected by the General
Administrative Agent or any Lender from either Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any
<PAGE> 144
7
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Borrower Obligations
or the Working Capital Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder which shall,
notwithstanding any such payment (other than any payment made by such Guarantor
in respect of the Borrower Obligations or the Working Capital Obligations or any
payment received or collected from such Guarantor in respect of the Borrower
Obligations and the Working Capital Obligations), remain liable for the Borrower
Obligations and the Working Capital Obligations up to the maximum liability of
such Guarantor hereunder until the Borrower Obligations and the Working Capital
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated.
2.2 Right of Contribution. Each Subsidiary Guarantor hereby
agrees that to the extent that a Subsidiary Guarantor shall have paid more than
its proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the General Administrative Agent and the Lenders, and each
Subsidiary Guarantor shall remain liable to the General Administrative Agent and
the Lenders for the full amount guaranteed by such Subsidiary Guarantor
hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the General Administrative Agent or any Lender, no Guarantor shall be entitled
to be subrogated to any of the rights of the General Administrative Agent or any
Lender against either Borrower or any other Guarantor or any collateral security
or guarantee or right of offset held by the General Administrative Agent or any
Lender for the payment of the Borrower Obligations or the Working Capital
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from either Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the General Administrative Agent and the Lenders by the Borrowers on account of
the Borrower Obligations and the Working Capital Obligations are paid in full,
no Letter of Credit shall be outstanding and the Commitments are terminated. If
any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations and the Working Capital
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the General Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the General Administrative Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
General Administrative Agent, if required), to be applied against the Borrower
Obligations and the Working Capital Obligations, whether matured or unmatured,
in such order as the General Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder notwithstanding that, without
any reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations or the Working Capital Obligations made by the General
Administrative Agent or any Lender may be rescinded by the General
Administrative Agent or such Lender and any of the Borrower Obligations or the
Working Capital Obligations continued, and the Borrower Obligations or the
Working Capital Obligations, or the liability of any other Person upon or for
any
<PAGE> 145
8
part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the General Administrative Agent or any Lender, and
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the General Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the General Administrative Agent or any Lender for
the payment of the Borrower Obligations or the Working Capital Obligations may
be sold, exchanged, waived, surrendered or released. Neither the General
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or the Working Capital Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations or the Working Capital Obligations and notice of or
proof of reliance by the General Administrative Agent or any Lender upon the
guarantee contained in this Section 2 or acceptance of the guarantee contained
in this Section 2; the Borrower Obligations and the Working Capital Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between either Borrower
and any of the Guarantors, on the one hand, and the General Administrative Agent
and the Lenders, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this
Section 2. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon either Borrower or any of
the Guarantors with respect to the Borrower Obligations or the Working Capital
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
the Working Capital Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the General Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by either Borrower or any other
Person against the General Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of either
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of either Borrower for the Borrower
Obligations or the Working Capital Obligations, or of such Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the General Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against either Borrower, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or the Working Capital Obligations or any
right of offset with respect thereto, and any failure by the General
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from either Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of either
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of
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any obligation or liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of the
General Administrative Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations or the
Working Capital Obligations is rescinded or must otherwise be restored or
returned by the General Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of either Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, either Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the General Administrative Agent without set-off or
counterclaim in U.S. Dollars at the office of the General Administrative Agent
referred to in Section 14.2 of the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the General
Administrative Agent, and hereby grants to the General Administrative Agent, for
the ratable benefit of the Lenders, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in which
such Grantor now has or at any time in the future may acquire any right, title
or interest (collectively, the "Collateral"), as collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
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10
(k) all books and records pertaining to the Collateral; and
(l) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the General Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrowers thereunder, each Grantor hereby
represents and warrants to the General Administrative Agent and each Lender
that:
4.1 Representations in Credit Agreement; Holdings
Representations. (a) In the case of each Guarantor, the representations and
warranties set forth in Section 7 of the Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a party, each of
which is hereby incorporated herein by reference, are true and correct, and the
General Administrative Agent and each Lender shall be entitled to rely on each
of them as if they were fully set forth herein, provided that each reference in
each such representation and warranty to a Borrower's knowledge shall, for the
purposes of this Section 4.1(a), be deemed to be a reference to such Guarantor's
knowledge.
(b) In the case of Holdings:
(i) Holdings (w) is duly organized, validly existing and
in good standing under the laws of the State of Delaware, (x) has the
corporate power and authority, and the legal right, to own and operate
its property, to lease the property it operates as lessee and to
conduct the business in which it is currently engaged, (y) is duly
qualified as a foreign corporation and in good standing under the laws
of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification and
(z) is in compliance with all Requirements of Law except to the extent
that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(ii) Holdings has the corporate power and authority, and
the legal right, to make, deliver and perform the Loan Documents to
which it is a party and has taken all necessary corporate action to
authorize the execution, delivery and performance of the Loan Documents
to which it is a party. No consent or authorization of, filing with,
notice to or other act by or in respect of, any Governmental Authority
or any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of the Loan Documents
to which Holdings is a party. This Agreement has been, and each other
Loan Document to which it is a party will be, duly executed and
delivered on behalf of Holdings. This Agreement constitutes, and each
other Loan Document to which it is a party when executed and delivered
will constitute, a legal, valid and binding obligation of Holdings
enforceable against Holdings in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing.
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11
(iii) The execution, delivery and performance of the Loan
Documents to which Holdings is a party will not violate any Requirement
of Law or Contractual Obligation of Holdings or of any of its
Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or
revenues pursuant to any such Requirement of Law or Contractual
Obligation (other than pursuant to this Agreement).
(iv) No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings, threatened by or against Holdings or any of its
Subsidiaries or against any of its or their respective properties or
revenues (x) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (y) which could
reasonably be expected to have a Material Adverse Effect.
(v) Holdings has no material assets other than the stock
of the Company.
4.2 Title; No Other Liens. Except for the security interest
granted to the General Administrative Agent for the ratable benefit of the
Lenders pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part of the
Collateral is on file or of record in any public office, except such as have
been filed in favor of the General Administrative Agent, for the ratable benefit
of the Lenders, pursuant to this Agreement or as are permitted by the Credit
Agreement.
4.3 Perfected First Priority Liens. The security interests
granted pursuant to this Agreement (a) upon completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other
documents referred to on said Schedule, have been delivered to the General
Administrative Agent in completed and duly executed form) will constitute valid
perfected security interests in all of the Collateral in favor of the General
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor and (b) are prior to all other Liens
on the Collateral in existence on the date hereof except for (i) unrecorded
Liens permitted by the Credit Agreement which have priority over the Liens on
the Collateral by operation of law and (ii) Liens described on Schedule 8.
4.4 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the Inventory
and the Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.
4.6 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged Stock
pledged by such Grantor hereunder constitute all the issued and outstanding
shares of all classes of the Capital Stock of each Issuer owned by such Grantor
(or, in the case of any Issuer that is a Foreign Subsidiary, if less, 65% of the
issued and outstanding shares of Capital Stock of such Issuer).
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12
(b) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such Grantor under
or in connection with any Receivable is evidenced by any Instrument or Chattel
Paper which has not been delivered to the General Administrative Agent.
(b) The amounts represented by such Grantor to the Lenders
from time to time as owing to such Grantor in respect of the Receivables will at
such times be accurate.
4.9 Contracts. (a) No consent of any party (other than such
Grantor) to any Contract is required, or purports to be required, in connection
with the execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the parties thereto, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
(d) Neither such Grantor nor (to the best of such Grantor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the terms thereof in any manner that, in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and
under the Contracts are not subject to any defenses, offsets, counterclaims or
claims that, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(f) Such Grantor has delivered to the Administrative Agent a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto.
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13
(g) No amount payable to such Grantor under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Administrative Agent.
(h) None of the parties to any Contract is a Governmental
Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is
valid, subsisting, unexpired and enforceable, has not been abandoned and does
not infringe the intellectual property rights of any other Person.
(c) Except as set forth in Schedule 6, on the date hereof,
none of the Intellectual Property is the subject of any licensing or franchise
agreement pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge
of such Grantor, threatened, on the date hereof (i) seeking to limit, cancel or
question the validity of any Intellectual Property or such Grantor's ownership
interest therein, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Intellectual Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the General
Administrative Agent and the Lenders that, from and after the date of this
Agreement until the Obligations shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of each
Guarantor, such Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the General Administrative Agent, duly
indorsed in a manner satisfactory to the General Administrative Agent, to be
held as Collateral pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will maintain,
with financially sound and reputable companies, insurance policies (i) insuring
the Inventory and Equipment against loss by fire, explosion, theft and such
other casualties as may be reasonably satisfactory to the General
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Administrative Agent and (ii) insuring such Grantor, the General Administrative
Agent and the Lenders against liability for personal injury and property damage
relating to such Inventory and Equipment, such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the
General Administrative Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the General Administrative
Agent of written notice thereof, (ii) name the General Administrative Agent as
insured party or joint loss payee, (iii) if reasonably requested by the General
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the General Administrative Agent.
(c) The Company shall deliver to the General Administrative
Agent and the Lenders a report of a reputable insurance broker with respect to
such insurance during the month of April in each calendar year and such
supplemental reports with respect thereto as the General Administrative Agent
may from time to time reasonably request.
5.4 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all taxes, assessments and governmental charges
or levies imposed upon the Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount or validity
thereof is currently being contested in good faith by appropriate proceedings,
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor and such proceedings could not reasonably be expected to
result in the sale, forfeiture or loss of any material portion of the Collateral
or any interest therein.
5.5 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the General Administrative
Agent and the Lenders from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the General Administrative Agent may reasonably request,
all in reasonable detail.
(c) At any time and from time to time, upon the written
request of the General Administrative Agent, and at the sole expense of such
Grantor, such Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further actions
as the General Administrative Agent may reasonably request for the purpose of
obtaining or preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the filing of any
financing or continuation statements under the Uniform Commercial Code (or other
similar laws) in effect in any jurisdiction with respect to the security
interests created hereby.
5.6 Changes in Locations, Name, etc. Such Grantor will not,
except upon 15 days' prior written notice to the General Administrative Agent
and delivery to the General Administrative
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Agent of (a) all additional executed financing statements and other documents
reasonably requested by the General Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to Schedule 5 showing any additional
location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at
a location other than those listed on Schedule 5;
(ii)change the location of its chief executive office or
sole place of business from that referred to in Section 4.4; or
(iii)change its name, identity or corporate structure to
such an extent that any financing statement filed by the General
Administrative Agent in connection with this Agreement would become
misleading.
5.7 Notices. Such Grantor will advise the General
Administrative Agent and the Lenders promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the General Administrative
Agent to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests created
hereby.
5.8 Pledged Securities. (a) If such Grantor shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Issuer, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the General Administrative Agent and the Lenders, hold the
same in trust for the General Administrative Agent and the Lenders and deliver
the same forthwith to the General Administrative Agent in the exact form
received, duly indorsed by such Grantor to the General Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the General Administrative Agent
so requests, signature guaranteed, to be held by the General Administrative
Agent, subject to the terms hereof, as additional collateral security for the
Obligations. Any sums paid upon or in respect of the Pledged Securities upon the
liquidation or dissolution of any Issuer shall be paid over to the General
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the General Administrative
Agent, be delivered to the General Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged Securities
shall be received by such Grantor, such Grantor shall, until such money or
property
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is paid or delivered to the General Administrative Agent, hold such money or
property in trust for the Lenders, segregated from other funds of such Grantor,
as additional collateral security for the Obligations. Notwithstanding anything
to the contrary contained herein, in no event shall any Grantor be required to
pledge more than 65% of the outstanding Capital Stock of any Foreign Subsidiary.
(b) Without the prior written consent of the General
Administrative Agent, such Grantor will not (i) vote to enable, or take any
other action to permit, any Issuer to issue any stock or other equity securities
of any nature or to issue any other securities convertible into or granting the
right to purchase or exchange for any stock or other equity securities of any
nature of any Issuer, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Pledged Securities or
Proceeds thereof (except pursuant to a transaction expressly permitted by the
Credit Agreement), (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Pledged
Securities or Proceeds thereof, or any interest therein, except for the security
interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of such Grantor or the General
Administrative Agent to sell, assign or transfer any of the Pledged Securities
or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such
Issuer agrees that (i) it will be bound by the terms of this Agreement relating
to the Pledged Securities issued by it and will comply with such terms insofar
as such terms are applicable to it, (ii) it will notify the General
Administrative Agent promptly in writing of the occurrence of any of the events
described in Section 5.8(a) with respect to the Pledged Securities issued by it
and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis
mutandis, with respect to all actions that may be required of it pursuant to
Section 6.3(c) or 6.7 with respect to the Pledged Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary course of
business consistent with its past practice, such Grantor will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the General Administrative
Agent a copy of each material demand, notice or document received by it that
questions or calls into doubt the validity or enforceability of more than 5% of
the aggregate amount of the then outstanding Receivables.
(c) If at any time the aggregate amount owing on all Accounts
of all Grantors as to which a Governmental Authority is an obligor
(collectively, "Total Government Accounts"), exceeds 10% (or, if an Event of
Default shall have occurred and be continuing, 5%) of the aggregate amount owing
on all Accounts of all Grantors (collectively, "Total Accounts"), such Grantor
shall, if requested by the General Administrative Agent, at such Grantor's sole
cost and expense, from and after the date on which such aggregate amount first
exceeds such percentage (regardless of whether the aggregate amount owing on the
Total Government Accounts shall equal less than 10% (or 5%, as the case may be)
of the aggregate amount owing on the Total Accounts at any subsequent time),
deliver to the General Administrative Agent such assignments, notices of
assignment and other documents or information as shall be necessary or otherwise
requested by the General Administrative Agent to permit the assignment hereunder
of all Accounts as to which a Governmental Authority is an obligor
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pursuant to all applicable Requirements of Law (including, without limitation,
the Assignment of Claims Act of 1940, as amended).
5.10 Contracts. (a) Such Grantor will perform and comply in
all material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive
any provision of any Contract in any manner which could reasonably be expected
to materially adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination).
(d) Such Grantor will deliver to the Administrative Agent a
copy of each material demand, notice or document received by it relating in any
way to any Contract that questions the validity or enforceability of such
Contract.
5.11 Intellectual Property. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any mark which is confusingly similar or a colorable
imitation of such Trademark unless the General Administrative Agent, for the
ratable benefit of the Lenders, shall obtain a perfected security interest in
such mark pursuant to this Agreement, and (v) not (and not permit any licensee
or sublicensee thereof to) do any act or knowingly omit to do any act whereby
such Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not
do any act, or omit to do any act, whereby any material Patent may become
forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will
employ each material Copyright and (ii) will not (and will not permit any
licensee or sublicensee thereof to) do any act or knowingly omit to do any act
whereby any material portion of the Copyrights may become invalidated or
otherwise impaired. Such Grantor will not (either itself or through licensees)
do any act whereby any material portion of the Copyrights may fall into the
public domain.
(d) Such Grantor (either itself or through licensees) will not
do any act that knowingly uses any material Intellectual Property to infringe
the intellectual property rights of any other Person.
(e) Such Grantor will notify the General Administrative Agent
and the Lenders immediately if it knows, or has reason to know, that any
application or registration relating to any material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office, the United States Copyright Office or any court or
tribunal in any country) regarding such Grantor's
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18
ownership of, or the validity of, any material Intellectual Property or such
Grantor's right to register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, such Grantor
shall report such filing to the General Administrative Agent within five
Business Days after the last day of the fiscal quarter in which such filing
occurs. Upon request of the General Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the General Administrative Agent may request to
evidence the General Administrative Agent's and the Lenders' security interest
in any Copyright, Patent or Trademark and the goodwill and general intangibles
of such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is
infringed, misappropriated or diluted by a third party, such Grantor shall (i)
take such actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the General
Administrative Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.12 Special Covenants of Holdings. Holdings hereby covenants
and agrees that:
(a) The terms of each of subsections 9.3, 9.4, 9.5, 9.6, 9.7,
9.8, 9.9 and 9.10 of the Credit Agreement shall apply to Holdings,
mutatis mutandis, to the same extent as if the references to a Borrower
therein were references to Holdings, and Holdings will perform and
satisfy all such covenants as so applied to it.
(b) Holdings shall take, or shall refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in
Section 9 or 10 of the Credit Agreement, and so that no Default or
Event of Default, is caused by any act or failure to act of Holdings.
(c) Holdings shall not incur any Indebtedness or Guarantee
Obligations, or make any investments in, or loans or advances to any
Person, or merge or consolidate with any Person, or conduct, transact
or otherwise engage, or commit to transact, conduct or otherwise
engage, in any business or operations other than (i) the ownership of
the capital stock of the Company and the exercise of rights and
performance of obligations in connection therewith, (ii) the entry
into, and exercise of rights and performance of obligations in respect
of, this Agreement, the Seller Note, the Westinghouse Debt Agreement,
the Stock Purchase Agreement, equity subscription agreements,
registration rights agreements, voting and other stockholder
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agreements, engagement letters, underwriting agreements and other
agreements in respect of its equity securities or any offering,
issuance or sale thereof, (iii) the offering, issuance and sale of its
equity securities to the extent such offering, issuance or sale does
not constitute a Change of Control or would be otherwise inconsistent
with the provisions of the Credit Agreement, (iv) the entry into, and
exercise of rights and performance of obligations in respect of,
indentures, engagement letters, underwriting agreements and other
agreements in respect of Indebtedness permitted under clause (iii)
above or any offering, issuance or sale thereof, and the offering,
issuance and sale of its debt securities representing such
Indebtedness, (v) the incurrence of Guarantee Obligations in the
ordinary course of business in respect of the obligations of the
Company and its Subsidiaries incurred in the ordinary course of
business, (vi) the filing of registration statements, and compliance
with applicable reporting and other obligations, under federal, state
or other securities laws, (vii) the listing of its equity securities
and compliance with applicable reporting and other obligations in
connection therewith, (viii) the retention of transfer agents, private
placement agents, underwriters, counsel, accountants and other advisors
and consultants, (ix) the performance of obligations under and in
compliance with its certificate of incorporation and by-laws, or any
applicable law, ordinance, regulation, rule, order, judgment, decree or
permit, including, without limitation, as a result of or in connection
with the activities of the Company, (x) the incurrence and payment of
any taxes for which it may be liable and (xi) other activities directly
related to the foregoing.
(d) Holdings shall not (i) amend the subordination provisions
of the Seller Note or the Westinghouse Debt Agreement or (ii) pay cash
interest on the Seller Note prior to the second anniversary of the
Closing Date.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The General
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the General Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the General
Administrative Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
General Administrative Agent to furnish to the General Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The General Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the General
Administrative Agent's direction and control, and the General Administrative
Agent may curtail or terminate said authority at any time after the occurrence
and during the continuance of an Event of Default. If required by the General
Administrative Agent at any time after the occurrence and during the continuance
of an Event of Default, any payments of Receivables, when collected by any
Grantor, (i) shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the General Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the General Administrative
Agent, subject to withdrawal by the General Administrative Agent for the account
of the Lenders only as provided in Section , and (ii) until so turned over,
shall be held by such Grantor in trust for the General Administrative Agent and
the Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables
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shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.
(c) At the General Administrative Agent's request, each
Grantor shall deliver to the General Administrative Agent all original and other
documents evidencing, and relating to, the agreements and transactions which
gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.
6.2 Communications with Obligors; Grantors Remain Liable. (a)
The General Administrative Agent in its own name or in the name of others may at
any time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the General Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
(b) Upon the request of the General Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
each Grantor shall notify obligors on the Receivables and parties to the
Contracts that the Receivables and the Contracts have been assigned to the
General Administrative Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the General Administrative
Agent.
(c) Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Receivables and the Contracts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the General Administrative Agent nor any Lender
shall have any obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract by reason of or arising out of this Agreement
or the receipt by the General Administrative Agent or any Lender of any payment
relating thereto, nor shall the General Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the General Administrative Agent shall have given
notice to the relevant Grantor of the General Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 6.3(b), each Grantor shall
be permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast or corporate right exercised or other action
taken which, in the General Administrative Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing and
the General Administrative Agent shall give notice of its intent to exercise
such rights to the relevant Grantor or
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Grantors, (i) the General Administrative Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and make application thereof to the Obligations in such order
as the General Administrative Agent may determine, and (ii) any or all of the
Pledged Securities shall be registered in the name of the General Administrative
Agent or its nominee, and the General Administrative Agent or its nominee may
thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise and (y) any and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof (including, without
limitation, the right to exchange at its discretion any and all of the Pledged
Securities upon the merger, consolidation, reorganization, recapitalization or
other fundamental change in the corporate structure of any Issuer, or upon the
exercise by any Grantor or the General Administrative Agent of any right,
privilege or option pertaining to such Pledged Securities, and in connection
therewith, the right to deposit and deliver any and all of the Pledged
Securities with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the General Administrative
Agent may determine), all without liability except to account for property
actually received by it, but the General Administrative Agent shall have no duty
to any Grantor to exercise any such right, privilege or option and shall not be
responsible for any failure to do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer
of any Pledged Securities pledged by such Grantor hereunder to (i) comply with
any instruction received by it from the General Administrative Agent in writing
that (x) states that an Event of Default has occurred and is continuing and (y)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the General Administrative Agent.
6.4 Proceeds to be Turned Over To General Administrative
Agent. In addition to the rights of the General Administrative Agent and the
Lenders specified in Section 6.1 with respect to payments of Receivables, if an
Event of Default shall occur and be continuing, all Proceeds received by any
Grantor consisting of cash, checks and other near-cash items shall be held by
such Grantor in trust for the General Administrative Agent and the Lenders,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the General Administrative Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the General
Administrative Agent, if required). All Proceeds received by the General
Administrative Agent hereunder shall be held by the General Administrative Agent
in a Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the General Administrative Agent in a Collateral Account
(or by such Grantor in trust for the General Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section .
6.5 Application of Proceeds. At such intervals as may be
agreed upon by the Company and the General Administrative Agent, or, if an Event
of Default shall have occurred and be continuing, at any time at the General
Administrative Agent's election, the General Administrative Agent may apply all
or any part of Proceeds held in any Collateral Account in payment of the
Obligations in such order as the General Administrative Agent may elect, and any
part of such funds which the General Administrative Agent elects not so to apply
and deems not required as collateral security for the Obligations shall be paid
over from time to time by the General Administrative Agent
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22
to the Company or to whomsoever may be lawfully entitled to receive the same.
Any balance of such Proceeds remaining after the Obligations shall have been
paid in full, no Letters of Credit or Acceptance Notes shall be outstanding and
the Commitments shall have terminated shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the General Administrative Agent, on behalf of the
Lenders, may exercise, in addition to all other rights and remedies granted to
them in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the New York UCC or any other applicable law. Without limiting the
generality of the foregoing, the General Administrative Agent, without demand of
performance or other demand, presentment, protest, advertisement or notice of
any kind (except any notice required by law referred to below) to or upon any
Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the General Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The General Administrative Agent or any Lender shall have the right upon any
such public sale or sales, and, to the extent permitted by law, upon any such
private sale or sales, to purchase the whole or any part of the Collateral so
sold, free of any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further agrees, at the
General Administrative Agent's request, to assemble the Collateral and make it
available to the General Administrative Agent at places which the General
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The General Administrative Agent shall apply the net proceeds of
any action taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in connection therewith or
incidental to the care or safekeeping of any of the Collateral or in any way
relating to the Collateral or the rights of the General Administrative Agent and
the Lenders hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Obligations, in
such order as the General Administrative Agent may elect, and only after such
application and after the payment by the General Administrative Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the New York UCC, need the General Administrative Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the General Administrative Agent or any Lender arising out of
the exercise by them of any rights hereunder. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
6.7 Registration Rights. (a) If the General Administrative
Agent shall determine to exercise its right to sell any or all of the Pledged
Stock pursuant to Section 6.6, and if in the opinion of the General
Administrative Agent it is necessary or advisable to have the Pledged Stock, or
that portion thereof to be sold, registered under the provisions of the
Securities Act, the relevant Grantor will cause the Issuer thereof to (i)
execute and deliver, and cause the directors and officers of such Issuer to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts as may be, in the opinion of the General Administrative
Agent, necessary or advisable to
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register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
General Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the General Administrative Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the General Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
General Administrative Agent shall be under no obligation to delay a sale of any
of the Pledged Stock for the period of time necessary to permit the Issuer
thereof to register such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would agree to do
so.
(c) Each Grantor agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the General Administrative
Agent and the Lenders, that the General Administrative Agent and the Lenders
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defenses against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Section 9-112 of the
New York UCC. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the General Administrative Agent or any Lender to collect such deficiency.
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SECTION 7. THE GENERAL ADMINISTRATIVE AGENT
7.1 General Administrative Agent's Appointment as
Attorney-in-Fact, etc. (a) Each Grantor hereby irrevocably constitutes and
appoints the General Administrative Agent and any officer or agent thereof, with
full power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the General Administrative Agent the
power and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of
moneys due under any Receivable or Contract or with respect to any
other Collateral and file any claim or take any other action or
proceeding in any court of law or equity or otherwise deemed
appropriate by the General Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or Contract
or with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and
deliver, and have recorded, any and all agreements, instruments,
documents and papers as the General Administrative Agent may request to
evidence the General Administrative Agent's and the Lenders' security
interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, effect any repairs or any
insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in
Section 6.6 or 6.7, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the General Administrative Agent or
as the General Administrative Agent shall direct; (2) ask or demand
for, collect, and receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral;
(4) commence and prosecute any suits, actions or proceedings at law or
in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, give such discharges or releases as the
General Administrative Agent may deem appropriate;
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(7) assign any Copyright, Patent or Trademark (along with the goodwill
of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such
conditions, and in such manner, as the General Administrative Agent
shall in its sole discretion determine; and (8) generally, sell,
transfer, pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as though the
General Administrative Agent were the absolute owner thereof for all
purposes, and do, at the General Administrative Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and
things which the General Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the General
Administrative Agent's and the Lenders' security interests therein and
to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
General Administrative Agent agrees that it will not exercise any rights under
the power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the General Administrative Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the General Administrative Agent incurred
in connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the General
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the General Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 Duty of General Administrative Agent. The General
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner as
the General Administrative Agent deals with similar property for its own
account. Neither the General Administrative Agent, any Lender nor any of their
respective officers, directors, employees or agents shall be liable for failure
to demand, collect or realize upon any of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of any Grantor or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the General Administrative Agent and the Lenders hereunder
are solely to protect the General Administrative Agent's and the Lenders'
interests in the Collateral and shall not impose any duty upon the General
Administrative Agent or any Lender to exercise any such powers. The General
Administrative Agent and the Lenders shall be accountable only for amounts that
they actually receive as a result of the exercise of such powers, and neither
they nor any of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act hereunder, except for
their own gross negligence or willful misconduct.
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7.3 Execution of Financing Statements. Pursuant to Section
9-402 of the New York UCC and any other applicable law, each Grantor authorizes
the General Administrative Agent to file or record financing statements and
other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the General Administrative Agent reasonably determines appropriate to
perfect the security interests of the General Administrative Agent under this
Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.
7.4 Authority of General Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the General Administrative
Agent under this Agreement with respect to any action taken by the General
Administrative Agent or the exercise or non-exercise by the General
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the General Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the General
Administrative Agent and the Grantors, the General Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
in accordance with Section 14.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the
General Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 14.2 of the Credit Agreement; provided that any
such notice, request or demand to or upon any Guarantor shall be addressed to
such Guarantor at its notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative Remedies.
Neither the General Administrative Agent nor any Lender shall by any act (except
by a written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the General Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the General Administrative
Agent or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the General
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Lender and the General Administrative Agent for
all its costs and expenses incurred in
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collecting against such Guarantor under the guarantee contained in Section 2 or
otherwise enforcing or preserving any rights under this Agreement and the other
Loan Documents to which such Guarantor is a party, including, without
limitation, the fees and disbursements of counsel (including the allocated fees
and expenses of in-house counsel) to each Lender and of counsel to the General
Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the General
Administrative Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the General
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement to the extent the Company would be required to do so pursuant to
subsection 14.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment
of the Obligations and all other amounts payable under the Credit Agreement and
the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of each Grantor and shall inure to the benefit
of the General Administrative Agent and the Lenders and their successors and
assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the General Administrative Agent.
8.6 Set-Off. Each Grantor hereby irrevocably authorizes the
General Administrative Agent and each Lender at any time and from time to time,
without notice to such Grantor or any other Grantor, any such notice being
expressly waived by each Grantor, to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the General Administrative Agent or such
Lender to or for the credit or the account of such Grantor, or any part thereof
in such amounts as the General Administrative Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Grantor to the
General Administrative Agent or such Lender hereunder and claims of every nature
and description of the General Administrative Agent or such Lender against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the General Administrative Agent or
such Lender may elect, whether or not the General Administrative Agent or any
Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The General
Administrative Agent and each Lender shall notify such Grantor promptly of any
such set-off and the application made by the General Administrative Agent or
such Lender of the proceeds thereof, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the General Administrative Agent and each Lender under this Section 8.6 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) which the General Administrative Agent or such Lender may
have.
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8.7 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the General Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the General
Administrative Agent or any Lender relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Grantor at its address referred to in Section 8.2 or
at such other address of which the General Administrative Agent shall
have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
<PAGE> 166
29
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
8.13 Acknowledgements. Each Grantor hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents
to which it is a party;
(b) neither the General Administrative Agent nor any Lender
has any fiduciary relationship with or duty to any Grantor arising out
of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Grantors, on the one hand,
and the General Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Grantors and the
Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Grantors. Each Subsidiary of the Company that
is required to become a party to this Agreement pursuant to subsection 9.10(b)
of the Credit Agreement shall become a Grantor for all purposes of this
Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations, the Acceptance Reimbursement Obligations and the
other Obligations shall have been paid in full, the Commitments have been
terminated and no Letters of Credit or Acceptance Notes shall be outstanding,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the General Administrative Agent and each Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such termination,
the General Administrative Agent shall deliver to such Grantor any Collateral
held by the General Administrative Agent hereunder, and execute and deliver to
such Grantor such documents as such Grantor shall reasonably request to evidence
such termination.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the General Administrative Agent, at the request and sole
expense of such Grantor, shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the release of the
Liens created hereby on such Collateral. At the request and sole expense of the
Company, a Subsidiary Guarantor shall be released from its obligations hereunder
in the event that all the Capital Stock of such Subsidiary Guarantor shall be
sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement;
<PAGE> 167
30
provided that the Company shall have delivered to the General Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Subsidiary Guarantor and
the terms of the sale or other disposition in reasonable detail, including the
price thereof and any expenses in connection therewith, together with a
certification by the Company stating that such transaction is in compliance with
the Credit Agreement and the other Loan Documents.
<PAGE> 168
31
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
LAIDLAW CHEM-WASTE, INC.
LAIDLAW ENVIRONMENTAL SERVICES (US),
INC.
LAIDLAW ENVIRONMENTAL SERVICES
OF ILLINOIS, INC.
GSX CHEMICAL SERVICES OF OHIO, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(BDT), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(FS), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(GS), INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
CHATTANOOGA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
WHITE CASTLE, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(RECOVERY), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TS), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(IMPERIAL VALLEY), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(LOKERN), INC.
LAIDLAW ENVIRONMENTAL SERVICES
OF CALIFORNIA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
SOUTH CAROLINA, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(NORTH EAST), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TES), INC.
CORSAN TRUCKING, INC.
LAIDLAW CHEMICAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TOC), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TG), INC.
REDOX, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(ALTAIR), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(WT), INC.
<PAGE> 169
32
SOLVENT SERVICE CO., INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
BARTOW, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(THERMAL TREATMENT), INC.
LEMC, INC.
LAIDLAW OSCO HOLDINGS, INC.
BRYSON INDUSTRIAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
NASHVILLE, INC.
OSCO ENVIRONMENTAL SERVICES, INC.
MASTER WASH PRODUCTS, INC.
USPCI CLIVE INCINERATION FACILITY, INC.
GREENFIELD SERVICES CORPORATION
UPC HOLDING CORP.
USPCI, INC.
UNITED STATES POLLUTION CONTROL, INC.
HYDROCARBON RECYCLERS, INC.
HYDROCARBON RECYCLERS, INC.
OF SAN ANTONIO
HYDROCARBON RECYCLERS, INC. OF WICHITA
NORTHEASTERN REMEDIAL CORPORATION
USPCI, INC. OF GEORGIA
MUNICIPAL SERVICES CORPORATION
CHEMCLEAR, INC. OF LOS ANGELES
MINNESOTA INDUSTRIAL CONTAINMENT
FACILITY, INC.
USPCI OF PENNSYLVANIA, INC.
MCDUFFIE COUNTY ENVIRONMENTAL
FACILITY, INC.
EAST CARBON DEVELOPMENT FINANCIAL
PARTNERS, INC.
PPM, INC. OF GEORGIA
NINTH STREET PROPERTIES, INC.
ALLWORTH OF TENNESSEE, INC.
HIGHWAY 36 LAND DEVELOPMENT COMPANY
NATIONAL ELECTRIC, INC.
APTUS, INC.
ROLLINS O.P.C. INC.
ROLLINS ENVIRONMENTAL SERVICES (LA) INC.
ROLLINS ENVIRONMENTAL SERVICES
OF LOUISIANA, INC.
ROLLINS ENVIRONMENTAL SERVICES (NJ) INC.
ROLLINS ENVIRONMENTAL SERVICES (TX) INC.
TIPTON ENVIRONMENTAL TECHNOLOGY, INC.
ROLLINS ENVIRONMENTAL, INC.
SUSSEX CONTRACTORS, INC.
<PAGE> 170
33
GLOUCESTER COUNTY CONSTRUCTION CO.
CUSTOM ENVIRONMENTAL TRANSPORT, INC.
By:
----------------------------------
Name:
Title:
<PAGE> 171
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
The notice address for each of the Guarantors is:
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
<PAGE> 172
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
---------------------------------
<TABLE>
<CAPTION>
Pledged Stock:
Issuer Class of Stock No. of Shareholder
Stock Cert. No. Shares
Issued
<S> <C> <C> <C> <C>
Laidlaw Chem-Waste, Inc. Common 6 & 7 212 Rollins Environmental Services,
Inc.*
WHOLLY-OWNED SUBSIDIARIES
Laidlaw Environmental Common 3 & 4 205 Laidlaw Chem-Waste, Inc.
Services (US), Inc.*
Laidlaw Environmental Common 2 500 Laidlaw Environmental Services
Services of Illinois, Inc. (US), Inc.*
GSX Chemical Services of Common 4 500 Laidlaw Environmental Services
Ohio, Inc. (US), Inc.
Laidlaw Environmental Common 12 7,510 Laidlaw Environmental Services
Services (BDT), Inc. (US), Inc.
Laidlaw Environmental Common 3 6,500 6,500 common shares (87%)
Services (FS), Inc. issued to Laidlaw
Environmental Services (US),
Inc.
2 1,000 1,000 common shares (13%)
issued to Laidlaw
Environmental Services (Altair),
Inc.
Laidlaw Environmental Common 12 10 Laidlaw Environmental Services
Services (GS), Inc. (US), Inc.
Laidlaw Environmental Common 2 100 Laidlaw Environmental Services
Services of Chattanooga, Inc. (US), Inc.
Laidlaw Environmental Common 10 17,820 Laidlaw Environmental Services
Services of White Castle, Inc. (US), Inc.
Laidlaw Environmental Common 2 105 Laidlaw Environmental Services
Services (Recovery), Inc. (US), Inc.
Laidlaw Environmental Common 2 100 Laidlaw Environmental Services
Services (TS), Inc. (US), Inc.
</TABLE>
- --------
* Name to be changed by the Closing Date.
<PAGE> 173
<TABLE>
<CAPTION>
Pledged Stock:
Issuer Class of Stock No. of Shareholder
Stock Cert. No. Shares
Issued
<S> <C> <C> <C> <C>
Laidlaw Environmental Common 1 20 10 common shares (50%) issued
Services (Imperial Valley), to Laidlaw Environmental
Inc. Services of California, Inc.
2 10 common shares (50%) issued
to Laidlaw Environmental
Services (US), Inc.
Laidlaw Environmental Common 2 13 3 common shares (23%) issued
Services (Lokern), Inc. to Laidlaw Environmental
Services (US), Inc.
1 10 common shares (77%) issued
to Laidlaw Environmental
Services of California, Inc.
Laidlaw Environmental Common 3 100 Laidlaw Environmental Services
Services of California, Inc. (US), Inc.
Laidlaw Environmental Common 222 1 Laidlaw Environmental Services
Services of South Carolina, (US), Inc.
Inc.
Laidlaw Environmental Common 5 100 Laidlaw Environmental Services
Services (North East), Inc. (US), Inc.
Corsan Trucking, Inc. Common 4 1,000 750 common shares (75%)
issued to Laidlaw
Environmental Services (US),
Inc.
3 250 common shares (25%)
issued to Laidlaw
Environmental Services (TES),
Inc.
Laidlaw Environmental Common 7 10,000 Laidlaw Environmental Services
Services (TES), Inc. (US), Inc.
Laidlaw Chemical Services, Common 7 3,000 Laidlaw Environmental Services
Inc. (US), Inc.
Laidlaw Environmental Common 3 100 Laidlaw Environmental Services
Services (TOC), Inc. (US), Inc.
Laidlaw Environmental Common 3 1,000 Laidlaw Environmental Services
Services (TG), Inc. (US), Inc.
Redox, Inc. Common 6 100 Laidlaw Environmental Services
(US), Inc.
Laidlaw Environmental Common 3 1,000 Laidlaw Environmental Services
Services (Altair), Inc. (US), Inc.
</TABLE>
<PAGE> 174
<TABLE>
<CAPTION>
Pledged Stock:
Issuer Class of Stock No. of Shareholder
Stock Cert. No. Shares
Issued
<S> <C> <C> <C> <C>
Laidlaw Environmental Common C-1 201,000 Laidlaw Environmental Services
Services (WT), Inc. (US), Inc.
Laidlaw Environmental Common 2 1,000 Laidlaw Environmental Services
Services of Bartow, Inc. (US), Inc.
Laidlaw Environmental Common 1 100 Laidlaw Environmental Services
Services (Thermal Treatment), (US), Inc.
Inc.
LEMC, Inc. Common 1 10 Laidlaw Environmental Services
(US), Inc.
Laidlaw Osco Holdings, Inc. Common 1 100 Laidlaw Environmental Services
(US), Inc.
Bryson Industrial Services, Common C-1 1,000 Laidlaw Osco Holdings, Inc.
Inc.
Laidlaw Environmental Common 2 1,000 Laidlaw Osco Holdings, Inc.
Services of Nashville, Inc.
Osco Environmental Services, Common 2 1,000 Laidlaw Osco Holdings, Inc.
Inc.
Master Wash Products, Inc. Common C101 5,100,000 Laidlaw Environmental Services
(US), Inc.
USPCI Clive Incineration Common 11 1,000 Laidlaw Environmental Services
Facility, Inc. (US), Inc.
Greenfield Services Common 2 100,000 Laidlaw Environmental Services
Corporation (US), Inc.
UPC Holding Corp. Common 3 100 Laidlaw Environmental Services
(US), Inc.
USPCI, Inc. Common A 1,000 UPC Holding Corp.
United States Pollution Common 9 3,076,872 USPCI, Inc.
Control, Inc.
Hydrocarbon Recyclers, Inc. Common C-2 10,000 United States Pollution Control,
Inc.
Hydrocarbon Recyclers, Inc. Common 1 3,402 Hydrocarbon Recyclers, Inc.
of San Antonio
Hydrocarbon Recyclers, Inc. Common 2 100 Hydrocarbon Recyclers, Inc.
of Wichita
Northeastern Remedial Common 1 1,000 United States Pollution Control,
Corporation Inc.
</TABLE>
<PAGE> 175
<TABLE>
<CAPTION>
Pledged Stock:
Issuer Class of Stock No. of Shareholder
Stock Cert. No. Shares
Issued
<S> <C> <C> <C> <C>
USPCI, Inc. of Georgia Common 1 100 USPCI, Inc.
Solvent Service Co., Inc. Common C-1 100 USPCI, Inc.
Municipal Services Common 2 1,000 USPCI, Inc.
Corporation
Chemclear, Inc. of Los Common 1 1,000 USPCI, Inc.
Angeles
Minnesota Industrial Common 1 5,000 USPCI, Inc.
Containment Facility, Inc.
USPCI of Pennsylvania, Inc. Common C38 1,053 USPCI, Inc.
McDuffie County Common 1 1,000 USPCI, Inc.
Environmental Facility, Inc.
East Carbon Development Common 1 1,000 USPCI, Inc.
Financial Partners, Inc.
PPM, Inc. of Georgia Common 1 100 USPCI, Inc.
Ninth Street Properties, Inc. Common 1 1,000 PPM, Inc. of Georgia
Allworth of Tennessee, Inc. Common 2 1,000 Laidlaw Chem-Waste, Inc.
Highway 36 Land Common 5 500 Laidlaw Chem-Waste, Inc.
Development Co.
National Electric, Inc. (Parent Common 11 3,000 Laidlaw Chem-Waste, Inc.
of Aptus, Inc.)
Rollins O.P.C. Inc. Common 4 1,000 Laidlaw Chem-Waste, Inc.
Rollins Environmental Common 2 1,000 Laidlaw Chem-Waste, Inc.
Services (LA) Inc.
Rollins Environmental Common 2 1,000 Laidlaw Chem-Waste, Inc.
Services of Louisiana, Inc.
Rollins Environmental Common 7 1,000 Laidlaw Chem-Waste, Inc.
Services (NJ) Inc.
Rollins Environmental Common 2 1,000 Laidlaw Chem-Waste, Inc.
Services (TX) Inc.
Tipton Environmental Common 3 1,000 Laidlaw Chem-Waste, Inc.
Technology, Inc.
Rollins Environmental, Inc. Common 2 1,000 Laidlaw Chem-Waste, Inc.
Sussex Contractors, Inc. Common 2 500 Laidlaw Chem-Waste, Inc.
Gloucester County Common 3 1,000 Laidlaw Chem-Waste, Inc.
Construction Co.
</TABLE>
<PAGE> 176
<TABLE>
<CAPTION>
Pledged Stock:
Issuer Class of Stock No. of Shareholder
Stock Cert. No. Shares
Issued
<S> <C> <C> <C> <C>
Custom Environmental Common 2 1,000 Laidlaw Chem-Waste, Inc.
Transport, Inc.
Aptus, Inc. Common 4 1,000 National Electric, Inc.
OTHER U.S.SUBSIDIARIES AND
INVESTMENTS:
Osco Treatment Systems of Common 13 1,000 500 common shares (50%)
Mississippi, Inc. issued to Laidlaw Osco
Holdings, Inc.
USPCI of Mississippi, Inc. Common 1R 2,000 1,000 common shares (50%)
issued to United States
Pollution Control, Inc.
ECDC Environmental, L.C. Class A 2-A n/a 80% Membership Interest held
Membership by Northeastern Remedial
Interest Corporation (made up of 60%
Class A and 20% Class B
Class B 6-B Membership Interests)
Membership
Interest
FOREIGN SUBSIDIARIES:
Laidlaw Environmental Series A and 1-B 500 400 Series B shares issued to
Services de Mexico, S.A. de Series B Laidlaw Investments Ltd.
C.V. Shares
Laidlaw Environmental Common 4 1 Laidlaw Finance (Barbados)
Services (Puerto Rico), Inc. Ltd.
Laidlaw Environmental Class A, 1 100 65 Class A shares issued to
Services (Canada) Ltd. Class B, Laidlaw Chem-Waste, Inc.
Class C,
Class D and 3 [ ] 1040 Class A shares issued to
Class E Laidlaw Chem-Waste, Inc.
shares
B-3 [ ] 6500 Class B shares issued to
Laidlaw Chem-Waste, Inc.
</TABLE>
<TABLE>
<CAPTION>
PLEDGED NOTES:
Issuer Payee Principal Amount
------ ----- ----------------
<S> <C> <C>
Sutton Street Realty Trust Dizzy Bridge Realty Trust $551,958.11
</TABLE>
<PAGE> 177
Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
----------------------------
[List all filings]
Actions with respect to Pledged Stock
-------------------------------------
Other Actions
[Describe other actions to be taken]
<PAGE> 178
Schedule 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
Grantor Location
------- --------
<PAGE> 179
Schedule 5
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
<PAGE> 180
Schedule 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 181
Schedule 7
CONTRACTS
Stock Purchase Agreement, dated February 6, 1997, among Rollins Environmental
Services, Inc., Laidlaw Inc. and Laidlaw Transportion, Inc.
<PAGE> 182
Schedule 8
EXISTING PRIOR LIENS
<PAGE> 183
ACKNOWLEDGEMENT AND CONSENT*
The undersigned hereby acknowledges receipt of a copy of the Guarantee
and Collateral Agreement dated as of May 15, 1997 (the "Agreement"), made by the
Grantors parties thereto for the benefit of Toronto Dominion (Texas), Inc., as
General Administrative Agent. The undersigned agrees for the benefit of the
General Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement
and will comply with such terms insofar as such terms are applicable to
the undersigned.
2. The undersigned will notify the General Administrative
Agent promptly in writing of the occurrence of any of the events
described in Section 5.8(a) of the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall
apply to it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section 6.3(a) or 6.7 of the Agreement.
[NAME OF ISSUER]
By
--------------------------------
Title
-----------------------------
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
Fax:
------------------------------
- --------
* This consent is necessary only with respect to any Issuer
which is not also a Grantor. This consent may be modified or eliminated with
respect to any Issuer that is not controlled by a Grantor.
<PAGE> 184
1
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of ________________, 199_, made
by ______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of TORONTO DOMINION (TEXAS) INC., as general administrative
agent (in such capacity, the "General Administrative Agent") for the banks and
other financial institutions (the "Lenders") parties to the Credit Agreement
referred to below. All capitalized terms not defined herein shall have the
meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H :
WHEREAS, Laidlaw Chem-Waste, Inc. (the "Company"), Laidlaw
Environmental Services (Canada) Ltd. (the "Canadian Borrower"; together with the
Company, the "Borrowers"), the Lenders, the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, and certain other
Agents named therein have entered into a Credit Agreement, dated as of May 9,
1997 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Company
and certain of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of May 15, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the General Administrative Agent for the
benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Grantor thereunder with the same
force and effect as if originally named therein as a Grantor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________** to the Guarantee and Collateral Agreement. The Additional Grantor
hereby represents and warrants that each of the representations and warranties
contained in
- --------
** Refer to each Schedule which needs to be supplemented.
<PAGE> 185
2
Section 4 of the Guarantee and Collateral Agreement is true and correct on and
as the date hereof (after giving effect to this Assumption Agreement) as if made
on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
---------------------
Name:
Title:
<PAGE> 186
EXHIBIT A-1
FORM OF DRAFT
<TABLE>
<CAPTION>
BANKERS' ACCEPTANCE No.________________
<S> <C>
To______________________________________ Due__________________ ________________________________ 19__
Bank
________________________________________ __________________________ days after the date (without grace)
Address
For value received pay to the order of the undersigned drawer
ACCEPTED the sum of $__________________________________________________
---------------------------
________________________________________ _________________ Dollars $
Payable At ---------------------------
________________________________________
________________________________________
Value Received, Charge to the Account of:
For_____________________________________
___________________________________________________________
________________________________________
Authorized Signature Per:_______________________________________________________
________________________________________ Per:_______________________________________________________
Authorized Signature
Form 8411 (7-88)
</TABLE>
_________________________________________________________
Per:_____________________________________________________
Per:_____________________________________________________
<PAGE> 187
EXHIBIT C
FORM OF
REVOLVING CREDIT NOTE
U.S.$_____________ New York, New York
May __, 1997
FOR VALUE RECEIVED, the undersigned, LAIDLAW CHEM-WASTE, INC., a
Delaware corporation (the "Company"), hereby unconditionally promises to pay to
the order of (the "Lender") at the office of _______________, located at
____________________, New York, New York ________, in lawful money of the United
States of America and in immediately available funds, on the Revolving Credit
Termination Date (as defined in the Credit Agreement referred to below) the
principal amount of (a) UNITED STATES DOLLARS (U.S.$____ ), or, if less, (b) the
aggregate unpaid principal amount of all Revolving Credit Loans made by the
Lender to the Company pursuant to Section 2.4 of such Credit Agreement. The
Company further agrees to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates and on
the dates specified in Section 6.6 of such Credit Agreement.
The holder of this Note is authorized to record on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made by the Lender pursuant to such Credit Agreement and
the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period and the
applicable LIBOR Rate with respect thereto. Each such recordation shall
constitute prima facie evidence of the accuracy of the information so recorded,
provided that the failure to make any such recordation or any error in any such
recordation shall not affect the obligations of the Company under such Credit
Agreement or this Note.
This Note (a) is one of the Revolving Credit Notes referred to in the
Credit Agreement, dated as of May __, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among the
Company, Laidlaw Environmental Services (Canada) Ltd., the Lender, the other
banks and financial institutions or entities from time to time parties thereto,
Toronto Dominion (Texas), Inc., as General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, NationsBank, N.A., as Syndication Agent, and The Bank of Nova
Scotia, NationsBank, N.A. and The First National Bank of Chicago, as Managing
Agents, (b) is subject to the provisions of the Credit Agreement and (c) is
subject to optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement. This Revolving Credit Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
<PAGE> 188
2
Upon the occurrence of any one or more Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
LAIDLAW CHEM-WASTE, INC.
By:
-----------------------------------------
Title:
<PAGE> 189
Schedule A
to Revolving Credit Note
BASE RATE LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Amount of Base Rate
Amount of Base Converted to Principal of Base Loans Converted to Unpaid Principal Balance
Date Rate Loans Base Rate Loans Rate Loans Repaid LIBOR Loans of Base Rate Loans Notation Made By
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
</TABLE>
<PAGE> 190
Schedule B
to Revolving Credit Note
LIBOR LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Amount Interest Period and Amount of LIBOR Unpaid Principal
Amount of Converted LIBOR Rate with Amount of Principal Loans Converted to Balance of Notation
Date LIBOR Loans to LIBOR Loans Respect Thereto of LIBOR Loans Repaid Base Rate Loans LIBOR Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
</TABLE>
<PAGE> 191
EXHIBIT D
FORM OF
U.S. TERM NOTE
U.S.$______________________ New York, New York
May __, 1997
FOR VALUE RECEIVED, the undersigned, LAIDLAW CHEM-WASTE, INC., a
Delaware corporation (the "Company"), hereby, unconditionally promises to pay to
the order of ________________________ (the "Lender"), at the office of
_______________, located at _______________________, New York, New York ______,
in lawful money of the United States of America and in immediately available
funds, the principal amount of _____________ UNITED STATES DOLLARS
(U.S.$________), or, if less, the unpaid principal amount of the Tranche [A] [B]
[C] Term Loan of the Lender made to the Company pursuant to Section 2.1 of the
Credit Agreement (as hereinafter defined). The principal amount of this Note
shall be payable in the amounts and on the dates specified in Section 2.3[(a)]
[(b)] [(c)] of the Credit Agreement. The Company further agrees to pay interest
in like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates and on the dates specified in Section 6.6 of the
Credit Agreement.
The holder of this Note is authorized to record on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche [A] [B] [C] Term Loan of the Lender and the date and amount of each
payment or prepayment of principal with respect thereto, each conversion of all
or a portion thereof to another Type, each continuation of all or a portion
thereof as the same Type and, in the case of LIBOR Loans, the length of each
Interest Period with respect thereto. Each such recordation shall constitute
prima facie evidence of the accuracy of the information so recorded. The failure
to make any such recordation (or any error therein) shall not affect the
obligations of the Company in respect of the Credit Agreement or this Note.
This Note (a) is one of the U.S. Term Notes referred to in the Credit
Agreement, dated as of May ___, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Company, Laidlaw
Environmental Services (Canada) Ltd., the Lender, the several other banks and
financial institutions or entities from time to time parties thereto, Toronto
Dominion (Texas), Inc., as General Administrative Agent, The Toronto-Dominion
Bank, as Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
NationsBank, N.A., as Syndication Agent, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as Managing Agents,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
<PAGE> 192
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
LAIDLAW CHEM-WASTE, INC.
By:
-----------------------------------------
Title:
<PAGE> 193
Schedule A
to U.S. Term Note
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Amount Amount of Amount of Base Rate
Amount of Base Converted to Principal of Base Loans Converted to Unpaid Principal Balance
Date Rate Loans Base Rate Loans Rate Loans Repaid LIBOR Loans of Base Rate Loans Notation Made By
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
</TABLE>
<PAGE> 194
Schedule B
to U.S. Term Note
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Amount Interest Period and Amount of LIBOR Unpaid Principal
Amount of Converted LIBOR Rate with Amount of Principal Loans Converted to Balance of Notation
Date LIBOR Loans to LIBOR Loans Respect Thereto of LIBOR Loans Repaid Base Rate Loans LIBOR Loans Made By
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
===============================================================================================================================
</TABLE>
<PAGE> 195
EXHIBIT E
FORM OF
CANADIAN TERM NOTE
C$______________________ New York, New York
May __, 1997
FOR VALUE RECEIVED, the undersigned, LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD., a Canadian corporation (the "Canadian Borrower"), hereby,
unconditionally promises to pay to the order of ________________________________
(the "Lender"), at the office of _____________________ located at
________________________, in the lawful money of Canada and in immediately
available funds, the principal amount of _____________ CANADIAN DOLLARS
(C$________), or, if less, the unpaid principal amount of the Canadian Term Loan
of the Lender made to the Canadian Borrower pursuant to Section 4.1 of the
Credit Agreement (as hereinafter defined). The principal amount of this Note
shall be payable in the amounts and on the dates specified in Section 4.3 of the
Credit Agreement. The Canadian Borrower further agrees to pay interest in like
money at such office on the unpaid principal amount hereof from time to time
outstanding at the rates and on the dates specified in Section 6.6 of the Credit
Agreement.
The holder of this Note is authorized to record on the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date and amount of the Canadian Term
Loan of the Lender and the date and amount of each payment or prepayment of
principal thereof. Each such recordation shall constitute prima facie evidence
of the accuracy of the information endorsed. The failure to make any such
recordation (or any error therein) shall not affect the obligations of the
Canadian Borrower under the Credit Agreement or this Note.
This Note (a) is one of the Canadian Term Notes referred to in the
Credit Agreement, dated as of May ___, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"), among Laidlaw
Chem-Waste, Inc., the Canadian Borrower, the Lender, the several other banks and
financial institutions or entities from time to time parties thereto, Toronto
Dominion (Texas), Inc., as General Administrative Agent, The Toronto-Dominion
Bank, as Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
NationsBank, N.A., as Syndication Agent, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as Managing Agents,
(b) is subject to the provisions of the Credit Agreement and (c) is subject to
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
<PAGE> 196
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
-----------------------------------------
Title:
<PAGE> 197
Schedule A
to Canadian Term Note
CANADIAN TERM LOANS AND REPAYMENTS OF CANADIAN TERM LOANS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Amount of Principal
Amount of Canadian of Canadian Unpaid Principal Balance
Date Term Loans Term Loans Repaid of Canadian Term Loans Notation Made By
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
===================================================================================================
</TABLE>
<PAGE> 198
EXHIBIT F
[NAME OF CANADIAN LENDER]
________________ [BRANCH]
POWER OF ATTORNEY - SPECIFIC
The undersigned hereby appoints [NAME OF CANADIAN LENDER] (hereinafter
called the "Canadian Lender"), acting by any authorized signatory of the
Canadian Lender, the attorney of the undersigned:
(a) to sign for and on behalf and in the name of the undersigned as drawer,
Drafts (as defined in the Credit Agreement referred to below) drawn on
the Canadian Lender payable to the order of the undersigned or payable
to the order of the Canadian Lender;
(b) to fill in the amount, date and maturity date of such Drafts; and
(c) to discount and purchase and/or deliver such Drafts which have been
accepted by the Canadian Lender,
provided that such acts in each case are to be undertaken by the Canadian Lender
strictly in accordance with instructions given to the Canadian Lender by the
undersigned as provided in this power of attorney.
Instructions from the undersigned to the Canadian Lender relating to
the execution, completion, endorsement, discount and/or delivery by the Canadian
Lender on behalf of the undersigned of Drafts which the undersigned wishes to
submit to the Canadian Lender for acceptance by the Canadian Lender shall be
communicated by the undersigned in writing to the Canadian Administrative Agent
pursuant to Requests for Acceptances (as those terms are defined in the Credit
Agreement referred to below) (in accordance with the terms of the Credit
Agreement, dated as of May ___, 1997, among Laidlaw Chem-Waste, Inc., Laidlaw
Environmental Services (Canada) Ltd., the several banks and other financial
institutions or entities from time to time parties thereto, Toronto Dominion
(Texas), Inc., as General Administrative Agent, The Toronto-Dominion Bank, as
Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
NationsBank, N.A., as Syndication Agent, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as Managing Agents, to
which the undersigned and the Canadian Lender are parties (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"))
and shall specify the following information:
(a) reference to this power of attorney;
(b) a Canadian Dollar amount, which shall be the aggregate face amount of
the Drafts to be drawn in a particular transaction;
(c) a specified period of time (not less than one month or in excess of six
months) which shall be the number of days after the date of such Drafts
that such Drafts are to be payable, and the dates of issuance and
maturity of such Drafts; and
<PAGE> 199
2
(d) discount/payment instructions specifying the account number of the
undersigned and the financial institution at which the proceeds of the
purchase of such Drafts are to be credited;
all as set out in the Request for Acceptances (as that term is defined in the
Credit Agreement).
The communication in writing by the undersigned, or on behalf of the
undersigned by the Canadian Administrative Agent, to the Canadian Lender of the
instructions set out in the Request for Acceptances referred to above shall
constitute (a) the authorization and instruction of the undersigned to the
Canadian Lender to complete and/or endorse Drafts in accordance with such
information as set out above and (b) the request of the undersigned to the
Canadian Lender to accept such Drafts and purchase the same. The undersigned
acknowledges that the Canadian Lender shall not be obligated to accept any such
Drafts except in accordance with the provisions of the Credit Agreement.
The Canadian Lender shall be and it is hereby authorized to act on
behalf of the undersigned upon and in compliance with instructions communicated
to the Canadian Lender as provided herein if the Canadian Lender reasonably
believes them to be genuine. If the Canadian Lender accepts Drafts pursuant to
any such instructions, the Canadian Lender shall confirm particulars of such
instructions and advise the undersigned that the Canadian Lender has complied
therewith by notice in writing addressed to the undersigned and served
personally or by telecopier in accordance with the provisions of the Credit
Agreement. The Canadian Lender's actions in compliance with such instructions,
confirmed and advised to the undersigned by such notice, shall be conclusively
deemed to have been in accordance with the instructions of the undersigned
unless the undersigned notifies the Canadian Administrative Agent to the
contrary in writing not later than the business day next following receipt by
the undersigned. Notice in writing to the Canadian Administrative Agent as
contemplated hereby shall be delivered in accordance with the provisions of the
Credit Agreement.
The undersigned hereby agrees and promises to pay the Canadian
Administrative Agent for the account of the Canadian Lender, on the maturity
date thereof, the face amount of each draft signed, completed and endorsed as
contemplated herein and accepted by the Canadian Lender, such payment to be made
in accordance with and subject to the terms of the Credit Agreement.
The undersigned agrees to indemnify the Canadian Lender and its
directors, officers, employees, affiliates and agents and to hold it and them
harmless from and against any loss, liability, expense or claim of any kind or
nature whatsoever incurred by any of them as a result of any action or inaction
in any way relating to or arising out of this power of attorney or the acts
contemplated hereby; provided that this indemnity shall not apply to any such
loss, liability, expense or claim which results from the gross negligence or
willful misconduct of the Canadian Lender or any of its directors, officers,
employees, affiliates or agents.
This power of attorney may be revoked at any time upon not less than 5
business days' written notice served upon the Canadian Administrative Agent,
provided that (i) it shall be replaced with another power of attorney forthwith
in accordance with the requirements of Section
<PAGE> 200
3
5.2(b) of the Credit Agreement; and (ii) no such revocation shall reduce, limit
or otherwise affect the obligations of the undersigned in respect of any Draft
executed, completed, endorsed, purchased and/or delivered in accordance herewith
prior to the time at which such revocation becomes effective.
This power of attorney is in addition to and not in substitution of any
agreement to which the Canadian Lender and the undersigned are parties.
This power of attorney shall be governed in all respects by the laws of
the province of Ontario and the laws of Canada applicable therein and the
undersigned and the Canadian Lender hereby irrevocably [attorns] to the
non-exclusive jurisdiction of the courts of such jurisdiction in respect of all
matters arising out of this power of attorney.
In the event of a conflict between the provisions of this Power of
Attorney (other than the provisions of the immediately preceding paragraph) and
the Credit Agreement, the Credit Agreement shall prevail.
The undersigned has (have) expressly requested that this document be
drawn up in the English language. Le(s) soussigne(s) a(ont) expressement demande
que ce document soit redige en langue anglaise.
DATED at _________ this ____ day of
_______________, ____.
LAIDLAW ENVIRONMENTAL SERVICE
(CANADA) LTD.
By:
-----------------------------------------
Name:
Title:
<PAGE> 201
EXHIBIT G
FORM OF
ACCEPTANCE NOTE
C$______________________ Toronto, Ontario
__________, ____
FOR VALUE RECEIVED, the undersigned, LAIDLAW ENVIRONMENTAL
SERVICES (CANADA) LTD., a corporation incorporated, organized and existing nder
the laws of the Province of [Ontario], Canada (the "Canadian Borrower"), hereby
unconditionally promises to pay to the order of [INSERT NAME OF LENDER] (the
"Lender") at the office of The Toronto-Dominion Bank, located at
_______________________, in lawful money of Canada and in immediately available
funds, the principal amount of [ ] CANADIAN DOLLARS (C$ ). The undiscounted
principal amount hereof shall be repaid on ___________ ___, ____(1). The
Canadian Borrower further agrees that interest shall be paid herein, in advance,
by the Lender discounting the face amount of this Acceptance Note in the manner
described in Sections 5.3 and 5.7 of the Credit Agreement described below
(capitalized terms used herein without definition being defined as set forth
therein).
This Acceptance Note (a) is one of the Acceptance Notes
referred to in the Credit Agreement, dated as of May ___, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
among Laidlaw Chem-Waste, Inc., the Canadian Borrower, the Lender, the several
other banks and financial institutions or entities from time to time parties
thereto, Toronto Dominion (Texas), Inc., as General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, NationsBank, N.A., as Syndication Agent, and The Bank of Nova
Scotia, NationsBank, N.A. and The First National Bank of Chicago, as Managing
Agents, and (b) is subject to the provisions of the Credit Agreement.
This Acceptance Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of
Default, all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Credit
Agreement.
- --------------------
(1) Insert maturity date for Acceptances created simultaneously herewith.
<PAGE> 202
2
All parties now and hereafter liable with respect to this
Note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby
waive presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
-----------------------------------------
Name:
Title:
<PAGE> 203
EXHIBIT H
FORM OF
PREPAYMENT OPTION NOTICE
Attention of [ ]
Telecopy No.[ ]
[Date]
Ladies and Gentlemen:
The undersigned, Toronto Dominion (Texas), Inc., as general
administrative agent (in such capacity, the "General Administrative Agent") for
the Lenders, refers to the Credit Agreement, dated as of May __, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders from time to time parties thereto, the General
Administrative Agent, The Toronto-Dominion Bank, as Canadian Administrative
Agent, TD Securities (USA) Inc., as Arranger, NationsBank, N.A., as Syndication
Agent, and The Bank of Nova Scotia, NationsBank, N.A. and The First National
Bank of Chicago, as Managing Agents. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. The General Administrative Agent hereby gives notice of an
offer of prepayment made by the Company pursuant to Section 6.3(f) of the Credit
Agreement of the Tranche [B] [C] Prepayment Amount. Amounts applied to prepay
the Tranche [B] [C] Term Loans shall be applied pro rata to the Tranche [B] [C]
Term Loan held by you. The portion of the prepayment amount to be allocated to
the Tranche [B] [C] Term Loan held by you and the date on which such prepayment
will be made to you (should you elect to receive such prepayment) are set forth
below:
(A) Total Tranche [B] [C] Term Loan Prepayment
Amount _______________________
(B) Portion of Tranche [B] [C] Term Loan
Prepayment Amount to be received by you _______________________
(C) Mandatory Prepayment Date (10 Business Days
after the date of this Prepayment Option Notice)
_______________________
If you wish to receive the portion of the Tranche [B] [C] Term Loan
Prepayment Amount to be allocated to you on the Mandatory Prepayment Date
indicated in paragraph (B) above, please sign this notice in the space provided
below as evidence of your acceptance and return it via telecopy to the attention
of [___________________] at Toronto Dominion
<PAGE> 204
2
(Texas), Inc., no later than [10:00] a.m., New York City time, on the Mandatory
Prepayment Date, at Telecopy No. [________________].
TORONTO DOMINION (TEXAS), INC., as General
Administrative Agent
By:
-------------------------------
Name:
Title:
[Lender]
By:
-------------------------------
Name:
Title:
<PAGE> 205
EXHIBIT I
FORM OF
CLOSING CERTIFICATE
Pursuant to Section 8.1(i)of the Credit Agreement, dated as of May __,
1997 (the "Credit Agreement"), among Laidlaw Chem-Waste, Inc., a Delaware
corporation, Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation, the several banks and other financial institutions or entities from
time to time parties thereto (the "Lenders"), Toronto Dominion (Texas), Inc., as
General Administrative Agent, The Toronto-Dominion Bank , as Canadian
Administrative Agent, TD Securities (USA) Inc., as Arranger, NationsBank, N.A.,
as Syndication Agent, and The Bank of Nova Scotia, NationsBank, N.A. and The
First National Bank of Chicago, as Managing Agents, the undersigned,
____________________ of [Loan Party] (the "Company"), hereby certifies as
follows:
1. The representations and warranties of the Company set forth
in the Credit Agreement and each of the other Loan Documents to which
it is a party or which are contained in any certificate, document or
financial or other statement furnished pursuant to or in connection
with the Credit Agreement or any Loan Document are true and correct on
and as of the date hereof with the same effect as if made on the date
hereof, except for representations and warranties expressly stated to
relate to a specific earlier date, in which case such representations
and warranties are true and correct as of such earlier date;
2. No Default or Event of Default has occurred and is
continuing as of the date hereof or will occur after giving effect to
the making of the Loans and the issuance of the Letters of Credit
requested to be made and/or issued on the date hereof or the
consummation of each of the transactions contemplated by the Loan
Documents; and
3. _________________ is and at all times since
________________, 199_, has been the duly elected and qualified
[Assistant] Secretary of the Company the signature set forth on the
signature line for such officer below is such officer's true and
genuine signature;
and the undersigned [Assistant] Secretary of the Company hereby certifies as
follows:
4. There are no liquidation or dissolution proceedings pending
or to the knowledge of the [Assistant] Secretary of the Company
threatened against the Company or any of its Subsidiaries, nor has any
other event occurred affecting or threatening the corporate existence
of the Company or any of its Subsidiaries;
5. The Company is a _________________ duly organized, validly
existing and in good standing under the laws of _______________;
6. (a) Attached hereto as Exhibit A is a true and complete
copy of resolutions duly adopted by the Board of Directors of the
Company on __________ __, 1997; such resolutions have not in any way
been amended, modified, revoked or rescinded and have been in full
force and effect since their adoption to and including the date hereof
and are now in full force and effect;
<PAGE> 206
2
such resolutions are the only corporate proceedings of the Company now
in force relating to or affecting the matters referred to therein;
(b) attached hereto as Exhibit B is a true and complete copy
of the Bylaws of the Company as in effect at all times since __________
__, 19__, to and including the date hereof; and
(c) attached hereto as Exhibit C is a true and complete copy
of the Certificate of Incorporation of the Company as in effect at all
times since __________ __, 19__, to and including the date hereof; and
7. The following persons are now duly elected and qualified
officers of the Company, holding the offices indicated next to their
respective names below, and such officers have held such offices with
the Company at all times since __________ __, 19__, to and including
the date hereof, and the signatures appearing opposite their respective
names below are the true and genuine signatures of such officers, and
each of such officers is duly authorized to execute and deliver on
behalf of the Company, the Loan Documents to which it is a party and
any certificate or other document to be delivered by the Company
pursuant to any such Loan Document:
<TABLE>
<CAPTION>
Name Office Signature
---- ------ ---------
<S> <C> <C>
----------- ----------- ---------------
----------- ----------- ---------------
</TABLE>
Unless otherwise defined herein, capitalized terms which are defined in
the Credit Agreement and used herein are so used as so defined.
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
[NAME OF COMPANY] [NAME OF COMPANY]
By: By:
--------------------------- -----------------------------
Name: Name:
Title: Title:
Date:_____________, 1997
<PAGE> 207
EXHIBIT L
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of May __, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"), among Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders from time to time parties thereto, Toronto Dominion
(Texas) Inc., as the General Administrative Agent, The Toronto-Dominion Bank, as
Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
NationsBank, N.A., as Syndication Agent, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as Managing Agents.
Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule 1 hereto (the "Assignor") and the
Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest set forth on Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"Assigned Facility"; collectively, the "Assigned Facilities"), in a principal
amount and/or commitment amount for each Assigned Facility as set forth on
Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers, any of their respective Subsidiaries, any
other Loan Party or any other obligor or the performance or observance by the
Borrowers, any of their respective Subsidiaries, any other Loan Party or any
other obligor of any of their respective obligations under the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the
Assigned Facilities and (i) requests that the Administrative Agents, upon
request by the Assignee, exchange any attached Notes for a new Note or Notes
payable to the Assignee and (ii) if the Assignor has retained any interest in
the Assigned Facility, requests that the Administrative Agents exchange any
attached Notes for a new Note or Notes payable to the Assignor, in each case in
amounts which reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date).
<PAGE> 208
2
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 9.1 thereof, the other Loan
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Administrative Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agents to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agents by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section
6.12(b) and (c) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
date set forth on Schedule 1 hereto (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered to the
[General Administrative Agent] for acceptance by it and recording by the
Administrative Agents pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agents, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agents).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agents shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agents for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
<PAGE> 209
3
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
<PAGE> 210
SCHEDULE 1
Name of Assignor:
Name of Assignee:
Notices Address:
Payment Instructions:
Effective Date of Assignment:
<TABLE>
<CAPTION>
Credit Principal/Commitment Commitment Percentage
Facility Assigned Amount Assigned Assigned(1)
- -------------------- ---------------------- -----------------------
<S> <C> <C>
$________________ __._______%
</TABLE>
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
--------------------------- ----------------------------
Title: Title:
Accepted: Consented To:
TORONTO DOMINION (TEXAS) INC., LAIDLAW CHEM-WASTE, INC.2
as General Administrative Agent
By: By:
--------------------------- ----------------------------
Title: Title:
- --------------------
(1) Calculate the Commitment Percentage that is assigned to at least 15
decimal places and show as a percentage of the aggregate commitments of
all Lenders.
(2) The Company's consent is required in the event that the Assignee is not
a Lender or an Affiliate of a Lender prior to effectiveness hereof.
<PAGE> 211
EXHIBIT J
FORM OF OPINION OF U.S. COUNSEL
1. Each of the Company and its Domestic Subsidiaries (collectively, the
"Credit Parties") (i) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has the corporate
power and authority and the legal right to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it
is currently engaged and (iii) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified could
not, in the aggregate, have a Material Adverse Effect.
2. Each of the Credit Parties has the corporate power and authority,
and the legal right, to make, deliver and perform its obligations under each of
the Loan Documents to which it is a party and, in the case of the Company, to
borrow and obtain the other extensions of credit under the Credit Agreement. The
Company has taken all necessary corporate action to authorize the borrowings and
other extensions of credit on the terms and conditions of the Credit Agreement
and the other Loan Documents. Each of the Credit Parties has taken all necessary
corporate action to grant the security interests contemplated by the Security
Documents to which it is a party and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party.
3. To our knowledge, no consent or authorization of, approval by,
notice to, filing with or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
under the Credit Agreement or with the execution, delivery, performance,
validity or enforceability of the Loan Documents, except filings required for
the perfection of security interests granted pursuant to the Security Documents.
4. Each of the Loan Documents to which any Credit Party is a party has
been duly executed and delivered on behalf of such Credit Party and constitutes,
and each of the Notes delivered after the date hereof (assuming due
authorization, execution and delivery by the Company) will constitute, a legal,
valid and binding obligation of such Credit Party, enforceable against such
Credit Party in accordance with its terms. Assuming the Credit Agreement and
each Canadian Term Note to which the Canadian Borrower is a party has been duly
executed and delivered on behalf of the Canadian Borrower, each such Loan
Document constitutes a legal, valid and binding obligation of the Canadian
Borrower, enforceable against the Canadian Borrower in accordance with its
terms.
5. The execution and delivery of each of the Loan Documents to which
any Credit Party is a party, the performance by each Credit Party of its
obligations thereunder, the consummation of the transactions contemplated
thereby, the compliance by each Credit Party with any of the provisions thereof,
the borrowings and other extensions of credit under the Credit Agreement and the
use of proceeds thereof, all as provided therein, (i) will not violate, or
constitute a default under, any Requirement of Law or, to the best of our
knowledge, any Contractual Obligation of any Credit Party which violation or
default would have a Material Adverse Effect on the business of the Credit
Parties and (ii) will not result in, or require, the creation or imposition of
any Lien on any of its or their respective properties or revenues, except the
security interests created pursuant to the Security Documents.
<PAGE> 212
6. Based solely on a review of our firm's litigation docket and an
officer's certificate, no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the best of our
knowledge, threatened by or against any Credit Party or against any of its
properties or revenues (a) with respect to the Loan Documents or any
transactions contemplated thereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
7. No Credit Party is (i) an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) a "holding company"
as defined in, or otherwise subject to regulation under, the Public Utility
Holding Company Act of 1935.
8. The making of the Extensions of Credit under the Credit Agreement
and the use of the proceeds thereof as contemplated by the Credit Agreement will
not violate Regulation G, T, U or X of the Board of Governors of the Federal
Reserve System.
9. The provisions of the Guarantee and Collateral Agreement create in
favor of the Administrative a legal, valid and enforceable security interest in
the Collateral (as defined in the Guarantee and Collateral Agreement).
10. The Guarantee and Collateral Agreement, together with the delivery
of the certificates representing the securities identified on Schedule 2 to the
Guarantee and Collateral Agreement (the "Pledged Securities") to the General
Administrative Agent for the benefit of the Lenders in the State of New York,
creates in favor of the General Administrative Agent for the benefit of the
Lenders a perfected security interest in the Pledged Securities under the New
York UCC. Assuming the General Administrative Agent acquires the interest in the
Pledge and Securities in good faith and without notice of any adverse claims,
and that each certificate representing Pledged Securities is either in bearer
form or in registered form, indorsed in blank, the General Administrative Agent
will acquire its security interest in the Pledged Securities for the benefit of
the Lenders free of adverse claims.
11. All of the shares of capital stock described on Schedule 2 to the
Guarantee and Collateral Agreement have been duly authorized and validly issued,
are fully paid and nonassessable and are owned of record by the Credit Party
specified as such owner on such Schedule 2.
12. Each of the Financing Statements is in appropriate form for filing
in the Filing Offices. Upon the filing of the Financing Statements in the Filing
Offices, the General Administrative Agent will have a perfected security
interest for the benefit of the Lenders in that portion of the Article 9
Collateral (the "Filing Collateral") in which a security interest is perfected
by filing a financing statement under the [State] UCC.
13. The UCC Search Reports set forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in the
jurisdictions listed on Schedule 2 financing statements covering the Filing
Collateral as of the dates and times specified on Schedule 3.
[14.The California Mortgage:
<PAGE> 213
(i) constitutes a legal, valid and binding obligation of [the
Company] enforceable against [the Company] in accordance with its terms;
(ii) is in proper form for recording;
(iii) complies as to form with all existing Requirements of Law;
(iv) creates in favor of the General Administrative Agent for the
ratable benefit of the Lenders a legal, valid and binding lien on the real
property and fixtures described in such Mortgage, enforceable as such against
the Company and, when recorded in the applicable office listed on Schedule 3,
all other Persons; and
(v) when recorded in the applicable office listed on Schedule 3, will
constitute a perfected lien on the real property and fixtures described in such
Mortgage.
[The facts that (a) the Mortgage secure obligations arising under a
revolving line of credit and (b) the Revolving Credit Loans may from time to
time be repaid in full or in part and reborrowed in accordance with the terms of
the Credit Agreement will not result in a subordination of the liens of the
Mortgage to any other lien on the real property and fixtures described in such
Mortgage or otherwise impair the priority of the liens of such Mortgage.]
15. The courts of the State of ____________ will enforce those
provisions in the Guarantee and Collateral Agreement and the Mortgage which
provide that the validity, construction and enforceability of such documents
will be governed by the laws of the State of New York, except that the Courts of
the State may apply the internal law of the State to determine the perfection
and effect of perfection of the liens created under such documents and the
application of remedies in enforcing such liens with respect to property located
in the State.]
<PAGE> 214
EXHIBIT K-1
FORM OF OPINION OF CANADIAN COUNSEL
1. Each of the Canadian Borrower and its Subsidiaries (collectively,
the "Canadian Credit Parties") (i) is duly organized and subsisting under the
laws of the jurisdiction of its organization and (ii) has the corporate power
and authority to own, lease and operate its properties and to conduct the
business in which it is currently engaged.
2. Each of the Canadian Credit Parties has the corporate power and
authority, and the legal right, to make, deliver and perform its obligations
under each of the Loan Documents to which it is a party and, in the case of the
Canadian Borrower, to borrow and obtain the other extensions of credit under the
Credit Agreement. The Canadian Borrower has taken all necessary corporate action
to authorize the borrowings and other extensions of credit on the terms and
conditions of the Credit Agreement and the other Loan Documents. Each of the
Canadian Credit Parties has taken all necessary corporate action to grant the
security interests contemplated by the Canadian Collateral Documents to which it
is a party and to authorize the execution, delivery and performance of the Loan
Documents to which it is a party.
3. Except for consents, authorizations, approvals, notices and filings
which have been obtained, made or waived and are in full force and effect, no
consent or authorization of, approval by, notice to, filing with or other act by
or in respect of, any Governmental Authority is required in connection with the
execution, delivery and performance by any Canadian Credit Party, or the
validity or enforceability against such Canadian Credit Party, of the Loan
Documents to which it is a party.
4. Each of the Loan Documents to which a Canadian Credit party is a
party has been duly executed and delivered by such Canadian Credit Party.
5. The Power of Attorney has been duly executed and delivered by the
Canadian Borrower and constitute a legal, valid and binding obligation of the
Canadian Borrower enforceable against the Canadian Borrower in accordance with
their respective terms.
6. The Canadian Borrower has taken all necessary corporate action to
authorize the execution, delivery and performance, from time to time, of the
Canadian Term Notes, Drafts, Acceptance Notes and Power of Attorney contemplated
by the Credit Agreement.
7. The execution and delivery of the Loan Documents, the performance by
the Canadian Credit Parties of its obligations thereunder, the consummation by
the Canadian Credit Parties of the transactions contemplated thereby, the
compliance by the Canadian Credit Parties with the provisions thereof, the
borrowing and other extension of credit under the Credit Agreement and the use
of proceeds thereof, all as provided therein, (i) will not violate any
requirement of [Ontario Law] applicable to a Canadian Credit Party, (ii) will
not violate any Contractual Obligation of any Canadian Credit Party in any
respect that would reasonably be expected to have a Material
<PAGE> 215
Adverse Effect, and (iii) will not result in, or require, the creation or
imposition of any Lien on any of its assets or properties pursuant to any such
requirement of [Ontario Law] or, to the best of our knowledge, any such
Contractual Obligation.
8. No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best of my knowledge,
threatened by or against any Loan Party or against any of its properties or
revenues (a) with respect to the Loan Documents, or (b) which would reasonably
be expected to have a Material Adverse Effect.
9. The choice of the parties of the laws of the State of New York to
govern the Credit Agreement and the Canadian Term Notes will, to the extent
specifically pleaded and proved as a fact by expert evidence, be recognized and
given effect to by the [Ontario Courts], provided that:
[(a)the choice of law was freely made by the parties thereto;
(b) the parties have not chosen the laws of the State of New York for
the purpose of evading the provisions of the system of law to which
the transaction contemplated by such Documents are most closely
related, although we are not aware of any facts which would lead us
to believe that the laws of the State of New York were chosen for
any such purpose;
(c) the choice of law will only be effective in regard to substantive
law, and the procedural laws of the jurisdiction in which the
substantive rights are being enforced will apply;
(d) [Ontario Courts] will not apply those laws of the State of New York
which it characterizes as being of a revenue, expropriatory, penal
or public nature; and
(e) enforcement of any provision of such Documents in the [Ontario
Courts] will not be contrary to public policy (as that term is
applied by the [Ontario Courts]) or a statute protecting the
citizens of [Ontario], although we are not aware of any such public
policy or statute that would prevent the recognition of and giving
effect to the choice of law.]
10. Any final judgment for a definite sum given by any court in the
State of New York (the "foreign court") against the Canadian Borrower in respect
of the Credit Agreement would, in an action to enforce such judgment in the
[Ontario Courts], be recognized as conclusive and enforceable without
reconsideration of the merits of the action, provided that:
(a) such judgment was for a sum certain in money;
(b) such judgment was final, conclusive and enforceable where rendered
and does not conflict with another final and conclusive judgment on
the same cause of action and no new admissible evidence relevant to
the
<PAGE> 216
action is discovered prior to the rendering of judgment by the
applicable [Ontario Court];
(c) such judgment was not obtained by fraud or in a manner contrary to
natural justice;
(d) the foreign court rendering the judgment was impartial and provided
procedures compatible with the due process and natural justice
standards of the [Ontario Courts];
(e) the foreign court that rendered the judgment had jurisdiction over
the Canadian Borrower and the subject matter and, if jurisdiction
in the foreign court was based on personal service alone, the
foreign court was not a seriously inconvenient forum for the trial
of the action;
(f) the proceedings in the foreign court were not contrary to an
agreement between the parties under which the dispute in question
was to be settled otherwise than by proceedings in that court;
(g) such judgment is a subsisting judgment and has not been satisfied,
(h) after the date of judgment in the foreign court, application to the
[Ontario Courts] to enforce such judgment is made within twenty
(20) years; and
(i) the claim for relief on which the foreign judgment was based is not
repugnant to the public policy of the Province of [Ontario], as
that term is applied by the [Ontario Courts], although we are not
aware of any reason why a money judgment for amounts payable under
the Credit Agreement would be repugnant to the public policy of the
Province of [Ontario] save and except that an [Ontario Court] might
not recognize and enforce a foreign judgment requiring that the
Canadian Borrower pay a higher rate of interest after default (than
before) or requiring the Canadian Borrower to pay fees, expenses,
interest and other amounts which in aggregate would exceed the
"criminal interest rate" provisions of the Criminal Code of Canada.
<PAGE> 217
EXHIBIT K-2
May , 1997
Each of the Lenders and the Administrative Agents
parties to the Credit Agreement
referred to below
c/o
Dear Sirs and Mesdames:
We have acted as special counsel in the Province of Ontario to the
Toronto-Dominion Bank, as Canadian Administrative Agent, and Toronto-Dominion
(Texas), Inc. as U.S. Administrative Agent (together, the "Agents") and the
Lenders (as hereinafter defined), in connection with, among other things, a
credit agreement (the "Credit Agreement") dated as of , 1997 between the
Agents, the several banks and other financial institutions or entities from
time to time party thereto as lenders (the "Lenders"), Laidlaw Chem-Waste,
Inc., a Delaware corporation (the "U.S. Borrower"), and Laidlaw Environmental
Services (Canada) Ltd., an Ontario corporation (the "Canadian Borrower"). The
U.S. Borrower and the Canadian Borrower are together referred to as the
"Borrowers". The several wholly-owned subsidiaries of the Canadian Borrower who
are parties to the Canadian Collateral Documents are together referred to as
the "Canadian Subsidiaries". The opinions expressed below are furnished to you
pursuant to the Credit Agreement. Capitalized items used but not defined in
this opinion letter have the meanings attributed to them in the Credit
Agreement.
As such counsel, we examined executed copies of the Credit Agreement
and the Canadian Collateral Documents. We have also made such investigations
and examined originals or copies, certified or otherwise identified to our
satisfaction, or such certificates of public officials and of such other
certificates, documents and records as we considered necessary or relevant for
purposes of the opinions expressed in this letter.
We assume, with respect to all documents examined by us, the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals and the conformity to authentic original documents of all
documents submitted to us as certified, conformed, telecopied or photocopied
copies.
<PAGE> 218
-2-
For the purposes of our opinions expressed below, we also assume that:
(a) each of the parties to the Credit Agreement and the Canadian
Collateral Documents is incorporated and existing, has the corporate
power and capacity to enter into and perform its obligations under the
Credit Agreement or the Canadian Collateral Documents, as the case may
be, and has duly authorized, executed and delivered the Credit
Agreement of such Canadian Collateral Document;
(b) the Credit Agreement has been executed and delivered in accordance
with the laws of the jurisdiction where execution and delivery
actually occurred by officers of the U.S. Borrower authorized to do
so;
(C) the Credit Agreement is a valid and legally binding obligation of each
of the parties thereto, enforceable, as a matter of substantive law of
the State of New York, against each of the parties (including the
Canadian Borrower) thereto in accordance with its terms;
(d) if any obligation under the Credit Agreement is incurred in any
jurisdiction outside of Ontario, the performance of that obligation
would not be illegal under the laws of that jurisdiction;
(e) none of the applicable provisions of the laws of the State of New York
governing the Credit Agreement are contrary to Ontario public policy
and enforcement of any N.Y. document would not constitute the indirect
enforcement of a foreign revenue of penal law;
(f) for the purpose of the opinion in paragraph 2:
(i) the Agents' and the U.S. Lenders' decision to make the credit
facilities evidenced by the Credit Agreement, available to
the U.S. Borrower was made outside Canada;
(ii) all negotiations relating to the Credit Agreement and all
related documentation either were conducted outside Canada or
were conducted by telephone communications during which all
officers and employees of the U.S. Administrative Agent and
the U.S. Lenders participating in those communications were
outside Canada;
(iii) all funding by the Agents and the Lenders under the Credit
Agreement inside Canada will occur only through the Canadian
Administrative Agent;
(iv) the U.S. Administrative Agent executed and delivered the
Credit Agreement outside Canada; and
(g) for purposes of our understanding of the nature and import of the
Credit Agreement, that such document would be interpreted and applied
under the laws
<PAGE> 219
-3-
of the State of New York in the same manner as they would be
interpreted and applied under Ontario law, if Ontario law were the
proper law thereof.
Our opinions herein are expressed with respect to the laws of the
Province of Ontario and the federal laws of Canada applicable therein and
should not be taken as expressing an opinion, or relied upon, in respect of the
laws of any other jurisdiction.
Our opinions herein are predicated solely upon laws and regulations in
existence as of the date of this opinion letter and as they currently apply,
and to facts in existence on the date hereof. We assume no obligation to
revise or supplement this opinion should present laws be changed by legislative
action, judicial decision or otherwise.
Based upon and subject to the foregoing, we are of the opinion that;
1. No stamp tax or other similar duty or levy is payable, and no filing,
registration or recording in respect of the Credit Agreement, other than the
normal filing of a statement of claim or other civil proceeding in connection
with an action commenced in Ontario, is necessary under the laws of the
Province of Ontario or the laws of Canada applicable therein in connection with
the execution, delivery, legality, validity, enforceability or admissibility in
evidence of the Credit Agreement or the performance by the U.S. Borrower or the
Canadian Borrower of the terms thereof.
2. It is not necessary under the laws of Ontario that the U.S. Administrative
Agent or any U.S. Lender be licensed, qualified or entitled to carry on
business in Ontario (a) merely by reason of the U.S. Administrative Agent's or
any U.S. Lender's execution of the Credit Agreement or (b) in order to enable
the U.S. Administrative Agent or any U.S. Lender to enforce its rights under
the Credit Agreement in Ontario unless the U.S. Administration Agent or any
U.S. Lender is otherwise carrying on business in Ontario, in which case it
would be necessary for the U.S. Administrative Agent or the relevant U.S.
Lender to first obtain a license under the Extra-Provincial Corporations Act
(Ontario) to enable it to enforce its rights under the Credit Agreement in
Ontario.
3. Neither the U.S. Administrative Agent nor any Lender is or will be deemed to
be resident, domiciled, carrying on business or subject to provincial taxation
in Ontario or federal taxation in Canada merely by reason of (a) the execution
and delivery of the Credit Agreement or (b) the exercise in Ontario of the
rights provided for in the Credit Agreement, which will not in and of itself
constitute carrying on business in Canada.
4. The choice of the law of the State of New York as the proper law of the N.Y.
Documents is permitted under the laws of the Ontario, provided that such choice
of law is bona fide (in the sense that it was not made with a view to avoiding
the consequences of the law of any other jurisdiction). Although questions
related to the application of the rules of conflict of laws cannot generally be
stated in absolute terms but rather as prima facie presumptions, based upon the
information concerning the Borrowers as set forth in the N.Y. Documents, and
assuming that New York law is specifically pleaded and proved as fact in the
relevant Ontario court, there is a substantial likelihood that a court in
Ontario would give effect to such choice of law in any
<PAGE> 220
-4-
action brought in Ontario to enforce the N.Y. Documents, in respect of matters
and issues which under Ontario conflict of law principals are characterized as
contract issues, unless such application of law would be in respect of a matter
which is (a) procedural in nature (b) related to revenue, expropriatory or penal
laws of (c) contrary to fundamental concepts of justice or public policy in
Ontario. In addition, an Ontario court has an inherent power to decline to hear
an action or proceeding if it is contrary to Ontario public policy for it to do
so, or if that court is not the proper forum to hear that action or
proceeding, or if concurrent proceedings are being brought elsewhere. We are
not aware of any reason why it would be contrary to public policy in Ontario or
Canada for an Ontario court to hear any action or proceeding brought in Ontario
to enforce the N.Y. Documents or why the choice of New York law or the
application of New York law in that action or proceeding would be contrary to
public policy in Ontario or Canada (it being understood that no opinion is
being rendered herein relating to the fee agreement referred to in the Credit
Agreement).
5. If a judgment from the appropriate court of the State of New York (the
"New York Court") is obtained against either Borrower in respect of the
Credit Agreement, after a valid service under New York law of process on such
Borrower, an Ontario court, in the face of the express submission to the
jurisdiction of the New York Court in respect of the Credit Agreement, would
recognize such judgment in Ontario in accordance with the laws of Ontario,
provided that each of the following additional conditions is satisfied;
(a) the New York Court acted with its jurisdiction under the laws
of the State of New York;
(b) the judgment of the New York Court is a final and conclusive
in personam judgment;
(c) the judgment is for a fixed and definitive sum of money which
is not to be determined at some future time;
(d) there has been compliance with the Limitations Act (Ontario),
which requires that an action to enforce a foreign judgment
must be commenced within a period of six years of the date of
the foreign judgment;
(e) no defences are available to either Borrower, as applicable,
in Ontario with respect to the action commenced in a New York
Court. Such defences include:
(i) the judgment was obtained by fraud;
(ii) the proceedings in which the judgement was obtained
were opposed to the rules of natural justice;
(iii) the enforcement of the judgment of the New York
Court is against the public policy of Ontario, or
contrary to any other made by the Attorney-General
of Canada under the Foreign Extraterritorial
Measures Act (Canada) or any order made by the
Competition Tribunal under the
<PAGE> 221
-5-
Competition Act (Canada) in respect of certain
judgements (as therein defined);
(iv) in the case of a judgment obtained by default, there
has been no manifest error in the granting of such
judgment; and
(v) the enforcement of such judgment would not
constitute, directly or indirectly, the enforcement
of foreign revenue, expropriatory, penal or other
similar laws.
6. The Canadian Collateral Documents which are governed by Ontario law
constitute legal, valid and binding obligation of each Canadian Subsidiary that
is a party thereto, enforceable against it in accordance with its terms.
7. The Canadian Collateral Documents create valid security interests in the
collateral therein described to which the Personal Property Security Act
(Ontario) ("PPSA") applies, subject to the reservation as to leaseholds and as
to certain contractual rights contained therein. We have registered financing
statements for a period of 10 years under the PPSA (the registrant's copy of
which has been provided to the Canadian Administrative Agent ) to perfect the
security interest created by the Canadian Collateral Documents. No other
notice, filing, registration or act is necessary to perfect the security
interest created by the Canadian Collateral Documents in respect of the
collateral there in described to which the PPSA applies.
8. Provided that the (DESCRIPTION OF SHARES) (the "Pledged Shares") are
situated in the Province of Ontario, the Canadian Collateral Documents relating
to the pledges of shares (the "Share Pledge Agreements") create a valid
security interest in the Pledged Shares and the other collateral described in
the Share Pledged Agreements to which the PPSA applies. We have registered a
financing statement for a period of 10 years under the PPSA (the registrant's
copy of which has been provided to the Canadian Administrative Agent) to
perfect the security interest created by the Share Pledge Agreements and the
certificates representing the Pledged Shares have been delivered to the
Canadian Administrative Agent in Ontario. No other notice, filing, registration
or act is necessary to perfect the security interest created by the Share
Pledge Agreements in respect of the collateral described therein to which the
PPSA applies. Provided that the Canadian Administrative Agent has taken
possession of the certificates representing the Pledged Shares and is acting in
good faith and has no notice of any adverse claim affecting the Pledged Shares,
the security interest of the Lenders in the Pledged Shares has priority over
any other security interest in the Pledged Shares perfected by registration or
temporarily perfected under the PPSA and the Lenders have acquired the Pledged
Shares free of any adverse claim.
9. Except for required filing fees for the financing statements noted above,
there are no other taxes or other governmental fees and charges, the payment of
which are required in the Province of Ontario in connection with the execution,
delivery and recording of the Canadian Collateral Documents.
The opinions set forth above are subject to the following:
<PAGE> 222
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(a) the enforceability of the Credit Agreement and the Canadian Collateral
Documents is subject to and may be limited by (i) bankruptcy,
insolvency, arrangement and similar laws of general application
affecting the enforcement of creditors' rights generally; and (ii) in
the case of the Canadian Collateral Documents which are governed by
Ontario Law, the provisions of the PPSA;
(b) the availability of equitable remedies, such as specific performance
and injunctive relief, are awarded in the discretion of the court;
(c) the discretion that a court may reserve to itself to decline to hear
an action if it is contrary to public policy for it to do so or if it
is not the proper forum to hear the action or if concurrent
proceedings are being brought elsewhere;
(d) we express no opinion as to whether registration of the financing
statements under the PPSA or possession of any collateral by the
Agents or Lenders is effective to perfect the security interest
created by the Canadian Collateral Documents in collateral in respect
of which the federal laws of Canada require notices, filings or
registrations to be made or other steps or actions to be taken in
order to perfect such security interest in such collateral, including
without limitation, patents, trademarks, copyrights, ships and rolling
stock; furthermore, we express no opinion as to the advisability of
compliance with any federal statute of Canada which permits the
registration of security in specified classes or collateral such as
the types of collateral mentioned above;
(e) we express no opinion as to whether the Canadian Collateral Documents
comply with Part VII of the Financial Administration Act (Canada) in
respect of the assignment of Crown Debts (as defined in that Act) and
we have taken no steps to provide the notices or to obtain the
acknowledgements provided for in the Part VII of that Act. An
assignment of Crown Debts which does not comply with that Act is
ineffective as between assignor and assignee and as against the Crown
and therefore the Agents and Lenders would not have a valid security
interest in Crown Debts unless the Act is complied with;
(f) we express no opinion as to the enforceability or creation of any
security interest with respect to quotas, licenses and permits being
collateral which, by its nature or by nature of the business of the
Canadian Borrower or any Canadian Subsidiary cannot be subject of a
security interest without the consent, authorization or approval of
third parties;
(g) we express no opinion as to each of the Canadian Borrower's or any
Canadian Subsidiary's rights in or title to any collateral, nor as to
the priority of any security interest in any collateral;
(h) an assignment of a debt or account will not be binding upon the
obligor to the extent that such debt or account is paid or otherwise
discharged before notice of
<PAGE> 223
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the assignment is, in fact, given to such account debtor together with
a direction to pay the same to one of the Agents or Lenders;
(i) if payment of the indebtedness of any Borrower were to be demanded
under the Credit Agreement or any Canadian Collateral Document, the
Agents and Lenders may be required to give the Borrowers or the
Canadian Subsidiaries a reasonable time to raise funds to pay that
indebtedness prior to taking any action to enforce the Agents'
and Lenders' right to payment or exercising any of the rights and
remedies expressed to be exercisable by the Agents in the Credit
Agreement or any Canadian Collateral Document as a result of that
demand;
(j) we express no opinion as to the enforceability of any provisions of the
Credit Agreement or any Canadian Collateral Document which may
be characterized by a court as an unenforceable penalty and not as a
genuine pre-estimate of damage;
(k) pursuant to the provisions of section 8 of the Interest Act (Canada),
no fine, penalty or rate of interest may be exacted on any arrears of
principal or interest secured by a mortgage on real property that
has the effect of increasing the charge on the arrears beyond the rate
of interest payable on principal money not in arrears;
(l) the provisions for the payment of interest under the Credit Agreement
or any Canadian Collateral Document may be contrarty to Ontario public
policy if those provisions provide for the reciept of interest by the
Lender at a criminal rate; the terms "interest" and "criminal rate"
being used in this qualification with the same meaning as set forth in
section 347 of the Criminal Code (Canada); a copy of those definitions
is set forth in Schedule "A" to this opinion;
(m) as a result of the decision In re Charge Card Services, [1987] Ch. 150
and certain other authorities, there is some doubt in Ontario as to
whether the Agents or Lenders can obtain a valid security interest
in the Borrowers' or the Canadian Subsidiaries' bank accounts with the
Agents or the Lenders; however, those authorites would not affect any
rights of set-off otherwise available to the Agents or the Lenders even
if those authorities represented good law in Ontario;
(n) the enforceability of the indemnity provisions of the Credit Agreement
or any Canadian Collateral Document may be limited by
applicable law to the extent they directly or indirectly relate to
liabilities imposed on the Agents or Lenders by law for which it would
be contrary to public policy to require the Borrowers or the Canadian
Subsidiaries to indemnify the Agents or Lenders or to the extent that it
constitutes the indirect enforcement of a foreign revenue or penal law;
(o) we express no opinion as to the enforceability, in any particular
circumstance, of any provision of the Credit Agreement or any
Canadian Collateral Document which provides for the severability of
illegal or unenforceable provisions;
<PAGE> 224
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(p) the Currency Act (Canada) precludes a court in Canada from giving judgment
in any currency other than Canadian currency;
(q) we express no opinion as to the enforceability of provisions of the Credit
Agreement or any Canadian Collateral Document which require the Borrowers
or the Canadian Subsidiaries to pay, or to indemnify the Agents and the
Lenders for, any and all losses, liablilities, damages, costs, expenses
and claims of the Agents or the Lenders on the basis that any such
provisions may only be enforced in the discretion of a court;
(r) we express no opinion as to the enforceability of provisions of the Credit
Agreement or any Canadian Collateral Document by which the Borrowers or
the Canadian Subsidiaries purport to generally waive all defences which
might be available to them or which might discharge its liability under
the Credit Agreement or any Canadian Collateral Document;
(s) we express no opinion as to the enforceability of any provision of the
Credit Agreement which asserts that any certificate or determination by
or of the Lenders or Agents shall be conclusive, because a court may
permit evidence to be introduced for the purpose of showing such
certificate or determination to be incorrect;
(t) we express no opinion as to the enforceability of provisions of the Credit
Agreement or any Canadian Collateral Document which state that
amendments or waivers of, or consent to any departure from, such documents
that are not in writing will not be effective;
(u) we express no opinion as to the enforceability of provisions of the
Credit Agreement or any Canadian Collateral Document by which the
Borrower or the Canadian Subsidiaries purport to waive their right to a
jury trial in any action brought on the Credit Agreement or any Canadian
Collateral Document; and
(v) the enforceability of the Credit Agreement may be limited to the extent
some of its provisions are expressly or implicitly subject of the
provisions of any other document comprising the Loan Documents and the
enforceability of any Loan Document may be limited to the extent some of
its provisions are expressly or implicitly subject to the provisions of
the Credit Agreement.
This opinion may be relied upon only by each of the addressees and its
permitted assigns, successors, participants and transferees for the purpose of
the transactions contemplated by this opinion. It may not be relied upon by
any other person or for any other purpose, nor may it be quoted in whole or in
part or otherwise referred to without our prior written consent.
Yours truly,
<PAGE> 225
EXHIBIT-K-2
SCHEDULE "A"
"CRIMINAL RATE" means an effective annual rate of interest calculated in
accordance with generally accepted actuarial practices and principles that
exceeds sixty per cent (60%) of the credit advanced under an agreement or
arrangement; and
"INTEREST" means the aggregate of all charges and expenses, whether in the form
of a fee, fine, penalty, commission or other similar charge or expense or in
any other form, paid or payable for the advancing of credit under an agreement
or arrangement, by or on behalf of the person to whom the credit is or is to
be advanced, irrespective of the person to whom any such charges and expenses
are or are to be paid or payable, but does not include any repayment of credit
advanced or any insurance charge, official fee, overdraft charge, reguired
deposit balance or, in the case of a mortgage transaction, any amount required
to be paid on account of property taxes.
<PAGE> 226
EXHIBIT M
SELLER CONSENT AND ACKNOWLEDGEMENT
CONSENT AND ACKNOWLEDGEMENT, dated as of May 15, 1997, among
LAIDLAW, INC., a Canadian corporation ("Laidlaw"), LAIDLAW TRANSPORTATION, INC.,
a Delaware corporation ("Laidlaw Transportation"; together with Laidlaw, the
"Sellers"), LAIDLAW ENVIRONMENTAL SERVICES, INC. (formerly known as Rollins
Environmental Services, Inc.), a Delaware corporation (the "Company"), and
TORONTO DOMINION (TEXAS) INC., as general administrative agent (in such
capacity, the "General Administrative Agent") under the Credit Agreement
described below.
W I T N E S S E T H:
WHEREAS, the Company, and the Sellers are parties to the Stock
Purchase Agreement, dated as of February 6, 1997 (as amended or otherwise
modified from time to time as contemplated hereby, the "Stock Purchase
Agreement"), pursuant to which Laidlaw Transportation is selling to the Company,
and the Company is purchasing from Laidlaw Transportation (the "Acquisition"),
all of Laidlaw Transportation's United States and Canada Hazardous and
Industrial Waste Business (as defined in the Stock Purchase Agreement);
WHEREAS, a portion of the consideration for the Acquisition is
being provided to the Company pursuant to the Credit Agreement, dated as of May
9, 1997 (the "Credit Agreement") among Laidlaw Chem-Waste, Inc., a Delaware
corporation, Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation, the several banks and other financial institutions or entities from
time to time parties thereto (the "Lenders"), the General Administrative Agent,
The Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities,
(USA) Inc., as Arranger, NationsBank, N.A., as Syndication Agent, and The Bank
of Nova Scotia, NationsBank N.A. and The First National Bank of Chicago, as
Managing Agents;
WHEREAS, pursuant to the Guarantee and Collateral Agreement
referred to in the Credit Agreement, the Company has assigned to the General
Administrative Agent, and granted to the General Administrative Agent a security
interest in, the Company's rights under the Stock Purchase Agreement;
WHEREAS, it is a condition precedent to the obligations of the
Lenders to extend credit under the Credit Agreement that the Sellers shall have
executed and delivered this Consent and Acknowledgment; and
WHEREAS, the Sellers are deriving valuable economic benefits
from the extensions of credit made by the Lenders under the Credit Agreement;
NOW, THEREFORE, the parties agree as follows:
<PAGE> 227
2
1. The Sellers hereby acknowledge receipt of a copy of the
Credit Agreement and the Guarantee and Collateral Agreement referred to in the
Credit Agreement (the "Guarantee and Collateral Agreement"). The Sellers hereby
consent to the assignment by the Company of, and the grant by the Company of a
security interest in, its rights under the Stock Purchase Agreement pursuant to
the Guarantee and Collateral Agreement.
2. The Sellers hereby represent and warrant to the General
Administrative Agent and the Lenders that the representations and warranties of
the Sellers set forth in the Stock Purchase Agreement are true and correct in
all material respects.
3. The Company and the Sellers agree with the General
Administrative Agent that they will not amend or otherwise modify the Stock
Purchase Agreement in any material respect without the written consent of the
General Administrative Agent.
4. The Company hereby irrevocably instructs the Sellers, and
the Sellers hereby agree, that upon receipt by the Sellers from the General
Administrative Agent of notice that an Event of Default has occurred and is
continuing under the Credit Agreement, the Sellers will pay directly to the
General Administrative Agent any amount payable by the Sellers under the Stock
Purchase Agreement.
5. This Consent and Acknowledgment may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
6. THIS CONSENT AND ACKNOWLEDGMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE> 228
3
IN WITNESS WHEREOF, the parties hereto have caused this
Consent and Acknowledgment to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
LAIDLAW INC.
By:
-------------------------------------
Title:
LAIDLAW TRANSPORTATION, INC.
By:
-------------------------------------
Title:
LAIDLAW ENVIRONMENTAL SERVICES, INC.
By:
-------------------------------------
Title:
TORONTO DOMINION (TEXAS) INC.,
as General Administrative Agent
By:
-------------------------------------
Title:
<PAGE> 229
EXHIBIT N
THIS MORTGAGE CONSTITUTES A FIXTURE FILING
UNDER THE MICHIGAN UNIFORM COMMERCIAL CODE
MORTGAGE
from
ROLLINS ENVIRONMENTAL, INC., Mortgagor, a
Delaware corporation whose address
is 1301 Gervais Street, 3rd Floor,
Columbia, South Carolina 29201
to
TORONTO DOMINION (TEXAS) INC., as
general administrative agent,
Mortgagee, a Delaware corporation
whose address is 909 Fannin Street,
Suite 1700, Houston, Texas 77010
DATED AS OF MAY 15, 1997
Prepared by, and after recording, please return to:
Simpson Thacher & Bartlett
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Erin L. Rothfuss, Esq.
<PAGE> 230
Michigan
MORTGAGE
THIS MORTGAGE, dated as of May 15, 1997 is made by Rollins
Environmental, Inc., a Delaware corporation ("Mortgagor"), whose address is
1301 Gervais Street, 3rd Floor, Columbia, South Carolina 29201, to Toronto
Dominion (Texas), Inc., a Delaware corporation, as general administrative agent
for the Lenders referred to below (in such capacity, "Mortgagee"), whose
address is 909 Fannin Street, Suite 1700, Houston, Texas 77010. References to
this "Mortgage" shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument.
Background
A. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached (such real property, together with all of the
buildings, improvements, structures and fixtures now or subsequently located
thereon (the "Improvements"), being collectively referred to as the "Real
Estate").
B. Mortgagor is a subsidiary of Laidlaw Chem-Waste, Inc., a
Delaware corporation ("Borrower"). Borrower is a party to the Credit Agreement
dated as of May 9, 1997 (as the same may be amended, supplemented, modified,
extended, restated or replaced from time to time, the "Credit Agreement") among
Borrower, the several banks and other financial institutions from time to time
parties thereto (the "Lenders"), Mortgagee, Laidlaw Environmental Services
(Canada) Ltd. (the "Canadian Borrower"), The Toronto-Dominion Bank, as Canadian
administrative agent, TD Securities (USA) Inc., as arranger, NationsBank, N.A.,
as syndication agent, and The Bank of Nova Scotia, NationsBank, N.A. and The
First National Bank of Chicago, as managing agents. All defined terms used and
not defined herein shall have the meanings assigned thereto in the Credit
Agreement.
C. Pursuant to the Credit Agreement, (i) certain of the
Lenders have agreed to make revolving credit loans to Borrower (the "Revolving
Credit Loans"); (ii) certain of the Lenders have agreed to make term loans to
Borrower (the "Term Loans"); (iii) the Issuing Lender has agreed to issue
letters of credit for the account of Borrower and (iv) pursuant to the Credit
Agreement, Borrower has guaranteed term loans to be made by certain of the
Lenders to the Canadian Borrower under the Credit Agreement and certain loans
by The Toronto-Dominion Bank to the Canadian Borrower pursuant to a separate
loan agreement (the "Canadian Operating Facility Loans") (the collective
<PAGE> 231
2
obligations of Borrower thereunder, the "Guarantor Obligations"). The maximum
aggregate principal amount of the Loans, the L/C Obligations and the Canadian
Operating Facility Loans outstanding at any one time shall not exceed
$670,000,000.
D. Pursuant to a letter agreement, dated as of May 9,
1997, NationsBank, N.A. has agreed to make loans to Borrower (the
"Working Capital Loans").
E. The Loans may be evidenced by promissory notes of Borrower
made payable to the order of the relevant Lender (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"Notes"). Each Loan bears interest at the rate stated in the Credit Agreement;
references in this Mortgage to the "Default Rate" shall mean, at any time, the
interest rate applicable to overdue principal amounts of the Loans as provided
in the Credit Agreement. The obligation of Borrower to reimburse the Issuing
Lender for amounts drawn under Letters of Credit (the "Reimbursement
Obligations") is governed by the section of the Credit Agreement entitled
"Letters of Credit."
F. Mortgagee is the general administrative agent for the
Lenders pursuant to the Credit Agreement and the Guarantee and Collateral
Agreement (as defined in the Credit Agreement). Mortgagor will benefit, as a
subsidiary of Borrower, from Borrower entering into the Credit Agreement. In
recognition of the benefits conferred on Mortgagor, Mortgagor has executed the
Guarantee and Collateral Agreement (the "Guarantee"), under which Mortgagor
guarantees to Mortgagee, as general administrative agent for the Lenders, the
prompt and complete payment and performance by Borrower when due of the
Borrower Obligations and the Working Capital Obligations (each as defined in
the Guarantee).
G. It is a condition precedent to the obligation of the
Lenders to make their respective Loans to Borrower and the Canadian Borrower,
of the Issuing Lender to issue the Letters of Credit for the account of
Borrower and of NationsBank, N.A. to make the Working Capital Loans to Borrower
that Mortgagor shall have executed and delivered this Mortgage to Mortgagee for
the benefit of Mortgagee and the other Lenders, and Mortgagor is willing to so
execute and deliver this Mortgage in order to obtain the benefits available to
it from Borrower entering into the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and to
induce Mortgagee and the other Lenders to make their respective Loans to
Mortgagor and the Canadian Borrower and the Issuing Lender to issue the Letters
of Credit for the account of
<PAGE> 232
3
Mortgagor, Mortgagor hereby agrees with Mortgagee, for the benefit of Mortgagee
and the other Lenders as follows:
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
(a) (i) the prompt and complete payment and performance when
due of the Borrower Obligations and the Working Capital Obligations
and (ii) all interest and fees, indemnities, costs and expenses
payable thereon by Mortgagor (the items set forth in the foregoing
clauses (i) and (ii) being referred to collectively as the
"Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Mortgagor (the "Obligations") whether direct or
indirect, absolute or contingent, due or to become due, or now
existing or hereinafter incurred, which may arise under, out of, or in
connection with, the Guarantee, this Mortgage, any other document
securing payment of the Indebtedness (the "Security Documents") and
any amendments, supplements, extensions, renewals, restatements,
replacements or modifications of any of the foregoing (the Guarantee,
the Mortgage, the Security Documents, the Credit Agreement and all
other documents and instruments from time to time evidencing, securing
or guaranteeing the payment of the Indebtedness or the performance of
the Obligations, as any of the same may be amended, supplemented,
extended, renewed, restated, replaced or modified from time to time,
are collectively referred to as the "Loan Documents");
MORTGAGOR HEREBY GRANTS TO MORTGAGEE A LIEN UPON AND A SECURITY
INTEREST IN, AND HEREBY MORTGAGES AND WARRANTS, GRANTS, ASSIGNS,
TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate
or any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water courses, water and
riparian rights, development rights, air rights, mineral rights and
all estates, rights, titles, interests, privileges, licenses,
tenements, hereditaments
<PAGE> 233
4
and appurtenances belonging, relating or appertaining to the Real
Estate, and any reversions, remainders, rents, issues, profits and
revenue thereof and all land lying in the bed of any street, road or
avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all right, title and interest of Mortgagor in all of the
fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in
connection with any operation or letting of the Real Estate, including
but without limiting the generality of the foregoing, all screens,
awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs,
storm doors and windows, furniture and furnishings, heating,
electrical, and mechanical equipment, lighting, switchboards,
plumbing, ventilating, air conditioning and air-cooling apparatus,
refrigerating, and incinerating equipment, escalators, elevators,
loading and unloading equipment and systems, stoves, ranges, laundry
equipment, cleaning systems (including window cleaning apparatus),
telephones, communication systems (including satellite dishes and
antennae), televisions, computers, sprinkler systems and other fire
prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
appliances, fittings and fixtures of every kind and description (all
of the foregoing in this paragraph (D) being referred to as the
"Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements
to, the Real Estate and the Equipment, subsequently acquired by or
released to Mortgagor or constructed, assembled or placed by Mortgagor
on the Real Estate, immediately upon such acquisition, release,
construction, assembling or placement, including, without limitation,
any and all building materials whether stored at the Real Estate or
offsite, and, in each such case, without any further mortgage,
conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other
<PAGE> 234
5
agreements relating to the use or occupancy of the Real Estate or the
Equipment or any part thereof, now existing or subsequently entered
into by Mortgagor and whether written or oral and all guarantees of
any of the foregoing (collectively, as any of the foregoing may be
amended, restated, extended, renewed or modified from time to time,
the "Leases"), and all rights of Mortgagor in respect of cash and
securities deposited thereunder and the right to receive and collect
the revenues, income, rents, issues and profits thereof, together with
all other rents, royalties, issues, profits, revenue, income and other
benefits arising from the use and enjoyment of the Mortgaged Property
(as defined below) (collectively, the "Rents") including, but not
limited to, all rights conferred by Act No. 210 of the Michigan Public
Acts of 1953 as amended by Act No. 151 of the Michigan Public Acts of
1966 (MCLA 554.231 et seq.), and Act No. 228 of the Michigan Public
Acts of 1925 as amended by Act No. 55 of the Michigan Public Acts of
1933 (MCLA 554.211 et seq.);
(G) all trade names, trade marks, logos, copyrights, good
will and books and records relating to or used in connection with the
operation of the Real Estate or the Equipment or any part thereof; all
general intangibles related to the operation of the Improvements now
existing or hereafter arising;
(H) all right, title and interest of Mortgagor in all
unearned premiums under insurance policies now or subsequently
obtained by Mortgagor relating to the Real Estate or Equipment and
Mortgagor's interest in and to all proceeds of any such insurance
policies (including title insurance policies) including the right to
collect and receive such proceeds, subject to the provisions relating
to insurance generally set forth below; and all awards and other
compensation, including the interest payable thereon and the right to
collect and receive the same, made to the present or any subsequent
owner of the Real Estate or Equipment for the taking by eminent
domain, condemnation or otherwise, of all or any part of the Real
Estate or any easement or other right therein;
(I) all right, title and interest of Mortgagor in and to (i)
all contracts from time to time executed by Mortgagor or any manager
or agent on its behalf relating to the ownership, construction,
maintenance, repair, operation, occupancy, sale or financing of the
Real Estate or Equipment or any part thereof and all agreements
relating to the purchase or lease of any portion of the Real Estate or
any property which is adjacent or peripheral to the Real Estate,
<PAGE> 235
6
together with the right to exercise such options and all leases of
Equipment (collectively, the "Contracts"), (ii) all consents,
licenses, building permits, certificates of occupancy and other
governmental approvals relating to construction, completion,
occupancy, use or operation of the Real Estate or any part thereof
(collectively, the "Permits") and (iii) all drawings, plans,
specifications and similar or related items relating to the Real
Estate (collectively, the "Plans");
(J) all right, title and interest of Mortgagor in any and all
monies now or subsequently on deposit for the payment of real estate
taxes or special assessments against the Real Estate or for the
payment of premiums on insurance policies covering the foregoing
property or otherwise on deposit with or held by Mortgagee as provided
in this Mortgage;
(K) all proceeds, both cash and noncash, of the
foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (K) are
collectively referred to as the "Mortgaged Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby mortgaged unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed.
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters that are set forth in Schedule
B of the title insurance policy or policies being issued to Mortgagee to insure
the lien of this Mortgage (the "Permitted Exceptions") and Mortgagor shall
warrant, defend and preserve such title and the lien of the Mortgage thereon
against all claims of all persons and entities. Mortgagor further warrants that
it has the right to mortgage the Mortgaged Property.
<PAGE> 236
7
2. Payment of Indebtedness. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified
in the Guarantee and shall perform all the Obligations.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements,
and irrespective of the nature of the work to be done, of each of the United
States of America, any State and any municipality, local government or other
political subdivision thereof and any agency, department, bureau, board,
commission or other instrumentality of any of them, now existing or
subsequently created (collectively, "Governmental Authority") which has
jurisdiction over the Mortgaged Property and all covenants, restrictions and
conditions now or later of record which may be applicable to any of the
Mortgaged Property, or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration, repair or reconstruction of any of the
Mortgaged Property. All present and future laws, statutes, codes, ordinances,
orders, judgments, decrees, rules, regulations and requirements of every
Governmental Authority applicable to Mortgagor or to any of the Mortgaged
Property and all covenants, restrictions, and conditions which now or later may
be applicable to any of the Mortgaged Property are collectively referred to as
the "Legal Requirements". Notwithstanding the foregoing, Mortgagor shall not be
required to comply with Legal Requirements to the extent that a failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
material adverse effect on (i) the Mortgaged Property or (ii) the validity of
enforceability of this Mortgage or the rights or remedies of Mortgagee or the
Lenders hereunder.
(b) From and after the date of this Mortgage, Mortgagor shall
not by act or omission permit any building or other improvement on any premises
not subject to the lien of this Mortgage to rely on the Premises or any part
thereof or any interest therein to fulfill any Legal Requirement, and Mortgagor
hereby assigns to Mortgagee any and all rights to give consent for all or any
portion of the Premises or any interest therein to be so used. Mortgagor shall
not by act or omission impair the integrity of any of the Real Estate as a
single zoning lot separate and apart from all other premises. Mortgagor
represents that each parcel of the Real Estate constitutes a legally subdivided
lot, in compliance with all subdivision laws and similar Legal Requirements.
Any act or omission by Mortgagor which would result in a violation of any of
the provisions of this subsection shall be void.
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4. Payment of Taxes and Other Impositions. (a) Promptly when
due, Mortgagor shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes), all
charges for any easement or agreement maintained for the benefit of any of the
Mortgaged Property, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents and charges and all
other public charges even if unforeseen or extraordinary, imposed upon or
assessed against or which may become a lien on any of the Mortgaged Property,
or arising in respect of the occupancy, use or possession thereof, together
with any penalties or interest on any of the foregoing (all of the foregoing
are collectively referred to as the "Impositions"). Mortgagor shall within 30
days after a request by Mortgagee deliver to Mortgagee (i) original or copies
of receipted bills and cancelled checks evidencing payment of such Imposition
if it is a real estate tax or other public charge and (ii) evidence acceptable
to Mortgagee showing the payment of any other such Imposition. If by law any
Imposition, at Mortgagor's option, may be paid in installments (whether or not
interest shall accrue on the unpaid balance of such Imposition), Mortgagor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become due, and to add to the Indebtedness the amount so paid, together with
interest from the time of payment at the Default Rate. Any sums paid by
Mortgagee in discharge of any Impositions shall be (i) a lien on the Premises
secured hereby prior to any right or title to, interest in, or claim upon the
Premises subordinate to the lien of this Mortgage, and (ii) payable on demand
by Mortgagor to Mortgagee together with interest at the Default Rate as set
forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on
any interest payable thereon for any taxes assessed against the Mortgaged
Property or any part thereof, and shall not claim any deduction from the
taxable value of the Mortgaged Property by reason of this Mortgage.
(d) Mortgagor shall have the right before any delinquency
occurs to contest or object in good faith to the amount or validity of any
Imposition by appropriate legal proceedings, but such right shall not be deemed
or construed in any way as relieving, modifying, or extending Mortgagor's
covenant to pay any such Imposition at the time and in the manner
<PAGE> 238
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provided in this Section unless (i) Mortgagor has given prior written notice to
Mortgagee of Mortgagor's intent so to contest or object to an Imposition, (ii)
Mortgagor shall demonstrate to Mortgagee's satisfaction that the legal
proceedings shall operate conclusively to prevent the sale of the Mortgaged
Property, or any part thereof, to satisfy such Imposition prior to final
determination of such proceedings and (iii) Mortgagor shall furnish a good and
sufficient bond or surety as requested by and reasonably satisfactory to
Mortgagee in the amount of the Impositions which are being contested plus any
interest and penalty which may be imposed thereon and which could become a lien
against the Real Estate or any part of the Mortgaged Property.
5. Insurance. (a) Mortgagor shall maintain or cause
to be maintained on all of the Premises
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss, and the policy limits shall be automatically
reinstated after each loss;
(ii) commercial general liability insurance under a
policy including the "broad form CGL endorsement" (or which
incorporates the language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage
occurring on, in or about the Premises in an amount not less than
$10,000,000 combined single limit with respect to injury and property
damage relating to any one occurrence plus such excess limits as
Mortgagee shall request from time to time;
(iii) insurance against rent loss, extra expense or
business interruption in amounts satisfactory to Mortgagee, but not
less than one year's gross rent or gross income;
(iv) such other insurance in such amounts as Mortgagee
may reasonably request from time to time against loss or damage by any
other risk commonly insured against by persons occupying or using like
properties in the locality or localities in which the Real Estate is
situated.
(b) Each insurance policy (other than flood insurance)
shall (x) provide that it shall not be cancelled, non-renewed or materially
amended without 30-days' prior written notice to Mortgagee, and (y) with
respect to all property insurance, contain a "Replacement Cost Endorsement"
without any deduction
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10
made for depreciation and with no co-insurance penalty (or attaching an agreed
amount endorsement satisfactory to Mortgagee), with loss payable to Mortgagee
and Mortgagor (modified, if necessary, to provide that proceeds in the amount
of replacement cost may be retained by Mortgagee without the obligation to
rebuild) as their interest may appear, without contribution, under a "standard"
or "New York" mortgagee clause acceptable to Mortgagee. Liability insurance
policies shall name Mortgagee as an additional insured and contain a waiver of
subrogation against Mortgagee. Each policy shall expressly provide that any
proceeds which are payable to Mortgagee shall be paid by check payable to the
order of Mortgagee and Mortgagor and requiring the endorsement of Mortgagee and
Mortgagor.
(c) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee, together with a copy of the declaration page for each
such policy. Mortgagor shall (i) pay as they become due all premiums for such
insurance and (ii) not later than 15 days prior to the expiration of each
policy to be furnished pursuant to the provisions of this Section, deliver a
renewed policy or policies, or duplicate original or originals thereof, marked
"premium paid," or accompanied by such other evidence of payment satisfactory
to Mortgagee.
(d) If Mortgagor is in default of its obligations to insure
or deliver any such prepaid policy or policies, then Mortgagee, at its option
and without notice, may effect such insurance from year to year, and pay the
premium or premiums therefor, and Mortgagor shall pay to Mortgagee on demand
such premium or premiums so paid by Mortgagee with interest from the time of
payment at the Default Rate and the same shall be deemed to be secured by this
Mortgage and shall be collectible in the same manner as the Indebtedness
secured by this Mortgage.
(e) If the Mortgaged Property, or any part thereof, shall be
destroyed or damaged and the cost to repair such damage exceeds $10,000,
Mortgagor shall give immediate notice thereof to Mortgagee. All insurance
proceeds shall be paid to Mortgagee to be held by Mortgagee as collateral to
secure the payment and performance of the Indebtedness and the Obligations.
Notwithstanding the preceding sentence, provided that no Event of Default shall
have occurred and be continuing, Mortgagor shall have the right to adjust such
loss, and the insurance proceeds relating to such loss shall be paid over to
Mortgagor; provided that Mortgagor shall, except as permitted by subsection
6.3(b) of the Credit Agreement, promptly after any such damage, repair all such
damage regardless of whether any insurance proceeds have
<PAGE> 240
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been received or whether such proceeds, if received, are sufficient to pay for
the costs of repair.
(f) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property, all right, title and interest of
Mortgagor in and to any insurance policies covering the Premises then in force
shall pass to the purchaser or grantee.
(g) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits in such blanket policy applicable to the Premises and the other
Mortgaged Property, (B) each such blanket policy shall include an endorsement
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
and (C) the protection afforded under any such blanket policy shall be no less
than that which would have been afforded under a separate policy or policies
relating only to the Mortgaged Property.
6. Restrictions on Liens and Encumbrances. Except for the
lien of this Mortgage and the Permitted Exceptions, and as otherwise expressly
permitted by subsection 10.3 of the Credit Agreement, Mortgagor shall not
further mortgage, nor otherwise encumber the Mortgaged Property nor create or
suffer to exist any lien, charge or encumbrance on the Mortgaged Property, or
any part thereof, whether superior or subordinate to the lien of this Mortgage
and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Mortgagor
shall not sell, transfer, lease, convey or assign or otherwise dispose of all
or any portion of, or any interest in, the Mortgaged Property, except as
expressly permitted by subsection 10.6 of the Credit Agreement.
8. Maintenance; No Alteration; Inspection; Utilities.
(a) Mortgagor shall maintain or cause to be maintained all the Improvements in
good condition and repair and shall not commit or suffer any waste of the
Improvements. Except as permitted by subsection 6.3(c) of the Credit Agreement,
Mortgagor shall repair, restore, replace or rebuild promptly any part of the
Premises which may be damaged or destroyed by any casualty whatsoever. The
Improvements shall not be demolished or
<PAGE> 241
12
materially altered, nor any material additions built, without the prior written
consent of Mortgagee.
(b) Mortgagee and any persons authorized by Mortgagee shall
have the right to enter and inspect the Premises and the right to inspect all
work done, labor performed and materials furnished in and about the
Improvements and the right to inspect and make copies of all books, contracts
and records of Mortgagor relating to the Mortgaged Property, at any reasonable
time and as may reasonably be desired.
(c) Mortgagor shall pay or cause to be paid when due all
utility charges which are incurred for gas, electricity, water or sewer
services furnished to the Premises and all other assessments or charges of a
similar nature, whether public or private, affecting the Premises or any
portion thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagee is hereby authorized and empowered
by Mortgagor to settle or compromise any claim in connection with such
condemnation and to receive all awards and proceeds thereof to be held by
Mortgagee as collateral to secure the payment and performance of the
Indebtedness and the Obligations. Notwithstanding the preceding sentence,
provided no Event of Default shall have occurred and be continuing, Mortgagor
shall, at its expense, diligently prosecute any proceeding relating to such
condemnation, settle or compromise any claims in connection therewith and,
subject to subsection 6.3 of the Credit Agreement, receive any awards or
proceeds thereof.
10. Restoration. Subject to the provisions of the Credit
Agreement which may require insurance proceeds and condemnation proceeds and
awards to be used to prepay the Loans, Mortgagor shall use all insurance
proceeds and all condemnation proceeds and awards to promptly restore the
Mortgaged Property to its condition prior to such casualty or condemnation
(giving effect to the remaining configuration of the Premises after such
condemnation), and in compliance with all Legal Requirements.
11. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, execute or permit to exist any Lease of any of the Mortgaged
Property, except as provided in subsection 10.5 of the Credit Agreement.
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13
(b) As to any Lease now in existence or subsequently
consented to by Mortgagee, Mortgagor shall not accept a surrender or terminate,
cancel, rescind, supplement, alter, revise, modify or amend such Lease or
permit any such action to be taken nor shall Mortgagor accept the payment of
rent more than thirty (30) days in advance of its due date.
12. Further Assurances. To further assure Mortgagee's rights
under this Mortgage, Mortgagor agrees upon demand of Mortgagee to do any act or
execute any additional documents (including, but not limited to, security
agreements on any personalty included or to be included in the Mortgaged
Property and a separate assignment of each Lease in recordable form) as may be
required by Mortgagee to confirm the lien of this Mortgage and all other rights
or benefits conferred on Mortgagee.
13. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee and the same shall be
secured by this Mortgage and shall be a lien on the Mortgaged Property prior to
any right, title to, interest in or claim upon the Mortgaged Property attaching
subsequent to the lien of this Mortgage. No payment or advance of money by
Mortgagee under this Section shall be deemed or construed to cure Mortgagor's
default or waive any right or remedy of Mortgagee.
14. Materials of Environmental Concern. (a) (i) Except in
compliance with all applicable Environmental Laws, neither Mortgagor nor, to
the best knowledge of Mortgagor, any other person has ever caused or permitted
any Materials of Environmental Concern to be placed, stored, held or located
on, under or at the Premises, or any part thereof; (ii) the Premises have never
been used (whether by Mortgagor or, to the best knowledge of Mortgagor, by any
other person, including any tenant or sub-tenant) as a disposal site for any
Materials of Environmental Concern; (iii) the Premises do not contain any
Materials of Environmental Concern in a concentration or condition that could
reasonably be expect to result in liability under any Environmental Law; and
(iv) the Premises are not and have not been in violation of any applicable
Environmental Law.
(b) Mortgagor shall comply with any and all applicable
Environmental Laws and any other applicable Legal Requirements relating to
Materials of Environmental Concern, shall pay immediately when due the costs of
investigation, remediation and removal of any Materials of Environmental
Concern, and shall keep
<PAGE> 243
14
the Premises free of any lien imposed in connection with such Legal
Requirements. In the event Mortgagor fails to do so, after notice to Mortgagor
and the expiration of the earlier of (i) applicable cure periods hereunder, or
(ii) the cure period permitted under the applicable Legal Requirement,
Mortgagee may declare such failure an Event of Default or may undertake to so
comply, pay, or keep free (as the case may be) in which case Mortgagor shall
give Mortgagee and its agents and employees access to the Premises to so act,
and the cost to so comply, pay or keep free with interest at the Default Rate
shall immediately be due from Mortgagor to Mortgagee and the same shall be
added to the Indebtedness and be secured by this Mortgage. Mortgagor further
agrees not to release or dispose of any Materials of Environmental Concern at
the Premises without the express approval of Mortgagee and any such release or
disposal shall comply with all applicable Legal Requirements and any conditions
established by Mortgagee. In addition, except in full compliance with all
applicable Environmental Laws, Mortgagor agrees not to allow the use, storage
or presence of any Materials of Environmental Concern over or upon the
Premises. Mortgagee shall have the right at any time to conduct an
environmental assessment of the Premises and Mortgagor shall cooperate in the
conduct of such environmental assessment, and the costs of such assessment with
interest at the Default Rate shall immediately be due from Mortgagor to
Mortgagee and the same shall be added to the Indebtedness and be secured by
this Mortgage. Mortgagor agrees to defend, indemnify and hold Mortgagee free
and harmless from and against all loss, costs, damage and expense (including
attorneys' fees and costs and consequential damages) Mortgagee may sustain by
reason of (i) the imposition or recording of a lien by any Governmental
Authority pursuant to any Legal Requirement relating to Materials of
Environmental Concern; (ii) claims of any private parties regarding violations
of Environmental Laws; (iii) costs and expenses (including, without limitation,
attorneys' fees and fees incidental to the securing of repayment of such costs
and expenses) incurred by Mortgagor or Mortgagee in connection with the removal
of any such lien or in connection with Mortgagor's or Mortgagee's compliance
with any Environmental Laws; and (iv) the assertion against Mortgagee by any
party of any claim in connection with Materials of Environmental Concern.
(c) The foregoing indemnification shall survive repayment of
the Note, notwithstanding the delivery of any satisfaction, release or release
deed, discharge or deed of reconveyance, or the assignment of this Mortgage by
Mortgagee.
15. Events of Default. The occurrence of any Event of
Default as such term is defined in the Credit Agreement shall constitute an
Event of Default hereunder.
<PAGE> 244
15
16. Remedies.
(a) Upon the occurrence of any Event of Default, in addition
to any other rights and remedies Mortgagee may have pursuant to the Loan
Documents, or as provided by law, and without limitation, (x) if such event is
an Event of Default specified in clause (i) or (ii) of subsection 11(f) of the
Credit Agreement, automatically the Indebtedness and all other amounts owing
under the Guarantee, this Mortgage and the other Security Documents immediately
shall become due and payable, and (y) if such event is any other Event of
Default, with the consent of the Required Lenders, the General Administrative
Agent may, by notice of default to Mortgagor, declare the Indebtedness
(together with accrued interest thereon) and all other amounts payable under
the Guarantee, this Mortgage and the other Security Documents to be immediately
due and payable. Except as expressly provided above in this Section or as
required by applicable law, notice of intention to accelerate, notice of
acceleration, presentment, demand, protest and all other notices of any kind
are hereby expressly waived. In addition, upon the occurrence of any Event of
Default, Mortgagee may immediately take such action, without notice or demand,
as it deems advisable to protect and enforce its rights against Mortgagor and
in and to the Mortgaged Property, including, but not limited to, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such manner as Mortgagee may determine, in its sole discretion, without
impairing or otherwise affecting the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by
applicable law, (A) institute and maintain an action of mortgage
foreclosure against all or any part of the Mortgaged Property (as
described below), (B) institute and maintain an action on the
Indebtedness or the Guarantee, (C) sell all or part of the Mortgaged
Property (Mortgagor expressly granting to Mortgagee the power of sale,
as more fully described below), or (D) take such other action at law
or in equity for the enforcement of this Mortgage or any of the Loan
Documents as the law may allow. Mortgagee may proceed in any such
action to final judgment and execution thereon for all sums due
hereunder, together with interest thereon at the Default Rate and all
costs of suit, including, without limitation, reasonable attorneys'
fees and disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Mortgagee from the date of judgment until
actual payment is made of the full amount of the judgment.
(ii) Mortgagee may immediately commence foreclosure
proceedings against the Mortgaged Property pursuant to
<PAGE> 245
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applicable law. The commencement by Mortgagee of foreclosure
proceedings by advertisement or in equity shall be deemed an exercise
by Mortgagee of its option set forth above to accelerate the due date
of all sums secured hereby. Mortgagor hereby grants power to
Mortgagee, in the event of the occurrence of an Event of Default
hereunder, to grant, bargain, sell, release and convey the Mortgaged
Property at public auction or vendue, and upon such sale to execute
and deliver to the purchaser(s) instruments of conveyance pursuant to
the terms hereof and to the applicable laws. Mortgagor acknowledges
that the foregoing sentence confers a power of sale upon Mortgagee,
and that upon the occurrence of an Event of Default this Mortgage may
be foreclosed by advertisement as described below and in the
applicable Michigan statutes. MORTGAGOR UNDERSTANDS THAT UPON DEFAULT,
MORTGAGEE IS HEREBY AUTHORIZED AND EMPOWERED TO SELL THE MORTGAGED
PROPERTY, OR CAUSE THE SAME TO BE SOLD AND TO CONVEY THE SAME TO THE
PURCHASER IN ANY LAWFUL MANNER, INCLUDING BUT NOT LIMITED TO THAT
PROVIDED BY CHAPTER 32 OF THE REVISED JUDICATURE ACT OF MICHIGAN,
ENTITLED "FORECLOSURE OF MORTGAGE BY ADVERTISEMENT", WHICH PERMITS
MORTGAGEE TO SELL THE MORTGAGED PROPERTY WITHOUT AFFORDING MORTGAGOR A
HEARING, OR GIVING IT ACTUAL PERSONAL NOTICE. THE ONLY NOTICE REQUIRED
UNDER SUCH CHAPTER 32 IS TO PUBLISH NOTICE IN A LOCAL NEWSPAPER AND TO
POST A COPY OF THE NOTICE ON THE MORTGAGED PROPERTY.
WAIVER: BY CONFERRING THIS POWER OF SALE UPON MORTGAGEE, MORTGAGOR,
FOR ITSELF, ITS SUCCESSORS AND ASSIGNS, AFTER AN OPPORTUNITY FOR
CONSULTATION WITH ITS LEGAL COUNSEL, HEREBY VOLUNTARILY, KNOWINGLY AND
INTELLIGENTLY WAIVES ALL RIGHTS UNDER THE CONSTITUTION AND LAWS OF THE
UNITED STATES AND UNDER THE CONSTITUTION AND LAWS OF THE STATE OF
MICHIGAN, BOTH TO A HEARING ON THE RIGHT TO EXERCISE AND THE EXERCISE
OF THE POWER OF SALE, AND TO NOTICE EXCEPT AS REQUIRED BY THE MICHIGAN
STATUTE WHICH PROVIDES FOR FORECLOSURE OF MORTGAGES BY ADVERTISEMENT.
(iii) Mortgagee may personally, or by its agents,
attorneys and employees and without regard to the adequacy or
inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations enter into and upon the
Mortgaged Property and each and every part thereof and exclude
Mortgagor and its agents and employees therefrom without liability for
trespass, damage or otherwise (Mortgagor hereby agreeing to surrender
possession of the Mortgaged Property to Mortgagee upon demand at any
such time) and use, operate, manage, maintain and control the
Mortgaged Property and every part thereof. Following such entry and
taking of possession, Mortgagee
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shall be entitled, without limitation, (x) to lease all or any part or
parts of the Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper, (y) to
enforce, cancel or modify any Lease to the extent permitted by
applicable law and the terms of such Lease and (z) generally to
execute, do and perform any other act, deed, matter or thing
concerning the Mortgaged Property as Mortgagee shall deem appropriate
as fully as Mortgagor might do.
In connection with Mortgagee's right to possession of the Mortgaged
Property as specified in this paragraph, Mortgagor acknowledges that
it has been advised that there is a significant body of case law in
Michigan which purportedly provides that in the absence of a showing
of waste of a character sufficient to endanger the value of the
Mortgaged Property, or other special factors, a mortgagor is entitled
to remain in possession of Mortgaged Property, and to enjoy the
income, rents and profits therefrom, during the pendency of
foreclosure proceedings and until the expiration of the redemption
period, even if the mortgage documents expressly provide to the
contrary. Mortgagor further acknowledges that it has been advised that
Mortgagee recognizes the value of the security covered hereby is
inextricably intertwined with the effectiveness of the management,
maintenance and general operation of the Mortgaged Property, and that
Mortgagee would not extend the Indebtedness secured hereby unless it
could be assured that it would have the right to take possession of
the Mortgaged Property in order to manage or to control management
thereof, and to enjoy the income, rents and profits therefrom,
immediately upon default by Mortgagor hereunder, notwithstanding that
foreclosure proceedings may not have been instituted, or are pending,
or the redemption period may not have expired. Accordingly, Mortgagor
hereby knowingly, intelligently and voluntarily waives all right to
possession of the Mortgaged Property from and after the occurrence of
an Event of Default hereunder, upon demand for possession by
Mortgagee, and Mortgagor agrees not to assert any objection or defense
to Mortgagee's request or petition to a court for possession. The
rights hereby conferred upon Mortgagee have been agreed upon prior to
any default by Mortgagor hereunder and the exercise by Mortgagee of
any such rights shall not be deemed to put Mortgagee in the status of
a "mortgagee in possession". Mortgagor acknowledges that this
provision is material to this transaction and that Mortgagee would not
extend the Indebtedness secured hereby but for this paragraph.
<PAGE> 247
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(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Mortgagee's election, in one
parcel or in more than one parcel and if in more than one parcel the same may
be divided as Mortgagee may elect and Mortgagee is specifically empowered,
(without being required to do so, and in its sole and absolute discretion) to
cause successive sales of portions of the Mortgaged Property to be held. At the
election of Mortgagee, the Mortgaged Property may be offered first in parcels
and then as a whole, the offer producing the highest price for the entire
property offered to prevail. Mortgagor hereby waives any right to require any
such sale to be made in parcels or any right to select such parcels.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, Mortgagee shall be
entitled to enjoin such breach and obtain specific performance of any covenant,
agreement, term or condition and Mortgagee shall have the right to invoke any
equitable right or remedy as though other remedies were not provided for in
this Mortgage.
(d) In the event of a default because of the existence of any
lien upon the Mortgaged Property, Mortgagee shall have the right (without being
obligated to do so or to continue to do so), without notice to Mortgagor, to
advance on and for the account of Mortgagor such sums as Mortgagee in its sole
discretion deems necessary to cure such default or to induce the holder of any
such lien to forbear from exercising its rights thereunder. Notwithstanding
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
17. Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Guarantee and
documents evidencing expenditures secured hereby may be presented to the person
or persons conducting the sale in order that the amount so used or applied may
be credited upon the Indebtedness as having been paid.
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19
18. Appointment of Receiver. If an Event of Default shall
have occurred and be continuing, Mortgagee as a matter of right and without
notice to Mortgagor, unless otherwise required by applicable law, and without
regard to the adequacy or inadequacy of the Mortgaged Property or any other
collateral as security for the Indebtedness and Obligations or the interest of
Mortgagor therein, shall have the right to apply to any court having
jurisdiction to appoint a receiver or receivers or other manager of the
Mortgaged Property, and Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers and
duties of Mortgagee in case of entry as provided in this Mortgage, including,
without limitation and to the extent permitted by law, the right to enter into
leases of all or any part of the Mortgaged Property, and shall continue as such
and exercise all such powers until the date of confirmation of sale of the
Mortgaged Property unless such receivership is sooner terminated.
19. Extension, Release, etc. (a) Without affecting the lien
or charge of this Mortgage upon any portion of the Mortgaged Property not then
or theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of
the terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall
not reduce the amount of the lien of this Mortgage until the lien amount shall
equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of
an execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the lien of this Mortgage or any liens,
rights, powers or remedies of Mortgagee hereunder, and such liens, rights,
powers and remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any
<PAGE> 249
20
tenants of the Mortgaged Property. The failure to make any such tenants parties
defendant to any such foreclosure proceeding and to foreclose their rights will
not be asserted by Mortgagor as a defense to any proceeding instituted by
Mortgagee to collect the Indebtedness or to foreclose the lien of this
Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid lien on the Mortgaged
Property for the amount secured hereby.
20. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State of Michigan. If an Event of Default shall occur under this
Mortgage, then in addition to having any other right or remedy available at law
or in equity, Mortgagee shall have the option of either (i) proceeding under
the Code and exercising such rights and remedies as may be provided to a
secured party by the Code with respect to all or any portion of the Mortgaged
Property which is personal property (including, without limitation, taking
possession of and selling such property) or (ii) treating such property as real
property and proceeding with respect to both the real and personal property
constituting the Mortgaged Property in accordance with Mortgagee's rights,
powers and remedies with respect to the real property (in which event the
default provisions of the Code shall not apply). If Mortgagee shall elect to
proceed under the Code, then five days' notice of sale of the personal property
shall be deemed reasonable notice and the reasonable expenses of retaking,
holding, preparing for sale, selling and the like incurred by Mortgagee shall
include, but not be limited to, attorneys' fees and legal expenses. At
Mortgagee's request, Mortgagor shall assemble the personal property and make it
available to Mortgagee at a place designated by Mortgagee which is reasonably
convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this
Mortgage upon recording or registration in the real estate records of the
proper office shall constitute a financing statement filed as a "fixture
filing" within the meaning of Sections 9-313 and 9-402 of the Code; (iii)
Mortgagor is the record owner of the Real Estate; (iv) the mailing addresses of
Mortgagor and Mortgagee are as set forth on the first page of this Mortgage;
and (v) Mortgagor's federal tax identification number is 51-0290240. In
addition,
<PAGE> 250
21
for purposes of Article 9 of the Michigan Uniform Commercial Code, (i)
Mortgagor is the "debtor", (ii) Mortgagee is the "secured party" and (iii)
information concerning the security interest created hereby may be obtained
from Mortgagee at its address on the first page of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee, covering all or any
part of the Mortgaged Property and will further execute, acknowledge and
deliver, or cause to be executed, acknowledged and delivered, any financing
statement, affidavit, continuation statement or certificate or other document
as Mortgagee may request in order to perfect, preserve, maintain, continue or
extend the security interest under and the priority of this Mortgage and such
security instrument. Mortgagor further agrees to pay to Mortgagee on demand all
costs and expenses incurred by Mortgagee in connection with the preparation,
execution, recording, filing and re-filing of any such document and all
reasonable costs and expenses of any record searches for financing statements
Mortgagee shall reasonably require. If Mortgagor shall fail to furnish any
financing or continuation statement within 10 days after request by Mortgagee,
then pursuant to the provisions of the Code, Mortgagor hereby authorizes
Mortgagee, without the signature of Mortgagor, to execute and file any such
financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or
chattels shall not be construed as in any way impairing the right of Mortgagee
to proceed against any personal property encumbered by this Mortgage as real
property, as set forth above.
21. Assignment of Rents. Mortgagor hereby assigns to
Mortgagee the Rents as further security for the payment of the Indebtedness and
performance of the Obligations, and Mortgagor grants to Mortgagee the right to
enter the Mortgaged Property for the purpose of collecting the same and to let
the Mortgaged Property or any part thereof, and to apply the Rents on account
of the Indebtedness. The foregoing assignment and grant is present and absolute
and shall continue in effect until the Indebtedness is paid in full, but
Mortgagee hereby waives the right to enter the Mortgaged Property for the
purpose of collecting the Rents and Mortgagor shall be entitled to collect,
receive, use and retain the Rents until the occurrence of an Event of Default
under this Mortgage; such right of Mortgagor to collect, receive, use and
retain the Rents may be revoked by Mortgagee upon the occurrence of any Event
of Default under this Mortgage by giving not less than five days' written
notice of such revocation to Mortgagor; in the event such notice is given,
Mortgagor shall pay over to Mortgagee, or to any receiver
<PAGE> 251
22
appointed to collect the Rents, any lease security deposits, and shall pay
monthly in advance to Mortgagee, or to any such receiver, the fair and
reasonable rental value as determined by Mortgagee for the use and occupancy of
the Mortgaged Property or of such part thereof as may be in the possession of
Mortgagor or any affiliate of Mortgagor, and upon default in any such payment
Mortgagor and any such affiliate will vacate and surrender the possession of
the Mortgaged Property to Mortgagee or to such receiver, and in default thereof
may be evicted by summary proceedings or otherwise. Mortgagor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any). Mortgagee shall be entitled to all of the rights and
benefits conferred by Act No. 210 of the Michigan Public Acts of 1953 as it may
be amended, including by Act No. 151 of the Michigan Public Acts of 1966 (MCLA
554.231 et seq.), and Act No. 228 of the Michigan Public Acts of 1925 as it may
be amended, including by Act No. 55 of the Michigan Public Acts of 1933 (MCLA
554.211 et seq.). The collection of rents by Mortgagee shall in no way waive
the right of Mortgagee to foreclose this Mortgage in the event of any default.
22. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other
funds of Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall
furnish Mortgagee satisfactory evidence of compliance with this subsection,
together with a statement of all lease security deposits by lessees and copies
of all Leases not previously delivered to Mortgagee, which statement shall be
certified by Mortgagor.
23. Additional Rights. The holder of any subordinate lien on
the Mortgaged Property shall have no right to terminate any Lease whether or
not such Lease is subordinate to this Mortgage nor shall any holder of any
subordinate lien join any tenant under any Lease in any action to foreclose the
lien or modify, interfere with, disturb or terminate the rights of any tenant
under any Lease. By recordation of this Mortgage all subordinate lienholders
are subject to and notified of this provision, and any action taken by any such
lienholder contrary to this provision shall be null and void. Upon the
occurrence of any Event of Default, Mortgagee may, in its sole discretion and
without regard to the adequacy of its security under this Mortgage, apply all
or any part of any amounts on deposit with Mortgagee under this Mortgage
against all or any part of the Indebtedness. Any such application shall not be
construed to cure or waive any Default or Event of Default or invalidate any
act taken by Mortgagee on account of such Default or Event of Default.
<PAGE> 252
23
24. Notices. All notices, requests, demands and other
communications to or upon the respective parties hereto shall be given in
accordance with the provisions of subsection 14.2 of the Credit Agreement,
addressed to Mortgagor at the address given on the first page of this Mortgage
and to Mortgagee at the address given on the first page of this Mortgage.
25. No Oral Modification. This Mortgage may not be amended,
supplemented, terminated or otherwise modified except in writing and in
accordance with the provisions of subsection 14.1 of the Credit Agreement. Any
agreement made by Mortgagor and Mortgagee after the date of this Mortgage
relating to this Mortgage shall be superior to the rights of the holder of any
intervening or subordinate lien or encumbrance.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision hereof, but each shall
be construed as if such invalid, illegal or unenforceable provision had never
been included. Notwithstanding to the contrary anything contained in this
Mortgage or in any provisions of the Indebtedness or Loan Documents, the
obligations of Mortgagor and of any other obligor under the Indebtedness or
Loan Documents shall be subject to the limitation that Mortgagee shall not
charge, take or receive, nor shall Mortgagor or any other obligor be obligated
to pay to Mortgagee, any amounts constituting interest in excess of the maximum
rate permitted by law to be charged by Mortgagee.
27. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to
<PAGE> 253
24
mature or declare due the whole of the secured indebtedness and marshalling in
the event of foreclosure of the liens hereby created.
28. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by mortgage, security agreement,
pledge, lien, assignment or otherwise. Neither the acceptance of this Mortgage
nor its enforcement, shall prejudice or in any manner affect Mortgagee's right
to realize upon or enforce any other security now or hereafter held by
Mortgagee, it being agreed that Mortgagee shall be entitled to enforce this
Mortgage and any other security now or hereafter held by Mortgagee in such
order and manner as Mortgagee may determine in its absolute discretion. No
remedy herein conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which it
may otherwise be entitled, may be exercised, concurrently or independently,
from time to time and as often as may be deemed expedient by Mortgagee. In no
event shall Mortgagee, in the exercise of the remedies provided in this
Mortgage (including, without limitation, in connection with the assignment of
Rents to Mortgagee, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession," and Mortgagee shall not in any way be made liable
for any act, either of commission or omission, in connection with the exercise
of such remedies.
29. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous but located in the same county,
or (b) in addition to this Mortgage, Mortgagee shall now or hereafter hold one
or more additional mortgages, liens, deeds of trust or other security (directly
or indirectly) for the Indebtedness upon other property in such county in the
state of Michigan (whether or not such property is owned by Mortgagor or by
others) or (c) both the circumstances described in clauses (a) and (b) shall be
true, then to the fullest extent permitted by law, Mortgagee may, at its
election, commence or consolidate in a single foreclosure action all
foreclosure proceedings against all such collateral securing the Indebtedness
(including the Mortgaged Property), which action may be brought or consolidated
in the courts of such county in which
<PAGE> 254
25
any of such collateral is located. Mortgagor acknowledges that the right to
maintain a consolidated foreclosure action is a specific inducement to
Mortgagee to extend the Indebtedness, and Mortgagor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now or hereafter
have. Mortgagor further agrees that if Mortgagee shall be prosecuting one or
more foreclosure or other proceedings against a portion of the Mortgaged
Property or against any collateral other than the Mortgaged Property, which
collateral directly or indirectly secures the Indebtedness, or if Mortgagee
shall have obtained a judgment of foreclosure and sale or similar judgment
against such collateral, then, whether or not such proceedings are being
maintained or judgments were obtained in or outside the State of Michigan,
Mortgagee may commence or continue foreclosure proceedings and exercise its
other remedies granted in this Mortgage against all or any part of the
Mortgaged Property and Mortgagor waives any objections to the commencement or
continuation of a foreclosure of this Mortgage or exercise of any other
remedies hereunder based on such other proceedings or judgments, and waives any
right to seek to dismiss, stay, remove, transfer or consolidate either any
action under this Mortgage or such other proceedings on such basis. Neither the
commencement nor continuation of proceedings to foreclose this Mortgage nor the
exercise of any other rights hereunder nor the recovery of any judgment by
Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral (either in or
outside the State of Michigan) which directly or indirectly secures the
Indebtedness, and Mortgagor expressly waives any objections to the commencement
of, continuation of, or entry of a judgment in such other proceedings or
exercise of any remedies in such proceedings based upon any action or judgment
connected to this Mortgage, and Mortgagor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other proceedings or
any action under this Mortgage on such basis. It is expressly understood and
agreed that to the fullest extent permitted by law, Mortgagee may, at its
election, cause the sale of all collateral which is the subject of a single
foreclosure action at either a single sale or at multiple sales conducted
simultaneously and take such other measures as are appropriate in order to
effect the agreement of the parties to dispose of and administer all collateral
securing the Indebtedness (directly or indirectly) in the most economical and
least time-consuming manner.
30. Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and
<PAGE> 255
26
exclusively for the benefit of Mortgagee and its successors and assigns, and no
other person or entity shall have standing to require compliance with such
covenants or be deemed, under any circumstances, to be a beneficiary of such
covenants, any or all of which may be freely waived in whole or in part by
Mortgagee at any time if in its sole discretion it deems such waiver advisable.
All such covenants of Mortgagor shall run with the land and bind Mortgagor, the
successors and assigns of Mortgagor (and each of them) and all subsequent
owners, encumbrancers and tenants of the Mortgaged Property, and shall inure to
the benefit of Mortgagee, its successors and assigns. The word "Mortgagor"
shall be construed as if it read "Mortgagors" whenever the sense of this
Mortgage so requires and if there shall be more than one Mortgagor, the
obligations of the Mortgagors shall be joint and several.
31. No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity
for any notice to or consent by the holder of any subordinate lien on the
Mortgaged Property, any part of the security held for the obligations secured
by this Mortgage without, as to the remainder of the security, in anywise
impairing or affecting the lien of this Mortgage or the priority of such lien
over any subordinate lien.
32. Governing Law, etc. This Mortgage shall be governed by
and construed in accordance with the laws of the State of Michigan, except that
Mortgagor expressly acknowledges that by its terms the Guarantee shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to principles of conflict of law, and for purposes of
consistency, Mortgagor agrees that in any in personam proceeding related to
this Mortgage the rights of the parties to this Mortgage shall also be governed
by and construed in accordance with the laws of the State of New York governing
contracts made and to be performed in that State, without regard to principles
of conflict of law.
33. Waiver of Trial by Jury. Mortgagor and Mortgagee
each hereby irrevocably and unconditionally waive trial by jury in any action,
claim, suit or proceeding relating to this Mortgage and for any counterclaim
brought therein. Mortgagor hereby waives all rights to interpose any
counterclaim in any suit brought by Mortgagee hereunder and all rights to have
any
<PAGE> 256
27
such suit consolidated with any separate suit, action or proceeding.
34. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Mortgage shall be used interchangeably in singular or plural form and
the word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein," the
word "Mortgagee" shall mean "Mortgagee or any successor agent for the Lenders,"
the word "Notes" shall mean "the Notes or any other evidence of indebtedness
secured by this Mortgage," the word "person" shall include any individual,
corporation, partnership, trust, unincorporated association, government,
governmental authority, or other entity, and the words "Mortgaged Property"
shall include any portion of the Mortgaged Property or interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in
this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
<PAGE> 257
28
This Mortgage has been duly executed by Mortgagor on the date
first above written.
In the Presence of: ROLLINS ENVIRONMENTAL, INC.
By:
- ------------------------- ---------------------------
Name: Name:
Title:
- -------------------------
Name:
<PAGE> 258
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ____
day of May 1997, by ______________, the [ ] President of ROLLINS ENVIRONMENT
AL, INC., a Delaware corporation, on behalf of the corporation.
------------------------
Notary Public
My Commission Expires
[seal]
<PAGE> 259
Schedule A
Description of the Premises
Land in the City of Ann Arbor, Washtenaw County, Michigan described as:
Lots 15 and 18, RESEARCH PARK, according to the plat thereof as recorded in
Liber 15 of Plats, Pages 56 and 57, Washtenaw County Records.
Tax Code No. 12-09-301-005 (Lot 18)
Tax Code No. 12-09-302-003 (Lot 15)
<PAGE> 260
INTERCREDITOR AGREEMENT
INTERCREDITOR AGREEMENT, dated as of May 15, 1997, among
TORONTO DOMINION (TEXAS) INC., as General Administrative Agent (as hereinafter
defined), THE TORONTO-DOMINION BANK, as Canadian Administrative Agent (as
hereinafter defined), THE TORONTO-DOMINION BANK, as Canadian Operating Facility
Agent (as hereinafter defined), and NATIONSBANK, N.A., as Working Capital Lender
(as hereinafter defined).
WITNESSETH:
WHEREAS, Laidlaw Chem-Waste, Inc., a Delaware corporation
(together with its successors and assigns, the "Company"), and Laidlaw
Environmental Services (Canada) Ltd., a Canadian corporation (together with its
successors and assigns, the "Canadian Borrower"; together with the Company, the
"Borrowers"), are parties to the Credit Agreement, dated as of May 9, 1997 (as
the same may be amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), with certain financial institutions from time to time
parties thereto (the "Lenders"), the Managing Agents named therein, the Arranger
named therein, the Syndication Agent named therein, Toronto Dominion (Texas)
Inc., as general administrative agent (in such capacity, the "General
Administrative Agent"), and The Toronto- Dominion Bank, as Canadian
administrative agent (in such capacity, the "Canadian Administrative Agent";
together with the General Administrative Agent, the "Administrative Agents");
WHEREAS, the Credit Agreement provides that the Borrower
Obligations (as hereinafter defined) shall be secured and supported pursuant to
the U.S. Security Documents (as hereinafter defined);
WHEREAS, included in the Borrower Obligations is the Company's
guarantee, pursuant to Section 13 of the Credit Agreement, of the Canadian
Borrower Obligations (as hereinafter defined) and the Canadian Operating
Facility Obligations (as hereinafter defined);
WHEREAS, the Loan Parties, the Lenders and the Administrative
Agents have agreed that the Security Documents shall, in addition to providing
collateral security and credit support for the Borrower Obligations, provide
collateral security and credit support for the Working Capital Obligations (as
hereinafter defined);
WHEREAS, the obligations of the Canadian Borrower in respect
of the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations are secured and supported pursuant to the Canadian Security
Documents (as hereinafter defined);
WHEREAS, the Canadian Administrative Agent has entered into an
agency agreement, dated as of May 15, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Agency Agreement"),
with The Toronto-Dominion
<PAGE> 261
2
Bank, in its capacity as Canadian Operating Facility Lender (as hereinafter
defined), pursuant to which the Canadian Administrative Agent has agreed that,
in addition to acting as Canadian Administrative Agent under the Canadian
Security Documents, it will act as collateral agent for the Canadian Operating
Facility Lender under the Canadian Security Documents (in such capacity, the
"Canadian Operating Facility Agent"; together with the Administrative Agents,
the "Agents"); and
WHEREAS, the purpose of this Agreement is to establish the
procedure for the disbursement of the proceeds of, or other monies received by
any of the Agents, the Lenders, the Canadian Operating Facility Lender and the
Working Capital Lender in connection with, the Security Documents;
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration receipt of which is hereby acknowledged, the
Agents, the Working Capital Lender and the Borrowers hereby agree as follows:
1. Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Intercreditor Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Borrower Obligations": as defined in the Guarantee and
Collateral Agreement.
"Canadian Borrower Obligations": as defined in the Credit
Agreement.
"Canadian Operating Facility": as defined in the Credit
Agreement.
"Canadian Operating Facility Lender": The Toronto-Dominion
Bank in its capacity as lender under the Canadian Operating Facility.
"Canadian Operating Facility Obligations": as defined in the
Credit Agreement.
"Canadian Security Documents": the "Canadian Collateral
Documents" described in the Credit Agreement.
"Guarantee and Collateral Agreement": as defined in the Credit
Agreement.
<PAGE> 262
3
"Secured Canadian Obligations": the collective reference to
(a) the Canadian Borrower Obligations, and (b) the Canadian Operating
Facility Obligations, including in each case, without duplication, the
Company's guarantee of such obligations pursuant to Section 13 of the
Credit Agreement.
"Secured Obligations": the collective reference to (a) Secured
U.S. Obligations, and (b) Secured Canadian Obligations.
"Secured U.S. Obligations": the collective reference to (a)
the Borrower Obligations, and (b) the Working Capital Obligations.
"U.S. Security Documents": the collective reference to all
Security Documents other than the Canadian Security Documents.
"Working Capital Facility": as defined in the Guarantee and
Collateral Agreement.
"Working Capital Lender": as defined in the Guarantee and
Collateral Agreement.
"Working Capital Obligations": as defined in the Guarantee and
Collateral Agreement.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Distribution of Proceeds. (a) Any money, property or
securities realized upon the sale, disposition or other realization upon all or
any part of the Canadian Security Documents shall be applied in the following
order:
(1) First, the amount equal to all costs and expenses
(including, without limitation, attorneys' fees and disbursements) paid
or incurred by the Canadian Administrative Agent in connection with
such sale, disposition or other realization or the protection of its
rights and interests therein, shall be distributed to the Canadian
Administrative Agent;
(2) Second, from any surplus then remaining, an amount equal
to the unpaid Secured Canadian Obligations consisting of principal and
accrued interest in the nature of Indebtedness for borrowed money and
fees thereon and unpaid reimbursement
<PAGE> 263
4
obligations in respect of Acceptances, whether matured or unmatured,
contingent or otherwise, shall be distributed to the respective Persons
to whom such amounts are owed (or their respective agents), with such
distribution to be made pro rata in accordance with the aggregate
unpaid amounts of such Secured Canadian Obligations and without
priority of any one over any other;
(3) Third, from any surplus then remaining, an amount equal to
the other unpaid Secured Canadian Obligations then outstanding, whether
matured or unmatured, contingent or otherwise, shall be distributed to
the respective Persons to whom such amounts are owed (or their
respective agents), with such distribution to be made pro rata in
accordance with the unpaid amounts thereof and without priority of any
one over any other; and
(4) Fourth, from any surplus then remaining shall be
distributed to the applicable Loan Party or as otherwise may be
required by applicable law.
(b) Any money, property or securities realized upon the sale,
disposition or other realization upon all or any part of the U.S. Security
Documents shall be applied in the following order:
(1) First, the amount equal to all costs and expenses
(including, without limitation, attorneys' fees and disbursements) paid
or incurred by the General Administrative Agent in connection with such
sale, disposition or other realization or the protection of its rights
and interests therein, shall be distributed to the General
Administrative Agent;
(2) Second, from any surplus then remaining, an amount equal
to the unpaid Secured U.S. Obligations consisting of principal and
accrued interest in the nature of Indebtedness for borrowed money and
fees thereon and unpaid reimbursement obligations in respect of Letters
of Credit and Acceptances, whether matured or unmatured, contingent or
otherwise (including the Company's guarantee of such amounts pursuant
to Section 13 of the Credit Agreement), shall be distributed to the
respective Persons to whom such amounts are owed (or their respective
agents), with such distribution to be made pro rata in accordance with
the aggregate unpaid amounts of such Secured U.S. Obligations and
without priority of any one over any other;
(3) Third, from any surplus then remaining, an amount equal to
the other unpaid Secured U.S. Obligations then outstanding, whether
matured or unmatured, contingent or otherwise, shall be distributed to
the respective Persons to whom such amounts are owed (or their
respective agents), with such distribution to be made pro rata in
accordance with the unpaid amounts thereof and without priority of any
one over any other; and
<PAGE> 264
5
(4) Fourth, from any surplus then remaining shall be
distributed to the applicable Loan Party or as otherwise may be
required by applicable law.
(c) The Agents shall consult in any sale, disposition or other
realization of or upon any Security Documents, and with respect to the order of
the application of proceeds thereof, with a view to causing all such sales,
dispositions or other realizations to result in the repayment of the maximum
possible amount of Secured Obligations. In furtherance of the foregoing, the
Agents may apply all proceeds of the Canadian Security Documents in accordance
with paragraph (a) above before applying any proceeds of the U.S. Security
Documents to the Canadian Borrower Obligations or the Canadian Operating
Facility Obligations.
3. Amounts of Secured Obligations. Whenever a distribution
pursuant to the provisions of Section 2 hereof is to be made, the Agents will
make such distribution on the basis of the unpaid amounts thereof based upon the
amount of Secured U.S. Obligations or Secured Canadian Obligations, as the case
may be, determined as provided in Section 5 hereof; provided, however, that
during the pendency of a bankruptcy proceeding with respect to any Loan Party at
the time of such distribution, the unpaid amounts of Secured Obligations of such
Loan Party shall mean all amounts allowed by the bankruptcy court in respect of
such Secured Obligations as a basis for distributions (including estimated
amounts, if any, allowed in respect of contingent claims) but only to the extent
that prior distributions have not been made in respect thereof. Notwithstanding
anything to the contrary contained herein, the Agents shall be under no
obligation to determine if any Secured Obligations are allowed in a bankruptcy
proceeding.
4. Time and Manner of Making Payments. All payments of such
monies under Section 2 shall be made at such time as the relevant Agent may in
its sole discretion determine.
5. Determination of Amounts of Secured Obligations. (a)
Whenever an Agent is required to determine the existence or amount (including,
without limitation, the principal amount) of any of the Secured Obligations for
any purpose of this Agreement, it shall (unless otherwise directed by a court of
competent jurisdiction) be entitled (but not obligated) to determine such
amounts on the basis of a certification to it of such amounts by the Borrowers;
provided, however, that if, upon the request of any Agent, a Borrower shall fail
to provide the certification as to the existence or amount of any Secured
Obligation as contemplated above within a reasonable period of time, such Agent
shall be entitled to determine such existence or amount by such method as such
Agent may, in its sole discretion, determine.
(b) The Agents may rely conclusively, and shall be fully
protected in relying, on any determination made by it in accordance with the
provisions of Section 5(a) hereof (or as otherwise directed by a court of
competent jurisdiction) and shall have no liability to the
<PAGE> 265
6
Borrowers, any other Loan Party, any holder of any Secured Obligation or any
other Person as a result of such determination.
(c) Upon any request of any Agent from time to time, the
Borrowers will furnish a certificate to such Agent as to the existence or amount
of any Secured Obligation and, if so requested, such certificate shall set forth
all the Secured Obligations. Any certificate by a Borrower under this Section
5(c) shall be in form and substance reasonably satisfactory to the relevant
Agent.
(d) Upon any request of any Agent from time to time, each
holder of Secured Obligations will furnish a certificate to such Agent as to the
existence or amount of any Secured Obligation held by it and, if so requested,
such certificate shall set forth all the Secured Obligations held by it. Any
certificate by such holder of Secured Obligations under this Section 5 shall be
in form and substance reasonably satisfactory to the relevant Agent.
(e) If when calculating the amount of Secured Obligations it
is necessary to convert Canadian Dollar amounts outstanding into U.S. Dollar
amounts, such amounts shall be converted at the rate of exchange quoted by the
General Administrative Agent as its spot rate of exchange for the conversion of
Canadian Dollars to U.S. Dollars at approximately noon (New York time) on such
day.
6. No Representation by Agent. No Agent shall be responsible
in any manner whatsoever for the correctness of any recitals, statements,
representations or warranties contained herein or in any of the other Security
Documents, all of which are made solely by the Borrowers or other Loan Party
thereto, as the case may be. No Agent makes any representations as to the value
of any collateral held by it or any part thereof or as to the title of the
Borrowers or any other Loan Party thereto, or as to the security afforded by the
Security Documents or this Agreement or as to the validity, execution (except
its own execution), enforceability, legality or sufficiency of this Agreement or
any of the other Security Documents or of the sufficiency of the Secured
Obligations, and no Agent shall incur any liability or responsibility in respect
of any such matters.
7. Powers Coupled With An Interest. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until the Secured Obligations are paid in full and
the Commitments under the Credit Agreement are terminated.
8. Notices. All notices, requests and demands to or upon the
Agents or the Borrowers to be effective shall be in writing (or by telex, fax or
similar electronic transfer confirmed in writing) and shall be deemed to have
been duly given or made (1) when delivered by hand or (2) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (3) if by
telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:
<PAGE> 266
7
If to the General Administrative Agent: Toronto Dominion (Texas) Inc.
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Fax: (703) 951-9921
If to the Canadian Administrative Agent or
the Canadian Operating Facility Agent: The Toronto-Dominion Bank
8th Floor, Toronto Dominion Bank
Tower
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attention: Manager Agency
Fax: (416) 982-5535
If to the Working Capital Lender: NationsBank, N.A.
100 North Tryon Street, 12th
Floor
NC-007-12-04
Charlotte, North Carolina 28255
Attention: David Sachsenmaier
Fax: (704) 388-9215
If to either Borrower, at the addresses provided in Section 14.2 of the Credit
Agreement.
The parties hereto may change their addresses and transmission numbers for
notices by notice in the manner provided in this Section.
9. Counterparts. This Agreement may be executed by one or
more of the parties on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. A set of the counterparts of this Agreement signed by all the
parties shall be lodged with each Agent.
10. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. Integration. This Agreement represents the agreement of
the parties hereto with respect to the subject matter hereof and there are no
promises or representations by the Agents or any such lender relative to the
subject matter hereof not reflected herein.
12. Amendments in Writing; No Waiver; Cumulative Remedies. (a)
None of the terms or provisions of this Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the parties hereto.
<PAGE> 267
8
(b) No failure to exercise, nor any delay in exercising, on
the part of any Agent, any right, power or privilege hereunder shall operate as
a waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
(c) The rights and remedies herein provided are cumulative,
may be exercised singly or concurrently and are not exclusive of any other
rights or remedies provided by law.
13. Section Headings. The section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
14. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, each other Loan Party, the Agents and
each holder of Secured Obligations and their respective successors and assigns,
and nothing herein is intended or shall be construed to give any other Person
any right, remedy or claim under, to or in respect of this Agreement.
15. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
<PAGE> 268
9
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
TORONTO-DOMINION BANK, as Canadian
Administrative Agent and as Canadian Operating
Facility Agent
By:
-------------------------------------------
Title:
----------------------------------------
TORONTO DOMINION (TEXAS) INC., as
General Administrative Agent
By:
-------------------------------------------
Title:
----------------------------------------
NATIONSBANK, N.A., as Working Capital
Lender
By:
-------------------------------------------
Title:
----------------------------------------
Consented and Agreed:
LAIDLAW CHEM-WASTE, INC.
By:
---------------------------
Title:
------------------------
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
---------------------------
Title:
------------------------
<PAGE> 269
1996
MANAGEMENT
INCENTIVE PLAN
Rev: September 12, 1995
<PAGE> 270
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
I. OVERVIEW 1
II. PLAN OBJECTIVES 1
III. ATTAINING GOALS 2
IV. ELIGIBILITY FOR PLAN PARTICIPATION 3
V. PLAN STRUCTURE 3
A. Performance Measures 3
1. Revenue 3
2. Return on Assets 3
3. Individual Goals 4
Table 1: Performance Rating Qualitative Category 4
B. Performance Criteria and Target Bonuses 4
1. Target Bonus Level 4
2. Performance Weights 4
Table 2: Target Bonus and Goals by Position 5
3. Units of Measure 5
Table 3: Units of Measure and Weights by Position 6
C. Payout Schedule 6
Table 4: Schedule A: Payout Schedule for Annual
Revenue/ROA Achieved Against Committed
Targets 7
Table 5: Schedule B: Payout Schedule for Annual
Revenue/ROA Achieved Against Committed
Targets 8
VI. PAYMENT OF AWARDS 9
VII. PLAN ADMINISTRATION 9
VIII. SUMMARY AND CONCLUSION 10
</TABLE>
<PAGE> 271
I. OVERVIEW
The Management Incentive Compensation Plan is a short-term cash incentive bonus
plan covering Corporate Executive Staff positions, Vice Presidents, Directors,
Facility Managers, Operations Managers, and other select key management
positions. The plan allows selected management employees to share directly in
the success of the company through the payment of annual incentive awards which
are in turn based on the attainment of business unit goals and individual
performance objectives.
The plan will provide the company with a mechanism to communicate its
expectations for Company performance while at the same time allowing the
management team the opportunity to earn a total compensation package that is
competitive for the industry.
II. PLAN OBJECTIVES
The purpose of a bonus compensation plan is to motivate key management
performance and to reward those individuals considered responsible for the
success of the business. Laidlaw Environmental Services, Inc. has developed a
Management Incentive Plan for key managerial personnel which will provide a
significant economic opportunity based on their business unit contribution to
the Corporation and on their own individual performance.
The objective of this Plan is to increase Laidlaw's market share, ensure maximum
cooperation between Sales and Operations through the creation of common goals,
sustain teamwork across operational units, and effectively manage capital
assets. In order to accomplish these objectives, a certain percentage of a key
management's total compensation package will be at risk. Therefore, key managers
must direct their efforts and set goals which will maximize the success of their
business unit as defined by the Plan.
<PAGE> 272
III. ATTAINING GOALS
The success of the Management Incentive Compensation Plan will be measured by
the success of attaining the preset goals for revenue, return on assets, and
qualitative goals as established at the beginning of the year. This can only be
accomplished by the combined support of the corporation's management team.
Each participant should understand that their earning opportunities are
dependent upon the attainment of these preset goals. To enhance this
understanding, each participant will be given an explanation of the plan along
with their individual goals and bonus potentials. This will allow the
participant to clearly understand that increased effort which increases results
will produce higher rewards.
In implementing and maintaining this plan, the following factors are of critical
importance:
- Performance goals will be quantitative and qualitative in
nature. The quantitative goals will be tied to the Company's
annual financial budget. The use of such goals will also help
generate and reinforce a commitment to the budgeting process.
The qualitative goals will be established through a goal
setting exercise between the immediate superior and
participant. It will be of such a nature which will drive the
business forward strategically. Measurements of these goals
must be defined and agreed upon by both parties. Copies of
these goals must be forwarded to the respective Regional or
Staff Vice President.
- Incentive awards will be based upon the achievement of
aggressive objectives. These "stretch" objectives will help
assure that the plan pays for itself; and that stockholders
receive an appropriate return on investment in the incentive
payments.
- The threshold of incentive awards will only be at a
"competent" level of performance but appreciably more award
will result from extra efforts and results achieved due to
higher levels of performance.
Page 2
<PAGE> 273
IV. ELIGIBILITY FOR PLAN PARTICIPATION
For fiscal year 1996 participation in the plan will be limited to:
- President - Regional Managers
- Senior Vice Presidents - Facility Managers
- Vice Presidents - Operations Managers
- Directors
These positions are targeted because of their direct accountability for the
operating results of a major business unit, and/or their indirect impact on
total Company results, and their accountability for structuring a function under
them.
To receive an annual incentive award, a participant must be employed by the
Company at the time the checks are distributed and be a participant in the
Management Incentive Plan as of April 1, 1996. Participants who have not
occupied an incentive eligible position for the full fiscal year will be
prorated based on the number of full months of participation. These eligibility
criteria apply to current employees promoted to eligible positions, new hires
hired into eligible positions, or employees in positions subsequently selected
to participate in the Plan.
V. PLAN STRUCTURE
A. PERFORMANCE MEASURES
Participants will be judged against achieving three separate goals which will be
set at the beginning of the year. These are revenue, return on assets, and
qualitative goals.
1. Revenue
Revenue is defined as accrued and billed sales, including intercompany sales.
Intercompany sales are being included to encourage pass-through business. The
revenue goal will be judged against the year-end revenue as stated on the
appropriate FY96 Profit and Loss Statement.
2. Return on Assets
Return on assets is defined as earnings before interest and taxes divided by
average monthly assets. While EBIT will be obtained from the last monthly Profit
and Loss Statement, assets will be averaged across each ending month's balance.
Although assets could be averaged across each quarter or even across beginning
and ending year balance, averaging across each month has been chosen as the best
method to encourage timely asset management.
Page 3
<PAGE> 274
V. PLAN STRUCTURE
(Continued)
3. Individual Goals
While the appropriate performance rating in this category of payout is more
subjective, definitions of ratings have been created to assist in the final
determination. The rating schedule has been established in such a way as to
encourage superior performance.
<TABLE>
<CAPTION>
DEFINITION:
-----------
<S> <C>
OUTSTANDING: Significantly beyond expectations, distinguished results.
SUPERIOR: Generally exceeded expectations.
GOOD: Results expected were met with some aspects above average.
SATISFACTORY: Results expected were met with some aspects needing attention.
UNACCEPTABLE: Outcomes did not meet expectations.
</TABLE>
TABLE 1
PERFORMANCE RATING
QUALITATIVE CATEGORY
1. Outstanding = 100% of points assigned
2. Superior = 80% of points assigned
3. Good = 60% of points assigned
4. Satisfactory = 40% of points assigned
5. Unacceptable = 0% of points assigned
B. PERFORMANCE CRITERIA AND TARGET BONUSES
1. Target Bonus Level
The target bonus payout is the monetary award that will be paid if all goals are
achieved exactly as set. This will be calculated as a percentage of base pay
called the target bonus percent. For example, a participant whose base pay is
$50,000 and whose target bonus percent is 30% will receive a $15,000 award if
all the performance goals are met. This award can fluctuate if the goals are
missed or exceeded. The base pay level used to calculate bonus awards will be
the base annualized salary paid as of August 31, 1996. Target bonus percents are
presented in Table 2 below.
2. Performance Weights
Each participant will be judged on a combination of the three separate goals:
Revenue, ROA, and individual goals. These goals do not carry equal weight in
determining the plan payout but are separately weighted according to each
position. These weights are outlined by position in Table 2. To obtain a full
incentive payout, all three goals must be fully achieved.
Page 4
<PAGE> 275
V. PLAN STRUCTURE
(Continued)
TABLE 2
TARGET BONUS AND GOALS
BY POSITION
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Goal
Target Payout Weights
Position Bonus Schedule Revenue ROA Indiv.
=======================================================================
<S> <C> <C> <C> <C> <C>
President 50% Table 4 40% 40% 20%
Senior VP 40% Table 5 40% 40% 20%
Regional VP 35% Table 5 40% 40% 20%
Staff VP 35% Table 4 40% 40% 20%
Ops Director 30% Table 5 40% 40% 20%
Staff Dir - Corp. 20% Table 4 40% 40% 20%
Staff Dir - Div. 20% Table 5 40% 40% 20%
Facility Manager 30% Table 5 40% 40% 20%
Operations Mgr 15% Table 5 40% 40% 20%
- -----------------------------------------------------------------------
</TABLE>
3. Units of Measure
The performance criteria for each plan participant should focus upon the
appropriate areas in which the position has an opportunity to impact. The
following list defines the various units of measure against which the two
financial performance goals will be judged. It should be noted that these
weightings are not permanently fixed and could vary from year to year.
Corporate - All of Laidlaw Environmental Services, Inc.
Divisional - A specific division under the control of a
Senior Vice President.
Regional - A territory or line of business within a
division that is under the control of an
Operating Vice President, i.e., East Central,
Western, et cetera.
District - A grouping of several facilities that is
usually controlled by a Director.
Facility - A specific operating center.
Page 5
<PAGE> 276
Each position will be judged against at least one of the units of measure
defined above. The unit of measure used and its associated weight is based upon
the position's level of control within the organization. These are presented in
Table 3 below:
V. PLAN STRUCTURE
(Continued)
TABLE 3
UNITS OF MEASURE AND WEIGHTS
BY POSITION
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
Weights
Position Corporate Divisional Regional District Facility
==============================================================================
<S> <C> <C> <C> <C> <C>
President 100%
-----------------------------------------------------
Senior VP 25% 75%
-----------------------------------------------------
Regional VP 100%
-----------------------------------------------------
Staff VP 100%
-----------------------------------------------------
Ops Director 100%
-----------------------------------------------------
Staff Dir - Corp. 100%
-----------------------------------------------------
Staff Dir - Div. 100%
-----------------------------------------------------
Facility Manager 100%
-----------------------------------------------------
Operations Mgr 100%
- ------------------------------------------------------------------------------
</TABLE>
IN ORDER TO BE ELIGIBLE FOR ANY INCENTIVE AWARD, 90% OR MORE OF THE ROA GOAL
WITH THE UNIT OF MEASURE THAT CARRIES THE HIGHEST WEIGHT MUST FIRST BE ACHIEVED.
For example, SVPs have two ROA goals split 25/75 between the corporation and
their division. To be eligible for the rest of the plan, SVPs must achieve at
least 90% of the ROA goal for their division.
C. PAYOUT SCHEDULE
The achievement level attained against each goal will determine how much of each
goal will be paid. The following schedules in Tables 4 and 5 presents the payout
percentages for various levels of achievement. Different payout schedules are
used depending upon the level of influence of the position. The payout schedule
associated with each position is presented in Table 2. In order to be paid an
award for a particular goal, at least 90% of the goal must be achieved. This is
called the threshold level. Achievement will not be rounded to the next highest
level. For example, if achievement against targets is 92.9%, the payout will be
based on 92%, not 93%.
Page 6
<PAGE> 277
V. PLAN STRUCTURE
(Continued)
TABLE 4
SCHEDULE A:
PAYOUT SCHEDULE FOR ANNUAL REVENUE/ROA
ACHIEVED AGAINST COMMITTED TARGETS
<TABLE>
<CAPTION>
- --------------------------------------------------------
Incentive Achievement Against Payout Level
Step Committet Targets
========================================================
<S> <C> <C>
21 110%+ 135%
20 109% 131%
19 108% 127%
18 107% 123%
17 106% 119%
16 105% 115%
15 104% 112%
14 103% 109%
13 102% 106%
12 101% 103%
11 100% 100%
10 99% 95%
9 98% 90%
8 97% 85%
7 96% 80%
6 95% 75%
5 94% 70%
4 93% 65%
3 92% 60%
2 91% 55%
1 90% 50%
0 <90% 0%
- --------------------------------------------------------
</TABLE>
Page 7
<PAGE> 278
V. PLAN STRUCTURE
(Continued)
TABLE 5
SCHEDULE B:
PAYOUT SCHEDULE FOR ANNUAL REVENUE/ROA
ACHIEVED AGAINST COMMITTED TARGETS
<TABLE>
<CAPTION>
- --------------------------------------------------------
Incentive Achievement Against Payout Level
Step Committet Targets
========================================================
<S> <C> <C>
21 110%+ 135%
20 109% 131%
19 108% 127%
18 107% 123%
17 106% 119%
16 105% 115%
15 104% 112%
14 103% 109%
13 102% 106%
12 101% 103%
11 100% 100%
10 99% 90%
9 98% 81%
8 97% 73%
7 96% 65%
6 95% 58%
5 94% 52%
4 93% 46%
3 92% 41%
2 91% 36%
1 90% 32%
0 <90% 0%
- --------------------------------------------------------
</TABLE>
Page 8
<PAGE> 279
V. PLAN STRUCTURE
(Continued)
An example of a bonus calculation is as follows:
Facility Manager
Annual Salary: $50,000
Target Bonus Percent: 30%
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Goal Achievement Payout Goal Target Annual Goal
Weight Bonus Salary Payout
========================================================================================
<S> <C> <C> <C> <C> <C> <C>
Dist. ROA 108.9% 127% x 40% x 30% x $50,000 = $ 7,620
Dist. Rev. 98.2% 81% x 40% x 30% x $50,000 = $ 4,860
Ind. Goals Superior 80% x 20% x 30% x $50,000 = $ 2,400
-----------------------------------------------------------------------
Total: $14,880
- ----------------------------------------------------------------------------------------
</TABLE>
VI. PAYMENT OF AWARDS
Each incentive award will be reviewed and approved by the appropriate most
senior Vice President, the Vice President Administration, and the President.
Checks will be issued no later than November 15, 1996. Participants that
voluntarily terminate their employment with Laidlaw prior to awards being issued
will forfeit their right to receive the award.
Any adjustments to bonus amounts must be approved by the Vice President -
Administration, and the President.
VII. PLAN ADMINISTRATION
The President of Laidlaw Environmental Services, Inc. is the sole interpreter
and arbitrator of these provisions and has the right to amend, withdraw or
revoke them at any time.
Page 9
<PAGE> 280
VIII. SUMMARY AND CONCLUSION
The conceptual framework and basic guidelines covered in this Plan represent
those elements that necessarily must be examined to assure the value to the
Company of utilizing a short-term cash incentive compensation plan. Several
steps must be taken to ensure that those objectives which the plan is designed
to meet can be accomplished. These steps are described as follows:
Communication of the Plan
It is important that the Plan be effectively communicated to all
participants. This would include individual discussions with each
participant. These discussions should include a review of the measures
and standards that should be developed to assess personal and/or
business unit performance, as well as a clarification of the details of
the plan and individual opportunities.
Development of Performance Measures
Business unit and individual goals should be established and
communicated at the beginning of the fiscal year. Accepted standards
are those that are reasonable and realistic reflections of current
opportunity, as well as a striving for improvement. Measurements of
performance should use relevant quantitative criteria.
Page 10
<PAGE> 1
EXHIBIT 4(F)
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
METROPOLITAN GOVERNMENT OF NASHVILLE
AND DAVIDSON COUNTY
(A TENNESSEE PUBLIC NONPROFIT CORPORATION)
TO
NATIONSBANK OF TENNESSEE, N.A.
(A NATIONAL BANKING ASSOCIATION)
NASHVILLE, TENNESSEE
TRUSTEE
INDENTURE DATED AS OF MAY 1, 1993
------------------------------------------
RELATING TO THE INDUSTRIAL DEVELOPMENT BOARD OF
THE METROPOLITAN GOVERNMENT OF NASHVILLE
AND DAVIDSON COUNTY INDUSTRIAL DEVELOPMENT
REVENUE REFUNDING AND IMPROVEMENT BONDS
(OSCO TREATMENT SYSTEMS, INC. PROJECT)
<PAGE> 2
This instrument prepared by:
Bass, Berry & Sims (CKW)
First American Center
Nashville, Tennessee 37238
<PAGE> 3
<TABLE>
<CAPTION>
TABLE OF CONTENTS
ARTICLE NO. Page
----
<S> <C>
Form of Series 1993 Bond 2
Granting Clauses 10
I Definitions 12
II Execution, Authentication, Maturity,
Form and Registration of Bonds 16
III The Series 1993 Bonds and Bonds of
Other Series 19
IV Accounts and Investment of Funds 23
V Redemption of Bonds 26
VI Covenants of the Issuer and Release of Property 28
VII Events of Default; Remedies 35
VIII Concerning the Trustee 41
IX Evidence of Rights of Bondholders 48
X Supplemental Indenture 49
XI Defeasance; Unclaimed Moneys 52
XII Miscellaneous Provisions 53
</TABLE>
- ----------------------------------------------------------------
This table of contents is provided for purposes of convenience only and does not
constitute a part of the Indenture.
i
<PAGE> 4
THIS INDENTURE, made and entered into as of the 1st day of May, 1993,
by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE METROPOLITAN GOVERNMENT
OF NASHVILLE AND DAVIDSON COUNTY, a public nonprofit corporation organized and
existing under and by virtue of the laws of the State of Tennessee (hereinafter
called the "Issuer"), party of the first part, and NATIONSBANK OF TENNESSEE,
N.A., a national banking association duly qualified to accept and administer the
trusts hereby created (hereinafter called the "Trustee"), and having its
principal place of business in Nashville, Tennessee, party of the second part,
as Trustee;
W I T N E S S E T H:
WHEREAS, the Issuer is a public nonprofit corporation and a public
instrumentality of The Metropolitan Government of Nashville and Davidson County,
Tennessee, and is authorized under Sections 7-53-101 to 7-53-311, inclusive, of
Tennessee Code Annotated, as amended (hereinafter called the "Act") to enter
into loan agreements with manufacturing, industrial, commercial and financial
enterprises with respect to one or more projects for such payments and upon such
terms and conditions as the board of directors of the Issuer may deem advisable
in accordance with the provisions of the Act in order to facilitate the disposal
of solid waste; and
WHEREAS, the Issuer has heretofore issued its Industrial Development
Revenue Bonds, Series 1989 (OSCO Treatment Systems, Inc. Project) (the "1989
Bonds") pursuant to the Act and pursuant to an Indenture of Trust dated as of
December 1, 1989, as amended by a First Supplemental Indenture of Trust dated as
of January 1, 1991 (the "Prior Indenture") between the Issuer and NationsBank of
Tennessee, N.A. (formerly, Sovran Bank/Central South) (the "Prior Trustee") to
pay a portion of the costs of acquiring and constructing a hazardous waste
disposal facility in Nashville, Tennessee; and
WHEREAS, the Issuer loaned the proceeds of the sale of the 1989 Bonds
to OSCO Treatment Systems, Inc., a Tennessee corporation (the "Company"),
pursuant to a Loan Agreement dated as of December 1, 1989, as amended by a First
Amendment to Loan Agreement dated as of January 1, 1991 (the "Prior Loan
Agreement"); and
WHEREAS, the Issuer has heretofore issued its Industrial Development
Revenue Bonds, Series 1991 (OSCO Treatment Systems, Inc. Project) (the "1991
Bonds") pursuant to the authority of the Act and pursuant to the Prior
Indenture, to defray the costs of certain improvements to the project financed
with the 1989 Bonds; and
WHEREAS, the Issuer loaned the proceeds of the sale of the 1991 Bonds
to the Company pursuant to the Prior Loan Agreement; and
WHEREAS, the Issuer is authorized and empowered by the provisions of
the Act to issue refunding bonds for the purpose of refunding the 1989 Bonds and
the 1991 Bonds and to secure such refunding bonds as provided in the Act; and
<PAGE> 5
WHEREAS, there are currently outstanding $6,630,000 principal
amount of the 1989 Bonds and $1,330,000 principal amount of the 1991 Bonds; and
WHEREAS, the Company has requested that the Issuer issue bonds in the
aggregate principal amount of $15,700,000 and loan the proceeds of the sale
thereof to the Company to (i) prepay its obligations under the Prior Loan
Agreement and thereby refund the outstanding 1989 Bonds and 1991 Bonds, and (ii)
finance the construction, acquisition and installation of modifications and
improvements to the facilities financed by the 1989 Bonds and the 1991 Bonds;
and
WHEREAS, the Issuer by due action has authorized the issuance under the
Act of $15,700,000 of its Industrial Development Revenue Refunding and
Improvement Bonds, Series 1993 (OSCO Treatment Systems, Inc. Project) (the "1993
Bonds") in order to assist the Company through savings to be realized through
the refunding of the 1989 Bonds and the 1991 Bonds with the proceeds of the 1993
Bonds and through financing such improvements; and
WHEREAS, the Issuer is authorized and empowered by the provisions of
the Act to issue, sell and deliver the 1993 Bonds for the purposes set forth
above and to enter into this Indenture and a Loan Agreement dated as of May 1,
1993, as the same may be amended or supplemented from time to time (the
"Agreement"); and
WHEREAS, the Series 1993 Bonds shall be substantially in the following
form with necessary or appropriate variations, omissions and insertions, as
permitted or required by this Indenture:
(Form of Series 1993 Bond)
UNITED STATES OF AMERICA
STATE OF TENNESSEE
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE METROPOLITAN GOVERNMENT OF NASHVILLE
AND DAVIDSON COUNTY
Industrial Development Revenue Refunding and Improvement Bond
(OSCO Treatment Systems, Inc. Project)
Series 1993
NO. R-____
The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County, a public non-profit corporation created and
existing by virtue of the laws of the State of Tennessee (hereinafter called the
"Issuer"), for value received, hereby promises to pay, but solely from the
source as hereinafter provided, to the Registered Owner, or registered
<PAGE> 6
assigns, on the Maturity Date identified below the Principal Amount identified
below and in like manner to pay interest on said sum from the Interest Payment
Date (defined herein) next preceding the Date of Authentication shown below,
unless such date is an Interest Payment Date, in which event from the Date of
Authentication, or if such date is prior to any Interest Payment Date, from May
1, 1993, at the fixed Rate of Interest per annum (computed on the basis of a 360
day year containing 12 30-day months) set forth below on November 1, 1993 and
semi-annually thereafter on May 1 and November 1 of each year (each an "Interest
Payment Date") until said principal sum is paid, except as the provisions
hereinafter set forth with respect to redemption prior to maturity may become
applicable hereto.
Registered Owner:
Dated Date: Maturity Date: Principal Amount: Rate of Interest:
May 1, 1993 May 1, 2003
The principal of and redemption premium, if any, on this Bond are payable in
lawful money of the United States of America upon presentation of this Bond at
the principal corporate trust office of NationsBank of Tennessee, N.A.,
Nashville, Tennessee, as Trustee, or its successor in trust (hereinafter
referred to as the "Trustee"), or at such other location as may be specified by
the Trustee. Payment of each installment of interest shall be made to the
Registered Owner hereof who shall appear on the registration books of the Issuer
maintained by the Trustee at the close of business on the 15th day next
preceding the Interest Payment Date and shall be paid by check or draft of the
Trustee to such Registered Owner at the address as it appears on such
registration books or at such other address as may be furnished in writing by
such Registered Owner to the Trustee.
Reference is hereby made to the additional provisions of this Bond set
forth on the reverse side hereof and such additional provisions shall for all
purposes have the same effect as if set forth on the front side thereof.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture, or in any Bond thereby secured, or under any
judgment obtained against the Issuer or by the enforcement of any assessment or
by any legal or equitable proceeding by virtue of any constitution or statute or
otherwise or under any circumstances, under or independent of the Indenture,
shall be had against any incorporator, member, director or officer, as such,
past, present or future, of the Issuer, either directly or through the Issuer,
or otherwise, for the payment for or to the Issuer or any receiver thereof, or
for or to the holder of any Bond issued thereunder or otherwise, of any sum that
may be due and unpaid by the Issuer upon any such Bond. Any and all personal
liability of every nature, whether at common law or in equity, or by statute or
by constitution or otherwise, of any such incorporator, member, director or
officer, as such, to respond by reason of any act or omission on his part or
otherwise for the payment for or to the
<PAGE> 7
Issuer or any receiver thereof, or for or to the holder of any Bond issued
thereunder or otherwise, of any sum that may remain due and unpaid upon the
Bonds thereby secured or any of them, is hereby expressly waived and released as
a condition of and consideration for the execution of the Indenture and the
issue of the Series 1993 Bonds.
The law pursuant to which this Bond is issued requires that the
following statement appear on the face hereof:
Neither this Bond nor the interest hereon shall be taxed by the State
of Tennessee or any county or municipality thereof.
However, such interest may be subject to the Tennessee corporate excise tax and
a Tennessee privilege tax imposed on savings and loan associations, and the Bond
may be subject to the Tennessee inheritance, gift and estate taxes.
This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture until the certificate of
authentication hereon shall have been duly executed by the Trustee.
IN WITNESS WHEREOF, The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County has caused this Bond to
be executed in its name by the facsimile signature of the Chairman and attested
by the facsimile signature of its Secretary, and its corporate seal to be
hereunto affixed or printed hereon.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE METROPOLITAN GOVERNMENT OF
NASHVILLE AND DAVIDSON COUNTY
By:
-----------------
Chairman
ATTEST:
- --------------------
Secretary
(facsimile seal)
(Form of Trustee's Certificate of Authentication)
This Bond is one of the Bonds described in the within-mentioned
Indenture.
Date of Authentication: NATIONSBANK OF TENNESSEE, N.A.,
as Trustee
<PAGE> 8
_______________________ By:___________________
Authorized Officer
(ADDITIONAL PROVISIONS)
This Bond is one of a duly authorized issue of Bonds of the Issuer
known as "The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County Industrial Development Revenue Refunding and
Improvement Bonds (OSCO Treatment Systems, Inc. Project) Series 1993" (the
"Series 1993 Bonds") in an aggregate principal amount of Fifteen Million Seven
Hundred Thousand Dollars ($15,700,000). All of the Series 1993 Bonds are issued
under and equally and ratably secured as to principal, premium, if any, and
interest by an Indenture (hereinafter called the "Indenture") dated as of May 1,
1993 executed by the Issuer and the Trustee, to which Indenture and all
indentures supplemental thereto reference is hereby made for description of the
trust estate, the nature and extent of the security, and a statement of the
terms and conditions upon which the Series 1993 Bonds are issued and secured,
the rights of the holders thereof and of the Trustee thereunder, and the
indebtedness which is equally secured. As provided in the Indenture, bonds of
other series ranking equally with Series 1993 Bonds may be issued and such Bonds
may vary in such manner as is provided and permitted in the Indenture. All Bonds
from time to time outstanding under the terms of the Indenture are hereinafter
referred to as the "Bonds".
This Series 1993 Bond is issued in full compliance with the
Constitution and statutes of the State of Tennessee, including among others
Chapter 53 of Title 7, of Tennessee Code Annotated. Pursuant to law and the
proceedings under which this Bond is issued, this Bond is payable solely out of
revenues and receipts derived from a Loan Agreement between the Issuer and OSCO
Treatment Systems, Inc., a Tennessee corporation (the "Company"), pursuant to
which the Issuer has loaned money to the Company to (i) provide funds to refund
all of the outstanding principal amount of the Issuer's Industrial Development
Revenue Bonds, Series 1989 (OSCO Treatment Systems, Inc. Project) and Industrial
Development Revenue Bonds, Series 1991 (OSCO Treatment Systems, Inc. Project),
the proceeds of which were loaned to the Company to finance the acquisition,
construction, equipping and improvement of the Company's hazardous waste
treatment facility in Nashville, Tennessee, and (ii) provide funds for the
construction, acquisition and installation of modifications and improvements to
the facilities financed by such prior bonds. The obligations of the Company
under the Loan Agreement have been secured by a Deed of Trust and a Security
Agreement pursuant to which the Company has granted a first lien on the project
to be financed and refinanced with the proceeds of the Bonds. The payments to be
made by the Company under said Loan Agreement have been assigned to the Trustee
as security for the Bonds, and such payments are sufficient to pay the principal
of, premium, if any, and interest on the Bonds as the same become due and
payable. Laidlaw Inc., a Canadian corporation, has unconditionally guaranteed to
the Trustee for the benefit of the holders
<PAGE> 9
of the Series 1993 Bonds the full and prompt payment of principal of, premium,
if any, and interest on the Series 1993 Bonds pursuant to the Guaranty Agreement
between them dated May 1, 1993. The Metropolitan Government of Nashville and
Davidson County, Tennessee shall in no event be liable for the payment of
principal of, premium, if any, or interest on the Bonds or for the performance
of any pledge, mortgage, obligations or agreement of any kind whatsoever of the
Issuer and none of the Bonds nor any of the Issuer's agreements or obligations
shall be construed to constitute an indebtedness of The Metropolitan Government
of Nashville and Davidson County, Tennessee, within the meaning of any
constitutional or statutory provisions whatsoever.
As provided in, and to the extent permitted by, Section 10.02 of the
Indenture or any indenture supplemental thereto, the rights and obligations of
the Issuer and of the holders of the Bonds may be modified by the Issuer with
the written consent of the holders of 66-2/3% in aggregate principal amount of
the Bonds then outstanding; provided, however, that no such modification shall
effect the reduction of or the extension of the stated time of payment of, the
principal hereof or of the interest of or premium, if any, hereon or permit the
creation of any lien on the trust estate prior to or on a parity with the lien
of said Indenture (except for additional parity Bonds to the extent permitted by
the Indenture) or deprive the holder hereof of the lien created by said
Indenture on the trust estate without the consent of the holder hereof.
The Series 1993 Bonds are not subject to redemption prior to maturity
except as hereinafter provided.
As set forth in Section 5.04 of the Indenture, the Series 1993 Bonds
are subject to redemption as a whole, at any time, at a redemption price equal
to the principal amount thereof, without premium, plus accrued interest to the
redemption date, if one or more of the following events shall have occurred:
(a) the Project (as defined in the Indenture) shall have been
damaged or destroyed to such an extent either (i) as to render the
Project unsatisfactory to the Company for the purposes for which the
same was used immediately prior to such damage or destruction, or (ii)
that the Company deems it unwise to rebuild, repair and restore the
Project (to be determined in the sole judgment of the Company) or (iii)
that the restoration costs would exceed the proceeds of insurance;
(b) title to, or the temporary use or control of, the whole or
substantially all of the Project shall have been taken by the exercise
of the power of eminent domain or condemnation or if such use or
control of a substantial part of the Project shall be so taken as
results in rendering the Project unsatisfactory to the Company for the
purpose for which same was used immediately prior to such taking or
condemnation (to be determined in the sole judgment of the Company); or
(c) the result of any condition of Force Majeure (as defined
in the Indenture) is in the sole judgment of the Company to cause the
Project to operate at substantially
<PAGE> 10
less than the capacity for which it was designed.
As set forth in Section 5.04 of the Indenture, the Series 1993 Bonds
are subject to redemption as a whole or in part (less than all of such Bonds to
be selected by lot in such manner as may be designated by the Trustee) at any
time at a redemption price equal to the principal amount thereof, without
premium, plus accrued interest to the redemption date, if one or more of the
following events shall have occurred:
(a) any condemnation proceeds are received by the Trustee
which are not applied to the restoration or rebuilding of the Project;
or
(b) any title insurance proceeds are received by the Trustee
which are not applied to remedy the defect in the title of the property
for which such payment is made.
As provided in Section 5.05 of the Indenture, the Series 1993 Bonds are
subject to mandatory redemption as a whole, and not in part, on the sixtieth
(60th) day following a "Determination of Taxability" as defined in the
Indenture, at a redemption price equal to 100% of the principal amount of the
Series 1993 Bonds, without redemption premium, to be redeemed and accrued
interest thereon to the date fixed for redemption.
As provided in Section 5.07 of the Indenture, notice of redemption
(unless waived by the registered owner) shall be given by first class mail
postage prepaid not less than 30 nor more than 60 days before the redemption
date, to the registered owner of any Bond to be redeemed. Any notice of
redemption which is mailed in the manner herein provided shall be conclusively
presumed to have been duly given whether or not the owner receives the notice.
Failure to give notice by mail or any defect in the notice to the owner of any
Bond designated for redemption shall not affect the validity of the proceedings
for redemption.
As provided in Section 2.06 of the Indenture, this Bond is transferable
by the Registered Owner hereof in person or by his attorney duly authorized in
writing at the main corporate trust office of the Trustee in Nashville,
Tennessee, but only in the manner, subject to the limitations and upon payment
of the charges provided in the Indenture, and upon surrender and cancellation of
this Bond. Upon such transfer a new fully registered Series 1993 Bond or Bonds,
of authorized denomination or denominations, for the same aggregate principal
amount, will be issued to the transferee in exchange therefor.
As provided in Section 2.06 of the Indenture, the Issuer and the
Trustee may deem and treat the Registered Owner hereof as the absolute owner
hereof for the purpose of receiving payment of or on account of principal
hereof, premium, if any, and interest due hereon and for all other purposes and
neither the Issuer nor the Trustee nor any paying agent shall be affected by any
notice to the contrary.
As provided in Section 3.01 of the Indenture, the Series 1993 Bonds are
issuable as fully registered Bonds in the denominations of $5,000 and any
integral multiple thereof.
<PAGE> 11
The principal hereof may be declared or may become due on the
conditions and in the manner and at the time set forth in Article VII of the
Indenture upon the occurrence of an event of default as in the Indenture
provided. As provided in Section 7.05 of the Indenture, no Bondholder shall have
any right to bring any action or otherwise to enforce any provision of the
Indenture unless the holders of 25% in aggregate principal amount of the Bonds
then outstanding shall have in writing requested the Trustee to take such action
and have offered the Trustee such reasonable indemnity as it may require against
expenses and liabilities to be incurred, and the Trustee shall have neglected
for 60 days to take such action; provided, however, that the right of any holder
of any Bond to receive payment of the principal thereof and/or interest thereon
when due or to institute suit for the enforcement of any such payment shall not
be impaired or affected without the consent of such holder.
ASSIGNMENT
FOR VALUE RECEIVED, ______________________________________ hereby sell,
assign, and transfer unto ____________________________________the within Bond,
together with accrued interest thereon, and all right, title and interest
thereto, and hereby irrevocably authorize and appoint __________________________
Attorney, to transfer said Bond on the books of the within-named Issuer with
full power of substitution in the premises.
Dated: ______________________, ________.
----------------------------------
NOTICE: The signature to this
assignment must correspond with
the name as it appears upon the
face of the within Bond in every
particular, without alteration or
enlargement or any change whatever.
Signature guaranteed:
------------------------
Notice: Signatures must be guaranteed by an institution which is a Participant
in the Securities
<PAGE> 12
Transfer Agent Medallion Program ("STAMP")or similar program.
(End of Bond Form)
WHEREAS, all things necessary to make the Series 1993 Bonds, when
authenticated by the Trustee and issued, as in this Indenture provided, valid,
binding and legal special obligations of the Issuer, and to constitute this
Indenture a valid and binding agreement securing the payment of the principal
of, redemption premium, if any, and interest on all Bonds issued and to be
issued hereunder, have been done and performed and the creation, execution and
delivery of this Indenture and the creation, execution and issuance of said
Bonds, subject to the terms hereof, have in all respects been authorized;
<PAGE> 13
NOW, THEREFORE, THIS INDENTURE FURTHER WITNESSETH:
That The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County, party of the first part, in consideration of the
premises and of the acceptance by the Trustee of the trusts hereby created, and
of the purchase and acceptance of the Bonds by the holders thereof, and of the
sum of One Dollar ($1.00) of lawful money of the United States of America to it
duly paid by the Trustee at or before the execution and delivery of these
presents, and for other good and valuable consideration, the receipt whereof is
hereby acknowledged, and in order to secure the payment of the principal of,
premium, if any, and interest on all Bonds at any time issued and outstanding
under this Indenture according to their tenor and effect and the performance and
observance by the Issuer of all the covenants expressed or implied herein and in
the Bonds, has granted, bargained, sold, warranted, alienated, demised,
released, conveyed, assigned, transferred, mortgaged, pledged, set over and
confirmed, and does by these presents hereby grant, bargain, sell, warrant,
alienate, demise, release, convey, assign, transfer, mortgage, pledge, set over
and confirm, unto the Trustee and to its successors in the trusts hereby
created, and to it and its assigns, forever, all of the Issuer's estate, right,
title and interest in, to and under the following described property, rights and
interests (herein sometimes referred to as the "mortgaged property" or "Trust
Estate"), to wit:
DIVISION I
All right, title and interest of the Issuer in and to the Agreement
(except for the Issuer's right to expenses under Section 4.03 of the Agreement),
it being the intent and purpose hereof that the assignment and transfer to the
Trustee of the payments and other sums due and to become due under the Agreement
shall be effective and operative immediately and shall continue in force and
effect, and the Trustee shall have the right to collect and receive said
payments and other sums for application in accordance with the provisions
hereof, at all times during the period from and after the date of this Indenture
until the indebtedness hereby secured shall have been fully paid and discharged,
including without limitation at all times after the institution and during the
pendency of foreclosure proceedings and after any sale on foreclosure. The
Issuer, however, is to remain liable to observe and perform all the conditions
and covenants in said Agreement provided to be observed and performed by it.
DIVISION II
The Deed of Trust (which is of record in Book ____, page ___,
Register's Office of Davidson County, Tennessee), the Security Agreement, and
all right, title and interest of the Issuer in and to the property from time to
time subject to the Deed of Trust and the Security Agreement.
10
<PAGE> 14
DIVISION III
All moneys and securities held by the Trustee in any of the funds or
accounts established under this Indenture.
DIVISION IV
All property which is by the express provisions of this Indenture
required to be subject to the lien hereof and any additional property that may,
from time to time hereafter, by delivery or by writing of any kind, be subjected
to the lien hereof, by the Issuer or by anyone on its behalf, and the Trustee is
hereby authorized to receive the same at any time as additional security
hereunder.
TO HAVE AND TO HOLD, all and singular, the trust estate, including all
additional property which by the terms hereof has or may become subject to the
encumbrance of this Indenture, unto the Trustee and its successors and assigns,
forever.
IN TRUST, NEVERTHELESS, with power of sale, for the equal and
proportionate benefit and security of the holders from time to time of the Bonds
authenticated and delivered hereunder and issued by the Issuer and outstanding,
without preference, priority or distinction as to lien or otherwise of any one
of said Bonds over any other or others of said Bonds to the end that each holder
of such Bonds has the same rights, privileges and lien under and by virtue of
this Indenture; and conditioned, however, that if the Issuer shall well and
truly pay or cause to be paid fully and promptly when due all indebtedness,
liabilities, obligations and sums at any time secured hereby, including interest
and reasonable attorney's fees, and shall promptly, faithfully and strictly
keep, perform and observe or cause to be kept, performed and observed all of its
covenants, warranties and agreements contained herein, then and in such event
this Indenture shall be and become void and of no further force and effect,
otherwise the same shall remain in full force and effect, and upon the trust and
subject to the covenants and conditions hereinafter set forth.
ARTICLE I
Definitions
Section 1.01. In addition to words and terms elsewhere defined in this
Indenture, the following words and terms as used in this Indenture and in the
Bonds shall have the following meanings, unless some other meaning is plainly
intended:
"Act" means the provisions of Chapter 53 of Title 7 of Tennessee Code
Annotated, as may be amended from time to time.
11
<PAGE> 15
"Agreement" means the Loan Agreement of even date herewith between the
Issuer and the Company, as may be amended from time to time.
"Authorized Company Representative" means the person at the time
designated to act on behalf of the Company pursuant to Section 2.09 of the
Agreement.
"Authorized Newspaper" means a newspaper of general circulation in
Nashville, Tennessee, printed in the English language, customarily published on
each business day whether or not published on Saturdays, Sundays or holidays.
"Bond Fund" means the account established under Section 4.01 hereof.
"Bondholder" and "holder" shall mean the registered owner of a Bond.
"Bonds" means the bonds of all series from time to time authenticated
and delivered under this Indenture.
"Building" means the Existing Building and the Modifications.
"Business Day" means a day on which banks in the States of New York and
Tennessee are not required or authorized by law to remain closed and on which
The New York Stock Exchange is not closed.
"Certified Resolution" with reference to the Issuer means a copy of a
resolution certified by the Secretary of the Issuer to have been duly passed and
adopted by the Board of Directors of the Issuer at a meeting duly called and
convened.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations issued thereunder.
"Company" shall mean OSCO Treatment Systems, Inc., a Tennessee
corporation.
"Construction Fund" means the account established under Section 4.04
hereof.
The word "continuing" as applied to an event of default, means any
event of default not cured or waived.
"Deed of Trust" shall mean that certain Deed of Trust of even date
herewith from the Company to Charles K. Wray, as trustee thereunder, securing
the obligations of the Company under the Agreement.
"Determination of Taxability" means the issuance of a statutory notice
of deficiency by
12
<PAGE> 16
the Internal Revenue Service which holds in effect that the interest payable on
any of the Series 1993 Bonds is includable in the gross income of a holder
thereof (other than a holder who is a "substantial user" of the Project or a
"related person" within the meaning of such terms as used in Section 147 of the
Code) for federal income tax purposes. Such a Determination of Taxability shall
be deemed to have occurred on the date borne by said statutory notice of
deficiency.
"Equipment" means all items of machinery, equipment, furniture and
similar property now or hereafter located on or used in connection with the
Building or elsewhere on the Land.
"Events of Default" is defined in Section 7.01 hereof.
"Existing Building" shall mean the building, and all other improvements
not constituting part of the Existing Equipment, which have been constructed on
the Land.
"Existing Equipment" means those items of machinery, equipment and
related property heretofore acquired and installed in the Existing Building or
elsewhere on the Land.
"Existing Project" means the Land, the Existing Building and the
Existing Equipment.
"Fiscal Year" shall mean the period commencing on the first day of May
of any year and ending on the last day of April of the next succeeding year.
"Force Majeure" means without limitation acts of God, strikes, lockouts
or other industrial disturbances, acts of public enemies, insurrections, labor
violence, riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, tornadoes, storms, floods, washouts, droughts, arrests, restraints
of government and people, civil disturbances, explosions, breakage, or accidents
to machinery, transmission pipes or canals, delays in delivery of materials,
machines or component parts thereof or equipment, partial or entire failure of
utilities, commercial frustration or any other cause or event not reasonably
within the control of or foreseeable by the party obliged to perform.
"Government Obligations" shall mean any obligation to the timely
payment of which the full faith and credit of the United States of America are
pledged.
"Guarantor" means Laidlaw Inc., a Canadian corporation.
"Guaranty Agreement" means that certain Guaranty Agreement of even date
herewith from the Guarantor to the Trustee.
"Indenture" shall mean this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto.
"Installment Payments" means the payments set forth in Section 3.01 of
the Agreement.
13
<PAGE> 17
"Interest Payment Date" means each May 1 and November 1, commencing
November 1, 1993.
"Issuer" shall mean The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County, a Tennessee public
nonprofit corporation.
"Land" shall mean the real property in Davidson County, Tennessee
conveyed to the Company by deed of record in Book 8007, page 216, Register's
Office of Davidson County, Tennessee.
"Modifications" means the modifications to the Existing Building to be
made in accordance with Section 2.05 of the Agreement.
"New Equipment" means those items of machinery, equipment and related
property required by the Agreement to be acquired and installed in the Building
or elsewhere on the Land from the proceeds of the sale of the Series 1993 Bonds.
"New Project" means the Modifications and the New Equipment.
"Officers' Certificate" with reference to the Company shall mean a
certificate signed by the President, a Vice President or the Secretary of the
Company, and with reference to the Issuer shall mean a certificate in writing
signed by the Chairman or the Vice Chairman and by the Secretary or the
Assistant Secretary of the Issuer.
"Opinion of Counsel" means a written opinion of counsel who may, but
need not, be counsel for the Issuer or counsel for the Company.
"Outstanding" or "outstanding", when used with reference to Bonds,
shall, subject to the provisions of Section 9.04, mean as of any particular time
all the Bonds authenticated and delivered by the Trustee under this Indenture,
except:
(a) Bonds theretofore cancelled by the Trustee or delivered
to the Trustee cancelled or for cancellation;
(b) Bonds for the payment or redemption of which moneys or
Government Obligations in the necessary amount shall have been
deposited in trust with the Trustee, provided that if such Bonds are to
be redeemed prior to the maturity thereof notice of such redemption
shall have been given as provided in Section 5.07 or provisions
satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Bonds in substitution for which other Bonds shall have
been authenticated and delivered pursuant to the terms of Section 2.05
or 2.06.
14
<PAGE> 18
"Permitted Encumbrances" shall have the meaning ascribed to it in
Section 5.01 of the Agreement.
"Project" shall mean the Building, the Equipment and the Land.
"Responsible Officers" of the Trustee or any separate trustee or
co-trustee hereunder shall mean the chairman of the board of directors, the
president, every vice president, every assistant vice president, the cashier,
every assistant cashier, the secretary, every trust officer, and every officer
and assistant officer of such Trustee, other than those specifically above
mentioned, to whom any corporate trust matter is referred because of his
knowledge of, and familiarity with, a particular subject.
"Security Agreement" shall mean that certain Security Agreement of even
date herewith between the Company and the Issuer, securing the obligations of
the Company under the Agreement.
"Series 1993 Bonds" shall mean the $15,700,000 principal amount of
Industrial Development Revenue Refunding and Improvement Bonds (OSCO Treatment
Systems, Inc. Project) Series 1993 of the Issuer from time to time outstanding
under this Indenture.
"Trust Estate", "trust estate" or "mortgaged property" shall mean the
property of the Issuer which is subject to the lien of this Indenture or
intended to be subject to the lien of this Indenture.
"Trustee" shall mean NationsBank of Tennessee, N.A., a national banking
association with its principal offices in Nashville, Tennessee, the party of the
second part of this Indenture and its successors in interest.
"Underwriter" means J. C. Bradford & Co., a Tennessee partnership.
"Written Request" with reference to the Issuer shall mean a request in
writing signed by the Chairman, the Vice Chairman or the Secretary of the Issuer
and with reference to the Company, shall mean a request in writing signed by the
President, a Vice President, the Secretary or an Assistant Secretary of the
Company.
Section 1.02. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter gender. The
words "Bond", "holder", and "person" shall include the plural as well as the
singular number unless the context shall otherwise indicate. The word "person"
shall include corporations, associations, natural persons and public bodies
unless the context shall otherwise indicate.
Any certificate or opinion made or given by an officer of the Issuer,
the Company or any Guarantor may be based, insofar as it relates to legal
matters, upon a certificate or opinion of or
15
<PAGE> 19
representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should have known that the same were erroneous. Any
certificate or opinion made or given by counsel may be based (insofar as it
relates to factual matters, information with respect to which is in the
possession of the Issuer, the Company or the Guarantor), upon the certificate or
opinion of or representations by an officer or officers or officials of the
Issuer, the Company or the Guarantor, unless such counsel knows that the
certificate or opinion or representations with respect to the matters upon which
his certificate or opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should have known that the same were erroneous.
ARTICLE II
Execution, Authentication, Maturity,
Form and Registration of Bonds
Section 2.01. The Bonds authorized to be issued under this Indenture
shall be designated as "The Industrial Development Board of the Metropolitan
Government of Nashville and Davidson County Industrial Development Revenue
Refunding and Improvement Bonds (OSCO Treatment Systems, Inc. Project)". All
Bonds issued under this Indenture shall be payable solely from the Trust Estate,
including the revenues and receipts derived from the Agreement. The principal
of, premium, if any, and interest on the Bonds issued hereunder are secured by
an assignment of the revenues and receipts from the Trust Estate out of which
the same are payable and are further secured by the lien of this Indenture on
the Trust Estate.
Section 2.02. The principal of, premium, if any, and the interest on
the Bonds shall be payable in any coin or currency of the United States of
America which on the respective dates of payment thereof is legal tender for the
payment of public and private debts. The principal of and premium, if any, on
all Bonds shall be payable at the office of the Trustee, and payment of the
interest on each Bond shall be made by the Trustee on each interest payment date
to the person appearing on the registration books maintained by the Trustee as
the registered owner thereof at the close of business on the 15th day next
preceding the interest payment date by check or draft mailed to such registered
owner at his address as it appears on such registration books or at such other
address as may be furnished in writing by such registered owner to the Trustee.
Payment of the principal of and premium, if any, on the Bonds shall be made upon
the presentation and surrender of such Bonds as the same shall become due and
payable.
Section 2.03. Only Bonds authenticated by the endorsement thereon of a
certificate substantially in the form hereinbefore recited, executed by the
Trustee, by one of its authorized Responsible Officers, shall be valid or become
obligatory for any purpose or be secured by this Indenture or shall be entitled
to any benefit hereunder; and every certificate of the Trustee upon any Bond
purporting to be secured hereby shall be conclusive evidence that such Bond so
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authenticated has been duly authenticated and delivered hereunder, and that the
holder is entitled to the benefit of the trusts hereby created.
Section 2.04. All Bonds issued and to be issued under this Indenture
shall be executed in the name of the Issuer by the manual or facsimile signature
of its Chairman or Vice Chairman and its corporate seal, or a facsimile thereof,
affixed thereto and attested by the manual or facsimile signature of its
Secretary or Assistant Secretary. In case any of the officers of the Issuer who
shall have signed any Bond shall cease to be such officer before the Bond so
signed shall have been actually authenticated by the Trustee or delivered or
issued, such Bond may be authenticated and delivered and issued with the same
effect as though the person who had signed such Bond had not ceased to be an
officer of the Issuer.
Section 2.05. Bonds of any series may be initially issued in temporary
form exchangeable for definitive Bonds of the same series when ready for
delivery. The temporary Bonds shall be of such denomination or denominations, as
may be determined by the Issuer, and may contain such reference to any of the
provisions of this Indenture as may be appropriate. Every temporary Bond shall
be executed by the Issuer and be authenticated by the Trustee upon the same
conditions and in substantially the same manner as the definitive Bonds. If the
Issuer issues temporary Bonds, it will execute and furnish definitive Bonds
without delay and thereupon the temporary Bonds may be surrendered for
cancellation in exchange therefor at the office of the Trustee, and the Trustee
shall authenticate and deliver in exchange for such temporary Bonds an equal
aggregate principal amount of definitive Bonds of the same series and maturity
of authorized denominations. Until so exchanged, the temporary Bonds shall be
entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
In case any temporary or definitive Bond issued hereunder shall become
mutilated, or be lost, stolen or destroyed, the Issuer, in its discretion, shall
issue, and the Trustee shall authenticate and deliver, a new Bond of like tenor,
amount, maturity and date, and bearing the same or a different number, in
exchange and substitution for, and upon the cancellation of, the mutilated Bond,
or in lieu of and substitution for such lost, stolen or destroyed Bond, or if
any such Bond shall have matured or shall be about to mature, instead of issuing
a substituted Bond the Issuer may pay or authorize payment of such Bond without
surrender thereof.
In every case the applicant shall furnish evidence satisfactory to the
Issuer and the Trustee of the destruction, theft or loss of such Bond, and
indemnity satisfactory to the Trustee, which indemnity shall protect the
Trustee, the Issuer and the Guarantor; and the Issuer may charge the applicant
for the issue of such new Bond an amount sufficient to reimburse the Issuer for
the expense incurred by it in the issue thereof.
Section 2.06. The Trustee shall maintain at its principal corporate
trust office in Nashville, Tennessee a register in which, at the Issuer's
expense (other than transfer taxes, if any) the Trustee shall provide for the
registration and transfer of the Bonds. Whenever any Bond
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shall be surrendered at such office for transfer or such other office of the
Trustee as it shall designate, the Issuer at its expense will execute and
deliver in exchange therefor a new Bond or Bonds of the same series and
maturity, of authorized denomination or denominations, for the same aggregate
principal amount as the Bond so surrendered, provided that any transfer tax
relating to such transaction shall be paid by the holder requesting such
transfer. The Trustee shall not be required to transfer any Bond during the
period of fifteen (15) days next preceding any interest payment date of such
Bond or, in the case of any proposed redemption of Bonds, during the fifteen
(15) days immediately preceding the selection of Bonds for such redemption or
after such Bonds or any portion thereof have been selected for redemption. The
Issuer and the Trustee may treat the person in whose name any Bond is registered
as the owner of such Bond for the purpose of receiving payment of the principal
of, premium, if any, and interest on such Bond and for all other purposes,
whether or not such Bond be overdue, and neither the Issuer nor the Trustee
shall be affected by any notice to the contrary.
ARTICLE III
The Series 1993 Bonds and Bonds of Other Series
Section 3.01. The first series of Bonds authorized to be issued
hereunder shall be entitled "The Industrial Development Board of the
Metropolitan Government of Nashville and Davidson County Industrial Development
Revenue Refunding and Improvement Bonds (OSCO Treatment Systems, Inc. Project)
Series 1993" and shall be in the aggregate principal amount of Fifteen Million
Seven Hundred Thousand Dollars ($15,700,000). The Series 1993 Bonds shall be
issuable as fully registered bonds in the denomination of $5,000 and any
integral multiple thereof. The Series 1993 Bonds shall be numbered from R-1
upward.
Interest on each Series 1993 Bond shall be payable from the Interest
Payment Date next preceding the date on which it is authenticated unless such
date is an Interest Payment Date, in which event from the date on which it is
authenticated, or if such date is prior to any Interest Payment Date, from May
1, 1993. Interest on the Series 1993 Bonds shall be payable on May 1 and
November 1 of each year commencing November 1, 1993.
The Series 1993 Bonds and the Trustee's Certificate of Authentication
shall be substantially in the form and be of the tenor and purport, respectively
hereinbefore set forth.
The Series 1993 Bonds shall bear annual interest (computed on the basis
of a 360-day year consisting of 12 30-day months) at a rate of 6.00% and shall
mature on May 1, 2003.
Section 3.02. The Trustee, forthwith upon the execution and delivery of
this Indenture or from time to time thereafter upon the execution and delivery
to it by the Issuer of the Series 1993 Bonds and without any further action on
the part of the Issuer, shall authenticate Series 1993 Bonds in the aggregate
principal amount of not to exceed Fifteen Million Seven Hundred
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Thousand Dollars ($15,700,000) and shall deliver them to or upon the Written
Request of the Issuer.
The Issuer shall simultaneously deposit with the Trustee all of the
proceeds from the sale of the Series 1993 Bonds (including accrued interest on
the Series 1993 Bonds from their date to the date of their delivery to the
purchasers) as set forth in the Written Request of the Issuer and the Trustee
shall out of such proceeds:
(a) Deposit to the credit of the Bond Fund the accrued
interest on the Series 1993 Bonds from their date to the date of their
delivery. It is understood that the amount so deposited shall
constitute a credit to the Company on the then next succeeding payment
or payments of Installment Payments due or to become due under the
Agreement.
(b) Deposit with the Prior Trustee, to the credit of the
General Account of the Bond Fund created under the Prior Indenture, the
sum of $7,960,000.
(c) Deposit the remainder of such proceeds to the credit of
the Construction Fund.
Section 3.03. Subject to the provisions of this Article III, Bonds of
any series other than Series 1993 Bonds shall contain such variant provisions,
if any, as to date, maturity or serial maturities, interest rate (or interest
rates in the case of serial maturities) and redemption, and shall be entitled to
such sinking fund provisions and shall be limited to such aggregate principal
amount, if any, as shall be determined by the Board of Directors of the Issuer
and set forth in an indenture supplemental hereto at the time any such other
series is created.
Section 3.04. Bonds of series other than Series 1993 Bonds may be fully
registered bonds, shall be of such denomination or denominations and shall be in
such form or forms, not substantially different from the form of Series 1993
Bonds, except as may be occasioned by variant provisions applicable to such
series. Bonds of any series may be endorsed with such notations or legends as
may be required by any indenture supplemental hereto, or as may be required to
conform to usage or law and be approved by the Trustee.
Section 3.05. Subject to the provisions of Section 3.06 hereof, one or
more series of Bonds in addition to the Series 1993 Bonds may be authenticated
and delivered from time to time when authorized by resolution or resolutions of
the Board of Directors of the Issuer which shall specify:
(a) The authorized principal amount of such series, the
designation and denomination or denominations thereof and the
directions for the authentication and delivery of the Bonds upon
payment of the purchase price therein set forth;
(b) The purpose for which such series is being issued;
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(c) The date of such series and maturity dates and amounts
of the Bonds thereof;
(d) The interest rate or rates of such series and the
interest payment dates therefor, provided that the interest rate or
rates shall be identical for all Bonds of a series of a like maturity
and the interest payment dates shall be identical for all Bonds of a
series;
(e) The redemption premiums and redemption terms, if any, for
such Bonds; and
(f) Any other matters deemed appropriate or necessary by the
Board of Directors of the Issuer and not inconsistent with the
provisions of this Indenture.
Section 3.06. So long as no event of default shall be continuing
hereunder, the Issuer may issue additional Bonds under this Indenture pursuant
to the provisions and limitations herein set forth, for any one or more of the
purposes set forth in Section 2.06 of the Agreement; provided, however, that in
no event shall the Issuer issue any additional Bonds hereunder if as a result of
the issuance thereof the interest on the Series 1993 Bonds or the Bonds of
additional series will not be fully excludable from the gross income of the
recipients thereof under the Code. The Bonds of each series other than Series
1993 shall be executed by the Issuer and delivered to the Trustee and thereupon
shall be authenticated by the Trustee and delivered to or upon the Written
Request of the Issuer, but only upon receipt by the Trustee of:
(a) A copy of the resolution or resolutions referred to in
Section 3.05 hereof and of a resolution or resolutions of the Board of
Directors of the Issuer authorizing or ratifying the supplemental
instrument referred to in paragraph (b) of this Section 3.06, certified
by the Secretary of the Issuer, and a Certified Resolution of the
Issuer authorizing or ratifying a supplemental indenture authorizing
the new series and pledging and assigning all rights of the Issuer
under such supplemental instrument and the additional Installment
Payments for such series to the Trustee.
(b) An executed counterpart of a supplemental instrument
executed by the Issuer and the Company pursuant to Section 2.06 of the
Agreement and Section 10.01 hereof containing a schedule of payments of
Installment Payments which are not less than the payment of principal,
premium, if any, and interest, when due, for such series and payments,
if any, into reserve funds required to be made as a consequence of the
issuance of such series.
(c) Executed counterpart or counterparts of a supplemental
instrument or instruments as are necessary to subject to the lien of
the Deed of Trust and/or the Security Agreement all property paid for
with the proceeds of the new series of Bonds.
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(d) An executed counterpart of a supplemental indenture
setting forth the provisions of the new series and pledging and
assigning to the Trustee all the right, title and interest of the
Issuer in and to the supplemental instrument referred to in
sub-paragraph (b) or (c) of this Section 3.06;
(e) An Opinion of Counsel to the effect that (i) such Bonds
are valid and binding obligations of the Issuer and enforceable in
accordance with their terms and the terms of this Indenture, subject to
bankruptcy and insolvency laws; (ii) such Bonds have been duly and
validly authorized and issued in acordance with law, this Indenture and
the Agreement; (iii) the Agreement has been effectively supplemented by
the supplemental instrument referred to in subparagraph (b) of this
Section 3.06 and the Agreement as supplemented is valid and binding on
the Issuer and the Company, subject to bankruptcy and insolvency laws;
and (iv) the Indenture constitutes a valid first lien on the property
described in the granting clauses thereof, as supplemented and
amended, and that all rights of the Issuer under the supplemental
instrument referred to in sub-paragraph (b) or (c) of this Section
3.06 and all Installment Payments payable under the Agreement as so
supplemented are effectively assigned to the Trustee for the security
of the Bonds issued hereunder.
(f) An Officers' Certificate of the Issuer stating that no
Bonds have been theretofore issued on the basis of the supplemental
instrument referred to in subparagraph (b) of this Section 3.06 and
that on the date of the authentication and delivery of such Bonds
neither the Issuer nor the Company is in default in the performance or
observance of any of the covenants, conditions, agreements or
provisions of this Indenture, or the Agreement.
(g) A copy of the resolution or resolutions of the Board of
Directors of the Company authorizing or ratifying the supplemental
instruments referred to in sub-paragraph (b) or (c) of this Section
3.06, certified by the Secretary or an Assistant Secretary of the
Company.
(h) A certificate of the Company stating that the Company
approves the issuance of the Bonds of the new series and is not in
default in the performance or observance of any of the covenants,
conditions, agreements, or provisions of the Agreement, the Deed of
Trust or the Security Agreement.
(i) The purchase price of the Bonds being delivered as
stated in the resolution referred to in Section 3.05 hereof.
(j) A Written Request of the Issuer for the authentication and
delivery of such Bonds.
(k) In the case of additional Bonds issued for the purpose of
redeeming Bonds
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of any series prior to their stated maturity or maturities, such
additional documents as shall be required by the Trustee to show that
provision has been duly made in accordance with the terms of this
Indenture for redemption of all of the Bonds to be refunded.
(l) An executed counterpart of a guaranty agreement executed
by the Guarantor substantially in the form of the Guaranty Agreement,
guaranteeing the payment of the principal of, redemption premium, if
any, and interest on the additional series of Bonds.
The proceeds from the sale of Bonds of such series received by the
Trustee shall be applied by the Trustee in substantially the same manner as
provided in Section 3.02 in regard to the Series 1993 Bonds; provided that in
the case of additional Bonds issued for the purpose of redeeming Bonds of any
series prior to their stated maturity or maturities, an amount which, with any
other funds that shall be available therefor, will be sufficient for paying the
principal and redemption premium, if any, of the Bonds to be refunded and the
interest which shall accrue thereon to the date fixed for their payment or
redemption, shall be deposited to the credit of a special account appropriately
designated, to be held in trust by the Trustee for the sole and exclusive
purpose of paying such principal, redemption premium and interest; and moneys
held for the credit of such special account shall, as nearly as may be
practicable and reasonable, be invested and reinvested by the Trustee in
Government Obligations which shall mature, or which shall be subject to
redemption by the holder thereof at the option of the holder, not later than the
respective dates when the moneys held for the credit of such special account
will be required for the purposes intended.
Section 3.07. All Bonds of all series from time to time outstanding
under this Indenture shall be equally and ratably secured both as to principal,
premium, if any, and interest by this Indenture.
ARTICLE IV
Accounts and Investment of Funds
Section 4.01. There is hereby created by the Issuer and ordered
established with the Trustee a trust fund to be designated "The Industrial
Development Board of the Metropolitan Government of Nashville and Davidson
County Bond Fund (OSCO Treatment Systems, Inc. Project)" (the "Bond Fund") which
shall be used to pay the principal of, premium, if any, and interest on the
Bonds. The Trustee shall keep and maintain adequate records pertaining to the
Bond Fund and all disbursements therefrom.
Section 4.02. There shall be deposited into the Bond Fund from the sale
of the Series 1993 Bonds the amount specified in Section 3.02 (a) hereof. In
addition, there shall be deposited into the Bond Fund, as and when received (a)
any amount remaining in the Construction Fund (referred to in the Agreement as
the Surplus Construction Fund Money) to the extent provided in
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Section 2.07 of the Agreement; (b) all Installment Payments specified in Section
3.01 of the Agreement; (c) all moneys received by the Trustee under and pursuant
to the Agreement which may be used by the Trustee for the redemption of Bonds;
(d) any payments received under the Guaranty Agreement; and (e) all other moneys
received by the Trustee under and pursuant to any of the provisions of the
Agreement when accompanied by directions by the Company that such moneys are to
be paid into the Bond Fund.
Section 4.03. Except as provided in Sections 4.09 and 4.10 hereof,
moneys in the Bond Fund shall be used solely for the payment of the principal
of, premium, if any, and interest on the Bonds and for the redemption of the
Bonds prior to maturity. Whenever the amount in the Bond Fund from any source
whatsoever is sufficient to redeem all of the Bonds outstanding hereunder and to
pay any applicable premium and interest to accrue thereon prior to such
redemption, the Issuer shall (if the Company so directs) take and cause to be
taken the necessary steps to redeem all of the Bonds on the next succeeding
redemption date for which the required redemption notice may be given; provided,
however, that any moneys in the Bond Fund may be used to redeem a part of the
Bonds outstanding so long as the Company is not in default with respect to any
Installment Payments and to the extent such moneys are in excess of the amount
required for payment of Bonds theretofore matured or called for redemption and
past due interest (including, without limitation, in all cases where such Bonds
have not been presented for payment).
Section 4.04. There is hereby created and established with the Trustee
a trust fund in the name of the Issuer to be designated "The Industrial
Development Board of the Metropolitan Government of Nashville and Davidson
County Construction Fund (OSCO Treatment Systems, Inc. Project)" (the
"Construction Fund"). Moneys in the Construction Fund shall be expended in
accordance with the provisions of the Agreement, and particularly Section 2.07
thereof.
The Trustee is hereby authorized and directed to issue its checks for
each disbursement required by the aforesaid provisions of the Agreement.
The Trustee shall keep and maintain adequate records pertaining to the
Construction Fund and all disbursements therefrom and after the New Project
shall have been completed and a certificate of payment of all costs filed as
provided in Section 4.05 hereof, the Trustee shall, if requested by the Company,
file an accounting thereof with the Issuer and with the Company.
Section 4.05. The completion of the New Project and the payment of all
costs and expenses incident thereto shall be evidenced by the filing with the
Trustee of the certificate of the Authorized Company Representative required by
the provisions of Section 2.08 of the Agreement. As soon as practicable and in
any event not more than sixty days from the date of the certificate referred to
in the preceding sentence any balance attributable to the proceeds of the Series
1993 Bonds remaining in the Construction Fund shall be applied in accordance
with instructions from the Company pursuant to Section 2.07 of the Agreement.
Section 4.06. Reference is hereby made to Articles VIII and IX of the
Agreement whereunder it is provided that under certain circumstances the net
proceeds of insurance and
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condemnation awards are to be paid to the Trustee and to be disbursed and paid
out as therein provided. The Trustee hereby accepts and agrees to perform the
duties and obligations as therein specified.
Section 4.07. A mortgage title insurance policy has been issued
insuring the Trustee for the benefit of the holders of the Bonds. In the event
that payment is made to the Trustee under said policy, such moneys shall be
applied by the Trustee (i) first to remedy the defect in the title of the
property for which such payment is made, and (ii) thereafter, to the extent of
any such moneys remaining after the payments required by clause (i) of this
Section 4.07 shall have been made, to the redemption of Bonds pursuant to
Section 5.04 hereof, and any balance shall be paid to the Company.
Section 4.08. All moneys received by the Trustee under the provisions
of this Indenture shall be trust funds under the terms hereof and shall not be
subject to lien or attachments of any creditor of the Issuer or the Company.
Such moneys shall be held in trust and applied in accordance with the provisions
of this Indenture.
Section 4.09. Any moneys held as part of the Construction Fund or Bond
Fund shall, to the extent permitted by law, at the written request of and as
specified by the Authorized Company Representative, be invested and reinvested
by the Trustee in accordance with the provisions of Section 2.10 of the
Agreement. Any such investments shall be held by or under the control of the
Trustee and shall be deemed at all times a part of the Construction Fund or Bond
Fund, as the case may be, and the interest accruing thereon and any profit
realized from such investments shall be credited to such fund, and in the case
of the Bond Fund constitute a credit against the next payment or payments of
Installment Payments due under the Agreement and any loss resulting from such
investments shall be charged to such fund. The Trustee is directed to sell and
reduce to cash funds a sufficient amount of such investments whenever the cash
balance in the Construction Fund or Bond Fund is insufficient to pay a
requisition or payment when due, as the case may be when presented. The Trustee
may make any and all investments permitted under this Section 4.09 through its
own Bond Department or Trust Department.
Section 4.10. Any amounts remaining in the Bond Fund, the Construction
Fund or any other separate trust account maintained by the Trustee pursuant to
this Indenture or the Agreement, after payment in full of the principal of,
interest and premiums if any, on the Bonds (or provision for payment thereof as
provided in this Indenture), the fees, charges and expenses of the Trustee and
any paying agents and all other amounts required to be paid hereunder, shall be
promptly paid to the Company as a refund of excess Installment Payments.
ARTICLE V
Redemption of Bonds
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Section 5.01. Under the terms of Section 4.07(ii) of this Indenture and
Sections 8.02, 8.03, 9.02, 10.04, 14.01 and 14.02 of the Agreement, moneys are
to be paid to the Trustee and the Trustee shall use such moneys for the purpose
of redeeming Bonds when redeemable, except as otherwise herein provided. The
Series 1993 Bonds shall be so redeemable pursuant to the provisions of Section
5.04 and 5.05 hereof and Bonds of other series shall be so redeemable pursuant
to the provisions of Section 5.09 hereof. The Issuer covenants that any and all
such moneys received by it which are to be used to redeem Bonds shall be paid to
the Trustee under this Indenture and, in such event, the Trustee shall use any
and all such moneys to redeem Bonds when and as the Bonds shall in accordance
with their terms be redeemable.
Section 5.02. If moneys received by the Trustee under and pursuant to
the provisions of Section 5.01 hereof for the purpose of redeeming Bonds are not
sufficient to pay principal of and interest (and premium, if any) on the Bonds
of all series until the next succeeding redemption date on which Bonds of such
series may be redeemed and to redeem all the Bonds of such series on such
redemption date, the Trustee shall, upon receipt, allocate such moneys among the
various series of Bonds outstanding pro rata on the basis of the aggregate
principal amount of the Bonds of each series then outstanding. The Trustee shall
apply such money so allocated to the redemption of Bonds of each such series on
the next succeeding date on which Bonds of such series may be redeemed in
accordance with the terms thereof. Any redemption premium shall be paid out of
such moneys. Any unapplied balance of such moneys so allocated to any series
shall be held by the Trustee and applied to the next redemption of Bonds of such
series hereunder. Notwithstanding the foregoing provisions of this Section 5.02,
the Issuer may redeem all or any part of any series of Bonds pursuant to the
optional redemption provisions of the Indenture applicable thereto without the
Trustee's being required to allocate any moneys to the redemption of any other
series of Bonds.
Section 5.03. (Intentionally Omitted).
Section 5.04. The Series 1993 Bonds are subject to redemption at any
time as a whole, but not in part, through the application of moneys received
pursuant to Sections 8.02, 9.02 and 14.02(b) of the Agreement, and are subject
to redemption at any time in whole or in part (less than all of such Bonds to be
selected by lot in such manner as may be designated by the Trustee) through the
application of moneys received pursuant to Section 4.07(ii) hereof or Section
8.03 of the Agreement, at a redemption price equal to 100% of the principal
amount of the Bonds to be redeemed plus accrued interest thereon to the date of
redemption and without redemption premium.
Section 5.05. The Trustee is hereby directed to use that portion of
moneys received by it pursuant to Section 14.01 of the Agreement constituting
the prepayment of All Unpaid Installments for the purpose of redeeming Series
1993 Bonds on the sixtieth (60th) day following the Determination of Taxability.
The Series 1993 Bonds shall be subject to mandatory redemption through the
application of such moneys as a whole, and not in part, at a redemption price
equal to 100% of the principal amount of the Series 1993 Bonds to be redeemed
and
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accrued interest thereon to the date fixed for redemption and without
redemption premium.
Section 5.06. If less than all of the Bonds of a particular maturity of
a series shall be called for redemption, the particular portions ($5,000 or any
integral multiple thereof) of Bonds of such maturity to be redeemed shall be
selected by the Trustee by lot or in such other random manner as the Trustee in
its discretion may determine.
Section 5.07. Notice of redemption (unless waived by the Bondholder)
shall be given by the Trustee by first class mail, postage prepaid, not less
than thirty (30) nor more than sixty (60) days prior to the redemption date, to
the registered owner of each Bond designated for redemption. Each notice of
redemption shall state the redemption date, the place of redemption, and the
principal amount, and, if less than all of any one maturity, the distinctive
numbers and letters of the Bonds to be redeemed and, in the case of Bonds to be
redeemed in part only, the portion of the principal amount thereof to be
redeemed. In case any Bond is to be redeemed in part only, the notice of
redemption which relates to that Bond shall also state that on or after the
redemption date, upon surrender of the Bond, a new Bond will be issued. The
notice of redemption shall also state that the interest on the Bonds, or
portions of Bonds, in such notice designated for redemption shall cease to
accrue from and after such redemption date and that on said date there will
become due and payable on each of said Bonds, or portions of Bonds, the
principal amount thereof to be redeemed, premium, if any, and interest accrued
thereon to the redemption date. Any notice of redemption which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given
whether or not the owner receives the notice. Failure to give notice by mail or
any defect in the notice to the owner of any Bond designated for redemption
shall not affect the validity of the proceedings for redemption.
Section 5.08. Notice having been given in the manner and under the
conditions hereinabove provided, and moneys for payment of the redemption price
being held by the Trustee as provided in this Indenture (i) the Bonds, or
portions of Bonds, so called for redemption shall, on the redemption date
designated in such notice, become due and payable at the redemption price
provided for redemption of such Bonds, or portions of Bonds, on such date and
interest on the Bonds, or portions of Bonds, so called for redemption shall
cease to accrue, (ii) such Bonds, or portions of Bonds, shall cease to be
entitled to any lien, benefit or security under this Indenture, and (iii) the
holders of said Bonds, or portions of Bonds, shall have no rights in respect
thereof except to receive payment of the redemption price thereof.
Section 5.09. Bonds of each other series are redeemable in the manner,
at the time or times and at the premiums, if any, specified in the supplemental
indenture relating to such series.
ARTICLE VI
Covenants of the Issuer and Release of Property
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Section 6.01. (A) The Issuer agrees to procure and maintain (or cause
the Company to procure and maintain) insurance of the type required to be
procured and maintained by the Company under Article VI of the Agreement.
Insurance of the type required by Section 6.02 of the Agreement shall be payable
to the Trustee or the Company, as the case may be, as provided in Section 6.03
and Article IX of the Agreement. Any insurance moneys received by the Trustee
pursuant to Article IX of the Agreement shall be held by it as a part of the
Trust Estate and shall be used by it in the manner provided in this Section
6.01. Certificates from insurers evidencing the existence of all Policies
required by Article VI of the Agreement shall be filed with the Trustee to the
extent required by Section 6.04 of the Agreement. The Trustee shall review all
such certificates of insurance to verify compliance with the requirements of
Article VI of the Agreement.
If all or any part of the Project shall be destroyed or damaged and the
Company repairs, rebuilds, replaces, restores or reconstructs the damaged
Project pursuant to the provisions of Section 9.01 of the Agreement, the Trustee
shall, from any insurance proceeds received and held by it on account of such
damage or destruction, from time to time pay the costs of such repair,
rebuilding, replacement, restoration and reconstruction, or reimburse the
Company for payment of such costs, upon receipt of a request therefor
substantially in the form of Exhibit A to the Agreement, modified to reflect a
request for disbursement of insurance proceeds rather than moneys from the
Construction Fund, signed by the Authorized Company Representative. Within 30
days after completion of such repair, rebuilding, replacement, restoration and
reconstruction, the Company shall deliver to the Trustee an Officers'
Certificate of the Company accompanied by an approving certificate of an
engineer or architect employed by the Company stating that the Company has
repaired, rebuilt, replaced, restored or reconstructed the damaged Project in
such manner as to restore the Project, or portion thereof, to at least the
market value thereof prior to such damage or destruction, that such repair,
rebuilding, replacement, restoration and construction has been completed, or a
portion thereof has been completed. Upon receipt of such Officer's Certificate
and approving certificate of an engineer or architect any undisbursed insurance
proceeds received and held by the Trustee on account of such damage of
destruction shall be paid to the Company.
If a substantial portion of the Project shall be destroyed or damaged
while any Bonds are outstanding and the Company delivers and pays to the Trustee
the certificate and amount required to be delivered and paid by it pursuant to
the provisions of Section 9.02 of the Agreement, the Trustee shall pay and
assign to the Company, in accordance with the provisions of Section 9.02 of the
Agreement, all insurance proceeds received and held by it or receivable by it on
account of such damage or destruction to the Project.
(B) If the entire Project or any part thereof which is sufficient to
render the remaining portion unsatisfactory for the Company's business purposes
is taken by condemnation or sold under threat of condemnation while any Bonds
remain Outstanding and the Company delivers and pays to the Trustee the
certificate and amount required to be delivered and paid by it pursuant to the
provisions of the Agreement, the Trustee shall pay and assign to the Company in
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accordance with the provisions of Section 8.02 of the Agreement any condemnation
award received and held by it or receivable by it on account of such taking.
(C) If a portion of the Project which is less than that referred
to in paragraph (B) of this Section 6.01 is taken by condemnation or sold under
threat of condemnation while any Bonds remain outstanding, the Trustee shall be
furnished with the following:
(1) an Officers' Certificate of the Company stating that the
Company has elected to make the necessary adjustments in the
Project suitable for its business purposes, or stating that no
adjustments were required, as the case may be; and
(2) If the Officer's Certificate of the Company described in
(C)(1) above states that the Company has elected to make the
necessary adjustments in the Project suitable for its business
purposes, within 30 days after completion of such adjustments
an Officer's Certificate of the Company stating that such
adjustments have been completed.
Upon receiving such items the Trustee shall, out of any condemnation
award received and held by it on account of such taking:
(a) if the Officer's Certificate of the Company states that
the Company has elected to make the necessary adjustments in the
Project suitable for its business purposes, from time to time pay the
cost of such adjustments, or reimburse the Company for payment by it of
such costs, upon receipt by the Trustee of a request for such payment
or reimbursement in substantially the form of Exhibit A attached to the
Loan Agreement, modified to reflect a request for disbursement of
condemnation proceeds rather than a request for disbursement of moneys
from the Construction Fund; and
(b) apply the balance, if any, to the redemption of Bonds in
accordance with the provisions of Article V hereof; provided, however,
that if the amount of such balance exceeds the amount needed to redeem
all of the outstanding Bonds, any excess shall be paid to the Company
in accordance with the provisions of Section 4.10 hereof.
Section 6.02. Reference is made to the provisions of the Agreement,
including without limitation Article X thereof, whereby the Company may withdraw
certain items of Equipment referred to in this Indenture and forming a part of
the Trust Estate upon compliance with terms and conditions of the Agreement. The
Trustee shall at the request of the Company release and confirm that any such
Equipment is no longer subject to the Security Agreement or this Indenture upon
compliance with the applicable provisions of the Agreement.
Section 6.03. If no Event of Default shall have happened and be
continuing hereunder as provided in Article VII hereof, the Company may at any
time or times grant easements, rights of way or similar encumbrances affecting,
dedicate or execute petitions with respect to, any portion
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or portions of the Project free from the lien of the Deed of Trust and this
Indenture but only as provided in and subject to the provisions of Section 14.05
of the Agreement, and the Trustee shall execute and deliver a release of said
portion from the lien of the Deed of Trust and this Indenture upon receipt by
the Trustee of:
(i) an Opinion of Counsel in form and substance satisfactory to
the Trustee, to the effect that the action taken or proposed
to be taken by the Company is in conformity with Section 14.05
of the Agreement relating to such property;
(ii) an Officers' Certificate of the Company stating that the dedication
of said portion does not adversely affect the market value of
the remaining portion thereof, nor the use of such remaining
portion in the Company's business; and
(iii) an undertaking of the Company, in form and substance satisfactory to
the Trustee, to the effect that the Company shall remain
obligated under the terms of the Agreement to the same extent
as if said dedication had not been made and that the Company
shall, if made necessary by such dedication, restore and
rebuild said property to good condition and repair.
Section 6.04. The Issuer covenants that so long as the Bonds or any of
them shall be outstanding it will cause an office or agency where the Bonds may
be presented for payment to be maintained in the United States. The Issuer
hereby appoints NationsBank of Tennessee, N.A., Nashville, Tennessee, the office
and agency where the Bonds may be presented for payment.
Section 6.05. Subject to the provisions of Sections 2.01 and 6.17
hereof the Issuer covenants that it will promptly pay the principal of and
interest on every Bond issued under the provisions of this Indenture at the
place, on the dates and in the manner provided herein and in said Bonds, and any
premium required for the retirement of said Bonds by purchase or redemption
according to the true intent and meaning thereof and on or before each date on
which any principal of or premium, if any, or interest on any of the Bonds
becomes payable, whether at stated maturity thereof, by call for redemption, by
declaration or otherwise the Issuer will irrevocably deposit with the Trustee,
under the trusts hereof, the entire amount necessary to pay all the principal,
premium, if any, and interest payable on such date on all Bonds then
Outstanding.
Section 6.06. So long as any of the Bonds shall remain Outstanding and
unpaid, the Issuer will not directly or indirectly extend or assent to the
extension of the time for the payment of any claim for interest of or upon any
Bond, and will not directly or indirectly be a party to any arrangement
therefor, either by purchasing or refunding or in any manner keeping alive such
claim for interest, or otherwise; that in case the payment of any such claim for
interest shall be so extended by or with or without the consent of the Issuer,
then anything in this Indenture contained to the contrary notwithstanding, such
claim for interest so extended shall not be entitled, in case of default
hereunder, to any benefit of or from this Indenture, except after the
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prior payment in full of the principal of all Bonds issued hereunder and of such
claims for interest as shall not have been so extended.
Section 6.07. The Issuer covenants that while any Bonds are outstanding
hereunder, moneys received by it from payments under the Agreement will, in
aggregate, produce revenues which will be sufficient to make all payments which
the Trustee is obligated to set aside in the various trust accounts established
under Article IV.
Section 6.08. The Issuer covenants and agrees and hereby appoints the
Trustee to keep or cause to be kept proper books of record and account in which
complete and correct entries shall be made of all transactions relating to the
receipts, disbursements, allocation and application of the revenues received or
disbursed pursuant to the Indenture and amount thereof forwarded to the Trustee,
and such books shall be available for inspection by the holder of any of the
Bonds at reasonable hours and under reasonable conditions.
Section 6.09. Within two months after the close of each Fiscal Year,
the Trustee shall prepare a statement for such Fiscal Year of all funds coming
into its possession as Trustee under this Indenture and the application and
allocation thereof. Not more than two months after the close of each Fiscal
Year, the Trustee shall furnish to each holder of any of the Bonds, who may so
request in writing, and to the Company and the Guarantor, a complete financial
statement covering receipts, disbursements, allocation and application of
revenues for such Fiscal Year accruing to the Trust Estate and dates and amount
thereof forwarded to the Trustee for such Fiscal Year. The Trustee, the Company
and the Guarantor shall at all times have access to the books and records of the
Issuer relating to the Bonds and the Project. Also the records of the Trustee
pertaining to the issue shall be available to and open for inspection by any
Bondholder during normal business hours, and the Issuer covenants that it shall
promptly furnish the Trustee such additional information as is deemed necessary
by the Trustee to carry out the provisions of this Indenture and the trusts
created hereby.
Section 6.10. The Issuer covenants that all charges made by the Trustee
and any paying agent for services rendered and for payment of principal of and
interest on the Bonds (not paid by the Company) will be paid by the Issuer from
revenues of the Trust Estate and will not be required to be paid by the holders
of the Bonds.
Section 6.11. The Issuer covenants that it is, at the date of the
execution and delivery of this Indenture and will be so long as any Bonds are
Outstanding hereunder, lawfully possessed of the Trust Estate; that the
Agreement, the Deed of Trust and the Security Agreement are at the date of the
execution and delivery of this Indenture the valid and subsisting contracts on
the terms therein set forth; that the Agreement, the Deed of Trust and the
Security Agreement were lawfully made by the Company; that the covenants
contained in the Agreement, the Deed of Trust and the Security Agreement are
valid and binding and that this Indenture is executed in conformity therewith;
that the Issuer has good right, full power and lawful authority to grant,
bargain and assign, and to transfer in trust, convey and pledge the Trust Estate
in the manner and
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form herein provided; and that the Issuer forever will warrant and defend the
title to the same to the Trustee against the claims of all persons whomsoever
except for claims arising from presently existing restrictions or encumbrances.
The Issuer and the Trustee shall without the consent of or notice to
the holders of the Outstanding Bonds consent to any amendment, change or
modification of the Agreement, the Deed of Trust, the Security Agreement and the
Guaranty Agreement as may be required (i) by the provisions of the Agreement and
this Indenture, (ii) in connection with the issuance of additional Bonds as
specified in Article III hereof, (iii) for the purpose of curing any ambiguity
or formal defect or omission, (iv) in connection with the furnishings and
equipment described in the Security Agreement so as more precisely to identify
the same or to delete or substitute or add additional furnishing and equipment
acquired with the proceeds of the Bonds in accordance with the provisions
hereof, or (v) in connection with any other change therein which, in the
judgment of the Trustee, is not to the prejudice of the Trustee or the holders
of the Bonds.
Except for the amendments, changes or modifications as hereinabove
provided in this Section 6.11, neither the Issuer nor the Trustee shall consent
to any other amendment, change or modification of the Agreement, the Deed of
Trust, the Security Agreement and the Guaranty Agreement without the written
approval or consent of the holders of not less than sixty-six and two-thirds per
cent (66-2/3%) in aggregate principal amount of the Outstanding Bonds; provided,
however, that no such modification shall result in the violation of any terms
and provisions of Section 10.02 hereof.
Section 6.12. The Issuer covenants that it will comply with all the
terms and provisions of the Agreement, and the Certificate of Incorporation of
the Issuer and that it will not engage in any activities or take any action
which might result in the income of the Issuer becoming taxable to it or any
interest payment on the Bonds becoming taxable to the recipient thereof.
The Issuer covenants and certifies to and for the benefit of the
holders of the Bonds from time to time Outstanding that so long as any of the
Bonds remain Outstanding, the Issuer shall not direct that moneys on deposit in
any fund or account in connection with the Bonds (whether or not such moneys
were derived from the proceeds of the sale of the Bonds or from any other
sources), be used in a manner which will cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code.
Section 6.13. The Issuer further covenants and agrees as follows:
First: Promptly to take such actions as may be necessary or proper to remedy
or cure any defect in or cloud upon the title to the trust estate
or any part thereof, whether now existing or hereafter
developing, and to prosecute all such suits, actions and other
proceedings as may be appropriate for such purposes and to
indemnify and save the Trustee and every such Bondholder harmless
from all loss, cost, damage and expenses, including attorneys'
fees, which they or either of them may incur by
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reason of any such defect, cloud, suit, action or proceedings.
Second: To maintain its existence as a public non-profit corporation
organized and existing under the Act and the laws of the State
of Tennessee.
Section 6.14. The Issuer will, at its cost, without expense to the
Trustee or the holders of the Bonds, do, execute, acknowledge and deliver or
cause to be done, executed, acknowledged, and delivered all and every such
further acts, conveyances, mortgages, assignments, transfers and assurances as
the Trustee shall require, for the better assuring, conveying, mortgaging,
assigning and confirming unto the Trustee all and singular the Trust Estate
hereby mortgaged, conveyed or assigned or intended so to be, or which the Issuer
may be or may hereafter become bound to mortgage, convey or assign to the
Trustee, or for carrying out the intention or facilitating the performance of
the terms of this Indenture or the Agreement.
Section 6.15. The Issuer, forthwith upon the execution and delivery of
this Indenture and thereafter from time to time, will, at the request of the
Trustee, cause this Indenture, and each supplement hereto, and all financing
statements, continuation statements and other instruments required by applicable
law necessary in connection therewith to be filed, registered and recorded and
refiled, reregistered and rerecorded as a lien upon the Trust Estate, in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully protect the lien hereof, and the title of
the Trustee to, the Trust Estate and in order to entitle the Bonds then
outstanding to the benefits and security of this Indenture, and will cause the
Deed of Trust, and any supplement hereto, to be filed, registered or recorded
and refiled, reregistered or rerecorded in such manner and in such places as may
be required by law in order to publish notice and fully protect the validity
thereof, and from time to time will perform or cause to be performed any other
act as provided by law and will execute or cause to be executed any and all
further instruments which may be necessary for such publication, protection and
entitlement. The Issuer will pay or cause to be paid all filing, registration
and recording taxes and fees incident to such filing, refiling, registration,
reregistration, recording and rerecording and all expenses incidental to the
preparation, execution and acknowledgment of this Indenture, the Agreement, the
Deed of Trust and the Security Agreement and any instrument of further assurance
and any supplements to any of said instruments and all federal or state stamp
taxes and other taxes, duties, imposts, assessments and charges arising out of
or in connection with the execution and delivery of this Indenture, the
Agreement, the Deed of Trust and the Security Agreement, the Bonds, any
instrument of further assurance, and any supplements to any of said instruments.
Section 6.16. Promptly after any filing, registration or recording or
any refiling, reregistration or rerecording of this Indenture, the Agreement,
the Deed of Trust or the Security Agreement or any filing, registration,
recording, refiling, reregistration or rerecording of any supplement to any of
said instruments, any financing statement or instruments of similar character
relating to any of said instruments or any instrument of further agreement which
is required pursuant to Section 6.15, the Issuer will, at the request of the
Trustee, deliver to the
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Trustee an Opinion of Counsel to the effect that such filing, registration,
recording, refiling, reregistration or rerecording has been duly accomplished
and setting forth the particulars thereof.
Section 6.17. Anything in this Indenture to the contrary
notwithstanding, the performance by the Issuer of all duties and obligations
imposed upon it hereby, the exercise by it of all powers granted to it
hereunder, the carrying out of all covenants, agreements, and promises made by
it hereunder, and the liability of the Issuer for all warranties and other
covenants hereunder, shall be limited solely to the Trust Estate, including
revenues and receipts derived from the Agreement, and the Issuer shall not be
required to effectuate any of its duties, obligations, powers or covenants
hereunder except to the extent of the Trust Estate and such revenues and
receipts.
ARTICLE VII
Events of Default; Remedies
Section 7.01. If one or more of the following events (herein called
"Events of Default" or "events of default") shall happen, that is to say,
(a) if default shall be made in the due and punctual payment
of the principal of, or interest on any Bond when and as the same shall
become due and payable, whether by declaration or otherwise;
(b) if default shall be made by the Issuer in the performance
or observance of any other of the covenants, agreements or conditions
on its part in this Indenture or in the Bonds contained, and such
default shall have continued for a period of sixty (60) days after
written notice thereof (or in the case of any such default which cannot
with due diligence be cured within such 60-day period, if the Issuer
shall fail to proceed promptly to commence curing the same and
thereafter prosecute the curing of such default with due diligence, it
being intended in connection with any such default not susceptible of
being cured with due diligence within the 60 days that the time of the
Issuer within which to cure the same shall be extended for such period
as may be necessary to complete the curing of the same with all due
diligence), specifying such default and requiring the same to be
remedied, shall have been given to the Issuer by the Trustee, or to the
Issuer and the Trustee by the holders of not less than twenty five per
cent (25%) in aggregate principal amount of the Outstanding Bonds;
(c) if (i) the Issuer files a petition in bankruptcy or for
composition under any State or Federal bankruptcy or insolvency law, or
makes an assignment for the benefit of its creditors or consents to the
appointment of a receiver for itself or the whole or any part of its
property, or (ii) a court of competent jurisdiction shall enter an
order, judgment or decree appointing a receiver of the Issuer, or the
whole or any part of its property, or
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approving a petition filed against the Issuer seeking the bankruptcy
or arrangement or reorganization of the Issuer under any applicable
law or statute of the United States or the State of Tennessee and such
order, judgment or decree shall not be vacated, set aside or stayed
within sixty days from the date of the entry thereof, or (iii) under
the provisions of any other law for the relief or aid of debtors, any
court of competent jurisdiction shall assume custody or control of the
Issuer or the whole or any substantial part of its property, and such
custody or control shall not be terminated within ninety days from the
date of assumption of such custody or control, and if as a result of
any of the foregoing events described in clauses (i) to (iii) any
court, trustee or receiver either (A) asserts jurisdiction over or
attempts in any way to obtain possession of any part of the Trust
Estate, including the Project or Installment Payments, or (B) seeks to
disaffirm or reject any obligations of the Issuer under the Indenture,
the Bonds or the Agreement;
(d) if the Company shall default in any of its obligations
under the Agreement, the Deed of Trust or the Security Agreement and
such default shall not have been remedied within the applicable period
of time for remedy, therein or in Article XIII of the Agreement
expressed; or
(e) if the Guarantor shall default in its obligations under
the Guaranty Agreement;
then and in each and every case during the continuance of such event of default
unless cured by the Issuer within 60 days after written notice thereof (except
for an Event of Default specified in subsection (a) hereof, in which case
immediately) and unless the principal of all the Bonds shall have already become
due and payable, the Trustee, by notice in writing to the Issuer, may, and upon
the written request of the holders of not less than twenty-five per cent (25%)
in principal amount of the Bonds at the time then outstanding shall, declare the
principal of all the Bonds then outstanding hereunder, and the interest accrued
thereon, to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, anything in this
Indenture or in the Bonds contained to the contrary notwithstanding.
This provision, however, is subject to the condition that if, at any
time after the principal of the Bonds shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Issuer or the
Company shall pay to or shall deposit with the Trustee a sum sufficient to pay
all principal on the Bonds matured prior to such declaration and all matured
installments of interest (if any) upon all the Bonds, and the reasonable
expenses of the Trustee, and any and all other defaults known to the Trustee
(other than in the payment of principal and of interest on the Bonds due and
payable solely by reason of such declaration) shall have been made good or cured
or provisions adequate shall have been made therefor, then, and in every such
case, the holders of at least sixty-six and two-thirds per cent (66-2/3%) in
aggregate principal amount of the Bonds then outstanding, by written notice to
the Issuer and to the Trustee, may, on behalf of the holders of all the Bonds,
rescind and annul such declaration and its consequences, but no such rescission
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and annulment shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon.
Section 7.02. The Trustee, in case of the happening of an Event of
Default specified in Section 7.01 hereof, may, and upon the written request of
the holders of more than 50% in aggregate principal amount of the Bonds then
outstanding, and upon being indemnified to its satisfaction, shall exercise any
or all rights under the Guaranty or any or all rights of the Issuer under the
Agreement including without limitation all rights of the Issuer to foreclose on
or take possession of the Project under the Deed of Trust or the Security
Agreement should the Company be in default under the Agreement.
The Trustee may proceed to protect and enforce its rights and the
rights of the holders of the Bonds under this Indenture by a suit or suits in
equity or at law, either for the specific performance of any covenant or
agreement contained herein or in aid of the execution of any power therein
granted, or for the foreclosure of this Indenture, or for the enforcement of any
other appropriate legal or equitable remedy, as the Trustee, being advised by
counsel, may deem most effectual to protect and enforce any of the rights or
interests under the Bonds and/or this Indenture. All rights of action under this
Indenture or under any of the Bonds may be enforced by the Trustee without the
possession of any of the Bonds or the production thereof on any trial or other
proceeding relative thereto and any such suit or proceeding instituted by the
Trustee shall be brought in its name as Trustee, and any recovery of judgment
shall be for the ratable benefit of the holders of the Bonds.
The Trustee, upon the bringing of a suit to foreclose this Indenture,
as a matter of right, without notice and without giving bond to the Issuer or
anyone claiming under it, may have a receiver appointed of all the mortgaged
property and of the earnings, income, rents, issues and profits thereof pending
such proceedings, with such powers as the court making such appointment shall
confer, including such powers as may be necessary or usual in such cases for the
protection, possession, control, management and operation of the mortgaged
property, and the Issuer does hereby irrevocably consent to such appointment.
The Trustee is hereby appointed, and the successive respective holders
of the Bonds by taking and holding the same shall be conclusively deemed to have
so appointed the Trustee, the true and lawful attorney in fact of the respective
holders of the Bonds, with authority to make or file, in the respective names of
the holders of the Bonds or in behalf of all holders of the Bonds, as a class,
any proof of debt, amendment to proof of debt, petition or other documents; to
receive payment of all sums becoming distributable on account thereof; to
execute any other papers and documents and to do and perform any and all acts
and things for and in behalf of all holders of the Bonds as a class, as may be
necessary or advisable in the opinion of the Trustee, in order to have the
respective claims of the holders of the Bonds against the Issuer, the Company or
the Guarantor allowed in any equity receivership, insolvency, liquidation,
bankruptcy or other proceedings, to which the Issuer, the Company or the
Guarantor shall be a party. The Trustee shall have full power of substitution
and delegation in respect of any such powers. Upon the
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occurrence of an event of default under the Agreement the Trustee may enforce
any and all rights of the Issuer thereunder.
Section 7.03. The proceeds or avails of any sale pursuant to this
Article VII shall be paid to and applied by the Trustee as follows:
(1) To the payment of costs and expenses of foreclosure or suit,
if any, and of such sale and the reasonable compensation of
the Trustee, its agents, attorneys and counsel, and of all
proper expenses, liabilities and advances incurred or made
hereunder by the Trustee or by any holder or holders of the
Bonds, and of all taxes, assessments or liens superior to the
lien of these presents, except any taxes, assessments or other
superior liens subject to which said sale may have been made;
then
(2) (a) Unless the principal of all the Bonds shall have become or
shall have been declared due and payable, all such moneys
shall be applied:
First: to the payment to the persons entitled thereto of all
installments of interest then due and payable in the order in
which such installments become due and payable and, if the
amount available shall not be sufficient to pay in full any
particular installment, then to the payment, ratably,
according to the amounts due on such installment, to the
persons entitled thereto, without any discrimination or
preference except as to any difference in the respective rates
of interest specified in the Bonds;
Second: to the payment to the persons entitled thereto of the
unpaid principal of any of the Bonds which shall have become
due and payable (other than Bonds called for redemption for
the payment of which moneys are held pursuant to the
provisions of this Indenture), in the order of their due
dates, with interest on the principal amount of the Bonds at
the respective rates specified therein from the respective
dates upon which the Bonds became due and payable, and, if the
amount available shall not be sufficient to pay in full the
principal of the Bonds due and payable on any particular date,
together with the interest, then to the payment first of the
interest, ratably, according to the amount of the interest due
on that date, and then to the payment of the principal,
ratably, according to the amount of the principal due on that
date, to the persons entitled thereto without any
discrimination.
Third: to the payment of the interest on and the principal of
the Bonds, to the purchase and retirement of Bonds and to the
redemption of Bonds, all in accordance with the provisions of
Article V of this Indenture.
(b) If the principal of all the Bonds shall have become or
shall have been declared
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due and payable, all the moneys shall be applied to the
payment of the principal and interest then due and unpaid upon
the Bonds, without preference or priority of principal over
interest or of interest over principal, or of any installment
of interest over any other installment of interest, or of any
Bond over any other Bond, ratably, according to the amounts
due respectively for principal and interest, to the persons
entitled thereto without any discrimination of preferences
except as to any difference in the respective rates of
interest specified in the Bonds.
(3) To the payment of the surplus, if any, to the Company, its
successors and assigns, pursuant to Section 4.10 hereof, or to
whomsoever may be lawfully entitled to receive the same.
Section 7.04. No delay or omission of the Trustee or of any holder of
any of the Bonds to exercise any right or power arising from any default on the
part of the Issuer shall exhaust or impair any such right or power or prevent
its exercise during the continuance of such default. No waiver by the Trustee or
Bondholders of any such default, whether such waiver be full or partial, shall
extend to or be taken to affect any subsequent default, or to impair the rights
resulting therefrom, except as may be otherwise provided herein. No remedy
hereunder is intended to be exclusive of any other remedy but each and every
remedy shall be cumulative and in addition to any and every other remedy given
hereunder or otherwise existing.
Section 7.05. No Bondholder shall have any right to institute or
prosecute any suit or proceeding at law or in equity for the foreclosure hereof,
for the appointment of a receiver of the Issuer, for the enforcement of any of
the provisions hereof or of any remedies hereunder in respect to the mortgaged
property unless the Trustee, after a request in writing by the holders of
twenty-five per cent (25%) in aggregate principal amount of the Bonds then
outstanding, provided, that the holders of the Bonds shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, shall have neglected for 60
days to take such action; provided, however, that the right of any holder of any
Bond to receive payment of the principal thereof and/or interest thereon on or
after the respective due dates expressed therein or to institute suit for the
enforcement of any such payment shall not be impaired or affected without the
consent of such holder.
Section 7.06. Notwithstanding any provision herein to the contrary or
the occurrence and continuance of any event of default by the Issuer hereunder,
so long as the Company is not in default under the Agreement none of the Issuer,
the Trustee nor any Bondholder or Bondholders shall have any right to accelerate
or otherwise declare due and payable the remaining unpaid installments under the
Agreement or take any action or initiate any proceedings under the Deed of Trust
or the Security Agreement.
ARTICLE VIII
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Concerning the Trustee
Section 8.01. The Trustee shall, prior to an Event of Default as
defined in Section 7.01, and after the curing of all such events of default
which may have occurred, perform such duties and only such duties as are
specifically set forth in this Indenture and shall have no implied duties
hereunder. The Trustee shall, during the existence of any such Event of Default
(which has not been cured) exercise such rights and powers vested in it by this
Indenture and may in its discretion, but shall have no affirmative duty to, take
such other actions as it deems to be in the best interest of the Bondholders,
exercising such discretion with the same degree of care and skill in their
exercise as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own grossly negligent action, its own negligent
failure to act, or its own misconduct, except that,
(a) prior to such an Event of Default hereunder and after the
curing of all such events of default which may have occurred, in the
absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any Officers'
Certificate, or Opinion of Counsel furnished to the Trustee and
believed by it to be genuine and executed by the person or persons
authorized to furnish the same, unless the Trustee knows that the
matters upon which the certificate or opinion is based are erroneous;
(b) at all times, regardless of whether or not any such Event
of Default shall exist:
(1) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer
or Officers of the Trustee unless the Trustee was
grossly negligent in ascertaining or failing to ascertain
the pertinent facts;
(2) The Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good
faith in accordance with the direction of the holders
of more than 50% (or such lesser or greater percentage as
is specifically required or permitted by this Indenture)
in aggregate principal amount of all Bonds at the time
outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee.
Section 8.02. Except as otherwise provided in Section 8.01,
(a) the Trustee may rely upon the authenticity of, and the
truth of the
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statements and the correctness of the opinions expressed in, and shall
be protected in acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, notarial seal, stamp,
acknowledgement, verification, request, consent, order, Bond or other
paper or documents believed by it to be genuine and to have been signed
or affixed or presented by the proper party or parties;
(b) any notice, request, direction, election, order or demand
of the Issuer mentioned herein shall be sufficiently evidenced by an
instrument signed in the name of the Issuer by any officer of the
Issuer (unless other evidence in respect thereof be herein specifically
prescribed), and any resolution of the Board of Directors of the Issuer
may be evidenced to the Trustee by a Certified Resolution;
(c) in the administration of the trusts of the Indenture, the
Trustee may execute any of the trusts or powers hereof directly or
through its agents or attorneys and the Trustee may consult with
counsel (who may be but need not necessarily be counsel for the Issuer
or the Company) and the opinion or advice of such counsel shall be full
and complete authorization and protection in respect of any action
taken or suffered by it hereunder in good faith and in accordance with
the opinion of such counsel;
(d) whenever in the administration of the trusts of this
Indenture, the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of gross negligence
or bad faith on the part of the Trustee, be deemed to be exclusively
proved and established by an Officers' Certificate of the Issuer; and
such Officers' Certificate of the Issuer shall, in the absence of gross
negligence or bad faith on the part of the Trustee, be full warrant to
the Trustee for any action taken or suffered by it under the provisions
of this Indenture upon the faith thereof, but in its discretion the
Trustee may in lieu thereof accept other evidence of such matter or may
require such further or additional evidence as it may deem reasonable;
(e) the recitals herein and in the Bonds (except the Trustee's
certificate of authentication thereon) shall be taken as the statement
of the Issuer and shall not be considered as made by, or imposing any
obligation or liability upon, the Trustee. The Trustee makes no
representations as to the value or condition of the trust estate or any
part thereof, or as to the title of the Issuer thereto, or as to the
security afforded thereby or hereby, or as to the validity of this
Indenture or of the Bonds issued hereunder, and the Trustee shall incur
no liability or responsibility in respect of any of such matters;
(f) the Trustee shall not be personally liable in case of
entry by it upon the Trust Estate for debts contracted or liability or
damages incurred in the management or operation of the Trust Estate.
The Trustee shall not in any event be required to take, defend or
appear in any legal action or proceeding hereunder or to exercise any
of the trusts or powers hereof unless it shall first be adequately
indemnified to its satisfaction
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against the costs, expenses and liabilities which may be incurred
thereby. Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this subsection (f);
(g) the Trustee shall not be required to ascertain or inquire
as to the performance or observance of any of the covenants or
agreements herein or in the Agreement or any contracts or securities
assigned or conveyed to or mortgaged with the Trustee hereunder
contained to be performed or observed by the Issuer or any party to the
Agreement or such contracts or securities; nor shall the Trustee have
any obligation, duty or liability under any of such agreements. The
Trustee shall not be required to take notice or be deemed to have
notice or actual knowledge of any default or Event of Default specified
in Section 7.01(b), (c), (d) or (e) hereunder unless the Trustee shall
receive from the Issuer or the holder of any Bond written notice
stating that a default or Event of Default hereunder has occurred and
specifying the same, and in the absence of such notice the Trustee may
conclusively assume that there is no such default or Event of Default.
Every provision contained in this Indenture or in the Agreement or any
such contract or security wherein it is provided that the duty of the
Trustee to take action or omit to take action or to permit the Issuer
or any party to any such agreement to do any act or thing depends on
the occurrence and continuance of such default hereunder or thereunder
shall be subject to the provisions of this subsection (g);
(h) no duty with respect to effecting or maintaining insurance
shall rest upon the Trustee and the Trustee shall not be responsible
for any loss by reason of want or insufficiency of insurance or by
reason of the failure of any insurer in which the insurance is carried
to pay the full amount of any loss against which it may have insured
the Issuer or any other person;
(i) it shall be no part of the duty of the Trustee to see to
any recording, filing or registration of this Indenture, the Agreement,
the Deed of Trust, the Security Agreement, any contracts or securities
assigned or conveyed to or mortgaged with the Trustee hereunder, any
instrument of further assurance, or any supplement to any of said
instruments, except for continuation statements which may from time to
time be required under the Tennessee Uniform Commercial Code, or to see
to the payment of any fees, charges or taxes in connection therewith,
or to give any notice thereof, or be under any duty in respect to any
tax or assessment or other governmental charge which may be levied or
assessed on the Trust Estate or any part thereof or against the Issuer.
The Trustee shall be under no obligation to see to the payment or
discharge of any liens upon the Trust Estate;
(j) the Trustee shall be under no duty to confirm or verify
any financial or other statements or reports or certificates furnished
pursuant to any provisions hereof, and shall be under no other duty in
respect of the same except to retain the same in its files and permit
the inspection of the same at reasonable times by the holder of any
Bond;
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(k) the Trustee shall not be under any obligation to give any
consent, enter into any agreement, release any property or to take any
other action which is discretionary with the Trustee under the
provisions hereof except on written request of the holders of not less
than any applicable specified percentage provided for in this Indenture
or if no percentage is specified then sixty-six and two-thirds per cent
(66-2/3%) in principal amount of the Bonds outstanding hereunder;
(l) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers; and
(m) the Trustee shall not be accountable for the use of
proceeds from the sale of the Bonds disbursed by it in accordance with
the provisions of this Indenture.
Section 8.03. The Trustee makes no representations as to the validity
or sufficiency of this Indenture, the Agreement, the Deed of Trust, the Security
Agreement, the Guaranty Agreement or of the Bonds. The Trustee shall not be
accountable for the use or application by the Issuer of any of the Bonds
authenticated or delivered hereunder or of the proceeds of such Bonds unless
deposited with the Trustee.
Section 8.04. The Trustee and its officers and directors may acquire
and hold, or become the pledgee of, Bonds and otherwise deal with the Issuer in
the manner and to the same extent and with like effect as though it were not
trustee hereunder.
Section 8.05. All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received and shall be segregated from other funds. The Trustee shall be
under no liability for interest on any moneys received by it hereunder except
such as it may agree with the Issuer to pay thereon.
Section 8.06. Subject to the provisions of Section 6.17 of this
Indenture, the Issuer covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, reasonable compensation for all
services rendered by it in the execution of the trusts hereby created and in the
exercise and performance of any of the powers and duties hereunder of the
Trustee, which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust, and the Issuer will
pay or reimburse the Trustee upon its request for all expenses, disbursements
and advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation, and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith. If any property, other than cash, shall at any time
be held by the Trustee subject to this Indenture, or any supplemental indenture,
as security for the Bonds, the Trustee, if and to the extent authorized by a
receivership, bankruptcy or other court of competent jurisdiction or by the
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instrument subjecting such property to the provisions of this Indenture as such
security for the Bonds, shall be entitled to make advances for the purpose of
preserving such property or of discharging tax liens or other prior liens or
encumbrances thereon. The Issuer also covenants to indemnify the Trustee for,
and to hold it harmless against, any loss, liability, expense or advance
incurred or made without negligence or bad faith on the part of the Trustee,
arising out of or in connection with the acceptance of this trust, including the
costs and expenses of defending itself against any claim or liability in the
premises. The obligations of the Issuer under this Section 8.06 to compensate
the Trustee for services and to pay or reimburse the Trustee for expenses,
disbursements, liabilities and advances shall constitute additional indebtedness
hereunder. Such additional indebtedness shall while an event of default
hereunder is continuing have priority over the Bonds in respect of all property
and funds held or collected by the Trustee as such.
Section 8.07. There shall at all times be a trustee hereunder which
shall be a banking corporation or banking association organized and doing
business under the laws of the United States or any State authorized under such
laws to exercise corporate trust powers, having its principal office and place
of business in any State, having a combined capital and surplus of at least
Twenty-Five Million Dollars ($25,000,000), and subject to supervision or
examination by federal or state authority. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority above referred to, then for the purposes of
this Section 8.07 the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section 8.07, the Trustee
shall resign immediately in the manner and with the effect specified in Section
8.08.
Section 8.08. (a) The Trustee may at any time resign by giving written
notice by first class mail to the Issuer, to the Company and to each Bondholder.
Upon receiving such notice of resignation, the Issuer, with the prior written
approval of the Company, shall promptly appoint a successor trustee by an
instrument in writing executed by order of its Board of Directors. If no
successor trustee shall have been so appointed and have accepted appointment
within thirty (30) days after the mailing of such notice of resignation, the
resigning trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Bondholder who has been a bona fide
holder of a Bond or Bonds for at least six months may, on behalf of himself and
others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) The Trustee shall cease to be eligible in accordance
with the provisions of Section 8.07 and shall fail to
resign after written request therefor by the Issuer
or by any Bondholder who has been a bona fide holder
of a Bond or Bonds for at least six months, or
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(2) The Trustee shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of
the Trustee or of its property shall be appointed, or
any public officer shall take charge or control of
the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or
liquidation,
then in any such case, the Issuer may remove the Trustee and, with the
prior written consent of the Company, appoint a successor trustee by an
instrument in writing executed by order of its Board of Directors, or
any such Bondholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of more than 50% in aggregate principal amount of all
the Bonds at the time outstanding may at any time remove the Trustee and appoint
a successor trustee by an instrument or concurrent instruments in writing signed
by such Bondholders.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.08 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.09.
Section 8.09. Any successor trustee appointed as provided in Section
8.08 shall execute, acknowledge and deliver to the Issuer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties and obligations of its
predecessor in the trusts hereunder, with like effect as if originally named as
trustee herein; but, nevertheless, on the Written Request of the Issuer or the
request of the successor trustee, the Trustee ceasing to act shall execute and
deliver an instrument transferring to such successor trustee, upon the trusts
herein expressed, all the rights, powers and trusts of the Trustee so ceasing to
act. Upon request of any such successor trustee, the Issuer shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers and duties. Any
trustee ceasing to act shall, nevertheless, retain a lien upon all property or
funds held or collected by such trustee to secure the amounts due it as
compensation, reimbursement, expenses and indemnity afforded to it by Section
8.06.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.09,
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the Issuer shall give written notice by first class mail to
each Bondholder of the succession of such trustee to the trusts hereunder. If
the Issuer fails to give such notice within ten (10) days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be mailed at the expense of the Issuer.
Section 8.10. Any corporation into which the Trustee may be merged or
with which it may be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided that such successor trustee shall be eligible under
the provisions of Section 8.07.
Section 8.11. Whenever the Trustee gives notice to the Bondholders of
any Event of Default, it shall also furnish a copy of such notice to the
Underwriter.
Section 8.12. The Trustee shall provide the rating agency whose credit
rating on any of the Bonds is in effect with prompt written notice of (i) any
change of Trustee hereunder, (ii) any material change in the Loan Agreement, the
Deed of Trust, the Security Agreement, the Indenture or the Guaranty Agreement,
(iii) payment of all the Bonds, (iv) expiration of the Guaranty Agreement, or
(v) defeasance of all of the Bonds in accordance with Article XI hereof. The
obligations of the Trustee under this Section shall survive defeasance of the
Bonds in accordance with Article XI hereof.
ARTICLE IX
Evidence of Rights of Bondholders
Section 9.01. Any request, consent or other instrument required by this
Indenture to be signed and executed by Bondholders may be in any number of
concurrent writings of substantially similar tenor and may be signed or executed
by such Bondholders in person or by agent or agents duly appointed in writing.
Proof of the execution of any such request, consent or other instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and shall be conclusive in favor of the Trustee and of the Issuer if
made in the manner provided in this Article.
Section 9.02. The fact and date of the execution by any person of any
such request, consent or other instrument or writing may be proved by the
affidavit of a witness of such execution or by the certificate of any notary
public or other officer of any jurisdiction, authorized by the laws thereof to
take acknowledgements of deeds, certifying that the person signing such request,
consent or other instrument acknowledged to him the execution thereof. Where
such execution is by an officer of a corporation or association or a member of a
partnership on behalf of such corporation, association or partnership such
affidavit or certificate shall also constitute
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sufficient proof of his authority.
Section 9.03. The ownership of the Bonds shall be proved by the
register of such Bonds. Any request, consent or vote of the holder of any Bond
shall bind every future holder of the same Bond and the holder of every Bond
issued in exchange therefor or in lieu thereof, in respect of anything done or
suffered to be done by the Trustee or the Issuer in pursuance of such request,
consent or vote.
Section 9.04. In determining whether the holders of the requisite
aggregate principal amount of Bonds have concurred in any demand, request,
direction, consent or waiver under this Indenture, Bonds which are owned by the
Issuer, the Company, the Guarantor or by any other obligor on the Bonds, shall
be disregarded and deemed not to be outstanding for the purpose of any such
determination, provided that for the purpose of determining whether the Trustee
shall be protected in relying on any such demand, request, direction, consent or
waiver only Bonds which the Trustee knows to be so owned shall be disregarded.
Bonds so owned which have been pledged in good faith may be regarded as
outstanding for the purpose of this Section 9.04 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Bonds and
that the pledgee is not a person directly or indirectly controlling or
controlled by or under common control with the Issuer or any other obligor on
the Bonds. In case of a dispute as to such right, any decision by the Trustee
taken in good faith upon the advice of counsel shall be full protection to the
Trustee.
ARTICLE X
Supplemental Indenture
Section 10.01. The Issuer, when authorized by resolution of its Board
of Directors, and the Trustee from time to time and at any time, subject to the
conditions and restrictions in this Indenture contained, may, with the prior
written consent of the Company and the Guarantor, enter into an indenture or
indentures supplemental hereto, which indenture or indentures thereafter shall
form a part hereof, for any one or more or all of the following purposes:
(a) to add to the covenants and agreements of the Issuer in
this Indenture contained, other covenants and agreements thereafter to
be observed or to surrender any right or power herein reserved or
conferred upon the Issuer;
(b) to make such provisions for the purpose of curing any
ambiguity, or of curing, correcting or supplementing any defective or
inconsistent provision contained in this Indenture, or in regard to
matters or questions arising under this Indenture, as the Issuer may
deem necessary or desirable and not inconsistent with this Indenture
and which shall not adversely affect the interests of the holders of
the Bonds;
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(c) to subject, describe or redescribe any property subjected
or to be subjected to the lien of this Indenture;
(d) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the
qualification hereof and thereof under the Trust Indenture Act of 1939
or any similar federal statute hereafter in affect, and, if they so
determine, to add to this Indenture or any indenture supplemental
hereto such other terms, conditions and provisions as may be permitted
by said Trust Indenture Act of 1939 or similar federal statute;
(e) to provide for additional series of Bonds to the extent
permitted by this Indenture; and
(f) to effect any other amendment to this Indenture which, in
the judgment of the Trustee, will not adversely affect the interests of
the holders.
Any supplemental indenture authorized by the provisions of this Section
10.01 may be executed by the Issuer and the Trustee without the consent of the
holders of any of the Bonds at the time outstanding, notwithstanding any of the
provisions of Section 10.02, but the Trustee shall not be obligated to enter
into any such supplemental indenture which affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
Section 10.02. With the consent (evidenced as provided in Article IX)
of the holders of not less than sixty-six and two-thirds per cent (66-2/3%) in
aggregate principal amount of the Bonds at the time outstanding and with the
prior written consent of the Company and the Guarantor, the Issuer, when
authorized by a resolution of its Board of Directors, and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture; provided, however, that no such supplemental indenture shall (1)
extend the fixed maturity of the Bonds or reduce the rate of interest thereon or
extend the time of payment of interest, or reduce the amount of the principal
thereof, or reduce any premium payable on the redemption thereof, without the
consent of the holder of each Bond so affected, or (2) reduce the aforesaid
percentage of holders of Bonds required to approve any such supplemental
Indenture, or (3) permit the creation of any lien on the properties mortgaged
and conveyed hereunder prior to or on a parity with the lien of this Indenture
(except for the issuance of additional Bonds permitted hereunder) or deprive the
holders of the Bonds of the lien created by this Indenture upon said properties,
without the consent of the holders of all the Bonds then outstanding. Upon
receipt by the Trustee of a Certified Resolution authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of Bondholders, as aforesaid, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such
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supplemental indenture.
It shall not be necessary for the consent of the Bondholders under this
Section 10.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 10.03. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article X, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, duties and obligations under this Indenture of the Issuer, the Trustee
and all holders of Bonds outstanding thereunder shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
Section 10.04. The Trustee in the absence of bad faith may rely on an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to the provisions of this Article X complies with the
requirements of this Article X.
Section 10.05. Bonds authenticated and delivered after the execution of
any supplemental indenture pursuant to the provisions of this Article X may bear
a notation, in form approved by the Trustee, as to any matter provided for in
such supplemental indenture and if such supplemental indenture shall so provide,
new Bonds, so modified as to conform, in the opinion of the Trustee, to any
modification of this Indenture contained in any such supplemental indenture, may
be prepared by the Issuer, authenticated by the Trustee and delivered without
cost to the holders of the Bonds then outstanding, upon surrender for
cancellation of such Bonds in equal aggregate principal amounts.
ARTICLE XI
Defeasance; Unclaimed Moneys
Section 11.01. If the Issuer shall pay and discharge the entire
indebtedness on all Bonds outstanding hereunder in any one or more of the
following ways, to-wit:
A. by well and truly paying or causing to be paid the principal
of (including redemption premium, if any) and interest on
Bonds outstanding hereunder, as and when the same become due
and payable;
B. by (i) depositing or causing to be deposited with the Trustee,
in trust, at or before the date of maturity or redemption,
sufficient money or Government Obligations the principal of
and interest on which, when due and payable, will provide
sufficient moneys to pay or redeem the Bonds outstanding
hereunder and to pay
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interest thereon until the maturity or redemption date and
(ii) delivery to the Trustee an opinion of nationally
recognized bond counsel that such deposit and redemption will
not cause interest on the Bonds to be includable in gross
income for federal income tax purposes; and/or
C. by delivering to the Trustee, for cancellation by it, Bonds
outstanding hereunder;
and if the Issuer shall also pay or cause to be paid all other sums payable
hereunder by the Issuer, then and in that case this Indenture shall cease,
determine and become null and void, and thereupon the Trustee shall, upon
Written Request of the Issuer, and upon receipt by the Trustee of an Officers'
Certificate of the Issuer and an Opinion of Counsel, each stating that in the
opinion of the signers all conditions precedent to the satisfaction and
discharge of this Indenture have been complied with, forthwith execute proper
instruments acknowledging satisfaction of and discharging this Indenture. The
satisfaction and discharge of this Indenture shall be without prejudice to the
rights of the Trustee to charge and be reimbursed by the Issuer for any
expenditures which it may thereafter incur in connection herewith, subject to
the provisions of Section 6.17 of this Indenture.
The Issuer may at any time surrender to the Trustee for cancellation by
it any Bonds previously authenticated and delivered hereunder; which the Issuer
may have acquired in any manner whatsoever, and such Bonds, upon such surrender
and cancellation, shall be deemed to be paid and retired.
Section 11.02. Upon the deposit with the Trustee, in trust, at or
before maturity, of moneys or Government Obligations in the necessary amount to
pay or redeem Bonds outstanding hereunder (whether upon or prior to their
maturity or the redemption date of such Bonds), and to pay interest thereon
until the maturity or redemption date provided that if such Bonds are to be
prior to the maturity thereof notice of such redemption shall have been given as
in Article V provided or provisions satisfactory to the Trustee shall have been
made for the giving of such notice, all liability of the Issuer in respect of
such Bonds shall cease, terminate and be completely discharged and the holders
thereof shall thereafter be entitled only to payment out of the money or
Government Obligations deposited with the Trustee as aforesaid for their
payment, subject, however, to the provisions of Section 11.03.
Section 11.03. Notwithstanding any provisions of this Indenture, any
moneys deposited with the Trustee or any other paying agent in trust for the
payment of the principal of, or interest or premium on, any Bond then due and
payable shall be retained and not invested. Any such moneys remaining unclaimed
for three (3) years after the principal of such Bond outstanding hereunder has
become due and payable (whether at maturity or upon call for redemption or by
declaration as provided in this Indenture), shall then be repaid to the Company
upon its Written Request, and the holder of such Bond shall thereafter be
entitled to look only to the Company for repayment thereof, and all liability of
the Trustee or any other paying agent with respect to such moneys shall
thereupon cease; provided, however, that before the repayment of such moneys to
the Company as aforesaid, the Trustee or other paying agent, as the case may be,
may (at the cost
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of the Company but subject to Section 6.17 hereof) first publish a notice, in
such form as may be deemed appropriate by the Trustee or such paying agent, in
respect of the Bonds so payable and not presented and in respect of the
provisions relating to the repayment to the Company of the moneys held for the
payment thereof. Such notice shall be published at least once in an Authorized
Newspaper. In the event of the repayment of any such moneys to the Company as
aforesaid, the holders of the Bonds in respect to which such moneys were
deposited shall thereafter be deemed to be unsecured creditors of the Company
for amounts equivalent to the respective amounts deposited for the payment of
such Bonds and so repaid to the Company (without interest thereon).
Notwithstanding the foregoing, the Trustee shall, upon the Written Request of
the Company, repay such moneys to the Issuer at any time earlier than three (3)
years if failure to repay such moneys to the Issuer within such earlier period
shall give rise to the operation of any escheat statute under applicable state
law.
ARTICLE XII
Miscellaneous Provisions
Section 12.01. All the covenants, stipulations, promises and agreements
in this Indenture contained, by or in behalf of the Issuer, shall bind and inure
to the benefit of its successors and assigns, whether so expressed or not.
Section 12.02. Nothing in this Indenture or in the Bonds expressed or
implied is intended or shall be construed to give to any person other than the
Issuer, the Trustee and the holders of the Bonds issued hereunder, any legal or
equitable right, remedy or claim under or in respect of this Indenture or any
covenants, conditions or provisions therein or herein contained; and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the Issuer, the Trustee and the holders of the Bonds
issued hereunder, provided, however, this Section 12.02 shall not diminish,
restrict or otherwise adversely affect the rights or benefits acquired by the
Company or the Guarantor by assignments or subrogation from the Issuer, Trustee
or the holders of the Bonds issued hereunder.
Section 12.03. Whenever in this Indenture the giving of notice by mail
or otherwise is required, the giving of such notice may be waived in writing by
the person entitled to receive such notice and in any such case the giving or
receipt of such notice shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
Section 12.04. Whenever in this Indenture provision is made for the
cancellation by the Trustee and the delivery to the Issuer of any Bonds, the
Trustee may, unless the Issuer shall by Written Request direct otherwise, in
lieu of such cancellation and delivery, destroy such Bonds and deliver a
certificate of such destruction to the Issuer.
Section 12.05. In case any one or more of the provisions contained in
this Indenture or in the Bonds shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such
49
<PAGE> 53
invalidity, illegality or unenforceability shall not affect any other provisions
of this Indenture or the Bonds, but this Indenture and the Bonds shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein.
Section 12.06. Any notice to or demand upon the Trustee may be served,
or presented, and such demand may be made, at the main office of the Trustee,
NationsBank Plaza, Nashville, Tennessee 37219, Attention: Corporate Trust
Department, and shall be deemed given only upon actual receipt by the Trustee.
Any notice to or demand upon the Issuer, the Company, the Guarantor or the
Underwriter shall be deemed to have been sufficiently given or served for all
purposes by being deposited, postage prepaid, in a post office letter box
addressed (a) if to the Issuer, to it at 2021 Gallatin Road North, Suite 132,
Madison, Tennessee 37115, or such other address as may be filed in writing by
the Issuer with the Trustee, (b) if to the Company as provided in Section 15.07
of the Loan Agreement, (c) if to the Guarantor, as provided in Section 15.07 of
the Loan Agreement for copies of notices to the Company, and (d) if to the
Underwriter, to it at 330 Commerce Street, Nashville, Tennessee 37201,
Attention: Municipal Finance Department, or at such other address as it from
time to time may have designated by written notice to the Company and the
Trustee.
Section 12.07. This Indenture may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original; and such counterparts, or as many of them as the Issuer and the
Trustee shall preserve undestroyed, shall together constitute but one and the
same instrument.
Section 12.08. No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in any Bond hereby secured, or under
any judgment obtained against the Issuer, or to the enforcement of any
assessment or by any legal or equitable proceeding by virtue of any constitution
or statute otherwise or under any circumstances, under or independent of this
Indenture, shall be had against any incorporator, member, director, or officer,
as such past, present or future, of the Issuer, either directly or through the
Issuer, or otherwise, for the payment for or to the Issuer or any receiver
thereof, or for or to the holder of any Bond issued hereunder or otherwise, of
any sum that may be due and unpaid by the Issuer upon any such Bond. Any and all
personal liability of every nature, whether at common law or in equity, or by
statute or by constitution or otherwise, of any such incorporator, member,
director, or officer as such, to respond by reason of any act or omission on his
part or otherwise, for the payment for or to the Issuer or any receiver thereof,
or for or to the holder of any Bond issued hereunder or otherwise, of any sum
that may remain due and unpaid upon the Bonds hereby secured or any of them, is
hereby expressly waived and released as a condition of and consideration for the
execution of this Indenture and the issue of such Bonds.
Section 12.09. The Metropolitan Government of Nashville and Davidson
County, Tennessee shall not in any event be liable for the payment of the
principal of, premium, if any, or interest on any of the Bonds issued hereunder,
or for the performance of any pledge, mortgage, obligation or agreement of any
kind whatsoever herein or indebtedness by the Issuer, and none of
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<PAGE> 54
the Bonds of the Issuer issued hereunder or any of its agreements or obligations
herein or otherwise shall be construed to constitute an indebtedness of the
Metropolitan Government of Nashville and Davidson County, Tennessee within the
meaning of any constitutional or statutory provision whatsoever.
Section 12.10. This Indenture shall be governed exclusively by the
applicable laws of the State of Tennessee.
Section 12.11. If, at the time any payment hereunder is required to be
made to the Company, the Company is not in existence, then such payment shall be
made to the person or entity lawfully entitled thereto.
Section 12.12. If the date for making any payment or the last date for
performance of any act or the exercising of any right, as provided in this
Indenture, shall not be a Business Day, such payment may, unless otherwise
provided in this Indenture or the Agreement, be made or act performed or right
exercised on the next succeeding Business Day with the same force and effect as
if done on the nominal date provided in this Indenture, and no interest shall
accrue for the period after such nominal date.
IN WITNESS WHEREOF, THE INDUSTRIAL DEVELOPMENT BOARD OF THE
METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY has caused these
presents to be signed in its name and behalf by its ___________ Chairman and its
__________ Secretary and to evidence its acceptance of the trusts hereby created
NATIONSBANK OF TENNESSEE, N.A., has caused these presents to be signed in its
name and behalf by its ____________________ and its ___________________ all as
of the first day of May, 1993.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE METROPOLITAN GOVERNMENT OF
NASHVILLE AND DAVIDSON COUNTY
By:
------------------------------
Chairman
---------
- -----------------------
Secretary
- --------------
NATIONSBANK OF TENNESSEE, N.A.,
as Trustee
By:
------------------------
-----------------
ATTEST:
- --------------------------
--------------
51
<PAGE> 1
INDENTURE OF TRUST
BETWEEN
CARBON COUNTY, UTAH,
AS ISSUER
AND
WEST ONE BANK, UTAH,
AS TRUSTEE
-------------------------------
Dated as of February 1, 1995
-------------------------------
Carbon County, Utah
Solid Waste Disposal Refunding Revenue Bonds
(Laidlaw Inc./ECDC Environmental, L.C. Project)
<PAGE> 2
TABLE OF CONTENTS
(THIS TABLE OF CONTENTS IS NOT A PART OF THIS INDENTURE OF TRUST
AND IS FOR CONVENIENCE OF REFERENCE ONLY.)
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS ........................................................................................... 5
SECTION 101. DEFINITIONS........................................................ 5
SECTION 102. RULES OF CONSTRUCTION.............................................. 13
ARTICLE II
THE BONDS.............................................................................................. 14
SECTION 201. AUTHORIZED AMOUNT OF BONDS......................................... 14
SECTION 202. ISSUANCE OF THE SERIES 1995A BONDS; CERTAIN TERMS.................. 14
SECTION 203. INTEREST ON THE BONDS.............................................. 15
SECTION 204. FORM OF BONDS AND TEMPORARY BONDS.................................. 15
SECTION 205. EXECUTION; SPECIAL LIMITED OBLIGATION.............................. 16
SECTION 206. AUTHENTICATION..................................................... 16
SECTION 207. DELIVERY OF THE SERIES 1995A BONDS................................. 16
SECTION 208. ISSUANCE OF ADDITIONAL BONDS....................................... 17
SECTION 209. MUTILATED, LOST, STOLEN OR DESTROYED BONDS......................... 19
SECTION 210. BOND REGISTER; TRANSFER AND EXCHANGE OF BONDS; PERSONS
TREATED AS OWNERS.................................................. 19
SECTION 211. BOOK ENTRY PROVISIONS.............................................. 20
SECTION 212. CANCELLATION....................................................... 22
ARTICLE III
REDEMPTION OF BONDS.................................................................................... 24
SECTION 301. OPTIONAL REDEMPTION OF SERIES 1995A BONDS.......................... 24
SECTION 302. EXTRAORDINARY OPTIONAL REDEMPTION.................................. 24
SECTION 303. SPECIAL MANDATORY REDEMPTION....................................... 25
SECTION 304. NOTICE OF REDEMPTION............................................... 26
SECTION 305. BONDS PAYABLE ON REDEMPTION DATE................................... 27
SECTION 306. BONDS REDEEMED IN PART............................................. 27
SECTION 307. ELECTION TO REDEEM; NOTICE TO TRUSTEE AND ISSUER................... 27
SECTION 308. SELECTION OF BONDS TO BE REDEEMED.................................. 27
SECTION 309. DEPOSIT OF REDEMPTION PRICE........................................ 28
ARTICLE IV
FUNDS AND ACCOUNTS..................................................................................... 29
SECTION 401. ESTABLISHMENT OF FUNDS AND ACCOUNTS................................ 29
SECTION 402. DISPOSITION OF PROCEEDS OF SALE OF SERIES 1995A BONDS.............. 29
SECTION 403. BOND FUND.......................................................... 29
SECTION 404. CONSTRUCTION FUND.................................................. 30
SECTION 405. REBATE FUND........................................................ 31
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE V
INVESTMENT OF MONEYS................................................................................... 33
ARTICLE VI
SATISFACTION OF THE INDENTURE.......................................................................... 34
SECTION 601. DISCHARGE OF INDENTURE............................................. 34
SECTION 602. BONDS DEEMED PAID.................................................. 34
ARTICLE VII
GENERAL COVENANTS...................................................................................... 36
SECTION 701. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; NO
GENERAL OBLIGATION................................................. 36
SECTION 702. PERFORMANCE OF COVENANTS; LEGAL AUTHORIZATION...................... 36
SECTION 703. FURTHER ASSURANCES................................................. 36
SECTION 704. IMMUNITIES AND LIMITATIONS OF RESPONSIBILITY OF ISSUER............. 36
SECTION 705. RECORDING AND FILING............................................... 37
SECTION 706. BOOKS AND RECORDS.................................................. 37
SECTION 707. DEFENSE OF ISSUER'S RIGHTS......................................... 37
SECTION 708. ARBITRAGE; COMPLIANCE WITH PROCEEDS CERTIFICATE.................... 37
ARTICLE VIII
EVENTS OF DEFAULT...................................................................................... 38
SECTION 801. EVENTS OF DEFAULT.................................................. 38
SECTION 802. ACCELERATION....................................................... 39
SECTION 803. REMEDIES; RIGHTS OF BONDHOLDERS.................................... 39
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM................................... 40
SECTION 805. DIRECTION OF PROCEEDINGS BY BONDHOLDERS............................ 40
SECTION 806. APPOINTMENT OF RECEIVERS........................................... 41
SECTION 807. APPLICATION OF MONEYS.............................................. 41
SECTION 808. REMEDIES VESTED IN TRUSTEE......................................... 42
SECTION 809. RIGHTS AND REMEDIES OF BONDHOLDERS................................. 42
SECTION 810. TERMINATION OF PROCEEDINGS......................................... 43
SECTION 811. WAIVERS OF EVENTS OF DEFAULT....................................... 43
SECTION 812. NOTICE OF DEFAULT.................................................. 43
SECTION 813. DEMAND UNDER GUARANTY.............................................. 43
SECTION 814. LIMITATION OF LIABILITY............................................ 43
ARTICLE IX
TRUSTEE................................................................................................ 44
SECTION 901. ACCEPTANCE OF TRUSTS............................................... 44
SECTION 902. COMPENSATION AND EXPENSES OF TRUSTEE............................... 46
SECTION 903. NOTICE TO BONDHOLDERS IF DEFAULT OCCURS............................ 46
SECTION 904. GOOD FAITH RELIANCE................................................ 47
SECTION 905. DEALINGS IN BONDS.................................................. 47
SECTION 906. INTERVENTION BY TRUSTEE............................................ 47
SECTION 907. SUCCESSOR TRUSTEE BY MERGER OR CONSOLIDATION....................... 47
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
SECTION 908. TRUSTEE REQUIRED; ELIGIBILITY...................................... 47
SECTION 909. RESIGNATION BY THE TRUSTEE......................................... 48
SECTION 910. REMOVAL OF THE TRUSTEE............................................. 48
SECTION 911. APPOINTMENT OF SUCCESSOR TRUSTEE BY THE BONDHOLDERS;
TEMPORARY TRUSTEE.................................................. 48
SECTION 912. JUDICIAL APPOINTMENT OF SUCCESSOR TRUSTEE.......................... 48
SECTION 913. CONCERNING ANY SUCCESSOR TRUSTEES.................................. 49
SECTION 914. SUCCESSOR TRUSTEE AS TRUSTEE OF FUNDS.............................. 49
ARTICLE X
SUPPLEMENTAL INDENTURES................................................................................ 50
SECTION 1001. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF
BONDHOLDERS........................................................ 50
SECTION 1002. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF BONDHOLDERS........... 51
ARTICLE XI
AMENDMENTS TO THE LOAN AGREEMENT....................................................................... 54
SECTION 1101. AMENDMENTS, ETC. TO LOAN AGREEMENT NOT REQUIRING CONSENT........... 54
SECTION 1102. AMENDMENTS, ETC. TO LOAN AGREEMENT REQUIRING CONSENT OF
BONDHOLDERS........................................................ 54
ARTICLE XII
MISCELLANEOUS.......................................................................................... 56
SECTION 1201. PARTIES IN INTEREST................................................ 56
SECTION 1202. SEVERABILITY....................................................... 56
SECTION 1203. DELIVERY OF NOTICES; DELIVERY OF BONDS............................. 56
SECTION 1204. COUNTERPARTS....................................................... 57
SECTION 1205. GOVERNING LAW...................................................... 57
SECTION 1206. IMMUNITY OF OFFICERS AND EMPLOYEES OF ISSUER....................... 57
SECTION 1207. BONDS OWNED BY THE ISSUER, THE GUARANTOR OR THE COMPANY............ 57
SECTION 1208. PLEDGE AND UNDERTAKING OF THE STATE................................ 57
</TABLE>
iii
<PAGE> 5
THIS INDENTURE OF TRUST, dated as of February 1, 1995 (the "Indenture"),
between CARBON COUNTY, UTAH (the "Issuer"), a duly organized and existing
political subdivision of the State of Utah, whose mailing address is 120 East
Main Street, Price, Utah 84501, and WEST ONE BANK, UTAH (the "Trustee"), a
banking institution duly established, 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 Utah, whose principal corporate trust office, domicile and
mailing address is 107 South Main Street, Salt Lake City, Utah 84111, Attention:
Corporate Trust Department:
WITNESSETH:
WHEREAS, the Legislature of the State of Utah has enacted the Utah
Industrial Facilities and Development Act, Title 11, Chapter 17, Utah Code
Annotated 1953, as amended (the "Act"), for the purpose of achieving greater
industrial development in the State of Utah and protecting and promoting the
health, welfare and safety of the citizens of the State of Utah; and
WHEREAS, the Act authorizes counties of the State of Utah to issue revenue
bonds for the purpose, among other things, of defraying the cost of financing,
acquiring, constructing, improving, equipping, furnishing or maintaining any
project or projects suitable for, among other things, industrial purposes, for
the reduction, abatement or prevention of pollution and for any other business
purpose, such project or projects to consist of any land, interest in land,
building, structure, facility, system, fixture, improvement, appurtenance,
machinery or equipment; and
WHEREAS, the Issuer is a county of the State of Utah within the meaning of
the Act; and
WHEREAS, the Issuer has previously issued its Unit Priced Demand
Adjustable Solid Waste Disposal Refunding Revenue Bonds (Union Pacific
Corporation/ECDC Environmental, L.C. Project), Series 1993A in an aggregate
principal amount of $15,000,000 (the "Series 1993A Bonds") and its Solid Waste
Disposal Refunding Revenue Bonds (East Carbon Landfill Project-- Short-Term
Series 1994) (the "Series 1994 Bonds") in the outstanding principal amount of
$35,242,500 (the Series 1993A Bonds and Series 1994 Bonds are collectively
referred to herein as the "Prior Bonds") for the purpose of paying a portion of
the costs of financing, acquiring, constructing, improving, equipping, and
furnishing certain facilities for ECDC Environmental, L.C., a Utah limited
liability company (the "Company"), consisting of land, interests in land,
buildings, structures, facilities, systems, fixtures, improvements,
appurtenances, machinery, rail cars, vehicles, containers, and equipment to be
located and/or utilized within the boundaries of the Issuer, and suitable for
use as a solid waste disposal facility (the "Project") or to refund bonds issued
for such purposes; and
WHEREAS, the Issuer is authorized by the provisions of the Act to issue
its revenue refunding bonds to refund all or a portion of the Prior Bonds and
the issuance of such bonds to refund the Prior Bonds will provide financing for
the cost of the Project to be financed by the Prior Bonds; and
WHEREAS, the Company has requested that the Issuer issue bonds to finance
the refunding of all of the Series 1993A Bonds and a portion of the Series 1994
Bonds; and
WHEREAS, upon the issuance of the Series 1995A Bonds (defined below), an
amount equal to $15,000,000 of the proceeds of said Series 1995A Bonds shall be
used to refund and retire the Series 1993A Bonds and an amount equal to
$8,000,000 of the proceeds of said Series 1995A Bonds shall be used to refund
and retire $8,000,000 principal amount of the
1
<PAGE> 6
Series 1994 Bonds which, in turn, will cause $8,000,000 from proceeds of the
Series 1994 Bonds to be deposited with the Trustee to be used (1) to pay certain
costs of financing, acquiring, constructing, improving, equipping, and
furnishing the Project, and (2) to pay costs and expenses incurred in connection
with the issuance of the Series 1995A Bonds, all as permitted under the Act; and
WHEREAS, pursuant to the Act, in connection with the issuance of the
Series 1995A Bonds under the Act, the Issuer is entitled to provide for and
enter into agreements incident to the financing of the Project to accomplish the
purposes of the Act and the performance of the Issuer's obligations relative to
the Series 1995A Bonds, including but not limited to the specification of the
terms and conditions under which the Series 1995A Bonds may be issued, the
officer of the Issuer responsible for the issuance, execution and delivery of
the Series 1995A Bonds, the source of payment on the Series 1995A Bonds and all
other details necessary or appropriate for the issuance of the Series 1995A
Bonds not inconsistent with the Act, it being the intention of the Issuer that
the provisions of this Indenture are determined and established in compliance
with and in furtherance of the authority granted the Issuer under the Act to
accomplish the foregoing purposes; and
WHEREAS, pursuant to and in accordance with the provisions of the Act, by
resolution duly adopted (the "Resolution"), and in furtherance of the intent and
purposes of the Act, the Issuer has authorized the issuance of its Solid Waste
Disposal Refunding Revenue Bonds (Laidlaw Inc./ECDC Environmental, L.C.
Project), 1995 Series A, in an aggregate principal amount not to exceed
$23,000,000 (the "Series 1995A Bonds") and the execution and delivery of an
indenture providing for the issuance of such Series 1995A Bonds and for their
security; and
WHEREAS, the Issuer will loan the proceeds of the Series 1995A Bonds to
the Company pursuant to a Loan Agreement, dated as of February 1, 1995 (the
"Loan Agreement"), by and between the Company and the Issuer, pursuant to which
the Company will covenant, among other things, to make payments at such times
and in such amounts so as to provide for payment of (i) the principal of,
premium, if any, and interest on the Series 1995A Bonds outstanding under this
Indenture, and (ii) all other amounts payable under this Indenture; and
WHEREAS, Laidlaw Inc., a Canadian corporation (the "Guarantor") is the
indirect owner of approximately 80% of the membership interest of the Company
and the Guarantor desires to execute and deliver a Guaranty (the "Guaranty")
whereby the Guarantor will guaranty payment of all obligations of the Company
with respect to the Series 1995A Bonds; and
WHEREAS, the Issuer is authorized under the Act to issue its revenue bonds
for the aforesaid purposes and the Issuer has determined that the public
interest will be best served and that the purposes of the Act can be
advantageously achieved by the Issuer's issuance of the Series 1995A Bonds in
order to obtain funds to loan to the Company for the foregoing purposes; and
WHEREAS, provision is made herein for the issuance of additional bonds
from time to time which will rank on a parity with the Series 1995A Bonds for
the purposes, upon the terms and subject to the conditions provided for herein;
and
WHEREAS, all things necessary to make the Series 1995A Bonds, when
authenticated by the Trustee and issued as in this Indenture provided, the
valid, binding and legal obligations of the Issuer according to the import
thereof, and to constitute this Indenture a valid assignment
2
<PAGE> 7
and pledge of the payments and prepayments under the Loan Agreement to be
applied to the payment of the principal of, premium, if any, and interest on the
Bonds (as hereinafter defined) and to the payment of certain other amounts, and
a valid assignment of the right, title and interest of the Issuer under the Loan
Agreement and amounts payable to the Issuer under the Loan Agreement (except
fees and expenses payable to the Issuer and the Issuer's rights relating to
indemnification and notice), have been done and performed, and the creation,
execution and delivery of this Indenture, and the creation, execution and
issuance of the Series 1995A Bonds, subject to the terms hereof, have in all
respects been duly authorized:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises and the acceptance by
the Trustee of the trusts hereby created and of the purchase and acceptance of
the Bonds by the owners thereof, and of other good and lawful consideration, the
receipt of which is hereby acknowledged, and to secure the payment of the
principal of, premium, if any, and interest on the Bonds according to their
tenor and effect and the payment of certain other amounts and to secure the
performance and observance by the Issuer of all of the covenants and conditions
herein or therein contained, by these presents does hereby convey, assign,
transfer, pledge, set over and confirm and grant a security interest in, unto
the Trustee, its successor or successors and its or their assigns forever, with
power of sale, all and singular the property hereinafter described (said
property being herein sometimes referred to as the "Trust Estate"), to wit:
GRANTING CLAUSES
DIVISION I
All right, title and interest of the Issuer in and to the Loan Agreement
and the amounts payable to the Issuer under the Loan Agreement (excluding the
Issuer's rights relating to the payment of fees, the reimbursement of expenses,
indemnification and notice);
DIVISION II
The Bond Fund and the Construction Fund (as each such term is hereinafter
defined), including moneys and obligations therein, held by the Trustee (except
moneys or obligations deposited with or paid to the Trustee for payment or
redemption of Bonds that are deemed no longer to be outstanding hereunder)
pursuant to the terms of this Indenture;
DIVISION III
Any and all other property of every kind and nature from time to time
hereafter, by delivery or by writing of any kind, conveyed, pledged, assigned or
transferred as and for additional security hereunder by the Issuer or the
Company or by anyone on their behalf to the Trustee, subject to the terms
thereof, including without limitation debt service reserve or similar funds,
letters or lines of credit, bond insurance policies, guaranties, or other forms
of credit enhancement or funds of the Company held by the Trustee as security
for the Bonds.
3
<PAGE> 8
EXCEPTED PROPERTY
There is, however, expressly excepted and excluded from the lien and
operation of this Indenture amounts to be transferred pursuant to this Indenture
to, or held by the Trustee in, the Rebate Fund established hereunder;
TO HAVE AND TO HOLD, all and singular, the properties and the rights and
privileges hereby conveyed, assigned and pledged by the Issuer or intended so to
be, unto the Trustee and its successors and assigns forever, in trust,
nevertheless, with power of sale for the equal and pro rata benefit and security
of each and every owner of the Bonds issued and to be issued hereunder, without
preference, priority or distinction as to participation in the lien, benefit and
protection hereof of one Bond over or from the others, by reason of priority in
the issue or negotiation or maturity thereof, or for any other reason
whatsoever, except as herein otherwise expressly provided, so that each and all
of such Bonds shall have the same right, lien and privilege under this Indenture
and shall be equally secured hereby with the same effect as if the same had all
been made, issued and negotiated simultaneously with the delivery hereof and
were expressed to mature on one and the same date;
PROVIDED, NEVERTHELESS, and these presents are upon the express condition
that if the Issuer or its successors or assigns shall well and truly pay or
cause to be paid the principal of the Bonds, with interest according to the
provisions set forth in the Bonds, or shall provide for the payment or
redemption of the Bonds by depositing or causing to be deposited with the
Trustee the entire amount of funds or securities required for payment or
redemption thereof when and as authorized by the provisions hereof, or shall
provide, as permitted hereby, for the payment thereof in accordance with Article
VI hereof, and shall also pay or cause to be paid all other sums payable
hereunder by the Issuer, then these presents and the estate and rights hereby
granted shall cease, determine and become void, and thereupon the Trustee, on
payment of its lawful charges and disbursements then unpaid, on demand of the
Issuer and upon the payment of the costs and expenses thereof, shall duly
execute, acknowledge and deliver to the Issuer and the Company such instruments
of satisfaction or release as may be necessary or proper to discharge this
Indenture, including, if appropriate, any required discharge of record, and if
necessary shall grant, reassign and deliver to the Issuer, its successors or
assigns, all and singular the property, rights, privileges and interests by it
hereby granted, conveyed and assigned, and all substitutes therefor, or any part
thereof, not previously disposed of or released as herein provided; otherwise
this Indenture shall be and remain in full force and effect.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the
parties hereto that all Bonds are to be issued, authenticated and delivered, and
that all the Trust Estate is to be held and applied, subject to the further
covenants, conditions, releases, uses and trusts hereinafter set forth, and the
Issuer, for itself and its successors, does hereby covenant and agree to and
with the Trustee and its respective successors in said trust, for the benefit of
those who shall hold the Bonds, or any of them, as follows:
4
<PAGE> 9
ARTICLE I
DEFINITIONS
SECTION 101. DEFINITIONS. To the extent not defined herein, capitalized
terms used in this Indenture shall have the same meanings as set forth in the
Loan Agreement. In addition to the capitalized words and terms used herein and
defined in the Loan Agreement or elsewhere in this Indenture, the following
words and terms as used in this Indenture shall have the following meanings
unless the context or use indicates another or different meaning or intent:
"ACT" means the Utah Industrial Facilities and Development Act, Title 11,
Chapter 17, Utah Code Annotated 1953, as amended.
"ACT OF BANKRUPTCY OF GUARANTOR" means that the Guarantor has become
insolvent or has failed to pay its debts generally as such debts become due or
has admitted in writing its inability to pay any of its indebtedness or has
consented to or has petitioned or applied to any authority for the appointment
of a receiver, liquidator, trustee, or similar official for itself or for all or
any substantial part of its properties or assets or that any such trustee,
receiver, liquidator, or similar official has otherwise been appointed or that
bankruptcy, insolvency, reorganization, arrangement, or liquidation proceedings
(or similar proceedings) have been instituted by or against the Guarantor, and,
in the case such proceedings are instituted against the Guarantor, such
proceedings continue undismissed in excess of 90 days.
"ADDITIONAL BONDS" means the parity bonds authorized to be issued by the
Issuer pursuant to the terms and conditions of this Indenture in addition to the
Series 1995A Bonds.
"AFFILIATE" means, with respect to the Company, any other Person which,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the Company. For the purposes of
this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of the Company, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AUTHORIZED COMPANY REPRESENTATIVE" means the person or persons at the
time and from time to time designated, by written certificate furnished to the
Issuer and the Trustee, as the person or persons authorized to act on behalf of
the Company. Such certificate shall contain the specimen signature of such
person or persons, shall be signed on behalf of the Company by the President,
any Vice President, a Treasurer or any Assistant Treasurer of the Company and
may designate alternate Authorized Company Representatives. The Authorized
Company Representative may, but need not, be an employee of the Company.
"AUTHORIZED DENOMINATIONS" means $5,000 and any integral multiple thereof.
"AUTHORIZED GUARANTOR REPRESENTATIVE" means the person or persons at the
time and from time to time designated, by written certificate furnished to the
Issuer and the Trustee, as the person or persons authorized to act on behalf of
the Guarantor. Such certificate shall contain the specimen signature of such
person or persons, shall be signed on behalf of the Guarantor by the President,
any Executive Vice President or Senior Vice President or the Treasurer of the
Guarantor and may designate alternate Authorized Guarantor Representatives. The
Authorized Guarantor Representative may, but need not, be an employee of the
Guarantor.
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<PAGE> 10
"AUTHORIZED ISSUER REPRESENTATIVE" means the person or persons at the time
and from time to time designated, by written certificate furnished to the
Company and the Trustee, as the person or persons authorized to act on behalf of
the Issuer. Such certificate shall contain the specimen signature of such person
or persons, shall be signed on behalf of the Issuer by the Chairman of the
Governing Body and may designate alternate Authorized Issuer Representatives.
The Authorized Issuer Representative may, but need not, be an employee of the
Issuer.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as now or
hereafter constituted.
"BOND COUNSEL" means the firm of Ballard Spahr Andrews & Ingersoll, or any
other law firm having a national reputation in the field of municipal law whose
opinions are generally accepted by purchasers of municipal bonds and appointed
by resolution of the Issuer.
"BOND FUND" means the trust fund so designated which is created and
established with the Trustee pursuant to Section 401 hereof.
"BONDHOLDER", "HOLDER", "OWNER" or "OWNER OF THE BONDS" means the
registered owner of any Bond.
"BOND PURCHASE CONTRACT" means a bond purchase contract between the Issuer
and BA Securities, Inc., providing for its purchase from time to time of Series
1995A Bonds.
"BOND REGISTER" means the registration books of the Issuer kept by the
Trustee to evidence the registration, transfer and exchange of Bonds.
"BOND RESOLUTION" means the resolution of the Governing Body adopted
February 1, 1995 authorizing the issuance and sale of the Series 1995A Bonds.
"BONDS" means the Series 1995A Bonds and any Additional Bonds,
collectively.
"BUSINESS DAY" means any day other than (a) a Saturday, (b) a Sunday, (c)
a day on which (i) the Principal Office of the Trustee, or (ii) banking
institutions located in the City of New York, New York, are authorized or
required by law or executive order to be closed, or (d) a day on which the New
York Stock Exchange is closed.
"CHAIRMAN" means the duly elected Chairman or Vice Chairman of the
Governing Body or any successor to the principal functions thereof or any other
member of the Governing Body temporarily designated by the Issuer to serve pro
tempore as Chairman.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Each reference to a Section of the Code herein shall be deemed to include
the United States Treasury Regulations, including temporary and proposed
regulations, relating to such Section which are applicable to the Bonds or the
use of the proceeds thereof.
"COMPANY" means ECDC Environmental, L.C., a Utah limited liability
company, its successors and assigns and any surviving, resulting or transferee
entity as permitted under the Loan Agreement.
"COMPANY DOCUMENTS" means the Loan Agreement and the Proceeds Certificate.
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<PAGE> 11
"COMPLETION CERTIFICATE" means the certificate delivered by the Company
pursuant to Section 3.4 of the Loan Agreement.
"CONSTRUCTION" (and other forms of the word "construct"), when used with
reference to any portion of the Project, means acquisition, construction,
improvement, renovation, equipping, installation and furnishing.
"CONSTRUCTION FUND" means the trust fund so designated which is created
and established pursuant to Section 401 hereof.
"DEFAULT RATE" means the per annum rate of interest announced publicly by
the Trustee from time to time as its base rate.
"DELIVERY DATE" means each date on which any of the Bonds are initially
authenticated and delivered hereunder.
"DTC" means The Depository Trust Company, New York, New York, a
limited-purpose trust company organized under the laws of the State of New York.
"ELIGIBLE SECURITIES" means, to the extent permitted by law, any of the
following securities, maturing (or redeemable at the option of the holder
thereof), at such time or times as to enable disbursements to be made from the
fund in which such investment is held in accordance with the terms hereof:
(a) Direct obligations of the United States of America or
obligations to the full and prompt payment of which the full faith
and credit of the United States of America is pledged or evidences
of direct ownership in future interest and principal payments on
such obligations held by a bank or trust company, as custodian,
under which the owner of the investment is the real party in
interest and has the right to proceed directly and individually
against the obligor on such obligations, and which underlying
obligations are not available to satisfy any claim of the custodian
or any person claiming through the custodian or to whom the
custodian may be obligated;
(b)
(i) any obligation, the interest on which is excludable
from gross income of the owner thereof for federal income tax
purposes; and
(ii) stock of a corporation during any quarter of the
taxable year of the corporation that--
(1) the corporation is a regulated investment
company (as defined in Section 851(a) of the Code)
which, for the taxable year, meets the requirements of
Section 852(a) of the Code;
(2) the corporation has authorized and outstanding
only one class of stock;
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<PAGE> 12
(3) the corporation to the extent practicable invests
all its assets in obligations described in subclause (i) of
this clause (b); and
(4) at least 98 percent of--
(A) the gross income of the corporation (without
regard to the exclusion of interest from gross income
under Section 103 of the Code) is derived from interest
on or gains from the sale or other disposition of
obligations described in subclause (i) of this clause
(b); or
(B) the weighted average value of the assets of
the corporation is represented by investments in
obligations described in subclause (i) of this clause
(b); and
(iii) any other investment which qualifies as a tax-exempt
bond for purposes of Section 148(b)(3)(A) of the Code and the
applicable United States Treasury Regulations;
provided that, at the time of purchase of any investment under this
clause (b), such investment is rated in either of the two highest
rating categories (without regard to pluses or minuses) of the
Rating Services;
(c) Evidences of indebtedness issued by any of the following: Bank
for Cooperatives; Export-Import Bank of the United States; Farmers Home
Administration; Federal Financing Bank; Federal Home Loan Bank System;
Federal Home Loan Mortgage Corporation (including participation
certificates); Federal Housing Administration; Federal Intermediate Credit
Banks; Federal Land Banks; Federal National Mortgage Association;
Government National Mortgage Association; Small Business Administration;
Student Loan Marketing Association; or any other agency or instrumentality
of the United States of America created by an act of Congress which is
substantially similar to the foregoing in its legal relationship to the
United States of America, provided that at the time of their purchase such
obligations of such other agency or instrumentality are guaranteed by the
full faith and credit of the United States of America or are rated in
either of the two highest rating categories (without regard to pluses or
minuses) of the Rating Services;
(d) Obligations of any person, including the Trustee, provided
that, at the time of their purchase, such obligations are rated in either
of the two highest rating categories (without regard to pluses or minuses)
of the Rating Services;
(e) Demand deposits or interest-bearing time deposits,
certificates of deposit or other similar banking arrangements that are
made with the Trustee or with any other bank having deposits insured by
the Federal Deposit Insurance Corporation ("FDIC"), or any savings and
loan association having deposits insured by the Resolution Trust
Corporation ("RTC"), provided that
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<PAGE> 13
such time deposits or certificates of deposit or other similar banking
arrangements are: (i) fully insured by the FDIC or the RTC, (ii) made with
any bank (including the Trustee) having undivided capital and surplus of
at least $100,000,000, the debt obligations (or, in the case of the
principal bank in a bank holding company, debt obligations of the bank
holding company) of which are rated in either of the two highest rating
categories (without regard to pluses or minuses) of the Rating Services,
or (iii) continuously secured as to principal, to the extent not insured
by the FDIC or the RTC, (A) by lodging with a bank or trust company other
than the depository, as collateral security, and granting to the Trustee a
perfected first security interest therein, obligations described in clause
(a), (b) or (c) above or, with the approval of the Trustee, other
marketable securities eligible as security for the deposit of trust funds
under applicable regulations, having a market value (exclusive of accrued
interest) not less than the amount of such deposit and not subject to the
prior claims of any third parties, or (B) if the furnishing of security as
provided in clause (A) of this clause is not permitted by applicable law,
in such other manner as may then be required or permitted by applicable
State or federal laws and regulations regarding the security for, or
granting a preference in the case of the deposit of, trust funds;
(f) Investment agreements or repurchase agreements with any
institution (including the Trustee), the long-term debt or claims paying
ability of which is rated in either of the two highest rating categories
(without regard to pluses or minuses) of the Rating Services;
(g) Repurchase agreements with a financial institution (including
the Trustee) having deposits insured by the FDIC or the RTC, or any broker
or dealer that is a dealer in government bonds and that is recognized by,
trades with and reports to, a Federal Reserve Bank as a primary dealer in
government securities, provided in any case: (i) the collateral for the
repurchase agreement, at the last determination thereof, is described in
clause (a), (b) or (c) above, (ii) the current market value of the
collateral securing the repurchase agreement, at the last determination
thereof, is at least equal to the amount of the repurchase agreement and
is determined not less frequently than monthly, (iii) the collateral is
held for the benefit of the Trustee by a Person other than the obligor on
such repurchase agreement and (iv) the collateral is not subject to the
prior claims of any third parties;
(h) Open market debt instruments (having an original maturity of
365 days or less) that are rated in either of the two highest short-term
debt rating categories (without regard to pluses or minuses) of the Rating
Services;
(i) Investments in money market funds rated in either of the two
highest rating categories (without regard to pluses or minuses) of the
Rating Services; and
(j) Any fund or other pooling arrangement which exclusively
purchases and holds one or more of the investments described in clauses
(a) through (i), above.
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<PAGE> 14
"EVENT OF DEFAULT" means (a) with respect to this Indenture, an "Event of
Default" as defined in Section 801 hereof and (b) with respect to the Loan
Agreement, an "Event of Default" as defined in Section 7.1 thereof.
"FACILITY" means the solid waste landfill located in East Carbon City,
Utah consisting of (i) land and land improvements to be used as a site for
approximately 29 landfill cells for the disposal of nonhazardous solid waste;
(ii) the equipment, facilities, and improvements to be used in connection with
the operation of said landfill; and (iii) the rail cars, containers, and other
transportation equipment acquired by the Company to transport solid waste to the
landfill site.
"GOVERNING BODY" means the Board of County Commissioners of the Issuer.
"GOVERNMENT OBLIGATIONS" means obligations described in clause (a) of the
definition of Eligible Securities.
"GUARANTOR" means Laidlaw Inc., a Canadian corporation and its successors
and assigns as permitted by the Guaranty.
"GUARANTY" means the Guaranty from the Guarantor to the Trustee, dated as
of February 1, 1995, with respect to the Series 1995A Bonds.
"IMMEDIATE NOTICE" means notice by telephone, telex or telecopier to such
address as the addressee shall have directed in writing, promptly followed by
written notice by first class mail, postage prepaid.
"INDENTURE" means this Indenture of Trust, dated as of February 1, 1995,
between the Issuer and the Trustee, as the same may from time to time be amended
or supplemented in accordance with the terms hereof.
"INTEREST PAYMENT DATE" means, with respect to any Bond each February 1
and August 1.
"ISSUE DATE" means, with respect to the Series 1995A Bonds, their initial
Delivery Date.
"ISSUER" means Carbon County, Utah.
"ISSUER DOCUMENTS" means the Bond Resolution, the Loan Agreement, the
Indenture, and the Proceeds Certificate.
"LOAN AGREEMENT" means the Loan Agreement dated as of February 1, 1995, by
and between the Company and the Issuer, as the same may from time to time be
amended or supplemented in accordance with the terms thereof and hereof.
"MAXIMUM RATE" means the maximum interest rate per annum permitted under
Utah law to be borne by obligations similar to the Bonds.
"OUTSTANDING", "BONDS OUTSTANDING" or "OUTSTANDING BONDS" means, as of any
given date, all Bonds which have been duly authenticated and delivered under
this Indenture, except:
(a) Bonds cancelled on or prior to such date or delivered to
or acquired by the Trustee on or prior to such date for
cancellation;
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<PAGE> 15
(b) Bonds deemed to be paid in accordance with Article VI of
this Indenture; and
(c) Bonds in lieu of which other Bonds have been authenticated
under Sections 204, 209, and 210 hereof.
"PERSON" means any natural person, firm, joint venture, association,
partnership, business trust, corporation, public body, agency or political
subdivision thereof or any other similar entity.
"PRINCIPAL OFFICE" means, when used with respect to the Issuer, the
Trustee, the Company and the Guarantor, each respective office of such Persons
designated in Section 1203 hereof. The Principal Office of any such Person may
be changed from time to time by delivering notice of such change to the Issuer,
the Trustee, the Company, and the Guarantor.
"PRIOR BONDS" means the Issuer's Series 1993A Bonds and Series 1994 Bonds.
All of the Series 1993A Bonds and $8,000,000 in principal amount of the Series
1994 Bonds will be refunded pursuant to the Refunding with the proceeds of the
Series 1995A Bonds.
"PROCEEDS CERTIFICATE" means that certain Proceeds Certificate, dated the
first Delivery Date, and executed by the Issuer and the Company, as amended from
time to time.
"PROJECT" means the Project described in Exhibit A to the Loan Agreement
as the same may be amended from time to time in accordance with the provisions
of the Loan Agreement, including any other project undertaken by the Company and
financed through Additional Bonds issued under this Indenture.
"PROJECT COSTS" OR "COSTS" means any cost of the Project or in respect of
the Project now or hereafter permitted under the Act. Without limiting the
generality of the foregoing, such costs may include: (i) amounts payable to
contractors and suppliers (including fees for designing the Project where the
designs are provided by the contractor or supplier); (ii) costs of labor,
services, materials, supplies and equipment furnished by the Borrower (including
shipping costs) plus the Borrower's standard overhead charge; (iii)
architectural, engineering, legal and other professional fees, marketing costs
and brokerage commissions; (iv) costs of funding a reserve to the extent
permitted by the Code; (v) interest on the Bonds to the extent permitted by the
Act; (vi) costs of financing including but not limited to bond discount,
printing expense, mortgage taxes and recording fees, Issuer and Trustee fees
accruing prior to completion of the Project, and legal and accounting fees.
"QUALIFIED PROJECT COSTS" means the Project Costs, but only to the extent
such costs were paid or incurred by the Borrower after April 25, 1991 and only
to the extent that such costs are incurred for the acquisition, development,
construction, equipping and furnishing, or improvement of land or property of a
character subject to the allowance for depreciation provided in Section 167 of
the Code and are chargeable to the capital account of the Project or would be so
chargeable either with a proper election by the Borrower or but for a proper
election by the Borrower to deduct such costs, within the meaning of Treasury
Regulation Section 1.103-8(a)(1), as the same may be amended or supplemented
from time to time. "Qualified Project Costs" shall not include (i) working
capital and inventory costs, (ii) costs of issuance, and (iii) interest
following completion of construction of the Project. Interest during
construction of the Project shall be allocated proportionately between Qualified
Project Costs and other costs paid from Bond proceeds.
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<PAGE> 16
"RATING SERVICES" means, collectively, Standard & Poor's Corporation, a
corporation organized and existing under the laws of the State of New York, and
its successors and assigns, and Moody's Investors Service, a corporation
organized and existing under the laws of the State of New York, and its
successors and assigns; provided that if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Rating Services" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Trustee, at the written
direction of the Company.
"REBATABLE ARBITRAGE" shall mean, with respect to any Series of Bonds, the
amount (determined as of each Rebate Calculation Date) of rebatable arbitrage
payable to the United States at the times and in the amounts specified in
Section 148(f)(3) of the Code and Section 1.148-1 and 1.148-2 of the
Regulations.
"REBATE CALCULATION DATE" means, with respect to each series of Bonds, the
interest payment date next preceding the fifth anniversary of the issue date of
such series of Bonds, each fifth anniversary of the initial Rebate Calculation
Date for such series of Bonds, and the date of retirement of the last Bond of
such series.
"REBATE FUND" shall mean the fund established by Section 405 hereof.
"RECORD DATE" means with respect to any Bond the fifteenth day of the
month preceding an Interest Payment Date with respect to such Bond.
"REFUNDING" means the series of transactions whereby a portion of the
Prior Bonds are refunded and cancelled with the proceeds of the Series 1995A
Bonds authenticated and delivered on the first Delivery Date.
"REGISTRAR" means the Trustee, when acting in accordance with Section 210
hereof.
"REGULATIONS" and all references thereto shall mean and include applicable
final, proposed and temporary United States Treasury Regulations promulgated
with respect to Sections 103 and 141 through 150 of the Code, including all
amendments thereto made hereafter.
"REQUIRED REBATE DEPOSIT" means with respect to any series of Bonds an
amount determinable as of each Rebate Calculation Date, which when added to
amounts then on deposit in the Rebate Fund with respect to such series of Bonds,
if any, equals the aggregate amount of Rebatable Arbitrage for such series of
Bonds less the amount of Rebatable Arbitrage theretofore paid to the United
States with respect to such series of Bonds, if any.
"SERIES 1992 BONDS" means the Issuer's Solid Waste Disposal Refunding
Revenue Bonds, 1992 Series A (East Carbon Development Corporation Project)
issued pursuant to the Series 1992 Indenture.
"SERIES 1992 INDENTURE" means that certain Indenture of Trust dated as of
May 1, 1992 between the Issuer and West One Bank, Utah.
"SERIES 1992 LOAN AGREEMENT" means that certain Loan Agreement dated as of
May 1, 1992 between the Issuer and East Carbon Development Corporation, the
predecessor in interest of the Company, relating to the 1992 Bonds.
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<PAGE> 17
"SERIES 1993A BONDS" means the Issuer's Unit Priced Demand Adjustable
Solid Waste Disposal Refunding Revenue Bonds (Union Pacific Corporation/ECDC
Environmental, L.C. Project) in the outstanding principal amount of $15,000,000.
"SERIES 1993A INDENTURE" means that certain Indenture of Trust dated as of
June 1, 1993 between the Issuer and West One Bank, Utah, as Trustee.
"SERIES 1994 BONDS" means the Issuer's Solid Waste Disposal Refunding
Revenue Bonds (East Carbon Landfill Project--Short Term Series 1994) in the
outstanding principal amount of $35,242,500.
"SERIES 1994 LOAN AGREEMENT" means the Loan and Trust Agreement among the
Issuer, the Company and West One Bank, Utah, as Trustee, dated as of April 15,
1994.
"SERIES 1995A BONDS" means the Issuer's Solid Waste Disposal Refunding
Revenue Bonds (Laidlaw Inc./ECDC Environmental, L.C. Project), 1995 Series A,
authorized by the Issuer to be authenticated and delivered from time to time
pursuant to the terms and conditions of this Indenture in an aggregate principal
amount not to exceed $23,000,000.
"SPECIAL RECORD DATE" means the date fixed by the Trustee pursuant to
Section 202 of this Indenture for the payment of Defaulted Interest (as such
term is defined in Section 202 hereof).
"STATE" means the State of Utah.
"TRUST ESTATE" is defined in the Granting Clauses of this Indenture.
"TRUSTEE" means West One Bank, Utah, Salt Lake City, Utah, and any
successor trustee under this Indenture.
SECTION 102. RULES OF CONSTRUCTION. Unless the context shall otherwise
require,
(a) an accounting term not otherwise defined shall have the
meaning assigned to it in accordance with generally accepted
accounting principles as the same shall be in effect from time to
time;
(b) references to Articles and Sections are to the Articles
and Sections of this Indenture;
(c) words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter
genders;
(d) unless the context shall otherwise indicate, words
importing the singular number shall include the plural and vice
versa; and
(e) headings of Articles and Sections herein and the table of
contents hereof are solely for convenience of reference, do not
constitute a part hereof and shall not affect the meaning,
construction or effect hereof.
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<PAGE> 18
ARTICLE II
THE BONDS
SECTION 201. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under the
provisions of this Indenture except in accordance with this Article. The total
principal amount of Bonds which may be issued hereunder is hereby expressly
limited (a) with respect to the Series 1995A Bonds authorized pursuant to
Section 202 hereof, to $23,000,000 and (b) with respect to any Additional Bonds
issued in accordance with Section 208 hereof, the amount permitted pursuant to
the provisions of Section 208 hereof and specified in any supplemental indenture
or supplemental indentures entered into pursuant to Section 208 and Article X
hereof.
SECTION 202. ISSUANCE OF THE SERIES 1995A BONDS; CERTAIN TERMS. In order
to provide funds to refund a portion of the Prior Bonds and to finance a portion
of the Project Costs there is hereby authorized to be issued by the Issuer a
series of bonds which is hereby designated as the "Carbon County, Utah Solid
Waste Disposal Refunding Revenue Bonds (Laidlaw Inc./ ECDC Environmental, L.C.
Project), 1995 Series A". The Series 1995A Bonds may be authenticated and
delivered to the purchasers thereof at any time and from time to time as
provided in Section 207(b) hereof.
The Series 1995A Bonds shall be issuable as fully registered bonds,
without coupons, in any Authorized Denomination, in substantially the form
described in Section 204 hereof. The Series 1995A Bonds shall be lettered "R"
and shall be numbered consecutively from one (1) upward. The Series 1995A Bonds
shall be dated the Issue Date, shall bear interest payable on each Interest
Payment Date beginning August 1, 1995, and shall mature, subject to prior
redemption, in the years and amounts as follows:
<TABLE>
<CAPTION>
================================================================================
Year
(February 1) Principal Amount Interest Rate
- --------------------------------------------------------------------------------
<S> <C> <C>
2010 $23,000,000 7.5%
================================================================================
</TABLE>
Each Bond authenticated prior to the first Interest Payment Date with
respect to such Bond shall bear interest from the Delivery Date thereof, as
evidenced by the Certificate of Authentication on such Bond. Each Bond
authenticated on or after the first Interest Payment Date with respect to such
Bond shall bear interest from the Interest Payment Date next preceding the date
of authentication thereof, unless the date of authentication shall be an
Interest Payment Date to which interest on such Bond has been paid in full or
duly provided for, in which case such Bond shall bear interest from the date of
authentication thereof; provided that if, as shown by the records of the
Trustee, interest on a Bond shall be in default, such Bond, or Bonds issued in
exchange for or upon the registration of transfer thereof, shall bear interest
from the date to which interest has been paid in full on the Bond or, if no
interest has been paid on the Bond with respect to which interest is in default,
the Delivery Date thereof.
Interest on each Bond shall be payable on the Interest Payment Date
applicable thereto to the Person who, on the close of business on the Record
Date, is the registered holder thereof. Interest on any Bond shall be payable by
check mailed on the Interest Payment Date to the registered holder of such Bond
at the address of such registered holder set forth in the Bond Register.
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<PAGE> 19
Interest on any Bond which is not punctually paid or duly provided for on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the owner thereof on the relevant Record Date by virtue
of having been such owner, and such Defaulted Interest shall be paid to the
Person in whose name such Bond (or the respective predecessor Bond) is
registered at the close of business on a Special Record Date to be established
as hereinafter provided. The Trustee shall establish (a) the date on which the
Defaulted Interest shall be paid, (b) the amount of Defaulted Interest payable
on each Bond on such payment date and (c) a Special Record Date for the payment
of such Defaulted Interest, which Special Record Date shall be not more than
fifteen (15) nor less than ten (10) days prior to the payment date. Not less
than ten (10) days prior to the Special Record Date the Trustee shall cause
notice to be delivered to the Issuer, the Company, and each owner of Bonds as to
which Defaulted Interest is payable, which notice shall specify the proposed
payment date, the Special Record Date and, in the case of notice to the Company
and the Issuer, the total amount of Defaulted Interest payable with respect to
all Bonds payable on such proposed payment date, and in the case of notice to
each Bondholder, the amount of Defaulted Interest payable with respect to each
Bond held by such Bondholder. Such notice shall be mailed, first-class postage
prepaid, to the address of each Bondholder appearing in the Register. Upon
receipt of such notice, the Company shall, in accordance with the Loan
Agreement, deposit with the Trustee, as appropriate, an amount of money equal to
the aggregate amount of Defaulted Interest to be paid on the payment date, or
shall make arrangements satisfactory to the Trustee, as appropriate, for such
deposit prior to the proposed date of payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted Interest
as provided in this paragraph. Notice having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Person in whose name the Bond (or the
respective predecessor Bond) is registered at the close of business on such
Special Record Date.
The principal of (including the principal component of the redemption
price) and any applicable redemption premium on the Bonds are payable at the
Principal Office of the Trustee only upon presentation and surrender thereof.
All payments of principal of, premium, if any, and interest on the Bonds
are payable in any coin or currency of the United States of America that is
legal tender for the payment of public and private debts on the respective dates
of payment thereof.
SECTION 203. INTEREST ON THE BONDS.
(a) Calculation of Interest. Interest on the Bonds shall be
calculated on the basis of a 360-day year composed of twelve 30-day
months.
(b) Maximum Rate. None of the Bonds shall bear interest at a
rate per annum in excess of the Maximum Rate.
SECTION 204. FORM OF BONDS AND TEMPORARY BONDS. The Bonds issued under
this Indenture shall be in substantially the form set forth in Exhibit "A"
hereto, with such appropriate variations, omissions and insertions as are
permitted or required by this Indenture or deemed necessary by the Trustee and
the Issuer.
Bonds of any series may be initially issued in temporary form exchangeable
for definitive Bonds of the same series when ready for delivery. The temporary
Bonds shall be in the form of registered Bonds without coupons in Authorized
Denominations, substantially in the form of Exhibit "A" hereto, with such
appropriate omissions, insertions and variations as may be
15
<PAGE> 20
required with respect to such temporary Bonds and may contain such reference to
any of the provisions of this Indenture as may be appropriate. Every temporary
Bond shall be executed by the Issuer and be authenticated by the Trustee, upon
the same conditions and in substantially the same manner as the definitive
Bonds. If the Issuer issues temporary Bonds it will execute and furnish
definitive Bonds without delay and thereupon the temporary Bonds shall be
surrendered for cancellation in exchange therefor at the Principal Office of the
Trustee, and the Trustee shall authenticate and deliver in exchange for such
temporary Bonds an equal aggregate principal amount of definitive Bonds of the
same series and maturity in Authorized Denominations. Until so exchanged, the
temporary Bonds shall be entitled to the same benefits under this Indenture as
definitive Bonds authenticated and delivered hereunder.
SECTION 205. EXECUTION; SPECIAL LIMITED OBLIGATION. The Bonds shall be
executed on behalf of the Issuer with the manual or facsimile signature of the
Chairman of the Governing Body and shall have impressed or imprinted thereon, by
facsimile or otherwise, the official seal of the Issuer and shall be attested
with the manual or facsimile signature of the Issuer's County Clerk. In case any
officer of the Issuer whose signature or whose facsimile signature shall appear
on the Bonds shall cease to be such officer before the delivery of such Bonds,
such signature or facsimile signature shall nevertheless be valid and sufficient
for all purposes, the same as if he had remained in office until delivery. The
Bonds are special, limited obligations of the Issuer, payable by the Issuer
solely from certain amounts received by the Issuer under, and secured by a
pledge of certain rights of the Issuer under and pursuant to, the Loan
Agreement, and, further, from the funds and accounts created hereunder (but not
including the Rebate Fund created hereunder) and investment earnings thereon,
all of which shall be used for no other purpose than to pay the principal of,
premium, if any, and interest on the Bonds, except as may be otherwise expressly
authorized in this Indenture. Neither the faith and credit nor the taxing power
of the State of Utah or any political subdivision thereof is pledged to the
payment of the principal of, premium, if any, or interest on the Bonds. The
Bonds and the interest thereon do not constitute or give rise to a general
obligation or liability of the Issuer or a charge against its general credit or
taxing powers and the Bonds do not constitute a loan of the credit of the Issuer
within the meaning of any constitutional restriction or statutory limitation of
the State of Utah.
SECTION 206. AUTHENTICATION. No Bond shall be valid or obligatory for any
purpose or entitled to any security or benefit under this Indenture unless and
until the Certificate of Authentication on such Bond in substantially the form
set forth in Exhibit "A" hereto shall have been duly executed by the Trustee and
such execution shall be conclusive evidence that such Bond has been
authenticated and delivered under this Indenture and that the holder thereof is
entitled to the benefits of the trust hereby created. The Trustee shall insert
the authentication date on each Bond authenticated hereunder. The Certificate of
Authentication on any Bond shall be deemed to have been executed by it if
manually signed by an authorized officer or signatory of the Trustee, but it
shall not be necessary that the same officer or signatory sign the Certificate
of Authentication on all of the Bonds.
SECTION 207. DELIVERY OF THE SERIES 1995A BONDS.
(a) Following the execution and delivery of this Indenture,
the Issuer shall execute and deliver to the Trustee, and the Trustee
shall authenticate, Series 1995A Bonds (in either temporary or
definitive form), and shall deliver them to the purchasers thereof
as directed by the Issuer as hereinafter in this Section provided.
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(b) Prior to the delivery by the Trustee on the Delivery
Date of any of the Series 1995A Bonds, there shall be delivered to the
Trustee:
(i) a copy, duly certified by the County Clerk of the
Issuer, of all resolutions adopted and approved by the Issuer
authorizing the issuance and sale of the Series 1995A Bonds and the
execution and delivery of the Loan Agreement, the Proceeds
Certificate, this Indenture and a Bond Purchase Contract relating to
the Series 1995A Bonds being delivered on such Delivery Date;
(ii) a copy, duly certified by a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer, as appropriate, of the Company, of all resolutions
adopted and approved by the Company authorizing the execution and
delivery of the Loan Agreement, the Proceeds Certificate, and
approving this Indenture and the issuance and sale of the Series
1995A Bonds and the terms thereof;
(iii) an original executed counterpart of this
Indenture, the Loan Agreement, and the Proceeds Certificate;
(iv) a request and authorization to the Trustee on
behalf of the Issuer and signed by the Chairman of the Governing
Body, to authenticate and deliver Series 1995A Bonds in the
aggregate principal amount specified therein to the purchasers
specified therein upon payment to the Trustee, but for the account
of the Issuer, of the net proceeds from the sale of such Series
1995A Bonds;
(v) the items required to be delivered prior to the
issuance of such Series 1995A Bonds under the terms of the Bond
Purchase Contract relating to such Series 1995A Bonds unless waived
by the respective parties thereto;
(vi) a certificate, signed by [a (Vice President) of
the Company], with a copy to the Issuer, requesting the Trustee to
cause Series 1995A Bonds in the amount specified in the request and
authorization delivered pursuant to Clause (b)(v) of this Section to
be authenticated and delivered, which certificate shall constitute
conclusive evidence under Section 3.1 of the Loan Agreement of such
request and approval;
(vii) the original executed Guaranty, and a certificate
signed by a duly authorized officer of the Guarantor and an opinion
of counsel to the Guarantor in form and substance satisfactory to
the original purchaser of the Series 1995A Bonds; and
(viii) such other closing documents and opinions of
counsel (including Bond Counsel) as the Trustee, the Issuer or Bond
Counsel may reasonably specify.
SECTION 208. ISSUANCE OF ADDITIONAL BONDS. Additional Bonds (in addition
to the Series 1995A Bonds) may be issued by the Issuer on a parity with the
Series 1995A Bonds for any
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one or more of the following purposes: (a) to refund any series of Outstanding
Bonds or portion thereof in a manner consistent with the provisions of Article
VI hereof; (b) to obtain funds to loan to the Company to complete the Facility;
(c) to obtain funds for any other purpose permitted under the Act; and (d) for
any combination of the foregoing purposes.
The principal amount of such Additional Bonds may include an amount
sufficient to pay the costs and expenses of issuance as well as such capitalized
amounts as are permitted by the Act. Such Additional Bonds shall be issued on a
parity with the Series 1995A Bonds (subject, however, to the terms of Article VI
hereof) notwithstanding the fact that no additional security (except the
security provided by any supplements or amendments to the Loan Agreement) is
made subject to the lien of this Indenture. The foregoing notwithstanding, the
Trustee is authorized to accept additional security upon the issuance of any
series of Additional Bonds with respect to such series of Additional Bonds,
including but not limited to debt service reserve or similar funds, letters or
lines of credit, guaranties, bond insurance policies or other forms of credit
enhancement.
Prior to the initial delivery of any Additional Bonds, there shall be
filed with the Trustee, among other items, all of the following:
(a) a written statement by the Company approving (i)
the issuance and delivery of such Additional Bonds and (ii)
any other matters to be approved by the Company pursuant to
the Loan Agreement and this Section 208;
(b) a copy, duly certified by the County Clerk of the
Issuer, of a resolution adopted and approved by the Governing
Body authorizing the execution and delivery of such
supplements or amendments to this Indenture and to the Loan
Agreement as may be necessary and authorizing the issuance of
such Additional Bonds;
(c) a copy, duly certified by a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Company, of the resolutions adopted
and approved authorizing the execution and delivery of a
supplement or amendment to the Loan Agreement and such other
documents as may be required, and approving a supplement or
amendment to this Indenture and the issuance and sale of such
Additional Bonds;
(d) the original executed counterparts of the
supplements or amendments to this Indenture and the Loan
Agreement providing, among other things, for payments to be
made thereunder in amounts sufficient to cover payments of
principal, premium and interest to be made on the Additional
Bonds to be issued;
(e) a request and authorization to the Trustee,
signed by the Chairman of the Governing Body, to authenticate
and deliver such Additional Bonds (specifically stating the
principal amount to be issued and delivered to the purchasers
therein identified) upon payment to the Trustee, but for the
account of the Issuer, of a sum specified in such request and
authorization plus accrued interest, if any, thereon to the
date of delivery. The Trustee shall deposit the proceeds of
such Additional Bonds in the funds and accounts hereunder as
specified in the supplemental indenture relating to such
Additional Bonds;
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<PAGE> 23
(f) any required supplement or amendment to the Guaranty
or an additional guaranty and related opinions and
certificates; and
(g) such other closing documents and opinions of counsel
as the Issuer, the Trustee and Bond Counsel may reasonably
specify.
SECTION 209. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. In the event
any temporary or definitive Bond is mutilated, lost, stolen or destroyed, the
Issuer may execute and the Trustee may authenticate a new Bond of like form,
date, maturity and denomination as that mutilated, lost, stolen or destroyed and
bearing a number not contemporaneously Outstanding; provided that, in the case
of any mutilated Bond, such mutilated Bond shall first be surrendered to the
Issuer, and in the case of any lost, stolen or destroyed Bond, there shall be
first furnished to the Issuer and the Trustee evidence of such loss, theft or
destruction satisfactory to the Issuer and the Trustee, together with indemnity
satisfactory to them. In the event any such Bond shall have matured or is about
to mature or been called for redemption, instead of issuing a duplicate Bond the
Issuer may pay the same without surrender thereof upon compliance with the
foregoing. The Issuer and the Trustee may charge the holder or owner of such
Bond with their reasonable fees and expenses in this connection.
All duplicate Bonds issued and authenticated pursuant to this Section
209 shall constitute original, contractual obligations of the Issuer (whether or
not, in the case of the first paragraph of this Section 209, lost or stolen
Bonds be at any time found by anyone) and shall be entitled to equal and
proportionate rights and benefits hereunder as all other Outstanding Bonds
issued hereunder.
All Bonds shall be owned upon the express condition that the foregoing
provisions, to the extent permitted by law, are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Bonds, and shall
preclude any and all other rights or remedies.
SECTION 210. BOND REGISTER; TRANSFER AND EXCHANGE OF BONDS; PERSONS
TREATED AS OWNERS. The Issuer shall cause books for the registration and
transfer of the Bonds to be kept by the Trustee which is hereby constituted and
appointed the Registrar for purposes of this Indenture with respect to such
Bonds. The Trustee shall keep in the Bond Register the name and address of each
Bondholder, and the serial number of each Bond held by such Bondholder. This
Indenture shall constitute a "system of registration" for all purposes of the
Registered Public Obligations Act of the State. At reasonable times and under
reasonable regulations established by the Trustee, such books may be inspected
and copied by the Issuer, the Company, the Trustee, or the owners (or a
designated representative thereof) of 15% or more in aggregate principal amount
of the Bonds then Outstanding.
Subject to the limitations contained in the next succeeding paragraph,
upon surrender for registration of transfer of any Bond at the Principal Office
of the Trustee, duly endorsed by, or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee and duly executed
by, the Bondholder or such Bondholder's attorney duly authorized in writing and
with such guarantee of signature as shall be satisfactory to the Trustee, the
Issuer shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees a new Bond or Bonds of the same series and of
Authorized Denominations, which shall be identical to the Bond being exchanged
with respect to interest rate and the stated maturity applicable to such Bond,
and bearing numbers not contemporaneously outstanding. Subject to the
limitations contained in the next succeeding paragraph, Bonds may be exchanged
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<PAGE> 24
at such Principal Office of the Trustee upon surrender thereof together with an
assignment duly executed by the registered owner thereof or such owner's
attorney or legal representative in such form and with guarantee of signature as
shall be satisfactory to the Trustee for an equal aggregate principal amount of
Bonds of any Authorized Denomination as the Bonds surrendered for exchange,
which Bonds shall be identical to the Bonds being exchanged with respect to
series, interest rate and stated maturity, bearing numbers not contemporaneously
outstanding. The execution by the Issuer of any Bond of any Authorized
Denomination shall constitute full and due authorization of such Bond and the
Trustee shall thereby be authorized to authenticate and deliver such registered
Bond.
The Registrar shall not be required to exchange or register the
transfer of any Bond during the period commencing on the Record Date next
preceding any Interest Payment Date for such Bond and ending at the close of
business on the day next preceding such Interest Payment Date, nor to exchange
or register the transfer of such Bond after the mailing of notice calling such
Bond for redemption, nor during the period of fifteen days next preceding the
mailing of such notice of redemption.
No service charge shall be imposed on any Bondholder for any exchange
or transfer of Bonds. The Issuer and the Trustee may, however, require payment
by the person requesting an exchange or transfer of Bonds of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in relation
thereto, except in the case of the issuance of a Bond or Bonds for the
unredeemed portion of a Bond surrendered for redemption in part unless there is
a transfer in connection with such issuance.
Bonds delivered upon any registration of transfer or exchange as
provided herein shall be valid limited obligations of the Issuer, evidencing the
same debt as the Bond surrendered, shall be secured by this Indenture and shall
be entitled to all of the security and benefits hereof to the same extent as the
Bond surrendered.
The Issuer, the Trustee, and the Company may treat the registered owner
of any Bond as the absolute owner thereof for all purposes, whether or not such
Bond shall be overdue, and shall not be bound by any notice to the contrary. All
payments of or on account of the principal of and premium, if any, and interest
on any such Bond as herein provided shall be made only to or upon the written
order of the registered owner thereof or such owner's legal representative, but
such registration may be changed as herein provided. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
SECTION 211. BOOK ENTRY PROVISIONS.
(a) The Series 1995A Bonds shall be initially issued
in the form of a separate single certificated fully registered
Series 1995A Bond for each of the maturities set forth in
Section 202 hereof. Upon initial issuance, the ownership of
each Series 1995A Bond shall be registered in the registration
books kept by the Bond Registrar in the name of Cede & Co.
("Cede"), as nominee of DTC. Except as provided in Section 210
hereof, all of the Outstanding Bonds shall be registered in
the registration books kept by the Bond Registrar in the name
of Cede, as nominee of DTC.
(b) With respect to Series 1995A Bonds registered
in the registration books kept by the Bond Registrar in the
name of Cede, as nominee
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<PAGE> 25
of DTC, the Issuer, the Trustee and the Paying Agent shall
have no responsibility or obligation to any Participant or to
any person on behalf of which a Participant holds an interest
in the Series 1995A Bonds. Without limiting the immediately
preceding sentence, the Issuer, the Paying Agent and the
Trustee shall have no responsibility or obligation with
respect to (i) the accuracy of the records of DTC, Cede or any
Participant with respect to any ownership interest in the
Series 1995A Bonds, (ii) the delivery to any Participant or
any other person, other than a Registered Owner, as shown in
the registration books kept by the Bond Registrar, of any
notice with respect to the Series 1995A Bonds, including any
notice of redemption, or (iii) the payment to any Participant
or any other person, other than a Registered Owner, as shown
in the registration books kept by the Trustee, of any amount
with respect to principal of, premium, if any, or interest on
the Series 1995A Bonds. The Issuer, the Paying Agent and the
Trustee may treat and consider the person in whose name each
Series 1995A Bond is registered in the registration books kept
by the Trustee as the holder and absolute owner of such Series
1995A Bond for the purpose of payment of principal, premium
and interest with respect to such Series 1995A Bond, for the
purpose of giving notices of redemption and other matters with
respect to such Series 1995A Bond, for the purpose of
registering transfers with respect to such Series 1995A Bond,
and for all other purposes whatsoever. The Paying Agent shall
pay all principal of, premium, if any, the interest on the
Series 1995A Bonds only to or upon the order of the respective
Registered Owners, as shown in the registration books kept by
the Trustee, or their respective attorneys duly authorized in
writing, as provided in Section 202 hereof, and all such
payments shall be valid and effective to fully satisfy and
discharge the Issuer's obligations with respect to payment of
principal of, premium, if any, and interest on the Series
1995A Bonds to the extent of the sum or sums so paid. No
person other than a Registered Owner, as shown in the
registration books kept by the Trustee, shall receive a
certificated Series 1995A Bond evidencing the obligation of
the Issuer to make payments of principal, premium, if any, and
interest pursuant to this Indenture. Upon delivery by DTC to
the Bond Registrar of written notice to the effect that DTC
has determined to substitute a new nominee in place of Cede,
and subject to the provisions herein with respect to record
dates, the word "Cede" in this Indenture shall refer to such
new nominee of DTC; and upon receipt of such a notice the Bond
Registrar shall promptly deliver a copy of the same to the
Trustee, if the Trustee is other than himself.
(c) The Representation Letter in substantially the
form attached hereto as Exhibit "B", with such changes,
omissions, insertions and revisions as the Chairman shall
approve, is hereby authorized and the Chairman shall execute
and deliver such Representation Letter. The approval of the
Chairman of any such changes, omissions, insertions and
revisions shall be conclusively established by said Chairman's
execution and delivery of the Representation Letter which
shall not in any way limit the provisions of Section 211(b)
hereof or in any other way impose upon the Issuer any
obligation whatsoever with respect to persons having interests
in the Series 1995A Bonds other than the Registered Owners, as
shown on the registration books kept by the Bond Registrar.
The Trustee shall take all action necessary for all
representations of the Issuer in the Representation Letter
with respect to the Paying Agent to at all times be complied
with.
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(d) (i) DTC may determine to discontinue
providing its services with respect to the Series 1995A Bonds
at any time by giving notice to the Issuer and the Trustee and
discharging its responsibilities with respect thereto under
applicable law.
(i) The Issuer, in its sole discretion and
without the consent of any other person, may
terminate the services of DTC with respect to the
Series 1995A Bonds if the Issuer determines that:
(A) DTC is unable to discharge its
responsibilities with respect to the Series
1995A Bonds, or
(B) a continuation of the requirement
that all of the Outstanding Bonds be
registered in the registration books kept
by the Bond Registrar in the name of Cede,
or any other nominee of DTC, is not in the
best interest of the beneficial owners of
the Series 1995A Bonds.
(ii) Upon the termination of the services of
DTC with respect to the Series 1995A Bonds pursuant
to subsection 211(d)(ii)(B) hereof, or upon the
discontinuance or termination of the services of DTC
with respect to the Series 1995A Bonds pursuant to
subsection 211(d)(i) or subsection 211(d)(ii)(A)
hereof after which no substitute securities
depository willing to undertake the functions of DTC
hereunder can be found which, in the opinion of the
Issuer, is willing and able to undertake such
functions upon reasonable and customary terms, the
Issuer is obligated to deliver Bond Certificates at
the expense of the beneficial owners of the Series
1995A Bonds, as described in this Indenture and the
Series 1995A Bonds shall no longer be restricted to
being registered in the registration books kept by
the Bond Registrar in the name of Cede as nominee of
DTC, but may be registered in whatever name or names
Registered Owners transferring or exchanging Series
1995A Bonds shall designate, in accordance with the
provisions of this Indenture.
(e) Notwithstanding any other provision of this
Indenture to the contrary, so long as any Series 1995A Bond is
registered in the name of Cede, as nominee of DTC, all
payments with respect to principal of, premium, if any, and
interest on such Series 1995A Bond and all notices with
respect to such Series 1995A Bond shall be made and given,
respectively, in the manner provided in the Representation
Letter.
SECTION 212. CANCELLATION. Upon payment of the principal of, premium,
if any, and interest on any Bond, or replacement of any Bond pursuant to Section
209 hereof or transfer or exchange pursuant to Section 210 hereof, any such Bond
shall be cancelled and destroyed by the Trustee. The Issuer or the Company may
at any time deliver to the Trustee for cancellation any Bonds previously
authenticated and delivered hereunder which the Issuer or the Company may have
acquired in any manner whatsoever, and all Bonds so delivered shall be promptly
cancelled and destroyed by the Trustee. No Bonds shall be authenticated in lieu
of or in exchange for any Bonds cancelled as provided in this Section, except as
expressly permitted by this Indenture. Counterparts of a certificate of
destruction evidencing the destruction and disposal of any Bond pursuant to this
Section 212 shall be furnished by the Trustee to the Company and the Issuer.
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ARTICLE III
REDEMPTION OF BONDS
SECTION 301. OPTIONAL REDEMPTION OF SERIES 1995A BONDS. The Series 1995A
Bonds are subject to optional redemption prior to maturity by the Trustee at the
direction of the Company, in whole at any time or in part on any Interest
Payment Date, in inverse order of maturity and by lot within each maturity at
any time on or after February 1, 2005, at a redemption price expressed as a
percentage of principal amount of Series 1995A Bonds to be redeemed set forth in
the table below, together with accrued interest to the Redemption Date:
<TABLE>
<CAPTION>
Redemption Date Redemption Price
--------------- ----------------
<S> <C>
February 1, 2005 - January 31, 2006 102%
February 1, 2006 - January 31, 2007 101%
February 1, 2007 and thereafter 100%
</TABLE>
SECTION 302. EXTRAORDINARY OPTIONAL REDEMPTION. The Series 1995A Bonds
shall be subject to extraordinary optional redemption prior to maturity by the
Trustee, at the direction of the Company, in whole or in part, on any date at a
redemption price equal to the principal amount of the Series 1995A Bonds to be
redeemed plus accrued interest to the redemption date, within 365 days following
the occurrence of any one of the following events (or, in the case of (a) and
(b) below, at the option of the Company, within sixty (60) days following the
receipt of any proceeds relating to such event):
(a) The Facility or a substantial portion thereof
shall have been damaged or destroyed by fire or other casualty
(i) to such extent that, in the opinion of the Company
expressed in a certificate signed by an Authorized Company
Representative and filed with the Issuer and the Trustee,
within a period of twelve consecutive months following such
damage or destruction it is not practicable or desirable to
rebuild, repair or restore the Facility, or (ii) to such
extent that, in the opinion of the Company expressed in a
certificate signed by an Authorized Company Representative and
filed with the Issuer and the Trustee, the Facility is or will
be prevented thereby from operating normally for a period of
twelve (12) consecutive months.
(b) Title to, or the temporary use of, all or
substantially all the Facility shall have been taken under the
exercise of the power of eminent domain (including such a
taking or takings which results or is likely to result, in the
opinion of the Company expressed in a certificate signed by an
Authorized Company Representative and filed with the Issuer
and the Trustee, in normal operations at the Facility being
interrupted for a period of twelve (12) consecutive months or
results or is likely to result in rendering the Facility, in
the opinion of the Company expressed in a certificate signed
by an Authorized Company Representative and filed with the
Issuer and the Trustee, unsuitable for use).
(c) As a result of any changes in the Constitution of
the State of Utah or the Constitution of the United States of
America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal)
entered
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after the contest thereof by the Company in good faith, the
Loan Agreement shall have become void or unenforceable or
impossible of performance in accordance with the intent and
purposes of the parties as expressed in the Loan Agreement, or
unreasonable burdens or excessive liabilities shall have been
imposed on the Issuer or the Company, including without
limitation, federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of the
Loan Agreement or changes since the date of initial issuance
of the Bonds in regulatory requirements, technology or the
economic availability of raw materials, operating supplies,
equipment or waste requiring treatment and disposal, which
condition cannot reasonably be expected to improve materially
within a period of twelve (12) consecutive months and causes
the Company to determine that the Facility should not be
completed or that operation of the Facility should be
discontinued.
SECTION 303. SPECIAL MANDATORY REDEMPTION. The Series 1995A Bonds are
also subject to special mandatory redemption in whole by the Issuer on any date
prior to maturity at a redemption price of 100% of the principal amount thereof
together with accrued interest to the date of redemption, upon the occurrence of
a Determination of Taxability, as soon as practicable, but in no event later
than thirty (30) days after the occurrence of such Determination of Taxability.
Upon being notified of a Determination of Taxability, the Trustee shall give
immediate notice of redemption to the Company, to the Guarantor and to the
Registered Owners as provided in Section 304 herein.
"Determination of Taxability" shall mean a determination that the
interest income on any Series 1995A Bond does not qualify as being excludable
from the gross income of the Registered Owner thereof ("exempt interest") for
any reason other than that such Registered Owner is a "substantial user" of the
Facility or a "related person" as such terms are defined in Section 103(b)(6) of
the Internal Revenue Code of 1954, which determination shall be deemed to have
been made upon the occurrence of the first to occur of the following:
(i) the date on which the Company determines that the
interest income on any of the Series 1995A Bonds does not
qualify as exempt interest; or
(ii) the date on which any change in law or regulation
becomes effective or on which the Internal Revenue Service has
issued any private ruling, technical advice or any other
written communication to the effect that the interest income
on any of the Series 1995A Bonds does not qualify as exempt
interest; or
(iii) the date on which the Company shall receive notice
from the Trustee in writing that the Trustee has been advised
in writing by any Registered Owner of any Series 1995A Bond
that the Internal Revenue Service has issued a thirty-day
letter or other notice which asserts that the interest on such
Series 1995A Bond does not qualify as exempt interest; or
(iv) the date on which the Trustee receives written
notice that the Company or the Issuer has taken any action
inconsistent with, or has failed to act consistently with, the
tax exempt status of interest on the Series 1995A Bonds;
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<PAGE> 29
provided that no Determination of Taxability shall be deemed
to have occurred as a result of a determination by the Company
pursuant to Clause (i), (ii) or (iv) above unless such
determination is supported by a written opinion of nationally
recognized bond counsel satisfactory to the Trustee that the
interest income on the Series 1995A Bonds does not constitute
exempt interest. If, however, in the opinion of nationally
recognized bond counsel acceptable to the Trustee, redemption
of less than all of the Series 1995A Bonds will preserve the
exclusion from gross income of the Registered Owners thereof
of interest on the remaining Series 1995A Bonds, then only
such amount need be redeemed, the particular Series 1995A
Bonds to be redeemed to be selected by lot by the Trustee in
such manner as the Trustee in its discretion shall determine
or otherwise as specified in such final determination or
opinion. Such determination shall be referred to herein as a
"Determination of Taxability" and the event giving rise to
such Determination shall be referred to herein as an "Event of
Taxability". The Trustee shall receive and coordinate notices
from Registered Owners of the Series 1995A Bonds in connection
with such determination and to forward such notices to the
Company.
SECTION 304. NOTICE OF REDEMPTION. Notice of redemption shall be given by
the Trustee, by first-class mail, postage prepaid, mailed not less than thirty
(30) nor more than sixty (60) days prior to the redemption date, to each owner
of Bonds to be redeemed, at his address appearing in the Bond Register;
provided, however, that in the event of a redemption pursuant to Section 303
hereof, the Trustee shall not later than 2:00 p.m. (Trustee's local time) on the
first Business Day following the Determination of Taxability (a) use its best
reasonable efforts to notify the Company, the Guarantor and the Issuer thereof
by telephone, telex or telecopier, and (b) send written notice thereof to the
Company, the Guarantor and the Issuer by personal delivery or by Federal Express
or other similar express mail service guaranteed for next-day delivery. Failure
to give such notice by mailing, or any defect therein, shall not affect the
validity of the proceedings for the redemption of any Bond or portion thereof
with respect to which no such failure has occurred. In addition, notice of
redemption shall be sent by first-class mail, postage prepaid, or by overnight
delivery service, not less than 35 days prior to the redemption date, (1) to at
least two or more information services of national recognition that disseminate
redemption information with respect to municipal bonds and (2) to any securities
depository registered as such pursuant to the Securities Exchange Act of 1934,
as amended, in whose name Bonds to be redeemed have been registered as nominee;
provided, however, that no defect in or failure to give the notice described in
this sentence shall in any manner defeat the effectiveness of a call for
redemption with respect to Bonds for which notice was properly given as
described in the preceding sentence.
All notices of redemption shall state:
(a) the redemption date,
(b) the redemption price,
(c) the identification of the Bonds to be redeemed,
including complete designation and issue date of the series of
Bonds of which such Bonds are a part and the CUSIP number (and
in the case of partial redemption, the certificate numbers of
the Bonds to be redeemed and the respective
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<PAGE> 30
principal amounts thereof), interest rates and maturity dates
of such Bonds, and any other descriptive information which may
be necessary to identify accurately the Bonds to be redeemed,
(d) that on the redemption date the redemption price
will become due and payable upon each such Bond, and that
interest thereon shall cease to accrue from and after said
date, and
(e) the name and address of the Trustee including the
name and telephone number of a contact person and the place
where such Bonds are to be surrendered for payment of the
redemption price.
If at the time of mailing of notice of an optional redemption there shall
not have been deposited with the Trustee moneys sufficient to redeem all the
Bonds called for redemption, which moneys are or will be available for
redemption of Bonds, such notice will state that it is conditional, that is,
subject to the deposit of the redemption moneys with the Trustee not later than
the close of business of the fifth day prior to the Redemption Date, and such
notice shall be of no effect unless such moneys are so deposited.
SECTION 305. BONDS PAYABLE ON REDEMPTION DATE. Notice of redemption having
been given as aforesaid, the Bonds so to be redeemed shall, on the redemption
date, become due and payable at the redemption price therein specified and from
and after such date (unless the Issuer shall default in the payment of the
redemption price) such Bonds shall cease to bear interest. Upon surrender of any
such Bond for redemption in accordance with said notice, the redemption price of
such Bond shall be paid by the Trustee. If any Bond called for redemption shall
not be so paid upon surrender thereof for redemption, the principal (and
premium, if any) shall, until paid, bear interest from the redemption date at
the rate last borne by the Bond.
SECTION 306. BONDS REDEEMED IN PART. Any Bond which is to be redeemed in
part only shall be surrendered at the place of payment, duly endorsed by the
owner of such Bond, or accompanied by a written instrument of transfer in form
satisfactory to the Trustee, as appropriate, duly executed by the owner thereof
or his attorney duly authorized in writing and, upon such surrender, the Issuer
shall execute and the Trustee shall authenticate and deliver to the owner of
such Bond without service charge, a new Bond or Bonds in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Bond so surrendered which Bond or Bonds shall be in any Authorized
Denominations and shall be identical to the Bond being purchased or redeemed
with respect to stated maturity and interest rate, and bearing numbers not
contemporaneously outstanding.
SECTION 307. ELECTION TO REDEEM; NOTICE TO TRUSTEE AND ISSUER. The
election of the Company to redeem any Bonds shall be evidenced by a written
notice, signed by an Authorized Company Representative, given to the Trustee and
the Issuer not less than 45 days (unless a shorter notice shall be satisfactory
to the Trustee and the Issuer) and not more than 90 days prior to the redemption
date specified by the Company therein, which notice shall specify the Section of
this Indenture pursuant to which the Bonds are being redeemed, the redemption
date, and the aggregate principal amount of Bonds to be redeemed.
SECTION 308. SELECTION OF BONDS TO BE REDEEMED. If less than all the Bonds
are to be redeemed, the particular Bonds or portion thereof to be redeemed shall
be selected prior to the redemption date by the Trustee, by lot by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions of the principal
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of Bonds of a denomination larger than the minimum Authorized Denomination. The
unredeemed portion of a Bond selected for partial redemption must be equal to an
Authorized Denomination.
SECTION 309. DEPOSIT OF REDEMPTION PRICE. Pursuant to Section 4.1(b)(iii)
of the Loan Agreement, the Company is required, prior to any redemption date, to
deposit with the Trustee an amount of money in immediately available funds
sufficient to pay the redemption price of all the Bonds which are to be redeemed
on such date.
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ARTICLE IV
FUNDS AND ACCOUNTS
SECTION 401. ESTABLISHMENT OF FUNDS AND ACCOUNTS. There are hereby created
by the Issuer and ordered established with the Trustee the following irrevocable
trust funds and accounts:
(a) A separate Bond Fund, to be designated "Carbon
County, Utah Solid Waste Disposal Refunding Revenue Bonds
(Laidlaw Inc./ECDC Environmental, L.C. Project) Bond Fund",
shall be used for the purposes and shall be administered in
the manner set forth in Section 403 hereof; and
(b) A separate Construction Fund to be designated
"Carbon County, Utah Solid Waste Disposal Refunding Revenue
Bonds (Laidlaw Inc./ ECDC Environmental, L.C. Project)
Construction Fund", and within the Construction Fund separate
accounts relating to the series of Bonds authenticated and
delivered on each Delivery Date. Each of such accounts shall
be designated by the Trustee as the Trustee deems appropriate
and shall be administered in the manner set forth in Section
404 hereof.
The Trustee may establish such other funds and accounts as it may deem
necessary and appropriate to carry out the trusts hereby created.
SECTION 402. DISPOSITION OF PROCEEDS OF SALE OF SERIES 1995A BONDS. The
proceeds of the sale of the Series 1995A Bonds to be received by the Issuer on
the first Delivery Date shall be deposited by the Trustee upon receipt thereof
as follows:
(a) $15,000,000 shall be deposited with the trustee
for the Series 1993A Bonds into the bond fund established
pursuant to the Series 1993A Indenture and applied in
accordance with the provisions thereof to redeem an equal
aggregate principal amount of the Series 1993A Bonds; and
(b) $8,000,000 shall be deposited with the trustee for
the Series 1994 Bonds into the bond fund established pursuant
to the Series 1994 Loan Agreement and applied in accordance
with the provisions thereof to redeem an equal aggregate
principal amount of the Series 1994 Bonds.
Upon the issuance of the Series 1995A Bonds, $8,000,000 from the proceeds
of the Series 1994 Bonds on deposit in the construction fund created under the
Series 1994 Loan Agreement shall be transferred to, and deposited into the
separate account of the Construction Fund established by, the Trustee on the
Delivery Date.
SECTION 403. BOND FUND. There shall be deposited into the Bond Fund as and
when received all payments made by the Company pursuant to the Loan Agreement
with respect to the principal of, premium, if any, and interest on the Bonds,
including the redemption price of Bonds to be redeemed, and any other moneys
required by this Indenture or the Loan Agreement to be deposited into the Bond
Fund.
Except as may otherwise be required by the Proceeds Certificate or Section
405 hereof, moneys in the Bond Fund shall be used solely for the payment of the
principal of and premium,
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if any, on the Bonds as the same becomes due and payable (whether at stated
maturity, upon redemption or upon acceleration), and to pay interest on the
Bonds when due, all as provided in this Indenture.
Upon delivery by the Company of a Completion Certificate pursuant to
Section 3.4 of the Loan Agreement, there shall be transferred from the
Construction Fund to a segregated account of the Bond Fund certain amounts on
deposit in the Construction Fund, as described in Section 404 hereof, which
amounts shall be used in the manner described in Section 3.4 of the Loan
Agreement. The Trustee is hereby authorized and directed to use the moneys
transferred to the Bond Fund as described in this paragraph for the purposes set
forth in Section 3.4 of the Loan Agreement.
After the right, title and interest of the Trustee in and to the Trust
Estate and all covenants and agreements and other obligations of the Issuer to
the owners of the Bonds shall have ceased, terminated and become void and shall
have been satisfied and discharged in accordance with Article VI hereof, and the
fees, expenses and other amounts payable to the Trustee and the Issuer, pursuant
to any provisions hereof shall have been paid in full, any moneys remaining in
the Bond Fund shall be paid to the Company upon a written request therefor
signed by an Authorized Company Representative.
SECTION 404. CONSTRUCTION FUND. There shall be deposited into the
Construction Fund the amounts specified in Section 402 hereof from the proceeds
to be received from time to time of the sale of the Series 1995A Bonds.
Moneys in the Construction Fund shall be expended in accordance with the
applicable provisions of the Loan Agreement to pay Project Costs at any time
with respect to which no Event of Default has occurred and is continuing, upon
receipt by the Trustee of a written requisition signed by an Authorized Company
Representative, stating the name and address of the person to whom payment is to
be made and the amount to be paid and certifying that (a) none of the payments
for which the payment or reimbursement is proposed to be made has formed the
basis for any payment or reimbursement theretofore made from the Construction
Fund, (b) each item for which payment or reimbursement is proposed to be made is
or was necessary in connection with Construction of the Project, (c) all of the
proceeds of the Bonds (to and including such disbursement) have been or are
being used to provide for Project Costs and (d) such payment or reimbursement is
in accordance with all applicable provisions of the Loan Agreement. In making
any such payment, the Trustee may conclusively rely upon such written
requisition and the Trustee shall be relieved of all liability with respect to
making such payment in accordance with such written requisition. The Trustee
shall keep and maintain adequate records pertaining to the Construction Fund and
all disbursements therefrom. Notwithstanding the foregoing the Trustee is
directed to pay an amount equal to $160,000 from the Construction Fund for costs
of issuance of the Series 1995A Bonds upon receipt of a closing statement signed
by an Authorized Company Representative.
In addition to the foregoing, there shall be withdrawn from the
Construction Fund (a) any moneys remaining on deposit in the Construction Fund
upon the delivery of a Completion Certificate pursuant to Section 3.4 of the
Loan Agreement (other than amounts to be retained by the Trustee in the
Construction Fund at the direction of the Company to pay Project Costs not then
due and payable or amounts with respect to which the liability for payment is in
dispute), to be deposited into a segregated account of the Bond Fund, and (b)
any moneys remaining on deposit in the Construction Fund upon the prepayment of
all installments payable pursuant to Article VIII of the Loan Agreement, to be
deposited into the Bond Fund.
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There shall also be transferred to the Bond Fund from the Construction Fund any
moneys remaining on deposit in the Construction Fund at such time as the
principal of all Outstanding Bonds shall have become due and payable in
accordance with the provisions of Section 7.3(a) of the Loan Agreement, and (c)
no more than 2% of the proceeds of the Refunded Bonds (less costs of issuance
previously paid from proceeds of the Refunded Bonds) shall be used for costs of
issuance of the Bonds, including the Underwriter's discount, and (d) not less
than 95% of the Spendable Proceeds of the Bonds, as defined herein, shall be
used for Qualified Project Costs. The term "Spendable Proceeds" means the
proceeds from the sale of the Bonds, less amounts used to redeem the Refunded
Bonds, plus transferred proceeds of the Refunded Bonds, plus earnings from
investment of the foregoing.
SECTION 405. REBATE FUND.
(a) There is hereby created and established with the Trustee a
trust fund to be designated "Carbon County, Utah Solid Waste
Disposal Refunding Revenue Rebate Fund". The Rebate Fund is not
pledged and does not secure the Registered Owners of the Bonds. The
Company shall on each applicable Rebate Calculation Date determine
or cause to be determined, the amount of Rebatable Arbitrage and the
corresponding Required Rebate Deposit with respect to the Bonds of
each Series to be deposited into the Rebate Fund and shall give
written notice to the Trustee of such determination. The Trustee
shall retain records of all such determinations until six years
after the requirement of the last Bond. In addition, the Company
shall deposit into the Rebate Fund the Required Rebate Deposit, if
any, within 30 days after each Rebate Calculation Date. Upon written
direction of the Company, the Trustee shall withdraw from the Rebate
Fund and pay over to the United States Government: (1) not less
frequently than once each five years commencing no later than 30
days after each Rebate Calculation Date, and upon each fifth
anniversary of the first such payment date, an amount equal to 90%
of the net aggregate amount of Rebatable Arbitrage less the amount,
if any, of Rebatable Arbitrage theretofore paid to the United
States, and (2) not later than 30 days after the retirement of the
last Bond of such series 100% of the aggregate amount of Rebatable
Arbitrage with respect to such series of Bonds.
(b) Withdrawals from the Rebate Fund may be made to the extent
the Company determines with the written approval of the Trustee that
amounts on deposit in such fund exceed amounts required to be on
deposit therein pursuant to this Section 405. All such withdrawals
shall be transferred to the Bond Fund.
(c) The provisions of this Section 405 may be amended or
deleted from this Indenture upon receipt by the Issuer and the
Trustee of an opinion of nationally recognized bond counsel that
such amendment or deletion will not adversely affect the exclusion
of the interest on the Bonds from gross income for purposes of
federal income taxation. Any moneys on deposit in the Rebate Fund
may be applied by the Trustee as permitted in such opinion.
(d) The Trustee shall at least 60 days prior to each Rebate
Calculation Date notify the Company and the Issuer of the
requirements of this Section. By agreeing to give this notice, the
Trustee assumes no responsibility whatsoever for compliance by the
Company with the requirements of Section 148 of the Code or any
successor. Notwithstanding any other provision of the Indenture, any
failure of the Trustee to give any such notice, for any reason
whatsoever, shall not cause the Trustee to be responsible for any
failure of the Company to comply with the requirements of said
Section 148 or any successor thereof.
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ARTICLE V
INVESTMENT OF MONEYS
Any moneys held pursuant to this Indenture as part of the Construction
Fund, the Bond Fund (other than moneys for the payment of Bonds which shall have
become payable at maturity, upon redemption or otherwise, or for the payment of
interest thereon which has become due) and the Rebate Fund shall be invested and
reinvested by the Trustee in Eligible Securities upon the written order of the
Company signed by an Authorized Company Representative, provided, however, that
all investments shall be made by the Trustee in compliance with the applicable
provisions of the Proceeds Certificate. The Trustee shall be entitled to rely on
each such written order and shall incur no liability for making any such
investment so designated or for any loss incurred in selling such investment.
The Trustee may make any and all such investments through or from its own bond
department, provided that such investments are on fair and reasonable terms no
less favorable than would be obtained in a comparable arm's-length transaction.
Any investments pursuant to this Article V shall be held by or under the
control of the Trustee and shall be deemed at all times a part of the fund,
account or subaccount for which they were made, but the Trustee shall have no
liability with respect to any investment made pursuant to any such written
order. The interest accruing thereon and any profit realized from such
investments shall be credited, and any loss resulting from such investment shall
be charged, to such fund, account or subaccount. The Trustee shall sell and
reduce to cash a sufficient amount of such investments (a) of the Construction
Fund whenever the cash balance in the Construction Fund is insufficient to pay a
written requisition when presented, (b) of the Bond Fund whenever the cash
balance in the Bond Fund is insufficient to pay the principal of or premium, if
any, or interest on the Bonds when due, and (c) of the Rebate Fund as necessary
for the purposes thereof.
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ARTICLE VI
SATISFACTION OF THE INDENTURE
SECTION 601. DISCHARGE OF INDENTURE. If the Issuer shall pay or cause to
be paid, or there shall be otherwise paid or deemed paid or provision for
payment made to or for the owners of the Bonds the principal, premium, if any,
and interest due or to become due thereon at the times and in the manner
stipulated therein and in this Indenture, and if the Issuer shall not then be in
default in any of the other covenants and promises in the Bonds and in this
Indenture expressed to be kept, performed and observed by it or on its part, and
shall pay or cause to be paid to the Trustee all sums of money due or to become
due according to the provisions hereof, then these presents and the estate and
rights hereby granted shall cease, determine and be void, whereupon the Trustee
shall cancel and discharge the lien of this Indenture and execute and deliver to
the Issuer such instruments in writing as shall be requisite to cancel and
discharge the lien of this Indenture, and reconvey, release, assign and deliver
unto the Issuer any and all estate, right, title and interest in and to any and
all property conveyed, assigned or pledged to the Trustee or otherwise subject
to this Indenture, except amounts in the Rebate Fund and amounts in the Bond
Fund required to be paid to the Company pursuant to any express provisions to
that effect contained herein and moneys or securities held by the Trustee for
the payment of the principal of, and premium, if any, and interest on, the
Bonds.
SECTION 602. BONDS DEEMED PAID. Any Bond shall be deemed to have been paid
if:
(a) in case said Bond is to be redeemed on any date prior to
its stated maturity, the Company shall have given to the Trustee in
form satisfactory to the Trustee, irrevocable instructions to give
notice of redemption of such Bond on said redemption date;
(b) payment of the principal of and premium, if any, on such
Bond, plus interest thereon to the due date thereof (whether such
due date be by reason of maturity or upon redemption as provided in
this Indenture, or otherwise), either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii)
shall have been provided for by depositing with the Trustee, in
trust and irrevocably set aside exclusively for such payment, (1)
moneys sufficient to make such payment or (2) Government Obligations
maturing as to principal and interest in such amounts and at such
times as will provide sufficient moneys to make such payment
(provided that such deposit will not affect the excludability of
interest on any of the Bonds from the gross income of the owners
thereof for federal income tax purposes or cause any of the Bonds to
be classified as "arbitrage bonds" within the meaning of Section 148
of the Code), and all necessary and proper fees, compensation and
expenses of the Issuer and the Trustee, pertaining to the Bond with
respect to which such deposit is made and all other liabilities of
the Company under the Loan Agreement pertaining to such Bond shall
have been paid or the payment thereof provided for; and
(c) in the event said Bond is not by its terms subject to
redemption within 60 days following the proposed date of deposit,
the Company shall have given the Trustee in form satisfactory to it
irrevocable instructions to give a notice to the holders of such
Bonds that the deposit required by clause (b)
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above has been made with the Trustee and that said Bonds are
deemed to have been paid in accordance with this Section and
stating such date upon which moneys are to be available for
payment of the principal of, premium, if any, and interest on
said Bonds.
The Issuer or the Company may at any time surrender to the Trustee for
cancellation by it any Bonds previously authenticated and delivered, which the
Issuer or the Company may have acquired in any manner whatsoever, and such
Bonds, upon such surrender and cancellation, shall be deemed to be paid and
retired.
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ARTICLE VII
GENERAL COVENANTS
SECTION 701. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; NO
GENERAL OBLIGATION. The Issuer covenants that it will promptly pay or cause to
be paid the principal of, premium, if any, and interest on every Bond issued
under this Indenture at the place or places, on the dates and in the manner
provided herein and in the Bonds, provided that such principal, premium, if any,
and interest are payable by the Issuer solely from the Trust Estate, and nothing
in the Bonds or this Indenture shall be considered as assigning or pledging any
other funds or assets of the Issuer other than the Trust Estate.
Each and every covenant made herein by the Issuer is predicated upon the
condition that the Issuer shall not in any event be liable from any property or
source other than the Trust Estate for the payment of the principal of, premium,
if any, or interest on the Bonds, or the payment of any amounts payable under
the Loan Agreement, or the performance of any pledge, obligation or agreement
created by or arising under this Indenture, the Bonds or the Loan Agreement;
and, further, that neither the Bonds nor any such obligation or agreement of the
Issuer shall be construed to constitute an indebtedness of the Issuer within the
meaning of any constitutional or statutory provision whatsoever, or a pecuniary
liability of the Issuer or a charge against its general credit or taxing power.
SECTION 702. PERFORMANCE OF COVENANTS; LEGAL AUTHORIZATION. The Issuer
covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Indenture, in any
and every Bond executed, authenticated and delivered hereunder and in all
proceedings of the Governing Body pertaining thereto. The Issuer represents that
it is duly authorized under the Constitution and laws of the State to issue the
Bonds authorized hereby, to execute this Indenture, to assign the Loan Agreement
and to pledge and assign the Trust Estate pledged to the payment of the Bonds
and payments thereon in the manner and to the extent herein set forth; that all
action on its part for the issuance of the Series 1995A Bonds and the execution
and delivery of this Indenture has been duly and effectively taken (or, if
Additional Bonds are issued pursuant to Section 208 hereof, will be duly taken
as provided therein); and that the Bonds in the hands of the owners thereof as
shown on the Bond Register are and will be valid and enforceable obligations of
the Issuer according to the import thereof.
SECTION 703. FURTHER ASSURANCES. Except to the extent otherwise provided
in this Indenture, the Issuer shall not enter into any contract or take any
action by which the rights of the Trustee or the Bondholders may be impaired and
shall, from time to time, execute and deliver such further instruments and take
such further action as may be required to carry out the purposes of this
Indenture. The Issuer shall be entitled to reimbursement from the Company for
any action taken pursuant to this Section 703.
SECTION 704. IMMUNITIES AND LIMITATIONS OF RESPONSIBILITY OF ISSUER. The
Issuer shall be entitled to the advice of counsel (who, except as otherwise
provided, may be counsel for any Bondholder), and the Issuer shall be wholly
protected as to action taken or omitted in good faith in reliance on such
advice. The Issuer may rely conclusively on any communication or other document
furnished to it hereunder and reasonably believed by it to be genuine. The
Issuer shall not be liable for any action (a) taken by it in good faith and
reasonably believed by it to be within its discretion or powers hereunder, or
(b) in good faith omitted to be taken by it because such action was reasonably
believed to be beyond its discretion or powers
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hereunder, or (c) taken by it pursuant to any direction or instruction by which
it is governed hereunder, or (d) omitted to be taken by it by reason of the lack
of any direction or instruction required hereby for such action; nor shall it be
responsible for the consequences of any error of judgment reasonably made by it.
The Issuer shall in no event be liable for the application or misapplication of
funds or for other acts or defaults by any person, except its own officers and
employees. When any payment or consent or other action by it is called for
hereby, it may defer such action pending receipt of such evidence (if any) as it
may reasonably require in support thereof. The Issuer shall not be required to
take any remedial action (other than the giving of notice) unless reasonable
indemnity is furnished for any expense or liability to be incurred thereby,
other than liability for failure to meet the standards set forth in this
Section. As provided herein and in the Loan Agreement, the Issuer shall be
entitled to reimbursement for its expenses reasonably incurred or advances
reasonably made, with interest at the rate borne by the Bonds, in the exercise
of its rights or the performance of its obligations hereunder, to the extent
that it acts without previously obtaining indemnity. No permissive right or
power to act which it may have shall be construed as a requirement to act, and
no delay in the exercise of a right or power shall affect its subsequent
exercise of that right or power.
SECTION 705. RECORDING AND FILING. The Issuer covenants that, solely from
additional amounts payable as provided in Section 4.3 of the Loan Agreement, it
will, if necessary, cause this Indenture and all supplements hereto and the Loan
Agreement and all supplements thereto, and all related financing statements, to
be kept, recorded and filed in such manner and in such places as may be required
by law in order to preserve and protect fully the security of the Bondholders
and the rights of the Trustee hereunder.
SECTION 706. BOOKS AND RECORDS. The Issuer covenants that so long as any
Bonds are Outstanding and unpaid, it will keep, or cause to be kept, proper
books of record and account, relating to its financial dealings under this
Indenture and the Loan Agreement. Such books shall at all times be open for any
lawful purpose to the inspection of such accountants or other agents as the
Trustee may from time to time designate.
SECTION 707. DEFENSE OF ISSUER'S RIGHTS. The Issuer agrees that the
Trustee may defend the Issuer's rights to the payments and other amounts due
under the Loan Agreement, for the benefit of the Bondholders, against the claims
and demands of all persons whomsoever. The Issuer covenants that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, transferring, pledging, assigning and confirming to the Trustee all
and singular the rights assigned hereby and the amounts pledged hereby to the
payment of the principal of, premium, if any, and interest on the Bonds. The
Issuer covenants and agrees that, except as herein and in the Loan Agreement
provided, it will not sell, convey, assign, pledge, encumber or otherwise
dispose of any part of the Trust Estate.
SECTION 708. ARBITRAGE; COMPLIANCE WITH PROCEEDS CERTIFICATE. The Issuer
covenants and agrees that it will not take any action or fail to take any action
with respect to the investment of the proceeds of any Bonds issued under this
Indenture or with respect to the payments derived from the Loan Agreement, which
would result in constituting the Bonds "arbitrage bonds" within the meaning of
such term as used in Section 148(a) of the Code. The Issuer further covenants
and agrees that it will comply with and take all actions required by the
Proceeds Certificate.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 801. EVENTS OF DEFAULT. An "Event of Default," as used herein,
shall mean any of the following events, whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body:
(a) failure to pay any installment of interest payable on any
of the Bonds when the same shall become due and payable; or
(b) failure to pay the principal of or the premium, if any, on
any of the Bonds when the same shall become due and payable, whether
at the stated maturity thereof, by proceedings for redemption, upon
acceleration or otherwise; or
(c) failure by the Issuer or the Company to duly observe or
perform any covenant or agreement (other than a covenant or
agreement whose performance or observance is elsewhere in this
Section 801 specifically dealt with) on the part of the Issuer or
the Company, respectively, contained in this Indenture or the Loan
Agreement, for a period of 30 days after the date on which written
notice of such failure, requiring the same to be remedied, shall
have been given to the Issuer and the Company by the Trustee, or to
the Issuer, the Company and the Trustee by the owners of at least
twenty-five percent (25%) in aggregate principal amount of Bonds
then Outstanding; provided that if such default can be cured by the
Issuer or the Company but cannot be cured within the 30-day curative
period described above, it shall not constitute an Event of Default
if corrective action is instituted by the Issuer or the Company
within such 30-day period and such action is diligently pursued
until the default is corrected; or
(d) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization or arrangement of the Company under the federal
Bankruptcy Code or any other similar applicable federal or state
law, and such decree or order shall have continued undischarged and
unstayed for a period of 90 days; or a decree or order of a court
having jurisdiction in the premises for the appointment of a
receiver or trustee or assignee in bankruptcy or insolvency of the
Company or of the Company's property, or for the winding up or
liquidation of the Company's affairs, shall have been entered, and
such decree or order shall have remained in force undischarged and
unstayed for a period of 90 days; or
(e) the Company shall institute proceedings to be adjudicated
a voluntary bankrupt, or shall consent to the institution of a
bankruptcy proceeding against it, or shall file a petition or answer
or consent seeking reorganization or arrangement under the federal
Bankruptcy Code or any other similar applicable federal or state
law, or shall consent to the appointment of a receiver or trustee or
assignee in bankruptcy or insolvency of it or of its
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property or shall make assignment for the benefit of creditors, or
shall admit in writing its inability to pay its debts generally as
they become due, or corporate action shall be taken by the Company
in furtherance of any of the aforesaid purposes;
(f) the occurrence of an "Event of Default" under the Loan
Agreement or the Guaranty; or
(g) the occurrence of an Act of Bankruptcy of Guarantor.
SECTION 802. ACCELERATION. Upon the occurrence and continuation of an
Event of Default the Trustee may, and upon receipt of the written directions of
the owners of not less than twenty-five percent (25%) in principal amount of the
Bonds Outstanding shall, by written notice delivered to the Issuer and the
Company declare the entire principal amount of the Bonds then Outstanding, and
the interest accrued thereon, immediately due and payable and the entire
principal and interest shall thereupon become and be immediately due and
payable, subject, however, to the provisions of Section 811 hereof with respect
to waivers of Events of Default, and the Trustee shall give notice thereof by
first class mail, postage prepaid, to all owners of Outstanding Bonds.
SECTION 803. REMEDIES; RIGHTS OF BONDHOLDERS. Upon the occurrence and
continuance of any Event of Default, the Trustee may, without any action on the
part of the Bondholders, and shall, at the written request of the owners of not
less than twenty-five percent (25%) in principal amount of the Bonds then
Outstanding, and in any case upon being indemnified to its satisfaction as
provided in Section 901(k) hereof:
(a) by mandamus, or other suit, action or proceeding at law or
in equity, enforce all rights of the Bondholders under, and require
the Issuer, the Company or the Guarantor to carry out any agreements
with or for the benefit of the Bondholders and to perform its or
their duties under, the Act, the Loan Agreement, the Guaranty, and
this Indenture, provided that any such remedy may be taken only to
the extent permitted under the applicable provisions of the Loan
Agreement, the Guaranty or this Indenture, as the case may be;
(b) bring suit upon the Bonds; or
(c) by action or suit in equity enjoin any acts or things
which may be unlawful or in violation of the rights of the
Bondholders;
provided, however, that the Trustee shall have the right to decline to comply
with any such request or direction if the Trustee shall be advised by counsel
(who may be its own counsel) that the action so requested may not lawfully be
taken or the Trustee in good faith shall determine that such action would be
unjustly prejudicial to the Bondholders not parties to such request.
No remedy by the terms of this Indenture conferred upon or reserved to
the Trustee (or to the Bondholders) is intended to be exclusive of any other
remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Trustee or to the Bondholders now or
hereafter existing at law or in equity or by statute; provided, however, that
any conditions set forth herein to the taking of any remedy to enforce the
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provisions of this Indenture, the Bonds, the Guaranty or the Loan Agreement
shall also be conditions to seeking any remedies under any of the foregoing
pursuant to this Section 803.
No delay or omission of the Trustee or any Bondholder to exercise any
right or power accruing upon any default or Event of Default shall impair any
such right or power or shall be construed to be a waiver of any such default or
Event of Default, or acquiescence therein; and every such right and power given
by this Article VIII to the Trustee and the Bondholders, respectively, may be
exercised from time to time and as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the
Trustee or by the Bondholders, shall extend to or shall affect any subsequent
default or Event of Default or shall impair any rights or remedies consequent
thereon.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer, the Company, the Guarantor or any other obligor upon the Bonds or
their creditors, and whether or not an Event of Default hereunder shall have
occurred and be continuing, the Trustee (irrespective of whether the principal
of the Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Issuer for the payment of overdue principal or interest) may
be entitled and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid with
respect to the Bonds and to file such other papers or documents as
may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Bondholders allowed in such judicial proceeding,
and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the
same; and any receiver, assignee, trustee, liquidator, sequestrator
(or other similar official) in any such judicial proceeding is
hereby authorized by each Bondholder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Bondholders, to pay to the
Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel, and any other amounts due the Trustee under this Indenture.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any owner thereof, or to authorize the Trustee to vote with
respect to the claim of any Bondholder in any such proceeding.
SECTION 805. DIRECTION OF PROCEEDINGS BY BONDHOLDERS. The owners of not
less than fifty-one percent (51%) in aggregate principal amount of Bonds then
Outstanding shall have the right, at any time, by an instrument or instruments
in writing executed and delivered to the Trustee, to direct the method and place
of conducting all proceedings to be taken in connection
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with the enforcement of the terms and conditions of this Indenture, including
enforcement of the rights of the Issuer under the Loan Agreement or the
appointment of a receiver or any other proceedings hereunder; provided, that
such direction shall not be otherwise than in accordance with the provisions of
law and of this Indenture.
SECTION 806. 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 Bondholders under this
Indenture, the Trustee shall be entitled, as a matter of right, to the
appointment of a receiver or receivers of the rights and properties pledged
hereunder and of the revenues, issues, payments and profits thereof, pending
such proceedings, with such powers as the court making such appointment shall
confer.
SECTION 807. APPLICATION OF MONEYS. Subject to the provisions of the
Proceeds Certificate, all moneys received by the Trustee, by any receiver or by
any Bondholder pursuant to any right given or action taken under the provisions
of this Article VIII shall, after payment of the costs and expenses of the
proceedings resulting in the collection of such moneys and of the expenses,
liabilities and advances incurred or made by the Trustee (provided that moneys
on deposit in the Bond Fund prior to the Event of Default and held for Bonds not
presented for payment and moneys deposited pursuant to Article VI hereof shall
not be used for purposes other than payment of such Bonds), be deposited into
the Bond Fund and all moneys so deposited during the continuance of an Event of
Default (other than moneys for the payment of Bonds which had matured or
otherwise become payable prior to such Event of Default or for the payment of
interest due prior to such Event of Default), together with all moneys in any
other fund or account maintained by the Trustee under this Indenture shall be
applied as follows:
(a) Unless the principal of all the Bonds shall have become or
shall have been declared due and payable, all such moneys shall be
applied:
First: To the payment of amounts, if any, payable to
the United States Treasury pursuant to the Proceeds
Certificate and Section 405 hereof;
Second: To the payment to the Persons entitled thereto
of all installments of interest then due on the Bonds, with
interest on overdue installments of interest and principal, if
lawful, at the Default Rate in the order of the maturity of
the installments of such interest, and, if the amount
available shall not be sufficient to pay in full any
particular installment of interest, then to the payment
ratably, according to the amounts due on such installment, to
the Persons entitled thereto without any discrimination or
privilege; and
Third: To the payment to the Persons entitled thereto
of the unpaid principal of any of the Bonds which shall have
become due (other than Bonds called for redemption for the
payment of which moneys are held pursuant to the provisions of
this Indenture), in the order of their due dates, and, if the
amount available shall not be sufficient to pay in full the
principal of Bonds due on any particular date, then to the
payment ratably, according to the amount of principal due on
such date, to the Persons entitled thereto without any
discrimination or privilege.
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(b) If the principal of all the Bonds shall have
become due or shall have been declared due and payable, all
such moneys shall be applied to the payment of the principal
and interest then due and unpaid upon the Bonds, with interest
on overdue interest and principal, as aforesaid, without
preference or priority of principal over interest or of
interest over principal, or of any installment of interest
over any other installment of interest, or of any Bond over
any other Bond, ratably, according to the amounts due
respectively for principal and interest, to the Persons
entitled thereto without any discrimination or privilege.
Whenever moneys are to be applied pursuant to the provisions of this
Section 807, such moneys shall be applied at such times, and from time to time,
as the Trustee shall determine, having due regard for the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such moneys, it shall fix the date upon which such application is to commence
and upon such date interest on the amounts of principal and interest to be paid
on such date shall cease to accrue. The Trustee shall give such notice as it may
deem appropriate of the deposit with it of any such moneys and of the fixing of
any such date by mailing a copy of such notice by first class mail postage
prepaid to the owners of the then Outstanding Bonds. The Trustee shall not be
required to make payment to the holder of any unpaid Bond until such Bond shall
be presented to the Trustee for appropriate endorsement or for cancellation if
fully paid.
SECTION 808. REMEDIES VESTED IN TRUSTEE. All rights of action, including
the right to file proof of claims under this Indenture or under any of the
Bonds, may be enforced by the Trustee without the possession of any of the Bonds
or the production thereof in any trial or other proceedings relating thereto and
any such suit or proceeding instituted by the Trustee shall be brought in its
name as Trustee without the necessity of joining as plaintiffs or defendants any
holders of the Bonds, and any recovery of judgment shall be for the equal
benefit of the holders of the then Outstanding Bonds, subject to the provisions
of this Indenture.
SECTION 809. RIGHTS AND REMEDIES OF BONDHOLDERS. No holder of any Bond
shall have any right to institute any suit, action or proceeding in equity or at
law for the enforcement of this Indenture or for the execution of any trust
hereof or for the appointment of a receiver or for the enforcement of any other
remedy hereunder, unless a default shall have become an Event of Default and the
holders of twenty-five percent (25%) in aggregate principal amount of Bonds then
Outstanding shall have made written request to the Trustee and shall have
offered the Trustee reasonable opportunity either to proceed to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name, and unless such Bondholders have also offered to the Trustee
indemnity as provided in Section 901(k) hereof, and unless the Trustee shall
thereafter fail or refuse to exercise the powers hereinbefore granted, or to
institute such action, suit or proceeding in its own name; and such
notification, request and offer of indemnity are hereby declared in every case
at the option of the Trustee to be conditions precedent to the execution of the
powers and trusts of this Indenture and to any action or cause of action for the
enforcement of this Indenture, or for the appointment of a receiver or for any
other remedy hereunder; it being understood and intended that no one or more
Bondholders shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien of this Indenture by any action or to enforce any right
hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner herein
provided and for the equal benefit of the holders of all Bonds
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Outstanding. Nothing in this Indenture contained shall, however, (a) affect or
impair the right of any Bondholder to enforce the payment of the principal of
and interest on any Bond at and after the maturity thereof, or (b) affect or
impair the obligation of the Issuer to pay the principal of and interest on each
of the Bonds issued hereunder to the respective holders thereof at the time and
place, from the source and in the manner in said Bonds expressed.
SECTION 810. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver, or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee, then and in every case the Issuer and the Trustee shall, subject to any
determination in such proceeding, be restored to their former positions and
rights hereunder with respect to the property pledged and assigned hereunder,
and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
SECTION 811. WAIVERS OF EVENTS OF DEFAULT. The Trustee may, in its
discretion, without any action on the part of the Bondholders, waive any Event
of Default hereunder and its consequences and rescind any declaration that the
principal of and interest on the Bonds is immediately due and payable, if such
waiver or rescission is not, in the judgment of the Trustee, detrimental to the
Bondholders, and shall do so upon the written request of the holders of at least
fifty-one percent (51%) in aggregate principal amount of all Bonds Outstanding
which are affected by such default.
SECTION 812. NOTICE OF DEFAULT. In the event of any default hereunder, the
Trustee will promptly give written notice thereof to the Issuer, the Guarantor
and the Company setting forth the nature of such default.
SECTION 813. DEMAND UNDER GUARANTY. In the event that the Trustee fails to
receive any payment due from the Company, the Trustee shall take the actions
provided under Section 4.7 of the Loan Agreement and seek to enforce the rights
as otherwise provided in the Guaranty.
SECTION 814. LIMITATION OF LIABILITY. In the event of a violation of the
tax covenants contained herein or in the Loan Agreement or the other Company
Documents, the Bondholders' remedy shall be limited to the payment of 100% of
the principal amount of the Bonds then outstanding, plus accrued interest, if
any, to the payment date, such that neither the Issuer nor the Company will be
liable for any premium or penalty.
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ARTICLE IX
TRUSTEE
SECTION 901. ACCEPTANCE OF TRUSTS. The Issuer initially appoints West One
Bank, Utah, Salt Lake City, Utah, as Trustee and Registrar. The Trustee hereby
accepts such appointment and agrees to execute the trusts imposed upon it by
this Indenture, but only upon the terms and conditions set forth herein, to all
of which the Issuer agrees and the respective owners of the Bonds agree by their
acceptance of delivery of any of the Bonds. The Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations should be read into this Indenture
against the Trustee. The Trustee agrees to perform such trusts as an ordinarily
prudent trustee under a corporate indenture, but in any such event, only upon
and subject to the following expressed terms and conditions:
(a) The Trustee may execute any of the trusts or powers hereof
and perform any of its duties by or through attorneys, agents or
receivers and shall not be responsible for the misconduct or
negligence of any such attorneys, agents or receivers appointed in
the exercise of the care of an ordinarily prudent trustee, and shall
be entitled to advice of counsel concerning all matters of trusts
hereof and duties hereunder, and may in all cases pay such
reasonable compensation to any attorney, agent, receiver or employee
retained or employed by it in connection herewith. The Trustee may
act upon the opinion or advice of an attorney, surveyor, engineer or
accountant selected by it in the exercise of reasonable care or, if
selected or retained by the Issuer, approved by the Trustee in the
exercise of such care. The Trustee shall not be responsible for any
loss or damage resulting from any action or nonaction based on its
good faith reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for any recital
herein, or in the Bonds (except with respect to the Certificate of
Authentication of the Trustee endorsed on the Bonds), or for the
investment of moneys as herein permitted (except that no investment
shall be made except in compliance with Article V hereof), or for
the recording or re-recording, filing or re-filing of this
Indenture, or any supplement or amendment thereto, or the filing of
financing statements, or for the validity of the execution by the
Issuer of this Indenture, or of any supplemental indentures or
instruments of further assurance, or for the sufficiency of the
security for the Bonds issued hereunder or intended to be secured
hereby, or for the value or title of the property herein conveyed or
otherwise as to the maintenance of the security hereof. The Trustee
may (but shall be under no duty to) require of the Issuer and the
Company full information and advice as to the performance of the
covenants, conditions and agreements in the Loan Agreement and shall
make its best efforts, but without any obligation, to advise the
Issuer and the Company of any impending default known to the
Trustee. Except as otherwise provided in Section 803 hereof, the
Trustee shall have no obligation to perform any of the duties of the
Issuer under the Loan Agreement.
(c) The Trustee shall not be accountable for the use or
application by the Issuer or the Company of any of the Bonds or the
proceeds thereof or
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for the use or application of any money paid over by the Trustee in
accordance with the provisions of this Indenture.
(d) The Trustee shall be protected in acting upon any notice,
order, requisition, request, consent, certificate, order, opinion
(including an opinion of counsel), affidavit, letter, telegram or
other paper or document in good faith deemed by it to be 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 Bond, shall be conclusive and binding upon all
future owners of the same Bond and upon Bonds issued in exchange
therefor or in place thereof.
(e) 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, or an Authorized Company
Representative, as the case may be, as sufficient evidence of the
facts therein contained and prior to the occurrence of a default of
which the Trustee has been notified as provided in subsection (g) of
this Section, or of which by said subsection it is deemed to have
notice, may 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
necessary or advisable, but shall in no case be bound to secure the
same. The Trustee may accept a certificate of the County Clerk of
the Issuer under its seal to the effect that a resolution in the
form therein set forth has been adopted by the Issuer as conclusive
evidence that such resolution has been duly adopted, and is in full
force and effect.
(f) 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 negligence or
willful default.
(g) The Trustee shall not be required to take notice or be
deemed to have notice of any default hereunder, other than an Event
of Default under clause (a), (b), and (c) of Section 801 hereof
unless the Trustee shall be specifically notified in writing of such
default by the Issuer, the Company, or the holders of at least
twenty-five percent (25%) in aggregate principal amount of all Bonds
then Outstanding, 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 Office of the Trustee, and
in the absence of such notice so delivered the Trustee may
conclusively assume there is no default except as aforesaid.
(h) At any and all reasonable times, the Trustee, and its duly
authorized agents, attorneys, experts, engineers, accountants and
representatives, shall have the right fully to inspect any and all
of the property pledged hereunder, including all books, papers and
records of the Issuer pertaining to the property pledged hereunder
and the Bonds, and to take such memoranda from and in regard thereto
as may be desired.
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(i) The Trustee shall not be required to give any bond or
surety with respect to the execution of the said trusts and powers
or otherwise in respect of the premises.
(j) Notwithstanding anything elsewhere in this Indenture
contained, the Trustee shall have the right, but shall not be
required, to demand, with respect to the authentication of any
Bonds, the withdrawal of any cash, the release of any property or
any action whatsoever within the purview of this Indenture, any
showings, certificates, opinions, appraisals or other information,
or corporate action or evidence thereof, in addition to that by the
terms hereof required, as a condition of such action by the Trustee
deemed reasonably necessary for the purpose of establishing the
right of the Issuer to the authentication of any Bonds, the
withdrawal of any cash, the release of any property or the taking of
any other action by the Trustee.
(k) Before taking any action under this Section 901 other than
an acceleration when required pursuant to Section 802 hereof, the
Trustee may require that a satisfactory indemnity bond be furnished
for the reimbursement of all expenses to which it may be put and to
protect it against all liability, except liability which is
adjudicated to have resulted from its negligence or willful default
in connection with any action so taken.
(l) All moneys received by the Trustee shall, until used or
applied or invested as provided in this Indenture, 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, by
this Indenture. The Trustee shall not be under any liability for
interest on any moneys received hereunder except such as may be
agreed upon.
(m) If any Event of Default under this Indenture shall have
occurred and be continuing, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and shall use the
same degree of care as a prudent person would exercise or use in the
circumstances in the conduct of such prudent person's own affairs.
SECTION 902. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee shall be
entitled to payment and/or reimbursement for reasonable fees for its services
rendered hereunder (including services as Registrar, Co-Registrar, paying agent
and authenticating agent and services relating to the transfer of Bonds) and all
advances, counsel fees and other expenses reasonably and necessarily made or
incurred by each of them in connection with such services. Upon an Event of
Default hereunder, but only upon such an Event of Default, the Trustee shall
have a right of payment prior to payment on account of principal of, or premium,
if any, or interest on, any Bond for the foregoing advances, fees, costs and
expenses incurred; provided, however, that in no event shall the Trustee have
any such prior right of payment or claim therefor against moneys or obligations
deposited with or paid to the Trustee for the redemption or payment of Bonds
which are deemed to have been paid in accordance with Article VI hereof.
SECTION 903. NOTICE TO BONDHOLDERS IF DEFAULT OCCURS. If a default occurs
of which the Trustee is by subsection (g) of Section 901 hereof required to take
notice or if notice of default be given as in said subsection (g) provided, then
the Trustee shall give or cause to be
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given written notice thereof by first-class mail, postage prepaid, to the owners
of all then Outstanding Bonds.
SECTION 904. GOOD FAITH RELIANCE. The Trustee shall be protected and shall
incur no liability in acting or proceeding in good faith upon any resolution,
notice, telegram, telex or facsimile transmission, request, consent, waiver,
certificate, statement, affidavit, voucher, bond, requisition or other paper or
document which it shall in good faith believe to be genuine and to have been
passed or signed by the proper board, body or person or to have been prepared
and furnished pursuant to any of the provisions of this Indenture or the Loan
Agreement, or upon the written opinion of any attorney, engineer, accountant or
other expert believed by the Trustee to be qualified in relation to the subject
matter, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statements contained or matters referred to in any such
instrument, but may accept and rely upon the same as conclusive evidence of the
truth and accuracy of such statements. The Trustee shall not be bound to
recognize any person as an owner of Bonds or to take any action at such person's
request unless satisfactory evidence of the ownership of such Bond shall be
furnished to such entity.
SECTION 905. DEALINGS IN BONDS. The Trustee, in its individual capacity,
may in good faith buy, sell, own, hold and deal in any of the Bonds issued
hereunder, and may join in any action which any owner may be entitled to take
with like effect as if it did not act in any capacity hereunder. The Trustee in
its individual capacity, either as principal or agent, may also engage in or be
interested in any financial or other transaction with the Company, any Affiliate
of the Company, the Guarantor, or the Issuer, and may act as depositary, trustee
or agent for any committee or body of owners of Bonds secured hereby or other
obligations of the Issuer, the Company, the Guarantor, or any such Affiliate as
freely as if it did not act in any capacity hereunder.
SECTION 906. INTERVENTION BY TRUSTEE. In any judicial proceeding to which
the Issuer is a party and which in the opinion of the Trustee and its counsel
has a substantial bearing on the interests of owners of the Bonds, the Trustee
may intervene on behalf of Bondholders and, subject to the provisions of Section
901(k) hereof, shall do so if requested in writing by the owners of at least
twenty-five percent (25%) in aggregate principal amount of all Bonds then
Outstanding. The rights and obligations of the Trustee under this Section are
subject to the approval of a court of competent jurisdiction.
SECTION 907. SUCCESSOR TRUSTEE BY MERGER OR CONSOLIDATION. Any corporation
or association into which the Trustee may be converted or merged, or with which
it may be consolidated, or to which it may sell or transfer its corporate trust
business and assets as a whole or substantially as a whole, or any corporation
or association resulting from any such conversion, sale, merger, consolidation
or transfer to which it is a party, provided such corporation or association is
otherwise eligible under Section 908 hereof, shall be and become successor
Trustee hereunder, vested with all of the title to the whole property or trust
estate and all the trusts, powers, discretions, immunities, privileges and all
other matters as was its predecessor under this Indenture, without the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
SECTION 908. TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be a
Trustee hereunder which shall (a) be a commercial bank or trust company within
the State of Utah organized under the laws of the United States of America or
the State, authorized to exercise
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corporate trust powers, subject to supervision or examination by federal or
state authorities and (b) have a reported combined capital and surplus of not
less than $50,000,000. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner provided in Section 909 hereof. No resignation or removal of the
Trustee and no appointment of a successor Trustee shall become effective until
the successor Trustee has accepted its appointment under Section 913 hereof.
SECTION 909. RESIGNATION BY THE TRUSTEE. The Trustee and any successor
Trustee may at any time resign from the trusts created by this Indenture by
executing an instrument in writing resigning such trusts and specifying the date
when such resignation shall take effect, and filing the same with the Issuer and
the Company not less than 45 days before the date specified in such instrument
when such resignation shall take effect (subject to Section 908 hereof), and by
giving notice of such resignation by first class mail, postage prepaid, not less
than 20 days prior to such resignation date, to each registered owner of Bonds
then Outstanding.
SECTION 910. REMOVAL OF THE TRUSTEE. The Trustee may be removed at any
time, by filing with the Trustee so removed, and with the Issuer and the
Company, an instrument or instruments in writing, appointing a successor, or an
instrument or instruments in writing, consenting to the appointment by the
Issuer of a successor and accompanied by an instrument of appointment by the
Issuer of such successor, and in any event executed by the owners of not less
than fifty-one percent (51%) in aggregate principal amount of Bonds then
Outstanding.
SECTION 911. APPOINTMENT OF SUCCESSOR TRUSTEE BY THE BONDHOLDERS;
TEMPORARY TRUSTEE. In case the Trustee hereunder shall resign or be removed, or
be dissolved, or shall be in the process of dissolution or liquidation, or
otherwise becomes incapable of acting hereunder, or in case it shall be taken
under the control of any public officer or officers, or of a receiver appointed
by a court, then a vacancy shall forthwith and ipso facto exist in the office of
Trustee and a successor may be appointed by the owners of fifty-one percent
(51%) in aggregate principal amount of Bonds then Outstanding, by filing with
the Issuer and the Company, an instrument or concurrent instruments in writing
signed by such owners, or by their attorneys in fact duly authorized; provided,
nevertheless, that in case of such vacancy the Issuer, by an instrument executed
and signed by an Authorized Issuer Representative, may appoint a temporary
Trustee to fill such vacancy until a successor Trustee shall be appointed by the
Bondholders in the manner above provided; provided further, that if no permanent
successor Trustee shall have been appointed by the Bondholders within the six
(6) calendar months next succeeding the month during which the Issuer appoints
such a temporary Trustee, such temporary Trustee shall without any further
action on the part of the Issuer or the Bondholders become the permanent
successor Trustee. After any appointment by the Issuer as provided herein, the
Issuer shall cause notice of such appointment to be given to the Company and the
Rating Services and to be given by first class mail, postage prepaid, to all
Bondholders. The foregoing notwithstanding, any such temporary Trustee so
appointed by the Issuer shall immediately and without further act be superseded
by any successor Trustee so appointed by such Bondholders as provided above
within the six (6) calendar months next succeeding the month during which such
temporary Trustee is appointed.
SECTION 912. JUDICIAL APPOINTMENT OF SUCCESSOR TRUSTEE. In case at any
time the Trustee shall resign and no appointment of a successor Trustee shall be
made pursuant to the foregoing provisions of this Article IX prior to the date
specified in the notice of resignation as the date when such resignation is to
take effect, the resigning Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor Trustee. If no appointment
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of a successor Trustee shall be made pursuant to the foregoing provisions of
this Article IX within six (6) calendar months after a vacancy shall have
occurred in the office of Trustee, any Bondholder may apply to any court of
competent jurisdiction to appoint a successor Trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor Trustee.
SECTION 913. CONCERNING ANY SUCCESSOR TRUSTEES. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Issuer an instrument in writing accepting such appointment
hereunder, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor; but such predecessor
shall, nevertheless, on the written request of the Issuer, or of its successor,
execute and deliver an instrument transferring to such successor Trustee all the
estates, properties, rights, powers and trusts of such predecessor hereunder;
and every predecessor Trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in writing from the
Issuer be required by any successor Trustee for more fully and certainly vesting
in such successor the estate, rights, powers and duties hereby vested or
intended to be vested in the predecessor, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the
Issuer. The resignation of any Trustee and the instrument or instruments
removing any Trustee and appointing a successor hereunder, together with all
other instruments provided for in this Article, shall be filed and/or recorded
by the successor Trustee in each recording office, if any, where this Indenture
shall have been filed and/or recorded.
SECTION 914. SUCCESSOR TRUSTEE AS TRUSTEE OF FUNDS. In the event of a
change in Trustee, the predecessor Trustee which has resigned or been removed
shall cease to be Trustee of the funds and accounts created hereunder or
pursuant hereto and shall cease to be the Registrar, authenticating agent, and
paying agent for principal of, premium, if any, and interest on the Bonds, as
provided herein, and the successor Trustee shall become such Trustee, Registrar
and paying agent.
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ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 1001. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF
BONDHOLDERS. Subject to the limitation set forth in Section 1002 hereof with
respect to this Section 1001, the Issuer and the Trustee may (and, in the case
of clause (k) of this Section, shall at the written request of the Authorized
Company Representative), without the consent of, or notice to, any of the
Bondholders, enter into such indenture or indentures supplemental to this
Indenture as shall not be inconsistent with the terms and provisions hereof, for
any one or more of the following purposes:
(a) to cure any ambiguity or formal defect or omission in this
Indenture;
(b) to grant to or confer upon the Trustee for the benefit of
the Bondholders any additional rights, remedies, powers or authority
that may lawfully be granted to or conferred upon the Bondholders
and the Trustee, or either of them;
(c) to assign and pledge under or subject to this Indenture
additional revenues, properties or collateral;
(d) to evidence the appointment of a separate trustee or the
succession of a new trustee hereunder;
(e) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the
qualification of this Indenture under the Trust Indenture Act of
1939, as then amended, or any similar federal statute hereafter in
effect or to permit the qualification of the Bonds for sale under
the securities laws of any state of the United States;
(f) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit continued
compliance with the Proceeds Certificate or any similar certificate
executed in connection with the issuance of any Bonds;
(g) to provide for the refunding of any Bonds, including the
right to establish and administer an escrow fund and to take related
action in connection therewith or to provide for the issuance of
Additional Bonds as provided in Section 208 herein;
(h) to provide for the issuance of Bonds to the extent
permitted by this Indenture, including but not limited to such
provisions as are necessary for the Trustee and the Issuer to
accept, implement and administer any additional security as herein
authorized, including debt service reserve or similar funds, letters
or lines of credit, bond insurance policies or other forms of credit
enhancement and establishing terms and provisions for such Bonds
which may differ from those established for Bonds then outstanding;
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<PAGE> 53
(i) to evidence or give effect to or facilitate the delivery
and administration under this Indenture of one or more credit
facilities, including a letter of credit, a bond insurance policy or
any other credit facility, to provide credit enhancement relating to
payment of principal of and interest on the Bonds, provided that
prior to the entry into of a supplemental indenture pursuant to this
Section 1001(i), the Trustee shall be provided with an opinion of
Bond Counsel to the effect that the provisions outlined in such
supplemental indenture or indentures with respect to the delivery of
one or more credit facilities for such purposes will not have an
adverse impact on the excludability of interest on the Bonds from
the gross income of the owners thereof for federal income tax
purposes;
(j) to effect changes in the Indenture so as to secure or
maintain ratings on the Bonds from the Rating Services, which
changes will not restrict, limit or reduce the obligation of the
Issuer to pay the principal of, premium, if any, and interest on the
Bonds as provided in this Indenture or otherwise materially
adversely affect the owners of the Bonds under this Indenture; and
(k) to make any change that in the judgment of the Trustee
does not materially adversely affect the rights of any Bondholders.
SECTION 1002. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF BONDHOLDERS.
(a) In addition to supplemental indentures covered by Section
1001 hereof and subject to the terms and provisions contained in
this Section, and not otherwise, the holders of not less than
fifty-one percent (51%) in aggregate principal amount of the Bonds
which are Outstanding hereunder at the time of the execution of any
such supplemental indenture and, in case less than all of the Bonds
Outstanding are affected thereby, the holders of not less than
fifty-one percent (51%) in aggregate principal amount of the Bonds
so affected, shall have the right, from time to time, anything
contained in this Indenture to the contrary notwithstanding, to
consent to and approve the execution by the Issuer and the Trustee
of such other indenture or indentures supplemental hereto as shall
be deemed necessary and desirable by the Issuer for the purpose of
modifying, altering, amending, adding to or rescinding, in any
particular, any of the terms or provisions contained in this
Indenture or in any supplemental indenture; provided, however, that
nothing in this Section contained or in Section 1001 hereof shall
permit, or be construed as permitting, a supplemental indenture to
effect: (i) an extension of the stated maturity or reduction in the
principal amount of, or reduction in the rate of or extension of the
time of paying interest on, or reduction of any premium payable on
the redemption of, any Bonds, without the consent of the holders of
such Bonds; (ii) a reduction in the amount or extension of the time
of any payment required to be made to or from the Bond Fund or any
interest or sinking fund applicable to any Bonds, without the
consent of the holders of all of the Bonds at the time Outstanding;
(iii) the creation of any lien prior to or on a parity with the lien
of this Indenture on the Trust Estate or the deprivation of any
Bondholders of the lien created by this Indenture on such Trust
Estate, without the consent of the holders of all the Bonds at the
time Outstanding, provided that nothing in this subparagraph (iii)
shall be construed to require the consent of Bondholders to the
issuance of Bonds pursuant to this Indenture; (iv) a reduction in
the
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<PAGE> 54
aforesaid aggregate principal amount of Bonds the owners of which
are required to consent to any such supplemental indenture, without
the consent of the owners of all the Bonds at the time Outstanding
which would be affected by the action to be taken; or (v) a
modification of the rights, duties or immunities of the Trustee,
without the written consent of the Trustee.
(b) If at any time the Issuer or the Company shall request the
Trustee to enter into any such supplemental indenture for any of the
purposes of this Section, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of
the proposed execution of such supplemental indenture to be mailed
by registered or certified mail to the owners of the Bonds. Such
notice shall briefly set forth the nature of the proposed
supplemental indenture and shall state that copies thereof are on
file at the Principal Office of the Trustee for inspection by all
Bondholders. The Trustee shall not, however, be subject to any
liability to any Bondholder by reason of its failure to mail such
notice, and any such failure shall not affect the validity of such
supplemental indenture when consented to and approved as provided in
this Section. If the holders of the requisite principal amount of
Bonds which are Outstanding hereunder at the time of the execution
of any such supplemental indenture shall have consented to and
approved the execution thereof as herein provided, no holder of any
Bond shall have any right to object to any of the terms and
provisions contained therein, or the operation thereof, or in any
manner to question the propriety of the execution thereof, or to
enjoin or restrain the Trustee or the Issuer from executing the same
or from taking any action pursuant to the provisions thereof. Upon
the execution of any such supplemental indenture as in this Section
permitted and provided, this Indenture shall be and be deemed to be
modified and amended in accordance therewith.
(c) Anything herein to the contrary notwithstanding, a
supplemental indenture under this Article X which adversely affects
the Company shall not become effective unless and until the Company
shall have consented in writing to the execution and delivery of
such supplemental indenture. In this regard, the Trustee shall cause
notice of the proposed execution and delivery of any such
supplemental indenture to which the Company has not already
consented, together with a copy of the proposed supplemental
indenture and a written consent form to be signed by the Company, to
be mailed by certified or registered mail to the Company at least
thirty (30) days (or such shorter period of time acceptable to the
Company) prior to the proposed date of execution and delivery of any
such supplemental indenture.
(d) Subject to the terms and provisions contained in this
Section 1002(d), the owners of all the Bonds at any time Outstanding
shall have the right, and the Issuer and the Trustee by their
execution and delivery of this Indenture hereby expressly confer
upon such owners the right, to modify, alter, amend or supplement
this Indenture in any respect, including without limitation in
respect of the matters described in clauses (i), (ii) and (iii) of
the proviso contained in subsection (a) of this Section 1002, by
delivering to the Issuer, the Trustee and the Company a written
instrument or instruments, executed by or on behalf of such owners,
containing a form of supplemental indenture which sets forth such
modifications, alterations,
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<PAGE> 55
amendments and supplements, and, upon the expiration of a 30-day
period commencing on the date of such delivery during which no
notice of objection shall have been delivered by the Issuer or the
Trustee to such owners at an address specified in such written
instrument, such supplemental indenture shall be deemed to have been
approved and confirmed by the Issuer and the Trustee, to the same
extent as if actually executed and delivered by the Issuer and the
Trustee, and such supplemental indenture shall thereupon become and
be for all purposes in full force and effect without further action
by the Issuer or the Trustee. The foregoing provisions are, however,
subject to the following conditions:
(i) no such supplemental indenture shall in any way
affect the limited nature of the obligations of the Issuer
under this Indenture as set forth in Section 205 hereof, or
otherwise, or adversely affect any of its rights hereunder;
(ii) no such supplemental indenture shall be to the
prejudice of the Trustee, and no such supplemental indenture
which adversely affects the Company shall become effective
unless consented to by the Company in the manner provided in
Section 1002(c) hereof; and
(iii) there shall have been delivered to the Issuer, the
Trustee and the Company an opinion of Bond Counsel stating
that such supplemental indenture is authorized or permitted by
this Indenture and the Act, complies with their respective
terms, will, upon the expiration of the aforesaid 30-day
period, be valid and binding upon the Issuer in accordance
with its terms and will not adversely affect the exclusion
from gross income for federal income tax purposes of interest
on any of the Bonds.
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ARTICLE XI
AMENDMENTS TO THE LOAN AGREEMENT
SECTION 1101. AMENDMENTS, ETC. TO LOAN AGREEMENT NOT REQUIRING CONSENT.
The Issuer, the Company and the Trustee may, without the consent of or notice to
the owners of the Bonds, consent to any supplemental loan agreement which
effects such amendment, change or modification of the Loan Agreement as may be
required (a) by the provisions of this Indenture or the Loan Agreement; (b) for
the purpose of curing any ambiguity or formal defect or omission; (c) in
connection with the issuance of Bonds as provided in Section 207 or Section 208
hereof; (d) for the purpose of complying with the provisions of the Proceeds
Certificate; (e) to evidence or give effect to or facilitate the delivery and
administration under this Indenture of one or more credit facilities including a
letter of credit, a bond insurance policy or any other credit facility to
provide credit enhancement relating to payment of principal of and interest on
the Bonds, provided that prior to the entering into of a supplemental loan
agreement pursuant to this Section 1101, the Trustee shall be provided with an
opinion of Bond Counsel to the effect that the provisions outlined in such
supplemental loan agreement or loan agreements with respect to the delivery of
one or more credit facilities for such purposes will not have an adverse impact
on the excludability of interest on the Bonds from the gross income of the
owners thereof for federal income tax purposes; (f) to secure or maintain
ratings on the Bonds from the Rating Services, which changes will not restrict,
limit or reduce the obligation of the Issuer to pay the principal of and
premium, if any, and interest on the Bonds as provided in this Indenture or
otherwise materially adversely affect the owners of the Bonds; (g) to amend or
supplement the description of the Project set forth in Exhibit A to the Loan
Agreement, provided that no such amendment or supplement shall be entered into
that would cause the Company to violate its covenants set forth in Section 3.7
of the Loan Agreement; or (h) to make any other change therein which, in the
judgment of the Trustee, does not materially adversely affect the rights of the
Trustee or the owners of the Bonds, provided, however, that nothing in this
Section 1101 shall permit, or be construed as permitting, any amendment, change
or modification of the Loan Agreement that may result in anything described in
the numbered clauses of Section 1002(a) hereof, without the consent of each
Bondholder affected. If at any time the Company shall request the Issuer and the
Trustee to consent to any amendment, change or modification of the Loan
Agreement pursuant to subparagraph (h) above, the Trustee shall cause notice of
the proposed execution of such amendment, change or modification to the Loan
Agreement to be given to the Rating Services at least thirty (30) days prior to
the execution of such amendment, change or modification to the Loan Agreement,
which notice shall include a copy of the proposed amendment, change or
modification to the Loan Agreement.
Before the Issuer shall enter into, and the Trustee shall consent to, any
modification, alteration, amendment or supplement to the Loan Agreement pursuant
to this Section 1101, there shall have been delivered to the Issuer and the
Trustee an opinion of Bond Counsel stating that such modification, alteration,
amendment or supplement is authorized or permitted by the Loan Agreement or this
Indenture and the Act, complies with their respective terms, will, upon the
execution and delivery thereof, be valid and binding upon the Issuer in
accordance with its terms and will not adversely affect the exclusion from gross
income for federal income tax purposes of interest on any of the Bonds.
SECTION 1102. AMENDMENTS, ETC. TO LOAN AGREEMENT REQUIRING CONSENT OF
BONDHOLDERS. Except for the amendments, changes or modifications as provided in
Section 1101 hereof, neither the Issuer nor the Trustee shall consent to any
amendment,
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<PAGE> 57
change or modification of the Loan Agreement without the prior written approval
or consent, given and procured as in this Section provided, of the owners of not
less than fifty-one percent (51%) in aggregate principal amount of the Bonds
Outstanding hereunder at the time of the execution of such amendment or
modification and, in case less than all of the Bonds Outstanding are affected
thereby, of the holders of not less than fifty-one percent (51%) in aggregate
principal amount of the Bonds so affected. If at any time the Issuer and the
Company shall request the consent of the Trustee to any such proposed amendment,
change or modification of the Loan Agreement, the Trustee shall, upon being
satisfactorily indemnified with respect to expenses, cause notice of such
proposed amendment, change or modification to be mailed in the same manner as
provided by Section 1002 hereof with respect to supplemental indentures. Such
notice shall briefly set forth the nature of such proposed amendment, change or
modification and shall state that copies of the instrument embodying the same
are on file at the Principal Office of the Trustee for inspection by all
Bondholders. The Trustee shall not, however, be subject to any liability to any
Bondholder by reason of its failure to mail such notice, and any such failure
shall not affect the validity of such amendment, change or modification when
consented to and approved as provided in this Section. If the holders of not
less than fifty-one percent (51%) in aggregate principal amount of the Bonds
Outstanding which are affected by the amendment to the Loan Agreement shall have
consented to and approved the execution thereof as herein provided, no holder of
any Bond shall have any right to object to any of the terms and provisions
contained therein, or the operation thereof, or in any manner to question the
propriety of the execution thereof, or to enjoin or restrain the Trustee or the
Issuer from executing the same or from taking any action pursuant to the
provisions thereof. The foregoing notwithstanding, no amendment or supplement
may be made which permits the assignment of the Loan Agreement by the Company
other than as permitted by Section 6.1 of the Loan Agreement or which results in
anything described in the numbered clauses of Section 1002(a) hereof unless the
holders of 100% in aggregate principal amount of the Bonds Outstanding shall
have consented to such amendment or supplement.
Before the Issuer shall enter into, and the Trustee shall consent to,
any modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 1102, there shall have been delivered to the Issuer and
the Trustee an opinion of Bond Counsel stating that such modification,
alteration, amendment or supplement is authorized or permitted by the Loan
Agreement or this Indenture and the Act, complies with their respective terms,
will, upon the execution and delivery thereof, be valid and binding upon the
Issuer in accordance with its terms and will not adversely affect the exclusion
from gross income for federal income tax purposes of interest on any of the
Bonds.
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ARTICLE XII
MISCELLANEOUS
SECTION 1201. PARTIES IN INTEREST. With the exception of rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from
this Indenture or the Bonds is intended or shall be construed to give to any
person other than the Issuer, the Trustee, the Company and the holders of the
Bonds any legal or equitable right, remedy or claim under or with respect to
this Indenture or any covenants, conditions and provisions herein contained;
this Indenture and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the Issuer, the
Trustee, the Company and the holders of the Bonds as herein provided.
SECTION 1202. SEVERABILITY. If any provision of this Indenture shall be
held or deemed to be or shall, in fact, be inoperative or unenforceable as
applied in any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions of any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to any extent whatever. The invalidity of
any one or more phrases, sentences, clauses or Sections in this Indenture
contained shall not affect the remaining portions of this Indenture or any part
thereof.
SECTION 1203. DELIVERY OF NOTICES; DELIVERY OF BONDS. Except as otherwise
provided in this Indenture, all notices, certificates, requests, requisitions or
other communications by the Issuer, the Company, or the Trustee, pursuant to
this Indenture shall be in writing and shall be sufficiently given and shall be
deemed given when mailed by first class mail, postage prepaid, addressed as
follows:
If to the Issuer: Carbon County
Board of County Commissioners
County Courthouse
120 East Main Street
Price, Utah 84501
Telecopier: (801) 637-4700
Attention: Chairman
If to the Trustee: West One Bank, Utah
107 South Main Street, Suite 303
Salt Lake City, Utah 84111
Telecopier: (801) 534-6208
Attention: Corporate Trust Department
If to the Company: ECDC Environmental, L.C.
127 South 500 East
Suite 675
Salt Lake City, Utah 84102
Telecopier: (801) 355-9167
Attention: V.P. Finance
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If to the Guarantor: Laidlaw Inc.
3221 North Service Road
Burlington, Ontario
Canada L7R3Y8
Telecopier: (905) 336-3976
Attention: Senior Vice President and
General Counsel
SECTION 1204. COUNTERPARTS. This Indenture may be simultaneously executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
SECTION 1205. GOVERNING LAW. This Indenture shall be governed exclusively
by and construed in accordance with the laws of the State of Utah.
SECTION 1206. IMMUNITY OF OFFICERS AND EMPLOYEES OF ISSUER. No recourse
shall be had for the payment of the principal of or premium, if any, or interest
on any of the Bonds or for any claim based thereon or upon any obligation,
covenant or agreement in this Indenture contained against any past, present or
future officer, employee or agent of the Issuer, or any officer, employee or
agent of any successor body politic, either directly or through the Issuer or
any successor body politic, under any rule of law or equity, statute or
constitution or by the enforcement of any assessment or penalty or otherwise,
and all such liability of any such officers, employees or agents, as such, is
hereby expressly waived and released as a condition of and consideration for the
execution of this Indenture and the issuance of any of the Bonds.
SECTION 1207. BONDS OWNED BY THE ISSUER, THE GUARANTOR OR THE COMPANY. In
determining whether the owners of the requisite aggregate principal amount of
the Bonds have concurred in any direction, consent or waiver under this
Indenture, Bonds which are owned by the Issuer, the Guarantor or the Company or
by any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or the Guarantor (unless the
Issuer, the Company or such person owns all Bonds which are then Outstanding,
determined without regard to this Section) shall be disregarded and deemed not
to be Outstanding for the purpose of any such determination, except that, for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver, only Bonds which the Trustee knows are so
owned shall be so disregarded. Bonds so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Bonds and that the pledgee is not the Issuer, the Guarantor or the Company or
any person directly or indirectly controlling or controlled by or under direct
or indirect common control with the Company or the Guarantor. In case of a
dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
SECTION 1208. PLEDGE AND UNDERTAKING OF THE STATE. In entering into this
Indenture and otherwise providing for the issuance of the Series 1995A Bonds,
the Issuer and the Trustee have specifically relied upon Section 11-17-13 of the
Act, which provides:
The State of Utah does hereby pledge to and agree with the holders of any
bonds issued under this act and with those parties who may enter into
contracts with any county or municipality under this act, that the state
will not alter, impair or limit the rights thereby vested until the bonds,
together with applicable interest, are fully met and discharged and such
contracts are fully
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<PAGE> 60
performed. Nothing contained in this act shall preclude such alteration,
impairment or limitation if and when adequate provision shall be made by
law for the protection of the holders of the bonds or persons entering
into contracts with any county or municipality. Each county and
municipality is authorized to include this pledge and undertaking for the
state in such bonds or contracts.
The Issuer hereby incorporates herein the foregoing pledge and undertaking
for the State.
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<PAGE> 61
IN WITNESS WHEREOF, CARBON COUNTY, UTAH has caused these presents to be
signed in its name and on its behalf by the Chairman of its Board of County
Commissioners and its corporate seal to be hereunto affixed and attested by its
County Clerk, and to evidence its acceptance of the trusts hereby created WEST
ONE BANK, UTAH has caused these presents to be signed in its name and on its
behalf by its Vice President and its official seal to be hereunto affixed, all
as of the day and year first above written.
CARBON COUNTY, UTAH
By /s/ William D. Krompel
---------------------------
[Seal] Chairman,
Board of County Commissioners
Attest:
/s/ Robert P. Pew
- ----------------------------------------
County Clerk
WEST ONE BANK, UTAH, as Trustee
By /s/
---------------------------
[Seal] Vice President
57
<PAGE> 62
EXHIBIT "A"
[FORM OF FRONT OF BOND]
REGISTERED REGISTERED
NO. R- $
------------------------- ----------------
UNITED STATES OF AMERICA
STATE OF UTAH
COUNTY OF CARBON
SOLID WASTE DISPOSAL REFUNDING REVENUE BOND
(LAIDLAW INC./ECDC ENVIRONMENTAL, L.C. PROJECT), 1995 SERIES A
Interest Maturity Issue
Rate Date Date CUSIP
-------- -------- ----- -----
February 1, 2010
Registered Owner:
Principal Amount: Dollars
Carbon County, Utah (the "Issuer"), a duly organized and existing
political subdivision of the State of Utah, for value received, hereby promises
to pay (but only from the sources hereinafter mentioned) to the Registered Owner
identified above or registered assigns, on the Maturity Date set forth above,
upon presentation and surrender hereof, the Principal Amount set forth above and
to pay solely from such sources interest on said Principal Amount at the
Interest Rate set forth above, calculated on the basis of a 360-day year of
twelve (12) thirty (30) day months, from the Interest Payment Date next
preceding the date of authentication hereof unless (i) this Bond is
authenticated as of an Interest Payment Date in which event this Bond shall bear
interest from such Interest Payment Date or (ii) this Bond is authenticated
prior to the first Interest Payment Date in which event this Bond shall bear
interest from the Issue Date set forth above; provided, however, that if
interest on the Bonds shall be in default as shown by the records of the
Trustee, interest shall accrue at the Default Rate (as defined in the Indenture
hereinafter described) from the Interest Payment Date to which interest has been
paid in full, until the payment of such Principal Amount (except as the
provisions set forth in the Indenture hereinafter described with respect to
redemption prior to maturity may be applicable hereto), such interest being
payable semiannually on each February 1 and August 1, commencing August 1, 1995
(each an "Interest Payment Date"). Payments of interest shall be made to the
Registered Owner hereof, as of the fifteenth day of the month next preceding
such Interest Payment Date, by check or draft mailed on the Interest Payment
Date to the address of such Registered Owner as it appears on the registration
books of the Issuer maintained by the Trustee as Bond Registrar, or to such
other address as may be furnished to said Trustee in writing by such Registered
Owner. Payment of principal or redemption price of
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<PAGE> 63
and premium, if any, on this Bond shall be made by check or draft only upon
presentation and surrender of this Bond at the principal corporate trust office
of West One Bank, Utah, Salt Lake City, Utah, as Paying Agent (the "Paying
Agent"), or at the office designated for such payment of any successor thereof
or of any other paying agent as provided in said Indenture. The principal of,
premium, if any, and interest on this Bond are payable by check or draft
denominated in any coin or currency of the United States of America which, at
the respective times of payment is legal tender for the payment of public and
private debts. As used herein the term "Business Day" means any day other than a
Saturday, Sunday or a day on which banking institutions in the State of Utah or
the city in which the principal corporate trust office of the Trustee is
located, or the New York Stock Exchange are closed or required by law to close.
If any payment of principal of, premium, if any, or interest required to be made
on this Bond becomes due and payable on a day other than a Business Day, then
such payment shall be made on the next succeeding Business Day, with the same
force and effect as if made on the Interest Payment Date, the date of maturity
or the date fixed for redemption, and such payment shall not include the
interest for the period between such date and the next succeeding Business Day.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse side hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Bond is one of an issue of Bonds which is issued under the
provisions of, and in full compliance with, the Constitution and laws of the
State of Utah, particularly Title 11, Chapter 17, Utah Code Annotated 1953, as
amended. The Bonds are special, limited obligations of the Issuer, payable by
the Issuer solely from certain amounts received by the Issuer under, and secured
by a pledge of certain rights of the issuer under and pursuant to, the Loan
Agreement (as such term is defined in the Indenture), and, further, from the
funds and accounts created under the Indenture (but not including the Rebate
Fund created under the Indenture) and investment earnings thereon, all of which
shall be used for no other purpose than to pay the principal of, premium, if
any, and interest on the Bonds, except as may be otherwise expressly authorized
in the Indenture. Neither the faith and credit nor the taxing power of the State
of Utah or any political subdivision thereof is pledged to the payment of the
principal of, premium, if any, or interest on the Bonds. The Bonds and the
interest thereon do not constitute or give rise to a general obligation or
liability of the Issuer or a charge against its general credit or taxing powers,
and the Bonds do not constitute a loan of the credit of the Issuer within the
meaning of any constitutional restriction or statutory limitation of the State
of Utah.
It Is Hereby Certified, Recited and Declared that all acts, conditions
and things required to exist, happen and be performed precedent to and in the
execution and delivery of the indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law, and that the issuance of this Bond and the series of which it forms a
part, together with all other obligations of the Issuer, does not exceed or
violate any constitutional or statutory limitation on indebtedness, and that
payment in full for this Bond has been received.
This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture unless and until the
Certificate of Authentication hereon shall have been duly executed by the
Trustee, as provided in the Indenture.
A-2
<PAGE> 64
In Witness Whereof, Carbon County, Utah has caused this Bond to be
executed in its name by the facsimile signature of the Chairman of its Board of
County Commissioners, and the facsimile of its official seal to be imprinted
hereon and attested by the facsimile signature of its County Clerk.
CARBON COUNTY, UTAH
By
-------------------------------
[Seal] Chairman,
Board of County Commissioners
Attest:
- -------------------------------
County Clerk
A-3
<PAGE> 65
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned
Indenture of Trust.
Date of registration and authentication:
WEST ONE BANK, UTAH,
as Trustee
By
-----------------------------
Authorized Signatory
(FORM OF REVERSE OF BOND)
This Bond is one of the duly authorized Carbon County, Utah Solid Waste
Disposal Refunding Revenue Bonds (Laidlaw Inc./ECDC Environmental, L.C.
Project), 1995 Series A, to be issued in an aggregate principal amount not
exceeding $23,000,000 (the "Bonds"), pursuant to certain resolutions
(collectively, the "Resolution") duly adopted by the Issuer's Board of County
Commissioners (the "Board"), in accordance with the applicable provisions of the
Utah Industrial Facilities and Development Act, Title 11, Chapter 17, Utah Code
Annotated 1953, as amended (the "Act"), under an Indenture of Trust dated as of
February 1, 1995 (the "Indenture"), between the Issuer and West One Bank, Utah,
as Trustee (the "Trustee", which term shall include any successor Trustee), for
the purpose of providing a portion of the funds necessary to refund up to
$23,000,000 outstanding principal amount of certain solid waste disposal revenue
bonds previously issued by the Issuer to provide a portion of the funds
necessary to finance among other things a solid waste disposal facility located
within the boundaries of the Issuer (the "Project") for ECDC Environmental,
L.C., a Utah limited liability company (the "Company"). Proceeds from the sale
of the Bonds are to be loaned by the Issuer to the Company, under the terms of a
Loan Agreement dated as of February 1, 1995 (the "Loan Agreement"). The Bonds
are all issuable under and are equally and ratably secured by and are entitled
to the benefits of the Indenture, including the security of the pledge and
assignment of certain amounts payable to the Issuer pursuant to the Loan
Agreement, and all receipts of the Trustee credited under the provisions of the
Indenture against the payment of such amounts, and from any other moneys held by
the Trustee under the Indenture for such purpose. The Project is not security
for the Bonds.
Pursuant to a Guaranty dated as of February 1, 1995 from Laidlaw Inc., a
Canadian corporation (the "Guarantor"), to the Trustee, the Guarantor has agreed
to guaranty timely payment of the Company's obligations relating to the Bonds.
Any term used herein as a defined term but not defined herein shall have
the meaning ascribed to such term in the Indenture or the Loan Agreement.
A-4
<PAGE> 66
Part I -- Redemption Provisions
Optional Redemption of Bonds. The Series 1995A Bonds are subject to
optional redemption prior to maturity by the Trustee at the direction of the
Company, in whole at any time or in part on any Interest Payment Date, in
inverse order of maturity and by lot within each maturity at any time on or
after February 1, 2005, at a redemption price expressed as a percentage of
principal amount of Series 1995A Bonds to be redeemed set forth in the table
below, together with accrued interest to the Redemption Date:
<TABLE>
<CAPTION>
Redemption Date Redemption Price
--------------- ----------------
<S> <C>
February 1, 2005 - January 31, 2006 102%
February 1, 2006 - January 31, 2007 101%
February 1, 2007 and thereafter 100%
</TABLE>
Extraordinary Optional Redemption. The Series 1995A Bonds shall be
subject to extraordinary optional redemption prior to maturity by the Trustee,
at the direction of the Company, in whole or in part, on any date at a
redemption price equal to the principal amount of the Series 1995A Bonds to be
redeemed plus accrued interest to the redemption date, within 365 days following
the occurrence of any one of the following events (or, in the case of
subparagraph (a) and (b) below, at the option of the Company, within sixty (60)
days following the receipt of any proceeds relating to such event):
(a) The Facility (as defined in the Indenture) or a
substantial portion thereof shall have been damaged or
destroyed by fire or other casualty (i) to such extent that,
in the opinion of the Company, within a period of twelve
consecutive months following such damage or destruction it is
not practicable or desirable to rebuild, repair or restore the
Facility, or (ii) to such extent that, in the opinion of the
Company, the Facility is or will be prevented thereby from
operating normally for a period of twelve (12) consecutive
months.
(b) Title to, or the temporary use of, all or
substantially all of the Facility shall have been taken under
the exercise of the power of eminent domain (including such a
taking or takings as results or is likely to result, in the
opinion of the Company, in normal operations at the Facility
being interrupted for a period of twelve (12) consecutive
months or results or is likely to result in rendering the
Facility, in the opinion of the Company, unsuitable for use).
(c) As a result of any changes in the Constitution of
the State of Utah or the Constitution of the United States of
America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal)
entered after the contest thereof by the Company in good
faith, the Loan Agreement shall have become void or
unenforceable or impossible of performance in accordance with
the intent and purposes of the parties as expressed in the
Loan Agreement, or unreasonable burdens or excessive
liabilities shall have been imposed on the Issuer or the
Company, including without limitation, federal, state or other
ad valorem, property, income or other taxes not being imposed
on the date of the Loan Agreement or changes since the date of
initial issuance of the Bonds in regulatory requirements,
technology or the economic availability of raw materials,
operating supplies, equipment or waste requiring treatment
A-5
<PAGE> 67
and disposal, which condition cannot reasonably be expected to
improve materially within a period of twelve (12) consecutive
months and causes the Company to determine that the Facility
should not be completed or that operation of the Facility
should be discontinued.
Special Mandatory Redemption. The Series 1995A Bonds are also subject
to Special Mandatory Redemption in whole by the Issuer on any date prior to
maturity at a redemption price of 100% of the principal amount thereof together
with accrued interest to the date of redemption, upon the occurrence of a
Determination of Taxability (as defined in the Indenture), as soon as
practicable, but in no event later than thirty (30) days after the occurrence of
such Determination of Taxability.
Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than thirty (30) nor more
than sixty (60) days prior to the redemption date (except in the case of Special
Mandatory Redemption, in which case the Trustee will give immediate notice as
provided in the Indenture), to each owner of a Bond to be redeemed at the
address of such Bondholder appearing in the Bond Register. Failure to give such
notice to any Bondholder, or any defect therein, shall not affect the validity
of the proceedings for the redemption of any Bond or portion thereof with
respect to which no such failure has occurred. The Indenture provides for the
giving of additional notice under certain circumstances, provided that no defect
in or failure to give such additional notice shall in any manner defeat the
effectiveness of a call for redemption with respect to Bonds for which notice
was properly given as described above. Notice of redemption having been given as
aforesaid, the Bond so to be redeemed shall, on the redemption date, become due
and payable at the redemption price therein specified and from and after such
date (unless the Issuer shall default in the payment of the redemption price)
such Bond shall cease to bear interest. Upon surrender of any such Bond for
redemption in accordance with said notice, the redemption price of such Bond
shall be paid. If any Bond called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the redemption date at the rate last borne by the
Bond.
If at the time of mailing of notice of an optional redemption there
shall not have been deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, which moneys are or will be available for
redemption of Bonds, such notice will state that it is conditional, that is,
subject to the deposit of the redemption moneys with the Trustee not later than
the close of business of the fifth day prior to the Redemption Date, and such
notice shall be of no effect unless such moneys are so deposited.
Partial Redemption. The Trustee, upon surrender of any Bond to be
redeemed in part, shall authenticate and deliver to the owner of such Bond,
without service charge, a new Bond or Bonds in aggregate principal amount equal
to and in exchange for the unpurchased or unredeemed portion of the principal of
the Bond so surrendered, which new Bond or Bonds shall be in any Authorized
Denominations and shall be identical to the Bond being purchased or redeemed
with respect to stated maturity and interest rate, and bearing numbers not
contemporaneously outstanding. If less than all the Bonds are to be redeemed,
the particular Bonds or portion thereof to be redeemed shall be selected prior
to the redemption date by the Trustee, by lot by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions of the principal of Bonds of a denomination larger than
the minimum Authorized Denomination. The unredeemed portion of a Bond selected
for partial redemption must be equal to an Authorized Denomination.
A-6
<PAGE> 68
Part II -- General
The owner of this Bond shall have no right to enforce the provisions of
the Indenture or to institute any suit, action or proceeding in equity or at law
for the enforcement of the Indenture or for the appointment of a receiver or for
the enforcement of any other remedy under the Indenture, except as provided in
the Indenture. The Issuer, the Trustee, and the Company may treat the registered
owner of this Bond as the absolute owner hereof for all purposes, whether or not
this Bond shall be overdue, and shall not be bound by any notice to the
contrary.
If provision is made for the payment of the principal of, premium, if
any, and interest on this Bond in accordance with the Indenture, this Bond shall
no longer be deemed Outstanding under the Indenture, shall cease to be entitled
to any lien, benefit or security under the Indenture, except for purposes of
registration and exchange and of such payment.
Modifications or alterations of the Indenture or of any supplements
thereto, may be made only to the extent and in the circumstances permitted by
the Indenture.
Except as otherwise provided in the Indenture, the Bonds are issuable
only as fully registered Bonds, without coupons, in denominations of $5,000 and
any integral multiple of $5,000 in excess thereof.
The transfer of this Bond shall be registered upon the books kept at
the Principal Office of the Trustee, upon surrender of this Bond, duly endorsed
by, or accompanied by a written instrument or instruments of transfer in form
satisfactory to the Trustee and duly executed by the Bondholder or such
Bondholder's attorney duly authorized in writing and with guarantee of
signature.
Subject to the limitations contained in the Indenture, this Bond may be
exchanged at any time at the Principal Office of the Trustee, upon surrender
hereof together with an assignment duly executed by the registered owner hereof
or such owner's attorney or legal representative in such form and with guarantee
of signature as shall be satisfactory to the Trustee for an equal aggregate
principal amount of Bonds of any Authorized Denomination as the Bonds
surrendered for exchange, which Bonds shall be identical to the Bonds being
exchanged with respect to interest rate and stated maturity, and bearing numbers
not contemporaneously outstanding.
Reference is hereby made to the Indenture, the Loan Agreement and the
Proceeds Certificate, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent of the rights,
duties and obligations of the Issuer, the Company, the Trustee, and the owners
of the Bonds, including provisions relating to acceleration under certain
circumstances and provisions relating to the issuance of additional bonds under
the Indenture. The owner of this Bond, by acceptance hereof, is deemed to have
agreed and consented to and to be bound by the terms and provisions of the
Indenture, the Loan Agreement and the Proceeds Certificate.
The following abbreviations, when used in the inscription on the face
of this Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:
A-7
<PAGE> 69
UNIF GIFT MIN ACT
TEN COM -- as tenants in common Custodian
------- --------
TEN ENT -- as tenants by the entirety (Cust)(Minor)
JT TEN -- as joint tenantss with right Under Uniform Gifts tp
of survivorship and not as Minors Act
-------------
tenants in common (State)
Additional abbreviations may also be used though not in the above list.
ASSIGNMENT
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS
UNTO
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------------
- ----------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address, including Zip Code, of
Assignee)
the within Bond of CARBON COUNTY, UTAH, and all rights thereunder, and hereby
irrevocably constitutes and appoints
- --------------------------------------------------------------------------------
attorney to register the transfer of said Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: Signature:
---------------------- ---------------------------
Signature
Guaranteed:
---------------------------------------------------------------------
Notice: The signature to this assignment must correspond with the name
as it appears upon the face of the within Bond in every
particular, without alteration or enlargement or any change
whatever.
Notice: The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C.
Rule 17Ad-15.
A-8
<PAGE> 70
EXHIBIT "B"
DTC LETTER OF REPRESENTATIONS
(See Transcript Document No. 27)
B-1
<PAGE> 1
EXAMPLE 4(h)
INDENTURE OF TRUST
BETWEEN
TOOELE COUNTY, UTAH,
AS ISSUER
AND
WEST ONE BANK, UTAH,
AS TRUSTEE
-------------------------------
Dated as of August 1, 1995
-------------------------------
Tooele County, Utah
Hazardous Waste Disposal Revenue Bonds
(Laidlaw Inc./USPCI Clive Project) Series 1995
<PAGE> 2
TABLE OF CONTENTS
(THIS TABLE OF CONTENTS IS NOT A PART OF THIS INDENTURE OF TRUST
AND IS FOR CONVENIENCE OF REFERENCE ONLY.)
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS .................................................................................... 5
SECTION 101. DEFINITIONS........................................................ 5
SECTION 102. RULES OF CONSTRUCTION.............................................. 13
ARTICLE II
THE BONDS....................................................................................... 15
SECTION 201. AUTHORIZED AMOUNT OF BONDS......................................... 15
SECTION 202. ISSUANCE OF THE SERIES 1995 BONDS; CERTAIN
TERMS.............................................................. 15
SECTION 203. INTEREST ON THE BONDS.............................................. 16
SECTION 204. FORM OF BONDS AND TEMPORARY BONDS.................................. 17
SECTION 205. EXECUTION; SPECIAL LIMITED OBLIGATION.............................. 17
SECTION 206. AUTHENTICATION..................................................... 17
SECTION 207. DELIVERY OF THE SERIES 1995 BONDS.................................. 18
SECTION 208. ISSUANCE OF ADDITIONAL BONDS....................................... 19
SECTION 209. MUTILATED, LOST, STOLEN OR DESTROYED BONDS......................... 20
SECTION 210. BOND REGISTER; TRANSFER AND EXCHANGE OF
BONDS; PERSONS TREATED AS OWNERS................................... 21
SECTION 211. BOOK ENTRY PROVISIONS.............................................. 22
SECTION 212. CANCELLATION....................................................... 24
ARTICLE III
REDEMPTION OF BONDS............................................................................. 25
SECTION 301. OPTIONAL REDEMPTION OF SERIES 1995 BONDS........................... 25
SECTION 302. EXTRAORDINARY OPTIONAL REDEMPTION.................................. 25
SECTION 303. SPECIAL MANDATORY REDEMPTION....................................... 26
SECTION 304. NOTICE OF REDEMPTION............................................... 27
SECTION 305. BONDS PAYABLE ON REDEMPTION DATE................................... 28
SECTION 306. BONDS REDEEMED IN PART............................................. 28
SECTION 307. ELECTION TO REDEEM; NOTICE TO TRUSTEE AND
ISSUER............................................................. 29
SECTION 308. SELECTION OF BONDS TO BE REDEEMED.................................. 29
SECTION 309. DEPOSIT OF REDEMPTION PRICE........................................ 29
ARTICLE IV
FUNDS AND ACCOUNTS.............................................................................. 30
SECTION 401. ESTABLISHMENT OF FUNDS AND ACCOUNTS................................ 30
SECTION 402. DISPOSITION OF PROCEEDS OF SALE OF SERIES
1995 BONDS......................................................... 30
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
SECTION 403. BOND FUND.......................................................... 30
SECTION 404. CONSTRUCTION FUND.................................................. 31
SECTION 405. REBATE FUND........................................................ 32
ARTICLE V
INVESTMENT OF MONEYS................................................................................... 34
ARTICLE VI
SATISFACTION OF THE INDENTURE.......................................................................... 35
SECTION 601. DISCHARGE OF INDENTURE............................................. 35
SECTION 602. BONDS DEEMED PAID.................................................. 35
ARTICLE VII
GENERAL COVENANTS...................................................................................... 37
SECTION 701. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND
INTEREST; NO GENERAL OBLIGATION.................................... 37
SECTION 702. PERFORMANCE OF COVENANTS; LEGAL
AUTHORIZATION...................................................... 37
SECTION 703. FURTHER ASSURANCES................................................. 37
SECTION 704. IMMUNITIES AND LIMITATIONS OF
RESPONSIBILITY OF ISSUER........................................... 37
SECTION 705. RECORDING AND FILING............................................... 38
SECTION 706. BOOKS AND RECORDS.................................................. 38
SECTION 707. DEFENSE OF ISSUER'S RIGHTS......................................... 38
SECTION 708. ARBITRAGE; COMPLIANCE WITH PROCEEDS
CERTIFICATE........................................................ 39
SECTION 709. CONTINUING DISCLOSURE ..............................................39
ARTICLE VIII
EVENTS OF DEFAULT...................................................................................... 40
SECTION 801. EVENTS OF DEFAULT.................................................. 40
SECTION 802. ACCELERATION....................................................... 41
SECTION 803. REMEDIES; RIGHTS OF BONDHOLDERS.................................... 41
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM................................... 42
SECTION 805. DIRECTION OF PROCEEDINGS BY BONDHOLDERS............................ 43
SECTION 806. APPOINTMENT OF RECEIVERS........................................... 43
SECTION 807. APPLICATION OF MONEYS.............................................. 43
SECTION 808. REMEDIES VESTED IN TRUSTEE......................................... 44
SECTION 809. RIGHTS AND REMEDIES OF BONDHOLDERS................................. 45
SECTION 810. TERMINATION OF PROCEEDINGS......................................... 45
SECTION 811. WAIVERS OF EVENTS OF DEFAULT....................................... 45
SECTION 812. NOTICE OF DEFAULT.................................................. 45
SECTION 813. DEMAND UNDER GUARANTY.............................................. 46
SECTION 814. LIMITATION OF LIABILITY............................................ 46
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IX
TRUSTEE.............................................................................................. 47
SECTION 901. ACCEPTANCE OF TRUSTS............................................. 47
SECTION 902. COMPENSATION AND EXPENSES OF TRUSTEE............................. 49
SECTION 903. NOTICE TO BONDHOLDERS IF DEFAULT OCCURS.......................... 50
SECTION 904. GOOD FAITH RELIANCE.............................................. 50
SECTION 905. DEALINGS IN BONDS................................................ 50
SECTION 906. INTERVENTION BY TRUSTEE.......................................... 50
SECTION 907. SUCCESSOR TRUSTEE BY MERGER OR CONSOLIDATION..................... 51
SECTION 908. TRUSTEE REQUIRED; ELIGIBILITY.................................... 51
SECTION 909. RESIGNATION BY THE TRUSTEE....................................... 51
SECTION 910. REMOVAL OF THE TRUSTEE........................................... 51
SECTION 911. APPOINTMENT OF SUCCESSOR TRUSTEE BY THE
BONDHOLDERS; TEMPORARY TRUSTEE................................... 51
SECTION 912. JUDICIAL APPOINTMENT OF SUCCESSOR TRUSTEE........................ 52
SECTION 913. CONCERNING ANY SUCCESSOR TRUSTEES................................ 52
SECTION 914. SUCCESSOR TRUSTEE AS TRUSTEE OF FUNDS............................ 53
ARTICLE X
SUPPLEMENTAL INDENTURES.............................................................................. 54
SECTION 1001. SUPPLEMENTAL INDENTURES NOT REQUIRING
CONSENT OF BONDHOLDERS........................................... 54
SECTION 1002. SUPPLEMENTAL INDENTURES REQUIRING CONSENT
OF BONDHOLDERS................................................... 55
ARTICLE XI
AMENDMENTS TO THE LOAN AGREEMENT..................................................................... 58
SECTION 1101. AMENDMENTS, ETC. TO LOAN AGREEMENT NOT
REQUIRING CONSENT................................................ 58
SECTION 1102. AMENDMENTS, ETC. TO LOAN AGREEMENT REQUIRING
CONSENT OF BONDHOLDERS........................................... 59
ARTICLE XII
MISCELLANEOUS........................................................................................ 60
SECTION 1201. PARTIES IN INTEREST.............................................. 60
SECTION 1202. SEVERABILITY..................................................... 60
SECTION 1203. DELIVERY OF NOTICES; DELIVERY OF BONDS........................... 60
SECTION 1204. COUNTERPARTS..................................................... 61
SECTION 1205. GOVERNING LAW.................................................... 61
SECTION 1206. IMMUNITY OF OFFICERS AND EMPLOYEES OF ISSUER..................... 61
SECTION 1207. BONDS OWNED BY THE ISSUER, THE GUARANTOR OR
THE COMPANY...................................................... 61
SECTION 1208. PLEDGE AND UNDERTAKING OF THE STATE.............................. 62
EXHIBIT "A" FORM OF BOND..................................................... A-1
EXHIBIT "B" DTC LETTER OF REPRESENTATIONS.................................... B-1
</TABLE>
iii
<PAGE> 5
THIS INDENTURE OF TRUST, dated as of August 1, 1995 (the "Indenture"),
between TOOELE COUNTY, UTAH (the "Issuer"), a duly organized and existing
political subdivision of the State of Utah, whose mailing address is 47 South
Main, Tooele, Utah 84074, and WEST ONE BANK, UTAH (the "Trustee"), a banking
institution duly established, 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 Utah, whose principal corporate trust office, domicile and mailing
address is 107 South Main Street, Salt Lake City, Utah 84111, Attention:
Corporate Trust Department:
WITNESSETH:
WHEREAS, the Legislature of the State of Utah has enacted the Utah
Industrial Facilities and Development Act, Title 11, Chapter 17, Utah Code
Annotated 1953, as amended (the "Act"), for the purpose of achieving greater
industrial development in the State of Utah and protecting and promoting the
health, welfare and safety of the citizens of the State of Utah; and
WHEREAS, the Act authorizes counties of the State of Utah to issue
revenue bonds for the purpose, among other things, of defraying the cost of
financing, acquiring, constructing, improving, equipping, furnishing or
maintaining any project or projects suitable for, among other things, industrial
purposes, for the reduction, abatement or prevention of pollution and for any
other business purpose, such project or projects to consist of any land,
interest in land, building, structure, facility, system, fixture, improvement,
appurtenance, machinery or equipment; and
WHEREAS, the Issuer is a county of the State of Utah within the meaning
of the Act; and
WHEREAS, USPCI Clive Incineration Facility, Inc., an Oklahoma
corporation (the "Company") has requested that the Issuer issue bonds to
finance, in part, the acquisition, construction and equipping of a hazardous
waste disposal and treatment facility for the reduction, abatement or prevention
of pollution and for certain other business purposes as more particularly
described herein (the "Project"); and
WHEREAS, pursuant to the Act, in connection with the issuance of the
Series 1995 Bonds under the Act, the Issuer is entitled to provide for and enter
into agreements incident to the financing of the Project to accomplish the
purposes of the Act and the performance of the Issuer's obligations relative to
the Series 1995 Bonds, including but not limited to the specification of the
terms and conditions under which the Series 1995 Bonds may be issued, the
officer of the Issuer responsible for the issuance, execution and delivery of
the Series 1995 Bonds, the source of payment on the Series 1995 Bonds and all
other details necessary or appropriate for the issuance of the Series 1995 Bonds
not inconsistent with the Act, it being the intention of the Issuer that the
provisions of this Indenture are determined and established in compliance with
and in furtherance of the authority granted the Issuer under the Act to
accomplish the foregoing purposes; and
WHEREAS, pursuant to and in accordance with the provisions of the Act,
by resolution duly adopted (the "Resolution"), and in furtherance of the intent
and
1
<PAGE> 6
purposes of the Act, the Issuer has authorized the issuance of its Hazardous
Waste Disposal Revenue Bonds (Laidlaw Inc./USPCI Clive Project), Series 1995, in
an aggregate principal amount of $10,000,000 (the "Series 1995 Bonds") and the
execution and delivery of an indenture providing for the issuance of such Series
1995 Bonds and for their security; and
WHEREAS, the Issuer will loan the proceeds of the Series 1995 Bonds to
the Company pursuant to a Loan Agreement, dated as of August 1, 1995 (the "Loan
Agreement"), by and between the Company and the Issuer, pursuant to which the
Company will covenant, among other things, to make payments at such times and in
such amounts so as to provide for payment of (i) the principal of, premium, if
any, and interest on the Series 1995 Bonds outstanding under this Indenture, and
(ii) all other amounts payable under this Indenture; and
WHEREAS, Laidlaw Inc., a Canadian corporation (the "Guarantor") is the
indirect owner of the Company, and the Guarantor desires to execute and deliver
a Guaranty (the "Guaranty") whereby the Guarantor will guaranty payment of all
obligations of the Company with respect to the Series 1995 Bonds; and
WHEREAS, the Issuer is authorized under the Act to issue its revenue
bonds for the aforesaid purposes and the Issuer has determined that the public
interest will be best served and that the purposes of the Act can be
advantageously achieved by the Issuer's issuance of the Series 1995 Bonds in
order to obtain funds to loan to the Company for the foregoing purposes; and
WHEREAS, provision is made herein for the issuance of additional bonds
from time to time which will rank on a parity with the Series 1995 Bonds for the
purposes, upon the terms and subject to the conditions provided for herein; and
WHEREAS, all things necessary to make the Series 1995 Bonds, when
authenticated by the Trustee and issued as in this Indenture provided, the
valid, binding and legal obligations of the Issuer according to the import
thereof, and to constitute this Indenture a valid assignment and pledge of the
payments and prepayments under the Loan Agreement to be applied to the payment
of the principal of, premium, if any, and interest on the Bonds (as hereinafter
defined) and to the payment of certain other amounts, and a valid assignment of
the right, title and interest of the Issuer under the Loan Agreement and amounts
payable to the Issuer under the Loan Agreement (except fees and expenses payable
to the Issuer and the Issuer's rights relating to indemnification and notice),
have been done and performed, and the creation, execution and delivery of this
Indenture, and the creation, execution and issuance of the Series 1995 Bonds,
subject to the terms hereof, have in all respects been duly authorized:
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That the Issuer, in consideration of the premises and the acceptance by
the Trustee of the trusts hereby created and of the purchase and acceptance of
the Bonds by the owners thereof, and of other good and lawful consideration, the
receipt of which is hereby acknowledged, and to secure the payment of the
principal of, premium, if any, and interest on the Bonds according to their
tenor and effect and the
2
<PAGE> 7
payment of certain other amounts and to secure the performance and observance by
the Issuer of all of the covenants and conditions herein or therein contained,
by these presents does hereby convey, assign, transfer, pledge, set over and
confirm and grant a security interest in, unto the Trustee, its successor or
successors and its or their assigns forever, with power of sale, all and
singular the property hereinafter described (said property being herein
sometimes referred to as the "Trust Estate"), to wit:
GRANTING CLAUSES
DIVISION I
All right, title and interest of the Issuer in and to the Loan
Agreement and the amounts payable to the Issuer under the Loan Agreement
(excluding the Issuer's rights relating to the payment of fees, the
reimbursement of expenses, indemnification and notice);
DIVISION II
The Bond Fund and the Construction Fund (as each such term is
hereinafter defined), including moneys and obligations therein, held by the
Trustee (except moneys or obligations deposited with or paid to the Trustee for
payment or redemption of Bonds that are deemed no longer to be outstanding
hereunder) pursuant to the terms of this Indenture;
DIVISION III
Any and all other property of every kind and nature from time to time
hereafter, by delivery or by writing of any kind, conveyed, pledged, assigned or
transferred as and for additional security hereunder by the Issuer or the
Company or by anyone on their behalf to the Trustee, subject to the terms
thereof, including without limitation debt service reserve or similar funds,
letters or lines of credit, bond insurance policies, guaranties, including the
Guaranty or other forms of credit enhancement or funds of the Company held by
the Trustee as security for the Bonds.
EXCEPTED PROPERTY
There is, however, expressly excepted and excluded from the lien and
operation of this Indenture amounts to be transferred pursuant to this Indenture
to, or held by the Trustee in, the Rebate Fund established hereunder;
TO HAVE AND TO HOLD, all and singular, the properties and the rights
and privileges hereby conveyed, assigned and pledged by the Issuer or intended
so to be, unto the Trustee and its successors and assigns forever, in trust,
nevertheless, with power of sale for the equal and pro rata benefit and security
of each and every owner of the Bonds issued and to be issued hereunder, without
preference, priority or distinction as to participation in the lien, benefit and
protection hereof of one Bond over or from the others, by reason of priority in
the issue or negotiation or maturity thereof, or for any other reason
whatsoever, except as herein otherwise expressly provided, so that each and all
of such Bonds shall have the same right, lien and privilege under this Indenture
and shall be equally secured hereby with the same effect as if the same had
3
<PAGE> 8
all been made, issued and negotiated simultaneously with the delivery hereof and
were expressed to mature on one and the same date;
PROVIDED, NEVERTHELESS, and these presents are upon the express
condition that if the Issuer or its successors or assigns shall well and truly
pay or cause to be paid the principal of the Bonds, with interest according to
the provisions set forth in the Bonds, or shall provide for the payment or
redemption of the Bonds by depositing or causing to be deposited with the
Trustee the entire amount of funds or securities required for payment or
redemption thereof when and as authorized by the provisions hereof, or shall
provide, as permitted hereby, for the payment thereof in accordance with Article
VI hereof, and shall also pay or cause to be paid all other sums payable
hereunder by the Issuer, then these presents and the estate and rights hereby
granted shall cease, determine and become void, and thereupon the Trustee, on
payment of its lawful charges and disbursements then unpaid, on demand of the
Issuer and upon the payment of the costs and expenses thereof, shall duly
execute, acknowledge and deliver to the Issuer and the Company such instruments
of satisfaction or release as may be necessary or proper to discharge this
Indenture, including, if appropriate, any required discharge of record, and if
necessary shall grant, reassign and deliver to the Issuer, its successors or
assigns, all and singular the property, rights, privileges and interests by it
hereby granted, conveyed and assigned, and all substitutes therefor, or any part
thereof, not previously disposed of or released as herein provided; otherwise
this Indenture shall be and remain in full force and effect.
AND IT IS HEREBY COVENANTED, DECLARED AND AGREED by and between the
parties hereto that all Bonds are to be issued, authenticated and delivered, and
that all the Trust Estate is to be held and applied, subject to the further
covenants, conditions, releases, uses and trusts hereinafter set forth, and the
Issuer, for itself and its successors, does hereby covenant and agree to and
with the Trustee and its respective successors in said trust, for the benefit of
those who shall hold the Bonds, or any of them, as follows:
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<PAGE> 9
ARTICLE I
DEFINITIONS
SECTION 101. DEFINITIONS. To the extent not defined herein, capitalized
terms used in this Indenture shall have the same meanings as set forth in the
Loan Agreement. In addition to the capitalized words and terms used herein and
defined in the Loan Agreement or elsewhere in this Indenture, the following
words and terms as used in this Indenture shall have the following meanings
unless the context or use indicates another or different meaning or intent:
"ACT" means the Utah Industrial Facilities and Development Act, Title
11, Chapter 17, Utah Code Annotated 1953, as amended.
"ACT OF BANKRUPTCY OF GUARANTOR" means that the Guarantor has become
insolvent or has failed to pay its debts generally as such debts become due or
has admitted in writing its inability to pay any of its indebtedness or has
consented to or has petitioned or applied to any authority for the appointment
of a receiver, liquidator, trustee, or similar official for itself or for all or
any substantial part of its properties or assets or that any such trustee,
receiver, liquidator, or similar official has otherwise been appointed or that
bankruptcy, insolvency, reorganization, arrangement, or liquidation proceedings
(or similar proceedings) have been instituted by or against the Guarantor, and,
in the case such proceedings are instituted against the Guarantor, such
proceedings continue undismissed in excess of 90 days.
"ADDITIONAL BONDS" means the parity bonds authorized to be issued by
the Issuer pursuant to the terms and conditions of this Indenture in addition to
the Series 1995 Bonds.
"AFFILIATE" means, with respect to the Company, any other Person which,
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, the Company. For the purposes of
this definition, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of the Company, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AUTHORIZED COMPANY REPRESENTATIVE" means the person or persons at the
time and from time to time designated, by written certificate furnished to the
Issuer and the Trustee, as the person or persons authorized to act on behalf of
the Company. Such certificate shall contain the specimen signature of such
person or persons, shall be signed on behalf of the Company by the President,
any Vice President, a Treasurer or any Assistant Treasurer of the Company and
may designate alternate Authorized Company Representatives. The Authorized
Company Representative may, but need not, be an employee of the Company.
"AUTHORIZED DENOMINATIONS" means $5,000 and any integral multiple
thereof.
"AUTHORIZED GUARANTOR REPRESENTATIVE" means the person or persons at
the time and from time to time designated, by written certificate furnished to
the Issuer and the
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<PAGE> 10
Trustee, as the person or persons authorized to act on behalf of the Guarantor.
Such certificate shall contain the specimen signature of such person or persons,
shall be signed on behalf of the Guarantor by the President, any Executive Vice
President or Senior Vice President or the Treasurer of the Guarantor and may
designate alternate Authorized Guarantor Representatives. The Authorized
Guarantor Representative may, but need not, be an employee of the Guarantor.
"AUTHORIZED ISSUER REPRESENTATIVE" means the person or persons at the
time and from time to time designated, by written certificate furnished to the
Company and the Trustee, as the person or persons authorized to act on behalf of
the Issuer. Such certificate shall contain the specimen signature of such person
or persons, shall be signed on behalf of the Issuer by the Chairman of the
Governing Body and may designate alternate Authorized Issuer Representatives.
The Authorized Issuer Representative may, but need not, be an employee of the
Issuer.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as now or
hereafter constituted.
"BOND COUNSEL" means the firm of Ballard Spahr Andrews & Ingersoll, or
any other law firm having a national reputation in the field of municipal law
whose opinions are generally accepted by purchasers of municipal bonds and
appointed by resolution of the Issuer.
"BOND FUND" means the trust fund so designated which is created and
established with the Trustee pursuant to Section 401 hereof.
"BONDHOLDER", "HOLDER", "OWNER" or "OWNER OF THE BONDS" means the
registered owner of any Bond.
"BOND PURCHASE CONTRACT" means a bond purchase contract between the
Issuer and BA Securities, Inc., providing for its purchase from time to time of
Series 1995 Bonds.
"BOND REGISTER" means the registration books of the Issuer kept by the
Trustee to evidence the registration, transfer and exchange of Bonds.
"BOND RESOLUTION" means the resolution of the Governing Body adopted
August 1, 1995 authorizing the issuance and sale of the Series 1995 Bonds.
"BONDS" means the Series 1995 Bonds and any Additional Bonds,
collectively.
"BUSINESS DAY" means any day other than (a) a Saturday, (b) a Sunday,
(c) a day on which (i) the Principal Office of the Trustee, or (ii) banking
institutions located in the City of New York, New York, are authorized or
required by law or executive order to be closed, or (d) a day on which the New
York Stock Exchange is closed.
"CHAIRMAN" means the duly elected Chairman or Vice Chairman of the
Governing Body or any successor to the principal functions thereof or any other
member of the Governing Body temporarily designated by the Issuer to serve pro
tempore as Chairman.
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<PAGE> 11
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time. Each reference to a Section of the Code herein shall be deemed to include
the United States Treasury Regulations, including temporary and proposed
regulations, relating to such Section which are applicable to the Bonds or the
use of the proceeds thereof.
"COMPANY" means USPCI Clive Incineration Facility, Inc., an Oklahoma
Corporation, its successors and assigns and any surviving, resulting or
transferee entity as permitted under the Loan Agreement.
"COMPANY DOCUMENTS" means the Loan Agreement and the Proceeds
Certificate.
"COMPLETION CERTIFICATE" means the certificate delivered by the Company
pursuant to Section 3.4 of the Loan Agreement.
"CONSTRUCTION" (and other forms of the word "construct"), when used
with reference to any portion of the Project, means acquisition, construction,
improvement, renovation, equipping, installation and furnishing.
"CONSTRUCTION FUND" means the trust fund so designated which is created
and established pursuant to Section 401 hereof.
"DEFAULT RATE" means the per annum rate of interest announced publicly
by the Trustee from time to time as its base rate.
"DTC" means The Depository Trust Company, New York, New York, a
limited- purpose trust company organized under the laws of the State of New
York.
"ELIGIBLE SECURITIES" means, to the extent permitted by law, any of the
following securities, maturing (or redeemable at the option of the holder
thereof), at such time or times as to enable disbursements to be made from the
fund in which such investment is held in accordance with the terms hereof:
(a) Direct obligations of the United States of
America or obligations to the full and prompt payment of which
the full faith and credit of the United States of America is
pledged or evidences of direct ownership in future interest
and principal payments on such obligations held by a bank or
trust company, as custodian, under which the owner of the
investment is the real party in interest and has the right to
proceed directly and individually against the obligor on such
obligations, and which underlying obligations are not
available to satisfy any claim of the custodian or any person
claiming through the custodian or to whom the custodian may be
obligated;
(b)
(i) any obligation, the
interest on which is excludable from gross income of
the owner thereof for federal income tax purposes;
and
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<PAGE> 12
(ii) stock of a corporation during any
quarter of the taxable year of the corporation
that--
(1) the corporation is a
regulated investment company (as defined in
Section 851(a) of the Code) which, for the
taxable year, meets the requirements of
Section 852(a) of the Code;
(2) the corporation has
authorized and outstanding only one class of
stock;
(3) the corporation to the
extent practicable invests all its assets in
obligations described in subclause (i) of
this clause (b); and
(4) at least 98 percent of--
(A) the gross income of the
corporation (without regard to the
exclusion of interest from gross
income under Section 103 of the
Code) is derived from interest on or
gains from the sale or other
disposition of obligations described
in subclause (i) of this clause (b);
or
(B) the weighted average
value of the assets of the
corporation is represented by
investments in obligations described
in subclause (i) of this clause (b);
and
(iii) any other investment which qualifies
as a tax-exempt bond for purposes of Section
148(b)(3)(A) of the Code and the applicable United
States Treasury Regulations;
provided that, at the time of purchase of any
investment under this clause (b), such investment
is rated in either of the two highest rating
categories (without regard to pluses or minuses) of
the Rating Service;
(c) Evidences of indebtedness issued by any of
the following: Bank for Cooperatives; Export-Import Bank
of the United States; Farmers Home Administration; Federal
Financing Bank; Federal Home Loan Bank System; Federal Home
Loan Mortgage Corporation (including participation
certificates); Federal Housing Administration; Federal
Intermediate Credit Banks; Federal Land Banks; Federal
National Mortgage Association; Government National Mortgage
Association; Small Business Administration; Student Loan
Marketing Association; or any other agency or instrumentality
of the United States of America created by an act of Congress
which is substantially similar to the foregoing in its legal
relationship to the United States of America, provided that at
the time of their purchase such obligations of such other
8
<PAGE> 13
agency or instrumentality are guaranteed by the full faith and
credit of the United States of America or are rated in either
of the two highest rating categories (without regard to pluses
or minuses) of the Rating Service;
(d) Obligations of any person, including the Trustee,
provided that, at the time of their purchase, such obligations
are rated in either of the two highest rating categories
(without regard to pluses or minuses) of the Rating Service;
(e) Demand deposits or interest-bearing time
deposits, certificates of deposit or other similar banking
arrangements that are made with the Trustee or with any other
bank having deposits insured by the Federal Deposit Insurance
Corporation ("FDIC"), or any savings and loan association
having deposits insured by the Resolution Trust Corporation
("RTC"), provided that such time deposits or certificates of
deposit or other similar banking arrangements are: (i) fully
insured by the FDIC or the RTC, (ii) made with any bank
(including the Trustee) having undivided capital and surplus
of at least $100,000,000, the debt obligations (or, in the
case of the principal bank in a bank holding company, debt
obligations of the bank holding company) of which are rated in
either of the two highest rating categories (without regard to
pluses or minuses) of the Rating Service, or (iii)
continuously secured as to principal, to the extent not
insured by the FDIC or the RTC, (A) by lodging with a bank or
trust company other than the depository, as collateral
security, and granting to the Trustee a perfected first
security interest therein, obligations described in clause
(a), (b) or (c) above or, with the approval of the Trustee,
other marketable securities eligible as security for the
deposit of trust funds under applicable regulations, having a
market value (exclusive of accrued interest) not less than the
amount of such deposit and not subject to the prior claims of
any third parties, or (B) if the furnishing of security as
provided in clause (A) of this clause is not permitted by
applicable law, in such other manner as may then be required
or permitted by applicable State or federal laws and
regulations regarding the security for, or granting a
preference in the case of the deposit of, trust funds;
(f) Investment agreements or repurchase agreements
with any institution (including the Trustee), the long-term
debt or claims paying ability of which is rated in either of
the two highest rating categories (without regard to pluses or
minuses) of the Rating Service;
(g) Repurchase agreements with a financial
institution (including the Trustee) having deposits insured by
the FDIC or the RTC, or any broker or dealer that is a dealer
in government bonds and that is recognized by, trades with and
reports to, a Federal Reserve Bank as a primary dealer in
government securities, provided in any case: (i) the
collateral for the repurchase agreement, at the last
determination thereof, is described in clause (a), (b) or (c)
above, (ii) the current market value of the collateral
securing the repurchase agreement, at the last
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<PAGE> 14
determination thereof, is at least equal to the amount of the
repurchase agreement and is determined not less frequently
than monthly, (iii) the collateral is held for the benefit of
the Trustee by a Person other than the obligor on such
repurchase agreement and (iv) the collateral is not subject to
the prior claims of any third parties;
(h) Open market debt instruments (having an original
maturity of 365 days or less) that are rated in either of the
two highest short-term debt rating categories (without regard
to pluses or minuses) of the Rating Service;
(i) Investments in money market funds rated in
either of the two highest rating categories (without regard to
pluses or minuses) of the Rating Service; and
(j) Any fund or other pooling arrangement which
exclusively purchases and holds one or more of the investments
described in clauses (a) through (i), above.
(k) Any investments or securities permitted for
investment of public funds under the Utah State Money
Management Act of 1974, Title 51, Chapter 7, Utah Code
Annotated 1953, as amended.
"EVENT OF DEFAULT" means (a) with respect to this Indenture, an "Event
of Default" as defined in Section 801 hereof and (b) with respect to the Loan
Agreement, an "Event of Default" as defined in Section 7.1 thereof.
"FACILITY" means the hazardous waste disposal and treatment facility
located in Tooele County, Utah consisting of (i) land and land improvements to
be used as a site for the disposal and treatment facility; and (ii) the
equipment, facilities, and improvements to be used in connection with the
operation of said disposal and treatment facility.
"GOVERNING BODY" means the Board of County Commissioners of the Issuer.
"GOVERNMENT OBLIGATIONS" means obligations described in clause (a) of
the definition of Eligible Securities.
"GUARANTOR" means Laidlaw Inc., a Canadian corporation and its
successors and assigns as permitted by the Guaranty.
"GUARANTY" means the Guaranty from the Guarantor to the Trustee, dated
as of August 1, 1995, with respect to the Series 1995 Bonds.
"IMMEDIATE NOTICE" means notice by telephone, telex or telecopier to
such address as the addressee shall have directed in writing, promptly followed
by written notice by first class mail, postage prepaid.
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<PAGE> 15
"INDENTURE" means this Indenture of Trust, dated as of August 1, 1995
between the Issuer and the Trustee, as the same may from time to time be amended
or supplemented in accordance with the terms hereof.
"INTEREST PAYMENT DATE" means, with respect to any Bond each February 1
and August 1.
"ISSUE DATE" means, with respect to the Series 1995 Bonds, August 1,
1995.
"ISSUER" means Tooele County, Utah.
"ISSUER DOCUMENTS" means the Bond Resolution, the Loan Agreement, the
Indenture, and the Proceeds Certificate.
"LOAN AGREEMENT" means the Loan Agreement dated as of August 1, 1995,
by and between the Company and the Issuer, as the same may from time to time be
amended or supplemented in accordance with the terms thereof and hereof.
"MAXIMUM RATE" means the maximum interest rate per annum permitted
under Utah law to be borne by obligations similar to the Bonds.
"OUTSTANDING", "BONDS OUTSTANDING" or "OUTSTANDING BONDS" means, as of
any given date, all Bonds which have been duly authenticated and delivered under
this Indenture, except:
(a) Bonds cancelled on or prior to such date or
delivered to or acquired by the Trustee on or prior to such
date for cancellation;
(b) Bonds deemed to be paid in accordance with
Article VI of this Indenture; and
(c) Bonds in lieu of which other Bonds have been
authenticated under Sections 204, 209, and 210 hereof.
"PAYING AGENT" means the Trustee or any successor trustee thereof.
"PERSON" means any natural person, firm, joint venture, association,
partnership, business trust, corporation, public body, agency or political
subdivision thereof or any other similar entity.
"PRINCIPAL OFFICE" means, when used with respect to the Issuer, the
Trustee, the Company and the Guarantor, each respective office of such Persons
designated in Section 1203 hereof. The Principal Office of any such Person may
be changed from time to time by delivering notice of such change to the Issuer,
the Trustee, the Company, and the Guarantor.
"PROCEEDS CERTIFICATE" means that certain Proceeds Certificate, dated
the Issue Date, and executed by the Issuer and the Company, as amended from time
to time.
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<PAGE> 16
"PROJECT" means the Project described in Exhibit A to the Loan
Agreement as the same may be amended from time to time in accordance with the
provisions of the Loan Agreement, including any other project undertaken by the
Company and financed through Additional Bonds issued under this Indenture.
"PROJECT COSTS" OR "COSTS" means any cost of the Project or in respect
of the Project now or hereafter permitted under the Act. Without limiting the
generality of the foregoing, such costs may include: (i) amounts payable to
contractors and suppliers (including fees for designing the Project where the
designs are provided by the contractor or supplier); (ii) costs of labor,
services, materials, supplies and equipment furnished by the Company (including
shipping costs) plus the Company's standard overhead charge; (iii)
architectural, engineering, legal and other professional fees, marketing costs
and brokerage commissions; (iv) costs of funding a reserve to the extent
permitted by the Code; (v) interest on the Bonds to the extent permitted by the
Act; (vi) costs of financing including but not limited to bond discount,
printing expense, mortgage taxes and recording fees, Issuer and Trustee fees
accruing prior to completion of the Project, and legal and accounting fees.
"QUALIFIED PROJECT COSTS" means the Project Costs, but only to the
extent such costs were paid or incurred by the Company after February 28, 1995
and only to the extent that such costs are incurred for the acquisition,
development, construction, equipping and furnishing, or improvement of land or
property of a character subject to the allowance for depreciation provided in
Section 167 of the Code and are chargeable to the capital account of the Project
or would be so chargeable either with a proper election by the Company or but
for a proper election by the Company to deduct such costs, within the meaning of
Treasury Regulation Section 1.103-8(a)(1), as the same may be amended or
supplemented from time to time. "Qualified Project Costs" shall not include (i)
working capital and inventory costs, (ii) costs of issuance, and (iii) interest
following completion of construction of the Project. Interest during
construction of the Project shall be allocated proportionately between Qualified
Project Costs and other costs paid from Bond proceeds.
"RATING SERVICE" means Standard & Poor's Corporation, a corporation
organized and existing under the laws of the State of New York, and its
successors and assigns, provided that if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Rating Service" shall be deemed to refer to any other nationally
recognized securities rating agency designated by the Trustee, at the written
direction of the Company.
"REBATABLE ARBITRAGE" shall mean, with respect to any Series of Bonds,
the amount (determined as of each Rebate Calculation Date) of rebatable
arbitrage payable to the United States at the times and in the amounts specified
in Section 148(f)(3) of the Code and Section 1.148-1 and 1.148-2 of the
Regulations.
"REBATE CALCULATION DATE" means, with respect to each series of Bonds,
the interest payment date next preceding the fifth anniversary of the issue date
of such series of Bonds, each fifth anniversary of the initial Rebate
Calculation Date for such series of Bonds, and the date of retirement of the
last Bond of such series.
"REBATE FUND" shall mean the fund established by Section 405 hereof.
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<PAGE> 17
"RECORD DATE" means with respect to any Bond the fifteenth day of the
month preceding an Interest Payment Date with respect to such Bond.
"REGISTRAR" means the Trustee, when acting in accordance with Section
210 hereof.
"REGULATIONS" and all references thereto shall mean and include
applicable final, proposed and temporary United States Treasury Regulations
promulgated with respect to Sections 103 and 141 through 150 of the Code,
including all amendments thereto made hereafter.
"REQUIRED REBATE DEPOSIT" means with respect to any series of Bonds an
amount determinable as of each Rebate Calculation Date, which when added to
amounts then on deposit in the Rebate Fund with respect to such series of Bonds,
if any, equals the aggregate amount of Rebatable Arbitrage for such series of
Bonds less the amount of Rebatable Arbitrage theretofore paid to the United
States with respect to such series of Bonds, if any.
"SERIES 1995 BONDS" means the Issuer's Hazardous Waste Disposal Revenue
Bonds (Laidlaw Inc./USPCI Clive Project), Series 1995, authorized by the Issuer
to be authenticated and delivered from time to time pursuant to the terms and
conditions of this Indenture in an aggregate principal amount of $10,000,000.
"SPECIAL RECORD DATE" means the date fixed by the Trustee pursuant to
Section 202 of this Indenture for the payment of Defaulted Interest (as such
term is defined in Section 202 hereof).
"STATE" means the State of Utah.
"TRUST ESTATE" is defined in the Granting Clauses of this Indenture.
"TRUSTEE" means West One Bank, Utah, Salt Lake City, Utah, and any
successor trustee under this Indenture.
SECTION 102. RULES OF CONSTRUCTION. Unless the context shall
otherwise require,
(a) an accounting term not otherwise defined
shall have the meaning assigned to it in accordance with
generally accepted accounting principles as the same shall be
in effect from time to time;
(b) references to Articles and Sections are to
the Articles and Sections of this Indenture;
(c) words of the masculine gender shall be
deemed and construed to include correlative words of the
feminine and neuter genders;
(d) unless the context shall otherwise
indicate, words importing the singular number shall include
the plural and vice versa; and
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<PAGE> 18
(e) headings of Articles and Sections herein and the
table of contents hereof are solely for convenience of
reference, do not constitute a part hereof and shall not
affect the meaning, construction or effect hereof.
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<PAGE> 19
ARTICLE II
THE BONDS
SECTION 201. AUTHORIZED AMOUNT OF BONDS. No Bonds may be issued under
the provisions of this Indenture except in accordance with this Article. The
total principal amount of Bonds which may be issued hereunder is hereby
expressly limited (a) with respect to the Series 1995 Bonds authorized pursuant
to Section 202 hereof, to $10,000,000 and (b) with respect to any Additional
Bonds issued in accordance with Section 208 hereof, the amount permitted
pursuant to the provisions of Section 208 hereof and specified in any
supplemental indenture or supplemental indentures entered into pursuant to
Section 208 and Article X hereof.
SECTION 202. ISSUANCE OF THE SERIES 1995 BONDS; CERTAIN TERMS. In order
to finance a portion of the Project Costs there is hereby authorized to be
issued by the Issuer a series of bonds which is hereby designated as the "Tooele
County, Utah Hazardous Waste Disposal Revenue Bonds (Laidlaw Inc./USPCI Clive
Project), Series 1995". The Series 1995 Bonds may be authenticated and delivered
to the purchasers thereof at any time and from time to time as provided in
Section 207(b) hereof.
The Series 1995 Bonds shall be issuable as fully registered bonds,
without coupons, in any Authorized Denomination, in substantially the form
described in Section 204 hereof. The Series 1995 Bonds shall be lettered "R" and
shall be numbered consecutively from one (1) upward. The Series 1995 Bonds shall
be dated the Issue Date, shall bear interest payable on each Interest Payment
Date beginning February 1, 1996, and shall mature, subject to prior redemption
as follows:
<TABLE>
<CAPTION>
==================================================================================================================
YEAR PRINCIPAL AMOUNT INTEREST RATE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
August 1, 2010 $10,000,000 6.75%
==================================================================================================================
</TABLE>
Each Bond authenticated prior to the first Interest Payment Date with
respect to such Bond shall bear interest from the Issue Date thereof, as
evidenced by the Certificate of Authentication on such Bond. Each Bond
authenticated on or after the first Interest Payment Date with respect to such
Bond shall bear interest from the Interest Payment Date next preceding the date
of authentication thereof, unless the date of authentication shall be an
Interest Payment Date to which interest on such Bond has been paid in full or
duly provided for, in which case such Bond shall bear interest from the date of
authentication thereof; provided that if, as shown by the records of the
Trustee, interest on a Bond shall be in default, such Bond, or Bonds issued in
exchange for or upon the registration of transfer thereof, shall bear interest
from the date to which interest has been paid in full on the Bond or, if no
interest has been paid on the Bond with respect to which interest is in default,
the Issue Date.
Interest on each Bond shall be payable on the Interest Payment Date
applicable thereto to the Person who, on the close of business on the Record
Date, is the registered holder thereof. Interest on any Bond shall be payable by
check mailed on
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<PAGE> 20
the Interest Payment Date to the registered holder of such Bond at the address
of such registered holder set forth in the Bond Register.
Interest on any Bond which is not punctually paid or duly provided for
on any Interest Payment Date (herein called "Defaulted Interest") shall
forthwith cease to be payable to the owner thereof on the relevant Record Date
by virtue of having been such owner, and such Defaulted Interest shall be paid
to the Person in whose name such Bond (or the respective predecessor Bond) is
registered at the close of business on a Special Record Date to be established
as hereinafter provided. The Trustee shall establish (a) the date on which the
Defaulted Interest shall be paid, (b) the amount of Defaulted Interest payable
on each Bond on such payment date and (c) a Special Record Date for the payment
of such Defaulted Interest, which Special Record Date shall be not more than
fifteen (15) nor less than ten (10) days prior to the payment date. Not less
than ten (10) days prior to the Special Record Date the Trustee shall cause
notice to be delivered to the Issuer, the Company, and each owner of Bonds as to
which Defaulted Interest is payable, which notice shall specify the proposed
payment date, the Special Record Date and, in the case of notice to the Company
and the Issuer, the total amount of Defaulted Interest payable with respect to
all Bonds payable on such proposed payment date, and in the case of notice to
each Bondholder, the amount of Defaulted Interest payable with respect to each
Bond held by such Bondholder. Such notice shall be mailed, first-class postage
prepaid, to the address of each Bondholder appearing in the Register. Upon
receipt of such notice, the Company shall, in accordance with the Loan
Agreement, deposit with the Trustee, as appropriate, an amount of money equal to
the aggregate amount of Defaulted Interest to be paid on the payment date, or
shall make arrangements satisfactory to the Trustee, as appropriate, for such
deposit prior to the proposed date of payment, such money when deposited to be
held in trust for the benefit of the persons entitled to such Defaulted Interest
as provided in this paragraph. Notice having been mailed as aforesaid, such
Defaulted Interest shall be paid to the Person in whose name the Bond (or the
respective predecessor Bond) is registered at the close of business on such
Special Record Date.
The principal of (including the principal component of the redemption
price) and any applicable redemption premium on the Bonds are payable at the
Principal Office of the Trustee only upon presentation and surrender thereof.
All payments of principal of, premium, if any, and interest on the
Bonds are payable in any coin or currency of the United States of America that
is legal tender for the payment of public and private debts on the respective
dates of payment thereof.
SECTION 203. INTEREST ON THE BONDS.
(a) Calculation of Interest. Interest on the
Bonds shall be calculated on the basis of a 360-day year
composed of twelve 30-day months.
(b) Maximum Rate. None of the Bonds shall bear
interest at a rate per annum in excess of the Maximum Rate.
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<PAGE> 21
SECTION 204. FORM OF BONDS AND TEMPORARY BONDS. The Bonds issued under
this Indenture shall be in substantially the form set forth in Exhibit "A"
hereto, with such appropriate variations, omissions and insertions as are
permitted or required by this Indenture or deemed necessary by the Trustee and
the Issuer.
Bonds of any series may be initially issued in temporary form
exchangeable for definitive Bonds of the same series when ready for delivery.
The temporary Bonds shall be in the form of registered Bonds without coupons in
Authorized Denominations, substantially in the form of Exhibit "A" hereto, with
such appropriate omissions, insertions and variations as may be required with
respect to such temporary Bonds and may contain such reference to any of the
provisions of this Indenture as may be appropriate. Every temporary Bond shall
be executed by the Issuer and be authenticated by the Trustee, upon the same
conditions and in substantially the same manner as the definitive Bonds. If the
Issuer issues temporary Bonds it will execute and furnish definitive Bonds
without delay and thereupon the temporary Bonds shall be surrendered for
cancellation in exchange therefor at the Principal Office of the Trustee, and
the Trustee shall authenticate and deliver in exchange for such temporary Bonds
an equal aggregate principal amount of definitive Bonds of the same series and
maturity in Authorized Denominations. Until so exchanged, the temporary Bonds
shall be entitled to the same benefits under this Indenture as definitive Bonds
authenticated and delivered hereunder.
SECTION 205. EXECUTION; SPECIAL LIMITED OBLIGATION. The Bonds shall be
executed on behalf of the Issuer with the manual or facsimile signature of the
Chairman of the Governing Body and shall have impressed or imprinted thereon, by
facsimile or otherwise, the official seal of the Issuer and shall be attested
with the manual or facsimile signature of the Issuer's County Clerk. In case any
officer of the Issuer whose signature or whose facsimile signature shall appear
on the Bonds shall cease to be such officer before the delivery of such Bonds,
such signature or facsimile signature shall nevertheless be valid and sufficient
for all purposes, the same as if he had remained in office until delivery. The
Bonds are special, limited obligations of the Issuer, payable by the Issuer
solely from certain amounts received by the Issuer under, and secured by a
pledge of certain rights of the Issuer under and pursuant to, the Loan
Agreement, and, further, from the funds and accounts created hereunder (but not
including the Rebate Fund created hereunder) and investment earnings thereon,
all of which shall be used for no other purpose than to pay the principal of,
premium, if any, and interest on the Bonds, except as may be otherwise expressly
authorized in this Indenture. Neither the faith and credit nor the taxing power
of the State of Utah or any political subdivision thereof is pledged to the
payment of the principal of, premium, if any, or interest on the Bonds. The
Bonds and the interest thereon do not constitute or give rise to a general
obligation or liability of the Issuer or a charge against its general credit or
taxing powers and the Bonds do not constitute a loan of the credit of the Issuer
within the meaning of any constitutional restriction or statutory limitation of
the State of Utah.
SECTION 206. AUTHENTICATION. No Bond shall be valid or obligatory for
any purpose or entitled to any security or benefit under this Indenture unless
and until the Certificate of Authentication on such Bond in substantially the
form set forth in Exhibit "A" hereto shall have been duly executed by the
Trustee and such execution shall be conclusive evidence that such Bond has been
authenticated and delivered
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<PAGE> 22
under this Indenture and that the holder thereof is entitled to the benefits of
the trust hereby created. The Trustee shall insert the authentication date on
each Bond authenticated hereunder. The Certificate of Authentication on any Bond
shall be deemed to have been executed by it if manually signed by an authorized
officer or signatory of the Trustee, but it shall not be necessary that the same
officer or signatory sign the Certificate of Authentication on all of the Bonds.
SECTION 207. DELIVERY OF THE SERIES 1995 BONDS.
(a) Following the execution and delivery of this
Indenture, the Issuer shall execute and deliver to the
Trustee, and the Trustee shall authenticate, Series 1995 Bonds
(in either temporary or definitive form), and shall deliver
them to the purchasers thereof as directed by the Issuer as
hereinafter in this Section provided.
(b) Prior to the delivery by the Trustee on the
Issue Date of any of the Series 1995 Bonds, there shall be
delivered to the Trustee:
(i) a copy, duly certified by the County
Clerk of the Issuer, of all resolutions adopted and
approved by the Issuer authorizing the issuance and
sale of the Series 1995 Bonds and the execution and
delivery of the Loan Agreement, the Proceeds
Certificate, this Indenture and a Bond Purchase
Contract relating to the Series 1995 Bonds being
delivered on such Issue Date;
(ii) a copy, duly certified by a Vice
President, the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer, as appropriate,
of the Company, of all resolutions adopted and
approved by the Company authorizing the execution and
delivery of the Loan Agreement, the Proceeds
Certificate, and approving this Indenture and the
issuance and sale of the Series 1995 Bonds and the
terms thereof;
(iii) an original executed counterpart of
this Indenture, the Loan Agreement, and the Proceeds
Certificate;
(iv) a request and authorization to the
Trustee on behalf of the Issuer and signed by the
Chairman of the Governing Body, to authenticate and
deliver Series 1995 Bonds in the aggregate principal
amount specified therein to the purchasers specified
therein upon payment to the Trustee, but for the
account of the Issuer, of the net proceeds from the
sale of such Series 1995 Bonds;
(v) the items required to be delivered
prior to the issuance of such Series 1995 Bonds under
the terms of the Bond Purchase Contract relating to
such Series 1995 Bonds unless waived by the
respective parties thereto;
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<PAGE> 23
(vi) a certificate, signed by a Vice President of the
Company, with a copy to the Issuer, requesting the Trustee to cause
Series 1995 Bonds in the amount specified in the request and
authorization delivered pursuant to Clause (b)(v) of this Section to be
authenticated and delivered, which certificate shall constitute
conclusive evidence under Section 3.1 of the Loan Agreement of such
request and approval;
(vii) the original executed Guaranty, and a certificate
signed by a duly authorized officer of the Guarantor and an
opinion of counsel to the Guarantor in form and substance satisfactory
to the original purchaser of the Series 1995 Bonds; and
(viii) such other closing documents and opinions of counsel
(including Bond Counsel) as the Trustee, the Issuer or Bond Counsel may
reasonably specify.
Section 208. Issuance of Additional Bonds. Additional Bonds (in
addition to the Series 1995 Bonds) may be issued by the Issuer on a parity with
the Series 1995 Bonds for any one or more of the following purposes: (a) to
refund any series of Outstanding Bonds or portion thereof in a manner consistent
with the provisions of Article VI hereof; (b) to obtain funds to loan to the
Company to complete the Facility; (c) to obtain funds for any other purpose
permitted under the Act; and (d) for any combination of the foregoing purposes.
The principal amount of such Additional Bonds may include an amount
sufficient to pay the costs and expenses of issuance as well as such capitalized
amounts as are permitted by the Act. Such Additional Bonds shall be issued on a
parity with the Series 1995 Bonds (subject, however, to the terms of Article VI
hereof) notwithstanding the fact that no additional security (except the
security provided by any supplements or amendments to the Loan Agreement) is
made subject to the lien of this Indenture. The foregoing notwithstanding, the
Trustee is authorized to accept additional security upon the issuance of any
series of Additional Bonds with respect to such series of Additional Bonds,
including but not limited to debt service reserve or similar funds, letters or
lines of credit, guaranties, bond insurance policies or other forms of credit
enhancement.
Prior to the initial delivery of any Additional Bonds, there shall be
filed with the Trustee, among other items, all of the following:
(a) a written statement by the Company approving (i)
the issuance and delivery of such Additional Bonds and
(ii) any other matters to be approved by the Company pursuant to
the Loan Agreement and this Section 208;
(b) a copy, duly certified by the County Clerk of the
Issuer, of a resolution adopted and approved by the Governing
Body authorizing the execution and delivery of such supplements
or amendments to this Indenture and to the Loan Agreement as may
be necessary and authorizing the issuance of such Additional
Bonds;
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<PAGE> 24
(vi) a certificate, signed by a Vice
President of the Company, with a copy to the Issuer,
requesting the Trustee to cause Series 1995 Bonds in
the amount specified in the request and authorization
delivered pursuant to Clause (b)(v) of this Section
to be authenticated and delivered, which certificate
shall constitute conclusive evidence under Section
3.1 of the Loan Agreement of such request and
approval;
(vii) the original executed Guaranty, and a
certificate signed by a duly authorized officer of
the Guarantor and an opinion of counsel to the
Guarantor in form and substance satisfactory to the
original purchaser of the Series 1995 Bonds; and
(viii) such other closing documents and
opinions of counsel (including Bond Counsel) as the
Trustee, the Issuer or Bond Counsel may reasonably
specify.
SECTION 208. ISSUANCE OF ADDITIONAL BONDS. Additional Bonds (in
addition to the Series 1995 Bonds) may be issued by the Issuer on a parity with
the Series 1995 Bonds for any one or more of the following purposes: (a) to
refund any series of Outstanding Bonds or portion thereof in a manner consistent
with the provisions of Article VI hereof; (b) to obtain funds to loan to the
Company to complete the Facility; (c) to obtain funds for any other purpose
permitted under the Act; and (d) for any combination of the foregoing purposes.
The principal amount of such Additional Bonds may include an amount
sufficient to pay the costs and expenses of issuance as well as such capitalized
amounts as are permitted by the Act. Such Additional Bonds shall be issued on a
parity with the Series 1995 Bonds (subject, however, to the terms of Article VI
hereof) notwithstanding the fact that no additional security (except the
security provided by any supplements or amendments to the Loan Agreement) is
made subject to the lien of this Indenture. The foregoing notwithstanding, the
Trustee is authorized to accept additional security upon the issuance of any
series of Additional Bonds with respect to such series of Additional Bonds,
including but not limited to debt service reserve or similar funds, letters or
lines of credit, guaranties, bond insurance policies or other forms of credit
enhancement.
Prior to the initial delivery of any Additional Bonds, there shall be
filed with the Trustee, among other items, all of the following:
(a) a written statement by the Company
approving (i) the issuance and delivery of such
Additional Bonds and (ii) any other matters to be approved by
the Company pursuant to the Loan Agreement and this Section
208;
(b) a copy, duly certified by the County Clerk
of the Issuer, of a resolution adopted and approved by
the Governing Body authorizing the execution and delivery of
such supplements or amendments to this Indenture and to the
Loan Agreement as may be necessary and authorizing the
issuance of such Additional Bonds;
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<PAGE> 25
(c) a copy, duly certified by a Vice President, the
Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer of the Company, of the resolutions adopted
and approved authorizing the execution and delivery of a
supplement or amendment to the Loan Agreement and such other
documents as may be required, and approving a supplement or
amendment to this Indenture and the issuance and sale of such
Additional Bonds;
(d) the original executed counterparts of the
supplements or amendments to this Indenture and the Loan
Agreement providing, among other things, for payments to be
made thereunder in amounts sufficient to cover payments of
principal, premium and interest to be made on the Additional
Bonds to be issued;
(e) a request and authorization to the Trustee,
signed by the Chairman of the Governing Body, to authenticate
and deliver such Additional Bonds (specifically stating the
principal amount to be issued and delivered to the purchasers
therein identified) upon payment to the Trustee, but for the
account of the Issuer, of a sum specified in such request and
authorization plus accrued interest, if any, thereon to the
date of delivery. The Trustee shall deposit the proceeds of
such Additional Bonds in the funds and accounts hereunder as
specified in the supplemental indenture relating to such
Additional Bonds;
(f) any required supplement or amendment to the
Guaranty or an additional guaranty and related opinions and
certificates; and
(g) such other closing documents and opinions
of counsel as the Issuer, the Trustee and Bond Counsel may
reasonably specify.
SECTION 209. MUTILATED, LOST, STOLEN OR DESTROYED BONDS. In the
event any temporary or definitive Bond is mutilated, lost, stolen or destroyed,
the Issuer may execute and the Trustee may authenticate a new Bond of like form,
date, maturity and denomination as that mutilated, lost, stolen or destroyed and
bearing a number not contemporaneously Outstanding; provided that, in the case
of any mutilated Bond, such mutilated Bond shall first be surrendered to the
Issuer, and in the case of any lost, stolen or destroyed Bond, there shall be
first furnished to the Issuer and the Trustee evidence of such loss, theft or
destruction satisfactory to the Issuer and the Trustee, together with indemnity
satisfactory to them. In the event any such Bond shall have matured or is about
to mature or been called for redemption, instead of issuing a duplicate Bond the
Issuer may pay the same without surrender thereof upon compliance with the
foregoing. The Issuer and the Trustee may charge the holder or owner of such
Bond with their reasonable fees and expenses in this connection.
All duplicate Bonds issued and authenticated pursuant to this Section
209 shall constitute original, contractual obligations of the Issuer (whether or
not, in the case of the first paragraph of this Section 209, lost or stolen
Bonds be at any time found by anyone) and shall be entitled to equal and
proportionate rights and benefits hereunder as all other Outstanding Bonds
issued hereunder.
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<PAGE> 26
All Bonds shall be owned upon the express condition that the foregoing
provisions, to the extent permitted by law, are exclusive with respect to the
replacement or payment of mutilated, destroyed, lost, or stolen Bonds, and shall
preclude any and all other rights or remedies.
SECTION 210. BOND REGISTER; TRANSFER AND EXCHANGE OF BONDS; PERSONS
TREATED AS OWNERS. The Issuer shall cause books for the registration and
transfer of the Bonds to be kept by the Trustee which is hereby constituted and
appointed the Registrar for purposes of this Indenture with respect to such
Bonds. The Trustee shall keep in the Bond Register the name and address of each
Bondholder, and the serial number of each Bond held by such Bondholder. This
Indenture shall constitute a "system of registration" for all purposes of the
Registered Public Obligations Act of the State. At reasonable times and under
reasonable regulations established by the Trustee, such books may be inspected
and copied by the Issuer, the Company, the Trustee, or the owners (or a
designated representative thereof) of 15% or more in aggregate principal amount
of the Bonds then Outstanding.
Subject to the limitations contained in the next succeeding paragraph,
upon surrender for registration of transfer of any Bond at the Principal Office
of the Trustee, duly endorsed by, or accompanied by a written instrument or
instruments of transfer in form satisfactory to the Trustee and duly executed
by, the Bondholder or such Bondholder's attorney duly authorized in writing and
with such guarantee of signature as shall be satisfactory to the Trustee, the
Issuer shall execute and the Trustee shall authenticate and deliver in the name
of the transferee or transferees a new Bond or Bonds of the same series and of
Authorized Denominations, which shall be identical to the Bond being exchanged
with respect to interest rate and the stated maturity applicable to such Bond,
and bearing numbers not contemporaneously outstanding. Subject to the
limitations contained in the next succeeding paragraph, Bonds may be exchanged
at such Principal Office of the Trustee upon surrender thereof together with an
assignment duly executed by the registered owner thereof or such owner's
attorney or legal representative in such form and with guarantee of signature as
shall be satisfactory to the Trustee for an equal aggregate principal amount of
Bonds of any Authorized Denomination as the Bonds surrendered for exchange,
which Bonds shall be identical to the Bonds being exchanged with respect to
series, interest rate and stated maturity, bearing numbers not contemporaneously
outstanding. The execution by the Issuer of any Bond of any Authorized
Denomination shall constitute full and due authorization of such Bond and the
Trustee shall thereby be authorized to authenticate and deliver such registered
Bond.
The Registrar shall not be required to exchange or register the
transfer of any Bond during the period commencing on the Record Date next
preceding any Interest Payment Date for such Bond and ending at the close of
business on the day next preceding such Interest Payment Date, nor to exchange
or register the transfer of such Bond after the mailing of notice calling such
Bond for redemption, nor during the period of fifteen days next preceding the
mailing of such notice of redemption.
No service charge shall be imposed on any Bondholder for any exchange
or transfer of Bonds. The Issuer and the Trustee may, however, require payment
by the person requesting an exchange or transfer of Bonds of a sum sufficient to
cover any tax, fee or other governmental charge that may be imposed in relation
thereto, except
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<PAGE> 27
in the case of the issuance of a Bond or Bonds for the unredeemed portion of a
Bond surrendered for redemption in part unless there is a transfer in connection
with such issuance.
Bonds delivered upon any registration of transfer or exchange as
provided herein shall be valid limited obligations of the Issuer, evidencing the
same debt as the Bond surrendered, shall be secured by this Indenture and shall
be entitled to all of the security and benefits hereof to the same extent as the
Bond surrendered.
The Issuer, the Trustee, and the Company may treat the registered owner
of any Bond as the absolute owner thereof for all purposes, whether or not such
Bond shall be overdue, and shall not be bound by any notice to the contrary. All
payments of or on account of the principal of and premium, if any, and interest
on any such Bond as herein provided shall be made only to or upon the written
order of the registered owner thereof or such owner's legal representative, but
such registration may be changed as herein provided. All such payments shall be
valid and effectual to satisfy and discharge the liability upon such Bond to the
extent of the sum or sums so paid.
SECTION 211. BOOK ENTRY PROVISIONS.
(a) The Series 1995 Bonds shall be initially issued
in the form of a separate single certificated fully registered
Series 1995 Bond for each of the maturities set forth in
Section 202 hereof. Upon initial issuance, the ownership of
each Series 1995 Bond shall be registered in the registration
books kept by the Bond Registrar in the name of Cede & Co.
("Cede"), as nominee of DTC. Except as provided in Section 210
hereof, all of the Outstanding Bonds shall be registered in
the registration books kept by the Bond Registrar in the name
of Cede, as nominee of DTC.
(b) With respect to Series 1995 Bonds registered in
the registration books kept by the Bond Registrar in the name
of Cede, as nominee of DTC, the Issuer, the Trustee and the
Paying Agent shall have no responsibility or obligation to any
Participant or to any person on behalf of which a Participant
holds an interest in the Series 1995 Bonds. Without limiting
the immediately preceding sentence, the Issuer, the Paying
Agent and the Trustee shall have no responsibility or
obligation with respect to (i) the accuracy of the records of
DTC, Cede or any Participant with respect to any ownership
interest in the Series 1995 Bonds, (ii) the delivery to any
Participant or any other person, other than a Registered
Owner, as shown in the registration books kept by the Bond
Registrar, of any notice with respect to the Series 1995
Bonds, including any notice of redemption, or (iii) the
payment to any Participant or any other person, other than a
Registered Owner, as shown in the registration books kept by
the Trustee, of any amount with respect to principal of,
premium, if any, or interest on the Series 1995 Bonds. The
Issuer, the Paying Agent and the Trustee may treat and
consider the person in whose name each Series 1995 Bond is
registered in the registration books kept by the Trustee as
the holder and absolute owner of such Series 1995 Bond for the
purpose of payment of principal,
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<PAGE> 28
premium and interest with respect to such Series 1995 Bond,
for the purpose of giving notices of redemption and other
matters with respect to such Series 1995 Bond, for the purpose
of registering transfers with respect to such Series 1995
Bond, and for all other purposes whatsoever. The Paying Agent
shall pay all principal of, premium, if any, the interest on
the Series 1995 Bonds only to or upon the order of the
respective Registered Owners, as shown in the registration
books kept by the Trustee, or their respective attorneys duly
authorized in writing, as provided in Section 202 hereof, and
all such payments shall be valid and effective to fully
satisfy and discharge the Issuer's obligations with respect to
payment of principal of, premium, if any, and interest on the
Series 1995 Bonds to the extent of the sum or sums so paid. No
person other than a Registered Owner, as shown in the
registration books kept by the Trustee, shall receive a
certificated Series 1995 Bond evidencing the obligation of the
Issuer to make payments of principal, premium, if any, and
interest pursuant to this Indenture. Upon delivery by DTC to
the Bond Registrar of written notice to the effect that DTC
has determined to substitute a new nominee in place of Cede,
and subject to the provisions herein with respect to record
dates, the word "Cede" in this Indenture shall refer to such
new nominee of DTC; and upon receipt of such a notice the Bond
Registrar shall promptly deliver a copy of the same to the
Trustee, if the Trustee is other than himself.
(c) The Representation Letter in substantially the
form attached hereto as Exhibit "B", with such changes,
omissions, insertions and revisions as the Chairman shall
approve, is hereby authorized and the Chairman shall execute
and deliver such Representation Letter. The approval of the
Chairman of any such changes, omissions, insertions and
revisions shall be conclusively established by said Chairman's
execution and delivery of the Representation Letter which
shall not in any way limit the provisions of Section 211(b)
hereof or in any other way impose upon the Issuer any
obligation whatsoever with respect to persons having interests
in the Series 1995 Bonds other than the Registered Owners, as
shown on the registration books kept by the Bond Registrar.
The Trustee shall take all action necessary for all
representations of the Issuer in the Representation Letter
with respect to the Paying Agent to at all times be complied
with.
(d) (i) DTC may determine to discontinue providing
its services with respect to the Series 1995 Bonds at any time
by giving notice to the Issuer and the Trustee and discharging
its responsibilities with respect thereto under applicable
law.
(i) The Issuer, in its sole discretion and
without the consent of any other person, may
terminate the services of DTC with respect to the
Series 1995 Bonds if the Issuer determines that:
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<PAGE> 29
(A) DTC is unable to discharge its
responsibilities with respect to the Series
1995 Bonds, or
(B) a continuation of the
requirement that all of the Outstanding
Bonds be registered in the registration
books kept by the Bond Registrar in the name
of Cede, or any other nominee of DTC, is not
in the best interest of the beneficial
owners of the Series 1995 Bonds.
(ii) Upon the termination of the services
of DTC with respect to the Series 1995 Bonds pursuant
to subsection 211(d)(ii)(B) hereof, or upon the
discontinuance or termination of the services of DTC
with respect to the Series 1995 Bonds pursuant to
subsection 211(d)(i) or subsection 211(d)(ii)(A)
hereof after which no substitute securities
depository willing to undertake the functions of DTC
hereunder can be found which, in the opinion of the
Issuer, is willing and able to undertake such
functions upon reasonable and customary terms, the
Issuer is obligated to deliver Bond Certificates at
the expense of the beneficial owners of the Series
1995 Bonds, as described in this Indenture and the
Series 1995 Bonds shall no longer be restricted to
being registered in the registration books kept by
the Bond Registrar in the name of Cede as nominee of
DTC, but may be registered in whatever name or names
Registered Owners transferring or exchanging Series
1995 Bonds shall designate, in accordance with the
provisions of this Indenture.
(e) Notwithstanding any other provision of this
Indenture to the contrary, so long as any Series 1995 Bond is
registered in the name of Cede, as nominee of DTC, all
payments with respect to principal of, premium, if any, and
interest on such Series 1995 Bond and all notices with respect
to such Series 1995 Bond shall be made and given,
respectively, in the manner provided in the Representation
Letter.
SECTION 212. CANCELLATION. Upon payment of the principal of,
premium, if any, and interest on any Bond, or replacement of any Bond pursuant
to Section 209 hereof or transfer or exchange pursuant to Section 210 hereof,
any such Bond shall be cancelled and destroyed by the Trustee. The Issuer or
the Company may at any time deliver to the Trustee for cancellation any Bonds
previously authenticated and delivered hereunder which the Issuer or the
Company may have acquired in any manner whatsoever, and all Bonds so delivered
shall be promptly cancelled and destroyed by the Trustee. No Bonds shall be
authenticated in lieu of or in exchange for any Bonds cancelled as provided in
this Section, except as expressly permitted by this Indenture. Counterparts of
a certificate of destruction evidencing the destruction and disposal of any
Bond pursuant to this Section 212 shall be furnished by the Trustee to the
Company and the Issuer.
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<PAGE> 30
ARTICLE III
REDEMPTION OF BONDS
SECTION 301. OPTIONAL REDEMPTION OF SERIES 1995 BONDS. The Series 1995
Bonds are subject to optional redemption prior to maturity by the Trustee at the
direction of the Company, in whole at any time or in part on any Interest
Payment Date, in inverse order of maturity and by lot within each maturity at
any time on or after August 1, 2005, at a redemption price expressed as a
percentage of principal amount of Series 1995 Bonds to be redeemed set forth in
the table below, together with accrued interest to the Redemption Date:
<TABLE>
<CAPTION>
Redemption Date Redemption Price
--------------- ----------------
<S> <C>
August 1, 2005 to July 31, 2006 102%
August 1, 2006 to July 31, 2007 101%
August 1, 2007 and thereafter 100%
</TABLE>
SECTION 302. EXTRAORDINARY OPTIONAL REDEMPTION. The Series 1995 Bonds
shall be subject to extraordinary optional redemption prior to maturity by the
Trustee, at the direction of the Company, in whole or in part, on any date at a
redemption price equal to the principal amount of the Series 1995 Bonds to be
redeemed plus accrued interest to the redemption date, within 365 days following
the occurrence of any one of the following events (or, in the case of (a) and
(b) below, at the option of the Company, within sixty (60) days following the
receipt of any proceeds relating to such event):
(a) The Facility or a substantial portion thereof shall
have been damaged or destroyed by fire or other casualty (i)
to such extent that, in the opinion of the Company expressed
in a certificate signed by an Authorized Company
Representative and filed with the Issuer and the Trustee,
within a period of twelve consecutive months following such
damage or destruction it is not practicable or desirable to
rebuild, repair or restore the Facility, or (ii) to such
extent that, in the opinion of the Company expressed in a
certificate signed by an Authorized Company Representative and
filed with the Issuer and the Trustee, the Facility is or will
be prevented thereby from operating normally for a period of
twelve (12) consecutive months.
(b) Title to, or the temporary use of, all or
substantially all the Facility shall have been taken under the
exercise of the power of eminent domain (including such a
taking or takings which results or is likely to result, in the
opinion of the Company expressed in a certificate signed by an
Authorized Company Representative and filed with the Issuer
and the Trustee, in normal operations at the Facility being
interrupted for a period of twelve (12) consecutive months or
results or is likely to result in rendering the Facility, in
the opinion of the Company expressed in a certificate signed
by an Authorized Company Representative and filed with the
Issuer and the Trustee, unsuitable for use).
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<PAGE> 31
(c) As a result of any changes in the Constitution of
the State of Utah or the Constitution of the United States of
America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal)
entered after the contest thereof by the Company in good
faith, the Loan Agreement shall have become void or
unenforceable or impossible of performance in accordance with
the intent and purposes of the parties as expressed in the
Loan Agreement, or unreasonable burdens or excessive
liabilities shall have been imposed on the Issuer or the
Company, including without limitation, federal, state or other
ad valorem, property, income or other taxes not being imposed
on the date of the Loan Agreement or changes since the date of
initial issuance of the Bonds in regulatory requirements,
technology or the economic availability of raw materials,
operating supplies, equipment or waste requiring treatment and
disposal, which condition cannot reasonably be expected to
improve materially within a period of twelve (12) consecutive
months and causes the Company to determine that the Facility
should not be completed or that operation of the Facility
should be discontinued.
SECTION 303. SPECIAL MANDATORY REDEMPTION. The Series 1995 Bonds are
also subject to special mandatory redemption in whole by the Issuer on any date
prior to maturity at a redemption price of 100% of the principal amount thereof
together with accrued interest to the date of redemption, upon the occurrence of
a Determination of Taxability, as soon as practicable, but in no event later
than thirty (30) days after the occurrence of such Determination of Taxability.
Upon being notified of a Determination of Taxability, the Trustee shall give
immediate notice of redemption to the Company, to the Guarantor and to the
Registered Owners as provided in Section 304 herein.
"Determination of Taxability" shall mean a determination that the
interest income on any Series 1995 Bond does not qualify as being excludable
from the gross income of the Registered Owner thereof ("exempt interest") for
any reason other than that such Registered Owner is a "substantial user" of the
Facility or a "related person" as such terms are defined in Section 103(b)(6) of
the Internal Revenue Code of 1954, which determination shall be deemed to have
been made upon the occurrence of the first to occur of the following:
(i) the date on which the Company
determines that the interest income on any of the
Series 1995 Bonds does not qualify as exempt
interest; or
(ii) the date on which any change in law or
regulation becomes effective or on which the Internal
Revenue Service has issued any private ruling,
technical advice or any other written communication
to the effect that the interest income on any of the
Series 1995 Bonds does not qualify as exempt
interest; or
(iii) the date on which the Company shall
receive notice from the Trustee in writing that the
Trustee has been advised in writing by any Registered
Owner of any Series 1995
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<PAGE> 32
Bond that the Internal Revenue Service has issued a
thirty-day letter or other notice which asserts that
the interest on such Series 1995 Bond does not
qualify as exempt interest; or
(iv) the date on which the Trustee receives
written notice that the Company or the Issuer has
taken any action inconsistent with, or has failed to
act consistently with, the tax exempt status of
interest on the Series 1995 Bonds;
provided that no Determination of Taxability shall be
deemed to have occurred as a result of a
determination by the Company pursuant to Clause (i),
(ii) or (iv) above unless such determination is
supported by a written opinion of nationally
recognized bond counsel satisfactory to the Trustee
that the interest income on the Series 1995 Bonds
does not constitute exempt interest. If, however, in
the opinion of nationally recognized bond counsel
acceptable to the Trustee, redemption of less than
all of the Series 1995 Bonds will preserve the
exclusion from gross income of the Registered Owners
thereof of interest on the remaining Series 1995
Bonds, then only such amount need be redeemed, the
particular Series 1995 Bonds to be redeemed to be
selected by lot by the Trustee in such manner as the
Trustee in its discretion shall determine or
otherwise as specified in such final determination or
opinion. Such determination shall be referred to
herein as a "Determination of Taxability" and the
event giving rise to such Determination shall be
referred to herein as an "Event of Taxability". The
Trustee shall receive and coordinate notices from
Registered Owners of the Series 1995 Bonds in
connection with such determination and forward such
notices to the Company.
SECTION 304. NOTICE OF REDEMPTION. Notice of redemption shall be
given by the Trustee, by first-class mail, postage prepaid, mailed not less than
thirty (30) nor more than sixty (60) days prior to the redemption date, to each
owner of Bonds to be redeemed, at his address appearing in the Bond Register;
provided, however, that in the event of a redemption pursuant to Section 303
hereof, the Trustee shall not later than 2:00 p.m. (Trustee's local time) on the
first Business Day following the Determination of Taxability (a) use its best
reasonable efforts to notify the Company, the Guarantor and the Issuer thereof
by telephone, telex or telecopier, and (b) send written notice thereof to the
Company, the Guarantor and the Issuer by personal delivery or by Federal Express
or other similar express mail service guaranteed for next-day delivery. Failure
to give such notice by mailing, or any defect therein, shall not affect the
validity of the proceedings for the redemption of any Bond or portion thereof
with respect to which no such failure has occurred. In addition, notice of
redemption shall be sent by first-class mail, postage prepaid, or by overnight
delivery service, not less than 35 days prior to the redemption date, (1) to at
least two or more information services of national recognition that disseminate
redemption information with respect to municipal bonds and (2) to any securities
depository registered as such pursuant to the Securities Exchange Act of 1934,
as amended, in whose name Bonds to be redeemed have been registered as nominee;
provided, however, that no defect in or
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failure to give the notice described in this sentence shall in any manner defeat
the effectiveness of a call for redemption with respect to Bonds for which
notice was properly given as described in the preceding sentence.
All notices of redemption shall state:
(a) the redemption date,
(b) the redemption price,
(c) the identification of the Bonds to be redeemed,
including complete designation and issue date of the series of
Bonds of which such Bonds are a part and the CUSIP number (and
in the case of partial redemption, the certificate numbers of
the Bonds to be redeemed and the respective principal amounts
thereof), interest rates and maturity dates of such Bonds, and
any other descriptive information which may be necessary to
identify accurately the Bonds to be redeemed,
(d) that on the redemption date the redemption price
will become due and payable upon each such Bond, and that
interest thereon shall cease to accrue from and after said
date, and
(e) the name and address of the Trustee including the
name and telephone number of a contact person and the place
where such Bonds are to be surrendered for payment of the
redemption price.
If at the time of mailing of notice of an optional redemption there
shall not have been deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, which moneys are or will be available for
redemption of Bonds, such notice will state that it is conditional, that is,
subject to the deposit of the redemption moneys with the Trustee not later than
the close of business of the fifth day prior to the Redemption Date, and such
notice shall be of no effect unless such moneys are so deposited.
SECTION 305. BONDS PAYABLE ON REDEMPTION DATE. Notice of
redemption having been given as aforesaid, the Bonds so to be redeemed shall, on
the redemption date, become due and payable at the redemption price therein
specified and from and after such date (unless the Issuer shall default in the
payment of the redemption price) such Bonds shall cease to bear interest. Upon
surrender of any such Bond for redemption in accordance with said notice, the
redemption price of such Bond shall be paid by the Trustee. If any Bond called
for redemption shall not be so paid upon surrender thereof for redemption, the
principal (and premium, if any) shall, until paid, bear interest from the
redemption date at the rate last borne by the Bond.
SECTION 306. BONDS REDEEMED IN PART. Any Bond which is to be
redeemed in part only shall be surrendered at the place of payment, duly
endorsed by the owner of such Bond, or accompanied by a written instrument of
transfer in form satisfactory to the Trustee, as appropriate, duly executed by
the owner thereof or his attorney duly authorized in writing and, upon such
surrender, the Issuer shall execute and the Trustee shall authenticate and
deliver to the owner of such Bond without service
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charge, a new Bond or Bonds in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Bond so surrendered
which Bond or Bonds shall be in any Authorized Denominations and shall be
identical to the Bond being purchased or redeemed with respect to stated
maturity and interest rate, and bearing numbers not contemporaneously
outstanding.
SECTION 307. ELECTION TO REDEEM; NOTICE TO TRUSTEE AND ISSUER. The
election of the Company to redeem any Bonds shall be evidenced by a written
notice, signed by an Authorized Company Representative, given to the Trustee and
the Issuer not less than 45 days (unless a shorter notice shall be satisfactory
to the Trustee and the Issuer) and not more than 90 days prior to the redemption
date specified by the Company therein, which notice shall specify the Section of
this Indenture pursuant to which the Bonds are being redeemed, the redemption
date, and the aggregate principal amount of Bonds to be redeemed.
SECTION 308. SELECTION OF BONDS TO BE REDEEMED. If less than all the
Bonds are to be redeemed, the particular Bonds or portion thereof to be redeemed
shall be selected prior to the redemption date by the Trustee, by lot by such
method as the Trustee shall deem fair and appropriate and which may provide for
the selection for redemption of portions of the principal of Bonds of a
denomination larger than the minimum Authorized Denomination. The unredeemed
portion of a Bond selected for partial redemption must be equal to an Authorized
Denomination.
SECTION 309. DEPOSIT OF REDEMPTION PRICE. Pursuant to Section
4.1(b)(iii) of the Loan Agreement, the Company is required, prior to any
redemption date, to deposit with the Trustee an amount of money in immediately
available funds sufficient to pay the redemption price of all the Bonds which
are to be redeemed on such date.
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ARTICLE IV
FUNDS AND ACCOUNTS
SECTION 401. ESTABLISHMENT OF FUNDS AND ACCOUNTS. There are hereby
created by the Issuer and ordered established with the Trustee the following
irrevocable trust funds and accounts:
(a) A separate Bond Fund, to be designated "Tooele
County, Utah Hazardous Waste Disposal Revenue Bonds (Laidlaw
Inc./USPCI Clive Project) Series 1995 Bond Fund", shall be
used for the purposes and shall be administered in the manner
set forth in Section 403 hereof; and
(b) A separate Construction Fund to be designated
"Tooele County, Utah Hazardous Waste Disposal Revenue Bonds
(Laidlaw Inc./USPCI Clive Project) Series 1995 Construction
Fund", and within the Construction Fund separate accounts
relating to the series of Bonds authenticated and delivered on
each Issue Date. Each of such accounts shall be designated by
the Trustee as the Trustee deems appropriate and shall be
administered in the manner set forth in Section 404 hereof.
The Trustee may establish such other funds and accounts as it may deem
necessary and appropriate to carry out the trusts hereby created.
SECTION 402. DISPOSITION OF PROCEEDS OF SALE OF SERIES 1995
BONDS. The proceeds of the sale of the Series 1995 Bonds to be received by the
Issuer on the Issue Date in the amount of $9,883,545 (representing the aggregate
principal amount of the Series 1995 Bonds, less an underwriter's discount of
$88,305 and an original issue discount of $46,900, plus accrued interest from
the Issue Date to the date of delivery of the Series 1995 Bonds of $18,750)
shall be deposited by the Trustee as follows:
(a) into the Bond Fund, the amount of $18,750
representing accrued interest on the Series 1995 Bonds, and
(b) into the Construction Fund, the remaining
balance to be disbursed in accordance with Section 404 herein.
SECTION 403. BOND FUND. There shall be deposited into the Bond
Fund as and when received all payments made by the Company pursuant to the Loan
Agreement with respect to the principal of, premium, if any, and interest on the
Bonds, including the redemption price of Bonds to be redeemed, and any other
moneys required by this Indenture or the Loan Agreement to be deposited into the
Bond Fund.
Except as may otherwise be required by the Proceeds Certificate or
Section 405 hereof, moneys in the Bond Fund shall be used solely for the payment
of the principal of and premium, if any, on the Bonds as the same becomes due
and payable (whether at stated maturity, upon redemption or upon acceleration),
and to pay interest on the Bonds when due, all as provided in this Indenture.
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Upon delivery by the Company of a Completion Certificate pursuant to
Section 3.4 of the Loan Agreement, there shall be transferred from the
Construction Fund to a segregated account of the Bond Fund certain amounts on
deposit in the Construction Fund, as described in Section 404 hereof, which
amounts shall be used in the manner described in Section 3.4 of the Loan
Agreement. The Trustee is hereby authorized and directed to use the moneys
transferred to the Bond Fund as described in this paragraph for the purposes set
forth in Section 3.4 of the Loan Agreement.
After the right, title and interest of the Trustee in and to the Trust
Estate and all covenants and agreements and other obligations of the Issuer to
the owners of the Bonds shall have ceased, terminated and become void and shall
have been satisfied and discharged in accordance with Article VI hereof, and the
fees, expenses and other amounts payable to the Trustee and the Issuer, pursuant
to any provisions hereof shall have been paid in full, any moneys remaining in
the Bond Fund shall be paid to the Company upon a written request therefor
signed by an Authorized Company Representative.
SECTION 404. CONSTRUCTION FUND. There shall be deposited into the
Construction Fund the amounts specified in Section 402 hereof from the proceeds
to be received from time to time of the sale of the Series 1995 Bonds.
Moneys in the Construction Fund shall be expended in accordance with
the applicable provisions of the Loan Agreement to pay Project Costs at any time
with respect to which no Event of Default has occurred and is continuing, upon
receipt by the Trustee of a written requisition signed by an Authorized Company
Representative, stating the name and address of the person to whom payment is to
be made and the amount to be paid and certifying that (a) none of the payments
for which the payment or reimbursement is proposed to be made has formed the
basis for any payment or reimbursement theretofore made from the Construction
Fund, (b) each item for which payment or reimbursement is proposed to be made is
or was necessary in connection with Construction of the Project, (c) all of the
proceeds of the Bonds (to and including such disbursement) have been or are
being used to provide for Project Costs and (d) such payment or reimbursement is
in accordance with all applicable provisions of the Loan Agreement. In making
any such payment, the Trustee may conclusively rely upon such written
requisition and the Trustee shall be relieved of all liability with respect to
making such payment in accordance with such written requisition. The Trustee
shall keep and maintain adequate records pertaining to the Construction Fund and
all disbursements therefrom. Notwithstanding the foregoing the Trustee is
directed to pay an amount not greater than $199,062 from the Construction Fund
for costs of issuance of the Series 1995 Bonds upon receipt of a closing
statement signed by an Authorized Company Representative.
In addition to the foregoing, there shall be withdrawn from the
Construction Fund (a) any moneys remaining on deposit in the Construction Fund
upon the delivery of a Completion Certificate pursuant to Section 3.4 of the
Loan Agreement (other than amounts to be retained by the Trustee in the
Construction Fund at the direction of the Company to pay Project Costs not then
due and payable or amounts with respect to which the liability for payment is in
dispute), to be deposited into a segregated account of the Bond Fund, and (b)
any moneys remaining on deposit in the Construction Fund upon the prepayment of
all installments payable pursuant to Article VIII of the Loan
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Agreement, to be deposited into the Bond Fund. There shall also be transferred
to the Bond Fund from the Construction Fund any moneys remaining on deposit in
the Construction Fund at such time as the principal of all Outstanding Bonds
shall have become due and payable in accordance with the provisions of Section
7.3(a) of the Loan Agreement.
SECTION 405. REBATE FUND.
(a) There is hereby created and established with the
Trustee a trust fund to be designated "Tooele County, Utah
Hazardous Waste Disposal Revenue Rebate Fund". The Rebate Fund
is not pledged and does not secure the Registered Owners of
the Bonds. The Company shall on each applicable Rebate
Calculation Date determine or cause to be determined, the
amount of Rebatable Arbitrage and the corresponding Required
Rebate Deposit with respect to the Bonds of each Series to be
deposited into the Rebate Fund and shall give written notice
to the Trustee of such determination. The Trustee shall retain
records of all such determinations until six years after the
requirement of the last Bond. In addition, the Company shall
deposit into the Rebate Fund the Required Rebate Deposit, if
any, within 30 days after each Rebate Calculation Date. Upon
written direction of the Company, the Trustee shall withdraw
from the Rebate Fund and pay over to the United States
Government: (1) not less frequently than once each five years
commencing no later than 30 days after each Rebate Calculation
Date, and upon each fifth anniversary of the first such
payment date, an amount equal to 90% of the net aggregate
amount of Rebatable Arbitrage less the amount, if any, of
Rebatable Arbitrage theretofore paid to the United States, and
(2) not later than 30 days after the retirement of the last
Bond of such series 100% of the aggregate amount of Rebatable
Arbitrage with respect to such series of Bonds.
(b) Withdrawals from the Rebate Fund may be made to
the extent the Company determines with the written approval of
the Trustee that amounts on deposit in such fund exceed
amounts required to be on deposit therein pursuant to this
Section 405. All such withdrawals shall be transferred to the
Bond Fund.
(c) The provisions of this Section 405 may be amended
or deleted from this Indenture upon receipt by the Issuer and
the Trustee of an opinion of nationally recognized bond
counsel that such amendment or deletion will not adversely
affect the exclusion of the interest on the Bonds from gross
income for purposes of federal income taxation. Any moneys on
deposit in the Rebate Fund may be applied by the Trustee as
permitted in such opinion.
(d) The Trustee shall at least 60 days prior to each
Rebate Calculation Date notify the Company and the Issuer of
the requirements of this Section. By agreeing to give this
notice, the Trustee assumes no responsibility whatsoever for
compliance by the Company with the requirements of Section 148
of the Code or any successor.
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Notwithstanding any other provision of the Indenture, any
failure of the Trustee to give any such notice, for any reason
whatsoever, shall not cause the Trustee to be responsible for
any failure of the Company to comply with the requirements of
said Section 148 or any successor thereof.
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ARTICLE V
INVESTMENT OF MONEYS
Any moneys held pursuant to this Indenture as part of the Construction
Fund, the Bond Fund (other than moneys for the payment of Bonds which shall have
become payable at maturity, upon redemption or otherwise, or for the payment of
interest thereon which has become due) and the Rebate Fund shall be invested and
reinvested by the Trustee in Eligible Securities upon the written order of the
Company signed by an Authorized Company Representative, provided, however, that
all investments shall be made by the Trustee in compliance with the applicable
provisions of the Proceeds Certificate. The Trustee shall be entitled to rely on
each such written order and shall incur no liability for making any such
investment so designated or for any loss incurred in selling such investment.
The Trustee may make any and all such investments through or from its own bond
department, provided that such investments are on fair and reasonable terms no
less favorable than would be obtained in a comparable arm's-length transaction.
Any investments pursuant to this Article V shall be held by or under
the control of the Trustee and shall be deemed at all times a part of the fund,
account or subaccount for which they were made, but the Trustee shall have no
liability with respect to any investment made pursuant to any such written
order. The interest accruing thereon and any profit realized from such
investments shall be credited, and any loss resulting from such investment shall
be charged, to such fund, account or subaccount. The Trustee shall sell and
reduce to cash a sufficient amount of such investments (a) of the Construction
Fund whenever the cash balance in the Construction Fund is insufficient to pay a
written requisition when presented, (b) of the Bond Fund whenever the cash
balance in the Bond Fund is insufficient to pay the principal of or premium, if
any, or interest on the Bonds when due, and (c) of the Rebate Fund as necessary
for the purposes thereof.
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ARTICLE VI
SATISFACTION OF THE INDENTURE
SECTION 601. DISCHARGE OF INDENTURE. If the Issuer shall pay or
cause to be paid, or there shall be otherwise paid or deemed paid or provision
for payment made to or for the owners of the Bonds the principal, premium, if
any, and interest due or to become due thereon at the times and in the manner
stipulated therein and in this Indenture, and if the Issuer shall not then be in
default in any of the other covenants and promises in the Bonds and in this
Indenture expressed to be kept, performed and observed by it or on its part, and
shall pay or cause to be paid to the Trustee all sums of money due or to become
due according to the provisions hereof, then these presents and the estate and
rights hereby granted shall cease, determine and be void, whereupon the Trustee
shall cancel and discharge the lien of this Indenture and execute and deliver to
the Issuer such instruments in writing as shall be requisite to cancel and
discharge the lien of this Indenture, and reconvey, release, assign and deliver
unto the Issuer any and all estate, right, title and interest in and to any and
all property conveyed, assigned or pledged to the Trustee or otherwise subject
to this Indenture, except amounts in the Rebate Fund and amounts in the Bond
Fund required to be paid to the Company pursuant to any express provisions to
that effect contained herein and moneys or securities held by the Trustee for
the payment of the principal of, and premium, if any, and interest on, the
Bonds.
SECTION 602. BONDS DEEMED PAID. Any Bond shall be deemed to have
been paid if:
(a) in case said Bond is to be redeemed on any date
prior to its stated maturity, the Company shall have given to
the Trustee in form satisfactory to the Trustee, irrevocable
instructions to give notice of redemption of such Bond on said
redemption date;
(b) payment of the principal of and premium, if any,
on such Bond, plus interest thereon to the due date thereof
(whether such due date be by reason of maturity or upon
redemption as provided in this Indenture, or otherwise),
either (i) shall have been made or caused to be made in
accordance with the terms thereof, or (ii) shall have been
provided for by depositing with the Trustee, in trust and
irrevocably set aside exclusively for such payment, (1) moneys
sufficient to make such payment or (2) Government Obligations
maturing as to principal and interest in such amounts and at
such times as will provide sufficient moneys to make such
payment (provided that such deposit will not affect the
excludability of interest on any of the Bonds from the gross
income of the owners thereof for federal income tax purposes
or cause any of the Bonds to be classified as "arbitrage
bonds" within the meaning of Section 148 of the Code), and all
necessary and proper fees, compensation and expenses of the
Issuer and the Trustee, pertaining to the Bond with respect to
which such deposit is made and all other liabilities of the
Company under the Loan Agreement pertaining to such Bond shall
have been paid or the payment thereof provided for; and
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(c) in the event said Bond is not by its terms
subject to redemption within 60 days following the proposed
date of deposit, the Company shall have given the Trustee in
form satisfactory to it irrevocable instructions to give a
notice to the holders of such Bonds that the deposit required
by clause (b) above has been made with the Trustee and that
said Bonds are deemed to have been paid in accordance with
this Section and stating such date upon which moneys are to be
available for payment of the principal of, premium, if any,
and interest on said Bonds.
The Issuer or the Company may at any time surrender to the Trustee for
cancellation by it any Bonds previously authenticated and delivered, which the
Issuer or the Company may have acquired in any manner whatsoever, and such
Bonds, upon such surrender and cancellation, shall be deemed to be paid and
retired.
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ARTICLE VII
GENERAL COVENANTS
SECTION 701. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST; NO
GENERAL OBLIGATION. The Issuer covenants that it will promptly pay or cause to
be paid the principal of, premium, if any, and interest on every Bond issued
under this Indenture at the place or places, on the dates and in the manner
provided herein and in the Bonds, provided that such principal, premium, if any,
and interest are payable by the Issuer solely from the Trust Estate, and nothing
in the Bonds or this Indenture shall be considered as assigning or pledging any
other funds or assets of the Issuer other than the Trust Estate.
Each and every covenant made herein by the Issuer is predicated upon
the condition that the Issuer shall not in any event be liable from any property
or source other than the Trust Estate for the payment of the principal of,
premium, if any, or interest on the Bonds, or the payment of any amounts payable
under the Loan Agreement, or the performance of any pledge, obligation or
agreement created by or arising under this Indenture, the Bonds or the Loan
Agreement; and, further, that neither the Bonds nor any such obligation or
agreement of the Issuer shall be construed to constitute an indebtedness of the
Issuer within the meaning of any constitutional or statutory provision
whatsoever, or a pecuniary liability of the Issuer or a charge against its
general credit or taxing power.
SECTION 702. PERFORMANCE OF COVENANTS; LEGAL AUTHORIZATION. The Issuer
covenants that it will faithfully perform at all times any and all covenants,
undertakings, stipulations and provisions contained in this Indenture, in any
and every Bond executed, authenticated and delivered hereunder and in all
proceedings of the Governing Body pertaining thereto. The Issuer represents that
it is duly authorized under the Constitution and laws of the State to issue the
Bonds authorized hereby, to execute this Indenture, to assign the Loan Agreement
and to pledge and assign the Trust Estate pledged to the payment of the Bonds
and payments thereon in the manner and to the extent herein set forth; that all
action on its part for the issuance of the Series 1995 Bonds and the execution
and delivery of this Indenture has been duly and effectively taken (or, if
Additional Bonds are issued pursuant to Section 208 hereof, will be duly taken
as provided therein); and that the Bonds in the hands of the owners thereof as
shown on the Bond Register are and will be valid and enforceable obligations of
the Issuer according to the import thereof.
SECTION 703. FURTHER ASSURANCES. Except to the extent otherwise
provided in this Indenture, the Issuer shall not enter into any contract or take
any action by which the rights of the Trustee or the Bondholders may be impaired
and shall, from time to time, execute and deliver such further instruments and
take such further action as may be required to carry out the purposes of this
Indenture. The Issuer shall be entitled to reimbursement from the Company for
any action taken pursuant to this Section 703.
SECTION 704. IMMUNITIES AND LIMITATIONS OF RESPONSIBILITY OF ISSUER.
The Issuer shall be entitled to the advice of counsel (who, except as otherwise
provided, may be counsel for any Bondholder), and the Issuer shall be wholly
protected as to action taken or omitted in good faith in reliance on such
advice. The Issuer may rely
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conclusively on any communication or other document furnished to it hereunder
and reasonably believed by it to be genuine. The Issuer shall not be liable for
any action (a) taken by it in good faith and reasonably believed by it to be
within its discretion or powers hereunder, or (b) in good faith omitted to be
taken by it because such action was reasonably believed to be beyond its
discretion or powers hereunder, or (c) taken by it pursuant to any direction or
instruction by which it is governed hereunder, or (d) omitted to be taken by it
by reason of the lack of any direction or instruction required hereby for such
action; nor shall it be responsible for the consequences of any error of
judgment reasonably made by it. The Issuer shall in no event be liable for the
application or misapplication of funds or for other acts or defaults by any
person, except its own officers and employees. When any payment or consent or
other action by it is called for hereby, it may defer such action pending
receipt of such evidence (if any) as it may reasonably require in support
thereof. The Issuer shall not be required to take any remedial action (other
than the giving of notice) unless reasonable indemnity is furnished for any
expense or liability to be incurred thereby, other than liability for failure to
meet the standards set forth in this Section. As provided herein and in the Loan
Agreement, the Issuer shall be entitled to reimbursement for its expenses
reasonably incurred or advances reasonably made, with interest at the rate borne
by the Bonds, in the exercise of its rights or the performance of its
obligations hereunder, to the extent that it acts without previously obtaining
indemnity. No permissive right or power to act which it may have shall be
construed as a requirement to act, and no delay in the exercise of a right or
power shall affect its subsequent exercise of that right or power.
SECTION 705. RECORDING AND FILING. The Issuer covenants that, solely
from additional amounts payable as provided in Section 4.3 of the Loan
Agreement, it will, if necessary, cause this Indenture and all supplements
hereto and the Loan Agreement and all supplements thereto, and all related
financing statements, to be kept, recorded and filed in such manner and in such
places as may be required by law in order to preserve and protect fully the
security of the Bondholders and the rights of the Trustee hereunder.
SECTION 706. BOOKS AND RECORDS. The Issuer covenants that so long as
any Bonds are Outstanding and unpaid, it will keep, or cause to be kept, proper
books of record and account, relating to its financial dealings under this
Indenture and the Loan Agreement. Such books shall at all times be open for any
lawful purpose to the inspection of such accountants or other agents as the
Trustee may from time to time designate.
SECTION 707. DEFENSE OF ISSUER'S RIGHTS. The Issuer agrees that the
Trustee may defend the Issuer's rights to the payments and other amounts due
under the Loan Agreement, for the benefit of the Bondholders, against the claims
and demands of all persons whomsoever. The Issuer covenants that it will do,
execute, acknowledge and deliver, or cause to be done, executed, acknowledged
and delivered, such indentures supplemental hereto and such further acts,
instruments and transfers as the Trustee may reasonably require for the better
assuring, transferring, pledging, assigning and confirming to the Trustee all
and singular the rights assigned hereby and the amounts pledged hereby to the
payment of the principal of, premium, if any, and interest on the Bonds. The
Issuer covenants and agrees that, except as herein and in the Loan
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Agreement provided, it will not sell, convey, assign, pledge, encumber or
otherwise dispose of any part of the Trust Estate.
SECTION 708. ARBITRAGE; COMPLIANCE WITH PROCEEDS CERTIFICATE. The
Issuer covenants and agrees that it will not take any action or fail to take any
action with respect to the investment of the proceeds of any Bonds issued under
this Indenture or with respect to the payments derived from the Loan Agreement,
which would result in constituting the Bonds "arbitrage bonds" within the
meaning of such term as used in Section 148(a) of the Code. The Issuer further
covenants and agrees that it will comply with and take all actions required by
the Proceeds Certificate.
SECTION 709. CONTINUING DISCLOSURE. Pursuant to Section 5.7 of the Loan
Agreement, the Company has undertaken all responsibility for compliance with
continuing disclosure requirements, and the Issuer shall have no liability to
the Holders of the Series 1995 Bonds or any other person with respect to such
disclosure matters. The Trustee hereby covenants and agrees that it will comply
with and carry out all of the provisions of the Continuing Disclosure Agreement
and Section 5.7 of the Loan Agreement. Notwithstanding any other provision of
this Indenture, failure of the Company or the Trustee to comply with the
Continuing Disclosure Agreement shall not be considered an Event of Default;
however, the Trustee may (and, at the request of BA Securities, Inc. or the
Holders of at least 25% aggregate principal amount of Outstanding Series 1995
Bonds, shall) or any Bondholder may take such actions as may be necessary and
appropriate, including seeking mandate or specific performance by court order,
to cause the Company to comply with its obligations under Section 5.7 of the
Loan Agreement or to cause the Trustee to comply with its obligations under this
Section 709.
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ARTICLE VIII
EVENTS OF DEFAULT
SECTION 801. EVENTS OF DEFAULT. An "Event of Default," as used
herein, shall mean any of the following events, whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or come about
or be effected by operation of law or pursuant to or in compliance with any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body:
(a) failure to pay any installment of interest
payable on any of the Bonds when the same shall become due and
payable; or
(b) failure to pay the principal of or the premium,
if any, on any of the Bonds when the same shall become due and
payable, whether at the stated maturity thereof, by
proceedings for redemption, upon acceleration or otherwise; or
(c) failure by the Issuer or the Company to duly
observe or perform any covenant or agreement (other than a
covenant or agreement whose performance or observance is
elsewhere in this Section 801 specifically dealt with) on the
part of the Issuer or the Company, respectively, contained in
this Indenture or the Loan Agreement, for a period of 30 days
after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to
the Issuer and the Company by the Trustee, or to the Issuer,
the Company and the Trustee by the owners of at least
twenty-five percent (25%) in aggregate principal amount of
Bonds then Outstanding; provided that if such default can be
cured by the Issuer or the Company but cannot be cured within
the 30-day curative period described above, it shall not
constitute an Event of Default if corrective action is
instituted by the Issuer or the Company within such 30-day
period and such action is diligently pursued until the default
is corrected; or
(d) a decree or order by a court having jurisdiction
in the premises shall have been entered adjudging the Company
bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization or arrangement of the Company
under the federal Bankruptcy Code or any other similar
applicable federal or state law, and such decree or order
shall have continued undischarged and unstayed for a period of
90 days; or a decree or order of a court having jurisdiction
in the premises for the appointment of a receiver or trustee
or assignee in bankruptcy or insolvency of the Company or of
the Company's property, or for the winding up or liquidation
of the Company's affairs, shall have been entered, and such
decree or order shall have remained in force undischarged and
unstayed for a period of 90 days; or
(e) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the
institution of a bankruptcy proceeding against it, or shall
file a petition or answer or consent
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seeking reorganization or arrangement under the federal
Bankruptcy Code or any other similar applicable federal or
state law, or shall consent to the appointment of a receiver
or trustee or assignee in bankruptcy or insolvency of it or of
its property or shall make assignment for the benefit of
creditors, or shall admit in writing its inability to pay its
debts generally as they become due, or corporate action shall
be taken by the Company in furtherance of any of the aforesaid
purposes;
(f) the occurrence of an "Event of Default"
under the Loan Agreement or the Guaranty; or
(g) the occurrence of an Act of Bankruptcy of
Guarantor.
SECTION 802. ACCELERATION. Upon the occurrence and continuation of an
Event of Default the Trustee may, and upon receipt of the written directions of
the owners of not less than twenty-five percent (25%) in principal amount of the
Bonds Outstanding shall, by written notice delivered to the Issuer and the
Company declare the entire principal amount of the Bonds then Outstanding, and
the interest accrued thereon, immediately due and payable and the entire
principal and interest shall thereupon become and be immediately due and
payable, subject, however, to the provisions of Section 811 hereof with respect
to waivers of Events of Default, and the Trustee shall give notice thereof by
first class mail, postage prepaid, to all owners of Outstanding Bonds.
SECTION 803. REMEDIES; RIGHTS OF BONDHOLDERS. Upon the occurrence and
continuance of any Event of Default, the Trustee may, without any action on the
part of the Bondholders, and shall, at the written request of the owners of not
less than twenty-five percent (25%) in principal amount of the Bonds then
Outstanding, and in any case upon being indemnified to its satisfaction as
provided in Section 901(k) hereof:
(a) by mandamus, or other suit, action or proceeding
at law or in equity, enforce all rights of the Bondholders
under, and require the Issuer, the Company or the Guarantor to
carry out any agreements with or for the benefit of the
Bondholders and to perform its or their duties under, the Act,
the Loan Agreement, the Guaranty, and this Indenture, provided
that any such remedy may be taken only to the extent permitted
under the applicable provisions of the Loan Agreement, the
Guaranty or this Indenture, as the case may be;
(b) bring suit upon the Bonds; or
(c) by action or suit in equity enjoin any acts or
things which may be unlawful or in violation of the rights of
the Bondholders;
provided, however, that the Trustee shall have the right to decline to comply
with any such request or direction if the Trustee shall be advised by counsel
(who may be its own counsel) that the action so requested may not lawfully be
taken or the Trustee in good faith shall determine that such action would be
unjustly prejudicial to the Bondholders not parties to such request.
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No remedy by the terms of this Indenture conferred upon or reserved to
the Trustee (or to the Bondholders) is intended to be exclusive of any other
remedy, but each and every such remedy shall be cumulative and shall be in
addition to any other remedy given to the Trustee or to the Bondholders now or
hereafter existing at law or in equity or by statute; provided, however, that
any conditions set forth herein to the taking of any remedy to enforce the
provisions of this Indenture, the Bonds, the Guaranty or the Loan Agreement
shall also be conditions to seeking any remedies under any of the foregoing
pursuant to this Section 803.
No delay or omission of the Trustee or any Bondholder to exercise any
right or power accruing upon any default or Event of Default shall impair any
such right or power or shall be construed to be a waiver of any such default or
Event of Default, or acquiescence therein; and every such right and power given
by this Article VIII to the Trustee and the Bondholders, respectively, may be
exercised from time to time and as often as may be deemed expedient.
No waiver of any default or Event of Default hereunder, whether by the
Trustee or by the Bondholders, shall extend to or shall affect any subsequent
default or Event of Default or shall impair any rights or remedies consequent
thereon.
SECTION 804. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Issuer, the Company, the Guarantor or any other obligor upon the Bonds or
their creditors, and whether or not an Event of Default hereunder shall have
occurred and be continuing, the Trustee (irrespective of whether the principal
of the Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Issuer for the payment of overdue principal or interest) may
be entitled and empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid
with respect to the Bonds and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and of the Bondholders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute
the same; and any receiver, assignee, trustee, liquidator,
sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Bondholder to make
such payments to the Trustee, and in the event that the
Trustee shall consent to the making of such payments directly
to the Bondholders, to pay to the Trustee any amount due to it
for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under this Indenture.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment or composition affecting the Bonds or
the rights of any owner thereof, or to authorize the Trustee to vote with
respect to the claim of any Bondholder in any such proceeding.
SECTION 805. DIRECTION OF PROCEEDINGS BY BONDHOLDERS. The owners of not
less than fifty-one percent (51%) in aggregate principal amount of Bonds then
Outstanding shall have the right, at any time, by an instrument or instruments
in writing executed and delivered to the Trustee, to direct the method and place
of conducting all proceedings to be taken in connection with the enforcement of
the terms and conditions of this Indenture, including enforcement of the rights
of the Issuer under the Loan Agreement or the appointment of a receiver or any
other proceedings hereunder; provided, that such direction shall not be
otherwise than in accordance with the provisions of law and of this Indenture.
SECTION 806. 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 Bondholders under this
Indenture, the Trustee shall be entitled, as a matter of right, to the
appointment of a receiver or receivers of the rights and properties pledged
hereunder and of the revenues, issues, payments and profits thereof, pending
such proceedings, with such powers as the court making such appointment shall
confer.
SECTION 807. APPLICATION OF MONEYS. Subject to the provisions of the
Proceeds Certificate, all moneys received by the Trustee, by any receiver or by
any Bondholder pursuant to any right given or action taken under the provisions
of this Article VIII shall, after payment of the costs and expenses of the
proceedings resulting in the collection of such moneys and of the expenses,
liabilities and advances incurred or made by the Trustee (provided that moneys
on deposit in the Bond Fund prior to the Event of Default and held for Bonds not
presented for payment and moneys deposited pursuant to Article VI hereof shall
not be used for purposes other than payment of such Bonds), be deposited into
the Bond Fund and all moneys so deposited during the continuance of an Event of
Default (other than moneys for the payment of Bonds which had matured or
otherwise become payable prior to such Event of Default or for the payment of
interest due prior to such Event of Default), together with all moneys in any
other fund or account maintained by the Trustee under this Indenture shall be
applied as follows:
(a) Unless the principal of all the Bonds shall have
become or shall have been declared due and payable, all such
moneys shall be applied:
First: To the payment of amounts, if any, payable to
the United States Treasury pursuant to the Proceeds
Certificate and Section 405 hereof;
Second: To the payment to the Persons entitled
thereto of all installments of interest then due on the
Bonds, with interest on overdue installments of interest
and principal, if lawful, at the
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Default Rate in the order of the maturity of the
installments of such interest, and, if the amount
available shall not be sufficient to pay in full any
particular installment of interest, then to the
payment ratably, according to the amounts due on such
installment, to the Persons entitled thereto without
any discrimination or privilege; and
Third: To the payment to the Persons
entitled thereto of the unpaid principal of any of
the Bonds which shall have become due (other than
Bonds called for redemption for the payment of which
moneys are held pursuant to the provisions of this
Indenture), in the order of their due dates, and, if
the amount available shall not be sufficient to pay
in full the principal of Bonds due on any particular
date, then to the payment ratably, according to the
amount of principal due on such date, to the Persons
entitled thereto without any discrimination or
privilege.
(b) If the principal of all the Bonds shall have
become due or shall have been declared due and payable, all
such moneys shall be applied to the payment of the principal
and interest then due and unpaid upon the Bonds, with interest
on overdue interest and principal, as aforesaid, without
preference or priority of principal over interest or of
interest over principal, or of any installment of interest
over any other installment of interest, or of any Bond over
any other Bond, ratably, according to the amounts due
respectively for principal and interest, to the Persons
entitled thereto without any discrimination or privilege.
Whenever moneys are to be applied pursuant to the provisions of this
Section 807, such moneys shall be applied at such times, and from time to time,
as the Trustee shall determine, having due regard for the amount of such moneys
available for application and the likelihood of additional moneys becoming
available for such application in the future. Whenever the Trustee shall apply
such moneys, it shall fix the date upon which such application is to commence
and upon such date interest on the amounts of principal and interest to be paid
on such date shall cease to accrue. The Trustee shall give such notice as it may
deem appropriate of the deposit with it of any such moneys and of the fixing of
any such date by mailing a copy of such notice by first class mail postage
prepaid to the owners of the then Outstanding Bonds. The Trustee shall not be
required to make payment to the holder of any unpaid Bond until such Bond shall
be presented to the Trustee for appropriate endorsement or for cancellation if
fully paid.
SECTION 808. REMEDIES VESTED IN TRUSTEE. All rights of action,
including the right to file proof of claims under this Indenture or under any of
the Bonds, may be enforced by the Trustee without the possession of any of the
Bonds or the production thereof in any trial or other proceedings relating
thereto and any such suit or proceeding instituted by the Trustee shall be
brought in its name as Trustee without the necessity of joining as plaintiffs or
defendants any holders of the Bonds, and any recovery of judgment shall be for
the equal benefit of the holders of the then Outstanding Bonds, subject to the
provisions of this Indenture.
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SECTION 809. RIGHTS AND REMEDIES OF BONDHOLDERS. No holder of any Bond
shall have any right to institute any suit, action or proceeding in equity or at
law for the enforcement of this Indenture or for the execution of any trust
hereof or for the appointment of a receiver or for the enforcement of any other
remedy hereunder, unless a default shall have become an Event of Default and the
holders of twenty-five percent (25%) in aggregate principal amount of Bonds then
Outstanding shall have made written request to the Trustee and shall have
offered the Trustee reasonable opportunity either to proceed to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name, and unless such Bondholders have also offered to the Trustee
indemnity as provided in Section 901(k) hereof, and unless the Trustee shall
thereafter fail or refuse to exercise the powers hereinbefore granted, or to
institute such action, suit or proceeding in its own name; and such
notification, request and offer of indemnity are hereby declared in every case
at the option of the Trustee to be conditions precedent to the execution of the
powers and trusts of this Indenture and to any action or cause of action for the
enforcement of this Indenture, or for the appointment of a receiver or for any
other remedy hereunder; it being understood and intended that no one or more
Bondholders shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien of this Indenture by any action or to enforce any right
hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner herein
provided and for the equal benefit of the holders of all Bonds Outstanding.
Nothing in this Indenture contained shall, however, (a) affect or impair the
right of any Bondholder to enforce the payment of the principal of and interest
on any Bond at and after the maturity thereof, or (b) affect or impair the
obligation of the Issuer to pay the principal of and interest on each of the
Bonds issued hereunder to the respective holders thereof at the time and place,
from the source and in the manner in said Bonds expressed.
SECTION 810. TERMINATION OF PROCEEDINGS. In case the Trustee shall have
proceeded to enforce any right under this Indenture by the appointment of a
receiver, or otherwise, and such proceedings shall have been discontinued or
abandoned for any reason, or shall have been determined adversely to the
Trustee, then and in every case the Issuer and the Trustee shall, subject to any
determination in such proceeding, be restored to their former positions and
rights hereunder with respect to the property pledged and assigned hereunder,
and all rights, remedies and powers of the Trustee shall continue as if no such
proceedings had been taken.
SECTION 811. WAIVERS OF EVENTS OF DEFAULT. The Trustee may, in its
discretion, without any action on the part of the Bondholders, waive any Event
of Default hereunder and its consequences and rescind any declaration that the
principal of and interest on the Bonds is immediately due and payable, if such
waiver or rescission is not, in the judgment of the Trustee, detrimental to the
Bondholders, and shall do so upon the written request of the holders of at least
fifty-one percent (51%) in aggregate principal amount of all Bonds Outstanding
which are affected by such default.
SECTION 812. NOTICE OF DEFAULT. In the event of any default hereunder,
the Trustee will promptly give written notice thereof to the Issuer, the
Guarantor and the Company setting forth the nature of such default.
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SECTION 813. DEMAND UNDER GUARANTY. In the event that the Trustee fails
to receive any payment due from the Company, the Trustee shall take the actions
provided under Section 4.7 of the Loan Agreement and seek to enforce the rights
as otherwise provided in the Guaranty.
SECTION 814. LIMITATION OF LIABILITY. In the event of a violation of
the tax covenants contained herein or in the Loan Agreement or the other Company
Documents, the Bondholders' remedy shall be limited to the payment of 100% of
the principal amount of the Bonds then outstanding, plus accrued interest, if
any, to the payment date, such that neither the Issuer nor the Company will be
liable for any premium or penalty.
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ARTICLE IX
TRUSTEE
SECTION 901. ACCEPTANCE OF TRUSTS. The Issuer initially appoints West
One Bank, Utah, Salt Lake City, Utah, as Trustee and Registrar. The Trustee
hereby accepts such appointment and agrees to execute the trusts imposed upon it
by this Indenture, but only upon the terms and conditions set forth herein, to
all of which the Issuer agrees and the respective owners of the Bonds agree by
their acceptance of delivery of any of the Bonds. The Trustee undertakes to
perform such duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations should be read into this
Indenture against the Trustee. The Trustee agrees to perform such trusts as an
ordinarily prudent trustee under a corporate indenture, but in any such event,
only upon and subject to the following expressed terms and conditions:
(a) The Trustee may execute any of the trusts or
powers hereof and perform any of its duties by or through
attorneys, agents or receivers and shall not be responsible
for the misconduct or negligence of any such attorneys, agents
or receivers appointed in the exercise of the care of an
ordinarily prudent trustee, and shall be entitled to advice of
counsel concerning all matters of trusts hereof and duties
hereunder, and may in all cases pay such reasonable
compensation to any attorney, agent, receiver or employee
retained or employed by it in connection herewith. The Trustee
may act upon the opinion or advice of an attorney, surveyor,
engineer or accountant selected by it in the exercise of
reasonable care or, if selected or retained by the Issuer,
approved by the Trustee in the exercise of such care. The
Trustee shall not be responsible for any loss or damage
resulting from any action or nonaction based on its good faith
reliance upon such opinion or advice.
(b) The Trustee shall not be responsible for any
recital herein, or in the Bonds (except with respect to the
Certificate of Authentication of the Trustee endorsed on the
Bonds), or for the investment of moneys as herein permitted
(except that no investment shall be made except in compliance
with Article V hereof), or for the recording or re-recording,
filing or re-filing of this Indenture, or any supplement or
amendment thereto, or the filing of financing statements, or
for the validity of the execution by the Issuer of this
Indenture, or of any supplemental indentures or instruments of
further assurance, or for the sufficiency of the security for
the Bonds issued hereunder or intended to be secured hereby,
or for the value or title of the property herein conveyed or
otherwise as to the maintenance of the security hereof. The
Trustee may (but shall be under no duty to) require of the
Issuer and the Company full information and advice as to the
performance of the covenants, conditions and agreements in the
Loan Agreement and shall make its best efforts, but without
any obligation, to advise the Issuer and the Company of any
impending default known to the Trustee. Except as otherwise
provided in Section 803 hereof, the Trustee shall
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have no obligation to perform any of the duties of the Issuer
under the Loan Agreement.
(c) The Trustee shall not be accountable for the use
or application by the Issuer or the Company of any of the
Bonds or the proceeds thereof or for the use or application of
any money paid over by the Trustee in accordance with the
provisions of this Indenture.
(d) The Trustee shall be protected in acting upon any
notice, order, requisition, request, consent, certificate,
order, opinion (including an opinion of counsel), affidavit,
letter, telegram or other paper or document in good faith
deemed by it to be 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 Bond, shall be conclusive and binding upon all future
owners of the same Bond and upon Bonds issued in exchange
therefor or in place thereof.
(e) 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, or
an Authorized Company Representative, as the case may be, as
sufficient evidence of the facts therein contained and prior
to the occurrence of a default of which the Trustee has been
notified as provided in subsection (g) of this Section, or of
which by said subsection it is deemed to have notice, may
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
necessary or advisable, but shall in no case be bound to
secure the same. The Trustee may accept a certificate of the
County Clerk of the Issuer under its seal to the effect that a
resolution in the form therein set forth has been adopted by
the Issuer as conclusive evidence that such resolution has
been duly adopted, and is in full force and effect.
(f) 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
negligence or willful default.
(g) The Trustee shall not be required to take notice
or be deemed to have notice of any default hereunder, other
than an Event of Default under clause (a), (b), and (c) of
Section 801 hereof unless the Trustee shall be specifically
notified in writing of such default by the Issuer, the
Company, or the holders of at least twenty-five percent (25%)
in aggregate principal amount of all Bonds then Outstanding,
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
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Office of the Trustee, and in the absence of such notice so
delivered the Trustee may conclusively assume there is no
default except as aforesaid.
(h) At any and all reasonable times, the Trustee, and
its duly authorized agents, attorneys, experts, engineers,
accountants and representatives, shall have the right fully to
inspect any and all of the property pledged hereunder,
including all books, papers and records of the Issuer
pertaining to the property pledged hereunder and the Bonds,
and to take such memoranda from and in regard thereto as may
be desired.
(i) The Trustee shall not be required to give any
bond or surety with respect to the execution of the said
trusts and powers or otherwise in respect of the premises.
(j) Notwithstanding anything elsewhere in this
Indenture contained, the Trustee shall have the right, but
shall not be required, to demand, with respect to the
authentication of any Bonds, the withdrawal of any cash, the
release of any property or any action whatsoever within the
purview of this Indenture, any showings, certificates,
opinions, appraisals or other information, or corporate action
or evidence thereof, in addition to that by the terms hereof
required, as a condition of such action by the Trustee deemed
reasonably necessary for the purpose of establishing the right
of the Issuer to the authentication of any Bonds, the
withdrawal of any cash, the release of any property or the
taking of any other action by the Trustee.
(k) Before taking any action under this Section 901
other than an acceleration when required pursuant to Section
802 hereof, the Trustee may require that a satisfactory
indemnity bond be furnished for the reimbursement of all
expenses to which it may be put and to protect it against all
liability, except liability which is adjudicated to have
resulted from its negligence or willful default in connection
with any action so taken.
(l) All moneys received by the Trustee shall, until
used or applied or invested as provided in this Indenture, 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, by this Indenture. The Trustee shall
not be under any liability for interest on any moneys received
hereunder except such as may be agreed upon.
(m) If any Event of Default under this Indenture
shall have occurred and be continuing, the Trustee shall
exercise such of the rights and powers vested in it by this
Indenture and shall use the same degree of care as a prudent
person would exercise or use in the circumstances in the
conduct of such prudent person's own affairs.
SECTION 902. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee
shall be entitled to payment and/or reimbursement for reasonable fees for its
services rendered
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hereunder (including services as Registrar, Co-Registrar, Paying Agent and
authenticating agent and services relating to the transfer of Bonds) and all
advances, counsel fees and other expenses reasonably and necessarily made or
incurred by each of them in connection with such services. Upon an Event of
Default hereunder, but only upon such an Event of Default, the Trustee shall
have a right of payment prior to payment on account of principal of, or premium,
if any, or interest on, any Bond for the foregoing advances, fees, costs and
expenses incurred; provided, however, that in no event shall the Trustee have
any such prior right of payment or claim therefor against moneys or obligations
deposited with or paid to the Trustee for the redemption or payment of Bonds
which are deemed to have been paid in accordance with Article VI hereof.
SECTION 903. NOTICE TO BONDHOLDERS IF DEFAULT OCCURS. If a default
occurs of which the Trustee is by subsection (g) of Section 901 hereof required
to take notice or if notice of default be given as in said subsection (g)
provided, then the Trustee shall give or cause to be given written notice
thereof by first-class mail, postage prepaid, to the owners of all then
Outstanding Bonds.
SECTION 904. GOOD FAITH RELIANCE. The Trustee shall be protected and
shall incur no liability in acting or proceeding in good faith upon any
resolution, notice, telegram, telex or facsimile transmission, request, consent,
waiver, certificate, statement, affidavit, voucher, bond, requisition or other
paper or document which it shall in good faith believe to be genuine and to have
been passed or signed by the proper board, body or person or to have been
prepared and furnished pursuant to any of the provisions of this Indenture or
the Loan Agreement, or upon the written opinion of any attorney, engineer,
accountant or other expert believed by the Trustee to be qualified in relation
to the subject matter, and the Trustee shall be under no duty to make any
investigation or inquiry as to any statements contained or matters referred to
in any such instrument, but may accept and rely upon the same as conclusive
evidence of the truth and accuracy of such statements. The Trustee shall not be
bound to recognize any person as an owner of Bonds or to take any action at such
person's request unless satisfactory evidence of the ownership of such Bond
shall be furnished to such entity.
SECTION 905. DEALINGS IN BONDS. The Trustee, in its individual
capacity, may in good faith buy, sell, own, hold and deal in any of the Bonds
issued hereunder, and may join in any action which any owner may be entitled to
take with like effect as if it did not act in any capacity hereunder. The
Trustee in its individual capacity, either as principal or agent, may also
engage in or be interested in any financial or other transaction with the
Company, any Affiliate of the Company, the Guarantor, or the Issuer, and may act
as depositary, trustee or agent for any committee or body of owners of Bonds
secured hereby or other obligations of the Issuer, the Company, the Guarantor,
or any such Affiliate as freely as if it did not act in any capacity hereunder.
SECTION 906. INTERVENTION BY TRUSTEE. In any judicial proceeding to
which the Issuer is a party and which in the opinion of the Trustee and its
counsel has a substantial bearing on the interests of owners of the Bonds, the
Trustee may intervene on behalf of Bondholders and, subject to the provisions of
Section 901(k) hereof, shall do so if requested in writing by the owners of at
least twenty-five percent (25%) in aggregate principal amount of all Bonds then
Outstanding. The rights and obligations
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of the Trustee under this Section are subject to the approval of a court of
competent jurisdiction.
SECTION 907. SUCCESSOR TRUSTEE BY MERGER OR CONSOLIDATION. Any
corporation or association into which the Trustee may be converted or merged, or
with which it may be consolidated, or to which it may sell or transfer its
corporate trust business and assets as a whole or substantially as a whole, or
any corporation or association resulting from any such conversion, sale, merger,
consolidation or transfer to which it is a party, provided such corporation or
association is otherwise eligible under Section 908 hereof, shall be and become
successor Trustee hereunder, vested with all of the title to the whole property
or trust estate and all the trusts, powers, discretions, immunities, privileges
and all other matters as was its predecessor under this Indenture, without the
execution or filing of any instrument or any further act, deed or conveyance on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding.
SECTION 908. TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be
a Trustee hereunder which shall (a) be a commercial bank or trust company within
the State of Utah organized under the laws of the United States of America or
the State, authorized to exercise corporate trust powers, subject to supervision
or examination by federal or state authorities and (b) have a reported combined
capital and surplus of not less than $50,000,000. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner provided in Section 909 hereof. No
resignation or removal of the Trustee and no appointment of a successor Trustee
shall become effective until the successor Trustee has accepted its appointment
under Section 913 hereof.
SECTION 909. RESIGNATION BY THE TRUSTEE. The Trustee and any successor
Trustee may at any time resign from the trusts created by this Indenture by
executing an instrument in writing resigning such trusts and specifying the date
when such resignation shall take effect, and filing the same with the Issuer and
the Company not less than 45 days before the date specified in such instrument
when such resignation shall take effect (subject to Section 908 hereof), and by
giving notice of such resignation by first class mail, postage prepaid, not less
than 20 days prior to such resignation date, to each registered owner of Bonds
then Outstanding.
SECTION 910. REMOVAL OF THE TRUSTEE. The Trustee may be removed at any
time, by filing with the Trustee so removed, and with the Issuer and the
Company, an instrument or instruments in writing, appointing a successor, or an
instrument or instruments in writing, consenting to the appointment by the
Issuer of a successor and accompanied by an instrument of appointment by the
Issuer of such successor, and in any event executed by the owners of not less
than fifty-one percent (51%) in aggregate principal amount of Bonds then
Outstanding.
SECTION 911. APPOINTMENT OF SUCCESSOR TRUSTEE BY THE BONDHOLDERS;
TEMPORARY TRUSTEE. In case the Trustee hereunder shall resign or be removed, or
be dissolved, or shall be in the process of dissolution or liquidation, or
otherwise becomes incapable of acting hereunder, or in case it shall be taken
under the control of any public officer or officers, or of a receiver appointed
by a court, then a vacancy shall forthwith and ipso facto exist in the office of
Trustee and a successor may be
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<PAGE> 57
appointed by the owners of fifty-one percent (51%) in aggregate principal amount
of Bonds then Outstanding, by filing with the Issuer and the Company, an
instrument or concurrent instruments in writing signed by such owners, or by
their attorneys in fact duly authorized; provided, nevertheless, that in case of
such vacancy the Issuer, by an instrument executed and signed by an Authorized
Issuer Representative, may appoint a temporary Trustee to fill such vacancy
until a successor Trustee shall be appointed by the Bondholders in the manner
above provided; provided further, that if no permanent successor Trustee shall
have been appointed by the Bondholders within the six (6) calendar months next
succeeding the month during which the Issuer appoints such a temporary Trustee,
such temporary Trustee shall without any further action on the part of the
Issuer or the Bondholders become the permanent successor Trustee. After any
appointment by the Issuer as provided herein, the Issuer shall cause notice of
such appointment to be given to the Company and the Rating Service and to be
given by first class mail, postage prepaid, to all Bondholders. The foregoing
notwithstanding, any such temporary Trustee so appointed by the Issuer shall
immediately and without further act be superseded by any successor Trustee so
appointed by such Bondholders as provided above within the six (6) calendar
months next succeeding the month during which such temporary Trustee is
appointed.
SECTION 912. JUDICIAL APPOINTMENT OF SUCCESSOR TRUSTEE. In case at any
time the Trustee shall resign and no appointment of a successor Trustee shall be
made pursuant to the foregoing provisions of this Article IX prior to the date
specified in the notice of resignation as the date when such resignation is to
take effect, the resigning Trustee may forthwith apply to a court of competent
jurisdiction for the appointment of a successor Trustee. If no appointment of a
successor Trustee shall be made pursuant to the foregoing provisions of this
Article IX within six (6) calendar months after a vacancy shall have occurred in
the office of Trustee, any Bondholder may apply to any court of competent
jurisdiction to appoint a successor Trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a successor
Trustee.
SECTION 913. CONCERNING ANY SUCCESSOR TRUSTEES. Every successor Trustee
appointed hereunder shall execute, acknowledge and deliver to its predecessor
and also to the Issuer an instrument in writing accepting such appointment
hereunder, and thereupon such successor, without any further act, deed or
conveyance, shall become fully vested with all the estates, properties, rights,
powers, trusts, duties and obligations of its predecessor; but such predecessor
shall, nevertheless, on the written request of the Issuer, or of its successor,
execute and deliver an instrument transferring to such successor Trustee all the
estates, properties, rights, powers and trusts of such predecessor hereunder;
and every predecessor Trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in writing from the
Issuer be required by any successor Trustee for more fully and certainly vesting
in such successor the estate, rights, powers and duties hereby vested or
intended to be vested in the predecessor, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the
Issuer. The resignation of any Trustee and the instrument or instruments
removing any Trustee and appointing a successor hereunder, together with all
other instruments provided for in this Article, shall be filed and/or recorded
by the successor Trustee in each recording office, if any, where this Indenture
shall have been filed and/or recorded.
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SECTION 914. SUCCESSOR TRUSTEE AS TRUSTEE OF FUNDS. In the event of a
change in Trustee, the predecessor Trustee which has resigned or been removed
shall cease to be Trustee of the funds and accounts created hereunder or
pursuant hereto and shall cease to be the Registrar, authenticating agent, and
Paying Agent for principal of, premium, if any, and interest on the Bonds, as
provided herein, and the successor Trustee shall become such Trustee, Registrar
and Paying Agent.
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ARTICLE X
SUPPLEMENTAL INDENTURES
SECTION 1001. SUPPLEMENTAL INDENTURES NOT REQUIRING CONSENT OF
BONDHOLDERS. Subject to the limitation set forth in Section 1002 hereof with
respect to this Section 1001, the Issuer and the Trustee may (and, in the case
of clause (k) of this Section, shall at the written request of the Authorized
Company Representative), without the consent of, or notice to, any of the
Bondholders, enter into such indenture or indentures supplemental to this
Indenture as shall not be inconsistent with the terms and provisions hereof, for
any one or more of the following purposes:
(a) to cure any ambiguity or formal defect or
omission in this Indenture;
(b) to grant to or confer upon the Trustee for the
benefit of the Bondholders any additional rights, remedies,
powers or authority that may lawfully be granted to or
conferred upon the Bondholders and the Trustee, or either of
them;
(c) to assign and pledge under or subject to this
Indenture additional revenues, properties or collateral;
(d) to evidence the appointment of a separate
trustee or the succession of a new trustee hereunder;
(e) to modify, amend or supplement this Indenture or
any indenture supplemental hereto in such manner as to permit
the qualification of this Indenture under the Trust Indenture
Act of 1939, as then amended, or any similar federal statute
hereafter in effect or to permit the qualification of the
Bonds for sale under the securities laws of any state of the
United States;
(f) to modify, amend or supplement this Indenture or
any indenture supplemental hereto in such manner as to permit
continued compliance with the Proceeds Certificate or any
similar certificate executed in connection with the issuance
of any Bonds;
(g) to provide for the refunding of any Bonds,
including the right to establish and administer an escrow fund
and to take related action in connection therewith or to
provide for the issuance of Additional Bonds as provided in
Section 208 herein;
(h) to provide for the issuance of Bonds to the
extent permitted by this Indenture, including but not limited
to such provisions as are necessary for the Trustee and the
Issuer to accept, implement and administer any additional
security as herein authorized, including debt service reserve
or similar funds, letters or lines of credit, bond insurance
policies or other forms of credit enhancement and establishing
terms and
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provisions for such Bonds which may differ from those
established for Bonds then outstanding;
(i) to evidence or give effect to or facilitate the
delivery and administration under this Indenture of one or
more credit facilities, including a letter of credit, a bond
insurance policy or any other credit facility, to provide
credit enhancement relating to payment of principal of and
interest on the Bonds, provided that prior to the entry into
of a supplemental indenture pursuant to this Section 1001(i),
the Trustee shall be provided with an opinion of Bond Counsel
to the effect that the provisions outlined in such
supplemental indenture or indentures with respect to the
delivery of one or more credit facilities for such purposes
will not have an adverse impact on the excludability of
interest on the Bonds from the gross income of the owners
thereof for federal income tax purposes;
(j) to effect changes in the Indenture so as to
secure or maintain ratings on the Bonds from the Rating
Service, which changes will not restrict, limit or reduce the
obligation of the Issuer to pay the principal of, premium, if
any, and interest on the Bonds as provided in this Indenture
or otherwise materially adversely affect the owners of the
Bonds under this Indenture; and
(k) to make any change that in the judgment of the
Trustee does not materially adversely affect the rights of any
Bondholders.
SECTION 1002. SUPPLEMENTAL INDENTURES REQUIRING CONSENT OF
BONDHOLDERS.
(a) In addition to supplemental indentures covered by
Section 1001 hereof and subject to the terms and provisions
contained in this Section, and not otherwise, the holders of
not less than fifty-one percent (51%) in aggregate principal
amount of the Bonds which are Outstanding hereunder at the
time of the execution of any such supplemental indenture and,
in case less than all of the Bonds Outstanding are affected
thereby, the holders of not less than fifty-one percent (51%)
in aggregate principal amount of the Bonds so affected, shall
have the right, from time to time, anything contained in this
Indenture to the contrary notwithstanding, to consent to and
approve the execution by the Issuer and the Trustee of such
other indenture or indentures supplemental hereto as shall be
deemed necessary and desirable by the Issuer for the purpose
of modifying, altering, amending, adding to or rescinding, in
any particular, any of the terms or provisions contained in
this Indenture or in any supplemental indenture; provided,
however, that nothing in this Section contained or in Section
1001 hereof shall permit, or be construed as permitting, a
supplemental indenture to effect: (i) an extension of the
stated maturity or reduction in the principal amount of, or
reduction in the rate of or extension of the time of paying
interest on, or reduction of any premium payable on the
redemption of, any Bonds, without the consent of the holders
of such
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Bonds; (ii) a reduction in the amount or extension of the time
of any payment required to be made to or from the Bond Fund or
any interest or sinking fund applicable to any Bonds, without
the consent of the holders of all of the Bonds at the time
Outstanding; (iii) the creation of any lien prior to or on a
parity with the lien of this Indenture on the Trust Estate or
the deprivation of any Bondholders of the lien created by this
Indenture on such Trust Estate, without the consent of the
holders of all the Bonds at the time Outstanding, provided
that nothing in this subparagraph (iii) shall be construed to
require the consent of Bondholders to the issuance of Bonds
pursuant to this Indenture; (iv) a reduction in the aforesaid
aggregate principal amount of Bonds the owners of which are
required to consent to any such supplemental indenture,
without the consent of the owners of all the Bonds at the time
Outstanding which would be affected by the action to be taken;
or (v) a modification of the rights, duties or immunities of
the Trustee, without the written consent of the Trustee.
(b) If at any time the Issuer or the Company shall
request the Trustee to enter into any such supplemental
indenture for any of the purposes of this Section, the Trustee
shall, upon being satisfactorily indemnified with respect to
expenses, cause notice of the proposed execution of such
supplemental indenture to be mailed by registered or certified
mail to the owners of the Bonds. Such notice shall briefly set
forth the nature of the proposed supplemental indenture and
shall state that copies thereof are on file at the Principal
Office of the Trustee for inspection by all Bondholders. The
Trustee shall not, however, be subject to any liability to any
Bondholder by reason of its failure to mail such notice, and
any such failure shall not affect the validity of such
supplemental indenture when consented to and approved as
provided in this Section. If the holders of the requisite
principal amount of Bonds which are Outstanding hereunder at
the time of the execution of any such supplemental indenture
shall have consented to and approved the execution thereof as
herein provided, no holder of any Bond shall have any right to
object to any of the terms and provisions contained therein,
or the operation thereof, or in any manner to question the
propriety of the execution thereof, or to enjoin or restrain
the Trustee or the Issuer from executing the same or from
taking any action pursuant to the provisions thereof. Upon the
execution of any such supplemental indenture as in this
Section permitted and provided, this Indenture shall be and be
deemed to be modified and amended in accordance therewith.
(c) Anything herein to the contrary notwithstanding,
a supplemental indenture under this Article X which adversely
affects the Company shall not become effective unless and
until the Company shall have consented in writing to the
execution and delivery of such supplemental indenture. In this
regard, the Trustee shall cause notice of the proposed
execution and delivery of any such supplemental indenture to
which the Company has not already consented, together with a
copy of the proposed supplemental indenture and a written
consent form to be signed by the Company, to be mailed by
certified or registered mail
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to the Company at least thirty (30) days (or such shorter
period of time acceptable to the Company) prior to the
proposed date of execution and delivery of any such
supplemental indenture.
(d) Subject to the terms and provisions
contained in this Section 1002(d), the owners of all the
Bonds at any time Outstanding shall have the right, and the
Issuer and the Trustee by their execution and delivery of this
Indenture hereby expressly confer upon such owners the right,
to modify, alter, amend or supplement this Indenture in any
respect, including without limitation in respect of the
matters described in clauses (i), (ii) and (iii) of the
proviso contained in subsection (a) of this Section 1002, by
delivering to the Issuer, the Trustee and the Company a
written instrument or instruments, executed by or on behalf of
such owners, containing a form of supplemental indenture which
sets forth such modifications, alterations, amendments and
supplements, and, upon the expiration of a 30-day period
commencing on the date of such delivery during which no notice
of objection shall have been delivered by the Issuer or the
Trustee to such owners at an address specified in such written
instrument, such supplemental indenture shall be deemed to
have been approved and confirmed by the Issuer and the
Trustee, to the same extent as if actually executed and
delivered by the Issuer and the Trustee, and such supplemental
indenture shall thereupon become and be for all purposes in
full force and effect without further action by the Issuer or
the Trustee. The foregoing provisions are, however, subject to
the following conditions:
(i) no such supplemental indenture shall
in any way affect the limited nature of the
obligations of the Issuer under this Indenture as set
forth in Section 205 hereof, or otherwise, or
adversely affect any of its rights hereunder;
(ii) no such supplemental indenture shall
be to the prejudice of the Trustee, and no such
supplemental indenture which adversely affects the
Company shall become effective unless consented to by
the Company in the manner provided in Section 1002(c)
hereof; and
(iii) there shall have been delivered to the
Issuer, the Trustee and the Company an opinion of
Bond Counsel stating that such supplemental indenture
is authorized or permitted by this Indenture and the
Act, complies with their respective terms, will, upon
the expiration of the aforesaid 30-day period, be
valid and binding upon the Issuer in accordance with
its terms and will not adversely affect the exclusion
from gross income for federal income tax purposes of
interest on any of the Bonds.
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ARTICLE XI
AMENDMENTS TO THE LOAN AGREEMENT
SECTION 1101. AMENDMENTS, ETC. TO LOAN AGREEMENT NOT REQUIRING CONSENT.
The Issuer, the Company and the Trustee may, without the consent of or notice to
the owners of the Bonds, consent to any supplemental loan agreement which
effects such amendment, change or modification of the Loan Agreement as may be
required (a) by the provisions of this Indenture or the Loan Agreement; (b) for
the purpose of curing any ambiguity or formal defect or omission; (c) in
connection with the issuance of Bonds as provided in Section 207 or Section 208
hereof; (d) for the purpose of complying with the provisions of the Proceeds
Certificate; (e) to evidence or give effect to or facilitate the delivery and
administration under this Indenture of one or more credit facilities including a
letter of credit, a bond insurance policy or any other credit facility to
provide credit enhancement relating to payment of principal of and interest on
the Bonds, provided that prior to the entering into of a supplemental loan
agreement pursuant to this Section 1101, the Trustee shall be provided with an
opinion of Bond Counsel to the effect that the provisions outlined in such
supplemental loan agreement or loan agreements with respect to the delivery of
one or more credit facilities for such purposes will not have an adverse impact
on the excludability of interest on the Bonds from the gross income of the
owners thereof for federal income tax purposes; (f) to secure or maintain
ratings on the Bonds from the Rating Service, which changes will not restrict,
limit or reduce the obligation of the Issuer to pay the principal of and
premium, if any, and interest on the Bonds as provided in this Indenture or
otherwise materially adversely affect the owners of the Bonds; (g) to amend or
supplement the description of the Project set forth in Exhibit A to the Loan
Agreement, provided that no such amendment or supplement shall be entered into
that would cause the Company to violate its covenants set forth in Section 3.7
of the Loan Agreement; or (h) to make any other change therein which, in the
judgment of the Trustee, does not materially adversely affect the rights of the
Trustee or the owners of the Bonds, provided, however, that nothing in this
Section 1101 shall permit, or be construed as permitting, any amendment, change
or modification of the Loan Agreement that may result in anything described in
the numbered clauses of Section 1002(a) hereof, without the consent of each
Bondholder affected. If at any time the Company shall request the Issuer and the
Trustee to consent to any amendment, change or modification of the Loan
Agreement pursuant to subparagraph (h) above, the Trustee shall cause notice of
the proposed execution of such amendment, change or modification to the Loan
Agreement to be given to the Rating Service at least thirty (30) days prior to
the execution of such amendment, change or modification to the Loan Agreement,
which notice shall include a copy of the proposed amendment, change or
modification to the Loan Agreement.
Before the Issuer shall enter into, and the Trustee shall consent to,
any modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 1101, there shall have been delivered to the Issuer and
the Trustee an opinion of Bond Counsel stating that such modification,
alteration, amendment or supplement is authorized or permitted by the Loan
Agreement or this Indenture and the Act, complies with their respective terms,
will, upon the execution and delivery thereof, be valid and binding upon the
Issuer in accordance with its terms and will not adversely
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affect the exclusion from gross income for federal income tax purposes of
interest on any of the Bonds.
SECTION 1102. AMENDMENTS, ETC. TO LOAN AGREEMENT REQUIRING CONSENT OF
BONDHOLDERS. Except for the amendments, changes or modifications as provided in
Section 1101 hereof, neither the Issuer nor the Trustee shall consent to any
amendment, change or modification of the Loan Agreement without the prior
written approval or consent, given and procured as in this Section provided, of
the owners of not less than fifty-one percent (51%) in aggregate principal
amount of the Bonds Outstanding hereunder at the time of the execution of such
amendment or modification and, in case less than all of the Bonds Outstanding
are affected thereby, of the holders of not less than fifty-one percent (51%) in
aggregate principal amount of the Bonds so affected. If at any time the Issuer
and the Company shall request the consent of the Trustee to any such proposed
amendment, change or modification of the Loan Agreement, the Trustee shall, upon
being satisfactorily indemnified with respect to expenses, cause notice of such
proposed amendment, change or modification to be mailed in the same manner as
provided by Section 1002 hereof with respect to supplemental indentures. Such
notice shall briefly set forth the nature of such proposed amendment, change or
modification and shall state that copies of the instrument embodying the same
are on file at the Principal Office of the Trustee for inspection by all
Bondholders. The Trustee shall not, however, be subject to any liability to any
Bondholder by reason of its failure to mail such notice, and any such failure
shall not affect the validity of such amendment, change or modification when
consented to and approved as provided in this Section. If the holders of not
less than fifty-one percent (51%) in aggregate principal amount of the Bonds
Outstanding which are affected by the amendment to the Loan Agreement shall have
consented to and approved the execution thereof as herein provided, no holder of
any Bond shall have any right to object to any of the terms and provisions
contained therein, or the operation thereof, or in any manner to question the
propriety of the execution thereof, or to enjoin or restrain the Trustee or the
Issuer from executing the same or from taking any action pursuant to the
provisions thereof. The foregoing notwithstanding, no amendment or supplement
may be made which permits the assignment of the Loan Agreement by the Company
other than as permitted by Section 6.1 of the Loan Agreement or which results in
anything described in the numbered clauses of Section 1002(a) hereof unless the
holders of 100% in aggregate principal amount of the Bonds Outstanding shall
have consented to such amendment or supplement.
Before the Issuer shall enter into, and the Trustee shall consent to,
any modification, alteration, amendment or supplement to the Loan Agreement
pursuant to this Section 1102, there shall have been delivered to the Issuer and
the Trustee an opinion of Bond Counsel stating that such modification,
alteration, amendment or supplement is authorized or permitted by the Loan
Agreement or this Indenture and the Act, complies with their respective terms,
will, upon the execution and delivery thereof, be valid and binding upon the
Issuer in accordance with its terms and will not adversely affect the exclusion
from gross income for federal income tax purposes of interest on any of the
Bonds.
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ARTICLE XII
MISCELLANEOUS
SECTION 1201. PARTIES IN INTEREST. With the exception of rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from
this Indenture or the Bonds is intended or shall be construed to give to any
person other than the Issuer, the Trustee, the Company and the holders of the
Bonds any legal or equitable right, remedy or claim under or with respect to
this Indenture or any covenants, conditions and provisions herein contained;
this Indenture and all of the covenants, conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of the Issuer, the
Trustee, the Company and the holders of the Bonds as herein provided.
SECTION 1202. SEVERABILITY. If any provision of this Indenture shall be
held or deemed to be or shall, in fact, be inoperative or unenforceable as
applied in any particular case in any jurisdiction or jurisdictions or in all
jurisdictions, or in all cases because it conflicts with any other provision or
provisions of any constitution or statute or rule of public policy, or for any
other reason, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
invalid, inoperative or unenforceable to any extent whatever. The invalidity of
any one or more phrases, sentences, clauses or Sections in this Indenture
contained shall not affect the remaining portions of this Indenture or any part
thereof.
SECTION 1203. DELIVERY OF NOTICES; DELIVERY OF BONDS. Except as
otherwise provided in this Indenture, all notices, certificates, requests,
requisitions or other communications by the Issuer, the Company, or the Trustee,
pursuant to this Indenture shall be in writing and shall be sufficiently given
and shall be deemed given when mailed by first class mail, postage prepaid,
addressed as follows:
If to the Issuer: Tooele County
Board of County Commissioners
County Courthouse
47 South Main
Tooele, Utah 84074
Telecopier: (801) 882-7317
Attention: Chairman
If to the Trustee: West One Bank, Utah
107 South Main Street, Suite 303
Salt Lake City, Utah 84111
Telecopier: (801) 534-6208
Attention: Corporate Trust
Department
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If to the Company: USPCI Clive Incineration Facility, Inc.
220 Outlet Point Blvd.
Columbia, South Carolina 29210
Telecopier: (803) 551-4365
Attention: Paul Humphreys
If to the Guarantor: Laidlaw Inc.
3221 North Service Road
Burlington, Ontario
Canada L7R3Y8
Telecopier: (905) 332-6550
Attention: Senior Vice President and
General Counsel
SECTION 1204. COUNTERPARTS. This Indenture may be simultaneously
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
SECTION 1205. GOVERNING LAW. This Indenture shall be governed
exclusively by and construed in accordance with the laws of the State of Utah.
SECTION 1206. IMMUNITY OF OFFICERS AND EMPLOYEES OF ISSUER. No
recourse shall be had for the payment of the principal of or premium, if any, or
interest on any of the Bonds or for any claim based thereon or upon any
obligation, covenant or agreement in this Indenture contained against any past,
present or future officer, employee or agent of the Issuer, or any officer,
employee or agent of any successor body politic, either directly or through the
Issuer or any successor body politic, under any rule of law or equity, statute
or constitution or by the enforcement of any assessment or penalty or otherwise,
and all such liability of any such officers, employees or agents, as such, is
hereby expressly waived and released as a condition of and consideration for the
execution of this Indenture and the issuance of any of the Bonds.
SECTION 1207. BONDS OWNED BY THE ISSUER, THE GUARANTOR OR THE
COMPANY. In determining whether the owners of the requisite aggregate principal
amount of the Bonds have concurred in any direction, consent or waiver under
this Indenture, Bonds which are owned by the Issuer, the Guarantor or the
Company or by any person directly or indirectly controlling or controlled by or
under direct or indirect common control with the Company or the Guarantor
(unless the Issuer, the Company or such person owns all Bonds which are then
Outstanding, determined without regard to this Section) shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination, except
that, for the purpose of determining whether the Trustee shall be protected in
relying on any such direction, consent or waiver, only Bonds which the Trustee
knows are so owned shall be so disregarded. Bonds so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Bonds and that the pledgee is not the Issuer, the Guarantor or the Company
or any person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or the Guarantor. In case of
a dispute
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as to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee.
SECTION 1208. PLEDGE AND UNDERTAKING OF THE STATE. In entering into
this Indenture and otherwise providing for the issuance of the Series 1995
Bonds, the Issuer and the Trustee have specifically relied upon Section 11-17-13
of the Act, which provides:
The State of Utah does hereby pledge to and agree with the holders of
any bonds issued under this act and with those parties who may enter
into contracts with any county or municipality under this act, that the
state will not alter, impair or limit the rights thereby vested until
the bonds, together with applicable interest, are fully met and
discharged and such contracts are fully performed. Nothing contained in
this act shall preclude such alteration, impairment or limitation if
and when adequate provision shall be made by law for the protection of
the holders of the bonds or persons entering into contracts with any
county or municipality. Each county and municipality is authorized to
include this pledge and undertaking for the state in such bonds or
contracts.
The Issuer hereby incorporates herein the foregoing pledge and
undertaking for the State.
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IN WITNESS WHEREOF, TOOELE COUNTY, UTAH has caused these presents to be
signed in its name and on its behalf by the Chairman of its Board of County
Commissioners and its corporate seal to be hereunto affixed and attested by its
County Clerk, and to evidence its acceptance of the trusts hereby created WEST
ONE BANK, UTAH has caused these presents to be signed in its name and on its
behalf by its Vice President and its official seal to be hereunto affixed, all
as of the day and year first above written.
TOOELE COUNTY, UTAH
By /s/
------------------------------------
[Seal] Chairman,
Board of County Commissioners
Attest:
/s/
- ----------------------------------------
County Clerk
WEST ONE BANK, UTAH, as Trustee
By /s/
------------------------------------
[Seal] Vice President
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EXHIBIT "A"
[FORM OF FRONT OF BOND]
REGISTERED REGISTERED
NO. R- $
------ -------------------
UNITED STATES OF AMERICA
STATE OF UTAH
COUNTY OF TOOELE
HAZARDOUS WASTE DISPOSAL REVENUE BOND
(LAIDLAW INC./USPCI CLIVE PROJECT), SERIES 1995
<TABLE>
<CAPTION>
Interest Maturity Issue
Rate Date Date CUSIP
---- ---- ---- -----
<S> <C> <C>
August 1, 2010
Registered Owner:
Principal Amount: Dollars
</TABLE>
Tooele County, Utah (the "Issuer"), a duly organized and existing
political subdivision of the State of Utah, for value received, hereby promises
to pay (but only from the sources hereinafter mentioned) to the Registered Owner
identified above or registered assigns, on the Maturity Date set forth above,
upon presentation and surrender hereof, the Principal Amount set forth above and
to pay solely from such sources interest on said Principal Amount at the
Interest Rate set forth above, calculated on the basis of a 360-day year of
twelve (12) thirty (30) day months, from the Interest Payment Date next
preceding the date of authentication hereof unless (i) this Bond is
authenticated as of an Interest Payment Date in which event this Bond shall bear
interest from such Interest Payment Date or (ii) this Bond is authenticated
prior to the first Interest Payment Date in which event this Bond shall bear
interest from the Issue Date set forth above; provided, however, that if
interest on the Bonds shall be in default as shown by the records of the
Trustee, interest shall accrue at the Default Rate (as defined in the Indenture
hereinafter described) from the Interest Payment Date to which interest has been
paid in full, until the payment of such Principal Amount (except as the
provisions set forth in the Indenture hereinafter described with respect to
redemption prior to maturity may be applicable hereto), such interest being
payable semiannually on each February 1 and August 1 commencing February 1, 1996
(each an "Interest Payment Date"). Payments of interest shall be made to the
Registered Owner hereof, as of the fifteenth day of the month next
A-1
<PAGE> 70
preceding such Interest Payment Date, by check or draft mailed on the Interest
Payment Date to the address of such Registered Owner as it appears on the
registration books of the Issuer maintained by the Trustee as Bond Registrar, or
to such other address as may be furnished to said Trustee in writing by such
Registered Owner. Payment of principal or redemption price of and premium, if
any, on this Bond shall be made by check or draft only upon presentation and
surrender of this Bond at the principal corporate trust office of West One Bank,
Utah, Salt Lake City, Utah (the "Trustee", which term shall include any
successor trustee), acting as paying agent (the "Paying Agent"), or at the
office designated for such payment of any successor thereof or of any other
paying agent as provided in said Indenture. The principal of, premium, if any,
and interest on this Bond are payable by check or draft denominated in any coin
or currency of the United States of America which, at the respective times of
payment is legal tender for the payment of public and private debts. As used
herein the term "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Utah or the city in which the
principal corporate trust office of the Trustee is located, or the New York
Stock Exchange are closed or required by law to close. If any payment of
principal of, premium, if any, or interest required to be made on this Bond
becomes due and payable on a day other than a Business Day, then such payment
shall be made on the next succeeding Business Day, with the same force and
effect as if made on the Interest Payment Date, the date of maturity or the date
fixed for redemption, and such payment shall not include the interest for the
period between such date and the next succeeding Business Day.
Reference is hereby made to the further provisions of this Bond set
forth on the reverse side hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
This Bond is one of an issue of Bonds which is issued under the
provisions of, and in full compliance with, the Constitution and laws of the
State of Utah, particularly Title 11, Chapter 17, Utah Code Annotated 1953, as
amended. The Bonds are special, limited obligations of the Issuer, payable by
the Issuer solely from certain amounts received by the Issuer under, and secured
by a pledge of certain rights of the Issuer under and pursuant to, the Loan
Agreement (as such term is defined in the Indenture), and, further, from the
funds and accounts created under the Indenture (but not including the Rebate
Fund created under the Indenture) and investment earnings thereon, all of which
shall be used for no other purpose than to pay the principal of, premium, if
any, and interest on the Bonds, except as may be otherwise expressly authorized
in the Indenture. Neither the faith and credit nor the taxing power of the State
of Utah or any political subdivision thereof is pledged to the payment of the
principal of, premium, if any, or interest on the Bonds. The Bonds and the
interest thereon do not constitute or give rise to a general obligation or
liability of the Issuer or a charge against its general credit or taxing powers,
and the Bonds do not constitute a loan of the credit of the Issuer within the
meaning of any constitutional restriction or statutory limitation of the State
of Utah.
It Is Hereby Certified, Recited and Declared that all acts, conditions
and things required to exist, happen and be performed precedent to and in the
execution and delivery of the indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law, and that the issuance of this Bond and the series of which it forms a
part, together with all other
A-2
<PAGE> 71
obligations of the Issuer, does not exceed or violate any constitutional or
statutory limitation on indebtedness, and that payment in full for this Bond has
been received.
This Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under the Indenture unless and until the
Certificate of Authentication hereon shall have been duly executed by the
Trustee, as provided in the Indenture.
In Witness Whereof, Tooele County, Utah has caused this Bond to be
executed in its name by the facsimile signature of the Chairman of its Board of
County Commissioners, and the facsimile of its official seal to be imprinted
hereon and attested by the facsimile signature of its County Clerk.
TOOELE COUNTY, UTAH
By
------------------------------------
[Seal] Chairman,
Board of County Commissioners
Attest:
- ------------------------------------------
County Clerk
A-3
<PAGE> 72
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the within-mentioned
Indenture of Trust.
Date of registration and authentication:
WEST ONE BANK, UTAH,
as Trustee
By
------------------------------
Authorized Signatory
(FORM OF REVERSE OF BOND)
This Bond is one of the duly authorized Tooele County, Utah Hazardous
Waste Disposal Revenue Bonds (Laidlaw Inc./USPCI Clive Project), Series 1995, to
be issued in an aggregate principal amount of $10,000,000 (the "Bonds"),
pursuant to certain resolutions (collectively, the "Resolution") duly adopted by
the Issuer's Board of County Commissioners (the "Board"), in accordance with the
applicable provisions of the Utah Industrial Facilities and Development Act,
Title 11, Chapter 17, Utah Code Annotated 1953, as amended (the "Act"), under an
Indenture of Trust dated as of August 1, 1995 (the "Indenture"), between the
Issuer and the Trustee, for the purpose of providing a portion of the funds
necessary to finance among other things a hazardous waste disposal and treatment
facility located within the boundaries of the Issuer (the "Project") for USPCI
Clive Incineration Facility, Inc., an Oklahoma corporation (the "Company").
Proceeds from the sale of the Bonds are to be loaned by the Issuer to the
Company, under the terms of a Loan Agreement dated as of August 1, 1995 (the
"Loan Agreement"). The Bonds are all issuable under and are equally and ratably
secured by and are entitled to the benefits of the Indenture, including the
security of the pledge and assignment of certain amounts payable to the Issuer
pursuant to the Loan Agreement, and all receipts of the Trustee credited under
the provisions of the Indenture against the payment of such amounts, and from
any other moneys held by the Trustee under the Indenture for such purpose. The
Project is not security for the Bonds.
Pursuant to a Guaranty dated as of August 1, 1995 from Laidlaw Inc., a
Canadian corporation (the "Guarantor"), to the Trustee, the Guarantor has agreed
to guaranty timely payment of the Company's obligations relating to the Bonds.
Any term used herein as a defined term but not defined herein shall
have the meaning ascribed to such term in the Indenture or the Loan Agreement.
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<PAGE> 73
Part I -- Redemption Provisions
Optional Redemption of Bonds. The Series 1995 Bonds are subject to
optional redemption prior to maturity by the Trustee at the direction of the
Company, in whole at any time or in part on any Interest Payment Date, in
inverse order of maturity and by lot within each maturity at any time on or
after August 1, 2005, at a redemption price expressed as a percentage of
principal amount of Series 1995 Bonds to be redeemed set forth in the table
below, together with accrued interest to the Redemption Date:
<TABLE>
<CAPTION>
Redemption Date Redemption Price
--------------- ----------------
<S> <C>
August 1, 2005 to July 31, 2006 102%
August 1, 2006 to July 31, 2007 101%
August 1, 2007 and thereafter 100%
</TABLE>
Extraordinary Optional Redemption. The Series 1995 Bonds shall be
subject to extraordinary optional redemption prior to maturity by the Trustee,
at the direction of the Company, in whole or in part, on any date at a
redemption price equal to the principal amount of the Series 1995 Bonds to be
redeemed plus accrued interest to the redemption date, within 365 days following
the occurrence of any one of the following events (or, in the case of
subparagraph (a) and (b) below, at the option of the Company, within sixty (60)
days following the receipt of any proceeds relating to such event):
(a) The Facility (as defined in the Indenture) or a
substantial portion thereof shall have been damaged or
destroyed by fire or other casualty (i) to such extent that,
in the opinion of the Company, within a period of twelve
consecutive months following such damage or destruction it is
not practicable or desirable to rebuild, repair or restore the
Facility, or (ii) to such extent that, in the opinion of the
Company, the Facility is or will be prevented thereby from
operating normally for a period of twelve (12) consecutive
months.
(b) Title to, or the temporary use of, all or
substantially all of the Facility shall have been taken under
the exercise of the power of eminent domain (including such a
taking or takings as results or is likely to result, in the
opinion of the Company, in normal operations at the Facility
being interrupted for a period of twelve (12) consecutive
months or results or is likely to result in rendering the
Facility, in the opinion of the Company, unsuitable for use).
(c) As a result of any changes in the Constitution of
the State of Utah or the Constitution of the United States of
America or of legislative or administrative action (whether
state or federal) or by final decree, judgment or order of any
court or administrative body (whether state or federal)
entered after the contest thereof by the Company in good
faith, the Loan Agreement shall have become void or
unenforceable or impossible of performance in accordance with
the intent and purposes of the parties as expressed in the
Loan Agreement,
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<PAGE> 74
or unreasonable burdens or excessive liabilities shall have
been imposed on the Issuer or the Company, including without
limitation, federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of the
Loan Agreement or changes since the date of initial issuance
of the Bonds in regulatory requirements, technology or the
economic availability of raw materials, operating supplies,
equipment or waste requiring treatment and disposal, which
condition cannot reasonably be expected to improve materially
within a period of twelve (12) consecutive months and causes
the Company to determine that the Facility should not be
completed or that operation of the Facility should be
discontinued.
Special Mandatory Redemption. The Series 1995 Bonds are also subject to
Special Mandatory Redemption in whole by the Issuer on any date prior to
maturity at a redemption price of 100% of the principal amount thereof together
with accrued interest to the date of redemption, upon the occurrence of a
Determination of Taxability (as defined in the Indenture), as soon as
practicable, but in no event later than thirty (30) days after the occurrence of
such Determination of Taxability.
Notice of Redemption. Notice of redemption shall be given by
first-class mail, postage prepaid, mailed not less than thirty (30) nor more
than sixty (60) days prior to the redemption date (except in the case of Special
Mandatory Redemption, in which case the Trustee will give immediate notice as
provided in the Indenture), to each owner of a Bond to be redeemed at the
address of such Bondholder appearing in the Bond Register. Failure to give such
notice to any Bondholder, or any defect therein, shall not affect the validity
of the proceedings for the redemption of any Bond or portion thereof with
respect to which no such failure has occurred. The Indenture provides for the
giving of additional notice under certain circumstances, provided that no defect
in or failure to give such additional notice shall in any manner defeat the
effectiveness of a call for redemption with respect to Bonds for which notice
was properly given as described above. Notice of redemption having been given as
aforesaid, the Bond so to be redeemed shall, on the redemption date, become due
and payable at the redemption price therein specified and from and after such
date (unless the Issuer shall default in the payment of the redemption price)
such Bond shall cease to bear interest. Upon surrender of any such Bond for
redemption in accordance with said notice, the redemption price of such Bond
shall be paid. If any Bond called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the redemption date at the rate last borne by the
Bond.
If at the time of mailing of notice of an optional redemption there
shall not have been deposited with the Trustee moneys sufficient to redeem all
the Bonds called for redemption, which moneys are or will be available for
redemption of Bonds, such notice will state that it is conditional, that is,
subject to the deposit of the redemption moneys with the Trustee not later than
the close of business of the fifth day prior to the Redemption Date, and such
notice shall be of no effect unless such moneys are so deposited.
Partial Redemption. The Trustee, upon surrender of any Bond to be
redeemed in part, shall authenticate and deliver to the owner of such Bond,
without service
A-6
<PAGE> 75
charge, a new Bond or Bonds in aggregate principal amount equal to and in
exchange for the unpurchased or unredeemed portion of the principal of the Bond
so surrendered, which new Bond or Bonds shall be in any Authorized Denominations
and shall be identical to the Bond being purchased or redeemed with respect to
stated maturity and interest rate, and bearing numbers not contemporaneously
outstanding. If less than all the Bonds are to be redeemed, the particular Bonds
or portion thereof to be redeemed shall be selected prior to the redemption date
by the Trustee, by lot by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for redemption of portions
of the principal of Bonds of a denomination larger than the minimum Authorized
Denomination. The unredeemed portion of a Bond selected for partial redemption
must be equal to an Authorized Denomination.
Part II -- General
The owner of this Bond shall have no right to enforce the provisions of
the Indenture or to institute any suit, action or proceeding in equity or at law
for the enforcement of the Indenture or for the appointment of a receiver or for
the enforcement of any other remedy under the Indenture, except as provided in
the Indenture. The Issuer, the Trustee, and the Company may treat the registered
owner of this Bond as the absolute owner hereof for all purposes, whether or not
this Bond shall be overdue, and shall not be bound by any notice to the
contrary.
If provision is made for the payment of the principal of, premium, if
any, and interest on this Bond in accordance with the Indenture, this Bond shall
no longer be deemed Outstanding under the Indenture, shall cease to be entitled
to any lien, benefit or security under the Indenture, except for purposes of
registration and exchange and of such payment.
Modifications or alterations of the Indenture or of any supplements
thereto, may be made only to the extent and in the circumstances permitted by
the Indenture.
Except as otherwise provided in the Indenture, the Bonds are issuable
only as fully registered Bonds, without coupons, in denominations of $5,000 and
any integral multiple of $5,000 in excess thereof.
The transfer of this Bond shall be registered upon the books kept at
the Principal Office of the Trustee, upon surrender of this Bond, duly endorsed
by, or accompanied by a written instrument or instruments of transfer in form
satisfactory to the Trustee and duly executed by the Bondholder or such
Bondholder's attorney duly authorized in writing and with guarantee of
signature.
Subject to the limitations contained in the Indenture, this Bond may be
exchanged at any time at the Principal Office of the Trustee, upon surrender
hereof together with an assignment duly executed by the registered owner hereof
or such owner's attorney or legal representative in such form and with guarantee
of signature as shall be satisfactory to the Trustee for an equal aggregate
principal amount of Bonds of any Authorized Denomination as the Bonds
surrendered for exchange, which Bonds shall be identical to the Bonds being
exchanged with respect to interest rate and stated maturity, and bearing numbers
not contemporaneously outstanding.
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<PAGE> 76
Reference is hereby made to the Indenture, the Loan Agreement and the
Proceeds Certificate, copies of which are on file with the Trustee, for the
provisions, among others, with respect to the nature and extent of the rights,
duties and obligations of the Issuer, the Company, the Trustee, and the owners
of the Bonds, including provisions relating to acceleration under certain
circumstances and provisions relating to the issuance of additional bonds under
the Indenture. The owner of this Bond, by acceptance hereof, is deemed to have
agreed and consented to and to be bound by the terms and provisions of the
Indenture, the Loan Agreement and the Proceeds Certificate.
The following abbreviations, when used in the inscription on the face
of this Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:
A-8
<PAGE> 77
UNIF GIFT MIN ACT
<TABLE>
<S> <C> <C>
TEN COM -- as tenants in common _______ Custodian _______
TEN ENT -- as tenants by the (Cust) (Minor)
entirety
JT TEN -- as joint tenants with Under Uniform Gifts to
right of survivorship and not Minors Act______________
tenants in common (State)
</TABLE>
Additional abbreviations may also be used though not in the
above list.
A-9
<PAGE> 78
ASSIGNMENT
FOR VALUE RECEIVED, THE UNDERSIGNED HEREBY SELLS, ASSIGNS AND TRANSFERS
UNTO
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------------
- ----------------------------------------------
- ------------------------------------------------------------------------------
(Please Print or Typewrite Name and Address, including Zip Code, of
Assignee)
the within Bond of TOOELE COUNTY, UTAH, and all rights thereunder, and hereby
irrevocably constitutes and appoints
- ------------------------------------------------------------------------------
attorney to register the transfer of said Bond on the books kept for
registration thereof, with full power of substitution in the premises.
Dated: Signature:
------------------ -----------------------------
Signature
Guaranteed:
---------------------------------------------------------------------
Notice: The signature to this assignment must correspond with the name
as it appears upon the face of the within Bond in every
particular, without alteration or enlargement or any change
whatever.
Notice: The signature(s) should be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan
associations and credit unions with membership in an approved
signature guarantee medallion program), pursuant to S.E.C.
Rule 17Ad-15.
A-10
<PAGE> 79
EXHIBIT "B"
DTC LETTER OF REPRESENTATIONS
(See Transcript Document No. )
-----
B-1
<PAGE> 1
EXHIBIT 4(i)
- --------------------------------------------------------------------------------
INDENTURE OF TRUST
Between
CARBON COUNTY, UTAH
And
U.S. BANK, a national banking association,
as Trustee
Dated as of July 1, 1997
Relating to
$20,000,000
Carbon County, Utah
Solid Waste Disposal Refunding Revenue Bonds
(Laidlaw Environmental Services, Inc.)
1997 Series A
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
DEFINITIONS
1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.2. Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.3. Articles, Sections, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.4. Content of Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II
THE BONDS
2.1. Authorization and Terms of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2. Execution of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.3. Transfer and Exchange of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4. Bond Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.5. Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6. Bonds Mutilated, Lost, Destroyed or Stolen . . . . . . . . . . . . . . . . . . . . . . . . 30
2.7. Disposition of Cancelled Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.8. CUSIP Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE III
ISSUANCE OF BONDS
3.1. Authentication and Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.2. Application of Proceeds of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
4.1. Redemption of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.2. Selection of Bonds for Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.3. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.4. Partial Redemption of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.5. Effect of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6. Holder's Option to Tender for Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.7. Mandatory Tender for Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
4.8. Delivery of Tendered Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.9. Bonds Deemed Purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.10. Bond Purchase Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.11. Deposit of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.12. Remarketing of Tendered Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.13. Deposits into Remarketing Accounts
and Borrower Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.14. Disbursements from the Bond Purchase Fund . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.15. Delivery of Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
ARTICLE V
REVENUES
5.1. Pledge of Revenues and Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . 49
5.2. Bond Fund; Credit Facility Debt Service Account . . . . . . . . . . . . . . . . . . . . . . 49
5.3. Construction Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.4. Trustee Authorized to Take Actions
Under the Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.5. Investment of Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.6. Assignment to Trustee; Enforcement of Obligations . . . . . . . . . . . . . . . . . . . . . 53
5.7. Repayment to Borrower or Credit Provider . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.8. Credit Facilities; Credit Provider Bonds . . . . . . . . . . . . . . . . . . . . . . . . . 53
ARTICLE VI
COVENANTS OF THE COUNTY
6.1. Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.2. Extension or Funding of Claims for Interest . . . . . . . . . . . . . . . . . . . . . . . . 57
6.3. Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.4. Preservation of Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
6.5. Compliance with Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.6. Arbitrage Covenants; Rebate Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.7. Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.8. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE VII
DEFAULT
7.1. Events of Default; Acceleration; Waiver of Default . . . . . . . . . . . . . . . . . . . . 60
7.2. Institution of Legal Proceedings by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 62
7.3. Application of Moneys Collected by Trustee . . . . . . . . . . . . . . . . . . . . . . . . 62
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
7.4. Effect of Delay or Omission to Pursue Remedy . . . . . . . . . . . . . . . . . . . . . . . 63
7.5. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.6. Covenant to Pay Bonds in Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.7. Trustee Appointed Agent for Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.8. Power of Trustee to Control Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . 64
7.9. Limitation on Bondholders' Right to Sue . . . . . . . . . . . . . . . . . . . . . . . . . . 65
7.10. Limitation of Liability to Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE VIII
THE TRUSTEE, THE REGISTRAR, THE TENDER AGENT
AND THE REMARKETING AGENT
8.1. Duties, Immunities and Liabilities of Trustee and Registrar . . . . . . . . . . . . . . . . 67
8.2. Right of Trustee and Registrar to Rely upon Documents, Etc . . . . . . . . . . . . . . . . 68
8.3. Trustee and Registrar Not Responsible for Recitals . . . . . . . . . . . . . . . . . . . . 69
8.4. Right of Trustee and Registrar to Acquire Bonds . . . . . . . . . . . . . . . . . . . . . . 69
8.5. Moneys Received by Trustee and Registrar to Be Held in Trust . . . . . . . . . . . . . . . 69
8.6. Compensation and Indemnification of Trustee and Registrar . . . . . . . . . . . . . . . . 69
8.7. Qualifications of Trustee and Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . 70
8.8. Resignation and Removal of Trustee or Registrar and Appointment of Successor
Trustee or Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.9. Acceptance of Trust by Successor Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.10. Merger or Consolidation of Trustee or Registrar . . . . . . . . . . . . . . . . . . . . . . 73
8.11. Accounting Records and Reports; Financing Statements . . . . . . . . . . . . . . . . . . . 73
8.12. Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.13. Tax Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.14. Appointment of Co-Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.15. Appointment, Duties and Qualifications of Tender Agent . . . . . . . . . . . . . . . . . . 75
8.16. Appointment, Duties and Qualifications of Remarketing Agent . . . . . . . . . . . . . . . 76
ARTICLE IX
MODIFICATION OF INDENTURE, DOCUMENTS
9.1. Modification without Consent of Bondholders . . . . . . . . . . . . . . . . . . . . . . . . 77
9.2. Modification with Consent of Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.3. Effect of Supplemental Indenture or Amendment . . . . . . . . . . . . . . . . . . . . . . . 80
9.4. Required and Permitted Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
<PAGE> 5
<TABLE>
<S> <C> <C>
9.5. Notation of Modification on Bonds; Preparation
of New Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE X
DEFEASANCE
10.1. Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
10.2. Discharge of Liability on Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.3. Payment of Bonds after Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . 82
10.4. Deposit of Money or Securities with Trustee . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE XI
MISCELLANEOUS
11.1. Successors of County . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.2. Limitation of Rights to Parties and Bondholders . . . . . . . . . . . . . . . . . . . . . . 84
11.3. Waiver of Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.4. Separability of Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
11.5. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.6. Evidence of Rights of Bondholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.7. Waiver of Personal Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.8. Publication of Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.9. Governing Law; Venue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.10. Execution in Several Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.11. Credit Provider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.12. Continuing Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.13. Opinions of Bond Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
</TABLE>
<PAGE> 6
THIS INDENTURE OF TRUST, made and entered into as of July 1, 1997, by
and between CARBON COUNTY, UTAH, a political subdivision and body politic
established under the Constitution of the State of Utah (herein called the
"County"), and UNITED STATES NATIONAL BANK OF OREGON, doing business as U.S.
BANK, a national banking association organized under the laws of the United
States, with corporate trust offices in Salt Lake City, Utah, being qualified
to accept and administer the trusts hereby created (herein called the
"Trustee"),
WITNESSETH:
WHEREAS, the County is a political subdivision and body politic of the
State of Utah organized and existing under the Constitution of the State of
Utah; and
WHEREAS, the Utah Industrial Facilities and Development Act, Title 11,
Chapter 17, Utah Code Annotated 1953, as amended (the "Act") authorizes the
County to issue its revenue bonds for the purposes of paying all or any part of
the costs of a "project" as defined in the Act and refunding its outstanding
bonds; and
WHEREAS, ECDC Environmental L.C., a Utah limited liability company
(herein called the "Borrower"), has previously requested from the County
financial assistance to acquire and construct certain solid waste disposal
facilities in the County (the "Project"); and
WHEREAS, in 1994, the County authorized its $35,242,500 Solid Waste
Disposal Refunding Revenue Bonds (East Carbon Landfill Project--Short-Term)
Series 1994 (the "Prior Bonds") to provide funds to finance a portion of the
costs of acquisition and construction by the Borrower of the Project, which
qualifies as a "project" under the Act; and
WHEREAS, the County authorized the issuance and sale of its
$20,000,000 Solid Waste Disposal Refunding Revenue Bonds (East Carbon Landfill
Project - Short-Term Taxable Bonds) Series 1997 (the "Short-Term Taxable
Bonds") to redeem in part the Prior Bonds on May 1, 1997; and
WHEREAS, prior to such redemption on May 1, 1997, the County adopted a
resolution expressing its intent to issue refunding bonds in the future to
refund the Short-Term Taxable Bonds; and
WHEREAS, the Borrower has requested that the County issue refunding
bonds to refund the Short-Term Taxable Bonds, and the County, after due
investigation and deliberation, has adopted a resolution approving said
request; and
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<PAGE> 7
WHEREAS, the County proposes to issue its Carbon County, Utah Solid
Waste Disposal Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.)
1997 Series A, in the aggregate principal amount of $20,000,000 (the "Bonds")
and to loan the proceeds thereof to the Borrower pursuant to a Loan Agreement
dated as of July 1, 1997, by and between the County and the Borrower (the
"Agreement") for the purposes of refunding and retiring the Short-Term Taxable
Bonds; and
WHEREAS, the issuance and sale of the Bonds and the loan of the
proceeds thereof to the Borrower to refund the Short-Term Taxable Bonds and
thereby refinance the costs of the Project will serve the purposes of the
County and the Act and in all respects conform to the provisions and
requirements of the Act; and
WHEREAS, in order to provide for the authentication and delivery of
the Bonds, to establish and declare the terms and conditions upon which the
Bonds are to be issued and secured and to secure the payment of the principal
thereof and of the interest and premium, if any, thereon, the County has
authorized the execution and delivery of this Indenture; and
WHEREAS, all Bonds issued under this Indenture will be secured by a
pledge and assignment of the County's rights under the aforesaid Agreement and
other security instruments; and
WHEREAS, the Project is owned by the Borrower, a subsidiary of Laidlaw
Environmental Services, Inc., a Delaware corporation (the "Guarantor"); and
WHEREAS, in order to enhance the marketability of the Bonds and
thereby achieve interest cost and other savings to the Borrower, and as an
inducement to the purchase of the Bonds by all who shall at any time become
holders of the Bonds, the Guarantor has agreed to execute and deliver to the
Trustee a Guaranty Agreement dated as of July 1, 1997 (the "Guaranty") wherein
the Guarantor has agreed to fully and unconditionally guaranty the payment of
principal and interest on the Bonds and all payments to be made by the Borrower
under the Agreement; and
WHEREAS, all acts and proceedings required by law necessary to make
the Bonds when executed by the County, authenticated and delivered by the
Registrar and duly issued, the valid, binding and legal limited obligations of
the County, and to constitute this Indenture a valid and binding agreement for
the uses and purposes herein set forth, in accordance with its terms, have been
done and taken; and the execution and delivery of this Indenture have been in
all respects duly authorized:
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest and premium, if any, on, all
Bonds issued and Outstanding under this Indenture, according to their tenor,
and to secure the performance and observance of all the covenants and
conditions therein and herein set
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<PAGE> 8
forth, and to declare the terms and conditions upon and subject to which the
Bonds are to be issued and received, and for and in consideration of the
premises and of the mutual covenants herein contained and of the purchase and
acceptance of the Bonds by the holders thereof, and for other valuable
consideration, the receipt of which is hereby acknowledged, the County
covenants and agrees with the Trustee, for the equal and proportionate benefit
of the respective holders from time to time of the Bonds, as follows:
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<PAGE> 9
ARTICLE I
DEFINITIONS
Section
1.1. Definitions. Unless the context otherwise requires, the terms defined
in this Section I.1.1 shall, for all purposes of this Indenture and of the
Agreement and of any indenture supplemental hereto or agreement supplemental
thereto, have the meanings herein specified, as follows:
"Act" means the Utah Industrial Facilities and Development
Act, Title 11, Chapter 17, Utah Code Annotated 1953, as amended.
"Act of Bankruptcy" means any of the following with respect to
any person: (a) the commencement by such person of a voluntary case under the
federal bankruptcy laws, as now in effect or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or similar laws, or (b)
failure by such person to timely controvert the filing of a petition with a
court having jurisdiction over such person to commence an involuntary case
against such person under the federal bankruptcy laws, as now in effect or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or similar laws, or (c) such person shall admit in writing its
inability to pay its debts generally as they become due, or (d) a receiver,
trustee, custodian or liquidator of such person or such person's assets shall
be appointed in any proceeding brought against the person or such person's
assets, or (e) assignment by such person for the benefit of its creditors, or
(f) the entry by such person into an agreement of composition with its
creditors.
"Agreement" means the Loan Agreement, of even date herewith,
between the County and the Borrower and relating to the loan of the proceeds of
the Bonds, as originally executed or as it may from time to time be
supplemented or amended.
"Amendment" means any amendment or modification of any
Document.
"Authorized Borrower Representative" means any person who at
the time and from time to time may be designated, by written certificate
furnished to the County, the Guarantor, the Credit Provider (if any) and the
Trustee, as a person authorized to act on behalf of the Borrower. Such
certificate shall contain the specimen signature of such person, shall be
signed on behalf of the Borrower by any officer of the Borrower and may
designate an alternate or alternates.
"Authorized County Representative" means the Chair of the
Board of Commissioners of the County, the County Attorney, or any person who at
the time and from time to time may be designated by said Chair of the County or
the County Attorney
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<PAGE> 10
by written certificate furnished to the Trustee, the Borrower, the Guarantor
and the Credit Provider (if any), as a person authorized to act on behalf of
the County.
"Authorized Denomination" means (a) with respect to Bonds
during any Daily Rate Period or any Weekly Rate Period, $100,000 or any
integral multiple thereof; and (b) with respect to Bonds during any Term Rate
Period, $100,000 or any integral multiple of $5,000 in excess of $100,000.
"Authorized Guarantor Representative" means the person or
persons at the time and from time to time designated, by written certificate
furnished to the Credit Provider, if any, the Borrower and the Trustee, as the
person or persons authorized to act on behalf of the Guarantor. Such
certificate shall contain the specimen signature of such person or persons,
shall be signed on behalf of the Guarantor by the President, any Executive Vice
President or Senior Vice President or the Treasurer of the Guarantor and may
designate alternate Authorized Guarantor Representatives. The Authorized
Guarantor Representative may, but need not, be an employee of the Guarantor.
"Available Amounts" means, with respect to any Bonds other
than Credit Provider Bonds, (a) funds received by the Trustee pursuant to any
Credit Facility (other than first mortgage bonds, debentures or other evidences
of indebtedness of the Borrower or any affiliate of the Borrower) for such
Bonds; (b) moneys which have been continuously on deposit with the Trustee (i)
held in any separate and segregated fund, account or subaccount established
hereunder in which no other moneys which are not Available Amounts are held,
and (ii) which have so been on deposit with the Trustee for at least 123
consecutive days from their receipt by the Trustee and not commingled with any
moneys so held for less than said period and during and prior to which period
no Act of Bankruptcy of the Borrower or the County has occurred; (c) proceeds
from the sale of the Bonds received contemporaneously with the issuance and
sale or remarketing of such Bonds; (d) any other moneys if there is delivered
to the Trustee at the time such moneys are deposited with the Trustee an
opinion of counsel (which may assume that no owner of Bonds is an "insider"
within the meaning of the Bankruptcy Code) from a firm experienced in
bankruptcy matters to the effect that the use of such moneys to pay amounts due
on the Bonds would not be recoverable from the Bondholders pursuant to Section
550 of the Bankruptcy Code as avoidable preferential payments under Section 547
of the Bankruptcy Code in the event of the occurrence of an Act of Bankruptcy
of the Borrower or the County; (e) proceeds of the investment of funds
qualifying as Available Amounts under the foregoing clauses; or (f) at any time
when there is no Credit Facility in effect with respect to the Bonds or when
the Credit Facility with respect to the Bonds is an obligation of the Borrower
or any affiliate of the Borrower, any moneys from whatever source derived
(including moneys from the Borrower or an affiliate of the Borrower).
"Available Amounts" means, with respect to Credit Provider Bonds, any moneys
from whatever source derived.
"Bankruptcy Code" means Title 11 of the United States Code,
as amended.
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<PAGE> 11
"Beneficial Owner" means, with respect any Book-Entry Bond,
the beneficial owner of such Bond as determined in accordance with the
applicable rules of DTC.
"Bond Counsel" means any attorney at law or firm of attorneys,
of nationally recognized standing in matters pertaining to the validity of, and
exclusion from gross income for federal tax purposes of interest on, bonds
issued by states and political subdivisions, acceptable to the Trustee and duly
admitted to practice law before the highest court of any state of the United
States, but shall not include counsel for the Borrower.
"Bond Fund" means the fund by that name established pursuant
to Section V.5.2 hereof.
"Bond Proceeds Fund" means the fund by that name established
pursuant to Section III.3.2 hereof.
"Bond Purchase Fund" means the fund by that name established
pursuant to Section IV.4.10 hereof.
"Bonds" means the bonds designated as provided in Section
II.2.1.(a) hereof, authorized and issued hereunder in an aggregate principal
amount not to exceed $20,000,000.
"Book-Entry Bonds" means any Bonds which are then held in
book-entry form as provided in Section II.2.1.(d) hereof.
"Borrower" means (i) ECDC Environmental, L.C., a Utah limited
liability company, and its successors and assigns, and (ii) any surviving,
resulting or transferee corporation as provided in Section 5.2 of the
Agreement.
"Business Day" means a day on which banks located in the
cities in which the Principal Offices of the Trustee, the Registrar, the Paying
Agent, the Tender Agent, the Remarketing Agent and the Credit Provider, if any,
are located are not required or authorized to be closed and on which the New
York Stock Exchange is not closed.
"Certificate of the Borrower" means a certificate signed by an
Authorized Borrower Representative. If and to the extent required by the
provisions of Section I.1.4 hereof, each Certificate of the Borrower shall
include the statements provided for in Section I.1.4 hereof.
"Certificate of the County" means a certificate signed by an
Authorized County Representative. If and to the extent required by the
provisions of Section I.1.4 hereof, each Certificate of the County shall
include the statements provided for in Section I.1.4 hereof.
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<PAGE> 12
"Certified Resolution" means a copy of a resolution or
ordinance of the County certified by the County Clerk of the County to have
been duly adopted by the County and to be in full force and effect on the date
of such certification.
"Code" means the Internal Revenue Code of 1986, as amended.
"Construction Fund" means the fund by that name established
pursuant to Section V.5.3 hereof.
"Conversion Date" means any Business Day, on or after July 1,
2007, on which the Rate Period on the Bonds is converted to another Rate
Period.
"County" means Carbon County, Utah, and any successor to its
functions hereunder.
"Credit Agreement" means, with respect to any Credit Facility,
the agreement between the Borrower and the applicable Credit Provider, as
originally executed or as it may from time to time be replaced, supplemented or
amended in accordance with the provisions thereof and Article IX hereof,
providing for the issuance of the Credit Facility and the reimbursement of the
Credit Provider for payments thereunder, and any subsequent agreement pursuant
to which a substitute Credit Facility is provided, together with any related
pledge agreement, security agreement or other security document.
"Credit Facility" means any letter of credit, guarantee,
standby purchase agreement, bond insurance or other support arrangement or
security or any combination of the foregoing, if any, provided by the Borrower
with respect to the Bonds, pursuant to Sections 4.2 and 4.6 of the Agreement
and Section V.5.8 hereof.
"Credit Facility Debt Service Account" means the account by
that name established within the Bond Fund.
"Credit Facility Purchase Account" means the account by that
name established within the Bond Purchase Fund.
"Credit Provider" means the issuer or other provider of a
Credit Facility with respect to the Bonds as permitted under Sections 4.2 and
4.6 of the Agreement and Section V.5.8 hereof (except the Borrower), and the
respective successors and assigns of the business thereof and any surviving,
resulting or transferee entity with or into which it may be consolidated or
merged or to which it may transfer all or substantially all of its business.
"Credit Provider Bonds" means any Bonds purchased pursuant to
a Credit Facility as provided in Section V.5.8.(c)(iii) hereof for so long as
such Bonds are held by
7
<PAGE> 13
or for the account of, or are pledged to, the applicable Credit Provider in
accordance with Section V.5.8.(d) hereof.
"Daily Put Bonds" has the meaning specified in Section
IV.4.12 hereof.
"Daily Rate" means the variable interest rate on any Bond
established in accordance with Section II.2.1.(c)(ii) hereof.
"Daily Rate Period" means each period during which Daily
Rates are in effect.
"Dated Date" means July 1, 1997.
"Determination of Taxability" means a determination that, due
to the untruth or inaccuracy of any representation or warranty made by the
Borrower in the Agreement or the breach of any covenant or warranty of the
Borrower contained in the Agreement, interest on the Bonds, or any of them, is
determined not to be Tax-Exempt by a final administrative determination of the
Internal Revenue Service or a final judicial decision of a court of competent
jurisdiction in a proceeding of which the Borrower received notice and was
afforded an opportunity to participate to the full extent permitted by law. A
determination or decision will not be considered final for purposes of the
preceding sentence unless (A) the holder or holders of the Bonds involved in
the proceeding in which the issue is raised (i) shall have given the Borrower
and the Trustee prompt written notice of the commencement thereof, and (ii)
shall have offered the Borrower the opportunity to control the proceeding;
provided that the Borrower agrees to pay all expenses in connection therewith
and to indemnify such holder or holders against all liability for such expenses
(except that any such holder may engage separate counsel, and the Borrower
shall not be liable for the fees or expenses of such counsel); and (B) such
proceeding shall not be subject to a further right of appeal or shall not have
been timely appealed.
"Documents" means, collectively, the Agreement, the Guaranty
and any Credit Facility.
"DTC" means The Depository Trust Company and its successors
and assigns.
"DTC Participants" means those broker-dealers, banks and other
financial institutions from time to time for which DTC holds Bonds as
securities depository.
"Electronic" notice means notice through a time-sharing
terminal.
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<PAGE> 14
"Event of Default" as used with respect to this Indenture has
the meaning specified in Section VII.7.1 hereof, and as used with respect to
the Agreement has the meaning specified in Section 6.1 thereof.
"Facility" means the Carbon County Solid Waste Disposal
Facility located in Carbon County, Utah, and more fully described in Exhibit A
to the Agreement, at which site the Project is located.
"Government Obligations" means bonds, notes, certificates of
indebtedness, treasury bills or other securities constituting direct
obligations of, or obligations the full and timely payment of which is
guaranteed by, the United States of America, or securities evidencing ownership
interests in such obligations or in specified portions thereof (which may
consist of specific portions of the principal of or interest on such
obligations).
"Guarantor" means Laidlaw Environmental Services, Inc., a
Delaware corporation, and its successors and assigns as permitted by the
Guaranty.
"Guaranty" means the Guaranty from the Guarantor to the
Trustee, dated as of July 1, 1997, with respect to the Bonds.
"holder" or "Bondholder" means the registered owner of any
Bond.
"Indenture" means this Indenture of Trust, as originally
executed or as it may from time to time be supplemented, modified or amended by
any supplemental indenture entered into pursuant to the provisions hereof.
"Information Services" means [Financial Information, Inc.'s
"Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New
Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond
Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal
and Government," 99 Church Street, 8th Floor, New York, New York 10007,
Attention: Municipal News Reports; the Municipal Securities Rulemaking Board,
CDI Pilot, 1640 King Street, Suite 300, Alexandria, Virginia 22314; and
Standard and Poor's "Called Bond Record," 25 Broadway, 3rd Floor, New York, New
York 10004]; or, in accordance with then-current guidelines of the Securities
and Exchange Commission, such other addresses and/or such other services
providing information with respect to called bonds, or no such services, as the
Borrower may designate in a Certificate of the Borrower delivered to the
Trustee.
"Initial Rate Period" for the Bonds means the Rate Period for
the Bonds on the Issue Date as specified in Section II.2.1.(c)(i) hereof.
"Interest Coverage Period" means (x) the number of days of
interest on the Bonds (calculated at the Maximum Interest Rate) for which the
Credit Facility, if any, then
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<PAGE> 15
in effect may be drawn upon or otherwise provide payment minus (y) five (5)
days, as certified by the Borrower to the Remarketing Agent from time to time.
"Interest Payment Date" means (i) with respect to any Daily or
Weekly Rate Period, the first Business Day of each calendar month, (ii) with
respect to any Term Rate Period, each July 1 and January 1 occurring during
such Term Rate Period and the Business Day next succeeding the last day of such
Term Rate Period, and (iii) in all events, the final maturity date of each
Bond.
"Investment Securities" means any of the following: (1)
Government Obligations; (2) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the following: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Housing Finance Board,
Export-Import Bank of the United States, Federal Financing Bank, Federal Land
Banks, Federal Farm Credit Bank, Government National Mortgage Association,
Farmer's Home Administration, Federal Home Loan Mortgage Corporation or Federal
Housing Administration; (3) obligations of any state or local government the
interest on which is Tax-Exempt for which a nationally recognized rating
service is maintaining a rating within the top two ratings of such rating
service; (4) repurchase agreements with reputable financial institutions fully
secured by collateral security actually delivered to the Trustee described in
clauses (1) or (2) of this definition continuously having a market value at
least equal to the amount so invested; (5) bankers' acceptances issued by a
bank rated Aa or better by Moody's or rated AA or better by Standard & Poor's
and eligible for purchase by the Federal Reserve Bank (which may include the
Trustee and its affiliates); (6) interest-bearing demand or time deposits
(including certificates of deposit) in banks (including the Trustee and its
affiliates) and savings and loan associations, provided such deposits are (a)
secured at all times, in the manner and to the extent provided by law, by
collateral security (described in clauses (1) or (2) of this definition) of a
market value of no less than the amount of moneys so invested or (b) with banks
(including the Trustee and its affiliates) or savings and loan associations
having a combined capital and surplus of at least one hundred million dollars
($100,000,000) or (c) fully insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation; (7)
investment in or shares of any "regulated investment company" within the
meaning of Section 851(a) of the Code, the assets of which are securities or
investments described in (1) through (6) above (except for any rating
requirement); and (8) units of a money-market fund or portfolio restricted to
obligations issued by, or guaranteed by the full faith and credit of, the
United States of America.
"Issue Date" means July 9, 1997.
"Mandatory Tender Bonds" has the meaning specified in Section
IV.4.12.(c) hereof.
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<PAGE> 16
"Maximum Interest Rate" means (a) while a Credit Facility is
in effect with respect to the Bonds, the rate of interest specified in such
Credit Facility which is used to determine the amount available under such
Credit Facility for payment of interest due and payable to holders of the
Bonds, but in no event greater than 12% per annum, and (b) at all other times,
12% per annum.
"Moody's" means Moody's Investors Service, a corporation
organized and existing under the laws of the State of Delaware, its successors
and assigns.
"Notice by Mail" or "notice" of any action or condition "by
Mail" shall mean a written notice meeting the requirements of this Indenture
mailed by first class mail to the holders of specified Bonds, at the addresses
shown on the registration books maintained pursuant to Section II.2.4 hereof.
"NRMSIR" means a nationally recognized municipal securities
information repository recognized by the Securities and Exchange Commission
pursuant to Rule 15c2-12. The name and address of each NRMSIR on the date of
this Indenture are as follows: Bloomberg Municipal Repositories, P.O. Box 840,
Princeton, New Jersey 08542-0840, Phone: (609) 279-3200, Fax: (609) 279-5963;
Thomson Financial Services, Secondary Market Disclosure, 395 Hudson Street, 3rd
Floor, New York, New York 10014, Phone: (212) 807-3814, Fax: (212) 989-9282;
Disclosure, Inc., Document Acquisitions/Municipal Securities, 5161 River Road,
Bethesda, Maryland 20816-1848, Phone: (30) 951-1450 (for issuer- related
questions), (800) 638-8241 (for purchase of documents), Fax: (301) 718-2329;
JJ Kenny Information Systems, The Repository, 65 Broadway, 16th Floor, New
York, New York 10006-2503, Phone: (212) 770-4568, Fax: (212) 707-7994; Moody's
NRMSIR, Public Finance Information Center, 99 Church Street, New York, New York
10007-2796, Phone: (800) 339-6306, Fax: (212) 553-1460; and R.R. Donnelley
Financial, Attention: Municipal Securities Disclosure Archive, 559 Main Street,
Hudson, Massachusetts 01749, Phone: (800) 580-3670, Fax: (508) 562-1969.
"Opinion of Counsel" means a written opinion of counsel (who
may be counsel for the Borrower [or the Guarantor]) acceptable to the Trustee,
the County and the Borrower. If and to the extent required by the provisions
of Section I.1.4, each Opinion of Counsel shall include the statements provided
for in Section I.1.4.
"Other Company Debt" means (i) any debt of the Borrower or its
subsidiaries on a parity with or superior to the Bonds, which is secured by
assets of the Borrower or any of its subsidiaries (including, but not limited
to, up to $650,000,000 in credit facilities given by a consortium of banks and
other financial institutions to the Borrower as of the Issue Date, or any
replacement thereof) and (ii) the loan agreements and/or guaranties relating to
$19,500,000 aggregate principal amount of California Pollution Control
Financing Authority Pollution Control Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A and $45,700,000 aggregate
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principal amount of Tooele County, Utah Pollution Control Refunding Revenue
Bonds (Laidlaw Environmental Services, Inc.) 1997 Series A.
"Outstanding," when used as of any particular time with
reference to Bonds (subject to the provisions of Section XI.11.6.(e)), means
all Bonds theretofore authenticated and delivered by the Registrar or the
Tender Agent under this Indenture except:
(a) Bonds theretofore cancelled by the Registrar or
surrendered to the Registrar for cancellation;
(b) Bonds in lieu of or in substitution for which other
Bonds shall have been authenticated and delivered by the Registrar
pursuant to the terms of Section II.2.6;
(c) Bonds with respect to which the liability of the
County, the Borrower and the Guarantor have been discharged to the
extent provided in, and pursuant to the requirements of, Section
X.10.2; and
(d) Bonds deemed purchased pursuant to Section IV.4.9
hereof.
"Paying Agent" means any paying agent appointed as provided in
Section VI.6.3 hereof, or any successor thereto.
"Permitted Termination" means, with respect to any Credit
Facility, any termination that has been approved by the County without
provision being made for a substitute Credit Facility in accordance with
Section 4.6(b)(i) of the Agreement.
"person" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Placement Agreement" means the Bond Placement Agreement,
dated July 2, 1997, among the County, the Borrower, the Guarantor and the
Placement Agent for the Bonds named therein, relating to the purchase from the
County and the placement of the Bonds with the purchasers thereof.
"Principal Office" (i) of the Tender Agent, the Registrar or
the Paying Agent means the office thereof designated in writing by the Tender
Agent, the Registrar or the Paying Agent, as the case may be, to the County,
the Trustee, the Credit Provider, if any, and the Borrower, which initially
shall be located in Salt Lake City, Utah at the address set forth in Section
XI.11.5 hereof; (ii) of the Trustee means the principal corporate trust office
of the Trustee designated in writing to the County, the Registrar, the Paying
Agent, the Tender Agent, the Credit Provider, if any, and the Borrower, which
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initially shall be located in Salt Lake City, Utah at the address set forth in
Section XI.11.5 hereof; (iii) of the Remarketing Agent means its office
designated in writing to the County, the Trustee, the Tender Agent, the Credit
Provider, if any, and the Borrower; (iv) of the Credit Provider, if any, means
its office located at such address as such Credit Provider shall designate in
writing to the County, the Trustee, the Tender Agent and the Borrower; and (v)
of the Guarantor means its office designated in writing to the County, the
Trustee, the Tender Agent, the Credit Provider, if any, and the Borrower.
"Prior Bonds" has the meaning assigned to such term in the
recitals to this Indenture.
"Project" means those facilities, including real property,
structures, buildings, fixtures or equipment, described in Exhibit A to the
Agreement, as it may be amended from time to time, which facilities were
financed or refinanced, in whole or in part, from the proceeds of the sale of
the Prior Bonds, and any real property, structures, buildings, fixtures or
equipment acquired in substitution for, as a renewal or replacement of, or a
modification or improvement to, all or any part of the facilities described in
said Exhibit A.
"Project Costs" or "Costs" means any cost of the Project or in
respect of the Project now or hereafter permitted under the Act. Without
limiting the generality of the foregoing, such costs may include: (i) amounts
payable to contractors and suppliers (including fees for designing the Project
where the designs are provided by the contractor or supplier); (ii) costs of
labor, services, materials, supplies and equipment furnished by the Borrower
(including shipping costs) plus the Borrowers's standard overhead charge; (iii)
architectural, engineering, legal and other professional fees, marketing costs
and brokerage commissions; (iv) costs of funding a reserve to the extent
permitted by the Code; (v) interest on the Bonds to the extent permitted by the
Act; (vi) costs of financing including but not limited to bond discount,
printing expense, mortgage taxes and recording fees, County and Trustee fees
accruing prior to completion of the Project, and legal and accounting fees.
"PSA Municipal Index" means the Public Securities Association
Municipal Index as of the most recent date for which such index was published
or such other weekly, high-grade index comprised of seven-day, Tax-Exempt
variable rate demand notes produced by Municipal Market Data, Inc., or its
successor, or as otherwise designated by the Public Securities Association;
provided, however, that, if such index is no longer produced by Municipal
Market Data, Inc. or its successor, then "PSA Municipal Index" shall mean such
other reasonably comparable index selected by the Borrower.
"Purchase Date" means any date on which any Bond is required
to be purchased pursuant to Section IV.4.6 or IV.4.7 hereof.
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"Qualified Newspaper" means The Wall Street Journal or The
Bond Buyer or any other newspaper or journal containing financial news, printed
in the English language and customarily published on each Business Day, of
general circulation in New York, New York, and selected by the Borrower and
designated to the Trustee.
"Qualified Project Costs" means the Project Costs, but only to
the extent such costs were paid or incurred by the Borrower after [April 25,
1991] and only to the extent that such costs are incurred for the acquisition,
development, construction, equipping and furnishing, or improvement of land or
property of a character subject to the allowance for depreciation provided in
Section 167 of the Code and are chargeable to the capital account of the
Project or would be so chargeable either with a proper election by the Borrower
or but for a proper election by the Borrower to deduct such costs, within the
meaning of Treasury Regulation Section 1.103-8(a)(1), as the same may be
amended or supplemented from time to time. "Qualified Project Costs" shall not
include (i) working capital and inventory costs, (ii) costs of issuance, and
(iii) interest following completion of construction of the Project. Interest
during construction of the Project shall be allocated proportionately between
Qualified Project Costs and other costs paid from Bond proceeds.
"Proceeds Certificate" means the Proceeds Certificate, dated
as of the delivery date of the Bonds, by and among the County, the Borrower and
the Guarantor, as the same may be amended from time to time.
"Rate Period" means any Daily Rate Period, Weekly Rate Period
or Term Rate Period.
"Rating Agency" means Moody's or Standard & Poor's to the
extent they then are providing or maintaining a rating on the Bonds at the
request of the Borrower, or in the event that Moody's or Standard & Poor's no
longer maintains a rating on the Bonds, any other nationally recognized rating
agency then providing or maintaining a rating on the Bonds at the request of
the Borrower.
"Rebate Fund" means the fund by that name established and held
by the Trustee in accordance with Section VI.6.6 hereof.
"Rebate Requirement" has the meaning assigned to such term in
the Tax Certificate.
"Record Date" means (a) with respect to any Interest Payment
Date in respect of any Daily Rate Period or Weekly Rate Period, the Business
Day next preceding such Interest Payment Date; and (b) with respect to any
Interest Payment Date in respect of any Term Rate Period, the fifteenth day
(whether or not a Business Day) next preceding such Interest Payment Date.
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"Registrar" means any registrar appointed as provided in
Section VIII.8.12 hereof, or any successor thereto.
"Remarketing Agent" means the Remarketing Agent for the Bonds,
if any, selected by the Borrower with the approval of the County pursuant to
Section VIII.8.16 hereof.
"Remarketing Agreement" means any agreement which meets the
requirements of Section VIII.8.16 hereof.
"Repayment Installment" means any amount that the Borrower is
required to pay to the Trustee pursuant to Section 4.2(a) of the Agreement as a
repayment of the loan made by the County under the Agreement.
"Representation Letter" has the meaning specified in Section
II.2.1.(d) hereof.
"Responsible Officer" of the Trustee means and includes the
chair of the board of directors, the president, every vice president, every
assistant vice president, every trust officer, and every officer and assistant
officer of the Trustee other than those specifically above mentioned, to whom
any corporate trust matter is referred because of his or her knowledge of, and
familiarity with, a particular subject.
"Revenues" means all rents, receipts, installment payments and
other income derived by the County or the Trustee under the Agreement or
otherwise in respect of the refinancing of the Project as contemplated by the
Agreement, and any income or revenue derived from the investment of any money
in any fund or account established pursuant to this Indenture [other than the
Bond Purchase Fund, the Rebate Fund and the accounts therein], including all
Repayment Installments, amounts received under any Credit Facility to pay
principal of and interest on the Bonds and any other payments made by the
Borrower with respect to the Bonds pursuant to the Agreement; provided,
however, that such term shall not include payments to the County or the Trustee
pursuant to Sections 4.2(c), 4.2(d), 5.6, 6.3, 8.2 and 8.3 of the Agreement.
"Rule 15c2-12" means Rule 15c2-12 adopted by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended.
"Securities Depositories" means The Depository Trust Company,
711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190;
Midwest Securities Trust Company, Capital Structures-Call Notification, 440
South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia
Depository Trust Company, Reorganization Division, 1900 Market Street,
Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215)
496-5058; or, in accordance with then-current guidelines of the Securities and
Exchange Commission, such other addresses and/or such
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other securities depositories, or no such depositories, as the County may
designate in a Certificate of the County delivered to the Trustee.
"Series 1992 Bonds" means the County's Solid Waste Disposal
Revenue Bonds (East Carbon Landfill Project - Series 1992) issued in the
original aggregate principal amount of $35,167,500.
"Series 1992 Loan and Trust Agreement" means the Loan and
Trust Agreement dated May 1, 1992, by and between the County and the Borrower
(formerly known as East Carbon Development Corporation, a Utah corporation)
which authorized the issuance of the Series 1992 Bonds.
"Short-Term Taxable Bonds" has the meaning assigned to such
term in the recitals to this Indenture.
"SID" means the state information depository, if any, of the
State recognized by the Securities and Exchange Commission pursuant to Rule
15c2-12.
"Standard & Poor's" means Standard & Poor's Ratings Group, a
corporation organized and existing under the laws of the State of New York, its
successors and assigns.
"State" means the State of Utah.
"supplemental indenture" or "indenture supplemental hereto"
means any indenture hereafter duly authorized and entered into between the
County and the Trustee in accordance with the provisions of this Indenture.
"Tax-Exempt" means, with respect to interest on any
obligations of a state or local government, including the Bonds, that such
interest is excluded from the gross income of the holders thereof (other than
any holder who is a "substantial user" of facilities financed with such
obligations or a "related person" within the meaning of Section 147(a) of the
Code) for federal income tax purposes, whether or not such interest is
includable as an item of tax preference or otherwise includable directly or
indirectly for purposes of calculating other tax liabilities, including any
alternative minimum tax or environmental tax under the Code.
"Tender Agent" means the tender agent for the Bonds, if any,
selected by the County with the advice and consent of the Borrower and the
Guarantor and meeting the requirements of Section VIII.8.15 hereof.
"Term Rate" means a non-variable interest rate on any Bond
established in accordance with Section II.2.1.(c)(iv) hereof.
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"Term Rate Period" means each period with a duration of one
month or any multiple thereof (which may be expressed as multiples of months or
years) or the entire period until final maturity of the Bonds, during which a
particular Term Rate is in effect.
"Trustee" means the United States National Bank of Oregon,
doing business as U.S. Bank, a national banking association organized under the
laws of the United States, and its successors and assigns or any successor
trustee appointed pursuant to Section VIII.8.8 hereof.
"Weekly Put Bonds" has the meaning specified in Section
IV.4.12 hereof.
"Weekly Rate" means the variable interest rate on the Bonds
established in accordance with Section II.2.1.(c)(iii) hereof.
"Weekly Rate Period" means each period during which Weekly
Rates are in effect.
"Written Consent of the County," "Written Order of the
County," and "Written Request of the County" mean, respectively, a written
consent, order or request signed by or on behalf of the County by an Authorized
County Representative.
"Yield" shall have the meaning ascribed to such term by
Section 148(h) of the Code.
Section 1.2. Number and Gender. The singular form of any word
used herein, including the terms defined in Section I.1.1, shall include the
plural, and vice versa. The use herein of a word of any gender shall include
all genders.
Section 1.3. Articles, Sections, Etc. All references herein to
"Articles," "Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Indenture as originally executed;
and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or subdivision hereof. The headings or titles of the several Articles and
Sections hereof, and any table of contents appended to copies hereof, shall be
solely for convenience of reference and shall not affect the meaning,
construction or effect of this Indenture.
Section 1.4. Content of Certificates and Opinions. Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture or the Agreement (except for the certificate of
cancelled Bonds provided for in Sections II.2.6, II.2.7, IV.4.5 and VI.6.1
hereof) shall include (a) a statement that the person or persons making or
giving such certificate or opinion have read such covenant or condition and the
definitions herein relating thereto; (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
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contained in such certificate or opinion are based; (c) a statement that, in
the opinion of the signers, they have made or caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (d) a statement as to whether, in the opinion of the
signers, such condition or covenant has been complied with.
Any such certificate or opinion made or given by an officer of
the County, the Borrower or the Guarantor may be based, insofar as it relates
to legal matters, upon a certificate or opinion of or representations by
counsel, unless such officer knows that the certificate or opinion or
representations with respect to the matters upon which his or her certificate
or opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous. Any such
certificate or opinion made or given by counsel may be based, insofar as it
relates to factual matters (with respect to which information is in the
possession of the County, the Borrower or the Guarantor), upon the certificate
or opinion of or representations by an officer of the County, the Borrower, or
the Guarantor, as applicable, unless such counsel knows that the certificate or
opinion or representations with respect to the matters upon which his or her
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
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ARTICLE II
THE BONDS
Section
2.1. Authorization and Terms of Bonds.
(a) Authorization. Bonds designated as "Carbon County,
Utah Solid Waste Disposal Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A", may be issued under this
Indenture. The aggregate principal amount of Bonds which may be
issued and Outstanding under this Indenture shall not exceed Twenty
Million Dollars ($20,000,000), exclusive of Bonds executed and
authenticated as provided in Section II.2.6.
(b) General Terms. The Bonds shall be issued as fully
registered Bonds, without coupons, in Authorized Denominations and
shall all be dated as of the Dated Date. The Bonds shall mature,
subject to prior redemption as provided in Article IV, upon the terms
and conditions hereinafter set forth, on July 1, 2017.
The Bonds shall bear the letter prefix "RA-" and be numbered
consecutively from 1 upward. Each Bond shall bear interest from the
last date to which interest has been paid in full or duly provided for
on such Bond, or, if no interest has been paid or duly provided for on
such Bond, from the Dated Date. Payment of the interest on any Bond
shall be made to the person appearing on the bond registration books
of the Registrar as the registered holder thereof as of the close of
business on the Record Date, such interest to be paid by the Paying
Agent to such registered holder (i) in the event such Bond is a
Book-Entry Bond, in immediately available funds on the Interest
Payment Date in accordance with the Representation Letter, (ii) in the
event such Bond is a Credit Provider Bond but is not a Book-Entry
Bond, in immediately available funds on the Interest Payment Date by
wire transfer in accordance with written instructions provided by the
Credit Provider to the Registrar prior to such Interest Payment Date;
and (iii) in the event such Bond is neither a Book-Entry Bond nor a
Credit Provider Bond, (A) in immediately available funds (by wire
transfer or by deposit to the account of the holder of any such Bond
if such account is maintained with the Paying Agent), according to the
instructions given by such holder to the Registrar or (B) in all other
cases, by check mailed by first class mail to the holder at such
holder's address as it appears as of the Record Date on the
registration books of the Registrar; except, in each case, that, if
and to the extent that there shall be a default in the payment of the
interest due on such Interest Payment Date, such defaulted interest
shall be paid to the holders in whose name any such Bonds are
registered as of a special record date to be fixed by the Trustee,
notice of which shall be given to such holders not less than ten (10)
days prior thereto. Both the principal of and premium, if any,
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on the Bonds shall be payable upon surrender thereof in lawful money
of the United States of America at the Principal Office of the Paying
Agent.
(c) Interest Rates and Rate Periods. The Bonds shall
bear interest until final payment of the principal or redemption price
thereof shall have been made in accordance with the provisions hereof,
whether at maturity, upon redemption or otherwise. During Daily Rate
Periods, interest on the Bonds shall be computed on the basis of a
365- or 366-day year for the number of days actually elapsed during
Daily Rate Periods. During Weekly Rate Periods, interest on the Bonds
shall be computed on the basis of a 365- or 366-day year for the
number of days actually elapsed based on the calendar year in which
the Weekly Rate Period commences. During any Term Rate Period
interest on the Bonds shall be computed upon the basis of a 360-day
year, consisting of twelve 30-day months. The Bonds shall bear
interest for the periods and at the rates set forth in this subsection
II.2.1.(c).
(i) Rate Period; Initial Rate Period. The term
of the Bonds shall be divided into consecutive Rate Periods
during which the Bonds shall bear interest at the Daily Rate,
Weekly Rate or Term Rate. The Initial Rate Period for the
Bonds shall be a Term Rate Period ending July 1, 2017 and the
Bonds shall bear interest at the rate of 7.45% per annum.
The Rate Period with respect to the Bonds shall be as
provided above until adjusted as provided herein. Except as
otherwise provided herein, any Daily Rate Period or Weekly
Rate Period established with respect to the Bonds shall
continue in effect unless and until adjusted to a different
Rate Period as provided herein.
(ii) Daily Rate.
(A) Determination of Daily Rate. During
each Daily Rate Period, the Bonds shall bear interest
at the Daily Rate, determined by the Remarketing
Agent on or before each Business Day for such
Business Day. The Daily Rate shall be the rate
determined by the Remarketing Agent to be the lowest
rate which would enable the Remarketing Agent to sell
the Bonds for delivery on the effective date of such
rate at a price (without regard to accrued interest)
equal to 100% of the principal amount thereof. The
Remarketing Agent shall provide the Trustee and the
Borrower with telephonic or Electronic notice of the
Daily Rate determined by 10:30 a.m. (New York City
time) on the date of determination. If the
Remarketing Agent shall not have determined a Daily
Rate for any day by 10:30 a.m. (New York City time)
on such day, the Daily Rate shall be the same as the
Daily Rate for the immediately
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preceding day. In no event shall the Daily Rate be
greater than the Maximum Interest Rate.
(B) Adjustment to a Daily Rate Period.
At any time, the Borrower, by written notice to the
County, the Trustee, the Paying Agent, the
Remarketing Agent and the Credit Provider, if any,
may elect that the Bonds shall bear interest at a
Daily Rate. Such notice (1) shall specify the
effective date of such adjustment to a Daily Rate,
which shall be (a) a Business Day not earlier than
twenty-five (25) days (thirty-one (31) days if the
then current Rate Period is a Term Date Period of six
months or longer) after delivery of such notice (or
such shorter period as shall be acceptable to the
Trustee); (b) in the case of an adjustment from a
Term Rate Period, a day on which the Bonds would be
permitted to be redeemed at the option of the
Borrower pursuant to Section IV.4.1.(a)..(2)(B)
hereof; and (c) in the case of an adjustment from a
Weekly Rate Period, an Interest Payment Date on which
interest is payable for the Weekly Rate Period from
which the adjustment is to be made; provided,
however, that if prior to the Borrower's making such
election, any Bonds shall have been called for
redemption and such redemption shall not have
theretofore been effected, the effective date of such
Daily Rate Period shall not precede such redemption
date; and (2) if the adjustment is from a Term Rate
Period, shall be accompanied by an opinion of Bond
Counsel addressed to the Trustee to the effect that
such adjustment (a) is authorized or permitted by the
Indenture and the Act, and (b) will not adversely
affect the Tax-Exempt status of the interest on the
Bonds.
(C) Notice of Adjustment to a Daily Rate
Period. The Trustee shall give Notice by Mail of an
adjustment to a Daily Rate Period to the holders of
the Bonds not less than fifteen (15) days (thirty
(30) days if the then current Rate Period is a Term
Rate Period of six months or longer) prior to the
effective date of such Daily Rate Period. Such
notice shall state (1) that the interest rate on the
Bonds will be adjusted to a Daily Rate (subject to
the Borrower's ability to rescind its election as
described in Section II.2.1.(c)(vii) hereof), (2) the
effective date of the Daily Rate Period, (3) that the
Bonds are subject to mandatory tender for purchase on
such effective date (except in the case of
adjustments between Daily Rate Periods and Weekly
Rate Periods), (4) the procedures for such mandatory
tender, and (5) the purchase price of the Bonds on
such effective date which purchase price shall be par
plus accrued interest and a premium, if any, equal to
the
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optional redemption premium that would be payable by
the County if the Bonds were redeemed on the
Conversion Date.
(iii) Weekly Rate.
(A) Determination of Weekly Rate.
During each Weekly Rate Period, the Bonds shall bear
interest at the Weekly Rate, determined by the
Remarketing Agent no later than the first day of such
Weekly Rate Period and thereafter no later than 10:00
a.m. (New York City time) on Wednesday of each week
during such Weekly Rate Period, unless any such
Wednesday shall not be a Business Day, in which event
the Weekly Rate shall be determined by the
Remarketing Agent no later than the Business Day next
preceding such Wednesday. The Weekly Rate shall be
the rate determined by the Remarketing Agent to be
the lowest rate which would enable the Remarketing
Agent to sell the Bonds for delivery on the effective
date of such rate at a price (without regard to
accrued interest) equal to 100% of the principal
amount thereof. If the Remarketing Agent shall not
have determined a Weekly Rate for any period by the
time specified above, the Weekly Rate shall be the
same as the Weekly Rate in effect for the immediately
preceding week. In no event shall any Weekly Rate be
greater than the Maximum Interest Rate. The first
Weekly Rate determined for each Weekly Rate Period
shall apply to the period commencing on the first day
of such Weekly Rate Period and ending on the next
succeeding Tuesday. Thereafter, each Weekly Rate
shall apply to the period commencing on each
Wednesday and ending on the next succeeding Tuesday,
unless such Weekly Rate Period shall end on a day
other than Tuesday, in which event the last Weekly
Rate for such Weekly Rate Period shall apply to the
period commencing on the Wednesday preceding the last
day of such Weekly Rate Period and ending on such
last day. The Remarketing Agent shall provide the
Trustee and the Borrower with written, telephonic or
Electronic notice of each Weekly Rate, as determined,
by 12:00 noon (New York City time) on the effective
date of such Weekly Rate.
(B) Adjustment to a Weekly Rate Period.
At any time, the Borrower, by written notice to the
County, the Trustee, the Paying Agent, the
Remarketing Agent and the Credit Provider, if any,
may elect that the Bonds shall bear interest at a
Weekly Rate. Such notice (1) shall specify the
effective date of such adjustment to a Weekly Rate,
which shall be (a) a Business Day not earlier than
twenty-five (25) days after delivery of such notice
(or such shorter period as shall be acceptable to the
Trustee); (b) in the case of an
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adjustment from a Term Rate Period, a day on which
the Bonds would be permitted to be redeemed at the
option of the Borrower pursuant to Section
IV.4.1.(a)..(2)(B) hereof; and (c) in the case of an
adjustment from a Daily Rate Period, an Interest
Payment Date on which interest is payable for the
Daily Rate Period from which the adjustment is to be
made; provided, however, that if prior to the
Borrower's making such election, any Bonds shall have
been called for redemption and such redemption shall
not have theretofore been effected, the effective
date of such Weekly Rate Period shall not precede
such redemption date; and (2) if the adjustment is
from a Term Rate Period, shall be accompanied by an
opinion of Bond Counsel addressed to the Trustee to
the effect that such adjustment (a) is authorized or
permitted by the Indenture and the Act, and (b) will
not adversely affect the Tax-Exempt status of
interest on the Bonds.
(C) Notice of Adjustment to a Weekly
Rate Period. The Trustee shall give Notice by Mail
of an adjustment to a Weekly Rate Period to the
holders of the Bonds not less than fifteen (15) days
(thirty (30) days if the then current Rate Period is
a Term Rate Period of six months or longer) prior to
the effective date of such Weekly Rate Period. Such
notice shall state (1) that the interest rate on the
Bonds will be adjusted to a Weekly Rate (subject to
the Borrower's ability to rescind its election as
provided in Section II.2.1.(c)(vii) hereof), (2) the
effective date of the Weekly Rate Period, (3) that
the Bonds are subject to mandatory tender for
purchase on such effective date (except in the case
of adjustments between Daily Rate Periods and Weekly
Rate Periods), (4) the procedures for such mandatory
tender, and (5) the purchase price of such Bonds on
such effective date which purchase price shall be par
plus accrued interest and a premium, if any, equal to
the optional redemption premium that would be payable
by the County if the Bonds were redeemed on the
Conversion Date.
(iv) Term Rate.
(A) Determination of Term Rate. During
each Term Rate Period, the Bonds shall bear interest
at the Term Rate, which shall be determined by the
Remarketing Agent on a Business Day selected by the
Remarketing Agent, but not more than forty (40) days
prior to and not later than the effective date of
such Term Rate Period. The Term Rate shall be the
rate determined by the Remarketing Agent on such
date, and communicated by the close of business on
such date to the Trustee, the Paying Agent and the
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Borrower, by written, telephonic or Electronic
notice, as being the lowest rate which would enable
the Remarketing Agent to sell the Bonds for delivery
on the effective date of such Term Rate Period at a
price (without regard to accrued interest) equal to
100% of the principal amount thereof; provided,
however, that if, for any reason, a Term Rate for any
Term Rate Period shall not be determined or effective
or if an adjustment from a Term Rate Period to
another Rate Period shall not be effective, the Rate
Period for the Bonds shall automatically convert to a
Daily Rate Period. No opinion of Bond Counsel shall
be required in connection with the automatic
adjustment to the Daily Rate pursuant to this
paragraph. If a Daily Rate for the first day of such
Daily Rate Period is not determined as provided in
Section II.2.1.(c)(ii) hereof, the Daily Rate for the
first day of such Daily Rate Period shall be equal to
the PSA Municipal Index. In no event shall any Term
Rate be greater than the Maximum Interest Rate.
(B) Adjustment to or Continuation of a
Term Rate Period. At any time, the Borrower, by
written notice to the County, the Trustee, the Paying
Agent, the Remarketing Agent and the Credit Provider,
if any, may elect that the Bonds shall bear, or
continue to bear, interest at a Term Rate, and if it
shall so elect, shall determine the duration of the
Term Rate Period during which the Bonds shall bear
interest at such Term Rate. Each Term Rate Period
shall have a duration such that the last day of such
Term Rate Period is (1) a day which both immediately
precedes a Business Day and is at least one (1) year
after the effective date of such Term Rate Period or
(2) if earlier, the day immediately preceding the
final maturity date of the Bonds. At the time the
Borrower so elects an adjustment to or continuation
of a Term Rate Period, the Borrower may specify two
or more consecutive Term Rate Periods and, if the
Borrower so specifies, shall specify the duration of
each such Term Rate Period as provided in this
paragraph (B). Such notice shall specify the
effective date of each Term Rate Period, which shall
be (1) a Business Day not earlier than twenty-five
(25) days after delivery of such notice (or such
shorter period as shall be acceptable to the
Trustee); (2) in the case of an adjustment from or
continuation of a Term Rate Period, a day on which
the Bonds would be permitted to be redeemed at the
option of the Borrower pursuant to Section
IV.4.1.(a)..(2)(B) hereof; and (3) in the case of an
adjustment from a Daily or Weekly Rate Period, an
Interest Payment Date on which interest is payable
for the Daily or Weekly Rate Period from which the
adjustment is to be made; provided, however, that if
prior to the Borrower's
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making such election, any Bonds shall have been
called for redemption and such redemption shall not
have theretofore been effected, the effective date of
such Term Rate Period shall not precede such
redemption date. In addition, such notice (i) shall
specify the last day of such Term Rate Period, and
(ii) if the adjustment is from a Daily or Weekly Rate
Period, shall be accompanied by an opinion of Bond
Counsel addressed to the Trustee to the effect that
such adjustment (a) is authorized or permitted by the
Indenture and the Act, and (b) will not adversely
affect the Tax-Exempt status of interest on the
Bonds.
If, by the thirty-fifth day prior to the last
day of any Term Rate Period, the Trustee shall not
have received notice of the Borrower's election that,
during the next succeeding Rate Period, the Bonds
shall bear interest at a Daily Rate, a Weekly Rate or
a Term Rate accompanied by appropriate opinions of
Bond Counsel, if required by Section
II.2.1.(c)(ii)..(B), II.2.1.(c)(iii)..(B), or
II.2.1.(c)(iv)..(B) hereof, the next succeeding Rate
Period for the Bonds shall be a Daily Rate Period.
No opinion of Bond Counsel shall be required in
connection with the automatic adjustment to the Daily
Rate pursuant to this paragraph. If a Daily Rate for
the first day of such Daily Rate Period is not
determined as provided in Section II.2.1.(c)(ii)
hereof, the Daily Rate for the first day of such
Daily Rate Period shall be equal to the PSA Municipal
Index. The Trustee shall give Notice by mail of the
automatic adjustment to the Daily Rate pursuant to
this paragraph in the manner provided below in
Section II.2.1.(c)(iv)..(C)
At the same time that the Borrower elects to
have the Bonds bear interest at a Term Rate or
continue to bear interest at a Term Rate, the
Borrower may also specify to the Trustee optional
redemption prices and periods different (including
that there be no such optional redemption) from those
set out in Section IV.4.1.(a) during the Term Rate
Period(s) with respect to which such election is
made; provided, however, that such notice shall be
accompanied by an opinion of Bond Counsel addressed
to the Trustee to the effect that such changes (i)
are authorized or permitted by the Act and this
Indenture, and (ii) will not adversely affect the
Tax-Exempt status of interest on the Bonds.
(C) Notice of Adjustment to or
Continuation of a Term Rate Period. The Trustee
shall give Notice by Mail of an adjustment to or
continuation of a Term Rate Period to the holders of
the Bonds not less than fifteen (15) days (thirty
(30) days if the
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then current Rate Period is a Term Rate Period of six
months or longer) prior to the effective date of such
Term Rate Period. Such notice shall state (1) that
the interest rate on the Bonds will be adjusted to,
or continue to be, a Term Rate (subject to the
Borrower's ability to rescind its election as
provided in Section II.2.1.(c)(vii) hereof), (2) the
effective date of the Term Rate Period, (3) that the
Bonds shall be subject to mandatory tender for
purchase on such effective date (except in the case
of the effective date of a Term Rate Period which is
preceded by a Term Rate Period of the same duration),
(4) the procedures for such mandatory tender, and (5)
the purchase price of the Bonds on such effective
date which purchase price shall be par plus accrued
interest and a premium, if any, equal to the optional
redemption premium that would be payable by the
County if the Bonds were redeemed on the Conversion
Date.
(v) Terms of Credit Facility. If a Credit
Facility in the form of a letter of credit is to be held by
the Trustee after the effective date of any adjustment from
one Rate Period to another Rate Period, such Credit Facility
shall be in an amount sufficient to provide payment of (x) the
principal amount of the Outstanding Bonds plus (y) the amount
of interest (computed on the basis of a 365-day year in the
case of an adjustment to a Daily Rate Period or Weekly Rate
Period, and on the basis of a 360-day year consisting of
twelve 30-day months in the case of an adjustment to a Term
Rate Period) which will accrue on the Outstanding Bonds for a
period equal to the maximum number of days between Interest
Payment Dates during the new Rate Period plus five (5) days.
In the case of an adjustment to a Term Rate Period, the Credit
Facility, if any, to be in effect after the effective date of
such adjustment shall (i) extend for a period ending on a date
no earlier than five (5) days after the first date on which
the Bonds may be called for redemption pursuant to Section
IV.4.1.(a)..(2)(B) and (ii) cover the premium, if any, which
would be included in the purchase price upon mandatory
purchase of the Bonds pursuant to Section IV.4.7.(a)..(2)
hereof if the term of such Credit Facility were not extended
beyond the expiration date set forth therein.
(vi) Determination Conclusive. The determination
of any Daily Rate, Weekly Rate and Term Rate and the
calculation of interest payable on the Bonds by the
Remarketing Agent shall be conclusive and binding upon such
Remarketing Agent, the Trustee, the Paying Agent, the County,
the Borrower, the holders of the Bonds and the Credit
Provider, if any.
(vii) Rescission of Election. Notwithstanding
anything herein to the contrary, the Borrower may rescind any
election by it to adjust to or
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<PAGE> 32
continue a Rate Period pursuant to Section
II.2.1.(c)(ii)..(B), II.2.1.(c)(iii)..(B) or
II.2.1.(c)(iv)..(B) hereof prior to the effective date of such
adjustment or continuation by giving written notice thereof to
the County, the Trustee and the Remarketing Agent prior to
such effective date. If the Trustee receives notice of such
rescission prior to the time the Trustee has given notice to
the holders of the Bonds pursuant to Section
II.2.1.(c)(ii)..(C), II.2.1.(c)(iii)..(C) or
II.2.1.(c)(iv)..(C) as applicable, then the notice of
adjustment or continuation previously delivered by the
Borrower shall be of no force and effect. If the Trustee
receives notice from the Borrower of rescission of an
adjustment to or continuation of a Rate Period after the
Trustee has given notice to the holders of the Bonds pursuant
to Section II.2.1.(c)(ii)..(C), II.2.1.(c)(iii)..(C) or
II.2.1.(c)(iv)..(C) as applicable, then (a) the Rate Period
for the Bonds shall automatically adjust to a Daily Rate
Period on the date originally scheduled for such adjustment or
continuation and (b) the Trustee shall give immediate Notice
by mail of the automatic adjustment to the Daily Rate pursuant
to this paragraph in a manner similar to that provided for in
Section II.2.1.(c)(iv)..(C). No opinion of Bond Counsel shall
be required in connection with the automatic adjustment to a
Daily Rate Period pursuant to this paragraph. If a Daily Rate
for the first day of such Daily Rate Period is not determined
as provided in Section II.2.1.(c)(ii) hereof, the Daily Rate
for the first day of such Daily Rate Period shall be equal to
the PSA Municipal Index.
(d) Form of Bonds. The Bonds may be engraved, printed,
lithographed or typewritten, shall be in Authorized Denominations and
may contain such references to any of the provisions of this Indenture
as may be appropriate. The Bonds and the certificate of
authentication to be executed thereon shall be in substantially the
form attached hereto as Exhibit A, with such appropriate variations,
omissions and insertions as are permitted or required by this
Indenture. Pursuant to recommendations promulgated by the Committee
on Uniform Security Identification Procedures, "CUSIP" numbers may be
printed on the Bonds. The Bonds may bear such endorsement or legend
relating thereto as may be required to conform to usage or law with
respect thereto. If appropriate, the Bonds may be printed with a
portion of the text printed on the reverse side thereof and with a
legend printed on the front referring to such text to the following
effect: "Reference is hereby made to the further provisions of this
Bond set forth on the back hereof and such further provisions are
hereby incorporated by reference as if set forth here in full." Upon
adjustment to a Term Rate Period, the form of Bond may include a
summary of the mandatory and optional redemption provisions to apply
to the Bonds during such Term Rate Period, or a statement to the
effect that the Bonds will not be optionally redeemed during such Term
Rate Period, provided that the Registrar shall not authenticate such a
revised Bond form prior to receiving an opinion of Bond Counsel that
such Bond form conforms to the
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<PAGE> 33
terms of the Act and of this Indenture and that authentication thereof
will not adversely affect the Tax-Exempt status of the Bonds.
(e) Book-Entry System. Unless otherwise determined by
the County, the Bonds shall be issued in the form of one or more
separate single certificated fully registered Bond or Bonds,
registered in the name of Cede & Co., as nominee of DTC, or any
successor nominee (the "Nominee"). Except as provided in paragraph
(iii) below, all of the Outstanding Bonds shall be so registered in
the registration books kept by the Registrar, and the provisions of
this Section II.2.1.(d) shall apply thereto.
(f) (i) The County, the Borrower, the Paying Agent,
the Registrar, the Tender Agent, the Remarketing Agent, the
Trustee and the Guarantor shall have no responsibility or
obligation to any DTC Participant or to any Beneficial Owner,
except as otherwise expressly provided herein. Without
limiting the immediately preceding sentence, the County, the
Borrower, the Paying Agent, the Registrar, the Tender Agent,
the Remarketing Agent, the Trustee and the Guarantor shall
have no responsibility or obligation with respect to (1) the
accuracy of the records of DTC, the Nominee or any DTC
Participant with respect to any ownership interest in the
Bonds, (2) the delivery to any DTC Participant or any other
person, other than a Bondholder as shown in the registration
books kept by the Registrar, of any notice with respect to the
Bonds, including any notice of redemption (except that the
Trustee and the Tender Agent shall have the obligation to
deliver notices of optional and mandatory tender to the
Remarketing Agent as provided herein) or (3) the payment to
any DTC Participant or any other person, other than a
Bondholder, as shown in the registration books kept by the
Registrar, of any amount with respect to principal or purchase
price of, premium, if any, or interest on the Bonds. The
Paying Agent shall pay all principal and purchase price of,
premium, if any, and interest on the Bonds only to or upon the
order of the respective Bondholders, as shown in the
registration books kept by the Registrar, or their respective
attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge
the County's obligations with respect to payment of principal
of, premium, if any, and interest on the Bonds to the extent
of the sum or sums so paid. The County, the Borrower, the
Paying Agent, the Registrar, the Tender Agent, the Remarketing
Agent, the Trustee and the Guarantor may treat and consider
the person in whose name each Bond is registered in the
registration books kept by the Registrar as the holder and
absolute owner of such Bond for the purpose of payment of
principal, purchase price, premium and interest with respect
to such Bond, for the purpose of giving notices of redemption
and other matters with respect to such Bond, for the purpose
of registering transfers with respect to such Bond, and for
all other purposes whatsoever; provided,
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<PAGE> 34
however, notwithstanding the foregoing provisions, the Tender
Agent shall accept any notice of optional tender pursuant to
Section IV.4.6 from any Beneficial Owner of any Book-Entry
Bond, but shall make payment of the purchase price thereof
only to the registered owner of such Bond in the manner
provided in the Representation Letter (as defined below).
(ii) No person other than a Bondholder, as shown
in the registration books kept by the Registrar, shall receive
a certificated Bond evidencing the obligation of the County to
make payments of principal, purchase price, premium, if any,
and interest pursuant to this Indenture.
(iii) The County, the Paying Agent, the Registrar,
the Tender Agent, if any, and the Trustee shall, if not
previously on file, execute and deliver to DTC a letter of
representation in customary form with respect to the Bonds
(the "Representation Letter"), but such Representation Letter
shall not in any way limit the provisions of the foregoing
paragraph (i) or in any other way impose upon the County any
obligation whatsoever with respect to persons having interests
in the Bonds other than the Bondholders, as shown on the
registration books kept by the Registrar. The Trustee, the
Tender Agent and the Paying Agent shall take all action
necessary for all representations of the County in the
Representation Letter with respect to the Trustee, the Tender
Agent and the Paying Agent to be complied with at all times.
(iv) The County, with the consent of the Borrower,
may, and upon request of the Borrower shall, terminate the
services of DTC with respect to the Bonds. DTC may determine
to discontinue providing its services with respect to the
Bonds at any time by giving written notice and all relevant
information on the Beneficial Owners of the Bonds to the
County, the Borrower, the Guarantor, the Tender Agent and the
Trustee and discharging its responsibilities with respect
thereto under applicable law. Upon the discontinuance or
termination of the services of DTC with respect to the Bonds,
unless a substitute securities depository is appointed by the
County (with the consent, or at the request, of the Borrower
and the Guarantor) to undertake the functions of DTC
hereunder, the County, at the expense of the Borrower, is
obligated to deliver Bond certificates to the Beneficial
Owners of such Bonds, as described in this Indenture, and such
Bonds shall no longer be restricted to being registered in the
registration books kept by the Registrar in the name of the
Nominee, but may be registered in whatever name or names
Bondholders transferring or exchanging such Bonds shall
designate, in accordance with the provisions of this
Indenture.
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<PAGE> 35
(v) So long as any Bond is registered in the name
of the Nominee, all payments with respect to principal,
purchase price, premium, if any, and interest on such Bond and
all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Representation
Letter. Bondholders shall have no lien or security interest
in any rebate or refund paid by DTC to the Tender Agent or the
Paying Agent which arises from the payment by the Tender Agent
or Paying Agent of principal of, premium, if any, or interest
on the Bonds in immediately available funds to DTC.
Section 2.2. Execution of Bonds. The Bonds shall be signed in the
name and on behalf of the County with the manual or facsimile signature of its
Chair and attested by the manual or facsimile signature of its County Clerk,
under seal of the County Clerk. Such seal may be in the form of a facsimile of
the County Clerk's seal and may be imprinted or impressed upon the Bonds. The
Bonds shall then be delivered to the Registrar or the Tender Agent for
authentication by the Registrar or the Tender Agent, as the case may be;
provided that upon initial issuance the Bonds shall be authenticated by the
Registrar. In case any officer who shall have signed any of the Bonds shall
cease to be such officer before the Bonds so signed or attested shall have been
authenticated or delivered by the Registrar or the Tender Agent or issued by
the County, such Bonds may nevertheless be authenticated, delivered and issued
and, upon such authentication, delivery and issuance, shall be as binding upon
the County as though those who signed and attested the same had continued to be
such officers of the County. Also, any Bond may be signed on behalf of the
County by such persons as on the actual date of the execution of such Bond
shall be the proper officers although on the nominal date of such Bond any such
person shall not have been such officer.
Only such of the Bonds as shall bear thereon a certificate of
authentication in the form recited in Exhibit A hereto, manually executed by
the Registrar or the Tender Agent, shall be valid or obligatory for any purpose
or entitled to the benefits of this Indenture, and such certificate of the
Registrar or the Tender Agent, as the case may be, shall be conclusive evidence
that the Bonds so authenticated have been duly authenticated and delivered
hereunder and are entitled to the benefits of this Indenture. Upon
authentication of any Bond, the Registrar or the Tender Agent, as the case may
be, shall set forth on such Bond the date of such authentication.
Section 2.3. Transfer and Exchange of Bonds. Registration of any
Bond may, in accordance with the terms of this Indenture, be transferred, upon
the books of the Registrar required to be kept pursuant to the provisions of
Section II.2.4, by the person in whose name it is registered, in person or by
his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by a written instrument of transfer in a form approved by the
Registrar, duly executed. Whenever any Bond shall be surrendered for
registration of transfer, the County shall execute and the Registrar shall
authenticate and deliver a new Bond or Bonds of the same tenor of Authorized
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Denominations. No registration of transfer of Bonds upon the books of the
Registrar required to be kept pursuant to the provisions of Section II.2.4
hereof shall be required to be made during the period after any Record Date and
prior to the related Interest Payment Date or during the period of fifteen (15)
days next preceding the date on which the Trustee gives any notice of
redemption, nor shall any registration of transfer of Bonds called for
redemption be required.
Bonds may be exchanged at the Principal Office of the Registrar for a
like aggregate principal amount of Bonds of the same tenor of Authorized
Denominations. The Registrar shall require the payment by the Bondholder
requesting such exchange of any tax or other governmental charge required to be
paid with respect to such exchange, and there shall be no other charge to any
Bondholders for any such exchange. Except with respect to Bonds purchased
pursuant to Section IV.4.7 hereof, no exchange of Bonds shall be required to be
made during the period after any Record Date and prior to the related Interest
Payment Date or during the period of fifteen (15) days next preceding the date
on which the Trustee gives notice of redemption, nor shall any exchange of
Bonds called for redemption be required.
Section 2.4. Bond Register. The Registrar will keep or cause to
be kept at its Principal Office sufficient books for the registration and the
registration of transfer of the Bonds, which shall at all times, during regular
business hours, be open to inspection by the County, the Trustee, the Credit
Provider, if any, and the Borrower; and, upon presentation for such purpose,
the Registrar shall, under such reasonable regulations as it may prescribe,
register the transfer or cause to be registered the transfer, on said books, of
Bonds as hereinbefore provided.
Section 2.5. Payment of Principal and Premium, if any, and
Interest. Notwithstanding the terms and provisions herein to the contrary, the
Guarantor, pursuant to the Guaranty, shall guarantee the timely payment of
principal of and interest on the Bonds as such payments shall become due, in
the event that the Borrower fails to make any payments due under the Agreement.
Should the Borrower fail to make any payment due under the Agreement with
respect to payments of the principal and interest or premium on the Bonds, the
Trustee shall immediately demand payment from the Guarantor under the Guaranty.
In the event the Trustee has failed to receive any payment to be made by the
Borrower by 1:00 p.m. New York City time, the Trustee shall notify the
Guarantor by telephone, promptly confirmed by telecopy, of the amount of any
deficiency and of the Guarantor's obligation to make payment of such amount in
immediately available funds by 3:00 p.m. New York City time on such date.
Section 2.6. Bonds Mutilated, Lost, Destroyed or Stolen. If any
Bond shall become mutilated, the County, upon the request and at the expense of
the holder of said Bond, shall execute, and the Registrar shall thereupon
authenticate and deliver, a new Bond of like tenor and number in exchange and
substitution for the Bond so mutilated, but only upon surrender to the
Registrar of the Bonds so mutilated. Every mutilated Bond so
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<PAGE> 37
surrendered to the Registrar shall be cancelled by it and destroyed and, upon
the written request of the County, a certificate evidencing such destruction
shall be delivered to the County, with a copy to the Borrower. If any Bond
issued hereunder shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the County, the Borrower and the
Registrar, and if such evidence be satisfactory to them and indemnity
satisfactory to them shall be given by or on behalf of the holder of such lost,
destroyed or stolen Bond, the County, at the expense of the holder, shall
execute, and the Registrar shall thereupon authenticate and deliver, a new Bond
of like tenor in lieu of and in substitution for the Bond so lost, destroyed or
stolen (or if any such Bond shall have matured or shall be about to mature,
instead of issuing a substitute Bond the Registrar may pay the same without
surrender thereof). The County may require payment of a reasonable fee for
each new Bond issued under this Section and payment of the expenses which may
be incurred by the County and the Registrar. Any Bond issued under the
provisions of this Section in lieu of any Bond mutilated or alleged to be lost,
destroyed or stolen shall constitute an original additional contractual
obligation on the part of the County whether or not the Bond mutilated or so
alleged to be lost, destroyed or stolen shall be at any time enforceable by
anyone, and shall be equally and proportionately entitled to the benefits of
this Indenture with all other Bonds secured by this Indenture.
Section 2.7. Disposition of Cancelled Bonds. When and as paid in
full, all Bonds, if any, shall be delivered to the Trustee, who shall forthwith
cancel such Bonds and deliver a certificate evidencing such cancellation to the
County and the Borrower. The Trustee may destroy or retain such cancelled
Bonds.
Section 2.8. CUSIP Numbers. As provided in Section II.2.1.(d) of
this Indenture, the County in issuing the Bonds may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to holders of Bonds; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such CUSIP numbers.
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ARTICLE III
ISSUANCE OF BONDS
Section
3.1. Authentication and Delivery of Bonds. Forthwith upon the execution
and delivery of this Indenture, upon the execution of the Bonds by the County
and delivery thereof to the Registrar, as hereinabove provided, and without any
further action on the part of the County, the Registrar shall authenticate the
Bonds in an aggregate principal amount of Twenty Million Dollars ($20,000,000)
and shall deliver the Bonds to or upon the Written Order of the County.
Section 3.2. Application of Proceeds of Bonds. The proceeds
received by the County from the sale of the Bonds in the amount of
$20,033,111.11 (representing the principal amount of the Bonds, plus accrued
interest from the Dated Date) shall be deposited with the Trustee in the Bond
Proceeds Fund, which the Trustee shall establish hereunder and hold in trust.
The Trustee shall, immediately thereafter transfer such money in the Bond
Proceeds Fund as follows: (a) $20,000,000, to U.S. Bank, a national banking
association, as trustee for the Short-Term Taxable Bonds, to be deposited under
the loan and trust agreement securing the Short-Term Taxable Bonds and applied
to the redemption thereof; and (b) $33,111.11, representing accrued interest
from the Dated Date, shall be deposited in the Bond Fund.
Upon completion of the foregoing transfer, the Bond Proceeds Fund
shall close.
Upon the issuance of the Bonds, $20,000,000 from the proceeds of the
Short-Term Taxable Bonds on deposit in the construction fund created under the
loan and trust agreement pursuant to which said Short-Term Taxable Bonds were
issued shall be transferred to, and deposited into the Construction Fund
established by the Trustee on the Issue Date.
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ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
Section
4.1. Redemption of Bonds. The Bonds are subject to redemption if and to
the extent the Borrower is entitled or required to make and makes a prepayment
pursuant to Article VII of the Agreement. The Trustee shall not give notice of
any optional redemption under Section IV.4.1.(a) hereof unless the Borrower has
so directed in accordance with Section 7.5 of the Agreement and, if a Credit
Facility will be in effect on the redemption date, the Credit Provider has
given its consent to such optional redemption to the extent required by the
applicable Credit Agreement. Notwithstanding the foregoing, such consent of
the Credit Provider shall not be required if at the time of mailing the notice
of optional redemption, the Trustee then holds Available Amounts sufficient to
pay the principal of, premium, if any, and interest on the Bonds to be
redeemed. In the event of a failure by the Borrower to give a notice of
mandatory prepayment under such Section 7.5, such notice may be given by the
County, the Trustee, the Credit Provider, if any, or any holder or holders of
ten percent (10%) or more in aggregate principal amount of the Outstanding
Bonds.
The Bonds shall be redeemed upon the following terms:
(a) Redemption Upon Optional Prepayment.
(1) Extraordinary Events. The Bonds shall be redeemed in
whole or in part, and if in part by lot, at any time at a redemption
price equal to 100% of the principal amount thereof, plus accrued
interest, if any, to the redemption date, upon the occurrence of any
one of the following events and receipt by the Trustee of a written
notice from the Borrower stating that such event has occurred and that
the Borrower therefore intends to exercise its option to prepay the
payments due under the Agreement in whole or in part pursuant to
Section 7.2 of the Agreement and thereby effect the redemption of
Bonds in whole or in part to the extent of such prepayments:
(A) All or part of the Facility shall have been
damaged or destroyed to such an extent that, in the opinion of
the Borrower (expressed in a certificate filed with the County
and the Trustee), (i) the Facility or such affected portion
could not reasonably be restored within a period of four (4)
months to the condition thereof immediately preceding such
damage or destruction, and the Borrower will be prevented, or
is likely to be prevented for a period of four (4) consecutive
months or more, from carrying on all or substantially all of
its normal operation of the Facility, or (ii) the cost of
restoration of the Facility or such affected portion will be
substantially in excess of the net proceeds of insurance
thereon.
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(B) Title to, or the temporary use of, all or a
part of the Facility shall have been taken under the exercise
of the power of eminent domain.
(C) Changes in economic availability of raw
materials, operating supplies or facilities necessary to
operate all or a part of the Facility or technological or
other changes which make the continued operation of the
Facility or such affected portion, uneconomical in the opinion
of the Borrower (expressed in a certificate filed with the
County and the Trustee) shall have occurred and which shall
have resulted in a cessation of all or substantially all of
the Borrower's normal operations of the Facility.
(D) Unreasonable burdens or excessive liabilities
shall have been imposed upon the County or the Borrower
affecting all or a part of the Facility, including, without
limitation, federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of the
Agreement.
Anything in this subsection to the contrary notwithstanding,
if any of the events described above shall have occurred with respect
to any portion of the Facility, the amount of Bonds that may be
redeemed shall not exceed an amount derived by multiplying the total
principal amount of the Bonds by a fraction (i) the numerator of which
is the cost of such Facility or portion thereof and (ii) the
denominator of which is the total cost of the Facility.
(2) Borrower Option. The Bonds shall be subject to
redemption upon prepayment of the Repayment Installments at the option
of the Borrower, in whole, or in part by lot, prior to their maturity
dates, as follows:
(A) During any Daily Rate Period or Weekly Rate
Period, the Bonds shall be subject to such redemption on any
Interest Payment Date at a redemption price equal to 100% of
the principal amount thereof.
(B) On the day next succeeding the last scheduled
day of any Term Rate Period, such Bonds shall be subject to
such redemption at a redemption price of 100% of the principal
amount thereof. During any Term Rate Period, the Bonds shall
be subject to such redemption during the periods specified
below, in whole or in part (by lot), at the redemption prices
(expressed as percentages of principal amount) hereinafter
indicated (unless different redemption terms shall be
specified by the Borrower pursuant to Section
II.2.1.(c)(iv)..(B)) together with accrued interest to the
date fixed for redemption:
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<TABLE>
<CAPTION>
Length of Term Rate Period Redemption Dates and Redemption Prices
-------------------------- --------------------------------------
<S> <C>
greater than 10 years after 10 years at 102%, declining by 1%
annually to 100%
less than or equal to 10 years and greater after 3 years at 102%, declining by 1%
than 8 years annually to 100%
less than or equal to 8 years and greater after 3 years at 101%, declining by 1%
than 6 years annually to 100%
less than or equal to 6 years and greater after 2 years at 101%, declining by 1%
than 4 years annually to 100%
less than or equal to 4 years and greater after 2 years at 101%, declining by 1%
than 2 years annually to 100%
less than or equal to 2 years and greater after 1 year at 100%
than 1 year
1 year or less only on day next succeeding last day of
period at 100%
</TABLE>
The Borrower shall have the option to cause the Rate Period for the
Bonds to change on any date on which the Bonds are subject to redemption as
provided above, in which event the Bonds shall be subject to mandatory tender
at the applicable price set forth above, as provided in Sections
IV.4.7.(a)..(1) and IV.4.7.(b).
(b) Redemption Upon Mandatory Prepayment. The Bonds
shall be subject to redemption from amounts which are required to be
prepaid by the Borrower under Section 7.3 of the Agreement, as set
forth below.
(1) The Bonds shall be redeemed in whole on any
date at a redemption price equal to 100% of the principal
amount thereof, plus interest accrued to the redemption date,
upon the occurrence of a Determination of Taxability;
provided, however, that if, in the opinion of Bond Counsel
delivered to the Trustee, the redemption of a specified
portion of such Bonds Outstanding would have the result that
interest payable on such Bonds remaining Outstanding after
such redemption would remain Tax-Exempt, then such Bonds shall
be redeemed in part by lot (in Authorized Denominations), in
such amount as Bond Counsel in such opinion shall have
determined is necessary to accomplish that result.
(2) The Bonds shall be redeemed in whole at a
redemption price equal to 100% of the principal amount
thereof, plus accrued interest to the redemption date, in the
event that as a result of any changes in the Constitution of
the United States of America or the State or as a result of
any legislative, judicial or administrative action, the
Agreement shall have become void or unenforceable or
impossible of performance in accordance
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<PAGE> 42
with the intention and purposes of the parties thereto, or
shall have been declared unlawful.
(3) The Bonds shall be redeemed in whole at a
redemption price equal to the principal amount thereof plus
accrued interest to the redemption date in the event that at
least thirty-five (35) days prior to the expiration of any
Credit Facility then in effect with respect to the Bonds
(other than a Permitted Termination or an expiration of the
Credit Facility at the maturity of the Bonds) the Trustee
shall not have received (a) a renewal or extension of the
existing Credit Facility for a period of at least one (1) year
(or, if shorter, the period to maturity of the Bonds) or (b) a
substitute Credit Facility meeting the requirements of Section
4.6 of the Agreement. Such redemption shall occur on the last
Business Day which is not less than five (5) calendar days
preceding the expiration date of the Credit Facility then in
effect.
Section 4.2. Selection of Bonds for Redemption. If fewer than all
of the Bonds are called for redemption, the Trustee shall select the Bonds or
any given portion thereof to be redeemed, first from the Outstanding Credit
Provider Bonds or such portion thereof not previously called for redemption, by
lot in such manner as it may determine, until all Credit Provider Bonds shall
have been redeemed, and then from the Outstanding Bonds or such given portion
thereof not previously called for redemption, by lot. For the purpose of any
such selection the Trustee shall assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that following any such selection, both the portion of such
Bond to be redeemed and the portion remaining shall be in Authorized
Denominations. The Trustee shall promptly notify the County and the Borrower
in writing of the numbers of the Bonds or portions thereof so selected for
redemption. Notwithstanding the foregoing, if less than all of the Bonds are
to be redeemed at any time while the Bonds are Book-Entry Bonds, selection of
the Bonds to be redeemed shall be made in accordance with customary practices
of DTC or the applicable successor depository, as the case may be.
Section 4.3. Notice of Redemption. The Trustee, for and on behalf
of the County, shall give notice of any redemption by first class mail, postage
prepaid, not less than thirty (30) nor more than sixty (60) days prior to the
redemption date to (i) the registered owner of such Bond at the address shown
on the registration books of the Registrar on the date such notice is mailed;
(ii) the Securities Depositories; (iii) the Credit Provider, if any; (iv) one
or more Information Services; (v) the Remarketing Agent, if any, and (vi) the
Municipal Securities Rulemaking Board, each NRMSIR and the SID. Notice of
redemption to the Securities Depositories, the Information Services, each
NRMSIR and the SID shall be given by telecopy confirmed by first class mail.
Each notice of redemption shall state the date of such notice, the date of
issue of the Bonds to be redeemed, the redemption date, the redemption price,
the place of redemption (including the name and appropriate address or
addresses of the Paying Agent), the source
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<PAGE> 43
of the funds to be used for such redemption, the principal amount, the CUSIP
numbers (if any) of the Bonds to be redeemed and, if less than all, the
distinctive certificate numbers of the Bonds to be redeemed and, in the case of
Bonds to be redeemed in part only, the respective portions of the principal
amount thereof to be redeemed. Each such notice shall also state that the
interest on the Bonds designated for redemption shall cease to accrue from and
after such redemption date and that on said date there will become due and
payable on each of said Bonds the principal amount thereof to be redeemed,
interest accrued thereon, if any, to the redemption date and the premium, if
any, thereon (such premium to be specified) and shall require that such Bonds
be then surrendered at the address or addresses of the Paying Agent specified
in the redemption notice. Notwithstanding the foregoing, failure by the
Trustee to give notice pursuant to this paragraph to the Credit Provider or the
Remarketing Agent or any one or more of the Information Services or the
Securities Depositories or Municipal Securities Rulemaking Board, the NRMSIRs
or the SID or the insufficiency of any such notices shall not affect the
sufficiency of the proceedings for redemption. Failure to mail the notices
required by this paragraph to any registered owner of any Bonds designated for
redemption, or any defect in any notice so mailed, shall not affect the
validity of the proceedings for redemption of any other Bonds and shall not
extend the period for making elections or in any way change the rights of the
holders of the Bonds to elect to have their Bonds purchased as provided herein.
With respect to any notice of optional redemption of Bonds pursuant to
Section IV.4.1.(a), unless upon the giving of such notice such Bonds shall be
deemed to have been paid within the meaning of Article X hereof, such notice
shall state that such redemption shall be conditional upon the receipt by the
Trustee on or prior to the date fixed for such redemption of Available Amounts
sufficient to pay the principal of, and premium, if any, and interest on, such
Bonds to be redeemed, and that if such Available Amounts shall not have been so
received said notice shall be of no force and effect and the County shall not
be required to redeem such Bonds. In the event that such notice of redemption
contains such a condition and such Available Amounts are not so received, the
redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, to the persons and in the manner in which the notice of
redemption was given, that such Available Amounts were not so received.
If upon the expiration of sixty (60) days succeeding any redemption
date, any Bonds called for redemption shall not have been presented to the
Trustee for payment, the Trustee shall no later than ninety (90) days following
such redemption date send Notice by Mail to the holder of each Bond not so
presented. Failure to mail the notices required by this paragraph to any
holder of a Bond, or any defect in any notice so mailed, shall not affect the
validity of the proceedings for redemption of any Bonds nor impose any
liability on the Trustee.
Section 4.4. Partial Redemption of Bonds. Upon surrender of any
Bond redeemed in part only, the Registrar shall exchange the Bond redeemed for
a new Bond
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<PAGE> 44
of like tenor and in an Authorized Denomination without charge to the holder in
the principal amount of the portion of the Bond not redeemed. In the event of
any partial redemption of a Bond which is registered in the name of the
Nominee, DTC may elect to make a notation on the Bond certificate which
reflects the date and amount of the reduction in principal amount of said Bond
in lieu of surrendering the Bond certificate to the Registrar for exchange.
The County, the Trustee and the Registrar shall be fully released and
discharged from all liability upon, and to the extent of, payment of the
redemption price for any partial redemption and upon the taking of all other
actions required hereunder in connection with such redemption.
Section 4.5. Effect of Redemption. Notice of redemption having
been duly given as aforesaid, and moneys for payment of the redemption price
being held by the Trustee, the Bonds so called for redemption shall, on the
redemption date designated in such notice, become due and payable at the
redemption price specified in such notice, interest on the Bonds so called for
redemption shall cease to accrue, said Bonds shall cease to be entitled to any
lien, benefit or security under this Indenture, and the holders of said Bonds
shall have no rights in respect thereof except to receive payment of the
redemption price thereof (including interest, if any, accrued to the redemption
date), without interest accrued on any funds held after the redemption date to
pay such redemption price.
All Bonds fully redeemed pursuant to the provisions of this Article IV
shall upon surrender thereof be cancelled by the Trustee, who shall deliver a
certificate evidencing such cancellation to the County and the Borrower. The
Trustee may retain or destroy such Bonds.
Section 4.6. Holder's Option to Tender for Purchase.
(a) During any Daily Rate Period, any Bond or portion
thereof in an Authorized Denomination shall be purchased on any
Business Day at a purchase price equal to 100% of the principal amount
thereof plus accrued interest from the Interest Payment Date next
preceding the Purchase Date to the Purchase Date (unless the Purchase
Date shall be an Interest Payment Date, in which case the purchase
price shall be equal to the principal amount thereof), payable in
immediately available funds, upon (A) delivery by the holder or
Beneficial Owner of such Bond to the Tender Agent at its Principal
Office, by no later than 11:00 a.m. (New York City time) on such
Business Day, of an irrevocable written, telephonic or Electronic
notice which states the principal amount of such Bond to be tendered
for purchase and the Purchase Date, and (B) delivery of such Bond
tendered for purchase to the Tender Agent on the Purchase Date in
accordance with Section IV.4.8 hereof. The Tender Agent shall keep a
written record of the notice described in clause (A).
(b) During any Weekly Rate Period, any Bond or portion
thereof in an Authorized Denomination shall be purchased on any
Business Day at a purchase
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<PAGE> 45
price equal to 100% of the principal amount thereof plus accrued
interest from the Interest Payment Date next preceding the Purchase
Date to the Purchase Date (unless the Purchase Date shall be an
Interest Payment Date, in which case the purchase price shall be equal
to the principal amount thereof), payable in immediately available
funds, upon (A) delivery by the holder or Beneficial Owner of such
Bond to the Tender Agent at its Principal Office of an irrevocable
notice by telephone (promptly confirmed in writing) or written or
Electronic notice by 5:00 p.m. (New York City time) on any Business
Day at least seven (7) days prior to the Purchase Date, which states
the principal amount of such Bond to be tendered for purchase and the
Purchase Date, and (B) delivery of such Bond to the Tender Agent on
the Purchase Date in accordance with Section IV.4.8 hereof. The
Tender Agent shall keep a written record of the notice described in
clause (A).
(c) Any Bond or portion thereof in an Authorized
Denomination shall be purchased on the first day of any Term Rate
Period which is preceded by a Term Rate Period of the same duration at
a purchase price equal to 100% of the principal amount thereof plus
accrued interest from the Interest Payment Date next preceding the
Purchase Date to the Purchase Date (unless the Purchase Date shall be
an Interest Payment Date, in which case the purchase price shall be
equal to the principal amount thereof), payable in immediately
available funds, upon (A) delivery by the holder or Beneficial Owner
of such Bond to the Tender Agent at its Principal Office of an
irrevocable notice by telephone (promptly confirmed in writing) or
written or Electronic notice by 5:00 p.m. (New York City time) on any
Business Day at least fifteen (15) days prior to the Purchase Date,
which states the principal amount of such Bond to be tendered for
purchase and the Purchase Date, and (B) delivery of such Bond to the
Tender Agent on the Purchase Date in accordance with Section IV.4.8
hereof. The Tender Agent shall keep a written record of the notice
described in clause (A).
(d) If any Bond is to be purchased in part pursuant to
(a), (b) or (c) above, the amount so purchased and the amount not so
purchased must each be an Authorized Denomination.
(e) Any instrument delivered to the Tender Agent in
accordance with this Section IV.4.6 shall be irrevocable with respect
to the purchase for which such instrument was delivered and shall be
binding upon any subsequent Bondholder or Beneficial Owner of the Bond
to which it relates, including any Bond issued in exchange therefor or
upon the registration of transfer thereof, and as of the date of such
instrument, the holder or Beneficial Owner of the Bonds specified
therein shall not have any right to optionally tender for purchase
such Bonds prior to the date of purchase specified in such notice.
The Tender Agent may conclusively assume that any person (other than a
holder) providing notice of optional tender pursuant to (a), (b) or
(c) above is the Beneficial Owner of the Bond to which such notice
relates, and the Tender Agent shall assume no liability in accepting
such
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<PAGE> 46
notice from any person whom it reasonably believes to be a Beneficial
Owner of Bonds.
Section 4.7. Mandatory Tender for Purchase.
(a) The Bonds shall be subject to mandatory tender for
purchase prior to their stated maturity, in whole, at a purchase price
equal to 100% of the principal amount thereof, plus accrued interest
to the Purchase Date described below, upon the occurrence of any of
the events stated below:
(1) as to any Bond, on the effective date of any
change in a Rate Period for such Bond, other than (A) the
effective date of any change from a Daily Rate Period to a
Weekly Rate Period or from a Weekly Rate Period to a Daily
Rate Period or (B) the effective date of any Term Rate Period
which was preceded by a Term Rate Period of the same duration;
or
(2) as to all Bonds, on the effective date of any
Credit Facility which may be provided with respect to the
Bonds pursuant to Section 4.6(d) of the Agreement or of any
substitute Credit Facility provided with respect to the Bonds
pursuant to Section 4.6(c) of the Agreement or upon any
Permitted Termination of any Credit Facility with respect to
the Bonds.
(b) In the event that the Borrower elects to change the
Rate Period with respect to the Bonds during a Term Rate Period or to
provide, substitute or terminate a Credit Facility during a Term Rate
Period and thereby causes a mandatory tender of such Bonds as provided
in Sections IV.4.7.(a)..(1) or IV.4.7.(a)..(2), as the case may be,
the Bonds shall be purchased on the applicable mandatory tender date
at a purchase price equal to the principal amount thereof plus an
amount equal to any premium which would have been payable on such day
had the Borrower directed redemption of the Bonds pursuant to Section
IV.4.1.(a)..(2)(B) hereof.
(c) The Trustee shall give notice by first class mail of
the provision of any Credit Facility with respect to the Bonds (other
than the Credit Facility in effect on the date of issuance of the
Bonds), the provision of any substitute Credit Facility with respect
to the Bonds and the Permitted Termination of any Credit Facility with
respect to the Bonds to the holders of the Bonds at their addresses
shown on the registration books kept by the Registrar, not later than
the fifteenth day (thirtieth day if the then current Rate Period is a
Term Rate Period) prior to the date on which the Bonds are subject to
mandatory tender pursuant to Section IV.4.7.(a)..(2), which notice
shall (i) state the date of such provision, substitution or Permitted
Termination; and (ii) state that such Bonds shall be subject to
mandatory tender for purchase on the effective date of such provision,
substitution or Permitted Termination in accordance with Section
IV.4.7.(a)..(2) hereof.
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<PAGE> 47
Section 4.8. Delivery of Tendered Bonds. With respect to any
Book-Entry Bond, delivery of such Bond to the Tender Agent in connection with
any optional or mandatory tender pursuant to Sections IV.4.6 or IV.4.7 hereof
shall be effected by the making of, or the irrevocable authorization to make,
appropriate entries on the books of DTC or any DTC Participant to reflect the
transfer of the beneficial ownership interest in such Bond to the account of
the Tender Agent, or to the account of a DTC Participant acting on behalf of
the Tender Agent. With respect to any Bond which is not a Book-Entry Bond,
delivery of such Bond to the Tender Agent in connection with any optional or
mandatory tender pursuant to Sections IV.4.6 or IV.4.7 hereof shall be effected
by physical delivery of such Bond to the Tender Agent at its Principal Office,
by 1:00 p.m. (New York City time) on the Purchase Date, accompanied by an
instrument of transfer thereof, in a form satisfactory to the Tender Agent,
executed in blank by the holder thereof with the signature of such holder
guaranteed in accordance with the guidelines set forth by one of the nationally
recognized medallion signature programs.
Section 4.9. Bonds Deemed Purchased.
(a) If moneys sufficient to pay the purchase price of
Bonds to be purchased pursuant to Sections IV.4.6 or IV.4.7 shall be
held by the Tender Agent on the date such Bonds are to be purchased,
such Bonds shall be deemed to have been purchased for all purposes of
this Indenture, irrespective of whether or not such Bonds shall have
been delivered to the Tender Agent, and neither the former holder of
such Bonds nor any other person shall have any claim thereon, under
this Indenture or otherwise, for any amount other than the purchase
price thereof.
(b) In the event of non-delivery of any Bond to be
purchased pursuant to Sections IV.4.6 or IV.4.7 hereof, the Tender
Agent shall segregate and hold uninvested the moneys for the purchase
price of such Bonds in trust, without liability for interest thereon,
for the benefit of the former holders of such Bonds, who shall, except
as provided in the following sentence, thereafter be restricted
exclusively to such moneys for the satisfaction of any claim for the
purchase price of such Bonds. Any moneys which the Tender Agent shall
segregate and hold in trust for the payment of the purchase price of
any Bond and remaining unclaimed for two (2) years after the date of
purchase shall be paid, upon the Borrower's written request, to the
Borrower. After the payment of such unclaimed moneys to the Borrower,
the former holder of such Bond shall look only to the Borrower for the
payment thereof.
Section 4.10. Bond Purchase Fund. There shall be created and
established with the Tender Agent a trust fund designated the "Carbon County,
Utah Solid Waste Disposal Refunding Revenue Bonds (Laidlaw Environmental
Services, Inc.) 1997 Series A Bond Purchase Fund" (the "Bond Purchase Fund").
There shall also be created and established three separate accounts in the Bond
Purchase Fund designated the "Remarketing Account", the "Credit Facility
Purchase Account" and the "Borrower Account".
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<PAGE> 48
(a) Remarketing Account. All moneys received by the
Tender Agent on behalf of purchasers of Bonds pursuant to Section
IV.4.13 hereof, other than the County, the Borrower or any affiliate
of the Borrower, shall be (i) deposited in the Remarketing Account
within the Bond Purchase Fund, (ii) held in trust in accordance with
the provisions hereof and (iii) paid out in accordance with Section
IV.4.14 hereof.
(b) Credit Facility Purchase Account. All moneys
received by the Tender Agent as payments under any Credit Facility for
the purchase of Bonds shall be (i) deposited in the Credit Facility
Purchase Account within the Bond Purchase Fund, (ii) held in trust in
accordance with the provisions hereof and (iii) paid out in accordance
with Section IV.4.14 hereof.
(c) Borrower Account. All moneys received by the Tender
Agent from the Borrower for the purchase of Bonds pursuant to Section
IV.4.13 hereof shall be (i) deposited in the Borrower Account within
the Bond Purchase Fund, (ii) held in trust in accordance with the
provisions hereof and (iii) paid out in accordance with Section
IV.4.14 hereof.
The funds held by the Tender Agent in the Bond Purchase Fund
shall not be considered Revenues as that term is defined herein and
shall not constitute part of the trust estate that is subject to the
lien of this Indenture. The moneys in the Bond Purchase Fund shall be
used solely to pay the purchase price of Bonds as provided herein (or
to reimburse the Credit Provider, if any, for payments made under the
Credit Facility for such purpose) and may not be used for any other
purposes. All amounts held in the Bond Purchase Fund and the Credit
Facility Purchase Account, Remarketing Account and Borrower Account
therein shall be held in trust by the Tender Agent for the benefit of
the holders of tendered Bonds (provided that any amounts held in a
Remarketing Account which are derived from the remarketing of Credit
Provider Bonds shall be held in trust for the benefit of the Credit
Provider).
Section 4.11. Deposit of Bonds. The Tender Agent agrees to accept
and hold all Bonds delivered to it pursuant to this Indenture in trust for the
benefit of the respective Bondholders which shall have so delivered such Bonds
until the purchase price of such Bonds shall have been delivered to or for the
account of or to the order of such holders pursuant to Section IV.4.12 hereof.
Any Bonds registered for transfer to new purchasers and delivered to the Tender
Agent as described in Section IV.4.14 hereof shall be held in trust by the
Tender Agent for the benefit of such new purchasers until delivery to such new
purchasers.
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<PAGE> 49
Section 4.12. Remarketing of Tendered Bonds.
(a) Daily Put Bonds.
(i) Promptly upon receipt, and, in any event not
later than 11:05 a.m. (New York City time) on each Business
Day on which the Tender Agent receives a notice from a
Bondholder pursuant to Section IV.4.6.(a) hereof, the Tender
Agent shall give notice by telephone to the Remarketing Agent,
the Trustee and the Registrar, specifying the principal amount
of Bonds for which it has received such notice (the "Daily Put
Bonds"), the names of the holder or holders thereof and the
Purchase Date for such Daily Put Bonds.
(ii) Not later than 11:30 a.m. (New York City
time) on the Purchase Date with respect to Daily Put Bonds,
the Trustee shall give notice by telephone to the Remarketing
Agent, the Tender Agent and the Registrar of the accrued
amount of interest payable as of such Purchase Date on, and
confirming the aggregate principal amount of, such Daily Put
Bonds. The Remarketing Agent shall thereupon offer for sale
and use its best efforts to find purchasers for all such Daily
Put Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Daily Put Bonds,
the Remarketing Agent shall give (A) Electronic notice or
notice by telecopy, telephone, telegram, telex or by other
similar communication to the Tender Agent, the Trustee and the
Registrar of the principal amount of Daily Put Bonds which
have been remarketed in accordance with the Remarketing
Agreement and (B) if any Daily Put Bonds have not been
remarketed, Electronic notice or notice by telecopy,
telephone, telegram, telex, or other similar communication to
the Borrower and the Trustee (which shall promptly thereafter
notify the Credit Provider, if any) of the principal amount of
the Daily Put Bonds which have not been remarketed.
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that the Remarketing Agent
has remarketed less than all the Daily Put Bonds to be
purchased on any Purchase Date, the Trustee shall demand
payment under the Credit Facility, if any, then in effect by
12:45 p.m. (New York City time) on such Purchase Date so as
to provide by 2:45 p.m. (New York City time) on such Purchase
Date an amount sufficient, together with the remarketing
proceeds to be available for such purchase, calculated solely
on the basis of the notice given by the Remarketing Agent
pursuant to subparagraph (iii) above, to pay the purchase
price of the Daily Put Bonds. The Trustee shall
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<PAGE> 50
immediately give notice by telephone to the Tender Agent and
the Borrower of the amount, if any, of such draw.
(b) Weekly Put Bonds and Term Put Bonds.
(i) Not later than 10:30 a.m. (New York City
time) on each Business Day succeeding a day on which the
Tender Agent receives a notice from a holder of Bonds to be
tendered pursuant to Section IV.4.6.(b) hereof (the "Weekly
Put Bonds") or Section IV.4.6.(c) hereof (the "Term Put
Bonds"), the Tender Agent shall give notice by telephone to
the Remarketing Agent, the Trustee and the Registrar,
specifying the principal amount of Bonds for which it has
received such notice (such amount, together with the accrued
amount of interest payable to but excluding the Purchase Date
on such Bonds, being the purchase price of such Bonds), the
names of the holder or holders thereof and the Purchase Date
for such Weekly Put Bonds or Term Put Bonds. The Remarketing
Agent shall thereupon offer for sale and use its best efforts
to find purchasers for such Weekly Put Bonds or Term Put
Bonds, as the case may be.
(ii) Not later than 11:00 a.m. (New York City
time) on the Business Day immediately preceding the Purchase
Date described in subparagraph (i) above, the Trustee shall
give notice by telephone to the Remarketing Agent, the Tender
Agent and the Registrar of the accrued amount of the interest
payable as of such Purchase Date, and confirming the aggregate
principal amount of, the Weekly Put Bonds or Term Put Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Weekly Put Bonds or
Term Put Bonds, the Remarketing Agent shall give (A)
Electronic notice or notice by telecopy, telephone, telegram,
telex or by other similar communication to the Tender Agent,
the Trustee and the Registrar of the principal amount of
Weekly Put Bonds or Term Put Bonds which have been remarketed
in accordance with the Remarketing Agreement and (B) if any
Weekly Put Bonds or Term Put Bonds have not been remarketed,
Electronic notice or notice by, telecopy, telephone, telegram,
telex or by other similar communication to the Borrower and
the Trustee (which shall promptly thereafter notify the Credit
Provider, if any) of the principal amount of such Bonds which
have not been remarketed.
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that the Remarketing Agent
has remarketed less than all the Weekly Put Bonds or Term Put
Bonds to be purchased on any Purchase Date, the Trustee shall
demand payment under
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<PAGE> 51
the Credit Facility, if any, then in effect by 12:45 p.m. (New
York City time) on such Purchase Date so as to provide by 2:45
p.m. (New York City time) on such Purchase Date an amount
sufficient, together with the remarketing proceeds to be
available for such purchase, calculated solely on the basis of
the notice given by the Remarketing Agent pursuant to
subparagraph (iii) above, to pay the purchase price of the
Weekly Put Bonds or Term Put Bonds, as the case may be. The
Trustee shall immediately after such demand for payment give
notice by telephone to the Tender Agent and the Borrower of
the amount, if any, of such demand.
(c) Mandatory Tender Bonds.
(i) Not later than 9:30 a.m. (New York City time)
on each Purchase Date occurring pursuant to Section IV.4.7
hereof, the Tender Agent shall give notice by telephone to the
Remarketing Agent, the Trustee and the Registrar specifying
the principal amount of all Outstanding Bonds which are
subject to mandatory tender on such Purchase Date pursuant to
Section IV.4.7 hereof (the "Mandatory Tender Bonds") (such
amount, together with the accrued amount of interest payable
to but excluding the Purchase Date on the Mandatory Tender
Bonds, being the purchase price of such Mandatory Tender
Bonds) and the names of the registered owner or owners
thereof. The Remarketing Agent shall thereupon offer for sale
and use its best efforts to find purchasers for such Mandatory
Tender Bonds.
(ii) Not later than 10:00 a.m. (New York City
time) on each Purchase Date described in subparagraph (i)
above, the Trustee shall give notice by telephone to the
Remarketing Agent, the Tender Agent and the Registrar of the
accrued amount of the interest payable as of the Purchase Date
specified in such notice from the Tender Agent on, and
confirming the aggregate principal amount of, the Mandatory
Tender Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Mandatory Tender
Bonds, the Remarketing Agent shall give (A) Electronic notice
or notice by telecopy, telephone, telegram, telex or by other
similar communication to the Tender Agent, the Trustee and the
Registrar of the principal amount of Mandatory Tender Bonds
which have been remarketed in accordance with the Remarketing
Agreement and (B) if any Mandatory Tender Bonds have not been
remarketed, Electronic notice or notice by telecopy,
telephone, telegram, telex or by other similar communication
to the Borrower and the Trustee (which shall promptly
thereafter notify the Credit Provider, if any) of the
principal amount of the Mandatory Tender Bonds which have not
been remarketed.
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<PAGE> 52
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that such Remarketing Agent
has remarketed less than all the Mandatory Tender Bonds to be
purchased on such Purchase Date, the Trustee shall demand
payment under the Credit Facility, if any, then in effect by
12:45 p.m. (New York City time) on such Purchase Date so as to
provide by 2:45 p.m. (New York City time) on such Purchase
Date an amount sufficient, together with the remarketing
proceeds to be available for such purchase, calculated solely
on the basis of the notice given by the Remarketing Agent
pursuant to subparagraph (iii) above, to pay the purchase
price of the Mandatory Tender Bonds. The Trustee shall
immediately after such demand for payment give notice to the
Tender Agent and the Borrower of the amount, if any, of such
demand.
(v) If no Credit Facility is then in effect with
respect to the Bonds and the Remarketing Agent's notice
pursuant to subparagraph (iii) above indicates that the
Remarketing Agent has remarketed less than all such Mandatory
Tender Bonds to be purchased on any Purchase Date, the Tender
Agent shall immediately (but in no event later than 12:45 p.m.
(New York City time)) give notice by telephone to the Borrower
specifying the principal amount and the purchase price of such
Mandatory Tender Bonds not so remarketed and requesting the
Borrower to deposit with the Tender Agent by 2:45 p.m. (New
York City time) on such Purchase Date an amount sufficient to
pay that portion of the purchase price of such Mandatory
Tender Bonds not so remarketed, such notice to be confirmed
immediately by telecopy to the Borrower.
(d) Limitation. If a Credit Facility is in effect with
respect to the Bonds, the Remarketing Agent shall not remarket any
tendered Bonds to the County, the Borrower or any affiliate of the
Borrower.
Section 4.13. Deposits into Remarketing Accounts and Borrower
Accounts.
(a) The terms of any sale by the Remarketing Agent of
tendered Bonds shall provide for the payment of the purchase price for
tendered Bonds by the Remarketing Agent to the Tender Agent for
deposit in the Remarketing Account of the Bond Purchase Fund in
immediately available funds at or before 2:45 p.m. (New York City
time) on the Purchase Date. The Remarketing Agent shall cause to be
paid to the Tender Agent on each Purchase Date for tendered Bonds all
amounts representing proceeds of the remarketing of such Bonds, based
upon the notice given by the Remarketing Agent pursuant to Section
IV.4.12.(a)(iii), IV.4.12.(b)(iii) or IV.4.12.(c)(iii), as the case
may be.
(b) Upon receipt of any notice from the Tender Agent that
insufficient funds will be on deposit in the Bond Purchase Fund to pay
tendered bonds, the
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Borrower shall deliver or cause to be delivered to the Trustee
immediately available funds in an amount equal to such deficiency
prior to 2:45 p.m. (New York City time) on the Purchase Date.
Section 4.14. Disbursements from the Bond Purchase Fund.
(a) Application of Moneys. Moneys in the Bond Purchase
Fund (other than the proceeds of any remarketing of Credit Provider
Bonds which shall be paid to the Credit Provider on the remarketing
date) shall be applied at or before 3:00 p.m. (New York City time) to
the purchase of Bonds as provided herein by the Tender Agent, on each
Purchase Date, as follows:
First -- Moneys constituting funds in the Remarketing
Account shall be used by the Tender Agent on any Purchase Date
to purchase tendered Bonds at the purchase price.
Second -- In the event such moneys in the Remarketing
Account on any Purchase Date are insufficient to purchase all
tendered Bonds, moneys in the Credit Facility Purchase Account
on such Purchase Date shall be used by the Tender Agent at
that time to purchase such remaining tendered Bonds at the
purchase price thereof.
Third -- In the event such moneys in the Remarketing
Account and the Credit Facility Purchase Account on any
Purchase Date are insufficient to purchase all tendered Bonds,
moneys in the Borrower Account on such Purchase Date, if any,
shall be used by the Tender Agent at that time to purchase
such remaining tendered Bonds at the purchase price thereof.
Notwithstanding anything to the contrary in this Section, if
the Bonds are Book-Entry Bonds, payment of the purchase price for
tendered Bonds shall be made in accordance with the rules and
procedures of DTC.
(b) Nondeliveries. The Tender Agent shall, as to any
Bonds which have not been delivered to it as required by Section
IV.4.8 hereof, (i) notify the Remarketing Agent in writing of such
nondelivery and (ii) direct the Registrar to place a stop transfer
against an appropriate amount of Bonds registered in the name of the
holder of such Bonds on the bond registry. The Registrar shall place
and maintain such stop transfer commencing with the lowest serial
number Bond registered in the name of such holder until stop transfers
have been placed against an appropriate amount of Bonds until the
appropriate Bonds are delivered to the Registrar. Upon such delivery,
the Registrar shall make any necessary adjustments to the bond
registry.
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(c) Limitation. Notwithstanding anything contained
herein to the contrary, the Tender Agent shall not use proceeds
obtained by remarketing any Bonds to the Borrower, any affiliate of
the Borrower, or the County to pay any portion of the purchase price
of the tendered Bonds, and no such proceeds shall be deposited in the
Remarketing Account.
Section 4.15. Delivery of Bonds.
(a) If the Bonds are not Book-Entry Bonds, a principal
amount of Bonds equal to the amount of Bonds successfully remarketed
by the Remarketing Agent shall be delivered by the Trustee to the
Tender Agent for registration of transfer to such persons as shall be
designated by the Remarketing Agent. Such Bonds shall be held
available at the office of the Tender Agent and shall be picked up by
the Remarketing Agent at or after 1:00 p.m. (New York City time) on
the Purchase Date against delivery of funds for deposit into the
Remarketing Account of the Bond Purchase Fund equal to the purchase
price of such Bonds that have been remarketed. If the Bonds are
Book-Entry Bonds, transfer of ownership of the remarketed Bonds shall
be effected in accordance with the procedures of DTC and the DTC
Participants against delivery of funds for deposit into the
Remarketing Account of the Bond Purchase Fund equal to the purchase
price of such Bonds that have been remarketed.
(b) Bonds purchased with funds in the Credit Facility
Purchase Account of the Bond Purchase Fund shall be delivered and held
in accordance with Section V.5.8.(c) hereof. Bonds purchased with
funds in the Borrower Account of the Bond Purchase Fund shall be
delivered and held in accordance with the instructions of the Borrower
furnished to the Tender Agent. Such Bonds shall be held available for
registration of transfer and delivery by the Registrar in such manner
as may be agreed between the Registrar and such Credit Provider or the
Borrower, as the case may be.
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ARTICLE V
REVENUES
Section
5.1. Pledge of Revenues and Credit Facility.
(a) All of the Revenues are hereby irrevocably pledged to
the punctual payment of the principal of and interest and premium, if
any, on the Bonds, and Revenues shall not be used for any other
purpose, except as provided in the last paragraph of Section V.5.2,
while any of the Bonds remain Outstanding. Said pledge shall
constitute a first and exclusive lien on the Revenues for the payment
of the Bonds in accordance with the terms hereof and thereof. All
Revenues shall be held in trust for the benefit of the holders from
time to time of the Bonds, but shall nevertheless be disbursed,
allocated and applied solely for the uses and purposes set forth in
Article IV and this Article V.
(b) Each Credit Facility, if any, provided with respect
to the Bonds is (to the extent the County has any interest therein)
hereby irrevocably pledged to the punctual payment of the principal of
and interest and premium, if any, on such Bonds, and proceeds of any
drawing on such Credit Facility shall not be used for any other
purpose. Said pledge shall constitute a first and exclusive lien in
favor of the Trustee for the benefit of the holders of the Bonds on
such Credit Facility and any payments thereunder for the payment of
the Bonds in accordance with the terms thereof. Each Credit Facility,
if any, and any payments thereunder shall be held in trust for the
benefit of the holders from time to time of the Bonds, but shall
nevertheless be disbursed, allocated and applied solely for the uses
and purposes set forth in Article IV and this Article V.
(c) The Borrower may at its sole discretion from time to
time deliver to the Trustee such additional or other security
interests permitted by this Indenture or the County to secure the
payment of the principal of and interest and premium, if any, on the
Bonds and any such additional or other security delivered by the
Borrower shall be pledged to such payment, provided that the delivery
of such additional or other security does not adversely affect the
Tax-Exempt status of interest on the Bonds.
(d) The Bonds shall not constitute a debt or liability,
or a pledge of the faith, credit or taxing power, of the State or any
political subdivisions thereof, but shall be payable solely from the
funds herein provided therefor. The issuance of the Bonds shall not
directly or indirectly or contingently obligate the County, the State
or any political subdivision thereof to levy or pledge any form of
taxation whatever therefor or to make any appropriation for their
payment.
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Section 5.2. Bond Fund; Credit Facility Debt Service Account.
Upon the receipt thereof, the Trustee shall deposit all Revenues in the "Carbon
County, Utah Solid Waste Disposal Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A Bond Fund," which the Trustee shall
establish and maintain and hold in trust, and which shall be disbursed and
applied only as hereinafter authorized. Except as provided in this Section,
Sections V.5.7 and X.10.3, moneys in the Bond Fund shall be used solely for the
payment of the principal of and premium, if any, and interest on the Bonds as
the same shall become due, whether at maturity or upon redemption or
acceleration or otherwise.
The Trustee shall deposit in the Bond Fund from time to time, upon
receipt thereof, all amounts received by the Trustee pursuant to any Credit
Facility (except to the extent such amounts are deposited in the Credit
Facility Purchase Account in the Bond Purchase Fund pursuant to Section IV.4.10
hereof or are deposited in an escrow to effect the defeasance of Bonds pursuant
to Article X hereof), all Repayment Installments received by the Trustee from
the Borrower for deposit in the Bond Fund, any income received from the
investment of moneys on deposit in the Bond Fund and any other Revenues,
including insurance proceeds, condemnation awards and other prepayment amounts
received under the Agreement from or for the account of the Borrower.
Within the Bond Fund, the Trustee shall establish and maintain a
separate account designated as the "Credit Facility Debt Service Account".
Except to the extent payments under any Credit Facility provided with respect
to the Bonds are to be deposited in the Credit Facility Purchase Account in the
Bond Purchase Fund pursuant to Section IV.4.10 hereof or are to be deposited in
an escrow to effect the defeasance of Bonds pursuant to Article X hereof, such
payments shall be deposited in the Credit Facility Debt Service Account to pay
principal of, premium, if any and interest on the Bonds. Except as otherwise
provided in this Section and Sections V.5.7 and VII.7.3 hereof, amounts held in
the Credit Facility Debt Service Account shall be used and applied solely to
the payment of the principal of, premium, if any, and interest on the Bonds.
In making payments of principal of, premium, if any, and interest on
the Bonds, the Trustee shall (a) first use all amounts held in the Credit
Facility Debt Service Account, (b) then use all other Available Amounts held in
the Bond Fund, and (c) then use any other Revenues received by the Trustee.
The stated amount of each Credit Facility shall be unavailable for the
payment of principal of and interest on Credit Provider Bonds, it being the
intent of the parties hereto that, so long as such Credit Facility is in
effect, principal of and interest on Credit Provider Bonds shall be payable
solely from the following sources, in the following priority: (1) amounts paid
by the Borrower to the Trustee for deposit in the Bond Fund, and (2) any other
Revenues available therefor.
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Except to the extent such moneys are required to be held for the
payment of principal of, redemption premium, if any, or interest on the Bonds
then due and payable or to effect the defeasance of Bonds pursuant to Article X
hereof, so long as no Event of Default (or any event which would be an Event of
Default hereunder with the passage of time or the giving of notice) exists
hereunder, on the fifth day after each Interest Payment Date, the Trustee,
unless otherwise instructed by the Borrower, shall return to the Borrower (free
and clear of the pledge and lien of this Indenture) any moneys then on deposit
in the Bond Fund (except any moneys then on deposit in the Credit Facility Debt
Service Account) or shall deposit such funds in the Rebate Fund if so
instructed by the Borrower; provided, however, that no payment shall be made to
the Borrower if the Borrower has any obligations to a Credit Provider which are
then due and payable, as certified by the Credit Provider to the Trustee.
Section 5.3. Construction Fund. There shall be deposited into the
Carbon County, Utah Solid Waste Disposal Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.), 1997 Series A Construction Fund the amounts
specified in Section III.3.2 hereof from the proceeds of the Short-Term Taxable
Bonds.
Moneys in the Construction Fund shall be expended in accordance with
the applicable provisions of the Agreement to pay Project Costs at any time
with respect to which no Event of Default has occurred and is continuing, upon
receipt by the Trustee of a written requisition signed by an Authorized
Borrower Representative, stating the name and address of the person to whom
payment is to be made and the amount to be paid and certifying that (a) none of
the payments for which the payment or reimbursement is proposed to be made has
formed the basis for any payment or reimbursement theretofore made from the
Construction Fund, (b) each item for which payment or reimbursement is proposed
to be made is or was necessary in connection with construction of the Project,
(c) all of the proceeds of the Bonds (to and including such disbursement) have
been or are being used to provide for Project Costs and (d) such payment or
reimbursement is in accordance with all applicable provisions of the Agreement.
In making any such payment, the Trustee may conclusively rely upon such written
requisition and the Trustee shall be relieved of all liability with respect to
making such payment in accordance with such written requisition. The Trustee
shall keep and maintain adequate records pertaining to the Construction Fund
and all disbursements therefrom.
In addition to the foregoing, there shall be withdrawn from the
Construction Fund (a) any moneys remaining on deposit in the Construction Fund
upon the delivery of a Completion Certificate pursuant to Section 3.4 of the
Agreement (other than amounts to be retained by the Trustee in the Construction
Fund at the direction of the Borrower to pay Project Costs not then due and
payable or amounts with respect to which the liability for payment is in
dispute), to be deposited into a segregated account of the Bond Fund, (b) any
moneys remaining on deposit in the Construction Fund upon the prepayment of all
installments payable pursuant to Article VII of the Agreement, to be deposited
into the Bond Fund, and (c) not less than 95% of the Spendable Proceeds of the
Bonds, as defined
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herein, for Qualified Project Costs. The term "Spendable Proceeds" means the
proceeds from the sale of the Bonds, less amounts used to redeem the Short-Term
Taxable Bonds, plus transferred proceeds of the Short-Term Taxable Bonds, plus
earnings from investment of the foregoing. There shall also be transferred to
the Bond Fund from the Construction Fund any moneys remaining on deposit in the
Construction Fund at such time as the principal of all Outstanding Bonds shall
have become due and payable in accordance with the provisions of Section 6.2 of
the Agreement.
Section 5.4. Trustee Authorized to Take Actions Under the
Agreement. The County hereby authorizes and directs the Trustee, and the
Trustee hereby agrees, subject to Section VII.7.2 hereof, to take such actions
as the Trustee deems necessary to enforce the Borrower's obligation under the
Agreement to make timely payment of principal of and interest on the Bonds to
the extent payments under any Credit Facility, Bond proceeds and other moneys
in the Bond Fund are not available for such payment in accordance with the
provisions of Section V.5.2 hereof.
Section 5.5. Investment of Moneys. Subject to Section VI.6.6
hereof, any moneys in any of the funds and accounts to be established by the
Trustee pursuant to this Indenture (other than the Bond Purchase Fund) shall be
invested upon the written direction of the Borrower signed by an Authorized
Borrower Representative (such direction to specify the particular investment to
be made), by the Trustee, if and to the extent then permitted by law, in
Investment Securities. In the absence of such written direction, the Trustee
shall invest solely in units of a money-market fund or portfolio restricted to
obligations issued by, or guaranteed by the full faith and credit of, the
United States of America which is rated by each Rating Agency at least as high
as the then current rating of such Rating Agency on the Bonds if such Rating
Agency is then rating the Bonds or if the Bonds are not rated, within the top
two rating categories of a nationally recognized rating service. Moneys in any
fund or account (other than the Bond Purchase Fund) shall be invested in
Investment Securities with respect to which payments of principal thereof and
interest thereon are scheduled to be paid or are otherwise payable (including
Investment Securities payable at the option of the holder) not later than the
date on which such moneys will be required by the Trustee. Available Amounts
held in the Bond Fund shall be invested only in Government Obligations maturing
or subject to payment at par upon demand of the holder thereof within thirty
(30) days after the acquisition of any such investment (or on such earlier date
as payment thereunder shall be needed hereunder).
Notwithstanding the foregoing provisions of this Section V.5.5, any
moneys held in the Bond Purchase Fund and any moneys constituting payments
under any Credit Facility shall be held uninvested unless such moneys are
invested in accordance with Article X hereof to effect the defeasance of Bonds.
Any interest, profit or loss on any investments of moneys in any fund
or account under this Indenture shall be credited or charged to the respective
funds from which such investments are made. The Trustee may sell or present
for redemption any obligations so
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purchased whenever it shall be necessary in order to provide moneys to meet any
payment, and the Trustee shall not be liable or responsible for any loss, fee,
tax or other charge resulting from any investment, reinvestment or liquidation
hereunder. Unless otherwise directed by the Borrower, the Trustee may make any
investment permitted under this Section V.5.5 through or with its own
commercial banking or investment departments.
Section 5.6. Assignment to Trustee; Enforcement of Obligations.
The County hereby transfers, assigns and sets over to the Trustee all of the
Revenues and any and all rights and privileges it has under the Agreement with
respect to the Bonds, except (i) the County's rights to receive any notices
under this Indenture or the Agreement, (ii) the County's right to receive
payments, if any, with respect to fees, expenses and indemnification and
certain other purposes under Sections 4.2(d), 4.2(e), 6.3, 8.2 and 8.3 of the
Agreement and (iii) the County's rights to give approvals or consents pursuant
to the Agreement, but including, without limitation, the right to collect and
receive directly all of the Revenues and the right to hold and enforce any
security interest, and any Revenues collected or received by the County shall
be deemed to be held, and to have been collected or received, by the County as
the agent of the Trustee, and shall forthwith be paid by the County to the
Trustee. The Trustee also shall be entitled to take all steps, actions and
proceedings reasonably necessary in its judgment (1) to enforce the terms,
covenants and conditions of, and preserve and protect the priority of its
interest in and under, the Agreement, any Credit Facility and any other
security agreement with respect to the Project or the Bonds, and (2) to assure
compliance with all covenants, agreements and conditions on the part of the
County contained in this Indenture with respect to the Revenues.
Section 5.7. Repayment to Borrower or Credit Provider. When there
are no longer any Bonds Outstanding or provision for payment of the Bonds has
been made in accordance with Article X hereof, and all fees, charges and
expenses of the Trustee, the Registrar, any Tender Agent, any Remarketing Agent
and any Paying Agent have been paid or provided for, payment of the full amount
owing the United States Government, as determined under Section 5.7 of the
Agreement, Section VI.6.6 hereof and the Tax Certificate, all expenses of the
County relating to the Project and this Indenture have been paid or provided
for, and all other amounts payable hereunder and under the Agreement have been
paid, and this Indenture has been discharged and satisfied, the Trustee shall
pay to the Borrower any amounts remaining in any fund established and held
hereunder; provided, however, that any amounts remaining in the Credit Facility
Debt Service Account shall be paid to the Credit Provider when there are no
longer any Bonds Outstanding or provision for payment of such Bonds has been
made in accordance with Article X hereof, regardless of whether all other
amounts payable hereunder or under the Agreement have been paid.
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Section 5.8. Credit Facilities; Credit Provider Bonds.
(a) There shall be no initial Credit Facility for the
Bonds. The Trustee acknowledges the right of the Borrower at any time
to provide a substitute Credit Facility with respect to the Bonds or,
with the consent of the County, to require the Trustee to surrender a
Credit Facility upon a Permitted Termination of such Credit Facility
and have no Credit Facility in effect with respect to the Bonds;
provided, however, that no substitution of a Credit Facility may be
made with respect to any Bond during any Rate Period unless the Bonds
would then be permitted to be redeemed at the option of the Borrower
pursuant to Section IV.4.1.(a)..(2) hereof. If there shall have been
delivered to the County and the Trustee (i) a substitute Credit
Facility and (ii) the opinions and documents required by Section
4.6(e) of the Agreement, then the Trustee shall accept such Credit
Facility and, if so directed by the Borrower, upon the effective date
of such substitute Credit Facility promptly surrender the Credit
Facility theretofore in effect in accordance with the respective terms
thereof for cancellation. In the event that the Borrower elects to
provide a substitute Credit Facility or elects to terminate a Credit
Facility, the Bonds shall be subject to mandatory tender as provided
in Section IV.4.7.(a)..(2) hereof. If at any time there shall cease
to be any Bonds Outstanding hereunder which are secured by a Credit
Facility, or a Credit Facility shall be terminated pursuant to its
terms, the Trustee shall promptly surrender such Credit Facility in
accordance with its terms for cancellation. The Trustee shall comply
with the procedures set forth in each Credit Facility relating to the
termination thereof.
(b) The Trustee acknowledges the right of the Borrower,
in the event that no Credit Facility is in effect with respect to the
Bonds, to provide a Credit Facility with respect to such Bonds at any
time upon the terms and conditions specified in Section 4.6(d) of the
Agreement; provided, however, that no such provision of a Credit
Facility may be made with respect to any Bond during any Rate Period
unless the Bonds would then be permitted to be redeemed at the option
of the Borrower pursuant to Section IV.4.1.(a)..(2) hereof.
(c) In the event that a Credit Facility is in effect with
respect to the Bonds, the Trustee shall make a demand for payment
under such Credit Facility subject to and in accordance with its
terms, in order to receive payment thereunder not later than the time
payment is due on the Bonds on the following dates in the following
amounts:
(i) On each Interest Payment Date, in an amount
which will be sufficient to pay all interest due and payable
on the Outstanding Bonds on such Interest Payment Date;
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(ii) On any date fixed for payment (whether by
acceleration or otherwise), defeasance or redemption of the
Bonds in an amount which, together with amounts demanded for
paymentn pursuant to paragraph (i) above, will be sufficient
to pay the amount due on such Bonds, including accrued
interest and premium, if any (if a demand for payment is
permitted for premium under the terms of such Credit
Facility); and
(iii) On each Purchase Date, in an amount
sufficient to pay the purchase price of any Bonds tendered or
deemed tendered pursuant to this Indenture and which have not
been remarketed in accordance with Section IV.4.12 hereof.
Each such demand for payment shall be made not later than the time
required by the Credit Facility in order to receive payment thereunder
not later than the time payment is required to be made to the holders
of the Bonds pursuant to this Indenture. The Trustee shall give
notice of each such demand for payment to the Borrower at the time of
each such demand. The proceeds of each such demand shall be deposited
in the Credit Facility Debt Service Account in the Bond Fund or the
Credit Facility Purchase Account in the Bond Purchase Fund, as
appropriate, and used in the order of priority established by Section
V.5.2 hereof or Section IV.4.14 hereof, as applicable. At the time of
making any demand under a Credit Facility pursuant to Section
V.5.8.(c)(iii) hereof, the Trustee shall direct the Credit Provider to
pay the proceeds of such demand directly to the Tender Agent for
deposit in the Credit Facility Purchase Account in the Bond Purchase
Fund. The Trustee shall comply with all provisions of each Credit
Facility in order to realize upon any demand for payment thereunder,
and will not demand payment under any Credit Facility any amounts for
payment of: (i) Credit Provider Bonds; or (ii) Bonds held by the
County or the Borrower or actually known by the Trustee to be held by
any affiliate of the Borrower or any nominee of the County unless such
Credit Facility specifically permits such demand.
(d) Any Bonds purchased with payments made under a Credit
Facility pursuant to Section V.5.8.(c)(iii) hereof shall be registered
in the name of, or as otherwise directed by, the Credit Provider and
delivered to or upon the order of, or as otherwise directed by, such
Credit Provider; provided, that if such Bonds are Book-Entry Bonds,
the Trustee shall immediately upon making any demand for payment on a
Credit Facility pursuant to Section V.5.8.(c)(iii) hereof notify the
Tender Agent. Upon receipt of such notice, the Tender Agent shall
direct DTC to cause any Bonds purchased with the proceeds of such
demand to be transferred to such account at DTC, as directed by the
Credit Provider, and such Bonds shall be held in the name of or for
the account of the Credit Provider or as may be directed by such
Credit Provider.
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(e) Credit Provider Bonds shall be remarketed by the
Remarketing Agent prior to any other Bonds tendered for purchase
hereunder, and shall be remarketed in accordance with the terms of the
Remarketing Agreement. Upon (i) receipt by the Trustee and the Tender
Agent of written notification from the Credit Provider that its Credit
Facility (if any is then in effect) has been fully reinstated with
respect to principal and interest and (ii) release by the Credit
Provider of any Credit Provider Bonds which the Remarketing Agent has
remarketed, such Bonds shall be made available to the purchasers
thereof and shall no longer constitute Credit Provider Bonds for
purposes of this Indenture. The proceeds of any remarketing of Credit
Provider Bonds shall be paid to the Credit Provider on such
remarketing date in immediately available funds.
(f) Each of the Trustee and the Tender Agent agrees that
it will, immediately upon receipt, send to the Credit Provider (by
telephonic or Electronic notice) a copy of every notice received by it
hereunder relating to any Credit Provider Bonds.
(g) Notwithstanding anything to the contrary herein or in
the Bonds, all obligations of the Borrower under or in connection with
any Credit Agreement (including, without limitation, reimbursement
obligations of the Borrower to any participating Credit Providers with
respect to a Credit Facility) shall be governed by the terms of such
Credit Agreement.
(h) The Trustee shall provide to each Rating Agency then
rating the Bonds written notice of the extension of any Credit
Facility in effect with respect to the Bonds.
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ARTICLE VI
COVENANTS OF THE COUNTY
Section 6.1. Payment of Principal and Interest. The County shall
punctually pay, but only out of Revenues as herein provided, the principal and
the interest (and premium, if any) to become due in respect of every Bond
issued hereunder at the times and places and in the manner provided herein and
in the Bonds according to the true intent and meaning thereof. All such
payments shall be made by the Trustee as provided in Section II.2.1.(b). When
and as paid in full, all Bonds, if any, shall be delivered to the Trustee and
shall forthwith be cancelled by the Trustee, who shall deliver a certificate
evidencing such cancellation to the County and the Borrower. The Trustee may
retain or destroy such cancelled Bonds.
Section 6.2. Extension or Funding of Claims for Interest. In
order to prevent any accumulation of claims for interest after maturity, the
County shall not, directly or indirectly, extend or assent to the extension of
the time for the payment of any claim for interest on any of the Bonds, and
shall not, directly or indirectly, be a party to or approve any such
arrangement by purchasing or funding such claims or in any other manner. In
case any such claim for interest shall be extended or funded, whether or not
with the consent of the County, such claim for interest so extended or funded
shall not be entitled, in case of default hereunder, to the benefits of this
Indenture, except subject to the prior payment in full of the principal of all
of the Bonds then Outstanding and of all claims for interest which shall not
have been so extended or funded.
Section 6.3. Paying Agents. The County, with the written approval
of the Trustee and the Borrower, may appoint and at all times have one or more
Paying Agents (which shall meet the qualifications of the Trustee set forth in
Section VIII.8.7 hereof) in such place or places as the Borrower may designate,
for the payment of the principal of, and the interest (and premium, if any) on,
the Bonds. All provisions of Article VIII hereof which apply to the Trustee
shall also apply to any Paying Agent appointed hereunder. It shall be the duty
of the Trustee to make such arrangements with any such Paying Agent as may be
necessary to assure, to the extent of the moneys held by the Trustee for such
payment, the prompt payment of the principal of and interest and premium, if
any, on the Bonds presented at either place of payment. The Paying Agent
initially appointed hereunder is the Trustee.
Section 6.4. Preservation of Revenues. The County shall not waive
any provision of the Agreement or take any action to interfere with or impair
the pledge and assignment hereunder of Revenues and the assignment to the
Trustee of rights under the Agreement, or the Trustee's enforcement of any
rights thereunder, without the prior written consent of the Trustee. The
Trustee may give such written consent, and may itself take any such action, or
consent to any Amendment, only in accordance with the provisions of Article IX
hereof.
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Section 6.5. Compliance with Indenture. The County shall not
issue, or permit to be issued, any Bonds secured or payable in any manner out
of Revenues in any manner other than in accordance with the provisions of this
Indenture, and shall not suffer or permit any default to occur under this
Indenture, but shall faithfully observe and perform all the covenants,
conditions and requirements hereof.
Section 6.6. Arbitrage Covenants; Rebate Fund.
(a) The County covenants with all persons who hold or at
any time held Bonds that the County will not directly or indirectly
use the proceeds of any of the Bonds or any other funds of the County
or permit the use of the proceeds of any of the Bonds or any other
funds of the County or take or omit to take any other action which
will cause any of the Bonds to be "arbitrage bonds" or otherwise
subject to federal income taxation by reason of Sections 103 and 141
through 150 of the Code and any applicable regulations promulgated
thereunder. To that end the County covenants to comply with all
covenants set forth in the Tax Certificate, which is hereby
incorporated herein by reference as though fully set forth herein.
(b) The Trustee shall establish and maintain a fund
separate from any other fund established and maintained hereunder
designated the "Carbon County, Utah Solid Waste Disposal Refunding
Revenue Bonds (Laidlaw Environmental Services, Inc.) 1997 Series A
Rebate Fund" (herein called the "Rebate Fund"). Within the Rebate
Fund, the Trustee shall maintain such accounts as shall be directed by
the Borrower as necessary in order for the County and the Borrower to
comply with the terms and requirements of the Tax Certificate.
Subject to the transfer provisions provided in paragraph (c) below,
all money at any time deposited in the Rebate Fund shall be held by
the Trustee in trust, to the extent required to satisfy the Rebate
Requirement (as defined in the Tax Certificate), for payment to the
United States Government, and neither the Borrower, the Guarantor, the
County nor the Bondholders shall have any rights in or claim to such
moneys. All amounts deposited into or on deposit in the Rebate Fund
shall be governed by this Section VI.6.6, by Section 5.7 of the
Agreement and by the Tax Certificate. The Trustee shall conclusively
be deemed to have complied with such provisions if it follows the
directions of the Borrower, including supplying all necessary
information requested by the Borrower, the Guarantor and the County in
the manner set forth in the Tax Certificate, and shall not be required
to take any actions thereunder in the absence of written directions
from the Borrower.
(c) Upon receipt of the Borrower's written instructions,
the Trustee shall remit part or all of the balances in the Rebate Fund
to the United States Government, as so directed. In addition, if the
Borrower so directs, the Trustee will deposit moneys into or transfer
moneys out of the Rebate Fund from or into such accounts or funds as
directed by the Borrower's written directions. Any funds remaining in
the Rebate Fund after redemption and payment of all of the
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Bonds and payment and satisfaction of any Rebate Requirement shall be
withdrawn and remitted to the Borrower upon its written request.
(d) Notwithstanding any provision of this Indenture,
including in particular Article X hereof, the obligation of the
Borrower to pay the Rebate Requirement to the United States Government
and to comply with all other requirements of this Section VI.6.6,
Section 5.7 of the Agreement and the Tax Certificate shall survive the
defeasance or payment in full of the Bonds.
Section 6.7. Other Liens. So long as any Bonds are Outstanding,
the County shall not create or suffer to be created any pledge, lien or charge
of any type whatsoever upon all or any part of the Revenues, other than the
lien of this Indenture.
Section 6.8. Further Assurances. Whenever and so often as
requested so to do by the Trustee, the County shall promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things, as may be necessary or reasonably required in
order to further and more fully vest in the Trustee and the Bondholders all of
the rights, interests, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Indenture and to perfect and
maintain as perfected such rights, interests, powers, benefits, privileges and
advantages.
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ARTICLE VII
DEFAULT
Section 7.1. Events of Default; Acceleration; Waiver of Default.
Each of the following events shall constitute an "Event of Default" hereunder:
(a) Failure to make payment of any installment of
interest upon any Bond after such payment shall have become due and
payable;
(b) Failure to make due and punctual payment of the
principal of or premium, if any, on any Bond after such payment shall
have become due and payable, whether at the stated maturity thereof,
or upon proceedings for redemption thereof or upon the maturity
thereof by declaration;
(c) Failure to make payment of the purchase price of any
Bond after such payment is required to be made pursuant to Section
IV.4.6 or IV.4.7 hereof;
(d) The occurrence of an "Event of Default" under the
Agreement, as specified in Section 6.1 thereof, with respect to the
Bonds;
(e) Default by the County in the performance or
observance of any other of the covenants, agreements or conditions on
its part contained in this Indenture or in the Bonds, and the
continuance of such default for a period of thirty (30) days after
written notice thereof, specifying such default and requiring the same
to be remedied, shall have been given to the County, the Borrower, the
Guarantor and the Credit Provider, if any, by the Trustee, or to the
County, the Borrower, the Guarantor, the Credit Provider and the
Trustee by the holders of not less than twenty-five percent (25%) in
aggregate principal amount of the Bonds at the time Outstanding;
(f) Receipt by the Trustee from the Credit Provider, if
any, of a notice as specified in the Credit Facility to the effect
that such Credit Provider has not been reimbursed for a payment under
the Credit Facility and stating that the amount available to be drawn
or otherwise to be provided thereunder to pay interest on the Bonds
has not been reinstated;
(g) Receipt by the Trustee from the Credit Provider, if
any, of a written notice to the effect that an event of default has
occurred under the Credit Agreement and directing the Trustee to
declare an Event of Default hereunder;
(h) The occurrence of an "Event of Default" under the
Guaranty; or
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(i) The occurrence of an Act of Bankruptcy of the
Guarantor.
No default specified in (e) above shall constitute an Event of
Default unless the County, the Borrower, the Guarantor or the Credit
Provider, if any, shall have failed to correct such default within the
applicable 30-day period; provided, however, that if the default shall
be such that it can be corrected, but cannot be corrected within such
period, it shall not constitute an Event of Default if corrective
action is instituted by the County, the Borrower, the Guarantor or the
Credit Provider within the applicable period and diligently pursued
until the default is corrected. With regard to any alleged default
concerning which notice is given to the Borrower, the Guarantor or the
Credit Provider under the provisions of this Section, the County
hereby grants the Borrower, the Guarantor and the Credit Provider, if
any, full authority for the account of the County to perform any
covenant or obligation the non-performance of which is alleged in said
notice to constitute a default in the name and stead of the County
with full power to do any and all things and acts to the same extent
that the County could do and perform any such things and acts and with
power of substitution. Notwithstanding such grant, neither the
Borrower, the Guarantor nor any Credit Provider shall have any
obligation to cure any default of the County.
Upon the occurrence and continuation of an Event of Default
under Section VII.7.1.(f), Section VII.7.1.(g), Section VII.7.1.(h) or
Section VII.7.1.(i) hereof, the Trustee shall, and upon the occurrence
and continuation of an Event of Default under Section VII.7.1.(a),
VII.7.1.(b), VII.7.1.(c), VII.7.1.(d) or VII.7.1.(e) hereof, the
Trustee may, and upon the written request of the holders of not less
than twenty-five percent (25%) in aggregate principal amount of Bonds
then Outstanding with the consent of the Credit Provider, if any, or
upon the written request of the Credit Provider, if any, shall, by
notice in writing delivered to the Borrower, the Guarantor and the
Credit Provider, if any, with copies of such notice being sent to the
County, declare the principal of all Bonds then Outstanding and the
interest accrued thereon immediately due and payable, and such
principal and interest shall thereupon become and be immediately due
and payable. Interest on the Bonds shall cease to accrue from and
after the date of declaration of any such acceleration.
Notwithstanding the foregoing, the Trustee shall not be required to
take any action upon the occurrence and continuation of an Event of
Default under Section VII.7.1.(d), VII.7.1.(e), VII.7.1.(h) or
VII.7.1.(i) above until a Responsible Officer of the Trustee has
actual knowledge of such Event of Default. After any declaration of
acceleration under this Section VII.7.1 the Trustee shall immediately
take such actions as are necessary to realize moneys under the
Guaranty or the Credit Facility, if any, and shall declare all
indebtedness payable under Section 4.2(a) of the Agreement with
respect to the Bonds to be immediately due and payable in accordance
with Section 7.3 of the Agreement and may exercise and enforce such
rights as exist under the Agreement and the Guaranty.
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The preceding paragraph, however, is subject to the condition
that if, at any time after the principal of the Bonds shall have been
so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as
hereinafter provided, there shall have been deposited with the Trustee
a sum which, together with any other amounts then held in the Bond
Fund, is sufficient to pay all the principal of such Bonds matured
prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, and the reasonable expenses (including
reasonable attorneys' fees) of the Trustee, and any and all other
defaults actually known to the Trustee (other than in the payment of
principal of and interest on such Bonds due and payable solely by
reason of such declaration) shall have been made good or cured to the
satisfaction of the Trustee in its sole discretion or provision deemed
by the Trustee to be adequate shall have been made therefor, then, and
in every such case, the holders of at least a majority in aggregate
principal amount of the Bonds then Outstanding, by written notice to
the County and to the Trustee accompanied by the written consent of
the Credit Provider, if any, and written notice from the Credit
Provider, if any, that the Credit Facility has been reinstated in
full, may, on behalf of the holders of all Bonds, rescind and annul
such declaration with respect to the Bonds and its consequences and
waive such default; provided that no such rescission and annulment
shall extend to or shall affect any subsequent default, or shall
impair or exhaust any right or power consequent thereon.
Section 7.2. Institution of Legal Proceedings by Trustee. In
addition, if one or more of the Events of Default hereunder shall happen and be
continuing, the Trustee in its sole discretion may, and upon the written
request of the Credit Provider, if any, or the holders of a majority in
aggregate principal amount of the Bonds then Outstanding with the consent of
the Credit Provider, if any, and upon being indemnified to its satisfaction in
its sole discretion therefor (including with respect to any expenses or
liability the Trustee may incur) shall, proceed to protect or enforce its
rights or the rights of the holders of Bonds under the Act or under this
Indenture, by a suit in equity or action at law, either for the specific
performance of any covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or by mandamus or other appropriate
proceeding for the enforcement of any other legal or equitable remedy as the
Trustee shall deem most effectual in support of any of its rights or duties
hereunder. If the Trustee reasonably determines that it may not receive
payment for its extraordinary services and expenses relating to the enforcement
of its rights or the rights of the holders of the Bonds under the Act or under
this Indenture, the Trustee shall have no duty to act if it gives written
notice of such decision to the Bondholders and the Bondholders subsequently
fail to provide the Trustee with reasonable indemnification.
Section 7.3. Application of Moneys Collected by Trustee. Any
moneys collected by the Trustee and moneys in the Bond Fund on or after the
occurrence of an Event of Default shall be applied in the order following, at
the date or dates fixed by the Trustee and, in the case of distribution of such
moneys on account of principal (or premium, if
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any) or interest, upon presentation of the Bonds, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of costs and expenses of collection,
just and reasonable compensation to the Trustee for its own services
and for the services of counsel, agents and employees by it properly
engaged and employed, and for advances made pursuant to the provisions
of this Indenture with interest on all such advances at the rate of
nine percent (9%) per annum; provided, that any payments under a
Credit Facility shall not be so applied.
Second: In case the principal of none of the Outstanding
Bonds shall have become due and remains unpaid, to the payment of
interest in default on the Outstanding Bonds in the order of the
maturity thereof, such payments to be made ratably and proportionately
to the persons entitled thereto without discrimination or preference,
except as specified in Section VI.6.2; provided, however, that no
payment of interest shall be made with respect to any Bonds held by
the County, the Borrower, the Guarantor or any Credit Provider or
actually known by the Trustee to be held by any affiliate of the
Borrower, the Guarantor or any nominee of the County, the Borrower,
the Guarantor, any affiliate of the Borrower or any Credit Provider,
until interest due on all Bonds not so registered shall have been
paid, and no interest on any such Bonds shall be paid from amounts
paid under the Credit Facility, if any.
Third: In case the principal of any of the Outstanding Bonds
shall have become due by declaration or otherwise and remains
unpaid, first to the payment of principal of all Outstanding Bonds then
due and unpaid, then to the payment of interest in default in the order
of maturity thereof, and then to the payment of the premium thereon, if
any; in every instance such payment to be made ratably to the persons
entitled thereto without discrimination or preference, except as
specified in Section VI.6.2; provided, however, that no payment of
principal or premium or interest shall be made with respect to any
Bonds held by the County, the Borrower, the Guarantor or any Credit
Provider or known by the Trustee to be held by any affiliate of the
Borrower or any nominee of the County, the Borrower, the Guarantor, any
affiliate of the Borrower, the Guarantor or any Credit Provider, until
all amounts due on all Bonds not so held have been paid, and no
principal of or premium or interest on any such Bonds shall be paid
from amounts paid under the Credit Facility, if any.
Fourth: To the Credit Provider, if any, as reimbursement for
amounts paid under its Credit Facility and other amounts due under the
applicable Credit Agreement, as certified by the Credit Provider to
the Trustee.
Section 7.4. Effect of Delay or Omission to Pursue Remedy. No
delay or omission of the Trustee or of any holder of Bonds to exercise any
right or power arising
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from any default shall impair any such right or power or shall be construed to
be a waiver of any such default or acquiescence therein, and every power and
remedy given by this Article VII to the Trustee or to the holders of Bonds may
be exercised from time to time and as often as shall be deemed expedient. In
case the Trustee shall have proceeded to enforce any right under this
Indenture, and such proceedings shall have been discontinued or abandoned
because of waiver or for any other reason, or shall have been determined
adversely to the Trustee, then and in every such case the County, the Trustee,
the Credit Provider, if any, and the holders of the Bonds, severally and
respectively, shall be restored to their former positions and rights hereunder
in respect to the trust estate; and all remedies, rights and powers of the
County, the Trustee, the Credit Provider and the holders of the Bonds shall
continue as though no such proceedings had been taken.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon
or reserved to the Trustee or to any holder of the Bonds is intended to be
exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity.
Section 7.6. Covenant to Pay Bonds in Event of Default. The
County covenants that, upon the happening of any Event of Default, the County
will pay to the Trustee upon demand, but only out of Revenues, for the benefit
of the holders of such Bonds, the whole amount then due and payable thereon (by
declaration or otherwise) for interest or for principal and premium, or both,
as the case may be, and all other sums which may be due hereunder or secured
hereby, including reasonable compensation to the Trustee, its agents and
counsel, and any expenses or liabilities incurred by the Trustee hereunder. In
case the County shall fail to pay the same forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
to institute proceedings at law or in equity in any court of competent
jurisdiction to recover judgment for the whole amount due and unpaid, together
with costs and reasonable attorneys' fees and expenses, subject, however, to
the condition that such judgment, if any, shall be limited to, and payable
solely out of, Revenues as herein provided and not otherwise. The Trustee
shall be entitled to recover such judgment as aforesaid, either before or after
or during the pendency of any proceedings for the enforcement of this
Indenture, and the right of the Trustee to recover such judgment shall not be
affected by the exercise of any other right, power or remedy for the
enforcement of the provisions of this Indenture. If the Event of Default
involves the bankruptcy of the Borrower (or the Guarantor, if applicable),
amounts payable to or for the benefit of the Bondholders pursuant to the
bankruptcy plan shall be paid to the Trustee for application as provided in
Section 7.3 of the Indenture; and if payments are made directly to the
Bondholders by the bankruptcy trustee, those Bondholders shall be liable to the
Trustee for applying the funds in the manner provided in Section VII.7.3
hereof, including, but not limited to, the payment of the Trustee's
extraordinary fees and expenses.
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Section 7.7. Trustee Appointed Agent for Bondholders. The Trustee
is hereby appointed the agent and attorney of the holders of all Bonds
Outstanding hereunder for the purpose of filing any claims relating to the
Bonds.
Section 7.8. Power of Trustee to Control Proceedings. In the
event that the Trustee, upon the happening of an Event of Default, shall have
taken any action, by judicial proceedings or otherwise, pursuant to its duties
hereunder, whether upon its own discretion or upon the request of holders of
the Bonds, it shall have full power, in the exercise of its discretion for the
best interests of the holders of the Bonds, with respect to the continuance,
discontinuance, withdrawal, compromise, settlement or other disposal of such
action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default hereunder, discontinue, withdraw, compromise or
settle, or otherwise dispose of any litigation pending at law or in equity, if
at the time there has been filed with it a written request signed by the Credit
Provider or the holders of at least a majority in principal amount of the Bonds
Outstanding hereunder opposing such discontinuance, withdrawal, compromise,
settlement or other disposal of such litigation.
All rights of action under this Indenture or under any of the Bonds
secured hereby which are enforceable by the Trustee may be enforced by it
without the possession of any of the Bonds, or the production thereof at the
trial or other proceedings relative thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name as Trustee of
an express trust for the equal and ratable benefit of the Bondholders, subject
to the provisions of this Indenture.
Section 7.9. Limitation on Bondholders' Right to Sue. No holder
of any Bond issued hereunder shall have the right to institute any suit, action
or proceeding at law or in equity, for any remedy under or upon this Indenture,
unless (a) such holder shall have previously given to the Trustee written
notice of the occurrence of an Event of Default hereunder; (b) the holders of
at least a majority in aggregate principal amount of all the Bonds then
Outstanding shall have made written request upon the Trustee to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name; (c) said holders shall have tendered to the Trustee indemnity
satisfactory to it against the costs, expenses (including reasonable attorneys'
fees) and liabilities to be incurred in compliance with such request; and (d)
the Trustee shall have refused or omitted to comply with such request for a
period of thirty (30) days after such written request shall have been received
by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or
omission are hereby declared, in every case, to be conditions precedent to the
exercise by any holder of Bonds of any remedy hereunder; it being understood
and intended that no one or more holders of Bonds shall have any right in any
manner whatever by his or her or their action to enforce any right under this
Indenture, except in the manner herein provided, and that all proceedings at
law or in equity to enforce any provision of this Indenture shall be
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instituted, had and maintained in the manner herein provided and for the equal
benefit of all holders of the Outstanding Bonds, subject to the provisions of
this Indenture.
The right of any holder of any Bond to receive payment of the
principal of (and premium, if any) and interest on such Bond out of Revenues,
as herein and therein provided, on and after the respective due dates expressed
in such Bond, or to institute suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such holder, notwithstanding the foregoing provisions of this
Section or Section VII.7.8 or any other provision of this Indenture.
Section 7.10. Limitation of Liability to Revenues. Notwithstanding
anything in this Indenture contained, the County shall not be required to
advance any moneys derived from the proceeds of taxes collected by the County
or by any governmental body or political subdivision of the State or from any
source of income of any governmental body or political subdivision of the State
or the County other than the Revenues, for any of the purposes in this
Indenture mentioned, whether for the payment of the principal of or interest on
the Bonds or for any other purpose of this Indenture. The Bonds are not
general obligations of the County, and are payable from and secured by the
Revenues only.
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ARTICLE VIII
THE TRUSTEE, THE REGISTRAR, THE TENDER AGENT
AND THE REMARKETING AGENT
Section
8.1. Duties, Immunities and Liabilities of Trustee and Registrar. The
Trustee and the Registrar shall, prior to an Event of Default hereunder, and
after the curing of all Events of Default hereunder which may have occurred,
perform such duties and only such duties as are specifically set forth in this
Indenture. The Trustee shall, during the existence of any Event of Default
hereunder (which has not been cured), exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in
their exercise, as prudent persons would exercise or use under the circumstances
in the conduct of their own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee or the Registrar from liability for its own negligent action or its own
negligent failure to act or its own willful misconduct, except that:
(a) Prior to the occurrence of any Event of Default
hereunder and after the curing of all Events of Default which may have
occurred, the duties and obligations of the Trustee and the Registrar,
as the case may be, shall be determined solely by the express
provisions of this Indenture; the Trustee or the Registrar, as the
case may be, shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture; and no covenants or obligations shall be implied into this
Indenture which are adverse to the Trustee or the Registrar, as the
case may be; and
(b) At all times, regardless of whether or not any Event
of Default shall exist,
(1) the Trustee and the Registrar shall not be
liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Trustee or the
Registrar unless it shall be proved that the Trustee or the
Registrar, as the case may be, was negligent in ascertaining
the pertinent facts; and
(2) neither the Trustee nor the Registrar shall
be personally liable with respect to any action taken,
permitted or omitted by it in good faith in accordance with
the direction of the holders of not less than a majority, or
such other percentage as may be required hereunder, in
aggregate principal amount of the Bonds Outstanding relating
to the time, method and place of conducting any proceeding for
any remedy available
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to the Trustee or the Registrar, or exercising any trust or
power conferred upon the Trustee or the Registrar under this
Indenture; and
(3) in the absence of bad faith on the part of
the Trustee or the Registrar, as the case may be, the Trustee
and the Registrar may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificate or opinion furnished to the
Trustee or the Registrar, as the case may be, conforming to
the requirements of this Indenture; but in the case of any
such certificate or opinion which by any provision hereof is
specifically required to be furnished to the Trustee or the
Registrar, as the case may be, the Trustee or the Registrar,
as the case may be, shall be under a duty to examine the same
to determine whether or not it conforms to the requirements of
this Indenture.
(c) The Trustee may execute any of the trusts or powers
hereof and perform the duties required of it hereunder by or through
attorneys, agents or receivers, and shall be entitled to advice of
counsel concerning all matters of trust and concerning its duties
hereunder and the Trustee shall not be responsible for any misconduct
or negligence on the part of any attorney or agent appointed with due
care by it hereunder.
None of the provisions contained in this Indenture shall
require the Trustee or the Registrar to expend or risk its own funds
or otherwise incur individual financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers. The permissive right of the Trustee to perform acts
enumerated in this Indenture or the Agreement shall not be construed
as a duty or obligation hereunder.
Section 8.2. Right of Trustee and Registrar to Rely upon
Documents, Etc. Except as otherwise provided in Section VIII.8.1:
(a) The Trustee and the Registrar may rely and shall be
protected in acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, Bond,
direction, demand, election or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) Any notice, request, direction, election, order or
demand of the County mentioned herein shall be deemed to be
sufficiently evidenced by an instrument signed in the name of the
County by an Authorized County Representative, and any resolution of
the County shall be evidenced to the Trustee or the Registrar by a
Certified Resolution;
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(c) Each of the Trustee and the Registrar may consult
with counsel of its selection (who may include its own counsel or
counsel for the County or Bond Counsel) and the opinion of such
counsel shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel; and
(d) Whenever in the administration of the trusts of this
Indenture the Trustee or the Registrar shall deem it necessary or
desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence
of negligence or bad faith on the part of the Trustee or the
Registrar, as the case may be, be deemed to be conclusively proved and
established by a Certificate of the County; and such Certificate of
the County shall, in the absence of negligence or bad faith on the
part of the Trustee or the Registrar, as the case may be, be full
warrant to the Trustee or the Registrar, as the case may be, for any
action taken or suffered by it under the provisions of this Indenture
upon the faith thereof.
Section 8.3. Trustee and Registrar Not Responsible for Recitals.
The recitals contained herein and in the Bonds shall be taken as the statements
of the County, and the Trustee and the Registrar assume no responsibility for
the correctness of the same except (with respect to the Registrar) for the
Certificate of Authentication thereon. The Trustee and the Registrar make no
representations as to the validity or sufficiency of this Indenture or of the
Bonds. The Trustee and the Registrar shall not be accountable for the use or
application by the County of any of the Bonds authenticated or delivered
hereunder or of the proceeds of such Bonds except to the extent specifically
provided in this Indenture.
Section 8.4. Right of Trustee and Registrar to Acquire Bonds. The
Trustee, the Registrar and their officers and directors may acquire and hold,
or become the pledgee of, Bonds and otherwise deal with the County in the
manner and to the same extent and with like effect as though it were not
Trustee or Registrar, as the case may be, hereunder.
Section 8.5. Moneys Received by Trustee and Registrar to Be Held
in Trust. Subject to the provisions of Section X.10.3, all moneys received by
the Trustee and the Registrar shall, until used or applied 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 or as
otherwise provided herein. Except to the extent provided otherwise herein, any
interest allowed on any such moneys shall be deposited in the fund to which
such moneys are credited. Available Amounts and amounts being aged to become
Available Amounts, amounts received under any Credit Facility and proceeds of
any remarketing of Bonds shall not be commingled with any other funds held by
the Trustee hereunder.
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Section 8.6. Compensation and Indemnification of Trustee and
Registrar. The Trustee and the Registrar shall be entitled to reasonable
compensation for all services rendered by them in the execution of the trusts
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee or the Registrar, as the case may be, which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust, and the Agreement will require
the Borrower to pay or reimburse the Trustee or the Registrar, as the case may
be, upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or the Registrar, as the case may be, in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. If any
property, other than cash, shall at any time be held by the Trustee or the
Registrar, as the case may be, subject to this Indenture, or any supplemental
indenture, as security for the Bonds, the Trustee or the Registrar, as the case
may be, if and to the extent authorized by a receivership, bankruptcy or other
court of competent jurisdiction or by the instrument subjecting such property
to the provisions of this Indenture as such security for the Bonds, shall be
entitled (but not required) to make advances for the purpose of preserving such
property or of discharging tax liens or other prior liens or encumbrances
thereon. The Agreement will also require the Borrower to provide certain
indemnification to the Trustee and the Registrar. Notwithstanding the
foregoing, prior to seeking indemnity the Trustee shall make timely payments of
principal of and interest on the Bonds with moneys on deposit in the Bond Fund
as provided herein, and shall accelerate the payment of principal on the Bonds
and demand payment under each Credit Facility when required by this Indenture
without seeking indemnification from the Borrower or any Bondholder. Upon the
occurrence and continuance of an Event of Default hereunder, and subject to
Section VII.7.3 hereof, the Trustee shall have a lien prior to the Bonds as to
all property and funds held by it (other than the Rebate Fund) for any amount
owing to it or any predecessor Trustee pursuant to this Section VIII.8.6 or the
Agreement and the rights of the Trustee to compensation for its services and to
payment or reimbursement for its costs, expenses, or advances shall have
priority over the Bonds in respect of all property or funds held or collected
by the Trustee as such and other funds held in trust by the Trustee for the
benefit of the holders of particular Bonds; provided, however, that neither the
Trustee nor any predecessor Trustee shall have any lien or claim against moneys
paid under any Credit Facility for payment of any such compensation,
reimbursement or other amounts.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.1(c) of the Agreement and
Section VII.7.1 hereof, such expenses (including the reasonable charges and
expenses of its counsel and agents) and the compensation for such services are
intended to constitute expenses of administration under any applicable federal
or state bankruptcy, insolvency or other similar law. The Trustee shall be
entitled to all reasonable fees and expenses incurred in enforcing the
Bondholders' rights in any bankruptcy action, and the intention that the fees
and expenses incurred by the Trustee in enforcing the rights of the Bondholders
be treated as expenses of
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administration under any applicable federal or state bankruptcy, insolvency or
other similar law shall not be deemed to limit the amount payable to the
Trustee. The provisions of this Section VIII.8.6 shall survive the termination
of this Indenture and the resignation or removal of the Trustee or the
Registrar.
Section 8.7. Qualifications of Trustee and Registrar. There shall
at all times be a trustee and a registrar hereunder which shall be corporations
or banking associations organized and doing business under the laws of the
United States or of a state thereof, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least fifty
million dollars ($50,000,000), subject to supervision or examination by federal
or state authority; provided, however, that no Credit Provider shall be
eligible to serve as Trustee or Registrar so long as it is the provider of a
Credit Facility hereunder. If such corporations or banking associations
publish reports of condition at least annually, pursuant to law or to the
requirements of any supervising or examining authority above referred to, then
for the purposes of this Section the combined capital and surplus of such
corporations or banking associations shall be deemed to be their combined
capital and surplus as set forth in their most recent reports of conditions so
published. In case at any time the Trustee or the Registrar shall cease to be
eligible in accordance with the provisions of this Section, the Trustee or the
Registrar, as the case may be, shall resign immediately in the manner and with
the effect specified in Section VIII.8.8.
Section 8.8. Resignation and Removal of Trustee or Registrar and
Appointment of Successor Trustee or Registrar.
(a) The Trustee or the Registrar may at any time resign
by giving written notice to the County, the Borrower and the Credit
Provider, if any, and by giving to the Bondholders notice either by
publication of such resignation, which notice shall be published at
least once in a Qualified Newspaper, or by giving Notice by Mail to
such Bondholders. The Trustee shall also mail a copy of any such
notice of resignation to the Rating Agencies. Upon receiving such
notice of resignation, the County, with the advice and consent of the
Borrower and the consent of the Credit Provider (whose consent shall
not be unreasonably withheld), shall promptly appoint a successor
trustee or registrar, as the case may be, by an instrument in writing.
If no successor trustee or registrar, as the case may be, shall have
been so appointed and have accepted appointment within thirty (30)
days after the giving of such notice of resignation by the Trustee or
the Registrar, as the case may be, the resigning trustee or registrar,
as the case may be, may petition any court of competent jurisdiction
for the appointment of a successor trustee or registrar, as the case
may be, or any Bondholder who has been a bona fide holder of a Bond
for at least six (6) months may, on behalf of himself and others
similarly situated, petition any such court for the appointment of a
successor trustee or registrar, as the case may be. Such court may
thereupon, after such notice, if any, as it may deem proper and may
prescribe, appoint a successor trustee or registrar, as the case may
be.
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(b) In case at any time either of the following shall
occur:
(1) the Trustee or the Registrar shall cease to
be eligible in accordance with the provisions of Section
VIII.8.7 and shall fail to resign after written request
therefor by the County or by any Bondholder who has been a
bona fide holder of a Bond for at least six (6) months.
(2) the Trustee or the Registrar shall become
incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or Registrar or of its
property shall be appointed, or any public officer shall take
charge or control of the Trustee or Registrar or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the County may remove the Trustee or the
Registrar, as the case may be, and, with the advice and consent of the
Borrower and the consent of the Credit Provider (whose consent shall
not be unreasonably withheld), appoint a successor trustee or
registrar, as the case may be, by an instrument in writing, or any
such Bondholder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee or the Registrar, as the case may be, and the
appointment of a successor trustee or registrar, as the case may be.
Such court may thereupon, after such notice, if any, as it may deem
proper and may prescribe, remove the Trustee or the Registrar, as the
case may be, and appoint a successor trustee or registrar, as the case
may be. Upon any removal of the Trustee, any outstanding fees and
expenses of such former Trustee shall be paid in accordance with
Section VIII.8.6 hereof.
(c) The County, in the absence of an Event of Default, or
the holders of a majority in aggregate principal amount of the Bonds
at the time Outstanding may at any time remove the Trustee or the
Registrar, as the case may be, and appoint a successor trustee or
registrar, as the case may be, by an instrument or concurrent
instruments in writing signed by the County or such Bondholders, as
the case may be.
(d) Any resignation or removal of the Trustee or the
Registrar, as the case may be, and appointment of a successor trustee
or registrar, as the case may be, pursuant to any of the provisions of
this Section shall become effective only upon acceptance of
appointment by the successor trustee or registrar, as the case may be,
as provided in Section VIII.8.9, and upon transfer of the Credit
Facility, if any, then in effect to the successor Trustee.
Section 8.9. Acceptance of Trust by Successor Trustee. Any
successor trustee appointed as provided in Section VIII.8.8 shall execute,
acknowledge and deliver to the County, the Borrower, the Guarantor, the Credit
Provider, if any, and to its predecessor
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trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts, duties and obligations of
its predecessor in the trusts hereunder, with like effect as if originally
named as Trustee herein; but, nevertheless, on the Written Request of the
County or the request of the successor trustee, the trustee ceasing to act
shall execute and deliver an instrument transferring to such successor trustee,
upon the trusts herein expressed, all the rights, powers and trusts of the
trustee so ceasing to act. Upon request of any such successor trustee, the
County shall execute any and all instruments in writing necessary or desirable
for more fully and certainly vesting in and confirming to such successor
trustee all such rights, powers and duties. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by
such trustee to secure the amounts due it as compensation, reimbursement,
expenses and indemnity afforded to it by Section VIII.8.6.
No successor trustee shall accept appointment as provided in this
Section VIII.8.9 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section VIII.8.7.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the County or such successor trustee shall give the Bondholders,
the Credit Provider, if any, and each Rating Agency notice of the succession of
such trustee to the trusts hereunder in the manner prescribed in Section
VIII.8.8 for the giving of notice of resignation of the Trustee.
Section 8.10. Merger or Consolidation of Trustee or Registrar. Any
corporation or banking association into which the Trustee may be merged or with
which it may be consolidated, or any corporation or banking association
resulting from any merger or consolidation to which the Trustee or the
Registrar shall be a party, or any corporation or banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee or the Registrar, shall be the successor of the Trustee or the
Registrar hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided that such successor trustee or registrar shall be
eligible under the provisions of Section VIII.8.7.
Section 8.11. Accounting Records and Reports; Financing Statements.
The Trustee and the Registrar shall keep proper books of record and account in
accordance with trust accounting standards in which complete and correct
entries shall be made of all transactions relating to the receipt, investment,
disbursement, allocation and application of the Revenues and the proceeds of
the Bonds received by the Trustee or the Registrar. Such records shall specify
the account or fund to which each investment (or portion thereof) held by the
Trustee is to be allocated and shall set forth, in the case of each Investment
Security, (a) its purchase price, (b) its value at maturity or its sale price,
as the case may be, (c) the amounts and dates of any payments to be made with
respect thereto
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and (d) such documentation and evidence as is required to be obtained by the
Borrower to establish that the requirements of Article V of the Tax Certificate
have been met. Such records shall be open to inspection by the County, the
Borrower and the Credit Provider, if any, and by any Bondholder at any
reasonable time during regular business hours on reasonable notice. The
Trustee shall furnish to the County and the Borrower monthly statements of all
investments made by the Trustee and all funds and accounts held by the Trustee.
The Trustee shall furnish to any Bondholder who may make written
request therefor a copy of the most recent audited financial statements of the
Borrower that are in the possession of the Trustee. The Trustee shall have no
responsibility or liability with respect to the Borrower's failure to provide
such statements, and the Trustee shall not be required to compel the Borrower
to provide any such statements.
The Trustee shall not be responsible for the preparation or filing of
any UCC financing statements or continuation statements under this Indenture.
Section 8.12. Registrar. The County, at the request and direction
of the Borrower, shall appoint a registrar for the Bonds. The Registrar shall
be a bank, trust company or national banking association which meets the
qualifications of Section VIII.8.7 hereof, willing and able to accept the
office on reasonable and customary terms and authorized by law to perform all
the duties imposed upon it hereby. The Registrar shall signify its acceptance
of the duties and obligations imposed upon it hereby by executing and
delivering to the County and the Trustee a written acceptance thereof. The
Registrar initially appointed hereunder is the Trustee.
Section 8.13. Tax Certificate. The Trustee covenants and agrees
that it will comply with all written instructions of the Borrower given in
accordance with the Tax Certificate and will take any and all action as may be
necessary in accordance with such written instructions. The Trustee
acknowledges receipt of the Tax Certificate and acknowledges that the
provisions of the Tax Certificate are incorporated herein by reference as
provided in Section VI.6.6 hereof. The Trustee shall not be accountable for
the use by the Borrower of the proceeds of the Bonds.
Section 8.14. Appointment of Co-Trustee. In the event the Trustee
deems that by reason of any present or future law of any jurisdiction it may
not exercise any of the powers, rights or remedies herein granted to the
Trustee or hold title to the properties, in trust, as herein granted, or take
any other action which may be desirable or necessary in connection therewith,
it may be necessary that the Trustee appoint an additional institution as a
separate trustee or co-trustee. In the absence of an Event of Default under
this Indenture, the appointment of any such separate trustee or co-trustee
shall be subject to the approval of the County and the Borrower. The following
provisions of this Section are adapted to these ends.
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(a) In the event that the Trustee appoints an additional
institution as a separate trustee or co- trustee, each and every
remedy, power, right, claim, demand, cause of action, immunity,
estate, interest or lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect
thereto shall be exercisable by and vest in such separate trustee or
co-trustee but only to the extent necessary to enable such separate
trustee or co-trustee to exercise such powers, rights and remedies,
and every covenant and obligation necessary to the exercise thereof by
such separate trustee or co-trustee shall run to and be enforceable by
either of them. Such co-trustee may be removed by the Trustee at any
time, with or without cause.
(b) Should any instrument in writing from the County be
required by the separate trustee or co- trustee so appointed by the
Trustee for more fully and certainly vesting in and confirming to it
such properties, rights, powers, trusts, duties and obligations, any
and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the County. In case any separate
trustee or co-trustee, or a successor to either, shall become
incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such
separate trustee or co-trustee, so far as permitted by law, shall vest
in and be exercised by the Trustee until the appointment of a
successor to such separate trustee or co-trustee.
Section 8.15. Appointment, Duties and Qualifications of Tender
Agent.
(a) In order to carry out the duties and obligations of
the Tender Agent contained herein, the County, with the advice and
consent of the Borrower, shall appoint a Tender Agent in order to
carry out such duties and obligations. The Tender Agent shall
designate to the Trustee its Principal Office to signify in writing
its acceptance of the duties and obligations imposed upon it under
this Indenture. The Tender Agent shall keep such books and records
with respect to its activities as Tender Agent as shall be consistent
with prudent industry practice and to make such books and records
available for inspection by each of the County, the Trustee and the
Borrower at all reasonable times.
(b) Each Tender Agent shall be a banking corporation or
banking association organized and doing business under the laws of the
United States or of a state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least fifty million dollars ($50,000,000), subject to
supervision or examination by federal or state authority. If such
banking corporation or banking association publishes a report of
condition at least annually, pursuant to law or to the requirements of
any supervising or examining authority above referred to, then for the
purposes of this Section the combined capital and surplus of such
banking corporation or banking association
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shall be deemed to be its combined capital and surplus as set forth in
its most recent report of condition so published.
(c) The Tender Agent may resign by notifying the County,
the Trustee, the Credit Provider, if any, the Remarketing Agent and
the Bondholders at least thirty (30) days before the effective date of
such resignation. The County, with the advice and consent of the
Borrower, may remove the Tender Agent and appoint a successor by
notifying the Tender Agent, the Remarketing Agent, the Credit
Provider, if any, and the Trustee. No resignation or removal shall be
effective until the successor has delivered an acceptance of its
appointment to the County, the Trustee and the predecessor Tender
Agent. In the event of the resignation or removal of the Tender
Agent, such Tender Agent shall pay over, assign and deliver any moneys
held by it as Tender Agent to its successor, or if there is no
successor, to the Trustee. In the event that for any reason there
shall be a vacancy in the office of Tender Agent, the Trustee shall
act as such Tender Agent to the extent it has operational capacity to
perform such tasks.
Section 8.16. Appointment, Duties and Qualifications of Remarketing
Agent.
(a) In order to carry out the duties and obligations
contained in this Indenture, the Borrower and the Guarantor, with the
approval of the County, shall appoint the Remarketing Agent for the
Bonds subject to the conditions set forth below. The Remarketing
Agent shall be a bank, trust company or member of the National
Association of Securities Dealers, Inc. organized and doing business
under the laws of any state of the United States of America or the
District of Columbia and shall have a capitalization of at least fifty
million dollars ($50,000,000) as shown in its most recently published
annual report.
(b) The Borrower and the Guarantor shall enter into a
Remarketing Agreement with the Remarketing Agent and such other
parties as shall be appropriate, pursuant to which such Remarketing
Agent shall designate its Principal Office and agree particularly (but
without limitation): (i) to perform the duties and comply with the
requirements imposed upon it by the Remarketing Agreement, this
Indenture and the Agreement; and (ii) to keep such books and records
with respect to its activities as Remarketing Agent as shall be
consistent with prudent industry practice and to make such books and
records available for inspection by each of the County, the Trustee,
the Borrower and the Guarantor at all reasonable times. The
Remarketing Agent shall not be entitled to any compensation from the
County or the Trustee but rather shall only be entitled to
compensation from the Borrower.
(c) The Borrower shall furnish a copy of the Remarketing
Agreement to the County, the Trustee, the Credit Provider, if any, and
the Tender Agent.
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ARTICLE IX
MODIFICATION OF INDENTURE, DOCUMENTS
Section
9.1. Modification without Consent of Bondholders. The County and the
Trustee, without the consent of or notice to any Bondholders from time to time
and at any time, but with the consent of the Credit Provider, if any, and
subject to the conditions and restrictions contained in this Indenture, may
enter into an indenture or indentures supplemental hereto, which indenture or
indentures thereafter shall form a part hereof; and the Trustee, without the
consent of or notice to any Bondholders from time to time and at any time, but
with the consent of the Credit Provider, if any, may consent to any Amendment
to any Document; in each case for any one or more of the following purposes:
(a) to add to the covenants and agreements of the County
contained in this Indenture, or of the Borrower, the Guarantor or of
any Credit Provider contained in any Document, other covenants and
agreements thereafter to be observed, or to assign or pledge
additional security for any of the Bonds, or to surrender any right or
power herein or therein reserved to or conferred upon the County or
the Borrower; provided, that no such covenant, agreement, assignment,
pledge or surrender shall materially adversely affect the interests of
the holders of the Bonds;
(b) to make such provisions for the purpose of curing any
ambiguity, inconsistency or omission, or of curing, correcting or
supplementing any defective provision contained in this Indenture or
any Document, or in regard to matters or questions arising under this
Indenture or any Document, as the County may deem necessary or
desirable and not inconsistent with this Indenture or any Document and
which shall not materially adversely affect the interests of the
holders of the Bonds;
(c) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the
qualification hereof or thereof under the Trust Indenture Act of 1939
or any similar federal statute hereafter in effect, and, if they so
determine, to add to this Indenture or any indenture supplemental
hereto such other terms, conditions and provisions as may be permitted
by said Trust Indenture Act of 1939 or similar federal statute, and
which shall not adversely affect the interests of the holders of the
Bonds;
(d) to provide for any additional procedures, covenants
or agreements necessary to maintain the Tax-Exempt status of interest
on the Bonds; provided that such amendment or supplement shall not
materially adversely affect the interests of the holders of the Bonds;
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(e) to modify or eliminate the book-entry registration
system for any of the Bonds;
(f) to provide for the procedures required to permit any
Bondholder to separate the right to receive interest on the Bonds from
the right to receive principal thereof and to sell or dispose of such
rights, as contemplated by Section 1286 of the Code;
(g) to provide for the appointment of a co-trustee or the
succession of a new Trustee, Registrar or Paying Agent;
(h) to change Exhibit A to the Agreement in accordance
with the provisions thereof and of the Tax Certificate;
(i) to provide for a Credit Facility or substitute Credit
Facility;
(j) to comply with requirements of any Rating Agency in
order to obtain or maintain a rating on any Bonds;
(k) in connection with any other change which, in the
judgment of the Trustee (which may be based upon an Opinion of
Counsel), will not adversely affect the security for the Bonds or the
Tax-Exempt status of interest thereon or otherwise materially
adversely affect the holders of the Bonds; or
(l) to modify, alter, amend or supplement this Indenture
or any Document in any other respect, including amendments which would
otherwise be described in Section IX.9.2 hereof, if the effective date
of such supplemental indenture or supplemental indenture or Amendment
is a date on which all Bonds affected thereby are subject to mandatory
tender for purchase pursuant to Section IV.4.7 hereof or if Notice by
Mail of the proposed supplemental indenture or Amendment is given to
holders of the affected Bonds at least thirty (30) days before the
effective date thereof and, on or before such effective date, such
Bondholders have the right to demand purchase of their Bonds pursuant
to Section IV.4.6 hereof.
Notwithstanding the foregoing provisions of this Section
IX.9.1, the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture, and the Trustee shall not enter into
any supplemental indenture or consent to any Amendment without first
obtaining the written consent of the Borrower. The Trustee will give
notice of the provisions of any supplemental indenture authorized by
the provisions of this Section IX.9.1 to the applicable Rating
Agencies. Any supplemental indenture or
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Amendment permitted pursuant to this Section IX.9.1 may be approved by
an Authorized County Representative and need not be approved by
resolution or other action of the Board of Commissioners of the
County.
Section 9.2. Modification with Consent of Bondholders. With the
consent of the holders of not less than sixty-six and two-thirds percent (66
2/3%) in aggregate principal amount of the Bonds at the time Outstanding,
evidenced as provided in Section XI.11.6 hereof, and the Credit Provider, if
any, (i) the County and the Trustee may from time to time and at any time enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture; or (ii) the
Trustee may consent to any Amendment to any Document and any other matters for
which its consent is required pursuant to Section VI.6.4 hereof; provided,
however, that no such supplement or Amendment will have the effect of extending
the time for payment or reducing any amount due and payable by the Borrower
pursuant to the Agreement without the consent of all the holders of the Bonds;
and that no such supplemental indenture shall (1) extend the fixed maturity of
any Bond or reduce the rate of interest thereon or extend the time of payment
of interest, or reduce the amount of the principal thereof, or reduce any
premium payable on the redemption thereof, without the consent of the holder of
each Bond so affected, or (2) reduce the aforesaid percentage of holders of
Bonds whose consent is required for the execution of such supplemental
indentures, or permit the creation of any lien on the Revenues prior to or on a
parity with the lien of this Indenture, except as permitted herein, or permit
the creation of any preference of any Bondholder over any other Bondholder,
except as permitted herein, or deprive the holders of the Bonds of the lien
created by this Indenture upon the Revenues, without the consent of the holders
of all the Bonds then Outstanding. Nothing in this paragraph shall be
construed as making necessary the approval of any Bondholder of any
supplemental indenture or Amendment permitted by the provisions of Section
IX.9.1.
Upon receipt by the Trustee of a Certified Resolution authorizing the
execution of any such supplemental indenture or Amendment, and upon the filing
with the Trustee of evidence of the consent of the Bondholders and the Credit
Provider, if any, as aforesaid, the Trustee shall join with the County in the
execution of such supplemental indenture or shall consent to such Amendment;
provided, however, that (i) the Trustee shall not be obligated to enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its sole discretion, but shall not be obligated to, enter into such
supplemental indenture; and (ii) the Trustee shall not enter into such
supplemental indenture or Amendment without first obtaining the Borrower's
written consent thereto.
It shall not be necessary for the consent of the Bondholders under
this Section to approve the particular form of any proposed supplemental
indenture or Amendment, but it shall be sufficient if such consent shall
approve the substance thereof.
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Promptly after the execution by the parties thereto of any
supplemental indenture or Amendment as provided in this Section, the Trustee
shall mail a notice (prepared by the Borrower or the Guarantor) setting forth
in general terms the substance of such supplemental indenture or such Amendment
to the Credit Provider, if any, to each Bondholder at the address contained in
the bond register maintained by the Registrar and to the applicable Rating
Agencies. Any failure of the Trustee to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture or such Amendment.
Section 9.3. Effect of Supplemental Indenture or Amendment. Upon
the execution of any supplemental indenture or any Amendment to the Agreement
or the Guaranty pursuant to the provisions of this Article IX, this Indenture,
the Agreement, the Guaranty, as the case may be, shall be and be deemed to be
modified and amended in accordance therewith, and the respective rights, duties
and obligations under this Indenture, the Agreement and the Guaranty of the
County, the Trustee, the Borrower, the Guarantor and all holders of Outstanding
Bonds shall thereafter be determined, exercised and enforced hereunder under
the Agreement and the Guaranty subject in all respects to such supplemental
indentures and Amendments, and all the terms and conditions of any such
supplemental indenture or Amendment shall be part of the terms and conditions
of this Indenture, the Agreement or the Guaranty, as the case may be, for any
and all purposes.
Section 9.4. Required and Permitted Opinions of Counsel. Subject
to the provisions of Section VIII.8.1 hereof, the Trustee is entitled to
receive an Opinion of Counsel and rely on such Opinion of Counsel as conclusive
evidence that any supplemental indenture or Amendment executed pursuant to the
provisions of this Article IX complies with the requirements of this Article
IX, that the appropriate consents have been obtained and that such supplemental
indenture or Amendment has been duly authorized by the County.
Section 9.5. Notation of Modification on Bonds; Preparation of New
Bonds. Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation, at the written request of the County, as to any matter provided for
in such supplemental indenture, and if such supplemental indenture shall so
provide, new Bonds, so modified as to conform, in the opinion of the Trustee
and the County, to any modification of this Indenture contained in any such
supplemental indenture, may be prepared by the County, authenticated by the
Registrar and delivered without cost to the holders of the Bonds then
Outstanding, upon surrender for cancellation of such Bonds in equal aggregate
principal amounts.
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ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Indenture. If the entire indebtedness
on all Bonds Outstanding shall be paid and discharged in any one or more of the
following ways:
(a) by the payment of the principal of, and premium, if
any, and interest on all Bonds Outstanding, as and when the same
become due and payable; or
(b) by the delivery to the Registrar, for cancellation by
it, of all Bonds Outstanding;
and if all other sums payable hereunder by the County shall be paid and
discharged, then thereupon this Indenture shall cease, terminate and become
null and void except only as provided in Section X.10.2 hereof, and thereupon
the Trustee shall, upon Written Request of the County, and upon receipt by the
Trustee of a Certificate of the County and an Opinion of Counsel, each stating
that in the opinion of the signers all conditions precedent to the satisfaction
and discharge of this Indenture have been complied with, forthwith execute
proper instruments acknowledging satisfaction of and discharging this
Indenture. The Trustee shall mail written notice of such payment and discharge
to the applicable Rating Agencies and to the Credit Provider, if any. The
satisfaction and discharge of this Indenture shall be without prejudice to the
rights of the Trustee to charge and be reimbursed by the Borrower for any
expenditures which it may thereafter incur in connection herewith.
Any Bond or Authorized Denomination thereof shall be deemed to be paid
within the meaning of this Indenture when (a) payment of the principal of and
premium, if any, on such Bond or Authorized Denomination thereof, plus interest
thereon to the due date thereof (whether such due date is by reason of maturity
or upon redemption as provided herein) either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii) shall have been
provided for by irrevocably depositing with the Trustee in trust and
irrevocably setting aside exclusively for such payment (1) moneys sufficient to
make such payment and/or (2) nonprepayable, noncallable Government Obligations
maturing as to principal and interest in such amount and at such time as will
insure the availability of sufficient moneys to make such payment, and (b) all
necessary and proper fees, compensation and expenses of the Trustee pertaining
to any such deposit shall have been paid or the payment thereof provided for to
the satisfaction of the Trustee; provided that no Bond shall be deemed to be
paid within the meaning of this Indenture unless arrangements satisfactory to
the Trustee shall have been made to assure that Bonds tendered for purchase in
accordance with Sections IV.4.6 or IV.4.7 hereof can be paid and redeemed from
such moneys and/or Government Obligations and the Trustee shall have received
written confirmation from each Rating Agency then rating the Bonds, if any,
that
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such Rating Agency's then current rating on the Bonds will not be lowered or
withdrawn as a result of such provision. At such time as a Bond or Authorized
Denomination thereof shall be deemed to be paid hereunder, as aforesaid, such
Bond or Authorized Denomination thereof shall no longer be secured by or
entitled to the benefits of this Indenture, except for the purposes of any such
payment from such moneys and/or Government Obligations. The Trustee shall not
be responsible for verifying the sufficiency of funds provided to effect the
defeasance of Bonds pursuant to this Article X.
While a Credit Facility is in effect with respect to the Bonds, moneys
for the payment of Bonds or the purchase of Government Obligations as set forth
above shall be derived exclusively from drawings under the Credit Facility.
The County, the Borrower, the Guarantor and any Credit Provider may at
any time surrender to the Registrar for cancellation by it any Bonds previously
authenticated and delivered which the County or the Borrower, the Guarantor or
such Credit Provider lawfully may have acquired in any manner whatsoever, and
such Bonds, upon such surrender and cancellation, shall be deemed to be paid
and retired.
Section 10.2. Discharge of Liability on Bonds. Upon the deposit
with the Trustee, in trust, at or before maturity, of money or securities in
the necessary amount (as provided in Section X.10.4) to pay or redeem
Outstanding Bonds, whether upon or prior to their maturity or the redemption
date of such Bonds, (provided that, if such Bonds are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been given as in
Article IV provided or provision satisfactory to the Trustee shall have been
made for giving such notice), all liability of the County and the Borrower and
the Guarantor in respect of such Bonds shall cease, terminate and be completely
discharged, except that the County and the Borrower shall remain liable for
such payment but only from, and the Bondholders shall thereafter be entitled
only to payment (without interest accrued thereon after such redemption date or
maturity date) out of, the money deposited with the Trustee as aforesaid for
their payment, subject, however, to the provisions of Sections VI.6.6 and
X.10.3; provided that no Bond shall be deemed to be paid within the meaning of
this Indenture unless arrangements satisfactory to the Trustee shall have been
made to assure that such Bond, if tendered for purchase in accordance with
Sections IV.4.6 or IV.4.7 hereof, could be paid and redeemed from such moneys
and/or Government Obligations.
Section 10.3. Payment of Bonds after Discharge of Indenture.
Notwithstanding any provisions of this Indenture, and subject to applicable
laws of the State, any moneys deposited with the Trustee or any Paying Agent,
in trust for the payment of the principal of, or interest or premium on, any
Bonds remaining unclaimed for [two (2) years] after the principal of any or all
of the Outstanding Bonds has become due and payable (whether at maturity or
upon call for redemption or by declaration as provided in this Indenture),
shall then be repaid to the Borrower upon its written request, and the holders
of such Bonds shall thereafter be entitled to look only to the Borrower for
payment thereof, and all liability of the Trustee or any Paying Agent with
respect to such moneys shall
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thereupon cease; provided, however, that before the repayment of such moneys to
the Borrower as aforesaid, the Trustee or Paying Agent, as the case may be,
shall (at the request and cost of the Borrower) first publish at least once in
a Qualified Newspaper a notice, in such form as may be deemed appropriate by
the Borrower and the Trustee, in respect of the Bonds so payable and not
presented and in respect of the provisions relating to the repayment to the
Borrower of the moneys held for the payment thereof. In the event of the
repayment of any such moneys to the Borrower as aforesaid, the holders of the
Bonds in respect of which such moneys were deposited shall thereafter be deemed
to be unsecured creditors of the Borrower for amounts equivalent to the
respective amounts deposited for the payment of such Bonds and so repaid to the
Borrower (without interest thereon).
Section 10.4. Deposit of Money or Securities with Trustee.
Whenever in this Indenture it is provided or permitted that there be deposited
with or held in trust by the Trustee money or securities in the necessary
amount to pay or redeem any Bonds, the money or securities so to be deposited
or held may include money or securities held by the Trustee in the funds and
accounts established pursuant to this Indenture and shall be:
(a) Available Amounts constituting lawful money of the
United States of America in an amount equal to the principal amount of
such Bonds and all unpaid interest thereon to maturity, except that,
in the case of Bonds which are to be redeemed prior to maturity and in
respect of which notice of such redemption shall have been given as
provided in Article IV or provision satisfactory to the Trustee shall
have been made for the giving of such notice, the amount to be
deposited or held shall be the principal amount or redemption price of
such Bonds and all unpaid interest thereon to the redemption date; or
(b) nonprepayable, noncallable Government Obligations
purchased with Available Amounts, the principal of and the interest on
which when due will provide money sufficient to pay the principal or
redemption price of and all unpaid interest to maturity, or to the
redemption date, as the case may be, on the Bonds to be paid or
redeemed, as such principal or redemption price and interest become
due, provided that, in the case of Bonds which are to be redeemed
prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article IV or provision satisfactory to the
Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably
instructed (by the terms of this Indenture or by Written Request of
the County) to apply such money to the payment of such principal or
redemption price and interest with respect to such Bonds.
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ARTICLE XI
MISCELLANEOUS
Section
11.1. Successors of County. All the covenants, stipulations, promises and
agreements in this Indenture contained, by or on behalf of the County, shall
bind and inure to the benefit of its successors and assigns, whether so
expressed or not. If any of the powers or duties of the County shall hereafter
be transferred by any law of the State, and if such transfer shall relate to
any matter or thing permitted or required to be done under this Indenture by
the County, then the body or official of the State who shall succeed to such
powers or duties shall act and be obligated in the place and stead of the
County as provided in this Indenture.
Section 11.2. Limitation of Rights to Parties and Bondholders.
Nothing in this Indenture or in the Bonds expressed or implied is intended or
shall be construed to give to any person other than the County, the Trustee,
the Registrar, the Paying Agent, the Tender Agent, the Borrower, the Credit
Provider, if any, and the holders of the Bonds issued hereunder any legal or
equitable right, remedy or claim under or in respect of this Indenture or any
covenant, condition or provision therein or herein contained; and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the County, the Trustee, the Registrar, the Paying
Agent, the Tender Agent, the Borrower, the Credit Provider, if any, and the
holders of the Bonds issued hereunder.
To the extent that any provision of this Indenture expressly confers
rights upon the Credit Provider (including, without limitation, rights to
provide consents or directions or to give or receive notices) the parties
hereto agree and acknowledge that the Credit Provider is a third party
beneficiary of such provision and that the Credit Provider may enforce such
provision against the other parties hereto.
Section 11.3. Waiver of Notice. Whenever in this Indenture the
giving of Notice by Mail or otherwise is required, the giving of such notice
may be waived in writing by the person entitled to receive such notice and in
any such case the giving or receipt of such notice shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Section 11.4. Separability of Invalid Provisions. In case any one
or more of the provisions contained in this Indenture or in the Bonds shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
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Section 11.5. Notices. It shall be sufficient service of any
notice, request, complaint, demand or other paper on the County, the Trustee,
the Borrower, the Registrar, the Paying Agent, the Tender Agent, the Credit
Provider, if any, or the Remarketing Agent if the same shall be duly mailed by
first class mail, postage prepaid, addressed as follows:
To the County: Carbon County, Utah
120 East Main
Price, UT 84501
Attention: Chair
To the Trustee, U.S. Bank, a national banking association
Registrar and 107 South Main Street, Suite 303
Paying Agent: Salt Lake City, UT 84111
Attention: Corporate Trust Department
To the Borrower: ECDC Environmental, L.C.
127 South 500 East, Suite 675
Salt Lake City, UT 84102
Attention: J. I. Everest II
To the The address specified in the
Credit Provider: applicable Credit Agreement.
To the The address specified in the
Remarketing Remarketing Agreement.
Agent:
To the Guarantor: Laidlaw Environmental Services, Inc.
1301 Gervais Street, Suite 300
Columbia, SC 29201
Attention: Chief Financial Officer
The County, the Trustee, the Borrower, the Guarantor, the Registrar, the Paying
Agent, the Tender Agent, the Credit Provider and the Remarketing Agent may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent. A
duplicate copy of each notice, certificate or other communication given
hereunder by the County or the Trustee to the other shall also be given to the
Borrower. Unless otherwise requested by the County, the Trustee, the Borrower,
the Guarantor, the Registrar, the Paying Agent, the Tender Agent, the Credit
Provider or the Remarketing Agent, any notice required to be given hereunder in
writing may be given by any form of telephonic or electronic transmission
capable of making a written record. Each such party shall file with the
Trustee information appropriate to receiving such form of telephonic or
electronic transmission.
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Section 11.6. Evidence of Rights of Bondholders.
(a) Any request, consent or other instrument required by
this Indenture to be signed and executed by Bondholders may be in any
number of concurrent writings of substantially similar tenor and may
be signed or executed by such Bondholders in person or by agent or
agents duly appointed in writing. Proof of the execution of any such
request, consent or other instrument or of a writing appointing any
such agent, shall be sufficient for any purpose of this Indenture and
shall be conclusive in favor of the Trustee, the Registrar and the
County if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of
any such request, consent or other instrument or writing may be proved
by the affidavit of a witness of such execution or by the certificate
of any notary public or other officer of any jurisdiction, authorized
by the laws thereof to take acknowledgments of deeds, certifying that
the person signing such request, consent or other instrument or
writing acknowledged to him or her the execution thereof.
(c) The ownership of registered Bonds shall be proved by
the Bond register maintained by the Registrar pursuant to Section
II.2.4 hereof. The fact and the date of execution of any request,
consent or other instrument may also be proved in any other manner
which the Trustee may deem sufficient. The Trustee may nevertheless,
in its discretion, require further proof in cases where it may deem
further proof desirable.
(d) Any request, consent or vote of the holder of any
Bond shall bind every future holder of the same Bond and the holder of
any Bond issued in exchange therefor or in lieu thereof, in respect of
anything done or suffered to be done by the Trustee or the County in
pursuance of such request, consent or vote.
(e) Except as otherwise provided herein, in determining
whether the holders of the requisite aggregate principal amount of
Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are owned by the County, by
the Borrower, by the Guarantor or by any other direct or indirect
obligor on the Bonds, or by any person directly or indirectly
controlling or controlled by, or under direct or indirect common
control with, the County, the Borrower, the Guarantor or any other
direct or indirect obligor on the Bonds, shall be disregarded and
deemed not to be Outstanding for the purpose of any such
determination, provided that, for the purpose of determining whether
the Trustee shall be protected in relying on any such demand, request,
direction, consent or waiver, only Bonds which the Trustee knows to be
so owned shall be disregarded. Bonds so owned which have been pledged
in good faith may be regarded as Outstanding for the purposes of this
subsection XI.11.6.(e) if the pledgee shall certify to the Trustee the
pledgee's right to vote such Bonds and that
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the pledgee is not a person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the
County, the Borrower, the Guarantor or any other direct or indirect
obligor on the Bonds. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
(f) In lieu of obtaining any demand, request, direction,
consent or waiver in writing, the Trustee may call and hold a meeting
of the Bondholders upon such notice and in accordance with such rules
and regulations, including the right of the Bondholders to be
represented and vote by proxy, as the Trustee considers fair and
reasonable for the purpose of obtaining any such action.
Section 11.7. Waiver of Personal Liability. No member, officer,
agent or employee of the County, and no officer, official, agent or employee of
the State or any department, board or agency of the State shall be individually
or personally liable for the payment of the principal of or premium or interest
on the Bonds or be subject to any personal liability or accountability by
reason of the issuance of the Bonds; but nothing herein contained shall relieve
any such member, officer, agent or employee from the performance of any
official duty provided by law or by this Indenture.
Section 11.8. Publication of Notices. Any publication of notice to
be made under the provisions of this Indenture may be made in each instance
upon any day, and, except as provided in Section X.10.3, no such publication
shall be required if such notice is given by first class mail to the holders of
all Bonds then Outstanding.
Section 11.9. Governing Law; Venue. This Indenture shall be
construed in accordance with and governed by the Constitution and laws of the
State applicable to contracts made and performed in the State. This Indenture
shall be enforceable in the State, and any action arising out of this Indenture
shall be filed and maintained in the County, unless the County waives this
requirement.
Section 11.10. Execution in Several Counterparts. This Indenture
may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original; and all such counterparts,
or as many of them as the County and the Trustee shall preserve undestroyed,
shall together constitute but one and the same instrument.
Section 11.11. Credit Provider. All provisions hereof regarding
consents, approvals, directions, appointments or requests by the Credit
Provider shall be deemed not to require or permit such consents, approvals,
directions, appointments or requests by the Credit Provider during any time in
which such Credit Provider has failed to honor a draft presented to it in
strict conformance with the applicable provisions of the Credit Facility, or
after the Credit Facility shall at any time for any reason cease to be valid
and binding on the Credit Provider, or while such Credit Provider is denying
further liability or
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obligation under the Credit Facility (unless such Credit Facility has been
fully drawn or to the extent that the conditions to payment thereunder have not
been fully satisfied) or after such Credit Provider has rescinded, repudiated
or terminated the Credit Facility; provided, however, that nothing contained in
this Section XI.11.11 shall limit the rights of the Credit Provider as a holder
of Credit Provider Bonds.
All provisions herein relating to the Credit Provider shall be of no
force and effect with respect to a particular Credit Provider if the applicable
Credit Facility and Credit Agreement are not in effect, there are no related
Credit Provider Bonds and all amounts owing to such Credit Provider under the
applicable Credit Agreement have been paid.
At any time during which the Borrower has provided its first mortgage
bonds or guaranties, standby purchase agreements or other support arrangements
or evidences of indebtedness of the Borrower as the Credit Facility with
respect to the Bonds, all provisions hereof regarding consents, approvals,
directions, appointments or requests by the Credit Provider shall be deemed not
to require or permit such consents, approvals, directions, appointments or
requests by the Borrower solely by virtue of its role as provider of such
Credit Facility.
Section 11.12. Continuing Disclosure. The Guarantor shall, during
any Term Rate Period, undertake the continuing disclosure requirements for the
Bonds as promulgated under Rule 15c2-12, as it may from time to time hereafter
be amended or supplemented, and the County shall have no liability to the
holders of the Bonds or any other person with respect to such disclosure
matters. Notwithstanding any other provision of this Indenture, failure of the
Guarantor to comply with the requirements of Rule 15c2-12 applicable to the
Bonds, as it may from time to time hereafter be amended or supplemented, shall
not be considered an Event of Default hereunder or under the Agreement;
however, the Trustee may (and, at the request of the Remarketing Agent or the
holders of at least 25% aggregate principal amount of Outstanding Bonds and
upon receipt of indemnity satisfactory to the Trustee, shall) or any Bondholder
or beneficial owner (within the meaning of Rule 15c2-12) of any Bonds may take
such actions as may be necessary and appropriate, including seeking mandate or
specific performance by court order, to cause the Borrower and the Guarantor to
comply with its obligations.
Section 11.13. Opinions of Bond Counsel. For so long as Ballard
Spahr Andrews & Ingersoll (or its successor) is a nationally recognized Bond
Counsel, whenever in this Indenture it is required that prior to the taking of
any action (including but not limited to any modifications of arbitrage
covenants contained in Section VI.6.6 hereof) an opinion of Bond Counsel is
required to be delivered to the effect that such action will not adversely
affect the Tax-Exempt status of the Bonds, and such opinion is not given by
Ballard Spahr Andrews & Ingersoll, the opinion of Bond Counsel shall instead
affirmatively state, in a manner acceptable to the County and the Trustee, that
interest on the Bonds is Tax-Exempt and will remain so after the action in
question. This Section
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shall apply in the same fashion with respect to the affirmative opinion of any
such successor Bond Counsel.
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IN WITNESS WHEREOF, the County has caused this Indenture to be signed
in its name and attested by its duly authorized officers, and the Trustee, in
token of its acceptance of the trust created hereunder, has caused this
Indenture to be signed in its name by its duly authorized signatory, all as of
the day and year first above written.
CARBON COUNTY, UTAH
By
--------------------------------------
Chair
Attest:
- ---------------------------------------
County Clerk
U.S. BANK, a national banking
association, as Trustee
By
--------------------------------------
Authorized Officer
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EXHIBIT "A"
[FORM OF BOND]
[See Transcript Document No. 19]
A-1
<PAGE> 1
Exhibit 4J
INDENTURE OF TRUST
Between
TOOELE COUNTY, UTAH
And
U.S. BANK, a national banking association,
as Trustee
Dated as of July 1, 1997
Relating to
$45,700,000
Tooele County, Utah
Pollution Control Refunding Revenue Bonds
(Laidlaw Environmental Services, Inc.)
1997 Series A
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS
<S> <C> <C>
1.1. Definitions................................................................. 3
1.2. Number and Gender........................................................... 14
1.3. Articles, Sections, Etc..................................................... 14
1.4. Content of Certificates and Opinions........................................ 14
ARTICLE II
THE BONDS
2.1. Authorization and Terms of Bonds............................................ 16
2.2. Execution of Bonds.......................................................... 26
2.3. Transfer and Exchange of Bonds.............................................. 27
2.4. Bond Register............................................................... 27
2.5. Reserved.................................................................... 27
2.6. Bonds Mutilated, Lost, Destroyed or Stolen.................................. 28
2.7. Disposition of Cancelled Bonds.............................................. 28
2.8. CUSIP Numbers............................................................... 28
ARTICLE III
ISSUANCE OF BONDS
3.1. Authentication and Delivery of Bonds........................................ 29
3.2. Application of Proceeds of Bonds............................................ 29
ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
4.1. Redemption of Bonds......................................................... 30
4.2. Selection of Bonds for Redemption........................................... 33
4.3. Notice of Redemption........................................................ 33
4.4. Partial Redemption of Bonds................................................. 34
4.5. Effect of Redemption........................................................ 34
4.6. Holder's Option to Tender for Purchase...................................... 35
4.7. Mandatory Tender for Purchase............................................... 36
4.8. Delivery of Tendered Bonds.................................................. 37
4.9. Bonds Deemed Purchased...................................................... 38
</TABLE>
i
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<TABLE>
<S> <C> <C>
4.10. Bond Purchase Fund.......................................................... 38
4.11. Deposit of Bonds............................................................ 39
4.12. Remarketing of Tendered Bonds............................................... 39
4.13. Deposits into Remarketing Accounts and Borrower Accounts.................... 43
4.14. Disbursements from the Bond Purchase Fund................................... 43
4.15. Delivery of Bonds........................................................... 44
ARTICLE V
REVENUES
5.1. Pledge of Revenues and Credit Facility...................................... 45
5.2. Bond Fund; Credit Facility Debt Service Account............................. 45
5.3. Trustee Authorized to Take Actions Under the Agreement...................... 47
5.4. Investment of Moneys........................................................ 47
5.5. Assignment to Trustee; Enforcement of Obligations........................... 48
5.6. Repayment to Borrower or Credit Provider.................................... 48
5.7. Credit Facilities; Credit Provider Bonds.................................... 49
ARTICLE VI
COVENANTS OF THE AUTHORITY
6.1. Payment of Principal and Interest........................................... 52
6.2. Extension or Funding of Claims for Interest................................. 52
6.3. Paying Agents............................................................... 52
6.4. Preservation of Revenues.................................................... 52
6.5. Compliance with Indenture................................................... 53
6.6. Arbitrage Covenants; Rebate Fund............................................ 53
6.7. Other Liens................................................................. 54
6.8. Further Assurances.......................................................... 54
ARTICLE VII
DEFAULT
7.1. Events of Default; Acceleration; Waiver of Default.......................... 55
7.2. Institution of Legal Proceedings by Trustee................................. 57
7.3. Application of Moneys Collected by Trustee.................................. 57
7.4. Effect of Delay or Omission to Pursue Remedy................................ 58
7.5. Remedies Cumulative......................................................... 58
7.6. Covenant to Pay Bonds in Event of Default................................... 58
7.7. Trustee Appointed Agent for Bondholders..................................... 59
7.8. Power of Trustee to Control Proceedings..................................... 59
ii
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
7.9. Limitation on Bondholders' Right to Sue..................................... 59
7.10. Limitation of Liability to Revenues......................................... 60
ARTICLE VIII
THE TRUSTEE, THE REGISTRAR, THE TENDER AGENT
AND THE REMARKETING AGENT
8.1. Duties, Immunities and Liabilities of
Trustee and Registrar....................................................... 61
8.2. Right of Trustee and Registrar to Rely
upon Documents, Etc......................................................... 62
8.3. Trustee and Registrar Not Responsible for Recitals.......................... 63
8.4. Right of Trustee and Registrar to Acquire Bonds............................. 63
8.5. Moneys Received by Trustee and Registrar to Be
Held in Trust............................................................... 63
8.6. Compensation and Indemnification of Trustee and Registrar................... 63
8.7. Qualifications of Trustee and Registrar..................................... 64
8.8. Resignation and Removal of Trustee or
Registrar and Appointment of Successor Trustee or
Registrar................................................................... 65
8.9. Acceptance of Trust by Successor Trustee.................................... 66
8.10. Merger or Consolidation of Trustee or Registrar............................. 67
8.11. Accounting Records and Reports; Financing Statements........................ 67
8.12. Registrar................................................................... 68
8.13. Tax Certificate............................................................. 68
8.14. Appointment of Co-Trustee................................................... 68
8.15. Appointment, Duties and Qualifications of Tender Agent...................... 69
8.16. Appointment, Duties and Qualifications
of Remarketing Agent........................................................ 70
ARTICLE IX
MODIFICATION OF INDENTURE, DOCUMENTS
9.1. Modification without Consent of Bondholders................................. 71
9.2. Modification with Consent of Bondholders.................................... 73
9.3. Effect of Supplemental Indenture or Amendment............................... 74
9.4. Required and Permitted Opinions of Counsel.................................. 74
9.5. Notation of Modification on Bonds; Preparation
of New Bonds................................................................ 74
</TABLE>
iii
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<TABLE>
<CAPTION>
ARTICLE X
DEFEASANCE
<S> <C> <C>
10.1. Discharge of Indenture...................................................... 75
10.2. Discharge of Liability on Bonds............................................. 76
10.3. Payment of Bonds after Discharge of Indenture............................... 76
10.4. Deposit of Money or Securities with Trustee................................. 77
ARTICLE XI
MISCELLANEOUS
11.1. Successors of County........................................................ 78
11.2. Limitation of Rights to Parties and Bondholders............................. 78
11.3. Waiver of Notice............................................................ 78
11.4. Separability of Invalid Provisions.......................................... 78
11.5. Notices..................................................................... 79
11.6. Evidence of Rights of Bondholders........................................... 80
11.7. Waiver of Personal Liability................................................ 81
11.8. Publication of Notices...................................................... 81
11.9. Governing Law; Venue........................................................ 81
11.10. Execution in Several Counterparts........................................... 81
11.11. Credit Provider............................................................. 81
11.12. Continuing Disclosure....................................................... 82
11.13. Opinions of Bond Counsel.................................................... 82
</TABLE>
iv
<PAGE> 6
THIS INDENTURE OF TRUST, made and entered into as of July 1, 1997, by
and between TOOELE COUNTY, UTAH, a political subdivision and body politic
established under the Constitution of the State of Utah (herein called the
"County"), and UNITED STATES NATIONAL BANK OF OREGON, doing business as U.S.
BANK, a national banking association organized under the laws of the United
States with corporate trust offices in Salt Lake City, Utah, being qualified to
accept and administer the trusts hereby created (herein called the "Trustee"),
W I T N E S S E T H:
WHEREAS, the County is a political subdivision and body politic of the
State of Utah organized and existing under the Constitution of the State of
Utah; and
WHEREAS, the Utah Industrial Facilities and Development Act, Title 11,
Chapter 17, Utah Code Annotated 1953, as amended (the "Act") authorizes the
County to issue its revenue bonds for the purposes of paying all or any part of
the costs of a "project" as defined in the Act and refunding its outstanding
bonds; and
WHEREAS, Rollins Environmental Services, Inc., a Delaware corporation,
which after a merger with a subsidiary of Laidlaw Inc., a Canadian corporation,
is now called Laidlaw Environmental Services, Inc. (herein called the
"Borrower"), previously requested from the County financial assistance to
acquire and construct certain hazardous waste disposal facilities in the County
(the "Project"); and
WHEREAS, in 1990, the County authorized its $45,700,000 Variable Rate
Hazardous Waste Treatment Revenue Bonds, Series A (Rollins Environmental
Services, Inc. Project) (the "Prior Bonds") to provide funds to finance a
portion of the costs of acquisition and construction by the Borrower of the
Project, which qualifies as a "project" under the Act; and
WHEREAS, the Project is owned by the Borrower; and
WHEREAS, the Borrower has requested that the County issue refunding
bonds to refund the Prior Bonds, and the County, after due investigation and
deliberation, has adopted a resolution approving said request; and
WHEREAS, the County proposes to issue its Tooele County, Utah
Pollution Control Refunding Revenue Bonds (Laidlaw Environmental Services,
Inc.) 1997 Series A, in the aggregate principal amount of $45,700,000 (the
"Bonds") and to loan the proceeds thereof to the Borrower pursuant to a Loan
Agreement dated as of July 1, 1997, by and between the County and the Borrower
(the "Agreement") for the purposes of refunding and retiring the Prior Bonds;
and
WHEREAS, the issuance and sale of the Bonds and the loan of the
proceeds thereof to the Borrower to refund the Prior Bonds and thereby
refinance the costs of the
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Project will serve the purposes of the County and the Act and in all respects
conform to the provisions and requirements of the Act; and
WHEREAS, in order to provide for the authentication and delivery of
the Bonds, to establish and declare the terms and conditions upon which the
Bonds are to be issued and secured and to secure the payment of the principal
thereof and of the interest and premium, if any, thereon, the County has
authorized the execution and delivery of this Indenture; and
WHEREAS, all Bonds issued under this Indenture will be secured by a
pledge and assignment of the County's rights under the aforesaid Agreement and
other security instruments; and
WHEREAS, all acts and proceedings required by law necessary to make
the Bonds when executed by the County, authenticated and delivered by the
Registrar and duly issued, the valid, binding and legal limited obligations of
the County, and to constitute this Indenture a valid and binding agreement for
the uses and purposes herein set forth, in accordance with its terms, have been
done and taken; and the execution and delivery of this Indenture have been in
all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest and premium, if any, on, all
Bonds issued and Outstanding under this Indenture, according to their tenor,
and to secure the performance and observance of all the covenants and
conditions therein and herein set forth, and to declare the terms and
conditions upon and subject to which the Bonds are to be issued and received,
and for and in consideration of the premises and of the mutual covenants herein
contained and of the purchase and acceptance of the Bonds by the holders
thereof, and for other valuable consideration, the receipt whereof is hereby
acknowledged, the County covenants and agrees with the Trustee, for the equal
and proportionate benefit of the respective holders from time to time of the
Bonds, as follows:
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions. Unless the context otherwise requires,
the terms defined in this Section I.1.1 shall, for all purposes of this
Indenture and of the Agreement and of any indenture supplemental hereto or
agreement supplemental thereto, have the meanings herein specified, as follows:
"Act" means the Utah Industrial Facilities and Development
Act, Title 11, Chapter 17, Utah Code Annotated 1953, as amended.
"Act of Bankruptcy" means any of the following with respect to
any person: (a) the commencement by such person of a voluntary case under the
federal bankruptcy laws, as now in effect or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or similar laws, or (b)
failure by such person to timely controvert the filing of a petition with a
court having jurisdiction over such person to commence an involuntary case
against such person under the federal bankruptcy laws, as now in effect or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or similar laws, or (c) such person shall admit in writing its
inability to pay its debts generally as they become due, or (d) a receiver,
trustee, custodian or liquidator of such person or such person's assets shall
be appointed in any proceeding brought against the person or such person's
assets, or (e) assignment by such person for the benefit of its creditors, or
(f) the entry by such person into an agreement of composition with its
creditors.
"Agreement" means the Loan Agreement, of even date herewith,
between the County and the Borrower and relating to the loan of the proceeds of
the Bonds, as originally executed or as it may from time to time be
supplemented or amended.
"Amendment" means any amendment or modification of any
Document.
"Authorized Borrower Representative" means any person who at
the time and from time to time may be designated, by written certificate
furnished to the County, the Credit Provider (if any) and the Trustee, as a
person authorized to act on behalf of the Borrower. Such certificate shall
contain the specimen signature of such person, shall be signed on behalf of the
Borrower by any officer of the Borrower and may designate an alternate or
alternates.
"Authorized County Representative" means the Chair of the
Board of Commissioners of the County, the County Attorney, or any person who at
the time and from time to time may be designated by said Chair of the County or
the County Attorney by written certificate furnished to the Trustee, the
Borrower and the Credit Provider (if any), as a person authorized to act on
behalf of the County.
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"Authorized Denomination" means (a) with respect to Bonds
during any Daily Rate Period or any Weekly Rate Period, $100,000 or any
integral multiple thereof; and (b) with respect to Bonds during any Term Rate
Period, $100,000 or any integral multiple of $5,000 in excess of $100,000.
"Available Amounts" means, with respect to any Bonds other
than Credit Provider Bonds, (a) funds received by the Trustee pursuant to any
Credit Facility (other than first mortgage bonds, debentures or other evidences
of indebtedness of the Borrower or any affiliate of the Borrower) for such
Bonds; (b) moneys which have been continuously on deposit with the Trustee (i)
held in any separate and segregated fund, account or subaccount established
hereunder in which no other moneys which are not Available Amounts are held,
and (ii) which have so been on deposit with the Trustee for at least 123
consecutive days from their receipt by the Trustee and not commingled with any
moneys so held for less than said period and during and prior to which period
no Act of Bankruptcy of the Borrower or the County has occurred; (c) proceeds
from the sale of the Bonds received contemporaneously with the issuance and
sale or remarketing of such Bonds; (d) any other moneys if there is delivered
to the Trustee at the time such moneys are deposited with the Trustee an
opinion of counsel (which may assume that no owner of Bonds is an "insider"
within the meaning of the Bankruptcy Code) from a firm experienced in
bankruptcy matters to the effect that the use of such moneys to pay amounts due
on the Bonds would not be recoverable from the Bondholders pursuant to Section
550 of the Bankruptcy Code as avoidable preferential payments under Section 547
of the Bankruptcy Code in the event of the occurrence of an Act of Bankruptcy
of the Borrower or the County; (e) proceeds of the investment of funds
qualifying as Available Amounts under the foregoing clauses; or (f) at any time
when there is no Credit Facility in effect with respect to the Bonds or when
the Credit Facility with respect to the Bonds is an obligation of the Borrower
or any affiliate of the Borrower, any moneys from whatever source derived
(including moneys from the Borrower or an affiliate of the Borrower).
"Available Amounts" means, with respect to Credit Provider Bonds, any moneys
from whatever source derived.
"Bankruptcy Code" means Title 11 of the United States Code, as
amended.
"Beneficial Owner" means, with respect any Book-Entry Bond,
the beneficial owner of such Bond as determined in accordance with the
applicable rules of DTC.
"Bond Counsel" means any attorney at law or firm of attorneys,
of nationally recognized standing in matters pertaining to the validity of, and
exclusion from gross income for federal tax purposes of interest on, bonds
issued by states and political subdivisions, acceptable to the Trustee and duly
admitted to practice law before the highest court of any state of the United
States, but shall not include counsel for the Borrower.
"Bond Fund" means the fund by that name established pursuant
to Section V.5.2 hereof.
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"Bond Purchase Fund" means the fund by that name established
pursuant to Section IV.4.10 hereof.
"Bonds" means the bonds designated as provided in Section
II.2.1.(a) hereof, authorized and issued hereunder in an aggregate principal
amount not to exceed $45,700,000.
"Book-Entry Bonds" means any Bonds which are then held in
book-entry form as provided in Section II.2.1.(d) hereof.
"Borrower" means (i) Laidlaw Environmental Services, Inc., a
Delaware corporation, and its successors and assigns, and (ii) any surviving,
resulting or transferee corporation as provided in Section 5.2 of the
Agreement.
"Business Day" means a day on which banks located in the
cities in which the Principal Offices of the Trustee, the Registrar, the Paying
Agent, the Tender Agent, the Remarketing Agent and the Credit Provider, if any,
are located are not required or authorized to be closed and on which the New
York Stock Exchange is not closed.
"Certificate of the Borrower" means a certificate signed by an
Authorized Borrower Representative. If and to the extent required by the
provisions of Section I.1.4 hereof, each Certificate of the Borrower shall
include the statements provided for in Section I.1.4 hereof.
"Certificate of the County" means a certificate signed by an
Authorized County Representative. If and to the extent required by the
provisions of Section I.1.4 hereof, each Certificate of the County shall
include the statements provided for in Section I.1.4 hereof.
"Certified Resolution" means a copy of a resolution or
ordinance of the County certified by the County Clerk of the County to have
been duly adopted by the County and to be in full force and effect on the date
of such certification.
"Code" means the Internal Revenue Code of 1986, as amended.
"Conversion Date" means any Business Day, on or after July 1,
2007, on which the Rate Period on the Bonds is converted to another Rate
Period.
"County" means Tooele County, Utah, and any successor to its
functions hereunder.
"Credit Agreement" means, with respect to any Credit Facility,
the agreement between the Borrower and the applicable Credit Provider, as
originally executed or as it may from time to time be replaced, supplemented or
amended in accordance with the provisions thereof and Article IX hereof,
providing for the issuance of the Credit Facility and the reimbursement of the
Credit Provider for payments
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thereunder, and any subsequent agreement pursuant to which a substitute Credit
Facility is provided, together with any related pledge agreement, security
agreement or other security document.
"Credit Facility" means any letter of credit, guarantee,
standby purchase agreement, bond insurance or other support arrangement or
security or any combination of the foregoing, if any, provided by the Borrower
with respect to the Bonds, pursuant to Sections 4.2 and 4.6 of the Agreement
and Section V.5.7 hereof.
"Credit Facility Debt Service Account" means the account by
that name established within the Bond Fund.
"Credit Facility Purchase Account" means the account by that
name established within the Bond Purchase Fund.
"Credit Provider" means the issuer or other provider of a
Credit Facility with respect to the Bonds as permitted under Sections 4.2 and
4.6 of the Agreement and Section V.5.7 hereof (except the Borrower), and the
respective successors and assigns of the business thereof and any surviving,
resulting or transferee entity with or into which it may be consolidated or
merged or to which it may transfer all or substantially all of its business.
"Credit Provider Bonds" means any Bonds purchased pursuant to
a Credit Facility as provided in Section V.5.7.(c)(iii) hereof for so long as
such Bonds are held by or for the account of, or are pledged to, the applicable
Credit Provider in accordance with Section V.5.7.(d) hereof.
"Daily Put Bonds" has the meaning specified in Section
IV.4.12 hereof.
"Daily Rate" means the variable interest rate on any Bond
established in accordance with Section II.2.1.(c)(ii) hereof.
"Daily Rate Period" means each period during which Daily Rates
are in effect.
"Dated Date" means July 1, 1997.
"Determination of Taxability" means a determination that, due
to the untruth or inaccuracy of any representation or warranty made by the
Borrower in the Agreement or the breach of any covenant or warranty of the
Borrower contained in the Agreement, interest on the Bonds, or any of them, is
determined not to be Tax-Exempt by a final administrative determination of the
Internal Revenue Service or a final judicial decision of a court of competent
jurisdiction in a proceeding of which the Borrower received notice and was
afforded an opportunity to participate to the full extent permitted by law. A
determination or decision will not be considered final for purposes of the
preceding sentence unless (A) the holder or holders of the Bonds involved in
the
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proceeding in which the issue is raised (i) shall have given the Borrower and
the Trustee prompt written notice of the commencement thereof, and (ii) shall
have offered the Borrower the opportunity to control the proceeding; provided
that the Borrower agrees to pay all expenses in connection therewith and to
indemnify such holder or holders against all liability for such expenses
(except that any such holder may engage separate counsel, and the Borrower
shall not be liable for the fees or expenses of such counsel); and (B) such
proceeding shall not be subject to a further right of appeal or shall not have
been timely appealed.
"Documents" means, collectively, the Agreement and any Credit
Facility.
"DTC" means The Depository Trust Company and its successors
and assigns.
"DTC Participants" means those broker-dealers, banks and other
financial institutions from time to time for which DTC holds Bonds as
securities depository.
"Electronic" notice means notice through a time-sharing
terminal.
"Event of Default" as used with respect to this Indenture has
the meaning specified in Section VII.7.1 hereof, and as used with respect to
the Agreement has the meaning specified in Section 6.1 thereof.
"Facility" means the Tooele County Hazardous Waste Disposal
Facility located in Tooele County, Utah, and more fully described in Exhibit A
to the Agreement, at which site the Project is located.
"Government Obligations" means bonds, notes, certificates of
indebtedness, treasury bills or other securities constituting direct
obligations of, or obligations the full and timely payment of which is
guaranteed by, the United States of America, or securities evidencing ownership
interests in such obligations or in specified portions thereof (which may
consist of specific portions of the principal of or interest on such
obligations).
"holder" or "Bondholder" means the registered owner of any
Bond.
"Indenture" means this Indenture of Trust, as originally
executed or as it may from time to time be supplemented, modified or amended by
any supplemental indenture entered into pursuant to the provisions hereof.
"Information Services" means Financial Information, Inc.'s
"Daily Called Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New
Jersey 07302, Attention: Editor; Kenny Information Services' "Called Bond
Service," 65 Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal
and Government," 99 Church Street, 8th Floor, New York, New York 10007,
Attention: Municipal News Reports; the Municipal Securities Rulemaking Board,
CDI Pilot, 1640 King Street, Suite
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300, Alexandria, Virginia 22314; and Standard and Poor's "Called Bond Record,"
25 Broadway, 3rd Floor, New York, New York 10004; or, in accordance with
then-current guidelines of the Securities and Exchange Commission, such other
addresses and/or such other services providing information with respect to
called bonds, or no such services, as the Borrower may designate in a
Certificate of the Borrower delivered to the Trustee.
"Initial Rate Period" for the Bonds means the Rate Period for
the Bonds on the Issue Date as specified in Section II.2.1.(c)(i) hereof.
"Interest Coverage Period" means (x) the number of days of
interest on the Bonds (calculated at the Maximum Interest Rate) for which the
Credit Facility, if any, then in effect may be drawn upon or otherwise provide
payment minus (y) five (5) days, as certified by the Borrower to the
Remarketing Agent from time to time.
"Interest Payment Date" means (i) with respect to any Daily or
Weekly Rate Period, the first Business Day of each calendar month, (ii) with
respect to any Term Rate Period, each July 1 and January 1 occurring during
such Term Rate Period and the Business Day next succeeding the last day of such
Term Rate Period, and (iii) in all events, the final maturity date of each
Bond.
"Investment Securities" means any of the following: (1)
Government Obligations; (2) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the following: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Housing Finance Board,
Export-Import Bank of the United States, Federal Financing Bank, Federal Land
Banks, Federal Farm Credit Bank, Government National Mortgage Association,
Farmer's Home Administration, Federal Home Loan Mortgage Corporation or Federal
Housing Administration; (3) obligations of any state or local government the
interest on which is Tax-Exempt for which a nationally recognized rating
service is maintaining a rating within the top two ratings of such rating
service; (4) repurchase agreements with reputable financial institutions fully
secured by collateral security actually delivered to the Trustee described in
clauses (1) or (2) of this definition continuously having a market value at
least equal to the amount so invested; (5) bankers' acceptances issued by a
bank rated Aa or better by Moody's or rated AA or better by Standard & Poor's
and eligible for purchase by the Federal Reserve Bank (which may include the
Trustee and its affiliates); (6) interest-bearing demand or time deposits
(including certificates of deposit) in banks (including the Trustee and its
affiliates) and savings and loan associations, provided such deposits are (a)
secured at all times, in the manner and to the extent provided by law, by
collateral security (described in clauses (1) or (2) of this definition) of a
market value of no less than the amount of moneys so invested or (b) with banks
(including the Trustee and its affiliates) or savings and loan associations
having a combined capital and surplus of at least one hundred million dollars
($100,000,000) or (c) fully insured by the Federal Deposit Insurance
Corporation or the Federal Savings and Loan Insurance Corporation; (7)
investment in or shares of any "regulated investment company" within the
meaning of Section 851(a) of the Code, the assets of which are securities or
investments described in (1) through
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(6) above (except for any rating requirement); and (8) units of a money-market
fund or portfolio restricted to obligations issued by, or guaranteed by the
full faith and credit of, the United States of America.
"Issue Date" means July 9, 1997.
"Mandatory Tender Bonds" has the meaning specified in Section
IV.4.12.(c) hereof.
"Maximum Interest Rate" means (a) while a Credit Facility is
in effect with respect to the Bonds, the rate of interest specified in such
Credit Facility which is used to determine the amount available under such
Credit Facility for payment of interest due and payable to holders of the
Bonds, but in no event greater than 12% per annum, and (b) at all other times,
12% per annum.
"Moody's" means Moody's Investors Service, a corporation
organized and existing under the laws of the State of Delaware, its successors
and assigns.
"Notice by Mail" or "notice" of any action or condition "by
Mail" shall mean a written notice meeting the requirements of this Indenture
mailed by first class mail to the holders of specified Bonds, at the addresses
shown on the registration books maintained pursuant to Section II.2.4 hereof.
"NRMSIR" means a nationally recognized municipal securities
information repository recognized by the Securities and Exchange Commission
pursuant to Rule 15c2-12. The name and address of each NRMSIR on the date of
this Indenture are as follows: Bloomberg Municipal Repositories, P.O. Box 840,
Princeton, New Jersey 08542-0840, Phone: (609) 279-3200, Fax: (609) 279-5963;
Thomson Financial Services, Secondary Market Disclosure, 395 Hudson Street, 3rd
Floor, New York, New York 10014, Phone: (212) 807-3814, Fax: (212) 989-9282;
Disclosure, Inc., Document Acquisitions/Municipal Securities, 5161 River Road,
Bethesda, Maryland 20816-1848, Phone: (30) 951-1450 (for issuer- related
questions), (800) 638-8241 (for purchase of documents), Fax: (301) 718-2329;
JJ Kenny Information Systems, The Repository, 65 Broadway, 16th Floor, New
York, New York 10006-2503, Phone: (212) 770-4568, Fax: (212) 707-7994; Moody's
NRMSIR, Public Finance Information Center, 99 Church Street, New York, New York
10007-2796, Phone: (800) 339-6306, Fax: (212) 553-1460; and R.R. Donnelley
Financial, Attention: Municipal Securities Disclosure Archive, 559 Main Street,
Hudson, Massachusetts 01749, Phone: (800) 580-3670, Fax: (508) 562-1969.
"Opinion of Counsel" means a written opinion of counsel (who
may be counsel for the Borrower) acceptable to the Trustee, the County and the
Borrower. If and to the extent required by the provisions of Section I.1.4,
each Opinion of Counsel shall include the statements provided for in Section
I.1.4.
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"Other Company Debt" means (i) any debt of the Borrower or its
subsidiaries on a parity with or superior to the Bonds, which is secured by
assets of the Borrower or any of its subsidiaries (including, but not limited
to, up to $650,000,000 in credit facilities given by a consortium of banks and
other financial institutions to the Borrower as of the Issue Date, or any
replacement thereof) and (ii) the loan agreements and/or guaranties relating to
$20,000,000 aggregate principal amount of Carbon County, Utah Solid Waste
Disposal Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.) 1997
Series A and $19,500,000 aggregate principal amount of California Pollution
Control Financing Authority Pollution Control Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A.
"Outstanding," when used as of any particular time with
reference to Bonds (subject to the provisions of Section XI.11.6.(e)), means
all Bonds theretofore authenticated and delivered by the Registrar or the
Tender Agent under this Indenture except:
(a) Bonds theretofore cancelled by the Registrar or
surrendered to the Registrar for cancellation;
(b) Bonds in lieu of or in substitution for which other
Bonds shall have been authenticated and delivered by the Registrar
pursuant to the terms of Section II.2.6;
(c) Bonds with respect to which the liability of the
County and the Borrower have been discharged to the extent provided
in, and pursuant to the requirements of, Section X.10.2; and
(d) Bonds deemed purchased pursuant to Section IV.4.9
hereof.
"Paying Agent" means any paying agent appointed as provided in
Section VI.6.3 hereof, or any successor thereto.
"Permitted Termination" means, with respect to any Credit
Facility, any termination that has been approved by the County without
provision being made for a substitute Credit Facility in accordance with
Section 4.6(b)(i) of the Agreement.
"person" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Placement Agreement" means the Bond Placement Agreement,
dated July 2, 1997, among the County, the Borrower and the Placement Agent
relating to the purchase from the County and the placement of the Bonds with
the purchasers thereof.
"Principal Office" (i) of the Tender Agent, the Registrar or
the Paying Agent means the office thereof designated in writing by the Tender
Agent, the Registrar
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or the Paying Agent, as the case may be, to the County, the Trustee, the Credit
Provider, if any, and the Borrower, which initially shall be located in Salt
Lake City, Utah at the address set forth in Section XI.11.5 hereof; (ii) of the
Trustee means the principal corporate trust office of the Trustee designated in
writing to the County, the Registrar, the Paying Agent, the Tender Agent, the
Credit Provider, if any, and the Borrower, which initially shall be located in
Salt Lake City, Utah at the address set forth in Section XI.11.5 hereof; (iii)
of the Remarketing Agent means its office designated in writing to the County,
the Trustee, the Tender Agent, the Credit Provider, if any, and the Borrower;
and (iv) of the Credit Provider, if any, means its office located at such
address as such Credit Provider shall designate in writing to the County, the
Trustee, the Tender Agent and the Borrower.
"Prior Bonds" has the meaning assigned to such term in the
recitals to this Indenture.
"Project" means those facilities, including real property,
structures, buildings, fixtures or equipment, described in Exhibit A to the
Agreement, as it may be amended from time to time, which facilities were
financed or refinanced, in whole or in part, from the proceeds of the sale of
the Prior Bonds, and any real property, structures, buildings, fixtures or
equipment acquired in substitution for, as a renewal or replacement of, or a
modification or improvement to, all or any part of the facilities described in
said Exhibit A.
"PSA Municipal Index" means the Public Securities Association
Municipal Index as of the most recent date for which such index was published
or such other weekly, high-grade index comprised of seven-day, Tax-Exempt
variable rate demand notes produced by Municipal Market Data, Inc., or its
successor, or as otherwise designated by the Public Securities Association;
provided, however, that, if such index is no longer produced by Municipal
Market Data, Inc. or its successor, then "PSA Municipal Index" shall mean such
other reasonably comparable index selected by the Borrower.
"Purchase Date" means any date on which any Bond is required
to be purchased pursuant to Section IV.4.6 or IV.4.7 hereof.
"Qualified Newspaper" means The Wall Street Journal or The
Bond Buyer or any other newspaper or journal containing financial news, printed
in the English language and customarily published on each Business Day, of
general circulation in New York, New York, and selected by the Borrower and
designated to the Trustee.
"Rate Period" means any Daily Rate Period, Weekly Rate Period
or Term Rate Period.
"Rating Agency" means Moody's or Standard & Poor's to the
extent they then are providing or maintaining a rating on the Bonds at the
request of the Borrower, or in the event that Moody's or Standard & Poor's no
longer maintains a rating on the
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Bonds, any other nationally recognized rating agency then providing or
maintaining a rating on the Bonds at the request of the Borrower.
"Rebate Fund" means the fund by that name established and held
by the Trustee in accordance with Section VI.6.6 hereof.
"Rebate Requirement" has the meaning assigned to such term in
the Tax Certificate.
"Record Date" means (a) with respect to any Interest Payment
Date in respect of any Daily Rate Period or Weekly Rate Period, the Business
Day next preceding such Interest Payment Date; and (b) with respect to any
Interest Payment Date in respect of any Term Rate Period, the fifteenth day
(whether or not a Business Day) next preceding such Interest Payment Date.
"Registrar" means any registrar appointed as provided in
Section VIII.8.12 hereof, or any successor thereto.
"Remarketing Agent" means the Remarketing Agent for the Bonds,
if any, selected by the Borrower with the approval of the County pursuant to
Section VIII.8.16 hereof.
"Remarketing Agreement" means any agreement which meets the
requirements of Section VIII.8.16 hereof.
"Repayment Installment" means any amount that the Borrower is
required to pay to the Trustee pursuant to Section 4.2(a) of the Agreement as a
repayment of the loan made by the County under the Agreement.
"Representation Letter" has the meaning specified in Section II.2.1.(d) hereof.
"Responsible Officer" of the Trustee means and includes the
chair of the board of directors, the president, every vice president, every
assistant vice president, every trust officer, and every officer and assistant
officer of the Trustee other than those specifically above mentioned, to whom
any corporate trust matter is referred because of his or her knowledge of, and
familiarity with, a particular subject.
"Revenues" means all rents, receipts, installment payments and
other income derived by the County or the Trustee under the Agreement or
otherwise in respect of the refinancing of the Project as contemplated by the
Agreement, and any income or revenue derived from the investment of any money
in any fund or account established pursuant to this Indenture (other than the
Bond Purchase Fund, the Rebate Fund and the accounts therein), including all
Repayment Installments, amounts received under any Credit Facility to pay
principal of and interest on the Bonds and any other payments made by the
Borrower with respect to the Bonds pursuant to the Agreement;
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provided, however, that such term shall not include payments to the County or
the Trustee pursuant to Sections 4.2(c), 4.2(d), 5.6, 6.3, 8.2 and 8.3 of the
Agreement or any amounts on deposit in the Bond Purchase Fund, the Rebate Fund
or accounts therein.
"Rule 15c2-12" means Rule 15c2-12 adopted by the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended.
"Securities Depositories" means [The Depository Trust Company,
711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190;
Midwest Securities Trust Company, Capital Structures-Call Notification, 440
South LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia
Depository Trust Company, Reorganization Division, 1900 Market Street,
Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215)
496-5058]; or, in accordance with then-current guidelines of the Securities and
Exchange Commission, such other addresses and/or such other securities
depositories, or no such depositories, as the County may designate in a
Certificate of the County delivered to the Trustee.
"SID" means the state information depository, if any, of the
State recognized by the Securities and Exchange Commission pursuant to Rule
15c2-12.
"Standard & Poor's" means Standard & Poor's Ratings Group, a
corporation organized and existing under the laws of the State of New York, its
successors and assigns.
"State" means the State of Utah.
The term "supplemental indenture" or "indenture supplemental
hereto" means any indenture hereafter duly authorized and entered into between
the County and the Trustee in accordance with the provisions of this Indenture.
"Tax Certificate" means the Tax Certificate and Agreement,
dated as of the Issue Date, by and between the County and the Borrower, as the
same may be amended from time to time.
"Tax-Exempt" means, with respect to interest on any
obligations of a state or local government, including the Bonds, that such
interest is excluded from the gross income of the holders thereof (other than
any holder who is a "substantial user" of facilities financed with such
obligations or a "related person" within the meaning of Section 147(a) of the
Code) for federal income tax purposes, whether or not such interest is
includable as an item of tax preference or otherwise includable directly or
indirectly for purposes of calculating other tax liabilities, including any
alternative minimum tax or environmental tax under the Code.
"Tender Agent" means the tender agent for the Bonds, if any,
selected by the County with the advice and consent of the Borrower and meeting
the requirements of Section VIII.8.15 hereof.
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"Term Rate" means a non-variable interest rate on any Bond
established in accordance with Section II.2.1.(c)(iv) hereof.
"Term Rate Period" means each period with a duration of one
month or any multiple thereof (which may be expressed as multiples of months or
years) or the entire period until final maturity of the Bonds, during which a
particular Term Rate is in effect.
"Trustee" means United States National Bank of Oregon, doing
business as U.S. Bank, a national banking association organized under the laws
of the United States, and its successors and assigns or any successor trustee
appointed pursuant to Section VIII.8.8 hereof.
"Weekly Put Bonds" has the meaning specified in Section IV.4.12 hereof.
"Weekly Rate" means the variable interest rate on the Bonds
established in accordance with Section II.2.1.(c)(iii) hereof.
"Weekly Rate Period" means each period during which Weekly Rates are in effect.
"Written Consent of the County," "Written Order of the
County," and "Written Request of the County" mean, respectively, a written
consent, order or request signed by or on behalf of the County by an Authorized
County Representative.
"Yield" shall have the meaning ascribed to such term by
Section 148(h) of the Code.
Section 1.2. Number and Gender. The singular form of any word
used herein, including the terms defined in Section I.1.1, shall include the
plural, and vice versa. The use herein of a word of any gender shall include
all genders.
Section 1.3. Articles, Sections, Etc. All references herein to
"Articles," "Sections" and other subdivisions are to the corresponding
Articles, Sections or subdivisions of this Indenture as originally executed;
and the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section
or subdivision hereof. The headings or titles of the several Articles and
Sections hereof, and any table of contents appended to copies hereof, shall be
solely for convenience of reference and shall not affect the meaning,
construction or effect of this Indenture.
Section 1.4. Content of Certificates and Opinions. Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture or the Agreement (except for the certificate of
cancelled Bonds provided for in Sections II.2.6, II.2.7, IV.4.5 and VI.6.1
hereof) shall include (a) a statement that the person or persons making or
giving such certificate or opinion have read such covenant
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or condition and the definitions herein relating thereto; (b) a brief statement
as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based; (c)
a statement that, in the opinion of the signers, they have made or caused to be
made such examination or investigation as is necessary to enable them to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (d) a statement as to whether, in the opinion of the
signers, such condition or covenant has been complied with.
Any such certificate or opinion made or given by an officer of
the County or the Borrower may be based, insofar as it relates to legal
matters, upon a certificate or opinion of or representations by counsel, unless
such officer knows that the certificate or opinion or representations with
respect to the matters upon which his or her certificate or opinion may be
based as aforesaid are erroneous, or in the exercise of reasonable care should
have known that the same were erroneous. Any such certificate or opinion made
or given by counsel may be based, insofar as it relates to factual matters
(with respect to which information is in the possession of the County or the
Borrower), upon the certificate or opinion of or representations by an officer
of the County or the Borrower, as applicable, unless such counsel knows that
the certificate or opinion or representations with respect to the matters upon
which his or her opinion may be based as aforesaid are erroneous, or in the
exercise of reasonable care should have known that the same were erroneous.
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ARTICLE II
THE BONDS
Section 2.1. Authorization and Terms of Bonds.
(a) Authorization. Bonds designated as "Tooele County,
Utah Pollution Control Refunding Revenue Bonds (Laidlaw Environmental
Services, Inc.) 1997 Series A", may be issued under this Indenture.
The aggregate principal amount of Bonds which may be issued and
Outstanding under this Indenture shall not exceed Forty-Five Million
Seven Hundred Thousand Dollars ($45,700,000), exclusive of Bonds
executed and authenticated as provided in Section II.2.6.
(b) General Terms. The Bonds shall be issued as fully
registered Bonds, without coupons, in Authorized Denominations and
shall all be dated as of the Dated Date. The Bonds shall mature,
subject to prior redemption as provided in Article IV, upon the terms
and conditions hereinafter set forth, on July 1, 2027.
The Bonds shall bear the letter prefix "RA-" and be numbered
consecutively from 1 upward. Each Bond shall bear interest from the
last date to which interest has been paid in full or duly provided for
on such Bond, or, if no interest has been paid or duly provided for on
such Bond, from the Dated Date. Payment of the interest on any Bond
shall be made to the person appearing on the bond registration books
of the Registrar as the registered holder thereof as of the close of
business on the Record Date, such interest to be paid by the Paying
Agent to such registered holder (i) in the event such Bond is a
Book-Entry Bond, in immediately available funds on the Interest
Payment Date in accordance with the Representation Letter, (ii) in the
event such Bond is a Credit Provider Bond but is not a Book-Entry
Bond, in immediately available funds on the Interest Payment Date by
wire transfer in accordance with written instructions provided by the
Credit Provider to the Registrar prior to such Interest Payment Date;
and (iii) in the event such Bond is neither a Book-Entry Bond nor a
Credit Provider Bond, (A) in immediately available funds (by wire
transfer or by deposit to the account of the holder of any such Bond
if such account is maintained with the Paying Agent), according to the
instructions given by such holder to the Registrar or (B) in all other
cases, by check mailed by first class mail to the holder at such
holder's address as it appears as of the Record Date on the
registration books of the Registrar; except, in each case, that, if
and to the extent that there shall be a default in the payment of the
interest due on such Interest Payment Date, such defaulted interest
shall be paid to the holders in whose name any such Bonds are
registered as of a special record date to be fixed by the Trustee,
notice of which shall be given to such holders not less than ten (10)
days prior thereto. Both the principal of and premium, if any, on the
Bonds shall be payable upon surrender
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thereof in lawful money of the United States of America at the
Principal Office of the Paying Agent.
(c) Interest Rates and Rate Periods. The Bonds shall
bear interest until final payment of the principal or redemption price
thereof shall have been made in accordance with the provisions hereof,
whether at maturity, upon redemption or otherwise. During Daily Rate
Periods, interest on the Bonds shall be computed on the basis of a
365- or 366-day year for the number of days actually elapsed during
Daily Rate Periods. During Weekly Rate Periods, interest on the Bonds
shall be computed on the basis of a 365- or 366-day year for the
number of days actually elapsed based on the calendar year in which
the Weekly Rate Period commences. During any Term Rate Period
interest on the Bonds shall be computed upon the basis of a 360-day
year, consisting of twelve 30-day months. The Bonds shall bear
interest for the periods and at the rates set forth in this subsection
II.2.1.(c).
(i) Rate Period; Initial Rate Period. The term
of the Bonds shall be divided into consecutive Rate Periods
during which the Bonds shall bear interest at the Daily Rate,
Weekly Rate or Term Rate. The Initial Rate Period for the
Bonds shall be a Term Rate Period ending July 1, 2027 and the
Bonds shall bear interest at the rate of 7.55% per annum.
The Rate Period with respect to the Bonds shall be as
provided above until adjusted as provided herein. Except as
otherwise provided herein, any Daily Rate Period or Weekly
Rate Period established with respect to the Bonds shall
continue in effect unless and until adjusted to a different
Rate Period as provided herein.
(ii) Daily Rate.
(A) Determination of Daily Rate. During
each Daily Rate Period, the Bonds shall bear interest
at the Daily Rate, determined by the Remarketing
Agent on or before each Business Day for such
Business Day. The Daily Rate shall be the rate
determined by the Remarketing Agent to be the lowest
rate which would enable the Remarketing Agent to sell
the Bonds for delivery on the effective date of such
rate at a price (without regard to accrued interest)
equal to 100% of the principal amount thereof. The
Remarketing Agent shall provide the Trustee and the
Borrower with telephonic or Electronic notice of the
Daily Rate determined by 10:30 a.m. (New York City
time) on the date of determination. If the
Remarketing Agent shall not have determined a Daily
Rate for any day by 10:30 a.m. (New York City time)
on such day, the Daily Rate shall be the same as the
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Daily Rate for the immediately preceding day. In
no event shall the Daily Rate be greater than the
Maximum Interest Rate.
(B) Adjustment to a Daily Rate Period.
At any time, the Borrower, by written notice to the
County, the Trustee, the Paying Agent, the
Remarketing Agent and the Credit Provider, if any,
may elect that the Bonds shall bear interest at a
Daily Rate. Such notice (1) shall specify the
effective date of such adjustment to a Daily Rate,
which shall be (a) a Business Day not earlier than
twenty-five (25) days (thirty-one (31) days if the
then current Rate Period is a Term Rate Period of six
months or longer) after delivery of such notice (or
such shorter period as shall be acceptable to the
Trustee); (b) in the case of an adjustment from a
Term Rate Period, a day on which the Bonds would be
permitted to be redeemed at the option of the
Borrower pursuant to Section IV.4.1.(a)..(2)(B)
hereof; and (c) in the case of an adjustment from a
Weekly Rate Period, an Interest Payment Date on which
interest is payable for the Weekly Rate Period from
which the adjustment is to be made; provided,
however, that if prior to the Borrower's making such
election, any Bonds shall have been called for
redemption and such redemption shall not have
theretofore been effected, the effective date of such
Daily Rate Period shall not precede such redemption
date; and (2) if the adjustment is from a Term Rate
Period, shall be accompanied by an opinion of Bond
Counsel addressed to the Trustee to the effect that
such adjustment (a) is authorized or permitted by the
Indenture and the Act, and (b) will not adversely
affect the Tax-Exempt status of the interest on the
Bonds.
(C) Notice of Adjustment to a Daily Rate
Period. The Trustee shall give Notice by Mail of an
adjustment to a Daily Rate Period to the holders of
the Bonds not less than fifteen (15) days (thirty
(30) days if the then current Rate Period is a Term
Rate Period of six months or longer) prior to the
effective date of such Daily Rate Period. Such
notice shall state (1) that the interest rate on the
Bonds will be adjusted to a Daily Rate (subject to
the Borrower's ability to rescind its election as
described in Section II.2.1.(c)(vii) hereof), (2) the
effective date of the Daily Rate Period, (3) that the
Bonds are subject to mandatory tender for purchase on
such effective date (except in the case of
adjustments between Daily Rate Periods and Weekly
Rate Periods), (4) the procedures for such mandatory
tender, and (5) the purchase price of the Bonds on
such effective date which purchase price shall be par
plus accrued interest and a premium, if any, equal to
the optional redemption premium that would be payable
by the County if the Bonds were redeemed on the
Conversion Date.
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(iii) Weekly Rate.
(A) Determination of Weekly Rate.
During each Weekly Rate Period, the Bonds shall bear
interest at the Weekly Rate, determined by the
Remarketing Agent no later than the first day of such
Weekly Rate Period and thereafter no later than 10:00
a.m. (New York City time) on Wednesday of each week
during such Weekly Rate Period, unless any such
Wednesday shall not be a Business Day, in which event
the Weekly Rate shall be determined by the
Remarketing Agent no later than the Business Day next
preceding such Wednesday. The Weekly Rate shall be
the rate determined by the Remarketing Agent to be
the lowest rate which would enable the Remarketing
Agent to sell the Bonds for delivery on the effective
date of such rate at a price (without regard to
accrued interest) equal to 100% of the principal
amount thereof. If the Remarketing Agent shall not
have determined a Weekly Rate for any period by the
time specified above, the Weekly Rate shall be the
same as the Weekly Rate in effect for the immediately
preceding week. In no event shall any Weekly Rate be
greater than the Maximum Interest Rate. The first
Weekly Rate determined for each Weekly Rate Period
shall apply to the period commencing on the first day
of such Weekly Rate Period and ending on the next
succeeding Tuesday. Thereafter, each Weekly Rate
shall apply to the period commencing on each
Wednesday and ending on the next succeeding Tuesday,
unless such Weekly Rate Period shall end on a day
other than Tuesday, in which event the last Weekly
Rate for such Weekly Rate Period shall apply to the
period commencing on the Wednesday preceding the last
day of such Weekly Rate Period and ending on such
last day. The Remarketing Agent shall provide the
Trustee and the Borrower with written, telephonic or
Electronic notice of each Weekly Rate, as determined,
by 12:00 noon (New York City time) on the effective
date of such Weekly Rate.
(B) Adjustment to a Weekly Rate Period.
At any time, the Borrower, by written notice to the
County, the Trustee, the Paying Agent, the
Remarketing Agent and the Credit Provider, if any,
may elect that the Bonds shall bear interest at a
Weekly Rate. Such notice (1) shall specify the
effective date of such adjustment to a Weekly Rate,
which shall be (a) a Business Day not earlier than
twenty-five (25) days after delivery of such notice
(or such shorter period as shall be acceptable to the
Trustee); (b) in the case of an adjustment from a
Term Rate Period, a day on which the Bonds would be
permitted to be redeemed at the option of the
Borrower pursuant to Section IV.4.1.(a)..(2)(B)
hereof; and (c) in the case of an adjustment from a
Daily Rate Period, an Interest
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Payment Date on which interest is payable for the
Daily Rate Period from which the adjustment is to
be made; provided, however, that if prior to the
Borrower's making such election, any Bonds shall have
been called for redemption and such redemption shall
not have theretofore been effected, the effective date
of such Weekly Rate Period shall not precede such
redemption date; and (2) if the adjustment is from a
Term Rate Period, shall be accompanied by an opinion
of Bond Counsel addressed to the Trustee to the effect
that such adjustment (a) is authorized or permitted by
the Indenture and the Act, and (b) will not adversely
affect the Tax-Exempt status of interest on the Bonds.
(C) Notice of Adjustment to a Weekly
Rate Period. The Trustee shall give Notice by Mail
of an adjustment to a Weekly Rate Period to the
holders of the Bonds not less than fifteen (15) days
(thirty (30) days if the then current Rate Period is
a Term Rate Period of six months or longer) prior to
the effective date of such Weekly Rate Period. Such
notice shall state (1) that the interest rate on the
Bonds will be adjusted to a Weekly Rate (subject to
the Borrower's ability to rescind its election as
provided in Section II.2.1.(c)(vii) hereof), (2) the
effective date of the Weekly Rate Period, (3) that
the Bonds are subject to mandatory tender for
purchase on such effective date (except in the case
of adjustments between Daily Rate Periods and Weekly
Rate Periods), (4) the procedures for such mandatory
tender, and (5) the purchase price of such Bonds on
such effective date which purchase price shall be par
plus accrued interest and a premium, if any, equal to
the optional redemption premium that would be payable
by the County if the Bonds were redeemed on the
Conversion Date.
(iv) Term Rate.
(A) Determination of Term Rate. During
each Term Rate Period, the Bonds shall bear interest
at the Term Rate, which shall be determined by the
Remarketing Agent on a Business Day selected by the
Remarketing Agent, but not more than forty (40) days
prior to and not later than the effective date of
such Term Rate Period. The Term Rate shall be the
rate determined by the Remarketing Agent on such
date, and communicated by the close of business on
such date to the Trustee, the Paying Agent and the
Borrower, by written, telephonic or Electronic
notice, as being the lowest rate which would enable
the Remarketing Agent to sell the Bonds for delivery
on the effective date of such Term Rate Period at a
price (without regard to accrued interest) equal to
100% of the principal amount thereof; provided,
however, that if, for any
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reason, a Term Rate for any Term Rate Period shall
not be determined or effective or if an adjustment
from a Term Rate Period to another Rate Period shall
not be effective, the Rate Period for the Bonds shall
automatically convert to a Daily Rate Period. No
opinion of Bond Counsel shall be required in
connection with the automatic adjustment to the Daily
Rate pursuant to this paragraph. If a Daily Rate for
the first day of such Daily Rate Period is not
determined as provided in Section II.2.1.(c)(ii)
hereof, the Daily Rate for the first day of such
Daily Rate Period shall be equal to the PSA Municipal
Index. In no event shall any Term Rate be greater
than the Maximum Interest Rate.
(B) Adjustment to or Continuation of a
Term Rate Period. At any time, the Borrower, by
written notice to the County, the Trustee, the Paying
Agent, the Remarketing Agent and the Credit Provider,
if any, may elect that the Bonds shall bear, or
continue to bear, interest at a Term Rate, and if it
shall so elect, shall determine the duration of the
Term Rate Period during which the Bonds shall bear
interest at such Term Rate. Each Term Rate Period
shall have a duration such that the last day of such
Term Rate Period is (1) a day which both immediately
precedes a Business Day and is at least one (1) year
after the effective date of such Term Rate Period or
(2) if earlier, the day immediately preceding the
final maturity date of the Bonds. At the time the
Borrower so elects an adjustment to or continuation
of a Term Rate Period, the Borrower may specify two
or more consecutive Term Rate Periods and, if the
Borrower so specifies, shall specify the duration of
each such Term Rate Period as provided in this
paragraph (B). Such notice shall specify the
effective date of each Term Rate Period, which shall
be (1) a Business Day not earlier than twenty-five
(25) days after delivery of such notice (or such
shorter period as shall be acceptable to the
Trustee); (2) in the case of an adjustment from or
continuation of a Term Rate Period, a day on which
the Bonds would be permitted to be redeemed at the
option of the Borrower pursuant to Section
IV.4.1.(a)..(2)(B) hereof; and (3) in the case of an
adjustment from a Daily or Weekly Rate Period, an
Interest Payment Date on which interest is payable
for the Daily or Weekly Rate Period from which the
adjustment is to be made; provided, however, that if
prior to the Borrower's making such election, any
Bonds shall have been called for redemption and such
redemption shall not have theretofore been effected,
the effective date of such Term Rate Period shall not
precede such redemption date. In addition, such
notice (i) shall specify the last day of such Term
Rate Period, and (ii) if the adjustment is from a
Daily or Weekly
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Rate Period, shall be accompanied by an opinion of
Bond Counseladdressed to the Trustee to the effect
that such adjustment (a) is authorized or permitted by
the Indenture and the Act, and (b) will not adversely
affect the Tax-Exempt status of interest on the Bonds.
If, by the thirty-fifth day prior to the last
day of any Term Rate Period, the Trustee shall not
have received notice of the Borrower's election that,
during the next succeeding Rate Period, the Bonds
shall bear interest at a Daily Rate, a Weekly Rate or
a Term Rate accompanied by appropriate opinions of
Bond Counsel, if required by Section
II.2.1.(c)(ii)..(B), II.2.1.(c)(iii)..(B), or
II.2.1.(c)(iv) hereof, the next succeeding Rate
Period for the Bonds shall be a Daily Rate Period.
No opinion of Bond Counsel shall be required in
connection with the automatic adjustment to the Daily
Rate pursuant to this paragraph. If a Daily Rate for
the first day of such Daily Rate Period is not
determined as provided in Section II.2.1.(c)(ii)
hereof, the Daily Rate for the first day of such
Daily Rate Period shall be equal to the PSA Municipal
Index. The Trustee shall give Notice by Mail of the
automatic adjustment to the Daily Rate pursuant to
this paragraph in the manner provided below in
Section II.2.1(c)(iv)(C).
At the same time that the Borrower elects to
have the Bonds bear interest at a Term Rate or
continue to bear interest at a Term Rate, the
Borrower may also specify to the Trustee optional
redemption prices and periods different (including
that there be no such optional redemption) from those
set out in Section IV.4.1.(a) during the Term Rate
Period(s) with respect to which such election is
made; provided, however, that such notice shall be
accompanied by an opinion of Bond Counsel addressed
to the Trustee to the effect that such changes (i)
are authorized or permitted by the Act and this
Indenture, and (ii) will not adversely affect the
Tax-Exempt status of interest on the Bonds.
(C) Notice of Adjustment to or
Continuation of a Term Rate Period. The Trustee
shall give Notice by Mail of an adjustment to or
continuation of a Term Rate Period to the holders of
the Bonds not less than fifteen (15) days (thirty
(30) days if the then current Rate Period is a Term
Rate Period of six months or longer) prior to the
effective date of such Term Rate Period. Such notice
shall state (1) that the interest rate on the Bonds
will be adjusted to, or continue to be, a Term Rate
(subject to the Borrower's ability to rescind its
election as provided in Section II.2.1.(c)(vii)
hereof), (2) the effective date of the Term Rate
Period, (3) that the Bonds shall be subject to
mandatory tender for
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purchase on such effective date (except in the case of
the effective date of a Term Rate Period which is
preceded by a Term Rate Period of the same duration),
(4) the procedures for such mandatory tender, and (5)
the purchase price of the Bonds on such effective date
which purchase price shall be par plus accrued
interest and a premium, if any, equal to the optional
redemption premium that would be payable by the County
if the Bonds were redeemed on the Conversion Date.
(v) Terms of Credit Facility. If a Credit
Facility in the form of a letter of credit is to be held by
the Trustee after the effective date of any adjustment from
one Rate Period to another Rate Period, such Credit Facility
shall be in an amount sufficient to provide payment of (x) the
principal amount of the Outstanding Bonds plus (y) the amount
of interest (computed on the basis of a 365-day year in the
case of an adjustment to a Daily Rate Period or Weekly Rate
Period, and on the basis of a 360-day year consisting of
twelve 30-day months in the case of an adjustment to a Term
Rate Period) which will accrue on the Outstanding Bonds for a
period equal to the maximum number of days between Interest
Payment Dates during the new Rate Period plus five (5) days.
In the case of an adjustment to a Term Rate Period, the Credit
Facility, if any, to be in effect after the effective date of
such adjustment shall (i) extend for a period ending on a date
no earlier than five (5) days after the first date on which
the Bonds may be called for redemption pursuant to Section
IV.4.1.(a)..(2)(B) and (ii) cover the premium, if any, which
would be included in the purchase price upon mandatory
purchase of the Bonds pursuant to Section IV.4.7.(a)..(2)
hereof if the term of such Credit Facility were not extended
beyond the expiration date set forth therein.
(vi) Determination Conclusive. The determination
of any Daily Rate, Weekly Rate and Term Rate and the
calculation of interest payable on the Bonds by the
Remarketing Agent shall be conclusive and binding upon such
Remarketing Agent, the Trustee, the Paying Agent, the County,
the Borrower, the holders of the Bonds and the Credit
Provider, if any.
(vii) Rescission of Election. Notwithstanding
anything herein to the contrary, the Borrower may rescind any
election by it to adjust to or continue a Rate Period pursuant
to Section II.2.1.(c)(ii)..(B), II.2.1.(c)(iii)..(B) or
II.2.1.(c)(iv)..(B) hereof prior to the effective date of such
adjustment or continuation by giving written notice thereof to
the County, the Trustee and the Remarketing Agent prior to
such effective date. If the Trustee receives notice of such
rescission prior to the time the Trustee has given notice to
the holders of the Bonds pursuant to Section
II.2.1.(c)(ii)..(C), II.2.1.(c)(iii)..(C) or
II.2.1.(c)(iv)..(C) as applicable, then the notice of
adjustment or continuation previously delivered by the
Borrower shall be of no force and effect. If the Trustee
receives notice
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from the Borrower of rescission of an adjustment to or
continuation of a Rate Period after the Trustee has given
notice to the holders of the Bonds pursuant to Section
II.2.1.(c)(ii)..(C), II.2.1.(c)(iii)..(C) or
II.2.1.(c)(iv)..(C) as applicable, then (a) the Rate Period for
the Bonds shall automatically adjust to a Daily Rate Period on
the date originally scheduled for such adjustment or
continuation and (b) the Trustee shall give immediate Notice by
mail of the automatic adjustment to the Daily Rate pursuant to
this paragraph in a manner similar to that provided for in
Section II.2.1.(c)(iv)(C). No opinion of Bond Counsel shall be
required in connection with the automatic adjustment to a Daily
Rate Period pursuant to this paragraph. If a Daily Rate for
the first day of such Daily Rate Period is not determined as
provided in Section II.2.1.(c)(ii) hereof, the Daily Rate for
the first day of such Daily Rate Period shall be equal to the
PSA Municipal Index.
(d) Form of Bonds. The Bonds may be engraved, printed,
lithographed or typewritten, shall be in Authorized Denominations and
may contain such references to any of the provisions of this Indenture
as may be appropriate. The Bonds and the certificate of
authentication to be executed thereon shall be in substantially the
form attached hereto as Exhibit A, with such appropriate variations,
omissions and insertions as are permitted or required by this
Indenture. Pursuant to recommendations promulgated by the Committee
on Uniform Security Identification Procedures, "CUSIP" numbers may be
printed on the Bonds. The Bonds may bear such endorsement or legend
relating thereto as may be required to conform to usage or law with
respect thereto. If appropriate, the Bonds may be printed with a
portion of the text printed on the reverse side thereof and with a
legend printed on the front referring to such text to the following
effect: "Reference is hereby made to the further provisions of this
Bond set forth on the back hereof and such further provisions are
hereby incorporated by reference as if set forth here in full." Upon
adjustment to a Term Rate Period, the form of Bond may include a
summary of the mandatory and optional redemption provisions to apply
to the Bonds during such Term Rate Period, or a statement to the
effect that the Bonds will not be optionally redeemed during such Term
Rate Period, provided that the Registrar shall not authenticate such a
revised Bond form prior to receiving an opinion of Bond Counsel that
such Bond form conforms to the terms of the Act and of this Indenture
and that authentication thereof will not adversely affect the
Tax-Exempt status of the Bonds.
(e) Book-Entry System. Unless otherwise determined by
the County, the Bonds shall be issued in the form of one or more
separate single certificated fully registered Bond or Bonds,
registered in the name of Cede & Co., as nominee of DTC, or any
successor nominee (the "Nominee"). Except as provided in paragraph
(iii) below, all of the Outstanding Bonds shall be so registered in
the registration books kept by the Registrar, and the provisions of
this Section II.2.1.(d) shall apply thereto.
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(f) (i) The County, the Borrower, the Paying Agent,
the Registrar, the Tender Agent, the Remarketing Agent and the
Trustee shall have no responsibility or obligation to any DTC
Participant or to any Beneficial Owner, except as otherwise
expressly provided herein. Without limiting the immediately
preceding sentence, the County, the Borrower, the Paying
Agent, the Registrar, the Tender Agent, the Remarketing Agent
and the Trustee shall have no responsibility or obligation
with respect to (1) the accuracy of the records of DTC, the
Nominee or any DTC Participant with respect to any ownership
interest in the Bonds, (2) the delivery to any DTC Participant
or any other person, other than a Bondholder as shown in the
registration books kept by the Registrar, of any notice with
respect to the Bonds, including any notice of redemption
(except that the Trustee and the Tender Agent shall have the
obligation to deliver notices of optional and mandatory tender
to the Remarketing Agent as provided herein) or (3) the
payment to any DTC Participant or any other person, other than
a Bondholder, as shown in the registration books kept by the
Registrar, of any amount with respect to principal or purchase
price of, premium, if any, or interest on the Bonds. The
Paying Agent shall pay all principal and purchase price of,
premium, if any, and interest on the Bonds only to or upon the
order of the respective Bondholders, as shown in the
registration books kept by the Registrar, or their respective
attorneys duly authorized in writing, and all such payments
shall be valid and effective to fully satisfy and discharge
the County's obligations with respect to payment of principal
of, premium, if any, and interest on the Bonds to the extent
of the sum or sums so paid. The County, the Borrower, the
Paying Agent, the Registrar, the Tender Agent, the Remarketing
Agent and the Trustee may treat and consider the person in
whose name each Bond is registered in the registration books
kept by the Registrar as the holder and absolute owner of such
Bond for the purpose of payment of principal, purchase price,
premium and interest with respect to such Bond, for the
purpose of giving notices of redemption and other matters with
respect to such Bond, for the purpose of registering transfers
with respect to such Bond, and for all other purposes
whatsoever; provided, however, notwithstanding the foregoing
provisions, the Tender Agent shall accept any notice of
optional tender pursuant to Section IV.4.6 from any Beneficial
Owner of any Book-Entry Bond, but shall make payment of the
purchase price thereof only to the registered owner of such
Bond in the manner provided in the Representation Letter (as
defined below).
(ii) No person other than a Bondholder, as shown
in the registration books kept by the Registrar, shall receive
a certificated Bond evidencing the obligation of the County to
make payments of principal, purchase price, premium, if any,
and interest pursuant to this Indenture.
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(iii) The County, the Paying Agent, the Registrar,
the Tender Agent and the Trustee shall, if not previously on
file, execute and deliver to DTC a letter of representation in
customary form with respect to the Bonds (the "Representation
Letter"), but such Representation Letter shall not in any way
limit the provisions of the foregoing paragraph (i) or in any
other way impose upon the County any obligation whatsoever
with respect to persons having interests in the Bonds other
than the Bondholders, as shown on the registration books kept
by the Registrar. The Trustee, the Tender Agent and the
Paying Agent shall take all action necessary for all
representations of the County in the Representation Letter
with respect to the Trustee, the Tender Agent and the Paying
Agent to be complied with at all times.
(iv) The County, with the consent of the Borrower,
may, and upon request of the Borrower shall, terminate the
services of DTC with respect to the Bonds. DTC may determine
to discontinue providing its services with respect to the
Bonds at any time by giving written notice and all relevant
information on the Beneficial Owners of the Bonds to the
County, the Borrower, the Tender Agent and the Trustee and
discharging its responsibilities with respect thereto under
applicable law. Upon the discontinuance or termination of the
services of DTC with respect to the Bonds, unless a substitute
securities depository is appointed by the County (with the
consent, or at the request, of the Borrower) to undertake the
functions of DTC hereunder, the County, at the expense of the
Borrower, is obligated to deliver Bond certificates to the
Beneficial Owners of such Bonds, as described in this
Indenture, and such Bonds shall no longer be restricted to
being registered in the registration books kept by the
Registrar in the name of the Nominee, but may be registered in
whatever name or names Bondholders transferring or exchanging
such Bonds shall designate, in accordance with the provisions
of this Indenture.
(v) So long as any Bond is registered in the name
of the Nominee, all payments with respect to principal,
purchase price, premium, if any, and interest on such Bond and
all notices with respect to such Bond shall be made and given,
respectively, in the manner provided in the Representation
Letter. Bondholders shall have no lien or security interest
in any rebate or refund paid by DTC to the Tender Agent or the
Paying Agent which arises from the payment by the Tender Agent
or Paying Agent of principal of, premium, if any, or interest
on the Bonds in immediately available funds to DTC.
Section 2.2. Execution of Bonds. The Bonds shall be signed in the
name and on behalf of the County with the manual or facsimile signature of its
Chair and attested by the manual or facsimile signature of its County Clerk,
under seal of the County Clerk. Such seal may be in the form of a facsimile of
the County Clerk's seal and may be imprinted or impressed upon the Bonds. The
Bonds shall then be delivered to the
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Registrar or the Tender Agent for authentication by the Registrar or the Tender
Agent, as the case may be; provided that upon initial issuance the Bonds shall
be authenticated by the Registrar. In case any officer who shall have signed
any of the Bonds shall cease to be such officer before the Bonds so signed or
attested shall have been authenticated or delivered by the Registrar or the
Tender Agent or issued by the County, such Bonds may nevertheless be
authenticated, delivered and issued and, upon such authentication, delivery and
issuance, shall be as binding upon the County as though those who signed and
attested the same had continued to be such officers of the County. Also, any
Bond may be signed on behalf of the County by such persons as on the actual
date of the execution of such Bond shall be the proper officers although on the
nominal date of such Bond any such person shall not have been such officer.
Only such of the Bonds as shall bear thereon a certificate of
authentication in the form recited in Exhibit A hereto, manually executed by
the Registrar or the Tender Agent, shall be valid or obligatory for any purpose
or entitled to the benefits of this Indenture, and such certificate of the
Registrar or the Tender Agent, as the case may be, shall be conclusive evidence
that the Bonds so authenticated have been duly authenticated and delivered
hereunder and are entitled to the benefits of this Indenture. Upon
authentication of any Bond, the Registrar or the Tender Agent, as the case may
be, shall set forth on such Bond the date of such authentication.
Section 2.3. Transfer and Exchange of Bonds. Registration of any
Bond may, in accordance with the terms of this Indenture, be transferred, upon
the books of the Registrar required to be kept pursuant to the provisions of
Section II.2.4, by the person in whose name it is registered, in person or by
his duly authorized attorney, upon surrender of such Bond for cancellation,
accompanied by a written instrument of transfer in a form approved by the
Registrar, duly executed. Whenever any Bond shall be surrendered for
registration of transfer, the County shall execute and the Registrar shall
authenticate and deliver a new Bond or Bonds of the same tenor of Authorized
Denominations. No registration of transfer of Bonds upon the books of the
Registrar required to be kept pursuant to the provisions of Section II.2.4
hereof shall be required to be made during the period after any Record Date and
prior to the related Interest Payment Date or during the period of fifteen (15)
days next preceding the date on which the Trustee gives any notice of
redemption, nor shall any registration of transfer of Bonds called for
redemption be required.
Bonds may be exchanged at the Principal Office of the Registrar for a
like aggregate principal amount of Bonds of the same tenor of Authorized
Denominations. The Registrar shall require the payment by the Bondholder
requesting such exchange of any tax or other governmental charge required to be
paid with respect to such exchange, and there shall be no other charge to any
Bondholders for any such exchange. Except with respect to Bonds purchased
pursuant to Section IV.4.7 hereof, no exchange of Bonds shall be required to be
made during the period after any Record Date and prior to the related Interest
Payment Date or during the period of fifteen (15) days next preceding the date
on which the Trustee gives notice of redemption, nor shall any exchange of
Bonds called for redemption be required.
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Section 2.4. Bond Register. The Registrar will keep or cause to
be kept at its Principal Office sufficient books for the registration and the
registration of transfer of the Bonds, which shall at all times, during regular
business hours, be open to inspection by the County, the Trustee, the Credit
Provider, if any, and the Borrower; and, upon presentation for such purpose,
the Registrar shall, under such reasonable regulations as it may prescribe,
register the transfer or cause to be registered the transfer, on said books, of
Bonds as hereinbefore provided.
Section 2.5. Reserved.
Section 2.6. Bonds Mutilated, Lost, Destroyed or Stolen. If any
Bond shall become mutilated, the County, upon the request and at the expense of
the holder of said Bond, shall execute, and the Registrar shall thereupon
authenticate and deliver, a new Bond of like tenor and number in exchange and
substitution for the Bond so mutilated, but only upon surrender to the
Registrar of the Bonds so mutilated. Every mutilated Bond so surrendered to
the Registrar shall be cancelled by it and destroyed and, upon the written
request of the County, a certificate evidencing such destruction shall be
delivered to the County, with a copy to the Borrower. If any Bond issued
hereunder shall be lost, destroyed or stolen, evidence of such loss,
destruction or theft may be submitted to the County, the Borrower and the
Registrar, and if such evidence be satisfactory to them and indemnity
satisfactory to them shall be given by or on behalf of the holder of such lost,
destroyed or stolen Bond, the County, at the expense of the holder, shall
execute, and the Registrar shall thereupon authenticate and deliver, a new Bond
of like tenor in lieu of and in substitution for the Bond so lost, destroyed or
stolen (or if any such Bond shall have matured or shall be about to mature,
instead of issuing a substitute Bond the Registrar may pay the same without
surrender thereof). The County may require payment of a reasonable fee for
each new Bond issued under this Section and payment of the expenses which may
be incurred by the County and the Registrar. Any Bond issued under the
provisions of this Section in lieu of any Bond mutilated or alleged to be lost,
destroyed or stolen shall constitute an original additional contractual
obligation on the part of the County whether or not the Bond mutilated or so
alleged to be lost, destroyed or stolen shall be at any time enforceable by
anyone, and shall be equally and proportionately entitled to the benefits of
this Indenture with all other Bonds secured by this Indenture.
Section 2.7. Disposition of Cancelled Bonds. When and as paid in
full, all Bonds, if any, shall be delivered to the Trustee, who shall forthwith
cancel such Bonds and deliver a certificate evidencing such cancellation to the
County and the Borrower. The Trustee may destroy or retain such cancelled
Bonds.
Section 2.8. CUSIP Numbers. As provided in Section II.2.1.(d) of
this Indenture, the County in issuing the Bonds may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to holders of Bonds; provided that any
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only
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on the other identification numbers printed on the Bonds, and any such
redemption shall not be affected by any defect in or omission of such CUSIP
numbers.
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ARTICLE III
ISSUANCE OF BONDS
Section 3.1. Authentication and Delivery of Bonds. Forthwith upon
the execution and delivery of this Indenture, upon the execution of the Bonds
by the County and delivery thereof to the Registrar, as hereinabove provided,
and without any further action on the part of the County, the Registrar shall
authenticate the Bonds in an aggregate principal amount of Forty-Five Million
Seven Hundred Thousand Dollars ($45,700,000) and shall deliver the Bonds to or
upon the Written Order of the County.
Section 3.2. Application of Proceeds of Bonds. The proceeds
received by the County from the sale of the Bonds in the amount of
$45,776,674.44 (representing the principal amount of the Bonds, plus accrued
interest from the Dated Date) shall be deposited with the Trustee as follows:
(a) accrued interest in the amount of $76,674.44 shall be
deposited in the Bond Fund and applied toward the first interest
payment on the Bonds.
(b) The remaining $45,700,000 shall be deposited in
the Bond Proceeds Fund.
(c) upon written direction from the Borrower, the Trustee
shall transfer $45,700,000 of the amount held in the Bond Proceeds
Fund, along with investment earnings thereon, to Citibank, N.A., as
trustee for the Prior Bonds, to be applied to the redemption of the
Prior Bonds. Upon completion of the foregoing transfer, the Bond
Proceeds Fund shall close.
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ARTICLE IV
REDEMPTION AND PURCHASE OF BONDS
Section 4.1. Redemption of Bonds. The Bonds are subject to
redemption if and to the extent the Borrower is entitled or required to make
and makes a prepayment pursuant to Article VII of the Agreement. The Trustee
shall not give notice of any optional redemption under Section IV.4.1.(a)
hereof unless the Borrower has so directed in accordance with Section 7.5 of
the Agreement and, if a Credit Facility will be in effect on the redemption
date, the Credit Provider has given its consent to such optional redemption to
the extent required by the applicable Credit Agreement. Notwithstanding the
foregoing, such consent of the Credit Provider shall not be required if at the
time of mailing the notice of optional redemption, the Trustee then holds
Available Amounts sufficient to pay the principal of, premium, if any, and
interest on the Bonds to be redeemed. In the event of a failure by the
Borrower to give a notice of mandatory prepayment under such Section 7.5, such
notice may be given by the County, the Trustee, the Credit Provider, if any, or
any holder or holders of ten percent (10%) or more in aggregate principal
amount of the Outstanding Bonds.
The Bonds shall be redeemed upon the following terms:
(a) Redemption Upon Optional Prepayment.
(1) Extraordinary Events. The Bonds shall be redeemed in
whole or in part, and if in part by lot, at any time at a redemption
price equal to 100% of the principal amount thereof, plus accrued
interest, if any, to the redemption date, upon the occurrence of any
one of the following events and receipt by the Trustee of a written
notice from the Borrower stating that such event has occurred and that
the Borrower intends to exercise its option to prepay the payments due
under the Agreement in whole or in part pursuant to Section 7.2 of the
Agreement and thereby effect the redemption of Bonds in whole or in
part to the extent of such prepayments:
(A) All or part of the Facility shall have been
damaged or destroyed to such an extent that, in the opinion of
the Borrower (expressed in a certificate filed with the County
and the Trustee), (i) the Facility or such affected portion
could not reasonably be restored within a period of four (4)
months to the condition thereof immediately preceding such
damage or destruction, and the Borrower will be prevented, or
is likely to be prevented for a period of four (4) consecutive
months or more, from carrying on all or substantially all of
its normal operation of the Facility, or (ii) the cost of
restoration of the Facility or such affected portion will be
substantially in excess of the net proceeds of insurance
thereon.
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(B) Title to, or the temporary use of, all or a
part of the Facility shall have been taken under the exercise
of the power of eminent domain.
(C) Changes in economic availability of raw
materials, operating supplies or facilities necessary to
operate all or a part of the Facility or technological or
other changes which make the continued operation of the
Facility or such affected portion, uneconomical in the opinion
of the Borrower (expressed in a certificate filed with the
County and the Trustee) shall have occurred and which shall
have resulted in a cessation of all or substantially all of
the Borrower's normal operations of the Facility.
(D) Unreasonable burdens or excessive liabilities
shall have been imposed upon the County or the Borrower
affecting all or a part of the Facility, including, without
limitation, federal, state or other ad valorem, property,
income or other taxes not being imposed on the date of the
Agreement.
Anything in this subsection to the contrary notwithstanding,
if any of the events described above shall have occurred with respect
to any portion of the Facility, the amount of Bonds that may be
redeemed shall not exceed an amount derived by multiplying the total
principal amount of the Bonds by a fraction (i) the numerator of which
is the cost of such Facility or portion thereof and (ii) the
denominator of which is the total cost of the Facility.
(2) Borrower Option. The Bonds shall be subject to
redemption upon prepayment of the Repayment Installments at the option
of the Borrower, in whole, or in part by lot, prior to their maturity
dates, as follows:
(A) During any Daily Rate Period or Weekly Rate
Period, the Bonds shall be subject to such redemption on any
Interest Payment Date at a redemption price equal to 100% of
the principal amount thereof.
(B) On the day next succeeding the last scheduled
day of any Term Rate Period, such Bonds shall be subject to
such redemption at a redemption price of 100% of the principal
amount thereof. During any Term Rate Period, the Bonds shall
be subject to such redemption during the periods specified
below, in whole or in part (by lot), at the redemption prices
(expressed as percentages of principal amount) hereinafter
indicated (unless different redemption terms shall be
specified by the Borrower pursuant to Section
II.2.1.(c)(iv)..(B)) together with accrued interest to the
date fixed for redemption:
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<TABLE>
<S> <C>
Length of Term Rate Period Redemption Dates and Redemption Prices
- -------------------------- --------------------------------------
greater than 20 years after 10 years at 102%, declining by 1% annually
to 100%
less than or equal to 20 years and after 5 years at 102%, declining by 1% annually
greater than 16 years to 100%
less than or equal to 16 years and after 5 years at 102%, declining by 1% annually
greater than 10 years to 100%
less than or equal to 10 years and after 3 years at 102%, declining by 1% annually greater
than 8 years to 100%
less than or equal to 8 years and greater after 3 years at 101%, declining by 1% annually
than 6 years to 100%
less than or equal to 6 years and greater after 2 years at 101%, declining by 1% annually
than 4 years to 100%
less than or equal to 4 years and greater after 2 years at 101%, declining by 1% annually
than 2 years to 100%
less than or equal to 2 years and greater after 1 year at 100%
than 1 year
1 year or less only on day next succeeding last day of period at 100%
</TABLE>
The Borrower shall have the option to cause the Rate
Period for the Bonds to change on any date on which the Bonds
are subject to redemption as provided above, in which event
the Bonds shall be subject to mandatory tender at the
applicable price set forth above, as provided in Sections
IV.4.7.(a)..(1) and IV.4.7.(b).
(b) Redemption Upon Mandatory Prepayment. The Bonds
shall be subject to redemption from amounts which are required to be
prepaid by the Borrower under Section 7.3 of the Agreement, as set
forth below.
(1) The Bonds shall be redeemed in whole on any
date at a redemption price equal to 100% of the principal
amount thereof, plus interest accrued to the redemption date,
upon the occurrence of a Determination of Taxability;
provided, however, that if, in the opinion of Bond Counsel
delivered to the Trustee, the redemption of a specified
portion of such Bonds Outstanding would have the result that
interest payable on such Bonds remaining Outstanding after
such redemption would remain Tax-Exempt, then such Bonds shall
be redeemed in part by lot (in Authorized Denominations), in
such amount as Bond Counsel in such opinion shall have
determined is necessary to accomplish that result.
(2) The Bonds shall be redeemed in whole at a
redemption price equal to 100% of the principal amount
thereof, plus accrued interest to the redemption date, in the
event that as a result of any changes in the
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Constitution of the United States of America or the State or as a
result of any legislative, judicial or administrative action, the
Agreement shall have become void or unenforceable or impossible of
performance in accordance with the intention and purposes of the
parties thereto, or shall have been declared unlawful.
(3) The Bonds shall be redeemed in whole at a
redemption price equal to the principal amount thereof plus
accrued interest to the redemption date in the event that at
least thirty-five (35) days prior to the expiration of any
Credit Facility then in effect with respect to the Bonds
(other than a Permitted Termination or an expiration of the
Credit Facility at the maturity of the Bonds) the Trustee
shall not have received (a) a renewal or extension of the
existing Credit Facility for a period of at least one (1) year
(or, if shorter, the period to maturity of the Bonds) or (b) a
substitute Credit Facility meeting the requirements of Section
4.6 of the Agreement. Such redemption shall occur on the last
Business Day which is not less than five (5) calendar days
preceding the expiration date of the Credit Facility then in
effect.
Section 4.2. Selection of Bonds for Redemption. If fewer than all
of the Bonds are called for redemption, the Trustee shall select the Bonds or
any given portion thereof to be redeemed, first from the Outstanding Credit
Provider Bonds or such portion thereof not previously called for redemption, by
lot in such manner as it may determine, until all Credit Provider Bonds shall
have been redeemed, and then from the Outstanding Bonds or such given portion
thereof not previously called for redemption, by lot. For the purpose of any
such selection the Trustee shall assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that following any such selection, both the portion of such
Bond to be redeemed and the portion remaining shall be in Authorized
Denominations. The Trustee shall promptly notify the County and the Borrower
in writing of the numbers of the Bonds or portions thereof so selected for
redemption. Notwithstanding the foregoing, if less than all of the Bonds are
to be redeemed at any time while the Bonds are Book-Entry Bonds, selection of
the Bonds to be redeemed shall be made in accordance with customary practices
of DTC or the applicable successor depository, as the case may be.
Section 4.3. Notice of Redemption. The Trustee, for and on behalf
of the County, shall give notice of any redemption by first class mail, postage
prepaid, not less than thirty (30) nor more than sixty (60) days prior to the
redemption date, to (i) the registered owner of such Bond at the address shown
on the registration books of the Registrar on the date such notice is mailed;
(ii) the Securities Depositories; (iii) the Credit Provider, if any; (iv) one
or more Information Services; (v) the Remarketing Agent, if any, and (vi) the
Municipal Securities Rulemaking Board, each NRMSIR and the SID. Notice of
redemption to the Securities Depositories, the Information Services, each
NRMSIR and the SID shall be given by telecopy confirmed by first class mail.
Each notice of redemption shall state the date of such notice, the date of
issue of the Bonds to be redeemed, the redemption date, the redemption price,
the place of
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redemption (including the name and appropriate address or addresses of the
Paying Agent), the source of the funds to be used for such redemption, the
principal amount, the CUSIP numbers (if any) of the Bonds to be redeemed and,
if less than all, the distinctive certificate numbers of the Bonds to be
redeemed and, in the case of Bonds to be redeemed in part only, the respective
portions of the principal amount thereof to be redeemed. Each such notice
shall also state that the interest on the Bonds designated for redemption shall
cease to accrue from and after such redemption date and that on said date there
will become due and payable on each of said Bonds the principal amount thereof
to be redeemed, interest accrued thereon, if any, to the redemption date and
the premium, if any, thereon (such premium to be specified) and shall require
that such Bonds be then surrendered at the address or addresses of the Paying
Agent specified in the redemption notice. Notwithstanding the foregoing,
failure by the Trustee to give notice pursuant to this paragraph to the Credit
Provider or the Remarketing Agent or any one or more of the Information
Services or the Securities Depositories or Municipal Securities Rulemaking
Board, the NRMSIRs or the SID or the insufficiency of any such notices shall
not affect the sufficiency of the proceedings for redemption. Failure to mail
the notices required by this paragraph to any registered owner of any Bonds
designated for redemption, or any defect in any notice so mailed, shall not
affect the validity of the proceedings for redemption of any other Bonds and
shall not extend the period for making elections or in any way change the
rights of the holders of the Bonds to elect to have their Bonds purchased as
provided herein.
With respect to any notice of optional redemption of Bonds pursuant to
Section IV.4.1.(a), unless upon the giving of such notice such Bonds shall be
deemed to have been paid within the meaning of Article X hereof, such notice
shall state that such redemption shall be conditional upon the receipt by the
Trustee on or prior to the date fixed for such redemption of Available Amounts
sufficient to pay the principal of, and premium, if any, and interest on, such
Bonds to be redeemed, and that if such Available Amounts shall not have been so
received said notice shall be of no force and effect and the County shall not
be required to redeem such Bonds. In the event that such notice of redemption
contains such a condition and such Available Amounts are not so received, the
redemption shall not be made and the Trustee shall within a reasonable time
thereafter give notice, to the persons and in the manner in which the notice of
redemption was given, that such Available Amounts were not so received.
If upon the expiration of sixty (60) days succeeding any redemption
date, any Bonds called for redemption shall not have been presented to the
Trustee for payment, the Trustee shall no later than ninety (90) days following
such redemption date send Notice by Mail to the holder of each Bond not so
presented. Failure to mail the notices required by this paragraph to any
holder of a Bond, or any defect in any notice so mailed, shall not affect the
validity of the proceedings for redemption of any Bonds nor impose any
liability on the Trustee.
Section 4.4. Partial Redemption of Bonds. Upon surrender of any
Bond redeemed in part only, the Registrar shall exchange the Bond redeemed for
a new Bond of like tenor and in an Authorized Denomination without charge to
the holder in the
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<PAGE> 41
principal amount of the portion of the Bond not redeemed. In the event of any
partial redemption of a Bond which is registered in the name of the Nominee,
DTC may elect to make a notation on the Bond certificate which reflects the
date and amount of the reduction in principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange. The County,
the Trustee and the Registrar shall be fully released and discharged from all
liability upon, and to the extent of, payment of the redemption price for any
partial redemption and upon the taking of all other actions required hereunder
in connection with such redemption.
Section 4.5. Effect of Redemption. Notice of redemption having
been duly given as aforesaid, and moneys for payment of the redemption price
being held by the Trustee, the Bonds so called for redemption shall, on the
redemption date designated in such notice, become due and payable at the
redemption price specified in such notice, interest on the Bonds so called for
redemption shall cease to accrue, said Bonds shall cease to be entitled to any
lien, benefit or security under this Indenture, and the holders of said Bonds
shall have no rights in respect thereof except to receive payment of the
redemption price thereof (including interest, if any, accrued to the redemption
date), without interest accrued on any funds held after the redemption date to
pay such redemption price.
All Bonds fully redeemed pursuant to the provisions of this Article IV
shall upon surrender thereof be cancelled by the Trustee, who shall deliver a
certificate evidencing such cancellation to the County and the Borrower. The
Trustee may retain or destroy such Bonds.
Section 4.6. Holder's Option to Tender for Purchase.
(a) During any Daily Rate Period, any Bond or portion
thereof in an Authorized Denomination shall be purchased on any
Business Day at a purchase price equal to 100% of the principal amount
thereof plus accrued interest from the Interest Payment Date next
preceding the Purchase Date to the Purchase Date (unless the Purchase
Date shall be an Interest Payment Date, in which case the purchase
price shall be equal to the principal amount thereof), payable in
immediately available funds, upon (A) delivery by the holder or
Beneficial Owner of such Bond to the Tender Agent at its Principal
Office, by no later than 11:00 a.m. (New York City time) on such
Business Day, of an irrevocable written, telephonic or Electronic
notice which states the principal amount of such Bond to be tendered
for purchase and the Purchase Date, and (B) delivery of such Bond
tendered for purchase to the Tender Agent on the Purchase Date in
accordance with Section IV.4.8 hereof. The Tender Agent shall keep a
written record of the notice described in clause (A).
(b) During any Weekly Rate Period, any Bond or portion
thereof in an Authorized Denomination shall be purchased on any
Business Day at a purchase price equal to 100% of the principal amount
thereof plus accrued interest from the Interest Payment Date next
preceding the Purchase Date to the
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Purchase Date (unless the Purchase Date shall be an Interest Payment
Date, in which case the purchase price shall be equal to the principal
amount thereof), payable in immediately available funds, upon (A)
delivery by the holder or Beneficial Owner of such Bond to the Tender
Agent at its Principal Office of an irrevocable notice by telephone
(promptly confirmed in writing) or written or Electronic notice by
5:00 p.m. (New York City time) on any Business Day at least seven (7)
days prior to the Purchase Date, which states the principal amount of
such Bond to be tendered for purchase and the Purchase Date, and (B)
delivery of such Bond to the Tender Agent on the Purchase Date in
accordance with Section IV.4.8 hereof. The Tender Agent shall keep a
written record of the notice described in clause (A).
(c) Any Bond or portion thereof in an Authorized
Denomination shall be purchased on the first day of any Term Rate
Period which is preceded by a Term Rate Period of the same duration at
a purchase price equal to 100% of the principal amount thereof plus
accrued interest from the Interest Payment Date next preceding the
Purchase Date to the Purchase Date (unless the Purchase Date shall be
an Interest Payment Date, in which case the purchase price shall be
equal to the principal amount thereof), payable in immediately
available funds, upon (A) delivery by the holder or Beneficial Owner
of such Bond to the Tender Agent at its Principal Office of an
irrevocable notice by telephone (promptly confirmed in writing) or
written or Electronic notice by 5:00 p.m. (New York City time) on any
Business Day at least fifteen (15) days prior to the Purchase Date,
which states the principal amount of such Bond to be tendered for
purchase and the Purchase Date, and (B) delivery of such Bond to the
Tender Agent on the Purchase Date in accordance with Section IV.4.8
hereof. The Tender Agent shall keep a written record of the notice
described in clause (A).
(d) If any Bond is to be purchased in part pursuant to
(a), (b) or (c) above, the amount so purchased and the amount not so
purchased must each be an Authorized Denomination.
(e) Any instrument delivered to the Tender Agent in
accordance with this Section IV.4.6 shall be irrevocable with respect
to the purchase for which such instrument was delivered and shall be
binding upon any subsequent Bondholder or Beneficial Owner of the Bond
to which it relates, including any Bond issued in exchange therefor or
upon the registration of transfer thereof, and as of the date of such
instrument, the holder or Beneficial Owner of the Bonds specified
therein shall not have any right to optionally tender for purchase
such Bonds prior to the date of purchase specified in such notice.
The Tender Agent may conclusively assume that any person (other than a
holder) providing notice of optional tender pursuant to (a), (b) or
(c) above is the Beneficial Owner of the Bond to which such notice
relates, and the Tender Agent shall assume no liability in accepting
such notice from any person whom it reasonably believes to be a
Beneficial Owner of Bonds.
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Section 4.7. Mandatory Tender for Purchase.
(a) The Bonds shall be subject to mandatory tender for
purchase prior to their stated maturity, in whole, at a purchase price
equal to 100% of the principal amount thereof, plus accrued interest
to the Purchase Date described below, upon the occurrence of any of
the events stated below:
(1) as to any Bond, on the effective date of any
change in a Rate Period for such Bond, other than (A) the
effective date of any change from a Daily Rate Period to a
Weekly Rate Period or from a Weekly Rate Period to a Daily
Rate Period or (B) the effective date of any Term Rate Period
which was preceded by a Term Rate Period of the same duration;
or
(2) as to all Bonds, on the effective date of any
Credit Facility which may be provided with respect to the
Bonds pursuant to Section 4.6(d) of the Agreement or of any
substitute Credit Facility provided with respect to the Bonds
pursuant to Section 4.6(c) of the Agreement or upon any
Permitted Termination of any Credit Facility with respect to
the Bonds.
(b) In the event that the Borrower elects to change the
Rate Period with respect to the Bonds during a Term Rate Period or to
provide, substitute or terminate a Credit Facility during a Term Rate
Period and thereby causes a mandatory tender of such Bonds as provided
in Sections IV.4.7.(a)..(1) or IV.4.7.(a)..(2), as the case may be,
the Bonds shall be purchased on the applicable mandatory tender date
at a purchase price equal to the principal amount thereof plus an
amount equal to any premium which would have been payable on such day
had the Borrower directed redemption of the Bonds pursuant to Section
IV.4.1.(a)..(2)(B) hereof.
(c) The Trustee shall give notice by first class mail of
the provision of any Credit Facility with respect to the Bonds (other
than the Credit Facility in effect on the date of issuance of the
Bonds), the provision of any substitute Credit Facility with respect
to the Bonds and the Permitted Termination of any Credit Facility with
respect to the Bonds to the holders of the Bonds at their addresses
shown on the registration books kept by the Registrar, not later than
the fifteenth day (thirtieth day if the then current Rate Period is a
Term Rate Period) prior to the date on which the Bonds are subject to
mandatory tender pursuant to Section IV.4.7.(a)..(2), which notice
shall (i) state the date of such provision, substitution or Permitted
Termination; and (ii) state that such Bonds shall be subject to
mandatory tender for purchase on the effective date of such provision,
substitution or Permitted Termination in accordance with Section
IV.4.7.(a)..(2) hereof.
Section 4.8. Delivery of Tendered Bonds. With respect to any
Book-Entry Bond, delivery of such Bond to the Tender Agent in connection with
any optional or
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mandatory tender pursuant to Sections IV.4.6 or IV.4.7 hereof shall be effected
by the making of, or the irrevocable authorization to make, appropriate entries
on the books of DTC or any DTC Participant to reflect the transfer of the
beneficial ownership interest in such Bond to the account of the Tender Agent,
or to the account of a DTC Participant acting on behalf of the Tender Agent.
With respect to any Bond which is not a Book-Entry Bond, delivery of such Bond
to the Tender Agent in connection with any optional or mandatory tender
pursuant to Sections IV.4.6 or IV.4.7 hereof shall be effected by physical
delivery of such Bond to the Tender Agent at its Principal Office, by 1:00 p.m.
(New York City time) on the Purchase Date, accompanied by an instrument of
transfer thereof, in a form satisfactory to the Tender Agent, executed in blank
by the holder thereof with the signature of such holder guaranteed in
accordance with the guidelines set forth by one of the nationally recognized
medallion signature programs.
Section 4.9. Bonds Deemed Purchased.
(a) If moneys sufficient to pay the purchase price of
Bonds to be purchased pursuant to Sections IV.4.6 or IV.4.7 shall be
held by the Tender Agent on the date such Bonds are to be purchased,
such Bonds shall be deemed to have been purchased for all purposes of
this Indenture, irrespective of whether or not such Bonds shall have
been delivered to the Tender Agent, and neither the former holder of
such Bonds nor any other person shall have any claim thereon, under
this Indenture or otherwise, for any amount other than the purchase
price thereof.
(b) In the event of non-delivery of any Bond to be
purchased pursuant to Sections IV.4.6 or IV.4.7 hereof, the Tender
Agent shall segregate and hold uninvested the moneys for the purchase
price of such Bonds in trust, without liability for interest thereon,
for the benefit of the former holders of such Bonds, who shall, except
as provided in the following sentence, thereafter be restricted
exclusively to such moneys for the satisfaction of any claim for the
purchase price of such Bonds. Any moneys which the Tender Agent shall
segregate and hold in trust for the payment of the purchase price of
any Bond and remaining unclaimed for two (2) years after the date of
purchase shall be paid, upon the Borrower's written request, to the
Borrower. After the payment of such unclaimed moneys to the Borrower,
the former holder of such Bond shall look only to the Borrower for the
payment thereof.
Section 4.10. Bond Purchase Fund. There shall be created and
established with the Tender Agent a trust fund designated the "Tooele County,
Utah Pollution Control Refunding Revenue Bonds (Laidlaw Environmental Services,
Inc.) 1997 Series A Bond Purchase Fund" (the "Bond Purchase Fund"). There
shall also be created and established three separate accounts in the Bond
Purchase Fund designated the "Remarketing Account", the "Credit Facility
Purchase Account" and the "Borrower Account".
(a) Remarketing Account. All moneys received by the
Tender Agent on behalf of purchasers of Bonds pursuant to Section
IV.4.13 hereof, other than
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the County, the Borrower or any affiliate of the Borrower, shall be
(i) deposited in the Remarketing Account within the Bond Purchase
Fund, (ii) held in trust in accordance with the provisions hereof and
(iii) paid out in accordance with Section IV.4.14 hereof.
(b) Credit Facility Purchase Account. All moneys
received by the Tender Agent as payments under any Credit Facility for
the purchase of Bonds shall be (i) deposited in the Credit Facility
Purchase Account within the Bond Purchase Fund, (ii) held in trust in
accordance with the provisions hereof and (iii) paid out in accordance
with Section IV.4.14 hereof.
(c) Borrower Account. All moneys received by the Tender
Agent from the Borrower for the purchase of Bonds pursuant to Section
IV.4.13 hereof shall be (i) deposited in the Borrower Account within
the Bond Purchase Fund, (ii) held in trust in accordance with the
provisions hereof and (iii) paid out in accordance with Section
IV.4.14 hereof.
The funds held by the Tender Agent in the Bond Purchase Fund
shall not be considered Revenues as that term is defined herein and
shall not constitute part of the trust estate that is subject to the
lien of this Indenture. The moneys in the Bond Purchase Fund shall be
used solely to pay the purchase price of Bonds as provided herein (or
to reimburse the Credit Provider, if any, for payments made under the
Credit Facility for such purpose) and may not be used for any other
purposes. All amounts held in the Bond Purchase Fund and the Credit
Facility Purchase Account, Remarketing Account and Borrower Account
therein shall be held in trust by the Tender Agent for the benefit of
the holders of tendered Bonds (provided that any amounts held in a
Remarketing Account which are derived from the remarketing of Credit
Provider Bonds shall be held in trust for the benefit of the Credit
Provider).
Section 4.11. Deposit of Bonds. The Tender Agent agrees to accept
and hold all Bonds delivered to it pursuant to this Indenture in trust for the
benefit of the respective Bondholders which shall have so delivered such Bonds
until the purchase price of such Bonds shall have been delivered to or for the
account of or to the order of such holders pursuant to Section IV.4.12 hereof.
Any Bonds registered for transfer to new purchasers and delivered to the Tender
Agent as described in Section IV.4.14 hereof shall be held in trust by the
Tender Agent for the benefit of such new purchasers until delivery to such new
purchasers.
Section 4.12. Remarketing of Tendered Bonds.
(a) Daily Put Bonds.
(i) Promptly upon receipt, and, in any event not
later than 11:05 a.m. (New York City time) on each Business
Day on which the Tender Agent receives a notice from a
Bondholder pursuant to
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Section IV.4.6.(a) hereof, the Tender Agent shall give notice
by telephone to the Remarketing Agent, the Trustee and the
Registrar, specifying the principal amount of Bonds for which
it has received such notice (the "Daily Put Bonds"), the names
of the holder or holders thereof and the Purchase Date
for such Daily Put Bonds.
(ii) Not later than 11:30 a.m. (New York City
time) on the Purchase Date with respect to Daily Put Bonds,
the Trustee shall give notice by telephone to the Remarketing
Agent, the Tender Agent and the Registrar of the accrued
amount of interest payable as of such Purchase Date on, and
confirming the aggregate principal amount of, such Daily Put
Bonds. The Remarketing Agent shall thereupon offer for sale
and use its best efforts to find purchasers for all such Daily
Put Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Daily Put Bonds,
the Remarketing Agent shall give (A) Electronic notice or
notice by telecopy, telephone, telegram, telex or by other
similar communication to the Tender Agent, the Trustee and the
Registrar of the principal amount of Daily Put Bonds which
have been remarketed in accordance with the Remarketing
Agreement and (B) if any Daily Put Bonds have not been
remarketed, Electronic notice or notice by telecopy,
telephone, telegram, telex, or other similar communication to
the Borrower and the Trustee (which shall promptly thereafter
notify the Credit Provider, if any) of the principal amount of
the Daily Put Bonds which have not been remarketed.
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that the Remarketing Agent
has remarketed less than all the Daily Put Bonds to be
purchased on any Purchase Date, the Trustee shall demand
payment under the Credit Facility, if any, then in effect by
12:45 p.m. (New York City time) on such Purchase Date so as
to provide by 2:45 p.m. (New York City time) on such Purchase
Date an amount sufficient, together with the remarketing
proceeds to be available for such purchase, calculated solely
on the basis of the notice given by the Remarketing Agent
pursuant to subparagraph (iii) above, to pay the purchase
price of the Daily Put Bonds. The Trustee shall immediately
give notice by telephone to the Tender Agent and the Borrower
of the amount, if any, of such draw.
(b) Weekly Put Bonds and Term Put Bonds.
(i) Not later than 10:30 a.m. (New York City
time) on each Business Day succeeding a day on which the
Tender Agent receives a notice from a holder of Bonds to be
tendered pursuant to Section IV.4.6.(b) hereof (the "Weekly
Put Bonds") or Section IV.4.6.(c) hereof (the "Term Put
Bonds"), the Tender Agent shall give notice by
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telephone to the Remarketing Agent, the Trustee and the
Registrar, specifying the principal amount of Bonds for which
it has received such notice (such amount, together with the
accrued amount of interest payable to but excluding the
Purchase Date on such Bonds, being the purchase price of such
Bonds), the names of the holder or holders thereof and the
Purchase Date for such Weekly Put Bonds or Term Put Bonds. The
Remarketing Agent shall thereupon offer for sale and use
its best efforts to find purchasers for such Weekly Put Bonds
or Term Put Bonds, as the case may be.
(ii) Not later than 11:00 a.m. (New York City
time) on the Business Day immediately preceding the Purchase
Date described in subparagraph (i) above, the Trustee shall
give notice by telephone to the Remarketing Agent, the Tender
Agent and the Registrar of the accrued amount of the interest
payable as of such Purchase Date, and confirming the aggregate
principal amount of, the Weekly Put Bonds or Term Put Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Weekly Put Bonds or
Term Put Bonds, the Remarketing Agent shall give (A)
Electronic notice or notice by telecopy, telephone, telegram,
telex or by other similar communication to the Tender Agent,
the Trustee and the Registrar of the principal amount of
Weekly Put Bonds or Term Put Bonds which have been remarketed
in accordance with the Remarketing Agreement and (B) if any
Weekly Put Bonds or Term Put Bonds have not been remarketed,
Electronic notice or notice by, telecopy, telephone, telegram,
telex or by other similar communication to the Borrower and
the Trustee (which shall promptly thereafter notify the Credit
Provider, if any) of the principal amount of such Bonds which
have not been remarketed.
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that the Remarketing Agent
has remarketed less than all the Weekly Put Bonds or Term Put
Bonds to be purchased on any Purchase Date, the Trustee shall
demand payment under the Credit Facility, if any, then in
effect by 12:45 p.m. (New York City time) on such Purchase
Date so as to provide by 2:45 p.m. (New York City time) on
such Purchase Date an amount sufficient, together with the
remarketing proceeds to be available for such purchase,
calculated solely on the basis of the notice given by the
Remarketing Agent pursuant to subparagraph (iii) above, to pay
the purchase price of the Weekly Put Bonds or Term Put Bonds,
as the case may be. The Trustee shall immediately after such
demand for payment give notice by telephone to the Tender
Agent and the Borrower of the amount, if any, of such demand.
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(c) Mandatory Tender Bonds.
(i) Not later than 9:30 a.m. (New York City time)
on each Purchase Date occurring pursuant to Section IV.4.7
hereof, the Tender Agent shall give notice by telephone to the
Remarketing Agent, the Trustee and the Registrar specifying
the principal amount of all Outstanding Bonds which are
subject to mandatory tender on such Purchase Date pursuant to
Section IV.4.7 hereof (the "Mandatory Tender Bonds") (such
amount, together with the accrued amount of interest payable
to but excluding the Purchase Date on the Mandatory Tender
Bonds, being the purchase price of such Mandatory Tender
Bonds) and the names of the registered owner or owners
thereof. The Remarketing Agent shall thereupon offer for sale
and use its best efforts to find purchasers for such Mandatory
Tender Bonds.
(ii) Not later than 10:00 a.m. (New York City
time) on each Purchase Date described in subparagraph (i)
above, the Trustee shall give notice by telephone to the
Remarketing Agent, the Tender Agent and the Registrar of the
accrued amount of the interest payable as of the Purchase Date
specified in such notice from the Tender Agent on, and
confirming the aggregate principal amount of, the Mandatory
Tender Bonds.
(iii) Not later than 12:30 p.m. (New York City
time) on any Purchase Date with respect to Mandatory Tender
Bonds, the Remarketing Agent shall give (A) Electronic notice
or notice by telecopy, telephone, telegram, telex or by other
similar communication to the Tender Agent, the Trustee and the
Registrar of the principal amount of Mandatory Tender Bonds
which have been remarketed in accordance with the Remarketing
Agreement and (B) if any Mandatory Tender Bonds have not been
remarketed, Electronic notice or notice by telecopy,
telephone, telegram, telex or by other similar communication
to the Borrower and the Trustee (which shall promptly
thereafter notify the Credit Provider, if any) of the
principal amount of the Mandatory Tender Bonds which have not
been remarketed.
(iv) If the Remarketing Agent's notice pursuant to
subparagraph (iii) above indicates that such Remarketing Agent
has remarketed less than all the Mandatory Tender Bonds to be
purchased on such Purchase Date, the Trustee shall demand
payment under the Credit Facility, if any, then in effect by
12:45 p.m. (New York City time) on such Purchase Date so as to
provide by 2:45 p.m. (New York City time) on such Purchase
Date an amount sufficient, together with the remarketing
proceeds to be available for such purchase, calculated solely
on the basis of the notice given by the Remarketing Agent
pursuant to subparagraph (iii) above, to pay the purchase
price of the Mandatory Tender Bonds. The Trustee shall
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immediately after such demand for payment give notice to
the Tender Agent and the Borrower of the amount, if any, of
such demand.
(v) If no Credit Facility is then in effect with
respect to the Bonds and the Remarketing Agent's notice
pursuant to subparagraph (iii) above indicates that the
Remarketing Agent has remarketed less than all such Mandatory
Tender Bonds to be purchased on any Purchase Date, the Tender
Agent shall immediately (but in no event later than 12:45 p.m.
(New York City time)) give notice by telephone to the Borrower
specifying the principal amount and the purchase price of such
Mandatory Tender Bonds not so remarketed and requesting the
Borrower to deposit with the Tender Agent by 2:45 p.m. (New
York City time) on such Purchase Date an amount sufficient to
pay that portion of the purchase price of such Mandatory
Tender Bonds not so remarketed, such notice to be confirmed
immediately by telecopy to the Borrower.
(d) Limitation. If a Credit Facility is in effect with
respect to the Bonds, the Remarketing Agent shall not remarket any
tendered Bonds to the County, the Borrower or any affiliate of the
Borrower.
Section 4.13. Deposits into Remarketing Accounts and Borrower
Accounts.
(a) The terms of any sale by the Remarketing Agent of
tendered Bonds shall provide for the payment of the purchase price for
tendered Bonds by the Remarketing Agent to the Tender Agent for
deposit in the Remarketing Account of the Bond Purchase Fund in
immediately available funds at or before 2:45 p.m. (New York City
time) on the Purchase Date. The Remarketing Agent shall cause to be
paid to the Tender Agent on each Purchase Date for tendered Bonds all
amounts representing proceeds of the remarketing of such Bonds, based
upon the notice given by the Remarketing Agent pursuant to Section
IV.4.12.(a)(iii), IV.4.12.(b)(iii) or IV.4.12.(c)(iii), as the case
may be.
(b) Upon receipt of any notice from the Tender Agent
pursuant to Section IV.4.12.(a), IV.4.12.(b) or IV.4.12.(c) hereof
that insufficient funds will be on deposit in the Bond Purchase Fund
to pay tendered bonds, the Borrower shall deliver or cause to be
delivered to the Trustee immediately available funds in an amount
equal to such deficiency prior to 2:45 p.m. (New York City time) on
the Purchase Date.
Section 4.14. Disbursements from the Bond Purchase Fund.
(a) Application of Moneys. Moneys in the Bond Purchase
Fund (other than the proceeds of any remarketing of Credit Provider
Bonds which shall be paid to the Credit Provider on the remarketing
date) shall be applied at or before 3:00 p.m. (New York City time) to
the purchase of Bonds as provided herein by the Tender Agent, on each
Purchase Date, as follows:
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First -- Moneys constituting funds in the Remarketing
Account shall be used by the Tender Agent on any Purchase Date
to purchase tendered Bonds at the purchase price.
Second -- In the event such moneys in the Remarketing
Account on any Purchase Date are insufficient to purchase all
tendered Bonds, moneys in the Credit Facility Purchase Account
on such Purchase Date shall be used by the Tender Agent at
that time to purchase such remaining tendered Bonds at the
purchase price thereof.
Third -- In the event such moneys in the Remarketing
Account and the Credit Facility Purchase Account on any
Purchase Date are insufficient to purchase all tendered Bonds,
moneys in the Borrower Account on such Purchase Date, if any,
shall be used by the Tender Agent at that time to purchase
such remaining tendered Bonds at the purchase price thereof.
Notwithstanding anything to the contrary in this Section, if
the Bonds are Book-Entry Bonds, payment of the purchase price for
tendered Bonds shall be made in accordance with the rules and
procedures of DTC.
(b) Nondeliveries. The Tender Agent shall, as to any
Bonds which have not been delivered to it as required by Section
IV.4.8 hereof, (i) notify the Remarketing Agent in writing of such
nondelivery and (ii) direct the Registrar to place a stop transfer
against an appropriate amount of Bonds registered in the name of the
holder of such Bonds on the bond registry. The Registrar shall place
and maintain such stop transfer commencing with the lowest serial
number Bond registered in the name of such holder until stop transfers
have been placed against an appropriate amount of Bonds until the
appropriate Bonds are delivered to the Registrar. Upon such delivery,
the Registrar shall make any necessary adjustments to the bond
registry.
(c) Limitation. Notwithstanding anything contained
herein to the contrary, the Tender Agent shall not use proceeds
obtained by remarketing any Bonds to the Borrower, any affiliate of
the Borrower, or the County to pay any portion of the purchase price
of the tendered Bonds, and no such proceeds shall be deposited in the
Remarketing Account.
Section 4.15. Delivery of Bonds.
(a) If the Bonds are not Book-Entry Bonds, a principal
amount of Bonds equal to the amount of Bonds successfully remarketed
by the Remarketing Agent shall be delivered by the Trustee to the
Tender Agent for registration of transfer to such persons as shall be
designated by the Remarketing Agent. Such Bonds shall be held
available at the office of the Tender Agent and shall be picked up by
the Remarketing Agent at or after 1:00 p.m. (New York City time) on
the Purchase Date against delivery of funds for deposit into the
Remarketing
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Account of the Bond Purchase Fund equal to the purchase price of such
Bonds that have been remarketed. If the Bonds are Book-Entry Bonds,
transfer of ownership of the remarketed Bonds shall be effected in
accordance with the procedures of DTC and the DTC Participants against
delivery of funds for deposit into the Remarketing Account of the Bond
Purchase Fund equal to the purchase price of such Bonds that have been
remarketed.
(b) Bonds purchased with funds in the Credit Facility
Purchase Account of the Bond Purchase Fund shall be delivered and held
in accordance with Section V.5.7.(c) hereof. Bonds purchased with
funds in the Borrower Account of the Bond Purchase Fund shall be
delivered and held in accordance with the instructions of the Borrower
furnished to the Tender Agent. Such Bonds shall be held available for
registration of transfer and delivery by the Registrar in such manner
as may be agreed between the Registrar and such Credit Provider or the
Borrower, as the case may be.
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ARTICLE V
REVENUES
Section 5.1. Pledge of Revenues and Credit Facility.
(a) All of the Revenues are hereby irrevocably pledged to
the punctual payment of the principal of and interest and premium, if
any, on the Bonds, and Revenues shall not be used for any other
purpose, except as provided in the last paragraph of Section V.5.2,
while any of the Bonds remain Outstanding. Said pledge shall
constitute a first and exclusive lien on the Revenues for the payment
of the Bonds in accordance with the terms hereof and thereof. All
Revenues shall be held in trust for the benefit of the holders from
time to time of the Bonds, but shall nevertheless be disbursed,
allocated and applied solely for the uses and purposes set forth in
Article IV and this Article V.
(b) Each Credit Facility, if any, provided with respect
to the Bonds is (to the extent the County has any interest therein)
hereby irrevocably pledged to the punctual payment of the principal of
and interest and premium, if any, on such Bonds, and proceeds of any
drawing on such Credit Facility shall not be used for any other
purpose. Said pledge shall constitute a first and exclusive lien in
favor of the Trustee for the benefit of the holders of the Bonds on
such Credit Facility and any payments thereunder for the payment of
the Bonds in accordance with the terms thereof. Each Credit Facility,
if any, and any payments thereunder shall be held in trust for the
benefit of the holders from time to time of the Bonds, but shall
nevertheless be disbursed, allocated and applied solely for the uses
and purposes set forth in Article IV and this Article V.
(c) The Borrower may at its sole discretion from time to
time deliver to the Trustee such additional or other security
interests permitted by this Indenture or the County to secure the
payment of the principal of and interest and premium, if any, on the
Bonds and any such additional or other security delivered by the
Borrower shall be pledged to such payment, provided that the delivery
of such additional or other security does not adversely affect the
Tax-Exempt status of interest on the Bonds.
(d) The Bonds shall not constitute a debt or liability,
or a pledge of the faith, credit or taxing power, of the State or any
political subdivisions thereof, but shall be payable solely from the
funds herein provided therefor. The issuance of the Bonds shall not
directly or indirectly or contingently obligate the County, the State
or any political subdivision thereof to levy or pledge any form of
taxation whatever therefor or to make any appropriation for their
payment.
Section 5.2. Bond Fund; Credit Facility Debt Service Account.
Upon the receipt thereof, the Trustee shall deposit all Revenues in the "Tooele
County, Utah Pollution Control Refunding Revenue Bonds (Laidlaw Environmental
Services, Inc.)
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1997 Series A Bond Fund," which the Trustee shall establish and maintain and
hold in trust, and which shall be disbursed and applied only as hereinafter
authorized. Except as provided in this Section, Sections V.5.6 and X.10.3,
moneys in the Bond Fund shall be used solely for the payment of the principal
of and premium, if any, and interest on the Bonds as the same shall become due,
whether at maturity or upon redemption or acceleration or otherwise.
The Trustee shall deposit in the Bond Fund from time to time, upon
receipt thereof, all amounts received by the Trustee pursuant to any Credit
Facility (except to the extent such amounts are deposited in the Credit
Facility Purchase Account in the Bond Purchase Fund pursuant to Section IV.4.10
hereof or are deposited in an escrow to effect the defeasance of Bonds pursuant
to Article X hereof), all Repayment Installments received by the Trustee from
the Borrower for deposit in the Bond Fund, any income received from the
investment of moneys on deposit in the Bond Fund and any other Revenues,
including insurance proceeds, condemnation awards and other prepayment amounts
received under the Agreement from or for the account of the Borrower.
Within the Bond Fund, the Trustee shall establish and maintain a
separate account designated as the "Credit Facility Debt Service Account".
Except to the extent payments under any Credit Facility provided with respect
to the Bonds are to be deposited in the Credit Facility Purchase Account in the
Bond Purchase Fund pursuant to Section IV.4.10 hereof or are to be deposited in
an escrow to effect the defeasance of Bonds pursuant to Article X hereof, such
payments shall be deposited in the Credit Facility Debt Service Account to pay
principal of, premium, if any and interest on the Bonds. Except as otherwise
provided in this Section and Sections V.5.6 and VII.7.3 hereof, amounts held in
the Credit Facility Debt Service Account shall be used and applied solely to
the payment of the principal of, premium, if any, and interest on the Bonds.
In making payments of principal of, premium, if any, and interest on
the Bonds, the Trustee shall (a) first use all amounts held in the Credit
Facility Debt Service Account, (b) then use all other Available Amounts held in
the Bond Fund, and (c) then use any other Revenues received by the Trustee.
The stated amount of each Credit Facility shall be unavailable for the
payment of principal of and interest on Credit Provider Bonds, it being the
intent of the parties hereto that, so long as such Credit Facility is in
effect, principal of and interest on Credit Provider Bonds shall be payable
solely from the following sources, in the following priority: (1) amounts paid
by the Borrower to the Trustee for deposit in the Bond Fund, and (2) any other
Revenues available therefor.
Except to the extent such moneys are required to be held for the
payment of principal of, redemption premium, if any, or interest on the Bonds
then due and payable or to effect the defeasance of Bonds pursuant to Article X
hereof, so long as no Event of Default (or any event which would be an Event of
Default hereunder with the passage of time or the giving of notice) exists
hereunder, on the fifth day after each Interest
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Payment Date, the Trustee, unless otherwise instructed by the Borrower, shall
return to the Borrower (free and clear of the pledge and lien of this
Indenture) any moneys then on deposit in the Bond Fund (except any moneys then
on deposit in the Credit Facility Debt Service Account) or shall deposit such
funds in the Rebate Fund if so instructed by the Borrower; provided, however,
that no payment shall be made to the Borrower if the Borrower has any
obligations to a Credit Provider which are then due and payable, as certified
by the Credit Provider to the Trustee.
Section 5.3. Trustee Authorized to Take Actions Under the
Agreement. The County hereby authorizes and directs the Trustee, and the
Trustee hereby agrees, subject to Section VII.7.2 hereof, to take such actions
as the Trustee deems necessary to enforce the Borrower's obligation under the
Agreement to make timely payment of principal of and interest on the Bonds to
the extent payments under any Credit Facility, Bond proceeds and other moneys
in the Bond Fund are not available for such payment in accordance with the
provisions of Section V.5.2 hereof.
Section 5.4. Investment of Moneys. Subject to Section VI.6.6
hereof, any moneys in any of the funds and accounts to be established by the
Trustee pursuant to this Indenture (other than the Bond Purchase Fund and the
Bond Proceeds Fund) shall be invested upon the written direction of the
Borrower signed by an Authorized Borrower Representative (such direction to
specify the particular investment to be made), by the Trustee, if and to the
extent then permitted by law, in Investment Securities. In the absence of such
written direction, the Trustee shall invest solely in units of a money-market
fund or portfolio restricted to obligations issued by, or guaranteed by the
full faith and credit of, the United States of America which is rated by each
Rating Agency at least as high as the then current rating of such Rating Agency
on the Bonds if such Rating Agency is then rating the Bonds or if the Bonds are
not rated, within the top two rating categories of a nationally recognized
rating service. Moneys in any fund or account (other than the Bond Purchase
Fund and the Bond Proceeds Fund) shall be invested in Investment Securities
with respect to which payments of principal thereof and interest thereon are
scheduled to be paid or are otherwise payable (including Investment Securities
payable at the option of the holder) not later than the date on which such
moneys will be required by the Trustee. Available Amounts held in the Bond
Fund and any amounts held in the Bond Proceeds Fund shall be invested only in
Government Obligations maturing or subject to payment at par upon demand of the
holder thereof within thirty (30) days after the acquisition of any such
investment (or on such earlier date as payment thereunder shall be needed
hereunder).
Notwithstanding the foregoing provisions of this Section V.5.4, any
moneys held in the Bond Purchase Fund and any moneys constituting payments
under any Credit Facility shall be held uninvested unless such moneys are
invested in accordance with Article X hereof to effect the defeasance of Bonds.
Any interest, profit or loss on any investments of moneys in any fund
or account under this Indenture shall be credited or charged to the respective
funds from which such investments are made. The Trustee may sell or present
for redemption any obligations
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so purchased whenever it shall be necessary in order to provide moneys to meet
any payment, and the Trustee shall not be liable or responsible for any loss,
fee, tax or other charge resulting from any investment, reinvestment or
liquidation hereunder. Unless otherwise directed by the Borrower, the Trustee
may make any investment permitted under this Section V.5.4 through or with its
own commercial banking or investment departments.
Section 5.5. Assignment to Trustee; Enforcement of Obligations.
The County hereby transfers, assigns and sets over to the Trustee all of the
Revenues and any and all rights and privileges it has under the Agreement with
respect to the Bonds, except (i) the County's rights to receive any notices
under this Indenture or the Agreement, (ii) the County's right to receive
payments, if any, with respect to fees, expenses and indemnification and
certain other purposes under Sections 4.2(d), 4.2(e), 6.3, 8.2 and 8.3 of the
Agreement and (iii) the County's rights to give approvals or consents pursuant
to the Agreement, but including, without limitation, the right to collect and
receive directly all of the Revenues and the right to hold and enforce any
security interest, and any Revenues collected or received by the County shall
be deemed to be held, and to have been collected or received, by the County as
the agent of the Trustee, and shall forthwith be paid by the County to the
Trustee. The Trustee also shall be entitled to take all steps, actions and
proceedings reasonably necessary in its judgment (1) to enforce the terms,
covenants and conditions of, and preserve and protect the priority of its
interest in and under, the Agreement, any Credit Facility and any other
security agreement with respect to the Project or the Bonds, and (2) to assure
compliance with all covenants, agreements and conditions on the part of the
County contained in this Indenture with respect to the Revenues.
Section 5.6. Repayment to Borrower or Credit Provider. When there
are no longer any Bonds Outstanding or provision for payment of the Bonds has
been made in accordance with Article X hereof, and all fees, charges and
expenses of the Trustee, the Registrar, any Tender Agent, any Remarketing Agent
and any Paying Agent have been paid or provided for, payment of the full amount
owing the United States Government, as determined under Section 5.6 of the
Agreement, Section VI.6.6 hereof and the Tax Certificate, all expenses of the
County relating to the Project and this Indenture have been paid or provided
for, and all other amounts payable hereunder and under the Agreement have been
paid, and this Indenture has been discharged and satisfied, the Trustee shall
pay to the Borrower any amounts remaining in any fund established and held
hereunder; provided, however, that any amounts remaining in the Credit Facility
Debt Service Account shall be paid to the Credit Provider when there are no
longer any Bonds Outstanding or provision for payment of such Bonds has been
made in accordance with Article X hereof, regardless of whether all other
amounts payable hereunder or under the Agreement have been paid.
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Section 5.7. Credit Facilities; Credit Provider Bonds.
(a) There shall be no initial Credit Facility for the
Bonds. The Trustee acknowledges the right of the Borrower at any time
to provide a substitute Credit Facility with respect to the Bonds or,
with the consent of the County, to require the Trustee to surrender a
Credit Facility upon a Permitted Termination of such Credit Facility
and have no Credit Facility in effect with respect to the Bonds;
provided, however, that no substitution of a Credit Facility may be
made with respect to any Bond during any Rate Period unless the Bonds
would then be permitted to be redeemed at the option of the Borrower
pursuant to Section IV.4.1.(a)..(2) hereof. If there shall have been
delivered to the County and the Trustee (i) a substitute Credit
Facility and (ii) the opinions and documents required by Section
4.6(e) of the Agreement, then the Trustee shall accept such Credit
Facility and, if so directed by the Borrower, upon the effective date
of such substitute Credit Facility promptly surrender the Credit
Facility theretofore in effect in accordance with the respective terms
thereof for cancellation. In the event that the Borrower elects to
provide a substitute Credit Facility or elects to terminate a Credit
Facility, the Bonds shall be subject to mandatory tender as provided
in Section IV.4.7.(a)..(2) hereof. If at any time there shall cease
to be any Bonds Outstanding hereunder which are secured by a Credit
Facility, or a Credit Facility shall be terminated pursuant to its
terms, the Trustee shall promptly surrender such Credit Facility in
accordance with its terms for cancellation. The Trustee shall comply
with the procedures set forth in each Credit Facility relating to the
termination thereof.
(b) The Trustee acknowledges the right of the Borrower,
in the event that no Credit Facility is in effect with respect to the
Bonds, to provide a Credit Facility with respect to such Bonds at any
time upon the terms and conditions specified in Section 4.6(d) of the
Agreement; provided, however, that no such provision of a Credit
Facility may be made with respect to any Bond during any Rate Period
unless the Bonds would then be permitted to be redeemed at the option
of the Borrower pursuant to Section IV.4.1.(a)..(2) hereof.
(c) In the event that a Credit Facility is in effect with
respect to the Bonds, the Trustee shall make a demand for payment
under such Credit Facility subject to and in accordance with its
terms, in order to receive payment thereunder not later than the time
payment is due on the Bonds on the following dates in the following
amounts:
(i) On each Interest Payment Date, in an amount
which will be sufficient to pay all interest due and payable
on the Outstanding Bonds on such Interest Payment Date;
(ii) On any date fixed for payment (whether by
acceleration or otherwise), defeasance or redemption of the
Bonds in an amount which, together with amounts demanded for
payment pursuant to paragraph (i)
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above, will be sufficient to pay the amount due on such Bonds,
including accrued interest and premium, if any (if a demand
for payment is permitted for premium under the terms of such
Credit Facility); and
(iii) On each Purchase Date, in an amount
sufficient to pay the purchase price of any Bonds tendered or
deemed tendered pursuant to this Indenture and which have not
been remarketed in accordance with Section IV.4.12 hereof.
Each such demand for payment shall be made not later than the time
required by the Credit Facility in order to receive payment thereunder
not later than the time payment is required to be made to the holders
of the Bonds pursuant to this Indenture. The Trustee shall give
notice of each such demand for payment to the Borrower at the time of
each such demand. The proceeds of each such demand shall be deposited
in the Credit Facility Debt Service Account in the Bond Fund or the
Credit Facility Purchase Account in the Bond Purchase Fund, as
appropriate, and used in the order of priority established by Section
V.5.2 hereof or Section IV.4.14 hereof, as applicable. At the time of
making any demand under a Credit Facility pursuant to Section
V.5.7.(c)(iii) hereof, the Trustee shall direct the Credit Provider to
pay the proceeds of such demand directly to the Tender Agent for
deposit in the Credit Facility Purchase Account in the Bond Purchase
Fund. The Trustee shall comply with all provisions of each Credit
Facility in order to realize upon any demand for payment thereunder,
and will not demand payment under any Credit Facility any amounts for
payment of: (i) Credit Provider Bonds; or (ii) Bonds held by the
County or the Borrower or actually known by the Trustee to be held by
any affiliate of the Borrower or any nominee of the County unless such
Credit Facility specifically permits such demand.
(d) Any Bonds purchased with payments made under a Credit
Facility pursuant to Section V.5.7.(c)(iii) hereof shall be registered
in the name of, or as otherwise directed by, the Credit Provider and
delivered to or upon the order of, or as otherwise directed by, such
Credit Provider; provided, that if such Bonds are Book-Entry Bonds,
the Trustee shall immediately upon making any demand for payment on a
Credit Facility pursuant to Section V.5.7.(c)(iii) hereof notify the
Tender Agent. Upon receipt of such notice, the Tender Agent shall
direct DTC to cause any Bonds purchased with the proceeds of such
demand to be transferred to such account at DTC, as directed by the
Credit Provider, and such Bonds shall be held in the name of or for
the account of the Credit Provider or as may be directed by such
Credit Provider.
(e) Credit Provider Bonds shall be remarketed by the
Remarketing Agent prior to any other Bonds tendered for purchase
hereunder, and shall be remarketed in accordance with the terms of the
Remarketing Agreement. Upon (i) receipt by the Trustee and the Tender
Agent of written notification from the Credit Provider that its Credit
Facility (if any is then in effect) has been fully
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reinstated with respect to principal and interest and (ii) release by
the Credit Provider of any Credit Provider Bonds which the Remarketing
Agent has remarketed, such Bonds shall be made available to the
purchasers thereof and shall no longer constitute Credit Provider
Bonds for purposes of this Indenture. The proceeds of any remarketing
of Credit Provider Bonds shall be paid to the Credit Provider on such
remarketing date in immediately available funds.
(f) Each of the Trustee and the Tender Agent agrees that
it will, immediately upon receipt, send to the Credit Provider (by
telephonic or Electronic notice) a copy of every notice received by it
hereunder relating to any Credit Provider Bonds.
(g) Notwithstanding anything to the contrary herein or in
the Bonds, all obligations of the Borrower under or in connection with
any Credit Agreement (including, without limitation, reimbursement
obligations of the Borrower to any participating Credit Providers with
respect to a Credit Facility) shall be governed by the terms of such
Credit Agreement.
(h) The Trustee shall provide to each Rating Agency then
rating the Bonds written notice of the extension of any Credit
Facility in effect with respect to the Bonds.
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ARTICLE VI
COVENANTS OF THE COUNTY
Section 6.1. Payment of Principal and Interest. The County shall
punctually pay, but only out of Revenues as herein provided, the principal and
the interest (and premium, if any) to become due in respect of every Bond
issued hereunder at the times and places and in the manner provided herein and
in the Bonds according to the true intent and meaning thereof. All such
payments shall be made by the Trustee as provided in Section II.2.1.(b). When
and as paid in full, all Bonds, if any, shall be delivered to the Trustee and
shall forthwith be cancelled by the Trustee, who shall deliver a certificate
evidencing such cancellation to the County and the Borrower. The Trustee may
retain or destroy such cancelled Bonds.
Section 6.2. Extension or Funding of Claims for Interest. In
order to prevent any accumulation of claims for interest after maturity, the
County shall not, directly or indirectly, extend or assent to the extension of
the time for the payment of any claim for interest on any of the Bonds, and
shall not, directly or indirectly, be a party to or approve any such
arrangement by purchasing or funding such claims or in any other manner. In
case any such claim for interest shall be extended or funded, whether or not
with the consent of the County, such claim for interest so extended or funded
shall not be entitled, in case of default hereunder, to the benefits of this
Indenture, except subject to the prior payment in full of the principal of all
of the Bonds then Outstanding and of all claims for interest which shall not
have been so extended or funded.
Section 6.3. Paying Agents. The County, with the written approval
of the Trustee and the Borrower, may appoint and at all times have one or more
Paying Agents (which shall meet the qualifications of the Trustee set forth in
Section VIII.8.7 hereof) in such place or places as the Borrower may designate,
for the payment of the principal of, and the interest (and premium, if any) on,
the Bonds. All provisions of Article VIII hereof which apply to the Trustee
shall also apply to any Paying Agent appointed hereunder. It shall be the duty
of the Trustee to make such arrangements with any such Paying Agent as may be
necessary to assure, to the extent of the moneys held by the Trustee for such
payment, the prompt payment of the principal of and interest and premium, if
any, on the Bonds presented at either place of payment. The Paying Agent
initially appointed hereunder is the Trustee.
Section 6.4. Preservation of Revenues. The County shall not waive
any provision of the Agreement or take any action to interfere with or impair
the pledge and assignment hereunder of Revenues and the assignment to the
Trustee of rights under the Agreement, or the Trustee's enforcement of any
rights thereunder, without the prior written consent of the Trustee. The
Trustee may give such written consent, and may itself take any such action, or
consent to any Amendment, only in accordance with the provisions of Article IX
hereof.
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Section 6.5. Compliance with Indenture. The County shall not
issue, or permit to be issued, any Bonds secured or payable in any manner out
of Revenues in any manner other than in accordance with the provisions of this
Indenture, and shall not suffer or permit any default to occur under this
Indenture, but shall faithfully observe and perform all the covenants,
conditions and requirements hereof.
Section 6.6. Arbitrage Covenants; Rebate Fund.
(a) The County covenants with all persons who hold or at
any time held Bonds that the County will not directly or indirectly
use the proceeds of any of the Bonds or any other funds of the County
or permit the use of the proceeds of any of the Bonds or any other
funds of the County or take or omit to take any other action which
will cause any of the Bonds to be "arbitrage bonds" or otherwise
subject to federal income taxation by reason of Sections 103 and 141
through 150 of the Code and any applicable regulations promulgated
thereunder. To that end the County covenants to comply with all
covenants set forth in the Tax Certificate, which is hereby
incorporated herein by reference as though fully set forth herein.
(b) The Trustee shall establish and maintain a fund
separate from any other fund established and maintained hereunder
designated the "Tooele County, Utah Pollution Control Refunding
Revenue Bonds (Laidlaw Environmental Services, Inc.) 1997 Series A
Rebate Fund" (herein called the "Rebate Fund"). Within the Rebate
Fund, the Trustee shall maintain such accounts as shall be directed by
the Borrower as necessary in order for the County and the Borrower to
comply with the terms and requirements of the Tax Certificate.
Subject to the transfer provisions provided in paragraph (c) below,
all money at any time deposited in the Rebate Fund shall be held by
the Trustee in trust, to the extent required to satisfy the Rebate
Requirement (as defined in the Tax Certificate), for payment to the
United States Government, and neither the Borrower, the County nor the
Bondholders shall have any rights in or claim to such moneys. All
amounts deposited into or on deposit in the Rebate Fund shall be
governed by this Section VI.6.6, by Section 5.6 of the Agreement and
by the Tax Certificate. The Trustee shall conclusively be deemed to
have complied with such provisions if it follows the directions of the
Borrower, including supplying all necessary information requested by
the Borrower and the County in the manner set forth in the Tax
Certificate, and shall not be required to take any actions thereunder
in the absence of written directions from the Borrower.
(c) Upon receipt of the Borrower's written instructions,
the Trustee shall remit part or all of the balances in the Rebate Fund
to the United States Government, as so directed. In addition, if the
Borrower so directs, the Trustee will deposit moneys into or transfer
moneys out of the Rebate Fund from or into such accounts or funds as
directed by the Borrower's written directions. Any funds remaining in
the Rebate Fund after redemption and payment of all of the
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Bonds and payment and satisfaction of any Rebate Requirement shall be
withdrawn and remitted to the Borrower upon its written request.
(d) Notwithstanding any provision of this Indenture,
including in particular Article X hereof, the obligation of the
Borrower to pay the Rebate Requirement to the United States Government
and to comply with all other requirements of this Section VI.6.6,
Section 5.6 of the Agreement and the Tax Certificate shall survive the
defeasance or payment in full of the Bonds.
Section 6.7. Other Liens. So long as any Bonds are Outstanding,
the County shall not create or suffer to be created any pledge, lien or charge
of any type whatsoever upon all or any part of the Revenues, other than the
lien of this Indenture.
Section 6.8. Further Assurances. Whenever and so often as
requested so to do by the Trustee, the County shall promptly execute and
deliver or cause to be executed and delivered all such other and further
instruments, documents or assurances, and promptly do or cause to be done all
such other and further things, as may be necessary or reasonably required in
order to further and more fully vest in the Trustee and the Bondholders all of
the rights, interests, powers, benefits, privileges and advantages conferred or
intended to be conferred upon them by this Indenture and to perfect and
maintain as perfected such rights, interests, powers, benefits, privileges and
advantages.
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ARTICLE VII
DEFAULT
Section 7.1. Events of Default; Acceleration; Waiver of Default.
Each of the following events shall constitute an "Event of Default" hereunder:
(a) Failure to make payment of any installment of
interest upon any Bond after such payment shall have become due and
payable;
(b) Failure to make due and punctual payment of the
principal of or premium, if any, on any Bond after such payment shall
have become due and payable, whether at the stated maturity thereof,
or upon proceedings for redemption thereof or upon the maturity
thereof by declaration;
(c) Failure to make payment of the purchase price of any
Bond after such payment is required to be made pursuant to Section
IV.4.6 or IV.4.7 hereof;
(d) The occurrence of an "Event of Default" under the
Agreement, as specified in Section 6.1 thereof, with respect to the
Bonds;
(e) Default by the County in the performance or
observance of any other of the covenants, agreements or conditions on
its part contained in this Indenture or in the Bonds, and the
continuance of such default for a period of thirty (30) days after
written notice thereof, specifying such default and requiring the same
to be remedied, shall have been given to the County, the Borrower and
the Credit Provider, if any, by the Trustee, or to the County, the
Borrower, the Credit Provider and the Trustee by the holders of not
less than twenty-five percent (25%) in aggregate principal amount of
the Bonds at the time Outstanding;
(f) Receipt by the Trustee from the Credit Provider, if
any, of a notice as specified in the Credit Facility to the effect
that such Credit Provider has not been reimbursed for a payment under
the Credit Facility and stating that the amount available to be drawn
or otherwise to be provided thereunder to pay interest on the Bonds
has not been reinstated; or
(g) Receipt by the Trustee from the Credit Provider, if
any, of a written notice to the effect that an event of default has
occurred under the Credit Agreement and directing the Trustee to
declare an Event of Default hereunder.
No default specified in (e) above shall constitute an Event of
Default unless the County, the Borrower and the Credit Provider, if
any, shall have failed to correct such default within the applicable
30-day period; provided, however, that if the default shall be such
that it can be corrected, but cannot be corrected within such period,
it shall not constitute an Event of Default if corrective action
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is instituted by the County, the Borrower or the Credit Provider
within the applicable period and diligently pursued until the default
is corrected. With regard to any alleged default concerning which
notice is given to the Borrower or the Credit Provider under the
provisions of this Section, the County hereby grants the Borrower and
the Credit Provider, if any, full authority for the account of the
County to perform any covenant or obligation the non-performance of
which is alleged in said notice to constitute a default in the name
and stead of the County with full power to do any and all things and
acts to the same extent that the County could do and perform any such
things and acts and with power of substitution. Notwithstanding such
grant, neither the Borrower nor any Credit Provider shall have any
obligation to cure any default of the County.
Upon the occurrence and continuation of an Event of Default
under Section VII.7.1.(f) or Section VII.7.1.(g) hereof, the Trustee
shall, and upon the occurrence and continuation of an Event of Default
under Section VII.7.1.(a), VII.7.1.(b), VII.7.1.(c), VII.7.1.(d) or
VII.7.1.(e) hereof, the Trustee may, and upon the written request of
the holders of not less than twenty-five percent (25%) in aggregate
principal amount of Bonds then Outstanding with the consent of the
Credit Provider, if any, or upon the written request of the Credit
Provider, if any, shall, by notice in writing delivered to the
Borrower and the Credit Provider, if any, with copies of such notice
being sent to the County, declare the principal of all Bonds then
Outstanding and the interest accrued thereon immediately due and
payable, and such principal and interest shall thereupon become and be
immediately due and payable. Interest on the Bonds shall cease to
accrue from and after the date of declaration of any such
acceleration. Notwithstanding the foregoing, the Trustee shall not be
required to take any action upon the occurrence and continuation of an
Event of Default under Section VII.7.1.(d) or VII.7.1.(e) above until
a Responsible Officer of the Trustee has actual knowledge of such
Event of Default. After any declaration of acceleration under this
Section VII.7.1 the Trustee shall immediately take such actions as are
necessary to realize moneys under the Credit Facility, if any, and
shall declare all indebtedness payable under Section 4.2(a) of the
Agreement with respect to the Bonds to be immediately due and payable
in accordance with Section 7.3 of the Agreement and may exercise and
enforce such rights as exist under the Agreement.
The preceding paragraph, however, is subject to the condition
that if, at any time after the principal of the Bonds shall have been
so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as
hereinafter provided, there shall have been deposited with the Trustee
a sum which, together with any other amounts then held in the Bond
Fund, is sufficient to pay all the principal of such Bonds matured
prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, and the reasonable expenses (including
reasonable attorneys' fees) of the Trustee, and any and all other
defaults actually known to the Trustee (other than in the payment of
principal of and interest on such Bonds due and
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payable solely by reason of such declaration) shall have been made
good or cured to the satisfaction of the Trustee in its sole
discretion or provision deemed by the Trustee to be adequate shall
have been made therefor, then, and in every such case, the holders of
at least a majority in aggregate principal amount of the Bonds then
Outstanding, by written notice to the County and to the Trustee
accompanied by the written consent of the Credit Provider, if any, and
written notice from the Credit Provider, if any, that the Credit
Facility has been reinstated in full, may, on behalf of the holders of
all Bonds, rescind and annul such declaration with respect to the
Bonds and its consequences and waive such default; provided that no
such rescission and annulment shall extend to or shall affect any
subsequent default, or shall impair or exhaust any right or power
consequent thereon.
Section 7.2. Institution of Legal Proceedings by Trustee. In
addition, if one or more of the Events of Default hereunder shall happen and be
continuing, the Trustee in its sole discretion may, and upon the written
request of the Credit Provider, if any, or the holders of a majority in
aggregate principal amount of the Bonds then Outstanding with the consent of
the Credit Provider, if any, and upon being indemnified to its satisfaction in
its sole discretion therefor (including with respect to any expenses or
liability the Trustee may incur) shall, proceed to protect or enforce its
rights or the rights of the holders of Bonds under the Act or under this
Indenture, by a suit in equity or action at law, either for the specific
performance of any covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or by mandamus or other appropriate
proceeding for the enforcement of any other legal or equitable remedy as the
Trustee shall deem most effectual in support of any of its rights or duties
hereunder. If the Trustee reasonably determines that it may not receive
payment for its extraordinary services and expenses relating to the enforcement
of its rights or the rights of the holders of the Bonds under the Act or under
the Indenture, the Trustee shall have no duty to act if it gives written notice
of such decision to the Bondholders and the Bondholders subsequently fail to
provide the Trustee with reasonable indemnification.
Section 7.3. Application of Moneys Collected by Trustee. Any
moneys collected by the Trustee and moneys in the Bond Fund on or after the
occurrence of an Event of Default shall be applied in the order following, at
the date or dates fixed by the Trustee and, in the case of distribution of such
moneys on account of principal (or premium, if any) or interest, upon
presentation of the Bonds, and stamping thereon the payment, if only partially
paid, and upon surrender thereof, if fully paid:
First: To the payment of costs and expenses of collection,
just and reasonable compensation to the Trustee for its own services
and for the services of counsel, agents and employees by it properly
engaged and employed, and for advances made pursuant to the provisions
of this Indenture with interest on all such advances at the rate of
nine percent (9%) per annum; provided, that any payments under a
Credit Facility shall not be so applied.
Second: In case the principal of none of the Outstanding
Bonds shall have become due and remains unpaid, to the payment of
interest in default on the
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Outstanding Bonds in the order of the maturity thereof, such payments
to be made ratably and proportionately to the persons entitled thereto
without discrimination or preference, except as specified in Section
VI.6.2; provided, however, that no payment of interest shall be made
with respect to any Bonds held by the County, the Borrower or any
Credit Provider or actually known by the Trustee to be held by any
affiliate of the Borrower, or any nominee of the County, the Borrower,
any affiliate of the Borrower or any Credit Provider, until interest
due on all Bonds not so registered shall have been paid, and no
interest on any such Bonds shall be paid from amounts paid under the
Credit Facility, if any.
Third: In case the principal of any of the Outstanding Bonds
shall have become due by declaration or otherwise and remains unpaid,
first to the payment of principal of all Outstanding Bonds then due and
unpaid, then to the payment of interest in default in the order of
maturity thereof, and then to the payment of the premium thereon, if
any; in every instance such payment to be made ratably to the persons
entitled thereto without discrimination or preference, except as
specified in Section VI.6.2; provided, however, that no payment of
principal or premium or interest shall be made with respect to any
Bonds held by the County, the Borrower or any Credit Provider or known
by the Trustee to be held by any affiliate of the Borrower or any
nominee of the County, the Borrower, any affiliate of the Borrower or
any Credit Provider, until all amounts due on all Bonds not so held
have been paid, and no principal of or premium or interest on any such
Bonds shall be paid from amounts paid under the Credit Facility, if
any.
Fourth: To the Credit Provider, if any, as reimbursement for
amounts paid under its Credit Facility and other amounts due under the
applicable Credit Agreement, as certified by the Credit Provider to
the Trustee.
Section 7.4. Effect of Delay or Omission to Pursue Remedy. No
delay or omission of the Trustee or of any holder of Bonds to exercise any
right or power arising from any default shall impair any such right or power or
shall be construed to be a waiver of any such default or acquiescence therein,
and every power and remedy given by this Article VII to the Trustee or to the
holders of Bonds may be exercised from time to time and as often as shall be
deemed expedient. In case the Trustee shall have proceeded to enforce any
right under this Indenture, and such proceedings shall have been discontinued
or abandoned because of waiver or for any other reason, or shall have been
determined adversely to the Trustee, then and in every such case the County,
the Trustee, the Credit Provider, if any, and the holders of the Bonds,
severally and respectively, shall be restored to their former positions and
rights hereunder in respect to the trust estate; and all remedies, rights and
powers of the County, the Trustee, the Credit Provider and the holders of the
Bonds shall continue as though no such proceedings had been taken.
Section 7.5. Remedies Cumulative. No remedy herein conferred upon
or reserved to the Trustee or to any holder of the Bonds is intended to be
exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in
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addition to every other remedy given hereunder or now or hereafter existing at
law or in equity.
Section 7.6. Covenant to Pay Bonds in Event of Default. The
County covenants that, upon the happening of any Event of Default, the County
will pay to the Trustee upon demand, but only out of Revenues, for the benefit
of the holders of such Bonds, the whole amount then due and payable thereon (by
declaration or otherwise) for interest or for principal and premium, or both,
as the case may be, and all other sums which may be due hereunder or secured
hereby, including reasonable compensation to the Trustee, its agents and
counsel, and any expenses or liabilities incurred by the Trustee hereunder. In
case the County shall fail to pay the same forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, shall be entitled
to institute proceedings at law or in equity in any court of competent
jurisdiction to recover judgment for the whole amount due and unpaid, together
with costs and reasonable attorneys' fees and expenses, subject, however, to
the condition that such judgment, if any, shall be limited to, and payable
solely out of, Revenues as herein provided and not otherwise. The Trustee
shall be entitled to recover such judgment as aforesaid, either before or after
or during the pendency of any proceedings for the enforcement of this
Indenture, and the right of the Trustee to recover such judgment shall not be
affected by the exercise of any other right, power or remedy for the
enforcement of the provisions of this Indenture. If the Event of Default
involves the bankruptcy of the Borrower, amounts payable to or for the benefit
of the Bondholders pursuant to the bankruptcy plan shall be paid to the Trustee
for application as provided in Section 7.3 of the Indenture; and if payments
are made directly to the Bondholders by the bankruptcy trustee, those
Bondholders shall be liable to the Trustee for applying the funds in the manner
provided in Section 7.3 hereof, including, but not limited to, the payment of
the Trustee's extraordinary fees and expenses.
Section 7.7. Trustee Appointed Agent for Bondholders. The Trustee
is hereby appointed the agent and attorney of the holders of all Bonds
Outstanding hereunder for the purpose of filing any claims relating to the
Bonds.
Section 7.8. Power of Trustee to Control Proceedings. In the
event that the Trustee, upon the happening of an Event of Default, shall have
taken any action, by judicial proceedings or otherwise, pursuant to its duties
hereunder, whether upon its own discretion or upon the request of holders of
the Bonds, it shall have full power, in the exercise of its discretion for the
best interests of the holders of the Bonds, with respect to the continuance,
discontinuance, withdrawal, compromise, settlement or other disposal of such
action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default hereunder, discontinue, withdraw, compromise or
settle, or otherwise dispose of any litigation pending at law or in equity, if
at the time there has been filed with it a written request signed by the Credit
Provider or the holders of at least a majority in principal amount of the Bonds
Outstanding hereunder opposing such discontinuance, withdrawal, compromise,
settlement or other disposal of such litigation.
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All rights of action under this Indenture or under any of the Bonds
secured hereby which are enforceable by the Trustee may be enforced by it
without the possession of any of the Bonds, or the production thereof at the
trial or other proceedings relative thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name as Trustee of
an express trust for the equal and ratable benefit of the Bondholders, subject
to the provisions of this Indenture.
Section 7.9. Limitation on Bondholders' Right to Sue. No holder
of any Bond issued hereunder shall have the right to institute any suit, action
or proceeding at law or in equity, for any remedy under or upon this Indenture,
unless (a) such holder shall have previously given to the Trustee written
notice of the occurrence of an Event of Default hereunder; (b) the holders of
at least a majority in aggregate principal amount of all the Bonds then
Outstanding shall have made written request upon the Trustee to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name; (c) said holders shall have tendered to the Trustee indemnity
satisfactory to it against the costs, expenses (including reasonable attorneys'
fees) and liabilities to be incurred in compliance with such request; and (d)
the Trustee shall have refused or omitted to comply with such request for a
period of thirty (30) days after such written request shall have been received
by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or
omission are hereby declared, in every case, to be conditions precedent to the
exercise by any holder of Bonds of any remedy hereunder; it being understood
and intended that no one or more holders of Bonds shall have any right in any
manner whatever by his or her or their action to enforce any right under this
Indenture, except in the manner herein provided, and that all proceedings at
law or in equity to enforce any provision of this Indenture shall be
instituted, had and maintained in the manner herein provided and for the equal
benefit of all holders of the Outstanding Bonds, subject to the provisions of
this Indenture.
The right of any holder of any Bond to receive payment of the
principal of (and premium, if any) and interest on such Bond out of Revenues,
as herein and therein provided, on and after the respective due dates expressed
in such Bond, or to institute suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such holder, notwithstanding the foregoing provisions of this
Section or Section VII.7.8 or any other provision of this Indenture.
Section 7.10. Limitation of Liability to Revenues. Notwithstanding
anything in this Indenture contained, the County shall not be required to
advance any moneys derived from the proceeds of taxes collected by the County
or by any governmental body or political subdivision of the State or from any
source of income of any governmental body or political subdivision of the State
or the County other than the Revenues, for any of the purposes in this
Indenture mentioned, whether for the payment of the principal of or interest on
the Bonds or for any other purpose of this Indenture. The Bonds are not
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general obligations of the County, and are payable from and secured by the
Revenues only.
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ARTICLE VIII
THE TRUSTEE, THE REGISTRAR, THE TENDER AGENT
AND THE REMARKETING AGENT
Section 8.1. Duties, Immunities and Liabilities of Trustee and
Registrar. The Trustee and the Registrar shall, prior to an Event of Default
hereunder, and after the curing of all Events of Default hereunder which may
have occurred, perform such duties and only such duties as are specifically set
forth in this Indenture. The Trustee shall, during the existence of any Event
of Default hereunder (which has not been cured), exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care and
skill in their exercise, as prudent persons would exercise or use under the
circumstances in the conduct of their own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee or the Registrar from liability for its own negligent action or its own
negligent failure to act or its own willful misconduct, except that:
(a) Prior to the occurrence of any Event of Default
hereunder and after the curing of all Events of Default which may have
occurred, the duties and obligations of the Trustee and the Registrar,
as the case may be, shall be determined solely by the express
provisions of this Indenture; the Trustee or the Registrar, as the
case may be, shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Indenture; and no covenants or obligations shall be implied into this
Indenture which are adverse to the Trustee or the Registrar, as the
case may be; and
(b) At all times, regardless of whether or not any Event of
Default shall exist,
(1) the Trustee and the Registrar shall not be
liable for any error of judgment made in good faith by a
Responsible Officer or Officers of the Trustee or the
Registrar unless it shall be proved that the Trustee or the
Registrar, as the case may be, was negligent in ascertaining
the pertinent facts; and
(2) neither the Trustee nor the Registrar shall
be personally liable with respect to any action taken,
permitted or omitted by it in good faith in accordance with
the direction of the holders of not less than a majority, or
such other percentage as may be required hereunder, in
aggregate principal amount of the Bonds Outstanding relating
to the time, method and place of conducting any proceeding for
any remedy available to the Trustee or the Registrar, or
exercising any trust or power conferred upon the Trustee or
the Registrar under this Indenture; and
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(3) in the absence of bad faith on the part of
the Trustee or the Registrar, as the case may be, the Trustee
and the Registrar may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon any certificate or opinion furnished to the
Trustee or the Registrar, as the case may be, conforming to
the requirements of this Indenture; but in the case of any
such certificate or opinion which by any provision hereof is
specifically required to be furnished to the Trustee or the
Registrar, as the case may be, the Trustee or the Registrar,
as the case may be, shall be under a duty to examine the same
to determine whether or not it conforms to the requirements of
this Indenture.
(c) The Trustee may execute any of the trusts or powers
hereof and perform the duties required of it hereunder by or through
attorneys, agents or receivers, and shall be entitled to advice of
counsel concerning all matters of trust and concerning its duties
hereunder and the Trustee shall not be responsible for any misconduct
or negligence on the part of any attorney or agent appointed with due
care by it hereunder.
None of the provisions contained in this Indenture shall
require the Trustee or the Registrar to expend or risk its own funds
or otherwise incur individual financial liability in the performance
of any of its duties or in the exercise of any of its rights or
powers. The permissive right of the Trustee to perform acts
enumerated in this Indenture or the Agreement shall not be construed
as a duty or obligation hereunder.
Section 8.2. Right of Trustee and Registrar to Rely upon
Documents, Etc. Except as otherwise provided in Section VIII.8.1:
(a) The Trustee and the Registrar may rely and shall be
protected in acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, Bond,
direction, demand, election or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party
or parties;
(b) Any notice, request, direction, election, order or
demand of the County mentioned herein shall be deemed to be
sufficiently evidenced by an instrument signed in the name of the
County by an Authorized County Representative, and any resolution of
the County shall be evidenced to the Trustee or the Registrar by a
Certified Resolution;
(c) Each of the Trustee and the Registrar may consult
with counsel of its selection (who may include its own counsel or
counsel for the County or Bond Counsel) and the opinion of such
counsel shall be full and complete authorization and protection in
respect of any action taken or suffered by it hereunder in good faith
and in accordance with the opinion of such counsel; and
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(d) Whenever in the administration of the trusts of this
Indenture the Trustee or the Registrar shall deem it necessary or
desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence
of negligence or bad faith on the part of the Trustee or the
Registrar, as the case may be, be deemed to be conclusively proved and
established by a Certificate of the County; and such Certificate of
the County shall, in the absence of negligence or bad faith on the
part of the Trustee or the Registrar, as the case may be, be full
warrant to the Trustee or the Registrar, as the case may be, for any
action taken or suffered by it under the provisions of this Indenture
upon the faith thereof.
Section 8.3. Trustee and Registrar Not Responsible for Recitals.
The recitals contained herein and in the Bonds shall be taken as the statements
of the County, and the Trustee and the Registrar assume no responsibility for
the correctness of the same except (with respect to the Registrar) for the
Certificate of Authentication thereon. The Trustee and the Registrar make no
representations as to the validity or sufficiency of this Indenture or of the
Bonds. The Trustee and the Registrar shall not be accountable for the use or
application by the County of any of the Bonds authenticated or delivered
hereunder or of the proceeds of such Bonds except to the extent specifically
provided in this Indenture.
Section 8.4. Right of Trustee and Registrar to Acquire Bonds. The
Trustee, the Registrar and their officers and directors may acquire and hold,
or become the pledgee of, Bonds and otherwise deal with the County in the
manner and to the same extent and with like effect as though it were not
Trustee or Registrar, as the case may be, hereunder.
Section 8.5. Moneys Received by Trustee and Registrar to Be Held
in Trust. Subject to the provisions of Section X.10.3, all moneys received by
the Trustee and the Registrar shall, until used or applied 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 or as
otherwise provided herein. Except to the extent provided otherwise herein, any
interest allowed on any such moneys shall be deposited in the fund to which
such moneys are credited. Available Amounts and amounts being aged to become
Available Amounts, amounts received under any Credit Facility and proceeds of
any remarketing of Bonds shall not be commingled with any other funds held by
the Trustee hereunder.
Section 8.6. Compensation and Indemnification of Trustee and
Registrar. The Trustee and the Registrar shall be entitled to reasonable
compensation for all services rendered by them in the execution of the trusts
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee or the Registrar, as the case may be, which
compensation shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust, and the Agreement will require
the Borrower to pay or reimburse the Trustee or the Registrar, as the case may
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be, upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or the Registrar, as the case may be, in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and
of all persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. If any
property, other than cash, shall at any time be held by the Trustee or the
Registrar, as the case may be, subject to this Indenture, or any supplemental
indenture, as security for the Bonds, the Trustee or the Registrar, as the case
may be, if and to the extent authorized by a receivership, bankruptcy or other
court of competent jurisdiction or by the instrument subjecting such property
to the provisions of this Indenture as such security for the Bonds, shall be
entitled (but not required) to make advances for the purpose of preserving such
property or of discharging tax liens or other prior liens or encumbrances
thereon. The Agreement will also require the Borrower to provide certain
indemnification to the Trustee and the Registrar. Notwithstanding the
foregoing, prior to seeking indemnity the Trustee shall make timely payments of
principal of and interest on the Bonds with moneys on deposit in the Bond Fund
as provided herein, and shall accelerate the payment of principal on the Bonds
and demand payment under each Credit Facility when required by this Indenture
without seeking indemnification from the Borrower or any Bondholder. Upon the
occurrence and continuance of an Event of Default hereunder, and subject to
Section VII.7.3 hereof, the Trustee shall have a lien prior to the Bonds as to
all property and funds held by it (other than the Rebate Fund) for any amount
owing to it or any predecessor Trustee pursuant to this Section VIII.8.6 or the
Agreement and the rights of the Trustee to compensation for its services and to
payment or reimbursement for its costs, expenses, or advances shall have
priority over the Bonds in respect of all property or funds held or collected
by the Trustee as such and other funds held in trust by the Trustee for the
benefit of the holders of particular Bonds; provided, however, that neither the
Trustee nor any predecessor Trustee shall have any lien or claim against moneys
paid under any Credit Facility for payment of any such compensation,
reimbursement or other amounts.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 6.1(c) of the Agreement and
Section VII.7.1 hereof, such expenses (including the reasonable charges and
expenses of its counsel and agents) and the compensation for such services are
intended to constitute expenses of administration under any applicable federal
or state bankruptcy, insolvency or other similar law. The Trustee shall be
entitled to all reasonable fees and expenses incurred in enforcing the
Bondholders' rights in any bankruptcy action, and the intention that the fees
and expenses incurred by the Trustee in enforcing the rights of the Bondholders
be treated as expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law shall not be deemed to limit the
amount payable to the Trustee. The provisions of this Section VIII.8.6 shall
survive the termination of this Indenture and the resignation or removal of the
Trustee or the Registrar.
Section 8.7. Qualifications of Trustee and Registrar. There shall
at all times be a trustee and a registrar hereunder which shall be corporations
or banking associations organized and doing business under the laws of the
United States or of a state thereof,
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authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least fifty million dollars ($50,000,000),
subject to supervision or examination by federal or state authority; provided,
however, that no Credit Provider shall be eligible to serve as Trustee or
Registrar so long as it is the provider of a Credit Facility hereunder. If
such corporations or banking associations publish reports of condition at least
annually, pursuant to law or to the requirements of any supervising or
examining authority above referred to, then for the purposes of this Section
the combined capital and surplus of such corporations or banking associations
shall be deemed to be their combined capital and surplus as set forth in their
most recent reports of conditions so published. In case at any time the
Trustee or the Registrar shall cease to be eligible in accordance with the
provisions of this Section, the Trustee or the Registrar, as the case may be,
shall resign immediately in the manner and with the effect specified in Section
VIII.8.8.
Section 8.8. Resignation and Removal of Trustee or Registrar and
Appointment of Successor Trustee or Registrar.
(a) The Trustee or the Registrar may at any time resign
by giving written notice to the County, the Borrower and the Credit
Provider, if any, and by giving to the Bondholders notice either by
publication of such resignation, which notice shall be published at
least once in a Qualified Newspaper, or by giving Notice by Mail to
such Bondholders. The Trustee shall also mail a copy of any such
notice of resignation to the Rating Agencies. Upon receiving such
notice of resignation, the County, with the advice and consent of the
Borrower and the consent of the Credit Provider (whose consent shall
not be unreasonably withheld), shall promptly appoint a successor
trustee or registrar, as the case may be, by an instrument in writing.
If no successor trustee or registrar, as the case may be, shall have
been so appointed and have accepted appointment within thirty (30)
days after the giving of such notice of resignation by the Trustee or
the Registrar, as the case may be, the resigning trustee or registrar,
as the case may be, may petition any court of competent jurisdiction
for the appointment of a successor trustee or registrar, as the case
may be, or any Bondholder who has been a bona fide holder of a Bond
for at least six (6) months may, on behalf of himself and others
similarly situated, petition any such court for the appointment of a
successor trustee or registrar, as the case may be. Such court may
thereupon, after such notice, if any, as it may deem proper and may
prescribe, appoint a successor trustee or registrar, as the case may
be.
(b) In case at any time either of the following shall
occur:
(1) the Trustee or the Registrar shall cease to
be eligible in accordance with the provisions of Section
VIII.8.7 and shall fail to resign after written request
therefor by the County or by any Bondholder who has been a
bona fide holder of a Bond for at least six (6) months.
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(2) the Trustee or the Registrar shall become
incapable of acting, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or Registrar or of its
property shall be appointed, or any public officer shall take
charge or control of the Trustee or Registrar or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the County may remove the Trustee or the
Registrar, as the case may be, and, with the advice and consent of the
Borrower and the consent of the Credit Provider (whose consent shall
not be unreasonably withheld), appoint a successor trustee or
registrar, as the case may be, by an instrument in writing, or any
such Bondholder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal
of the Trustee or the Registrar, as the case may be, and the
appointment of a successor trustee or registrar, as the case may be.
Such court may thereupon, after such notice, if any, as it may deem
proper and may prescribe, remove the Trustee or the Registrar, as the
case may be, and appoint a successor trustee or registrar, as the case
may be. Upon any removal of the Trustee, any outstanding fees and
expenses of such former Trustee shall be paid in accordance with
Section VIII.8.6 hereof.
(c) The County, in the absence of an Event of Default, or
the holders of a majority in aggregate principal amount of the Bonds
at the time Outstanding may at any time remove the Trustee or the
Registrar, as the case may be, and appoint a successor trustee or
registrar, as the case may be, by an instrument or concurrent
instruments in writing signed by the County or such Bondholders, as
the case may be.
(d) Any resignation or removal of the Trustee or the
Registrar, as the case may be, and appointment of a successor trustee
or registrar, as the case may be, pursuant to any of the provisions of
this Section shall become effective only upon acceptance of
appointment by the successor trustee or registrar, as the case may be,
as provided in Section VIII.8.9, and upon transfer of the Credit
Facility, if any, then in effect to the successor Trustee.
Section 8.9. Acceptance of Trust by Successor Trustee. Any
successor trustee appointed as provided in Section VIII.8.8 shall execute,
acknowledge and deliver to the County, the Borrower, the Credit Provider, if
any, and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act,
deed or conveyance, shall become vested with all the rights, powers, trusts,
duties and obligations of its predecessor in the trusts hereunder, with like
effect as if originally named as Trustee herein; but, nevertheless, on the
Written Request of the County or the request of the successor trustee, the
trustee ceasing to act shall execute and deliver an instrument transferring to
such successor trustee, upon the trusts herein expressed, all the rights,
powers and trusts of the trustee so ceasing to act. Upon
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request of any such successor trustee, the County shall execute any and all
instruments in writing necessary or desirable for more fully and certainly
vesting in and confirming to such successor trustee all such rights, powers and
duties. Any trustee ceasing to act shall, nevertheless, retain a lien upon all
property or funds held or collected by such trustee to secure the amounts due
it as compensation, reimbursement, expenses and indemnity afforded to it by
Section VIII.8.6.
No successor trustee shall accept appointment as provided in this
Section VIII.8.9 unless at the time of such acceptance such successor trustee
shall be eligible under the provisions of Section VIII.8.7.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the County or such successor trustee shall give the Bondholders,
the Credit Provider, if any, and each Rating Agency notice of the succession of
such trustee to the trusts hereunder in the manner prescribed in Section
VIII.8.8 for the giving of notice of resignation of the Trustee.
Section 8.10. Merger or Consolidation of Trustee or Registrar. Any
corporation or banking association into which the Trustee may be merged or with
which it may be consolidated, or any corporation or banking association
resulting from any merger or consolidation to which the Trustee or the
Registrar shall be a party, or any corporation or banking association
succeeding to all or substantially all of the corporate trust business of the
Trustee or the Registrar, shall be the successor of the Trustee or the
Registrar hereunder without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, provided that such successor trustee or registrar shall be
eligible under the provisions of Section VIII.8.7.
Section 8.11. Accounting Records and Reports; Financing Statements.
The Trustee and the Registrar shall keep proper books of record and account in
accordance with trust accounting standards in which complete and correct
entries shall be made of all transactions relating to the receipt, investment,
disbursement, allocation and application of the Revenues and the proceeds of
the Bonds received by the Trustee or the Registrar. Such records shall specify
the account or fund to which each investment (or portion thereof) held by the
Trustee is to be allocated and shall set forth, in the case of each Investment
Security, (a) its purchase price, (b) its value at maturity or its sale price,
as the case may be, (c) the amounts and dates of any payments to be made with
respect thereto and (d) such documentation and evidence as is required to be
obtained by the Borrower to establish that the requirements of Article V of the
Tax Certificate have been met. Such records shall be open to inspection by the
County, the Borrower and the Credit Provider, if any, and by any Bondholder at
any reasonable time during regular business hours on reasonable notice. The
Trustee shall furnish to the County and the Borrower monthly statements of all
investments made by the Trustee and all funds and accounts held by the Trustee.
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The Trustee shall furnish to any Bondholder who may make written
request therefor a copy of the most recent audited financial statements of the
Borrower that are in the possession of the Trustee. The Trustee shall have no
responsibility or liability with respect to the Borrower's failure to provide
such statements, and the Trustee shall not be required to compel the Borrower
to provide any such statements.
The Trustee shall not be responsible for the preparation or filing of
any UCC financing statements or continuation statements under this Indenture.
Section 8.12. Registrar. The County, at the request and direction
of the Borrower, shall appoint a registrar for the Bonds. The Registrar shall
be a bank, trust company or national banking association which meets the
qualifications of Section VIII.8.7 hereof, willing and able to accept the
office on reasonable and customary terms and authorized by law to perform all
the duties imposed upon it hereby. The Registrar shall signify its acceptance
of the duties and obligations imposed upon it hereby by executing and
delivering to the County and the Trustee a written acceptance thereof. The
Registrar initially appointed hereunder is the Trustee.
Section 8.13. Tax Certificate. The Trustee covenants and agrees
that it will comply with all written instructions of the Borrower given in
accordance with the Tax Certificate and will take any and all action as may be
necessary in accordance with such written instructions. The Trustee
acknowledges receipt of the Tax Certificate and acknowledges that the
provisions of the Tax Certificate are incorporated herein by reference as
provided in Section VI.6.6 hereof. The Trustee shall not be accountable for
the use by the Borrower of the proceeds of the Bonds.
Section 8.14. Appointment of Co-Trustee. In the event the Trustee
deems that by reason of any present or future law of any jurisdiction it may
not exercise any of the powers, rights or remedies herein granted to the
Trustee or hold title to the properties, in trust, as herein granted, or take
any other action which may be desirable or necessary in connection therewith,
it may be necessary that the Trustee appoint an additional institution as a
separate trustee or co-trustee. In the absence of an Event of Default under
this Indenture, the appointment of any such separate trustee or co-trustee
shall be subject to the approval of the County and the Borrower. The following
provisions of this Section are adapted to these ends.
(a) In the event that the Trustee appoints an additional
institution as a separate trustee or co- trustee, each and every
remedy, power, right, claim, demand, cause of action, immunity,
estate, interest or lien expressed or intended by this Indenture to be
exercised by or vested in or conveyed to the Trustee with respect
thereto shall be exercisable by and vest in such separate trustee or
co-trustee but only to the extent necessary to enable such separate
trustee or co-trustee to exercise such powers, rights and remedies,
and every covenant and obligation necessary to the exercise thereof by
such separate trustee or co-trustee shall run to and be enforceable by
either of them. Such co-trustee may be removed by the Trustee at any
time, with or without cause.
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(b) Should any instrument in writing from the County be
required by the separate trustee or co- trustee so appointed by the
Trustee for more fully and certainly vesting in and confirming to it
such properties, rights, powers, trusts, duties and obligations, any
and all such instruments in writing shall, on request, be executed,
acknowledged and delivered by the County. In case any separate
trustee or co-trustee, or a successor to either, shall become
incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such
separate trustee or co-trustee, so far as permitted by law, shall vest
in and be exercised by the Trustee until the appointment of a
successor to such separate trustee or co-trustee.
Section 8.15. Appointment, Duties and Qualifications of Tender
Agent.
(a) In order to carry out the duties and obligations of
the Tender Agent contained herein, the County, with the advice and
consent of the Borrower, shall appoint a Tender Agent in order to
carry out such duties and obligations. The Tender Agent shall
designate to the Trustee its Principal Office to signify in writing
its acceptance of the duties and obligations imposed upon it under
this Indenture. The Tender Agent shall keep such books and records
with respect to its activities as Tender Agent as shall be consistent
with prudent industry practice and to make such books and records
available for inspection by each of the County, the Trustee and the
Borrower at all reasonable times.
(b) Each Tender Agent shall be a banking corporation or
banking association organized and doing business under the laws of the
United States or of a state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least fifty million dollars ($50,000,000), subject to
supervision or examination by federal or state authority. If such
banking corporation or banking association publishes a report of
condition at least annually, pursuant to law or to the requirements of
any supervising or examining authority above referred to, then for the
purposes of this Section the combined capital and surplus of such
banking corporation or banking association shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published.
(c) The Tender Agent may resign by notifying the County,
the Trustee, the Credit Provider, if any, the Remarketing Agent and
the Bondholders at least thirty (30) days before the effective date of
such resignation. The County, with the advice and consent of the
Borrower, may remove the Tender Agent and appoint a successor by
notifying the Tender Agent, the Remarketing Agent, the Credit
Provider, if any, and the Trustee. No resignation or removal shall be
effective until the successor has delivered an acceptance of its
appointment to the County, the Trustee and the predecessor Tender
Agent. In the event of the resignation or removal of the Tender
Agent, such Tender Agent shall pay over, assign and deliver any moneys
held by it as Tender Agent to its successor, or if there is no
successor, to the Trustee. In the event that for any
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reason there shall be a vacancy in the office of Tender Agent, the
Trustee shall act as such Tender Agent to the extent it has
operational capacity to perform such tasks.
Section 8.16. Appointment, Duties and Qualifications of Remarketing
Agent.
(a) In order to carry out the duties and obligations
contained in this Indenture, the Borrower, with the approval of the
County, shall appoint the Remarketing Agent for the Bonds subject to
the conditions set forth below. The Remarketing Agent shall be a
bank, trust company or member of the National Association of
Securities Dealers, Inc. organized and doing business under the laws
of any state of the United States of America or the District of
Columbia and shall have a capitalization of at least fifty million
dollars ($50,000,000) as shown in its most recently published annual
report.
(b) The Borrower shall enter into a Remarketing Agreement
with the Remarketing Agent and such other parties as shall be
appropriate, pursuant to which such Remarketing Agent shall designate
its Principal Office and agree particularly (but without limitation):
(i) to perform the duties and comply with the requirements imposed
upon it by the Remarketing Agreement, this Indenture and the
Agreement; and (ii) to keep such books and records with respect to its
activities as Remarketing Agent as shall be consistent with prudent
industry practice and to make such books and records available for
inspection by each of the County, the Trustee and the Borrower at all
reasonable times. The Remarketing Agent shall not be entitled to any
compensation from the County or the Trustee but rather shall only be
entitled to compensation from the Borrower.
(c) The Borrower shall furnish a copy of the Remarketing
Agreement to the County, the Trustee, the Credit Provider, if any, and
the Tender Agent.
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ARTICLE IX
MODIFICATION OF INDENTURE, DOCUMENTS
Section 9.1. Modification without Consent of Bondholders. The
County and the Trustee, without the consent of or notice to any Bondholders
from time to time and at any time, but with the consent of the Credit Provider,
if any, and subject to the conditions and restrictions contained in this
Indenture, may enter into an indenture or indentures supplemental hereto, which
indenture or indentures thereafter shall form a part hereof; and the Trustee,
without the consent of or notice to any Bondholders from time to time and at
any time, but with the consent of the Credit Provider, if any, may consent to
any Amendment to any Document; in each case for any one or more of the
following purposes:
(a) to add to the covenants and agreements of the County
contained in this Indenture, or of the Borrower or of any Credit
Provider contained in any Document, other covenants and agreements
thereafter to be observed, or to assign or pledge additional security
for any of the Bonds, or to surrender any right or power herein or
therein reserved to or conferred upon the County or the Borrower;
provided, that no such covenant, agreement, assignment, pledge or
surrender shall materially adversely affect the interests of the
holders of the Bonds;
(b) to make such provisions for the purpose of curing any
ambiguity, inconsistency or omission, or of curing, correcting or
supplementing any defective provision contained in this Indenture or
any Document, or in regard to matters or questions arising under this
Indenture or any Document, as the County may deem necessary or
desirable and not inconsistent with this Indenture or any Document and
which shall not materially adversely affect the interests of the
holders of the Bonds;
(c) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the
qualification hereof or thereof under the Trust Indenture Act of 1939
or any similar federal statute hereafter in effect, and, if they so
determine, to add to this Indenture or any indenture supplemental
hereto such other terms, conditions and provisions as may be permitted
by said Trust Indenture Act of 1939 or similar federal statute, and
which shall not adversely affect the interests of the holders of the
Bonds;
(d) to provide for any additional procedures, covenants
or agreements necessary to maintain the Tax-Exempt status of interest
on the Bonds; provided that such amendment or supplement shall not
materially adversely affect the interests of the holders of the Bonds;
(e) to modify or eliminate the book-entry registration
system for any of the Bonds;
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(f) to provide for the procedures required to permit any
Bondholder to separate the right to receive interest on the Bonds from
the right to receive principal thereof and to sell or dispose of such
rights, as contemplated by Section 1286 of the Code;
(g) to provide for the appointment of a co-trustee or the
succession of a new Trustee, Registrar or Paying Agent;
(h) to change Exhibit A to the Agreement in accordance
with the provisions thereof and of the Tax Certificate;
(i) to provide for a Credit Facility or substitute Credit
Facility;
(j) to comply with requirements of any Rating Agency in
order to obtain or maintain a rating on any Bonds;
(k) in connection with any other change which, in the
judgment of the Trustee (which may be based upon an Opinion of
Counsel), will not adversely affect the security for the Bonds or the
Tax-Exempt status of interest thereon or otherwise materially
adversely affect the holders of the Bonds; or
(l) to modify, alter, amend or supplement this Indenture
or any Document in any other respect, including amendments which would
otherwise be described in Section IX.9.2 hereof, if the effective date
of such supplemental indenture or supplemental indenture or Amendment
is a date on which all Bonds affected thereby are subject to mandatory
tender for purchase pursuant to Section IV.4.7 hereof or if Notice by
Mail of the proposed supplemental indenture or Amendment is given to
holders of the affected Bonds at least thirty (30) days before the
effective date thereof and, on or before such effective date, such
Bondholders have the right to demand purchase of their Bonds pursuant
to Section IV.4.6 hereof.
Notwithstanding the foregoing provisions of this Section
IX.9.1, the Trustee shall not be obligated to enter into any such
supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture, and the Trustee shall not enter into
any supplemental indenture or consent to any Amendment without first
obtaining the written consent of the Borrower. The Trustee will give
notice of the provisions of any supplemental indenture authorized by
the provisions of this Section IX.9.1 to the applicable Rating
Agencies. Any supplemental indenture or Amendment permitted pursuant
to this Section IX.9.1 may be approved by an Authorized County
Representative and need not be approved by resolution or other action
of the Board of Commissioners of the County.
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Section 9.2. Modification with Consent of Bondholders. With the
consent of the holders of not less than sixty-six and two-thirds percent (66
2/3%) in aggregate principal amount of the Bonds at the time Outstanding,
evidenced as provided in Section XI.11.6, and the Credit Provider, if any, (i)
the County and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture; or (ii) the Trustee may
consent to any Amendment to any Document and any other matters for which its
consent is required pursuant to Section VI.6.4 hereof; provided, however, that
no such supplement or Amendment will have the effect of extending the time for
payment or reducing any amount due and payable by the Borrower pursuant to the
Agreement without the consent of all the holders of the Bonds; and that no such
supplemental indenture shall (1) extend the fixed maturity of any Bond or
reduce the rate of interest thereon or extend the time of payment of interest,
or reduce the amount of the principal thereof, or reduce any premium payable on
the redemption thereof, without the consent of the holder of each Bond so
affected, or (2) reduce the aforesaid percentage of holders of Bonds whose
consent is required for the execution of such supplemental indentures, or
permit the creation of any lien on the Revenues prior to or on a parity with
the lien of this Indenture, except as permitted herein, or permit the creation
of any preference of any Bondholder over any other Bondholder, except as
permitted herein, or deprive the holders of the Bonds of the lien created by
this Indenture upon the Revenues, without the consent of the holders of all the
Bonds then Outstanding. Nothing in this paragraph shall be construed as making
necessary the approval of any Bondholder of any supplemental indenture or
Amendment permitted by the provisions of Section IX.9.1.
Upon receipt by the Trustee of a Certified Resolution authorizing the
execution of any such supplemental indenture or Amendment, and upon the filing
with the Trustee of evidence of the consent of the Bondholders and the Credit
Provider, if any, as aforesaid, the Trustee shall join with the County in the
execution of such supplemental indenture or shall consent to such Amendment;
provided, however, that (i) the Trustee shall not be obligated to enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee may
in its sole discretion, but shall not be obligated to, enter into such
supplemental indenture; and (ii) the Trustee shall not enter into such
supplemental indenture or Amendment without first obtaining the Borrower's
written consent thereto.
It shall not be necessary for the consent of the Bondholders under
this Section to approve the particular form of any proposed supplemental
indenture or Amendment, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the parties thereto of any
supplemental indenture or Amendment as provided in this Section, the Trustee
shall mail a notice (prepared by the Borrower) setting forth in general terms
the substance of such supplemental indenture or such Amendment to the Credit
Provider, if any, to each Bondholder at the address contained in the bond
register maintained by the Registrar and to the applicable Rating Agencies.
Any failure of the Trustee to give such notice, or any defect therein, shall
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not, however, in any way impair or affect the validity of any such supplemental
indenture or such Amendment.
Section 9.3. Effect of Supplemental Indenture or Amendment. Upon
the execution of any supplemental indenture or any Amendment to the Agreement
pursuant to the provisions of this Article IX, this Indenture or the Agreement,
as the case may be, shall be and be deemed to be modified and amended in
accordance therewith, and the respective rights, duties and obligations under
this Indenture and the Agreement of the County, the Trustee, the Borrower and
all holders of Outstanding Bonds shall thereafter be determined, exercised and
enforced hereunder and under the Agreement subject in all respects to such
supplemental indentures and Amendments, and all the terms and conditions of any
such supplemental indenture or Amendment shall be part of the terms and
conditions of this Indenture or the Agreement, as the case may be, for any and
all purposes.
Section 9.4. Required and Permitted Opinions of Counsel. Subject
to the provisions of Section VIII.8.1 hereof, the Trustee is entitled to
receive an Opinion of Counsel and rely on such Opinion of Counsel as conclusive
evidence that any supplemental indenture or Amendment executed pursuant to the
provisions of this Article IX complies with the requirements of this Article
IX, that the appropriate consents have been obtained and that such supplemental
indenture or Amendment has been duly authorized by the County.
Section 9.5. Notation of Modification on Bonds; Preparation of New
Bonds. Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article IX may bear a
notation, at the written request of the County, as to any matter provided for
in such supplemental indenture, and if such supplemental indenture shall so
provide, new Bonds, so modified as to conform, in the opinion of the Trustee
and the County, to any modification of this Indenture contained in any such
supplemental indenture, may be prepared by the County, authenticated by the
Registrar and delivered without cost to the holders of the Bonds then
Outstanding, upon surrender for cancellation of such Bonds in equal aggregate
principal amounts.
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ARTICLE X
DEFEASANCE
Section 10.1. Discharge of Indenture. If the entire indebtedness
on all Bonds Outstanding shall be paid and discharged in any one or more of the
following ways:
(a) by the payment of the principal of, and premium, if
any, and interest on all Bonds Outstanding, as and when the same
become due and payable; or
(b) by the delivery to the Registrar, for cancellation by
it, of all Bonds Outstanding;
and if all other sums payable hereunder by the County shall be paid and
discharged, then thereupon this Indenture shall cease, terminate and become
null and void except only as provided in Section X.10.2 hereof, and thereupon
the Trustee shall, upon Written Request of the County, and upon receipt by the
Trustee of a Certificate of the County and an Opinion of Counsel, each stating
that in the opinion of the signers all conditions precedent to the satisfaction
and discharge of this Indenture have been complied with, forthwith execute
proper instruments acknowledging satisfaction of and discharging this
Indenture. The Trustee shall mail written notice of such payment and discharge
to the applicable Rating Agencies and to the Credit Provider, if any. The
satisfaction and discharge of this Indenture shall be without prejudice to the
rights of the Trustee to charge and be reimbursed by the Borrower for any
expenditures which it may thereafter incur in connection herewith.
Any Bond or Authorized Denomination thereof shall be deemed to be paid
within the meaning of this Indenture when (a) payment of the principal of and
premium, if any, on such Bond or Authorized Denomination thereof, plus interest
thereon to the due date thereof (whether such due date is by reason of maturity
or upon redemption as provided herein) either (i) shall have been made or
caused to be made in accordance with the terms thereof, or (ii) shall have been
provided for by irrevocably depositing with the Trustee in trust and
irrevocably setting aside exclusively for such payment (1) moneys sufficient to
make such payment and/or (2) nonprepayable, noncallable Government Obligations
maturing as to principal and interest in such amount and at such time as will
insure the availability of sufficient moneys to make such payment, and (b) all
necessary and proper fees, compensation and expenses of the Trustee pertaining
to any such deposit shall have been paid or the payment thereof provided for to
the satisfaction of the Trustee; provided that no Bond shall be deemed to be
paid within the meaning of this Indenture unless arrangements satisfactory to
the Trustee shall have been made to assure that Bonds tendered for purchase in
accordance with Sections IV.4.6 or IV.4.7 hereof can be paid and redeemed from
such moneys and/or Government Obligations and the Trustee shall have received
written confirmation from each Rating Agency then rating the Bonds, if any,
that such Rating Agency's then current rating on the Bonds will not be lowered
or withdrawn as a result of such provision. At such time as a Bond or
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Authorized Denomination thereof shall be deemed to be paid hereunder, as
aforesaid, such Bond or Authorized Denomination thereof shall no longer be
secured by or entitled to the benefits of this Indenture, except for the
purposes of any such payment from such moneys and/or Government Obligations.
The Trustee shall not be responsible for verifying the sufficiency of funds
provided to effect the defeasance of Bonds pursuant to this Article X.
While a Credit Facility is in effect with respect to the Bonds, moneys
for the payment of Bonds or the purchase of Government Obligations as set forth
above shall be derived exclusively from drawings under the Credit Facility.
The County, the Borrower and any Credit Provider may at any time
surrender to the Registrar for cancellation by it any Bonds previously
authenticated and delivered which the County or the Borrower or such Credit
Provider lawfully may have acquired in any manner whatsoever, and such Bonds,
upon such surrender and cancellation, shall be deemed to be paid and retired.
Section 10.2. Discharge of Liability on Bonds. Upon the deposit
with the Trustee, in trust, at or before maturity, of money or securities in
the necessary amount (as provided in Section X.10.4) to pay or redeem
Outstanding Bonds, whether upon or prior to their maturity or the redemption
date of such Bonds, (provided that, if such Bonds are to be redeemed prior to
the maturity thereof, notice of such redemption shall have been given as in
Article IV provided or provision satisfactory to the Trustee shall have been
made for giving such notice), all liability of the County and the Borrower in
respect of such Bonds shall cease, terminate and be completely discharged,
except that the County and the Borrower shall remain liable for such payment
but only from, and the Bondholders shall thereafter be entitled only to payment
(without interest accrued thereon after such redemption date or maturity date)
out of, the money deposited with the Trustee as aforesaid for their payment,
subject, however, to the provisions of Sections VI.6.6 and X.10.3; provided
that no Bond shall be deemed to be paid within the meaning of this Indenture
unless arrangements satisfactory to the Trustee shall have been made to assure
that such Bond, if tendered for purchase in accordance with Sections IV.4.6 or
IV.4.7 hereof, could be paid and redeemed from such moneys and/or Government
Obligations.
Section 10.3. Payment of Bonds after Discharge of Indenture.
Notwithstanding any provisions of this Indenture, and subject to applicable
laws of the State, any moneys deposited with the Trustee or any Paying Agent,
in trust for the payment of the principal of, or interest or premium on, any
Bonds remaining unclaimed for [two (2) years] after the principal of any or all
of the Outstanding Bonds has become due and payable (whether at maturity or
upon call for redemption or by declaration as provided in this Indenture),
shall then be repaid to the Borrower upon its written request, and the holders
of such Bonds shall thereafter be entitled to look only to the Borrower for
payment thereof, and all liability of the Trustee or any Paying Agent with
respect to such moneys shall thereupon cease; provided, however, that before
the repayment of such moneys to the Borrower as aforesaid, the Trustee or
Paying Agent, as the case may be, shall (at the
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request and cost of the Borrower) first publish at least once in a Qualified
Newspaper a notice, in such form as may be deemed appropriate by the Borrower
and the Trustee, in respect of the Bonds so payable and not presented and in
respect of the provisions relating to the repayment to the Borrower of the
moneys held for the payment thereof. In the event of the repayment of any such
moneys to the Borrower as aforesaid, the holders of the Bonds in respect of
which such moneys were deposited shall thereafter be deemed to be unsecured
creditors of the Borrower for amounts equivalent to the respective amounts
deposited for the payment of such Bonds and so repaid to the Borrower (without
interest thereon).
Section 10.4. Deposit of Money or Securities with Trustee.
Whenever in this Indenture it is provided or permitted that there be deposited
with or held in trust by the Trustee money or securities in the necessary
amount to pay or redeem any Bonds, the money or securities so to be deposited
or held may include money or securities held by the Trustee in the funds and
accounts established pursuant to this Indenture and shall be:
(a) Available Amounts constituting lawful money of the
United States of America in an amount equal to the principal amount of
such Bonds and all unpaid interest thereon to maturity, except that,
in the case of Bonds which are to be redeemed prior to maturity and in
respect of which notice of such redemption shall have been given as
provided in Article IV or provision satisfactory to the Trustee shall
have been made for the giving of such notice, the amount to be
deposited or held shall be the principal amount or redemption price of
such Bonds and all unpaid interest thereon to the redemption date; or
(b) nonprepayable, noncallable Government Obligations
purchased with Available Amounts, the principal of and the interest on
which when due will provide money sufficient to pay the principal or
redemption price of and all unpaid interest to maturity, or to the
redemption date, as the case may be, on the Bonds to be paid or
redeemed, as such principal or redemption price and interest become
due, provided that, in the case of Bonds which are to be redeemed
prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article IV or provision satisfactory to the
Trustee shall have been made for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably
instructed (by the terms of this Indenture or by Written Request of
the County) to apply such money to the payment of such principal or
redemption price and interest with respect to such Bonds.
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ARTICLE XI
MISCELLANEOUS
Section 11.1. Successors of County. All the covenants,
stipulations, promises and agreements in this Indenture contained, by or on
behalf of the County, shall bind and inure to the benefit of its successors and
assigns, whether so expressed or not. If any of the powers or duties of the
County shall hereafter be transferred by any law of the State, and if such
transfer shall relate to any matter or thing permitted or required to be done
under this Indenture by the County, then the body or official of the State who
shall succeed to such powers or duties shall act and be obligated in the place
and stead of the County as provided in this Indenture.
Section 11.2. Limitation of Rights to Parties and Bondholders.
Nothing in this Indenture or in the Bonds expressed or implied is intended or
shall be construed to give to any person other than the County, the Trustee,
the Registrar, the Paying Agent, the Tender Agent, the Borrower, the Credit
Provider, if any, and the holders of the Bonds issued hereunder any legal or
equitable right, remedy or claim under or in respect of this Indenture or any
covenant, condition or provision therein or herein contained; and all such
covenants, conditions and provisions are and shall be held to be for the sole
and exclusive benefit of the County, the Trustee, the Registrar, the Paying
Agent, the Tender Agent, the Borrower, the Credit Provider, if any, and the
holders of the Bonds issued hereunder.
To the extent that any provision of this Indenture expressly confers
rights upon the Credit Provider (including, without limitation, rights to
provide consents or directions or to give or receive notices) the parties
hereto agree and acknowledge that the Credit Provider is a third party
beneficiary of such provision and that the Credit Provider may enforce such
provision against the other parties hereto.
Section 11.3. Waiver of Notice. Whenever in this Indenture the
giving of Notice by Mail or otherwise is required, the giving of such notice
may be waived in writing by the person entitled to receive such notice and in
any such case the giving or receipt of such notice shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Section 11.4. Separability of Invalid Provisions. In case any one
or more of the provisions contained in this Indenture or in the Bonds shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
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Section 11.5. Notices. It shall be sufficient service of any
notice, request, complaint, demand or other paper on the County, the Trustee,
the Borrower, the Registrar, the Paying Agent, the Tender Agent, the Credit
Provider, if any, or the Remarketing Agent if the same shall be duly mailed by
first class mail, postage prepaid, addressed as follows:
To the County: Tooele County, Utah
47 South Main
Tooele, UT 84074
Attention: Chair
To the Trustee, U.S. Bank, a national banking association
Registrar and 107 South Main Street, Suite 303
the Paying Agent: Salt Lake City, UT 84111
Attention: Corporate Trust Department
To the Borrower: Laidlaw Environmental Services, Inc.
1301 Gervais Street, Suite 300
Columbia, SC 29201
Attention: Chief Financial Officer
To the The address specified in the
Credit Provider: applicable Credit Agreement.
To the The address specified in the
Remarketing Remarketing Agreement.
Agent:
The County, the Trustee, the Borrower, the Registrar, the Paying Agent, the
Tender Agent, the Credit Provider and the Remarketing Agent may, by notice
given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent. A
duplicate copy of each notice, certificate or other communication given
hereunder by the County or the Trustee to the other shall also be given to the
Borrower. Unless otherwise requested by the County, the Trustee, the Borrower,
the Registrar, the Paying Agent, the Tender Agent, the Credit Provider or the
Remarketing Agent, any notice required to be given hereunder in writing may be
given by any form of telephonic or electronic transmission capable of making a
written record. Each such party shall file with the Trustee information
appropriate to receiving such form of telephonic or electronic transmission.
Any notice required to be given hereunder to any Rating Agency then
maintaining a rating on the Bonds, as well as a duplicate copy of each notice
given hereunder by the Trustee to the holders of the Bonds, shall be given by
the Trustee via first class mail to the following Rating Agency at the
following address (or at such different address as may be specified in writing
to the Trustee by the Rating Agency): Standard & Poor's Ratings
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Group, 25 Broadway, New York, New York 10004, Attention: Financial
Institutions/LOC.
Section 11.6. Evidence of Rights of Bondholders.
(a) Any request, consent or other instrument required by
this Indenture to be signed and executed by Bondholders may be in any
number of concurrent writings of substantially similar tenor and may
be signed or executed by such Bondholders in person or by agent or
agents duly appointed in writing. Proof of the execution of any such
request, consent or other instrument or of a writing appointing any
such agent, shall be sufficient for any purpose of this Indenture and
shall be conclusive in favor of the Trustee, the Registrar and the
County if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of
any such request, consent or other instrument or writing may be proved
by the affidavit of a witness of such execution or by the certificate
of any notary public or other officer of any jurisdiction, authorized
by the laws thereof to take acknowledgments of deeds, certifying that
the person signing such request, consent or other instrument or
writing acknowledged to him or her the execution thereof.
(c) The ownership of registered Bonds shall be proved by
the Bond register maintained by the Registrar pursuant to Section
II.2.4 hereof. The fact and the date of execution of any request,
consent or other instrument may also be proved in any other manner
which the Trustee may deem sufficient. The Trustee may nevertheless,
in its discretion, require further proof in cases where it may deem
further proof desirable.
(d) Any request, consent or vote of the holder of any
Bond shall bind every future holder of the same Bond and the holder of
any Bond issued in exchange therefor or in lieu thereof, in respect of
anything done or suffered to be done by the Trustee or the County in
pursuance of such request, consent or vote.
(e) Except as otherwise provided herein, in determining
whether the holders of the requisite aggregate principal amount of
Bonds have concurred in any demand, request, direction, consent or
waiver under this Indenture, Bonds which are owned by the County, by
the Borrower or by any other direct or indirect obligor on the Bonds,
or by any person directly or indirectly controlling or controlled by,
or under direct or indirect common control with, the County, the
Borrower, or any other direct or indirect obligor on the Bonds, shall
be disregarded and deemed not to be Outstanding for the purpose of any
such determination, provided that, for the purpose of determining
whether the Trustee shall be protected in relying on any such demand,
request, direction, consent or waiver, only Bonds which the Trustee
knows to be so owned shall be disregarded. Bonds so owned which have
been pledged in good faith may be
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regarded as Outstanding for the purposes of this subsection
XI.11.6.(e) if the pledgee shall certify to the Trustee the pledgee's
right to vote such Bonds and that the pledgee is not a person directly
or indirectly controlling or controlled by, or under direct or
indirect common control with, the County, the Borrower or any other
direct or indirect obligor on the Bonds. In case of a dispute as to
such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
(f) In lieu of obtaining any demand, request, direction,
consent or waiver in writing, the Trustee may call and hold a meeting
of the Bondholders upon such notice and in accordance with such rules
and regulations, including the right of the Bondholders to be
represented and vote by proxy, as the Trustee considers fair and
reasonable for the purpose of obtaining any such action.
Section 11.7. Waiver of Personal Liability. No member, officer,
agent or employee of the County, and no officer, official, agent or employee of
the State or any department, board or agency of the State shall be individually
or personally liable for the payment of the principal of or premium or interest
on the Bonds or be subject to any personal liability or accountability by
reason of the issuance of the Bonds; but nothing herein contained shall relieve
any such member, officer, agent or employee from the performance of any
official duty provided by law or by this Indenture.
Section 11.8. Publication of Notices. Any publication of notice to
be made under the provisions of this Indenture may be made in each instance
upon any day, and, except as provided in Section X.10.3, no such publication
shall be required if such notice is given by first class mail to the holders of
all Bonds then Outstanding.
Section 11.9. Governing Law; Venue. This Indenture shall be
construed in accordance with and governed by the Constitution and laws of the
State applicable to contracts made and performed in the State. This Indenture
shall be enforceable in the State, and any action arising out of this Indenture
shall be filed and maintained in the County, unless the County waives this
requirement.
Section 11.10. Execution in Several Counterparts. This Indenture
may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original; and all such counterparts,
or as many of them as the County and the Trustee shall preserve undestroyed,
shall together constitute but one and the same instrument.
Section 11.11. Credit Provider. All provisions hereof regarding
consents, approvals, directions, appointments or requests by the Credit
Provider shall be deemed not to require or permit such consents, approvals,
directions, appointments or requests by the Credit Provider during any time in
which such Credit Provider has failed to honor a draft presented to it in
strict conformance with the applicable provisions of the Credit Facility, or
after the Credit Facility shall at any time for any reason cease to be valid
and binding on the Credit Provider, or while such Credit Provider is denying
further liability
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or obligation under the Credit Facility (unless such Credit Facility has been
fully drawn or to the extent that the conditions to payment thereunder have not
been fully satisfied) or after such Credit Provider has rescinded, repudiated
or terminated the Credit Facility; provided, however, that nothing contained in
this Section XI.11.11 shall limit the rights of the Credit Provider as a holder
of Credit Provider Bonds.
All provisions herein relating to the Credit Provider shall be of no
force and effect with respect to a particular Credit Provider if the applicable
Credit Facility and Credit Agreement are not in effect, there are no related
Credit Provider Bonds and all amounts owing to such Credit Provider under the
applicable Credit Agreement have been paid.
At any time during which the Borrower has provided its first mortgage
bonds or guaranties, standby purchase agreements or other support arrangements
or evidences of indebtedness of the Borrower as the Credit Facility with
respect to the Bonds, all provisions hereof regarding consents, approvals,
directions, appointments or requests by the Credit Provider shall be deemed not
to require or permit such consents, approvals, directions, appointments or
requests by the Borrower solely by virtue of its role as provider of such
Credit Facility.
Section 11.12. Continuing Disclosure. Pursuant to Section 5.9 of
the Agreement, the Borrower shall, during any Term Rate Period, undertake the
continuing disclosure requirements for the Bonds as promulgated under Rule
15c2-12, as it may from time to time hereafter be amended or supplemented, and
the County shall have no liability to the holders of the Bonds or any other
person with respect to such disclosure matters. Notwithstanding any other
provision of this Indenture, failure of the Borrower to comply with the
requirements of Rule 15c2-12 applicable to the Bonds, as it may from time to
time hereafter be amended or supplemented, shall not be considered an Event of
Default hereunder or under the Agreement; however, the Trustee may (and, at the
request of the Remarketing Agent or the holders of at least 25% aggregate
principal amount of Outstanding Bonds and upon receipt of indemnity
satisfactory to the Trustee, shall) or any Bondholder or beneficial owner
(within the meaning of Rule 15c2-12) of any Bonds may take such actions as may
be necessary and appropriate, including seeking mandate or specific performance
by court order, to cause the Borrower to comply with its obligations under
Section 5.9 of the Agreement.
Section 11.13. Opinions of Bond Counsel. For so long as Ballard
Spahr Andrews & Ingersoll (or its successor) is a nationally recognized Bond
Counsel, whenever in this Indenture it is required that prior to the taking of
any action (including but not limited to any modifications of arbitrage
covenants contained in Section VI.6.6 hereof) an opinion of Bond Counsel is
required to be delivered to the effect that such action will not adversely
affect the Tax-Exempt status of the Bonds, and such opinion is not given by
Ballard Spahr Andrews & Ingersoll, the opinion of Bond Counsel shall instead
affirmatively state, in a manner acceptable to the County and the Trustee, that
interest on the Bonds is Tax-Exempt and will remain so after the action in
question. This Section shall apply in the same fashion with respect to the
affirmative opinion of any such successor Bond Counsel.
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<PAGE> 91
IN WITNESS WHEREOF, the County has caused this Indenture to be signed
in its name and attested by its duly authorized officers, and the Trustee, in
token of its acceptance of the trust created hereunder, has caused this
Indenture to be signed in its name by its duly authorized signatory, all as of
the day and year first above written.
TOOELE COUNTY, UTAH
By /s/
--------------------------------
Chair
Attest:
/s/
- -----------------------------
County Clerk
U.S. BANK, a national banking
[SEAL] association, as Trustee
By /s/
----------------------------------
Authorized Officer
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<PAGE> 92
EXHIBIT "A"
[FORM OF BOND]
[See Transcript Document No. 17]
A-1
<PAGE> 1
- --------------------------------------------------------------------------------
INDENTURE OF TRUST
Between
CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
And
U.S. BANK, A National Banking Association,
as Trustee
Dated as of July 1, 1997
Relating to
$19,500,000
California Pollution Control Financing Authority
Pollution Control Refunding Revenue Bonds
(Laidlaw Environmental Services, Inc.)
1997 Series A
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
Parties..................................................................... 1
Preambles................................................................... 1
ARTICLE I
DEFINITIONS
1.01. Definitions........................................................ 3
1.02. Number and Gender.................................................. 12
1.03. Articles, Sections, Etc............................................ 12
1.04. Content of Certificates and Opinions............................... 12
ARTICLE II
THE BONDS
2.01. Authorization and Terms of Bonds................................... 13
(a) Authorization..................................... 13
(b) General Terms..................................... 13
(c) Interest Rate..................................... 14
(d) Form of Bonds..................................... 14
(e) Book-Entry System................................. 15
2.02. Execution of Bonds................................................. 16
2.03. Transfer and Exchange of Bonds..................................... 17
2.04. Bond Register...................................................... 17
2.05. Reserved........................................................... 18
2.06. Bonds Mutilated, Lost, Destroyed or Stolen......................... 18
2.07. Disposition of Cancelled Bonds..................................... 18
2.08. CUSIP Numbers...................................................... 19
ARTICLE III
ISSUANCE OF BONDS
3.01. Authentication and Delivery of Bonds............................... 19
3.02. Application of Proceeds of Bonds................................... 19
ARTICLE IV
REDEMPTION OF BONDS
4.01. Redemption of Bonds................................................ 19
4.02. Selection of Bonds for Redemption.................................. 22
4.03. Notice of Redemption............................................... 22
4.04. Partial Redemption of Bonds........................................ 23
4.05. Effect of Redemption............................................... 23
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
- ------- ----
ARTICLE V
REVENUES
<S> <C>
5.01. Pledge of Revenues................................................. 24
5.02. Bond Fund.......................................................... 24
5.03. Trustee Authorized to Take Actions Under the Agreement............. 25
5.04. Investment of Moneys............................................... 25
5.05. Assignment to Trustee; Enforcement of Obligations.................. 26
5.06. Repayment to Borrower.............................................. 27
ARTICLE VI
COVENANTS OF THE AUTHORITY
6.01. Payment of Principal and Interest.................................. 27
6.02. Extension or Funding of Claims for Interest........................ 27
6.03. Paying Agents...................................................... 27
6.04. Preservation of Revenues........................................... 28
6.05. Compliance with Indenture.......................................... 28
6.06. Arbitrage Covenants; Rebate Fund................................... 28
6.07. Other Liens........................................................ 29
6.08. Further Assurances................................................. 29
ARTICLE VII
DEFAULT
7.01. Events of Default; Acceleration; Waiver of Default................. 30
7.02. Institution of Legal Proceedings by Trustee........................ 31
7.03. Application of Moneys Collected by Trustee......................... 32
7.04. Effect of Delay or Omission to Pursue Remedy....................... 33
7.05. Remedies Cumulative................................................ 33
7.06. Covenant to Pay Bonds in Event of Default.......................... 33
7.07. Trustee Appointed Agent for Bondholders............................ 34
7.08. Power of Trustee to Control Proceedings............................ 34
7.09. Limitation on Bondholders' Right to Sue............................ 34
7.10. Limitation of Liability to Revenues................................ 35
ARTICLE VIII
THE TRUSTEE AND THE REGISTRAR
8.01. Duties, Immunities and Liabilities of Trustee and
Registrar.......................................................... 36
8.02. Right of Trustee and Registrar to Rely upon the
Agreement, Etc..................................................... 37
8.03. Trustee and Registrar Not Responsible for Recitals................. 38
8.04. Right of Trustee and Registrar to Acquire Bonds.................... 38
8.05. Moneys Received by Trustee and Registrar to Be Held in
Trust.............................................................. 38
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
8.06. Compensation and Indemnification of Trustee and
Registrar.......................................................... 38
8.07. Qualifications of Trustee and Registrar............................ 40
8.08. Resignation and Removal of Trustee or Registrar and
Appointment of Successor Trustee or Registrar...................... 40
8.09. Acceptance of Trust by Successor Trustee........................... 41
8.10. Merger or Consolidation of Trustee or Registrar.................... 42
8.11. Accounting Records and Reports; Financing Statements............... 42
8.12. Registrar.......................................................... 43
8.13. Tax Certificate.................................................... 43
8.14. Notices to the Authority........................................... 43
8.15. Appointment of Co-Trustee.......................................... 44
ARTICLE IX
MODIFICATION OF INDENTURE, AGREEMENT
9.01. Modification without Consent of Bondholders........................ 45
9.02. Modification with Consent of Bondholders........................... 46
9.03. Effect of Supplemental Indenture or Amendment...................... 48
9.04. Required and Permitted Opinions of Counsel......................... 48
9.05. Notation of Modification on Bonds; Preparation of New
Bonds.............................................................. 48
ARTICLE X
DEFEASANCE
10.01. Discharge of Indenture............................................ 49
10.02. Discharge of Liability on Bonds................................... 50
10.03. Payment of Bonds after Discharge of Indenture..................... 50
10.04. Deposit of Money or Securities with Trustee....................... 50
ARTICLE XI
MISCELLANEOUS
11.01. Successors of Authority........................................... 51
11.02. Limitation of Rights to Parties and Bondholders................... 52
11.03. Waiver of Notice.................................................. 52
11.04. Separability of Invalid Provisions................................ 52
11.05. Notices........................................................... 52
11.06. Evidence of Rights of Bondholders................................. 53
11.07. Waiver of Personal Liability...................................... 54
11.08. Publication of Notices............................................ 54
11.09. Governing Law; Venue.............................................. 54
11.10. Execution in Several Counterparts................................. 55
11.11. Reserved.......................................................... 55
11.12. Continuing Disclosure............................................. 55
11.13. Opinions of Bond Counsel.......................................... 55
EXHIBIT A FORM OF BOND......................................................A-1
EXHIBIT B TRUSTEE CERTIFICATE...............................................B-1
</TABLE>
iii
<PAGE> 5
THIS INDENTURE OF TRUST, made and entered into as of July 1, 1997, by
and between the CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY, a public
instrumentality and political subdivision of the State of California (herein
called the "Authority"), and UNITED STATES NATIONAL BANK OF OREGON, doing
business as U.S. BANK, a national banking association organized under the laws
of the United States with corporate trust offices in Salt Lake City, Utah, being
qualified to accept and administer the trusts hereby created (herein called the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Authority is a public instrumentality and political
subdivision of the State of California organized and existing under the
California Pollution Control Financing Authority Act, being Division 27
(commencing at section 44500) of the California Health and Safety Code, as
supplemented and amended (the "Act"); and
WHEREAS, the Act authorizes the Authority to issue its revenue bonds
for the purposes of paying all or any part of the costs of a "project" as
defined in the Act and refunding its outstanding bonds; and
WHEREAS, in 1992, Laidlaw Inc., a Canadian corporation (the
"Guarantor") and owner of 100% of the common stock of Laidlaw Transportation,
Inc., a Delaware corporation (herein called the "Prior Borrower"), duly caused
an application to be filed with the Authority for financial assistance to
acquire and construct certain hazardous waste treatment and stabilization
facilities indirectly owned by Guarantor in Kern County, California and Imperial
County, California; and
WHEREAS, in 1992, the Authority issued its Pollution Control Revenue
Bonds (Laidlaw Inc.) 1992 Series A (the "Prior Bonds") to provide funds to
finance the acquisition and construction by the Prior Borrower of such hazardous
waste facilities located in Imperial County, California and Kern County,
California (the "1992 Project"), which qualify as a "project" under the Act; and
WHEREAS, the Guarantor has sold the 1992 Project to Rollins
Environmental Services, Inc., a Delaware Corporation, which after a merger with
a subsidiary of the Guarantor is now called Laidlaw Environmental Services, Inc.
(the "Borrower"); and
WHEREAS, following the merger, the Borrower will through its
subsidiaries own certain assets of the Prior Borrower, including the 1992
Project (which hereafter is called the "Project"); and
1
<PAGE> 6
WHEREAS, prior to completion of such sale by the Guarantor, the
Guarantor arranged for the redemption of the Prior Bonds on May 1, 1997, through
the use of an interim loan made by The Toronto-Dominion Bank for that purpose
(the "Interim Loan"); and
WHEREAS, prior to such redemption on May 1, 1997, this Authority
adopted a resolution expressing its intent to issue refunding bonds in the
future to refinance the Prior Bonds by refunding the Interim Loan; and
WHEREAS, the sale and merger described above having been completed, the
Borrower has requested that the Authority issue refunding bonds to indirectly
refund the Prior Bonds, and the Authority, after due investigation and
deliberation, has adopted a resolution approving said request; and
WHEREAS, the Authority proposes to issue its California Pollution
Control Financing Authority Pollution Control Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A, in the aggregate principal amount
of $19,500,000 (the "Bonds") and to loan the proceeds thereof to the Borrower
pursuant to a loan agreement, dated as of July 1, 1997 (the "Agreement"), by and
between the Authority and the Borrower, for the purposes of refinancing the loan
with respect to the Prior Bonds;
WHEREAS, the issuance and sale of the Bonds and the loan of the
proceeds thereof to the Borrower to indirectly refund the Prior Bonds and
thereby refinance the costs of the 1992 Project will serve the purposes of the
Authority and the Act and in all respects conform to the provisions and
requirements of the Act; and
WHEREAS, in order to provide for the authentication and delivery of the
Bonds, to establish and declare the terms and conditions upon which the Bonds
are to be issued and secured and to secure the payment of the principal thereof
and of the interest thereon, the Authority has authorized the execution and
delivery of this Indenture; and
WHEREAS, all Bonds issued under this Indenture will be secured by a
pledge and assignment of the Authority's rights under the aforesaid Agreement
and other security instruments; and
WHEREAS, all acts and proceedings required by law necessary to make the
Bonds when executed by the Authority, authenticated and delivered by the
Registrar and duly issued, the valid, binding and legal limited obligations of
the Authority, and to constitute this Indenture a valid and binding agreement
for the uses and purposes herein set forth, in accordance with its terms, have
been done and taken; and the execution and delivery of this Indenture have been
in all respects duly authorized; and
2
<PAGE> 7
WHEREAS, in order to provide for the authentication and delivery of the
Bonds, to establish and declare the terms and conditions upon which the Bonds
are to be issued and secured and to secure the payment of the principal thereof
and of the interest thereon, the Authority has authorized the execution and
delivery of this Indenture;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the
payment of the principal of, and the interest on, all Bonds issued and
Outstanding under this Indenture, according to their tenor, and to secure the
performance and observance of all the covenants and conditions therein and
herein set forth, and to declare the terms and conditions upon and subject to
which the Bonds are to be issued and received, and for and in consideration of
the premises and of the mutual covenants herein contained and of the purchase
and acceptance of the Bonds by the holders thereof, and for other valuable
consideration, the receipt thereof is hereby acknowledged, the Authority
covenants and agrees with the Trustee, for the equal and proportionate benefit
of the respective holders from time to time of the Bonds, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. Unless the context otherwise requires, the
terms defined in this Section 1.01 shall, for all purposes of this Indenture and
of the Agreement and of any indenture supplemental hereto or agreement
supplemental thereto, have the meanings herein specified, as follows:
"Act" means the California Pollution Control Financing Authority Act,
constituting Division 27 of the California Health and Safety Code, as amended
and supplemented to the date hereof.
"Act of Bankruptcy" means any of the following with respect to any
person: (a) the commencement by such person of a voluntary case under the
federal bankruptcy laws, as now in effect or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or similar laws, or (b)
failure by such person to timely controvert the filing of a petition with a
court having jurisdiction over such person to commence an involuntary case
against such person under the federal bankruptcy laws, as now in effect or
hereafter amended, or any other applicable federal or state bankruptcy,
insolvency or similar laws, or (c) such person shall admit in writing its
inability to pay its debts generally as they become due, or (d) a receiver,
trustee, custodian or liquidator of such person or such person's assets shall be
appointed in any proceeding brought against the person or such person's assets,
or (e) assignment by such person for the benefit of its creditors, or (f) the
entry by such person into an agreement of composition with its creditors.
3
<PAGE> 8
"Agreement" means the Loan Agreement, of even date herewith, between
the Authority and the Borrower and relating to the loan of the proceeds of the
Bonds, as originally executed or as it may from time to time be supplemented or
amended.
"Amendment" means any amendment or modification of any Document.
"Authority" means the California Pollution Control Financing Authority,
and any successor to its functions.
"Authorized Authority Representative" means the Executive Director of
the Authority, the Deputy Executive Director of the Authority, or any person who
at the time and from time to time may be designated by the Executive Director of
the Authority or the Deputy Executive Director of the Authority by written
certificate furnished to the Trustee and the Borrower, as a person authorized to
act on behalf of the Authority.
"Authorized Borrower Representative" means any person who at the time
and from time to time may be designated, by written certificate furnished to the
Authority and the Trustee, as a person authorized to act on behalf of the
Borrower. Such certificate shall contain the specimen signature of such person,
shall be signed on behalf of the Borrower by any officer of the Borrower and may
designate an alternate or alternates.
"Authorized Denomination" means $1,000,000 or any multiple of $5,000
above that amount, until such time (if any) as a Rating Agency assigns a Single
A Rating to the Bonds, in which case "Authorized Denominations" means $100,000
or any multiple of $5,000 in excess of that amount.
"Bankruptcy Code" means Title 11 of the United States Code, as amended.
"Beneficial Owner" means, with respect any Book-Entry Bond, the
beneficial owner of such Bond as determined in accordance with the applicable
rules of DTC.
"Bond Counsel" means any attorney at law or firm of attorneys, of
nationally recognized standing in matters pertaining to the validity of, and
exclusion from gross income for federal tax purposes of interest on, bonds
issued by states and political subdivisions, acceptable to the Trustee and duly
admitted to practice law before the highest court of any state of the United
States, but shall not include counsel for the Borrower.
"Bond Fund" means the fund by that name established pursuant to Section
5.02 hereof.
"Bond Placement Agreement" means the Bond Placement Agreement, dated
July 2, 1997, among the Authority, the Treasurer
4
<PAGE> 9
of the State, the Borrower and the Placement Agent for the Bonds named therein,
relating to the purchase from the Authority and the placement of the Bonds with
the purchasers thereof.
"Bond Proceeds Fund" means the fund by that name established pursuant
to Section 3.02 hereof.
"Bonds" means the bonds designated as provided in Section 2.01(a)
hereof, authorized and issued hereunder in an aggregate principal amount not to
exceed $19,500,000.
"Book-Entry Bonds" means any Bonds which are then held in book-entry
form as provided in Section 2.01(e) hereof.
"Borrower" means (i) Laidlaw Environmental Services, Inc., a Delaware
corporation and its successors and assigns, and (ii) any surviving, resulting or
transferee corporation as provided in Section 5.2 of the Agreement.
"Business Day" means a day on which banks located in the cities in
which the Principal Offices of the Trustee, the Registrar and the Paying Agent
are located, are not required or authorized to be closed and on which the New
York Stock Exchange is not closed.
"Certificate of the Authority" means a certificate signed by an
Authorized Authority Representative. If and to the extent required by the
provisions of Section 1.04 hereof, each Certificate of the Authority shall
include the statements provided for in Section 1.04 hereof.
"Certificate of the Borrower" means a certificate signed by an
Authorized Borrower Representative. If and to the extent required by the
provisions of Section 1.04 hereof, each Certificate of the Borrower shall
include the statements provided for in Section 1.04 hereof.
"Certified Resolution" means a copy of a resolution or ordinance of the
Authority certified by the Executive Director or Deputy Executive Director of
the Authority to have been duly adopted by the Authority and to be in full force
and effect on the date of such certification.
"Code" means the Internal Revenue Code of 1986, as amended.
"Dated Date" means July 1, 1997.
"Determination of Taxability" means a determination that, due to the
untruth or inaccuracy of any representation or warranty made by the Borrower in
the Agreement or the breach of any covenant or warranty of the Borrower
contained in the Agreement, interest on the Bonds, or any of them, is determined
not to be Tax-Exempt by a final administrative determination of the Internal
Revenue Service or a final judicial decision of a
5
<PAGE> 10
court of competent jurisdiction in a proceeding of which the Borrower received
notice and was afforded an opportunity to participate to the full extent
permitted by law. A determination or decision will not be considered final for
purposes of the preceding sentence unless (A) the Authority or the holder or
holders of the Bonds involved in the proceeding in which the issue is raised (i)
shall have given the Borrower and the Trustee prompt written notice of the
commencement thereof, and (ii) shall have offered the Borrower the opportunity
to control the proceeding; provided that the Borrower agrees to pay all expenses
in connection therewith and to indemnify such holder or holders against all
liability for such expenses (except that any such holder may engage separate
counsel, and the Borrower shall not be liable for the fees or expenses of such
counsel); and (B) such proceeding shall not be subject to a further right of
appeal or shall not have been timely appealed.
"DTC" means The Depository Trust Company and its successors and
assigns.
"DTC Participants" means those broker-dealers, banks and other
financial institutions from time to time for which DTC holds Bonds as securities
depository.
"Electronic" notice means notice through a time-sharing terminal.
"Event of Default" as used with respect to this Indenture has the
meaning specified in Section 7.01 hereof, and as used with respect to the
Agreement has the meaning specified in Section 6.1 thereof.
"Facility" means either or both, as context may require, the Kern
County Hazardous Waste Facility located in Buttonwillow, Kern County, California
and the Imperial Valley Hazardous Waste Facility located in Westmoreland,
Imperial County, California, and more fully described in Exhibit A to the
Agreement, at which sites the 1992 Project is located.
"Government Obligations" means bonds, notes, certificates of
indebtedness, treasury bills or other securities constituting direct obligations
of, or obligations the full and timely payment of which is guaranteed by, the
United States of America, or securities evidencing ownership interests in such
obligations or in specified portions thereof (which may consist of specific
portions of the principal of or interest on such obligations).
The term "holder" or "Bondholder" means the registered owner of any
Bond.
"Indenture" means this Indenture of Trust, as originally executed or as
it may from time to time be supplemented, modified or amended by any
supplemental indenture entered into pursuant to the provisions hereof.
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<PAGE> 11
"Information Services" means Financial Information, Inc.'s " Called
Bond Service," 30 Montgomery Street, 10th Floor, Jersey City, New Jersey 07302,
Attention: Editor; Kenny Information Services' "Called Bond Service," 65
Broadway, 16th Floor, New York, New York 10006; Moody's "Municipal and
Government," 99 Church Street, 8th Floor, New York, New York 10007, Attention:
Municipal News Reports; the Municipal Securities Rulemaking Board, CDI Pilot,
1640 King Street, Suite 300, Alexandria, Virginia 22314; and Standard and Poor's
"Called Bond Record," 25 Broadway, 3rd Floor, New York, New York 10004; or, in
accordance with then-current guidelines of the Securities and Exchange
Commission, such other addresses and/or such other services providing
information with respect to called bonds, or no such services, as the Borrower
may designate in a Certificate of the Borrower delivered to the Trustee.
"Interest Payment Date" means each July 1 and January 1, commencing
January 1, 1998, and the final maturity date of the Bonds.
"Interim Loan" has the meaning set forth in the recitals to this
Indenture.
"Investment Securities" means any of the following: (1) Government
Obligations; (2) obligations, debentures, notes or other evidence of
indebtedness issued or guaranteed by any of the following: Banks for
Cooperatives, Federal Intermediate Credit Banks, Federal Housing Finance Board,
Export-Import Bank of the United States, Federal Financing Bank, Federal Land
Banks, Federal Farm Credit Bank, Government National Mortgage Association,
Farmer's Home Administration, Federal Home Loan Mortgage Corporation or Federal
Housing Administration; (3) obligations of any state or local government the
interest on which is Tax-Exempt for which a nationally recognized rating service
is maintaining a rating within the top two ratings of such rating service; (4)
repurchase agreements with reputable financial institutions fully secured by
collateral security actually delivered to the Trustee described in clauses (1)
or (2) of this definition continuously having a market value at least equal to
the amount so invested; (5) bankers' acceptances issued by a bank rated Aa or
better by Moody's or rated AA or better by Standard & Poor's and eligible for
purchase by the Federal Reserve Bank (which may include the Trustee and its
affiliates); (6) interest-bearing demand or time deposits (including
certificates of deposit) in banks (including the Trustee and its affiliates) and
savings and loan associations, provided such deposits are (a) secured at all
times, in the manner and to the extent provided by law, by collateral security
(described in clauses (1) or (2) of this definition) of a market value of no
less than the amount of moneys so invested or (b) with banks (including the
Trustee and its affiliates) or savings and loan associations having a combined
capital and surplus of at least one hundred million dollars ($100,000,000) or
(c) fully insured by the Federal Deposit Insurance Corporation or the Federal
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Savings and Loan Insurance Corporation; (7) investment in or shares of any
"regulated investment company" within the meaning of Section 851(a) of the Code,
the assets of which are securities or investments described in (1) through (6)
above (except for any rating requirement); and (8) units of a money-market fund
or portfolio restricted to obligations issued by, or guaranteed by the full
faith and credit of, the United States of America.
"Issue Date" means July 9, 1997.
"Moody's" means Moody's Investors Service, a corporation organized and
existing under the laws of the State of Delaware, its successors and assigns.
"1992 Project" means those facilities, including real property,
structures, buildings, fixtures or equipment, described in Exhibit A to the
Agreement, as it may be amended from time to time, which facilities were
financed or refinanced, in whole or in part, from the proceeds of the sale of
the Prior Bonds, and any real property, structures, buildings, fixtures or
equipment acquired in substitution for, as a renewal or replacement of, or a
modification or improvement to, all or any part of the facilities described in
said Exhibit A.
"Notice by Mail" or "notice" of any action or condition "by Mail" shall
mean a written notice meeting the requirements of this Indenture mailed by first
class mail to the holders of specified Bonds, at the addresses shown on the
registration books maintained pursuant to Section 2.04 hereof.
"NRMSIR" means a nationally recognized municipal securities information
repository recognized by the Securities and Exchange Commission pursuant to Rule
15c2-12. The name and address of each NRMSIR on the date of this Indenture are
as follows: Bloomberg Municipal Repository, P.O. Box 840, Princeton, New Jersey
08542-0840, Phone: (609) 279-3200, Fax: (609) 279-5963; Thomson NRMSIR,
Secondary Market Disclosure, 395 Hudson Street, 3rd Floor, New York, New York
10014, Phone: (212) 807-5001, Fax: (212) 989-2078; JJ Kenny Information Systems,
The Repository, 65 Broadway, 16th Floor, New York, New York 10006, Phone: (212)
770-4568, Fax: (212) 707-7994; Moody's NRMSIR, Public Finance Information
Center, 99 Church Street, New York, New York 10007, Phone: (800) 339-6306, Fax:
(212) 553-1460; Disclosure Inc., Commercial Indexing, 5161 River Road, Bethesda,
Maryland 20816, Attention Document Acquisition/Municipal Securities, Phone:
(301) 951-1450, Fax: (301) 718-2329; and RR Donnelley Financial, Attention:
Municipal Securities Disclosure Archive, 559 Main Street, Hudson, Massachusetts
01749, Phone: (800) 580-3670, Fax: (508) 562-1969.
"Opinion of Counsel" means a written opinion of counsel (who may be
counsel for the Borrower) acceptable to the Trustee, the Authority and the
Borrower. If and to the extent required by
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the provisions of Section 1.04, each Opinion of Counsel shall include the
statements provided for in Section 1.04.
"Other Company Debt" means (i) any debt of the Borrower or its
subsidiaries on a parity with or superior to the Bonds, which is secured by
assets of the Borrower or any of its subsidiaries (including, but not limited
to, up to $650,000,000 in credit facilities given by a consortium of banks and
other financial institutions to the Borrower as of the Issue Date, or
replacement thereof) and (ii) the loan agreements and/or guaranties relating to
$20,000,000 aggregate principal amount of Carbon County, Utah Solid Waste
Disposal Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.) 1997
Series A and $47,500,000 aggregate principal amount of Tooele County, Utah
Pollution Control Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.)
1997 Series A.
"Outstanding," when used as of any particular time with reference to
Bonds (subject to the provisions of Section 11.06(e)), means all Bonds
theretofore authenticated and delivered by the Registrar under this Indenture
except:
(a) Bonds theretofore cancelled by the Registrar or surrendered to
the Registrar for cancellation;
(b) Bonds in lieu of or in substitution for which other Bonds
shall have been authenticated and delivered by the Registrar pursuant to the
terms of Section 2.06; and
(c) Bonds with respect to which the liability of the Authority and
the Borrower have been discharged to the extent provided in, and pursuant to the
requirements of, Section 10.02.
"Paying Agent" means any paying agent appointed as provided in Section
6.03 hereof, or any successor thereto.
The term "person" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated organization or a
government or any agency or political subdivision thereof.
"Principal Office" (i) of the Registrar or the Paying Agent means the
office thereof designated in writing by the Registrar or the Paying Agent,
as the case may be, to the Authority, the Trustee and the Borrower, which
initially shall be located in Salt Lake City, Utah at the address set forth in
Section 11.05 hereof; and (ii) of the Trustee means the principal corporate
trust office of the Trustee designated in writing to the Authority, the
Registrar, the Paying Agent and the Borrower, which initially shall be located
in Salt Lake City, Utah at the address set forth in Section 11.05 hereof.
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"Prior Bonds" has the meaning assigned to such term in the recitals to
this Indenture.
"Qualified Newspaper" means The Wall Street Journal or The Bond Buyer
or any other newspaper or journal containing financial news, printed in the
English language and customarily published on each Business Day, of general
circulation in New York, New York, and selected by the Borrower and designated
to the Trustee.
"Rating Agency" means Moody's or Standard & Poor's to the extent they
then are providing or maintaining a rating on the Bonds at the request of the
Borrower, or in the event that Moody's or Standard & Poor's no longer maintains
a rating on the Bonds, any other nationally recognized rating agency then
providing or maintaining a rating on the Bonds at the request of the Borrower.
"Rebate Fund" means the fund by that name established and held by the
Trustee in accordance with Section 6.06 hereof.
"Rebate Requirement" has the meaning assigned to such term in the Tax
Certificate.
"Record Date" means the fifteenth day (whether or not a Business Day)
of the month preceding such Interest Payment Date.
"Registrar" means any registrar appointed as provided in Section 8.12
hereof, or any successor thereto.
"Repayment Installment" means any amount that the Borrower is required
to pay to the Trustee pursuant to Section 4.2(a) of the Agreement as a repayment
of the loan made by the Authority under the Agreement.
"Representation Letter" has the meaning specified in Section 2.01(e)
hereof.
"Responsible Officer" of the Trustee means and includes the chairman of
the board of directors, the president, every vice president, every assistant
vice president, every trust officer, and every officer and assistant officer of
the Trustee other than those specifically above mentioned, to whom any corporate
trust matter is referred because of his or her knowledge of, and familiarity
with, a particular subject.
"Revenues" means all rents, receipts, installment payments and other
income derived by the Authority or the Trustee under the Agreement or otherwise
in respect of the refinancing of the 1992 Project as contemplated by the
Agreement, and any income or revenue derived from the investment of any money in
any fund or account established pursuant to this Indenture (other than the
Rebate Fund and the accounts therein), including all Repayment Installments and
any other payments made by the Borrower with
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respect to the Bonds pursuant to the Agreement; provided, however, that such
term shall not include payments to the Authority or the Trustee pursuant to
Sections 4.2(c), 4.2(d), 5.6, 6.3, 8.2 and 8.3 of the Agreement or any amounts
on deposit in the Rebate Fund or accounts therein.
"Rule 15c2-12" means Rule 15c2-12 adopted by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended.
"Securities Depositories" means The Depository Trust Company, 711
Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; Midwest
Securities Trust Company, Capital Structures-Call Notification, 440 South
LaSalle Street, Chicago, Illinois 60605, Fax-(312) 663-2343; Philadelphia
Depository Trust Company, Reorganization Division, 1900 Market Street,
Philadelphia, Pennsylvania 19103, Attention: Bond Department, Fax-(215)
496-5058; or, in accordance with then-current guidelines of the Securities and
Exchange Commission, such other addresses and/or such other securities
depositories, or no such depositories, as the Authority may designate in a
Certificate of the Authority delivered to the Trustee.
"SID" means the state information depository, if any, of the State
recognized by the Securities and Exchange Commission pursuant to Rule 15c2-12.
"Single A Rating" means a rating with the designation of A or higher,
has been assigned to the Bonds by either one or both of Standard & Poor's or
Moody's.
"Standard & Poor's" means Standard & Poor's Ratings Services, A
Division of The McGraw-Hill Companies, Inc., a corporation organized and
existing under the laws of the State of New York, its successors and assigns.
"State" means the State of California.
The term "supplemental indenture" or "indenture supplemental hereto"
means any indenture hereafter duly authorized and entered into between the
Authority and the Trustee in accordance with the provisions of this Indenture.
"Tax Certificate" means the Tax Certificate and Agreement, dated as of
the Issue Date, by and between the Authority and the Borrower, as the same may
be amended from time to time.
"Tax-Exempt" means, with respect to interest on any obligations of a
state or local government, including the Bonds, that such interest is excluded
from the gross income of the holders thereof (other than any holder who is a
"substantial user" of facilities financed with such obligations or a "related
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person" within the meaning of Section 147(a) of the Code) for federal income tax
purposes, whether or not such interest is includable as an item of tax
preference or otherwise includable directly or indirectly for purposes of
calculating other tax liabilities, including any alternative minimum tax or
environmental tax under the Code.
"Trustee" means United States National Bank of Oregon, doing business
as U.S. Bank, a national banking association organized under the laws of the
United States, and its successors and assigns or any successor trustee appointed
pursuant to Section 8.08 hereof.
"Written Consent of the Authority," "Written Order of the Authority,"
and "Written Request of the Authority" mean, respectively, a written consent,
order or request signed by or on behalf of the Authority by an Authorized
Authority Representative.
"Written Consent of the Borrower," "Written Order of the Borrower," and
"Written Request of the Borrower" mean, respectively, a written consent, order
or request signed by or on behalf of the Borrower by an Authorized Borrower
Representative.
"Yield" shall have the meaning ascribed to such term by Section 148(h)
of the Code.
Section 1.02. Number and Gender. The singular form of any word used
herein, including the terms defined in Section 1.01, shall include the plural,
and vice versa. The use herein of a word of any gender shall include all
genders.
Section 1.03. Articles, Sections, Etc. All references herein to
"Articles," "Sections" and other subdivisions are to the corresponding Articles,
Sections or subdivisions of this Indenture as originally executed; and the words
"herein," "hereof," "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or subdivision
hereof. The headings or titles of the several Articles and Sections hereof, and
any table of contents appended to copies hereof, shall be solely for convenience
of reference and shall not affect the meaning, construction or effect of this
Indenture.
Section 1.04. Content of Certificates and Opinions. Every certificate
or opinion with respect to compliance with a condition or covenant provided for
in this Indenture or the Agreement (except for the certificate of cancelled
Bonds provided for in Sections 2.06, 2.07, 4.05 and 6.01 hereof) shall include
(a) a statement that the person or persons making or giving such certificate or
opinion have read such covenant or condition and the definitions herein relating
thereto; (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or
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opinion are based; (c) a statement that, in the opinion of the signers, they
have made or caused to be made such examination or investigation as is necessary
to enable them to express an informed opinion as to whether or not such covenant
or condition has been complied with; and (d) a statement as to whether, in the
opinion of the signers, such condition or covenant has been complied with.
Any such certificate or opinion made or given by an officer of the
Authority or the Borrower may be based, insofar as it relates to legal matters,
upon a certificate or opinion of or representations by counsel, unless such
officer knows that the certificate or opinion or representations with respect to
the matters upon which his or her certificate or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should have known
that the same were erroneous. Any such certificate or opinion made or given by
counsel may be based, insofar as it relates to factual matters (with respect to
which information is in the possession of the Authority or the Borrower), upon
the certificate or opinion of or representations by an officer of the Authority
or the Borrower, as applicable, unless such counsel knows that the certificate
or opinion or representations with respect to the matters upon which his or her
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should have known that the same were erroneous.
ARTICLE II
THE BONDS
Section 2.01. Authorization and Terms of Bonds.
(a) Authorization. Bonds designated as "California Pollution
Control Financing Authority Pollution Control Refunding Revenue Bonds (Laidlaw
Environmental Services, Inc.) 1997 Series A", may be issued under this
Indenture. The aggregate principal amount of Bonds which may be issued and
Outstanding under this Indenture shall not exceed Nineteen Million Five Hundred
Thousand Dollars ($19,500,000), exclusive of Bonds executed and authenticated as
provided in Section 2.06.
(b) General Terms. The Bonds shall be issued as fully registered
Bonds, without coupons, in Authorized Denominations and shall all be dated as of
the Dated Date. The Bonds shall mature upon the terms and conditions hereinafter
set forth, on July 1, 2007.
The Bonds shall bear the letter prefix "RA-" and be numbered
consecutively from 1 upward. Each Bond shall bear interest from the last date to
which interest has been paid in full or duly provided for on such Bond, or, if
no interest has been paid or duly provided for on such Bond, from the Dated
Date.
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Payment of the interest on any Bond shall be made to the person appearing on the
bond registration books of the Registrar as the registered holder thereof as of
the close of business on the Record Date, such interest to be paid by the Paying
Agent to such registered holder (i) in the event such Bond is a Book-Entry Bond,
in immediately available funds on the Interest Payment Date in accordance with
the Representation Letter; and (ii) in the event such Bond is not a Book-Entry
Bond, (A) in immediately available funds (by wire transfer or by deposit to the
account of the holder of any such Bond if such account is maintained with the
Paying Agent), according to the instructions given by such holder to the
Registrar or (B) in all other cases, by check mailed by first class mail to the
holder at such holder's address as it appears as of the Record Date on the
registration books of the Registrar; except, in each case, that, if and to the
extent that there shall be a default in the payment of the interest due on such
Interest Payment Date, such defaulted interest shall be paid to the holders in
whose name any such Bonds are registered as of a special record date to be fixed
by the Trustee, notice of which shall be given to such holders not less than ten
(10) days prior thereto. The principal of the Bonds shall be payable upon
surrender thereof in lawful money of the United States of America at the
Principal Office of the Paying Agent.
(c) Interest Rate. The Bonds shall bear interest until final
payment of the principal or redemption price thereof shall have been made in
accordance with the provisions hereof, whether at maturity, upon redemption or
otherwise. Interest on the Bonds shall be computed upon the basis of a 360-day
year, consisting of twelve 30-day months. The Bonds shall bear interest at the
rate of 6.70% per annum.
(d) Form of Bonds. The Bonds may be engraved, printed,
lithographed or typewritten, shall be in Authorized Denominations and may
contain such references to any of the provisions of this Indenture as may be
appropriate. The Bonds and the certificate of authentication to be executed
thereon shall be in substantially the form attached hereto as Exhibit A, with
such appropriate variations, omissions and insertions as are permitted or
required by this Indenture. Pursuant to recommendations promulgated by the
Committee on Uniform Security Identification Procedures, "CUSIP" numbers may be
printed on the Bonds. The Bonds may bear such endorsement or legend relating
thereto as may be required to conform to usage or law with respect thereto. If
appropriate, the Bonds may be printed with a portion of the text printed on the
reverse side thereof and with a legend printed on the front referring to such
text to the following effect: "Reference is hereby made to the further
provisions of this Bond set forth on the back hereof and such further provisions
are hereby incorporated by reference as if set forth here in full."
(e) Book-Entry System. Unless otherwise determined by the
Authority, the Bonds shall be issued in the form of one or more
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separate single certificated fully registered Bond or Bonds, registered in the
name of Cede & Co., as nominee of DTC, or any successor nominee (the "Nominee").
Except as provided in paragraph (iii) below, all of the Outstanding Bonds shall
be so registered in the registration books kept by the Registrar, and the
provisions of this Section 2.01(e) shall apply thereto.
(i) The Authority, the Borrower, the Paying Agent, the Registrar
and the Trustee shall have no responsibility or obligation to any DTC
Participant or to any Beneficial Owner, except as otherwise expressly provided
herein. Without limiting the immediately preceding sentence, the Authority, the
Borrower, the Paying Agent, the Registrar and the Trustee shall have no
responsibility or obligation with respect to (1) the accuracy of the records of
DTC, the Nominee or any DTC Participant with respect to any ownership interest
in the Bonds, (2) the delivery to any DTC Participant or any other person, other
than a Bondholder as shown in the registration books kept by the Registrar, of
any notice with respect to the Bonds, including any notice of redemption or (3)
the payment to any DTC Participant or any other person, other than a Bondholder,
as shown in the registration books kept by the Registrar, of any amount with
respect to principal of or interest on the Bonds. The Paying Agent shall pay all
principal of, and interest on the Bonds only to or upon the order of the
respective Bondholders, as shown in the registration books kept by the
Registrar, or their respective attorneys duly authorized in writing, and all
such payments shall be valid and effective to fully satisfy and discharge the
Authority's obligations with respect to payment of principal of, and interest on
the Bonds to the extent of the sum or sums so paid. The Authority, the Borrower,
the Paying Agent, the Registrar and the Trustee may treat and consider the
person in whose name each Bond is registered in the registration books kept by
the Registrar as the holder and absolute owner of such Bond for the purpose of
payment of principal and interest with respect to such Bond, for the purpose of
giving notices of redemption and other matters with respect to such Bond, for
the purpose of registering transfers with respect to such Bond, and for all
other purposes whatsoever.
(ii) No person other than a Bondholder, as shown in the
registration books kept by the Registrar, shall receive a certificated Bond
evidencing the obligation of the Authority to make payments of principal, and
interest pursuant to this Indenture.
(iii) The Authority, the Paying Agent, the Registrar and the Trustee
shall, if not previously on file, execute and deliver to DTC a letter of
representation in customary form with respect to the Bonds (the "Representation
Letter"), but such Representation Letter shall not in any way limit the
provisions of the foregoing paragraph (i) or in any other way impose upon the
Authority any obligation whatsoever with respect to persons having interests in
the Bonds other than the Bondholders, as
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shown on the registration books kept by the Registrar. The Trustee and the
Paying Agent shall take all action necessary for all representations of the
Authority in the Representation Letter with respect to the Trustee and the
Paying Agent to be complied with at all times.
(iv) The Authority, with the consent of the Borrower, may, and upon
request of the Borrower shall, terminate the services of DTC with respect to the
Bonds. DTC may determine to discontinue providing its services with respect to
the Bonds at any time by giving written notice and all relevant information
on the Beneficial Owners of the Bonds to the Authority, the Borrower and the
Trustee and discharging its responsibilities with respect thereto under
applicable law. Upon the discontinuance or termination of the services of DTC
with respect to the Bonds, unless a substitute securities depository is
appointed by the Authority (with the consent, or at the request, of the
Borrower) to undertake the functions of DTC hereunder, the Authority, at the
expense of the Borrower, is obligated to deliver Bond certificates to the
Beneficial Owners of such Bonds, as described in this Indenture, and such Bonds
shall no longer be restricted to being registered in the registration books kept
by the Registrar in the name of the Nominee, but may be registered in whatever
name or names Bondholders transferring or exchanging such Bonds shall designate,
in accordance with the provisions of this Indenture.
(v) So long as any Bond is registered in the name of the Nominee,
all payments with respect to principal and interest on such Bond and all notices
with respect to such Bond shall be made and given, respectively, in the manner
provided in the Representation Letter. Bondholders shall have no lien or
security interest in any rebate or refund paid by DTC to the Paying Agent which
arises from the payment by the Paying Agent of principal of, or interest on the
Bonds in immediately available funds to DTC.
Section 2.02. Execution of Bonds. The Bonds shall be signed in the name
and on behalf of the Authority with the manual or facsimile signature of its
Chairman and attested by the manual or facsimile signature of its Executive
Director or Deputy Executive Director, under seal of the Authority. Such seal
may be in the form of a facsimile of the Authority's seal and may be imprinted
or impressed upon the Bonds. The Bonds shall then be delivered to the Registrar
for authentication by the Registrar, as the case may be; provided that upon
initial issuance the Bonds shall be authenticated by the Registrar. In case any
officer who shall have signed any of the Bonds shall cease to be such officer
before the Bonds so signed or attested shall have been authenticated or
delivered by the Registrar or issued by the Authority, such Bonds may
nevertheless be authenticated, delivered and issued and, upon such
authentication, delivery and issuance, shall be as binding upon the Authority as
though those who signed and attested the same had continued to be such
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<PAGE> 21
officers of the Authority. Also, any Bond may be signed on behalf of the
Authority by such persons as on the actual date of the execution of such Bond
shall be the proper officers although on the nominal date of such Bond any such
person shall not have been such officer.
Only such of the Bonds as shall bear thereon a certificate of
authentication in the form recited in Exhibit A hereto, manually executed by the
Registrar, shall be valid or obligatory for any purpose or entitled to the
benefits of this Indenture, and such certificate of the Registrar shall be
conclusive evidence that the Bonds so authenticated have been duly authenticated
and delivered hereunder and are entitled to the benefits of this Indenture. Upon
authentication of any Bond, the Registrar shall set forth on such Bond the date
of such authentication.
Section 2.03. Transfer and Exchange of Bonds. Registration of any Bond
may, in accordance with the terms of this Indenture, be transferred, upon the
books of the Registrar required to be kept pursuant to the provisions of Section
2.04, by the person in whose name it is registered, in person or by his duly
authorized attorney, upon surrender of such Bond for cancellation, accompanied
by a written instrument of transfer in a form approved by the Registrar, duly
executed. Whenever any Bond shall be surrendered for registration of transfer,
the Authority shall execute and the Registrar shall authenticate and deliver a
new Bond or Bonds of the same tenor of Authorized Denominations. No registration
of transfer of Bonds upon the books of the Registrar required to be kept
pursuant to the provisions of Section 2.04 hereof shall be required to be made
during the period after any Record Date and prior to the related Interest
Payment Date or during the period of fifteen (15) days next preceding the date
on which the Trustee gives any notice of redemption, nor shall any registration
of transfer of Bonds called for redemption be required.
Bonds may be exchanged at the Principal Office of the Registrar for a
like aggregate principal amount of Bonds of the same tenor of Authorized
Denominations. The Registrar shall require the payment by the Bondholder
requesting such exchange of any tax or other governmental charge required to be
paid with respect to such exchange, and there shall be no other charge to any
Bondholders for any such exchange. No exchange of Bonds shall be required to be
made during the period after any Record Date and prior to the related Interest
Payment Date or during the period of fifteen (15) days next preceding the date
on which the Trustee gives notice of redemption, nor shall any exchange of Bonds
called for redemption be required.
Section 2.04. Bond Register. The Registrar will keep or cause to be
kept at its Principal Office sufficient books for the registration and the
registration of transfer of the Bonds, which shall at all times, during regular
business hours, be open to
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inspection by the Authority, the Trustee and the Borrower; and, upon
presentation for such purpose, the Registrar shall, under such reasonable
regulations as it may prescribe, register the transfer or cause to be registered
the transfer, on said books, of Bonds as hereinbefore provided.
Section 2.05. Reserved.
Section 2.06. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond
shall become mutilated, the Authority, upon the request and at the expense of
the holder of said Bond, shall execute, and the Registrar shall thereupon
authenticate and deliver, a new Bond of like tenor and number in exchange and
substitution for the Bond so mutilated, but only upon surrender to the Registrar
of the Bonds so mutilated. Every mutilated Bond so surrendered to the Registrar
shall be cancelled by it and destroyed and, upon the written request of the
Authority, a certificate evidencing such destruction shall be delivered to the
Authority, with a copy to the Borrower. If any Bond issued hereunder shall be
lost, destroyed or stolen, evidence of such loss, destruction or theft may be
submitted to the Authority, the Borrower and the Registrar, and if such evidence
be satisfactory to them and indemnity satisfactory to them shall be given by or
on behalf of the holder of such lost, destroyed or stolen Bond, the Authority,
at the expense of the holder, shall execute, and the Registrar shall thereupon
authenticate and deliver, a new Bond of like tenor in lieu of and in
substitution for the Bond so lost, destroyed or stolen (or if any such Bond
shall have matured or shall be about to mature, instead of issuing a substitute
Bond the Registrar may pay the same without surrender thereof). The Authority
may require payment of a reasonable fee for each new Bond issued under this
Section and payment of the expenses which may be incurred by the Authority and
the Registrar. Any Bond issued under the provisions of this Section in lieu of
any Bond mutilated or alleged to be lost, destroyed or stolen shall constitute
an original additional contractual obligation on the part of the Authority
whether or not the Bond mutilated or so alleged to be lost, destroyed or stolen
shall be at any time enforceable by anyone, and shall be equally and
proportionately entitled to the benefits of this Indenture with all other Bonds
secured by this Indenture.
Section 2.07. Disposition of Cancelled Bonds. When and as paid in full,
all Bonds, if any, shall be delivered to the Trustee, who shall forthwith cancel
such Bonds and deliver a certificate evidencing such cancellation to the
Authority and the Borrower. The Trustee may destroy or retain such cancelled
Bonds.
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Section 2.08. CUSIP Numbers. As provided in Section 2.01(d) of this
Indenture, the Authority in issuing the Bonds may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to holders of Bonds; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Bonds or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Bonds, and any such redemption shall not be affected by
any defect in or omission of such CUSIP numbers.
ARTICLE III
ISSUANCE OF BONDS
Section 3.01. Authentication and Delivery of Bonds. Forthwith upon the
execution and delivery of this Indenture, upon the execution of the Bonds by the
Authority and delivery thereof to the Registrar, as hereinabove provided, and
without any further action on the part of the Authority, the Registrar shall
authenticate the Bonds in an aggregate principal amount of Nineteen Million Five
Hundred Thousand Dollars ($19,500,000) and shall deliver the Bonds to or upon
the Written Order of the Authority.
Section 3.02. Application of Proceeds of Bonds. The proceeds received
by the Authority from the sale of the Bonds in the amount of $19,500,000 shall
be deposited with the Trustee in the Bond Proceeds Fund, which the Trustee shall
establish hereunder and hold in trust. The Trustee shall transfer such money in
the Bond Proceeds Fund upon Written Order of the Borrower to repay the Interim
Loan and thereby refunding the Prior Bonds.
Upon completion of the foregoing transfer, the Bond Proceeds Fund shall
close.
ARTICLE IV
REDEMPTION OF BONDS
Section 4.01. Redemption of Bonds. The Bonds are subject to redemption
if and to the extent the Borrower is entitled or required to make and makes a
prepayment pursuant to Article VII of the Agreement. The Trustee shall not give
notice of any optional redemption under Section 4.01(a) hereof unless the
Borrower has so directed in accordance with Section 7.5 of the Agreement. In the
event of a failure by the Borrower to give a notice of mandatory prepayment
under such Section 7.5, such notice may be given by the Authority, the Trustee,
or any holder
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or holders of ten percent (10%) or more in aggregate principal amount of the
Outstanding Bonds.
The Bonds shall be redeemed upon the following terms:
(a) Redemption Upon Optional Prepayment - Extraordinary Events.
The Bonds shall be redeemed in whole or in part, and if in part by lot,
at any time at a redemption price equal to 100% of the principal amount thereof
plus accrued interest to the redemption date upon the occurrence of any one of
the following events and receipt by the Trustee of a written notice from the
Borrower stating that such event has occurred and that the Borrower therefore
intends to exercise its option to prepay the payments due under the Agreement
in whole or in part pursuant to Section 7.2 of the Agreement and thereby effect
the redemption of Bonds in whole or in part to the extent of such prepayments:
(1) All or part of the Facility at which a portion of the 1992
Project is located shall have been damaged or destroyed to such an extent
that, in the opinion of the Borrower (expressed in a certificate
filed with the Authority and the Trustee), (i) the Facility or such
affected portion could not reasonably be restored within a period of four
(4) months to the condition thereof immediately preceding such damage or
destruction, and the Borrower will be prevented, or is likely to be
prevented for a period of four (4) consecutive months or more, from
carrying on all or substantially all of its normal operation of the
Facility, or (ii) the cost of restoration of the Facility or such affected
portion will be substantially in excess of the net proceeds of insurance
thereon.
(2) Title to, or the temporary use of, all or a part of the
Facility at which a portion of the 1992 Project is located shall have been
taken under the exercise of the power of eminent domain.
(3) Changes in economic availability of raw materials, operating
supplies or facilities necessary to operate all or a part of the Facility
at which a portion of the 1992 Project is located or technological or
other changes which make the continued operation of the Facility or such
affected portion, uneconomical in the opinion of the Borrower (expressed in
a certificate filed with the Authority and the Trustee) shall have occurred
and which shall have resulted in a cessation of all or substantially all of
the Borrower's normal operations of the Facility.
(4) Unreasonable burdens or excessive liabilities shall have been
imposed upon the Authority or the Borrower affecting all or a part of the
Facility at which a portion of the 1992 Project is located including,
without limitation,
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federal, state or other ad valorem, property, income or other taxes not being
imposed on the date of the Agreement.
Anything in this subsection to the contrary notwithstanding, if any of the
events described above shall have occurred with respect to one of the two
Facilities, the amount of Bonds that may be redeemed shall not exceed an amount
derived by multiplying the total principal amount of the Bonds by a fraction (i)
the numerator of which is the cost of the 1992 Project at such affected Facility
or portion thereof and (ii) the denominator of which is the total cost of the
1992 Project.
(b) Redemption Upon Mandatory Prepayment. The Bonds shall be
subject to redemption from amounts which are required to be prepaid by the
Borrower under Section 7.3 of the Agreement, as set forth below.
The Bonds shall be redeemed in whole on any date at a redemption price
equal 100% of the principal amount thereof plus interest accrued to the
redemption date upon the occurrence of a Determination of Taxability;
provided, however, that if, in the opinion of Bond Counsel delivered to the
Trustee, the redemption of a specified portion of such Bonds Outstanding would
have the result that interest payable on such Bonds remaining Outstanding
after such redemption would remain Tax-Exempt, then such Bonds shall be
redeemed in part by lot (in Authorized Denominations), in such amount as Bond
Counsel in such opinion shall have determined is necessary to accomplish that
result.
(2) The Bonds shall be redeemed in whole at a redemption price
equal to the principal amount thereof plus accrued interest to the redemption
date in the event that as a result of any changes in the Constitution of the
United States of America or the State or as a result of any legislative,
judicial or administrative action, the Agreement shall have become void or
unenforceable or impossible of performance in accordance with the intention
and purposes of the parties thereto, or shall have been declared unlawful.
(c) Sinking Fund Redemption. The Bonds are subject to mandatory
redemption in part on each July 1 commencing July 1, 2003, from sinking fund
payments made by the Borrower, at a redemption price equal to the principal
amount of Bonds to be
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<PAGE> 26
redeemed as set forth in the table below, without premium, plus accrued interest
to the date of redemption:
<TABLE>
<CAPTION>
Sinking Fund
Payment Date Amount
(July 1) Redeemed
-------- --------
<S> <C>
2003 $2,000,000
2004 2,000,000
2005 2,000,000
2006 3,000,000
2007* 10,500,000
</TABLE>
*Maturity
Section 4.02. Selection of Bonds for Redemption. If less than all of
the Bonds are called for redemption, the Trustee shall select the Bonds or any
given portion thereof to be redeemed from the Outstanding Bonds or such given
portion thereof not previously called for redemption, by lot. For the purpose of
any such selection the Trustee shall assign a separate number for each minimum
Authorized Denomination of each Bond of a denomination of more than such
minimum; provided that following any such selection, both the portion of such
Bond to be redeemed and the portion remaining shall be in Authorized
Denominations. The Trustee shall promptly notify the Authority and the Borrower
in writing of the numbers of the Bonds or portions thereof so selected for
redemption. Notwithstanding the foregoing, if less than all of the Bonds are to
be redeemed at any time while the Bonds are Book-Entry Bonds, selection of the
Bonds to be redeemed shall be made in accordance with customary practices of DTC
or the applicable successor depository, as the case may be.
Section 4.03. Notice of Redemption. The Trustee, for and on behalf of
the Authority, shall give notice of any redemption by first class mail, postage
prepaid, not less than thirty (30) nor more than sixty (60) days prior to the
redemption date to (i) the registered owner of such Bond at the address shown on
the registration books of the Registrar on the date such notice is mailed; (ii)
the Securities Depositories; (iii) one or more Information Services; and (iv)
the Municipal Securities Rulemaking Board, each NRMSIR and the SID. Notice of
redemption to the Securities Depositories, the Information Services, each NRMSIR
and the SID shall be given by telecopy confirmed by first class mail. Each
notice of redemption shall state the date of such notice, the date of issue of
the Bonds to be redeemed, the redemption date, the redemption price, the place
of redemption (including the name and appropriate address or addresses of the
Paying Agent), the principal amount, the CUSIP numbers (if any) of the Bonds to
be redeemed and, if less than all, the distinctive certificate numbers of the
Bonds to be redeemed and, in the case of Bonds to be redeemed in part only, the
respective portions of the principal amount thereof to be redeemed. Each such
notice shall also state that the interest on the Bonds
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<PAGE> 27
designated for redemption shall cease to accrue from and after such redemption
date and that on said date there will become due and payable on each of said
Bonds the principal amount thereof to be redeemed and the interest accrued
thereon, if any, to the redemption date and shall require that such Bonds be
then surrendered at the address or addresses of the Paying Agent specified in
the redemption notice. Notwithstanding the foregoing, failure by the Trustee to
give notice pursuant to this paragraph to any one or more of the Information
Services or the Securities Depositories or Municipal Securities Rulemaking
Board, the NRMSIRs or the SID or the insufficiency of any such notices shall not
affect the sufficiency of the proceedings for redemption. Failure to mail the
notices required by this paragraph to any registered owner of any Bonds
designated for redemption, or any defect in any notice so mailed, shall not
affect the validity of the proceedings for redemption of any other Bonds.
If upon the expiration of sixty (60) days succeeding any redemption
date, any Bonds called for redemption shall not have been presented to the
Trustee for payment, the Trustee shall no later than ninety (90) days following
such redemption date send Notice by Mail to the holder of each Bond not so
presented. Failure to mail the notices required by this paragraph to any holder
of a Bond, or any defect in any notice so mailed, shall not affect the validity
of the proceedings for redemption of any Bonds nor impose any liability on the
Trustee.
Section 4.04. Partial Redemption of Bonds. Upon surrender of any Bond
redeemed in part only, the Registrar shall exchange the Bond redeemed for a new
Bond of like tenor and in an Authorized Denomination without charge to the
holder in the principal amount of the portion of the Bond not redeemed. In the
event of any partial redemption of a Bond which is registered in the name of the
Nominee, DTC may elect to make a notation on the Bond certificate which reflects
the date and amount of the reduction in principal amount of said Bond in lieu of
surrendering the Bond certificate to the Registrar for exchange. The Authority,
the Trustee and the Registrar shall be fully released and discharged from all
liability upon, and to the extent of, payment of the redemption price for any
partial redemption and upon the taking of all other actions required hereunder
in connection with such redemption.
Section 4.05. Effect of Redemption. Notice of redemption having been
duly given as aforesaid, and moneys for payment of the redemption price being
held by the Trustee, the Bonds so called for redemption shall, on the redemption
date designated in such notice, become due and payable at the redemption price
specified in such notice, interest on the Bonds so called for redemption shall
cease to accrue, said Bonds shall cease to be entitled to any lien, benefit or
security under this Indenture, and the holders of said Bonds shall have no
rights in respect thereof except to receive payment of the redemption price
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<PAGE> 28
thereof (including interest, if any, accrued to the redemption date), without
interest accrued on any funds held after the redemption date to pay such
redemption price.
All Bonds fully redeemed pursuant to the provisions of this Article IV
shall upon surrender thereof be cancelled by the Trustee, who shall deliver a
certificate evidencing such cancellation to the Authority and the Borrower. The
Trustee may retain or destroy such Bonds.
ARTICLE V
REVENUES
Section 5.01. Pledge of Revenues.
(a) All of the Revenues are hereby irrevocably pledged to the punctual
payment of the principal of and interest on the Bonds, and Revenues shall not be
used for any other purpose, except as provided in the last paragraph of Section
5.02, while any of the Bonds remain Outstanding. Said pledge shall constitute a
first and exclusive lien on the Revenues for the payment of the Bonds in
accordance with the terms hereof and thereof. All Revenues shall be held in
trust for the benefit of the holders from time to time of the Bonds, but shall
nevertheless be disbursed, allocated and applied solely for the uses and
purposes set forth in Article IV and this Article V.
(b) Reserved.
(c) The Borrower may at its sole discretion from time to time deliver
to the Trustee such additional or other security interests permitted by this
Indenture or the Authority to secure the payment of the principal of and
interest on the Bonds and any such additional or other security delivered by the
Borrower shall be pledged to such payment, provided that the delivery of such
additional or other security does not adversely affect the Tax- Exempt status of
interest on the Bonds.
(d) The Bonds shall not constitute a debt or liability, or a pledge of
the faith and credit, of the State, but shall be payable solely from the funds
herein provided therefor. The issuance of the Bonds shall not directly or
indirectly or contingently obligate the Authority, the State or any political
subdivision thereof to levy or pledge any form of taxation whatever therefor or
to make any appropriation for their payment.
Section 5.02. Bond Fund. Upon the receipt thereof, the Trustee shall
deposit all Revenues in the "California Pollution Control Financing Authority
Pollution Control Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.)
1997 Series A Bond Fund," which the Trustee shall establish and maintain and
hold in trust, and which shall be disbursed and applied only as
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<PAGE> 29
hereinafter authorized. Except as provided in this Section, Sections 5.06 and
10.03, moneys in the Bond Fund shall be used solely for the payment of the
principal of and interest on the Bonds as the same shall become due, whether at
maturity or upon redemption or acceleration or otherwise.
The Trustee shall deposit in the Bond Fund from time to time, upon
receipt thereof, all Repayment Installments received by the Trustee from the
Borrower for deposit in the Bond Fund, any income received from the investment
of moneys on deposit in the Bond Fund and any other Revenues, including
insurance proceeds, condemnation awards and other prepayment amounts received
under the Agreement from or for the account of the Borrower.
In making payments of principal of, and interest on the Bonds, the
Trustee shall (a) first use all available amounts held in the Bond Fund, and (b)
then use any other Revenues received by the Trustee.
Except to the extent such moneys are required to be held for the
payment of principal of, or interest on the Bonds then due and payable or to
effect the defeasance of Bonds pursuant to Article X hereof, so long as no Event
of Default (or any event which would be an Event of Default hereunder with the
passage of time or the giving of notice) exists hereunder, on the fifth day
after each Interest Payment Date, the Trustee, unless otherwise instructed by
the Borrower, shall return to the Borrower (free and clear of the pledge and
lien of this Indenture) any moneys then on deposit in the Bond Fund or shall
deposit such funds in the Rebate Fund if so instructed by the Borrower.
Section 5.03. Trustee Authorized to Take Actions Under the Agreement.
The Authority hereby authorizes and directs the Trustee, and the Trustee hereby
agrees, subject to Section 7.02 hereof, to take such actions as the Trustee
deems necessary to enforce the Borrower's obligation under the Agreement to make
timely payment of principal of and interest on the Bonds to the extent Bond
proceeds and other moneys in the Bond Fund are not available for such payment in
accordance with the provisions of Section 5.02 hereof.
Section 5.04. Investment of Moneys. Subject to Section 6.06 hereof, any
moneys in any of the funds and accounts to be established by the Trustee
pursuant to this Indenture shall be invested upon the written direction of the
Borrower signed by an Authorized Borrower Representative (such direction to
specify the particular investment to be made), by the Trustee, if and to the
extent then permitted by law, in Investment Securities. In the absence of such
written direction, the Trustee shall invest solely in units of a money-market
fund or portfolio restricted to obligations issued by, or guaranteed by the full
faith and credit of, the United States of America which is rated by each Rating
Agency at least as high as the then current rating of such Rating
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<PAGE> 30
Agency on the Bonds if such Rating Agency is then rating the Bonds or if the
Bonds are not rated, within the top two rating categories of a nationally
recognized rating service. Moneys in any fund or account shall be invested in
Investment Securities with respect to which payments of principal thereof and
interest thereon are scheduled to be paid or are otherwise payable (including
Investment Securities payable at the option of the holder) not later than the
date on which such moneys will be required by the Trustee. Amounts held in the
Bond Fund shall be invested only in Government Obligations maturing or subject
to payment at par upon demand of the holder thereof within thirty (30) days
after the acquisition of any such investment (or on such earlier date as payment
thereunder shall be needed hereunder).
Any interest, profit or loss on any investments of moneys in any fund
or account under this Indenture shall be credited or charged to the respective
funds from which such investments are made. The Trustee may sell or present for
redemption any obligations so purchased whenever it shall be necessary in order
to provide moneys to meet any payment, and the Trustee shall not be liable or
responsible for any loss, fee, tax or other charge resulting from any
investment, reinvestment or liquidation hereunder. Unless otherwise directed by
the Borrower, the Trustee may make any investment permitted under this Section
5.04 through or with its own commercial banking or investment departments.
Section 5.05. Assignment to Trustee; Enforcement of Obligations. (a)
The Authority hereby transfers, assigns and sets over to the Trustee all of the
Revenues and any and all rights and privileges it has under the Agreement with
respect to the Bonds, except (i) the Authority's rights to receive any notices
under this Indenture or the Agreement, (ii) the Authority's right to receive
payments, if any, with respect to fees, expenses and indemnification and certain
other purposes under Sections 4.2(d), 4.2(e), 6.3, 8.2 and 8.3 of the Agreement
and (iii) the Authority's rights to give approvals or consents pursuant to the
Agreement, but including, without limitation, the right to collect and receive
directly all of the Revenues and the right to hold and enforce any security
interest, and any Revenues collected or received by the Authority shall be
deemed to be held, and to have been collected or received, by the Authority as
the agent of the Trustee, and shall forthwith be paid by the Authority to the
Trustee. The Trustee also shall be entitled to take all steps, actions and
proceedings reasonably necessary in its judgment (1) to enforce the terms,
covenants and conditions of, and preserve and protect the priority of its
interest in and under, the Agreement and any other security agreement with
respect to the 1992 Project or the Bonds, and (2) to assure compliance with all
covenants, agreements and conditions on the part of the Authority contained in
this Indenture with respect to the Revenues.
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Section 5.06. Repayment to Borrower. When there are no longer any Bonds
Outstanding or provision for payment of the Bonds has been made in accordance
with Article X hereof, and all fees, charges and expenses of the Trustee, the
Registrar and any Paying Agent have been paid or provided for, payment of the
full amount owing the United States Government, as determined under Section 5.6
of the Agreement, Section 6.06 hereof and the Tax Certificate, all expenses of
the Authority relating to the 1992 Project and this Indenture have been paid or
provided for, and all other amounts payable hereunder and under the Agreement
have been paid, and this Indenture has been discharged and satisfied, the
Trustee shall pay to the Borrower any amounts remaining in any fund established
and held hereunder.
ARTICLE VI
COVENANTS OF THE AUTHORITY
Section 6.01. Payment of Principal and Interest. The Authority shall
punctually pay, but only out of Revenues as herein provided, the principal and
the interest to become due in respect of every Bond issued hereunder at the
times and places and in the manner provided herein and in the Bonds according to
the true intent and meaning thereof. All such payments shall be made by the
Trustee as provided in Section 2.01(b). When and as paid in full, all Bonds, if
any, shall be delivered to the Trustee and shall forthwith be cancelled by the
Trustee, who shall deliver a certificate evidencing such cancellation to the
Authority and the Borrower. The Trustee may retain or destroy such cancelled
Bonds.
Section 6.02. Extension or Funding of Claims for Interest. In order to
prevent any accumulation of claims for interest after maturity, the Authority
shall not, directly or indirectly, extend or assent to the extension of the time
for the payment of any claim for interest on any of the Bonds, and shall not,
directly or indirectly, be a party to or approve any such arrangement by
purchasing or funding such claims or in any other manner. In case any such claim
for interest shall be extended or funded, whether or not with the consent of the
Authority, such claim for interest so extended or funded shall not be entitled,
in case of default hereunder, to the benefits of this Indenture, except subject
to the prior payment in full of the principal of all of the Bonds then
Outstanding and of all claims for interest which shall not have been so extended
or funded.
Section 6.03. Paying Agents. The Authority, with the written approval
of the Trustee and the Borrower, may appoint and at all times have one or more
Paying Agents (which shall meet the qualifications of the Trustee set forth in
Section 8.07 hereof) in such place or places as the Borrower may designate, for
the payment of the principal of, and the interest on, the Bonds. All provisions
of Article VIII hereof which apply to the Trustee
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<PAGE> 32
shall also apply to any Paying Agent appointed hereunder. It shall be the duty
of the Trustee to make such arrangements with any such Paying Agent as may be
necessary to assure, to the extent of the moneys held by the Trustee for such
payment, the prompt payment of the principal of and interest on the Bonds
presented at either place of payment. The Paying Agent initially appointed
hereunder is the Trustee.
Section 6.04. Preservation of Revenues. The Authority shall not waive
any provision of the Agreement or take any action to interfere with or impair
the pledge and assignment hereunder of Revenues and the assignment to the
Trustee of rights under the Agreement, or the Trustee's enforcement of any
rights thereunder, without the prior written consent of the Trustee. The Trustee
may give such written consent, and may itself take any such action, or consent
to any Amendment, only in accordance with the provisions of Article IX hereof.
Section 6.05. Compliance with Indenture. The Authority shall not issue,
or permit to be issued, any Bonds secured or payable in any manner out of
Revenues in any manner other than in accordance with the provisions of this
Indenture, and shall not suffer or permit any default to occur under this
Indenture, but shall faithfully observe and perform all the covenants,
conditions and requirements hereof.
Section 6.06. Arbitrage Covenants; Rebate Fund.
(a) The Authority covenants with all persons who hold or at any
time held Bonds that the Authority will not directly or indirectly use the
proceeds of any of the Bonds or any other funds of the Authority or permit the
use of the proceeds of any of the Bonds or any other funds of the Authority or
take or omit to take any other action which will cause any of the Bonds to be
"arbitrage bonds" or otherwise subject to federal income taxation by reason of
Sections 103 and 141 through 150 of the Code and any applicable regulations
promulgated thereunder. To that end the Authority covenants to comply with all
covenants set forth in the Tax Certificate, which is hereby incorporated herein
by reference as though fully set forth herein.
(b) The Trustee shall establish and maintain a fund separate from
any other fund established and maintained hereunder designated the "California
Pollution Control Financing Authority Pollution Control Refunding Revenue Bonds
(Laidlaw Environmental Services, Inc.) 1997 Series A Rebate Fund" (herein called
the "Rebate Fund"). Within the Rebate Fund, the Trustee shall maintain such
accounts as shall be directed by the Borrower as necessary in order for the
Authority and the Borrower to comply with the terms and requirements of the Tax
Certificate. Subject to the transfer provisions provided in paragraph (c) below,
all money at any time deposited in the Rebate Fund shall be held by the Trustee
in trust, to the extent required to satisfy the Rebate Requirement (as defined
in the Tax Certificate), for
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<PAGE> 33
payment to the United States Government, and neither the Borrower, the Authority
nor the Bondholders shall have any rights in or claim to such moneys. All
amounts deposited into or on deposit in the Rebate Fund shall be governed by
this Section 6.06, by Section 5.6 of the Agreement and by the Tax Certificate.
The Trustee shall conclusively be deemed to have complied with such provisions
if it follows the directions of the Borrower, including supplying all necessary
information requested by the Borrower and the Authority in the manner set forth
in the Tax Certificate, and shall not be required to take any actions thereunder
in the absence of written directions from the Borrower.
(c) Upon receipt of the Borrower's written instructions, the
Trustee shall remit part or all of the balances in the Rebate Fund to the United
States Government, as so directed. In addition, if the Borrower so directs, the
Trustee will deposit moneys into or transfer moneys out of the Rebate Fund from
or into such accounts or funds as directed by the Borrower's written directions.
Any funds remaining in the Rebate Fund after redemption and payment of all of
the Bonds and payment and satisfaction of any Rebate Requirement shall be
withdrawn and remitted to the Borrower upon its written request.
(d) Notwithstanding any provision of this Indenture, including in
particular Article X hereof, the obligation of the Borrower to pay the Rebate
Requirement to the United States Government and to comply with all other
requirements of this Section 6.06, Section 5.6 of the Agreement and the Tax
Certificate shall survive the defeasance or payment in full of the Bonds.
Section 6.07. Other Liens. So long as any Bonds are Outstanding, the
Authority shall not create or suffer to be created any pledge, lien or charge of
any type whatsoever upon all or any part of the Revenues, other than the lien of
this Indenture.
Section 6.08. Further Assurances. Whenever and so often as requested so
to do by the Trustee, the Authority shall promptly execute and deliver or cause
to be executed and delivered all such other and further instruments, documents
or assurances, and promptly do or cause to be done all such other and further
things, as may be necessary or reasonably required in order to further and more
fully vest in the Trustee and the Bondholders all of the rights, interests,
powers, benefits, privileges and advantages conferred or intended to be
conferred upon them by this Indenture and to perfect and maintain as perfected
such rights, interests, powers, benefits, privileges and advantages.
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<PAGE> 34
ARTICLE VII
DEFAULT
Section 7.01. Events of Default; Acceleration; Waiver of Default. Each
of the following events shall constitute an "Event of Default" hereunder:
(a) Failure to make payment of any installment of interest upon
any Bond when such payment shall have become due and payable;
(b) Failure to make due and punctual payment of the principal of
any Bond when such payment shall have become due and payable, whether at the
stated maturity thereof, or upon proceedings for redemption thereof or upon the
maturity thereof by declaration;
(c) The occurrence of an "Event of Default" under the Agreement,
as specified in Section 6.1 thereof; or
(d) Default by the Authority in the performance or observance of
any other of the covenants, agreements or conditions on its part contained in
this Indenture or in the Bonds, and the continuance of such default for a period
of sixty (60) days after written notice thereof, specifying such default and
requiring the same to be remedied, shall have been given to the Authority and
the Borrower by the Trustee, or to the Authority, the Borrower and the Trustee
by the holders of not less than twenty-five percent (25%) in aggregate principal
amount of the Bonds at the time Outstanding;
No default specified in (d) above shall constitute an Event of Default
unless the Authority and the Borrower shall have failed to correct such default
within the applicable 30-day period; provided, however, that if the default
shall be such that it can be corrected, but cannot be corrected within such
period, it shall not constitute an Event of Default if corrective action is
instituted by the Authority or the Borrower within the applicable period and
diligently pursued until the default is corrected. With regard to any alleged
default concerning which notice is given to the Borrower under the provisions of
this Section, the Authority hereby grants the Borrower full authority for the
account of the Authority to perform any covenant or obligation the
non-performance of which is alleged in said notice to constitute a default in
the name and stead of the Authority with full power to do any and all things and
acts to the same extent that the Authority could do and perform any such things
and acts and with power of substitution. Notwithstanding such grant, the
Borrower shall not have any obligation to cure any default of the Authority.
Upon the occurrence and continuation of an Event of Default under
Section 7.01(a), (b), (c) or (d) hereof, the
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<PAGE> 35
Trustee may, and upon the written request of the holders of not less than
twenty-five percent (25%) in aggregate principal amount of Bonds then
Outstanding, shall, by notice in writing delivered to the Borrower, with copies
of such notice being sent to the Authority, declare the principal of all Bonds
then Outstanding and the interest accrued thereon immediately due and payable,
and such principal and interest shall thereupon become and be immediately due
and payable. Interest on the Bonds shall cease to accrue from and after the date
of declaration of any such acceleration. Notwithstanding the foregoing, the
Trustee shall not be required to take any action upon the occurrence and
continuation of an Event of Default under Section 7.01(c) or (d) above until a
Responsible Officer of the Trustee has actual knowledge of such Event of
Default. After any declaration of acceleration under this Section 7.01 the
Trustee shall immediately declare all indebtedness payable under Section 4.2(a)
of the Agreement with respect to the Bonds to be immediately due and payable in
accordance with Section 7.3 of the Agreement and may exercise and enforce such
rights as exist under the Agreement.
The preceding paragraph, however, is subject to the condition that if,
at any time after the principal of the Bonds shall have been so declared due and
payable, and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, there shall have
been deposited with the Trustee a sum which, together with any other amounts
then held in the Bond Fund, is sufficient to pay all the principal of such Bonds
matured prior to such declaration and all matured installments of interest (if
any) upon all the Bonds, and the reasonable expenses (including reasonable
attorneys' fees) of the Trustee, and any and all other defaults actually known
to the Trustee (other than in the payment of principal of and interest on such
Bonds due and payable solely by reason of such declaration) shall have been made
good or cured to the satisfaction of the Trustee in its sole discretion or
provision deemed by the Trustee to be adequate shall have been made therefor,
then, and in every such case, the holders of at least a majority in aggregate
principal amount of the Bonds then Outstanding, by written notice to the
Authority and to the Trustee may, on behalf of the holders of all Bonds, rescind
and annul such declaration with respect to the Bonds and its consequences and
waive such default; provided that no such rescission and annulment shall extend
to or shall affect any subsequent default, or shall impair or exhaust any right
or power consequent thereon.
Section 7.02. Institution of Legal Proceedings by Trustee. In addition,
if one or more of the Events of Default hereunder shall happen and be
continuing, the Trustee in its sole discretion may, and upon the written request
of the holders of a majority in aggregate principal amount of the Bonds then
Outstanding, and upon being indemnified to its satisfaction in its sole
discretion therefor (including with respect to any
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expenses or liability the Trustee may incur) shall, proceed to protect or
enforce its rights or the rights of the holders of Bonds under the Act or under
this Indenture, by a suit in equity or action at law, either for the specific
performance of any covenant or agreement contained herein, or in aid of the
execution of any power herein granted, or by mandamus or other appropriate
proceeding for the enforcement of any other legal or equitable remedy as the
Trustee shall deem most effectual in support of any of its rights or duties
hereunder. If the Trustee reasonably determines that it may not receive payment
for its extraordinary services and expenses relating to the enforcement of its
rights or the rights of the holders of the Bonds under the Act or under the
Indenture, the Trustee shall have no duty to act if it gives written notice of
such decision to the Bondholders and the Bondholders subsequently fail to
provide the Trustee with reasonable indemnification.
Section 7.03. Application of Moneys Collected by Trustee. Any moneys
collected by the Trustee and moneys in the Bond Fund on or after the occurrence
of an Event of Default shall be applied in the order following, at the date or
dates fixed by the Trustee and, in the case of distribution of such moneys on
account of principal or interest, upon presentation of the Bonds, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
First: To the payment of costs and expenses of collection, just and
reasonable compensation to the Trustee for its own services and for the
services of counsel, agents and employees by it properly engaged and
employed, and for advances made pursuant to the provisions of this
Indenture with interest on all such advances at the rate of nine
percent (9%) per annum.
Second: In case the principal of none of the Outstanding Bonds shall
have become due and remains unpaid, to the payment of interest in
default on the Outstanding Bonds in the order of the maturity thereof,
such payments to be made ratably and proportionately to the persons
entitled thereto without discrimination or preference, except as
specified in Section 6.02; provided, however, that no payment of
interest shall be made with respect to any Bonds held by the Authority
or the Borrower or actually known by the Trustee to be held by any
affiliate of the Borrower, or any nominee of the Authority, the
Borrower, any affiliate of the Borrower, until interest due on all
Bonds not so registered shall have been paid.
Third: In case the principal of any of the Outstanding Bonds shall
have become due by declaration or otherwise and remains unpaid, first
to the payment of principal of all Outstanding Bonds then due and
unpaid, then to the payment of interest in default in the order
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of maturity thereof; in every instance such payment to be made ratably
to the persons entitled thereto without discrimination or preference,
except as specified in Section 6.02; provided, however, that no payment
of principal or interest shall be made with respect to any Bonds held
by the Authority or the Borrower or known by the Trustee to be held by
any affiliate of the Borrower or any nominee of the Authority, the
Borrower or any affiliate of the Borrower, until all amounts due on all
Bonds not so held have been paid.
Section 7.04. Effect of Delay or Omission to Pursue Remedy. No delay or
omission of the Trustee or of any holder of Bonds to exercise any right or power
arising from any default shall impair any such right or power or shall be
construed to be a waiver of any such default or acquiescence therein, and every
power and remedy given by this Article VII to the Trustee or to the holders of
Bonds may be exercised from time to time and as often as shall be deemed
expedient. In case the Trustee shall have proceeded to enforce any right under
this Indenture, and such proceedings shall have been discontinued or abandoned
because of waiver or for any other reason, or shall have been determined
adversely to the Trustee, then and in every such case the Authority, the
Trustee, and the holders of the Bonds, severally and respectively, shall be
restored to their former positions and rights hereunder in respect to the trust
estate; and all remedies, rights and powers of the Authority, the Trustee and
the holders of the Bonds shall continue as though no such proceedings had been
taken.
Section 7.05. Remedies Cumulative. No remedy herein conferred upon or
reserved to the Trustee or to any holder of the Bonds is intended to be
exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity.
Section 7.06. Covenant to Pay Bonds in Event of Default. The Authority
covenants that, upon the happening of any Event of Default, the Authority will
pay to the Trustee upon demand, but only out of Revenues, for the benefit of the
holders of such Bonds, the whole amount then due and payable thereon (by
declaration or otherwise) for interest or for principal and all other sums which
may be due hereunder or secured hereby, including reasonable compensation to the
Trustee, its agents and counsel, and any expenses or liabilities incurred by the
Trustee hereunder. In case the Authority shall fail to pay the same forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, shall be entitled to institute proceedings at law or in equity in any
court of competent jurisdiction to recover judgment for the whole amount due and
unpaid, together with costs and reasonable attorneys' fees and expenses,
subject, however, to the condition that such judgment, if any, shall be limited
to, and payable solely out of, Revenues
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as herein provided and not otherwise. The Trustee shall be entitled to recover
such judgment as aforesaid, either before or after or during the pendency of any
proceedings for the enforcement of this Indenture, and the right of the Trustee
to recover such judgment shall not be affected by the exercise of any other
right, power or remedy for the enforcement of the provisions of this Indenture.
If the Event of Default involves the bankruptcy of the Borrower, amounts payable
to or for the benefit of the Bondholders pursuant to the bankruptcy plan shall
be paid to the Trustee for application as provided in Section 7.03 of the
Indenture; and if payments are made directly to the Bondholders by the
bankruptcy trustee, those Bondholders shall be liable to the Trustee for
applying the funds in the manner provided in Section 7.03 hereof, including, but
not limited to, the payment of the Trustee's extraordinary fees and expenses.
Section 7.07. Trustee Appointed Agent for Bondholders. The Trustee is
hereby appointed the agent and attorney of the holders of all Bonds Outstanding
hereunder for the purpose of filing any claims relating to the Bonds.
Section 7.08. Power of Trustee to Control Proceedings. In the event
that the Trustee, upon the happening of an Event of Default, shall have taken
any action, by judicial proceedings or otherwise, pursuant to its duties
hereunder, whether upon its own discretion or upon the request of holders of the
Bonds, it shall have full power, in the exercise of its discretion for the best
interests of the holders of the Bonds, with respect to the continuance,
discontinuance, withdrawal, compromise, settlement or other disposal of such
action; provided, however, that the Trustee shall not, unless there no longer
continues an Event of Default hereunder, discontinue, withdraw, compromise or
settle, or otherwise dispose of any litigation pending at law or in equity, if
at the time there has been filed with it a written request signed by the holders
of at least a majority in principal amount of the Bonds Outstanding hereunder
opposing such discontinuance, withdrawal, compromise, settlement or other
disposal of such litigation.
All rights of action under this Indenture or under any of the Bonds
secured hereby which are enforceable by the Trustee may be enforced by it
without the possession of any of the Bonds, or the production thereof at the
trial or other proceedings relative thereto, and any such suit, action or
proceeding instituted by the Trustee shall be brought in its name as Trustee of
an express trust for the equal and ratable benefit of the Bondholders, subject
to the provisions of this Indenture.
Section 7.09. Limitation on Bondholders' Right to Sue. No holder of any
Bond issued hereunder shall have the right to institute any suit, action or
proceeding at law or in equity, for any remedy under or upon this Indenture,
unless (a) such holder shall have previously given to the Trustee written notice
of the occurrence of an Event of Default hereunder; (b) the holders of
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at least a majority in aggregate principal amount of all the Bonds then
Outstanding shall have made written request upon the Trustee to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in
its own name; (c) said holders shall have tendered to the Trustee indemnity
satisfactory to it against the costs, expenses (including reasonable attorneys'
fees) and liabilities to be incurred in compliance with such request; and (d)
the Trustee shall have refused or omitted to comply with such request for a
period of thirty (30) days after such written request shall have been received
by, and said tender of indemnity shall have been made to, the Trustee.
Such notification, request, tender of indemnity and refusal or omission
are hereby declared, in every case, to be conditions precedent to the exercise
by any holder of Bonds of any remedy hereunder; it being understood and intended
that no one or more holders of Bonds shall have any right in any manner whatever
by his or her or their action to enforce any right under this Indenture, except
in the manner herein provided, and that all proceedings at law or in equity to
enforce any provision of this Indenture shall be instituted, had and maintained
in the manner herein provided and for the equal benefit of all holders of the
Outstanding Bonds, subject to the provisions of this Indenture.
The right of any holder of any Bond to receive payment of the principal
of and interest on such Bond out of Revenues, as herein and therein provided, on
and after the respective due dates expressed in such Bond, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such holder, notwithstanding
the foregoing provisions of this Section or Section 7.08 or any other provision
of this Indenture.
Section 7.10. Limitation of Liability to Revenues. Notwithstanding
anything in this Indenture contained, the Authority shall not be required to
advance any moneys derived from the proceeds of taxes collected by the Authority
or by any governmental body or political subdivision of the State or from any
source of income of any governmental body or political subdivision of the State
or the Authority other than the Revenues, for any of the purposes in this
Indenture mentioned, whether for the payment of the principal of or interest on
the Bonds or for any other purpose of this Indenture. The Bonds are not general
obligations of the Authority, and are payable from and secured by the Revenues
only.
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ARTICLE VIII
THE TRUSTEE AND THE REGISTRAR
Section 8.01. Duties, Immunities and Liabilities of Trustee and
Registrar. The Trustee and the Registrar shall, prior to an Event of Default
hereunder, and after the curing of all Events of Default hereunder which may
have occurred, perform such duties and only such duties as are specifically set
forth in this Indenture. The Trustee shall, during the existence of any Event of
Default hereunder (which has not been cured), exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as prudent persons would exercise or use under the
circumstances in the conduct of their own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee or the Registrar from liability for its own negligent action or its own
negligent failure to act or its own willful misconduct, except that:
(a) Prior to the occurrence of any Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the duties
and obligations of the Trustee and the Registrar, as the case may be, shall be
determined solely by the express provisions of this Indenture; the Trustee or
the Registrar, as the case may be, shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Indenture; and no covenants or obligations shall be implied into this Indenture
which are adverse to the Trustee or the Registrar, as the case may be; and
(b) At all times, regardless of whether or not any Event of
Default shall exist,
(1) the Trustee and the Registrar shall not be liable for any
error of judgment made in good faith by a Responsible Officer or
Officers of the Trustee or the Registrar unless it shall be proved that
the Trustee or the Registrar, as the case may be, was negligent in
ascertaining the pertinent facts; and
(2) neither the Trustee nor the Registrar shall be personally
liable with respect to any action taken, permitted or omitted by it in
good faith in accordance with the direction of the holders of not less
than a majority, or such other percentage as may be required hereunder,
in aggregate principal amount of the Bonds Outstanding relating to the
time, method and place of conducting any proceeding for any remedy
available to the Trustee or the Registrar, or exercising any trust or
power conferred upon the Trustee or the Registrar under this Indenture;
and
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(3) in the absence of bad faith on the part of the Trustee or the
Registrar, as the case may be, the Trustee and the Registrar may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificate or
opinion furnished to the Trustee or the Registrar, as the case may be,
conforming to the requirements of this Indenture; but in the case of
any such certificate or opinion which by any provision hereof is
specifically required to be furnished to the Trustee or the Registrar,
as the case may be, the Trustee or the Registrar, as the case may be,
shall be under a duty to examine the same to determine whether or not
it conforms to the requirements of this Indenture.
(c) The Trustee may execute any of the trusts or powers hereof and
perform the duties required of it hereunder by or through attorneys, agents or
receivers, and shall be entitled to advice of counsel concerning all matters of
trust and concerning its duties hereunder and the Trustee shall not be
responsible for any misconduct or negligence on the part of any attorney or
agent appointed with due care by it hereunder.
None of the provisions contained in this Indenture shall require the
Trustee or the Registrar to expend or risk its own funds or otherwise incur
individual financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers. The permissive right of the Trustee to
perform acts enumerated in this Indenture or the Agreement shall not be
construed as a duty or obligation hereunder.
Section 8.02. Right of Trustee and Registrar to Rely upon the
Agreement, Etc. Except as otherwise provided in Section 8.01:
(a) The Trustee and the Registrar may rely and shall be protected
in acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, Bond, direction, demand, election or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any notice, request, direction, election, order or demand of
the Authority mentioned herein shall be deemed to be sufficiently evidenced by
an instrument signed in the name of the Authority by an Authorized Authority
Representative, and any resolution of the Authority shall be evidenced to the
Trustee or the Registrar by a Certified Resolution;
(c) Each of the Trustee and the Registrar may consult with counsel
of its selection (who may include its own counsel or counsel for the Authority
or Bond Counsel) and the opinion of such counsel shall be full and complete
authorization and protection in respect of any action taken or suffered by it
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hereunder in good faith and in accordance with the opinion of such counsel;
and
(d) Whenever in the administration of the trusts of this
Indenture the Trustee or the Registrar shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence or bad faith on the
part of the Trustee or the Registrar, as the case may be, be deemed to be
conclusively proved and established by a Certificate of the Authority; and
such Certificate of the Authority shall, in the absence of negligence or bad
faith on the part of the Trustee or the Registrar, as the case may be, be full
warrant to the Trustee or the Registrar, as the case may be, for any action
taken or suffered by it under the provisions of this Indenture upon the faith
thereof.
Section 8.03. Trustee and Registrar Not Responsible for Recitals. The
recitals contained herein and in the Bonds shall be taken as the statements of
the Authority, and the Trustee and the Registrar assume no responsibility for
the correctness of the same except (with respect to the Registrar) for the
Certificate of Authentication thereon. The Trustee and the Registrar make no
representations as to the validity or sufficiency of this Indenture or of the
Bonds. The Trustee and the Registrar shall not be accountable for the use or
application by the Authority of any of the Bonds authenticated or delivered
hereunder or of the proceeds of such Bonds except to the extent specifically
provided in this Indenture.
Section 8.04. Right of Trustee and Registrar to Acquire Bonds. The
Trustee, the Registrar and their officers and directors may acquire and hold, or
become the pledgee of, Bonds and otherwise deal with the Authority in the manner
and to the same extent and with like effect as though it were not Trustee or
Registrar, as the case may be, hereunder.
Section 8.05. Moneys Received by Trustee and Registrar to Be Held in
Trust. Subject to the provisions of Section 10.03, all moneys received by the
Trustee and the Registrar shall, until used or applied 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 or as otherwise
provided herein. Except to the extent provided otherwise herein, any interest
allowed on any such moneys shall be deposited in the fund to which such moneys
are credited.
Section 8.06. Compensation and Indemnification of Trustee and
Registrar. The Trustee and the Registrar shall be entitled to reasonable
compensation for all services rendered by them in the execution of the trusts
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee or the Registrar, as the case may be, which
compensation
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shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust, and the Agreement will require the Borrower to pay
or reimburse the Trustee or the Registrar, as the case may be, upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
Trustee or the Registrar, as the case may be, in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith. If any property, other than cash, shall at any time
be held by the Trustee or the Registrar, as the case may be, subject to this
Indenture, or any supplemental indenture, as security for the Bonds, the Trustee
or the Registrar, as the case may be, if and to the extent authorized by a
receivership, bankruptcy or other court of competent jurisdiction or by the
instrument subjecting such property to the provisions of this Indenture as such
security for the Bonds, shall be entitled (but not required) to make advances
for the purpose of preserving such property or of discharging tax liens or other
prior liens or encumbrances thereon. The Agreement will also require the
Borrower to provide certain indemnification to the Trustee and the Registrar.
Notwithstanding the foregoing, prior to seeking indemnity the Trustee shall make
timely payments of principal of and interest on the Bonds with moneys on deposit
in the Bond Fund as provided herein, and shall accelerate the payment of
principal on the Bonds when required by this Indenture without seeking
indemnification from the Borrower or any Bondholder. Upon the occurrence and
continuance of an Event of Default hereunder, and subject to Section 7.03
hereof, the Trustee shall have a lien prior to the Bonds as to all property and
funds held by it (other than the Rebate Fund) for any amount owing to it or any
predecessor Trustee pursuant to this Section 8.06 or the Agreement and the
rights of the Trustee to compensation for its services and to payment or
reimbursement for its costs, expenses, or advances shall have priority over the
Bonds in respect of all property or funds held or collected by the Trustee as
such and other funds held in trust by the Trustee for the benefit of the holders
of particular Bonds.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 6.1(c) of the Agreement and Section
7.01 hereof, such expenses (including the reasonable charges and expenses of its
counsel and agents) and the compensation for such services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law. The Trustee shall be entitled to
all reasonable fees and expenses incurred in enforcing the Bondholders' rights
in any bankruptcy action, and the intention that the fees and expenses incurred
by the Trustee in enforcing the rights of the Bondholders be treated as expenses
of administration under any applicable federal or state bankruptcy, insolvency
or other similar law shall not be
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deemed to limit the amount payable to the Trustee. The provisions of this
Section 8.06 shall survive the termination of this Indenture and the resignation
or removal of the Trustee or the Registrar.
Section 8.07. Qualifications of Trustee and Registrar. There shall at
all times be a trustee and a registrar hereunder which shall be corporations or
banking associations organized and doing business under the laws of the United
States or of a state thereof, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least fifty million
dollars ($50,000,000), subject to supervision or examination by federal or state
authority. If such corporations or banking associations publish reports of
condition at least annually, pursuant to law or to the requirements of any
supervising or examining authority above referred to, then for the purposes of
this Section the combined capital and surplus of such corporations or banking
associations shall be deemed to be their combined capital and surplus as set
forth in their most recent reports of conditions so published. In case at any
time the Trustee or the Registrar shall cease to be eligible in accordance with
the provisions of this Section, the Trustee or the Registrar, as the case may
be, shall resign immediately in the manner and with the effect specified in
Section 8.08.
Section 8.08. Resignation and Removal of Trustee or Registrar and
Appointment of Successor Trustee or Registrar.
(a) The Trustee or the Registrar may at any time resign by giving
written notice to the Authority and the Borrower and by giving to the
Bondholders notice either by publication of such resignation, which notice shall
be published at least once in a Qualified Newspaper, or by giving Notice by Mail
to such Bondholders. Upon receiving such notice of resignation, the Authority,
with the advice and consent of the Borrower, shall promptly appoint a successor
trustee or registrar, as the case may be, by an instrument in writing. If no
successor trustee or registrar, as the case may be, shall have been so appointed
and have accepted appointment within thirty (30) days after the giving of such
notice of resignation by the Trustee or the Registrar, as the case may be, the
resigning trustee or registrar, as the case may be, may petition any court of
competent jurisdiction for the appointment of a successor trustee or registrar,
as the case may be, or any Bondholder who has been a bona fide holder of a Bond
for at least six (6) months may, on behalf of himself and others similarly
situated, petition any such court for the appointment of a successor trustee or
registrar, as the case may be. Such court may thereupon, after such notice, if
any, as it may deem proper and may prescribe, appoint a successor trustee or
registrar, as the case may be.
(b) In case at any time either of the following shall occur:
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(1) the Trustee or the Registrar shall cease to be eligible in
accordance with the provisions of Section 8.07 and shall fail to resign
after written request therefor by the Authority or by any Bondholder
who has been a bona fide holder of a Bond for at least six (6) months,
or
(2) the Trustee or the Registrar shall become incapable of
acting, or shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or Registrar or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee or Registrar
or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, the Authority may remove the Trustee or the Registrar,
as the case may be, and, with the advice and consent of the Borrower, appoint a
successor trustee or registrar, as the case may be, by an instrument in writing,
or any such Bondholder may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee or the Registrar, as the case may be, and the appointment of a successor
trustee or registrar, as the case may be. Such court may thereupon, after such
notice, if any, as it may deem proper and may prescribe, remove the Trustee or
the Registrar, as the case may be, and appoint a successor trustee or registrar,
as the case may be. Upon any removal of the Trustee, any outstanding fees and
expenses of such former Trustee shall be paid in accordance with Section 8.06
hereof.
(c) The Authority, in the absence of an Event of Default, or the
holders of a majority in aggregate principal amount of the Bonds at the time
Outstanding may at any time remove the Trustee or the Registrar, as the case may
be, and appoint a successor trustee or registrar, as the case may be, by an
instrument or concurrent instruments in writing signed by the Authority or such
Bondholders, as the case may be.
(d) Any resignation or removal of the Trustee or the Registrar, as
the case may be, and appointment of a successor trustee or registrar, as the
case may be, pursuant to any of the provisions of this Section shall become
effective only upon acceptance of appointment by the successor trustee or
registrar, as the case may be, as provided in Section 8.09.
Section 8.09. Acceptance of Trust by Successor Trustee. Any successor
trustee appointed as provided in Section 8.08 shall execute, acknowledge and
deliver to the Authority, the Borrower and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, duties and obligations of its predecessor in the
trusts hereunder, with
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like effect as if originally named as Trustee herein; but, nevertheless, on the
Written Request of the Authority or the request of the successor trustee, the
trustee ceasing to act shall execute and deliver an instrument transferring to
such successor trustee, upon the trusts herein expressed, all the rights, powers
and trusts of the trustee so ceasing to act. Upon request of any such successor
trustee, the Authority shall execute any and all instruments in writing
necessary or desirable for more fully and certainly vesting in and confirming to
such successor trustee all such rights, powers and duties. Any trustee ceasing
to act shall, nevertheless, retain a lien upon all property or funds held or
collected by such trustee to secure the amounts due it as compensation,
reimbursement, expenses and indemnity afforded to it by Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.09 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.07.
Upon acceptance of appointment by a successor trustee as provided in
this Section, the Authority or such successor trustee shall give the
Bondholders, notice of the succession of such trustee to the trusts hereunder in
the manner prescribed in Section 8.08 for the giving of notice of resignation of
the Trustee.
Section 8.10. Merger or Consolidation of Trustee or Registrar. Any
corporation or banking association into which the Trustee may be merged or with
which it may be consolidated, or any corporation or banking association
resulting from any merger or consolidation to which the Trustee or the Registrar
shall be a party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Trustee or the
Registrar, shall be the successor of the Trustee or the Registrar hereunder
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding,
provided that such successor trustee or registrar shall be eligible under the
provisions of Section 8.07.
Section 8.11. Accounting Records and Reports; Financing Statements. The
Trustee and the Registrar shall keep proper books of record and account in
accordance with trust accounting standards in which complete and correct entries
shall be made of all transactions relating to the receipt, investment,
disbursement, allocation and application of the Revenues and the proceeds of the
Bonds received by the Trustee or the Registrar. Such records shall specify the
account or fund to which each investment (or portion thereof) held by the
Trustee is to be allocated and shall set forth, in the case of each Investment
Security, (a) its purchase price, (b) its value at maturity or its sale price,
as the case may be, (c) the amounts and dates of any payments to be made with
respect thereto and (d) such
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documentation and evidence as is required to be obtained by the Borrower to
establish that the requirements of Article V of the Tax Certificate have been
met. Such records shall be open to inspection by the Authority, the Borrower and
by any Bondholder at any reasonable time during regular business hours on
reasonable notice. The Trustee shall furnish to the Authority and the Borrower
monthly statements of all investments made by the Trustee and all funds and
accounts held by the Trustee.
The Trustee shall furnish to any Bondholder who may make written
request therefor a copy of the most recent audited financial statements of the
Borrower that are in the possession of the Trustee. The Trustee shall have no
responsibility or liability with respect to the Borrower's failure to provide
such statements, and the Trustee shall not be required to compel the Borrower to
provide any such statements.
The Trustee shall not be responsible for the preparation or filing of
any UCC financing statements or continuation statements under this Indenture.
Section 8.12. Registrar. The Authority, at the request and direction of
the Borrower, shall appoint a registrar for the Bonds. The Registrar shall be a
bank, trust company or national banking association which meets the
qualifications of Section 8.07 hereof, willing and able to accept the office on
reasonable and customary terms and authorized by law to perform all the duties
imposed upon it hereby. The Registrar shall signify its acceptance of the duties
and obligations imposed upon it hereby by executing and delivering to the
Authority and the Trustee a written acceptance thereof. The Registrar initially
appointed hereunder is the Trustee.
Section 8.13. Tax Certificate. The Trustee covenants and agrees
that it will comply with all written instructions of the Borrower given in
accordance with the Tax Certificate and will take any and all action as may be
necessary in accordance with such written instructions. The Trustee acknowledges
receipt of the Tax Certificate and acknowledges that the provisions of the Tax
Certificate are incorporated herein by reference as provided in Section 6.06
hereof. The Trustee shall not be accountable for the use by the Borrower of the
proceeds of the Bonds.
Section 8.14. Notices to the Authority. The Trustee shall provide the
Authority with the following:
(a) On or before January 15 of each year during which any of the
Bonds are Outstanding, or upon any significant change that occurs which would
adversely impact the Trustee's ability to perform its duties under the
Indenture, a written disclosure of any such change, or if applicable, of any
conflicts that the Trustee may have as a result of other business dealings
between the Trustee (or any affiliate thereof) and the Borrower.
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If there are no such instances of a significant change, or of a conflict
existing, then a statement to that effect shall be provided on such date;
(b) If there is a failure to pay any amount of principal of or
interest on the Bonds when due; or if there is a failure of the Borrower to
provide any notice, certification or report specified in Section 5.9 of the
Agreement; or if there is an occurrence of an Event of Default hereunder, of
which the Trustee has knowledge, the Trustee shall provide written notice to the
Authority within five (5) Business Days of receiving actual notice of such
occurrence and such notice shall include a statement setting forth the steps, if
any, the Trustee is taking to remedy such failure or Event of Default, as
applicable; and
(c) As of June 30 and December 31 of each year (beginning December
31, 1997), a Trustee's report in the form of Exhibit A attached hereto. This
report shall be received no later than January 15 or July 15 next following each
such June 30 or December 31, as the case may be.
Section 8.15. Appointment of Co-Trustee. In the event the Trustee deems
that by reason of any present or future law of any jurisdiction it may not
exercise any of the powers, rights or remedies herein granted to the Trustee or
hold title to the properties, in trust, as herein granted, or take any other
action which may be desirable or necessary in connection therewith, it may be
necessary that the Trustee appoint an additional institution as a separate
trustee or co-trustee. In the absence of an Event of Default under this
Indenture, the appointment of any such separate trustee or co-trustee shall be
subject to the approval of the Authority and the Borrower. The following
provisions of this Section are adapted to these ends.
(a) In the event that the Trustee appoints an additional
institution as a separate trustee or co-trustee, each and every remedy, power,
right, claim, demand, cause of action, immunity, estate, interest or lien
expressed or intended by this Indenture to be exercised by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in
such separate trustee or co-trustee but only to the extent necessary to enable
such separate trustee or co-trustee to exercise such powers, rights and
remedies, and every covenant and obligation necessary to the exercise thereof by
such separate trustee or co-trustee shall run to and be enforceable by either of
them. Such co-trustee may be removed by the Trustee at any time, with or without
cause.
(b) Should any instrument in writing from the Authority be
required by the separate trustee or co-trustee so appointed by the Trustee for
more fully and certainly vesting in and confirming to it such properties,
rights, powers, trusts, duties and obligations, any and all such instruments in
writing shall, on request, be executed, acknowledged and delivered by the
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Authority. In case any separate trustee or co-trustee, or a successor to either,
shall become incapable of acting, resign or be removed, all the estates,
properties, rights, powers, trusts, duties and obligations of such separate
trustee or co-trustee, so far as permitted by law, shall vest in and be
exercised by the Trustee until the appointment of a successor to such separate
trustee or co-trustee.
ARTICLE IX
MODIFICATION OF INDENTURE, AGREEMENT
Section 9.01. Modification without Consent of Bondholders. The
Authority and the Trustee, without the consent of or notice to any Bondholders
from time to time and at any time, and subject to the conditions and
restrictions contained in this Indenture, may enter into an indenture or
indentures supplemental hereto, which indenture or indentures thereafter shall
form a part hereof; and the Trustee, without the consent of or notice to any
Bondholders from time to time and at any time, may consent to any Amendment to
the Agreement; in each case for any one or more of the following purposes:
(a) to add to the covenants and agreements of the Authority
contained in this Indenture, or of the Borrower contained in the Agreement,
other covenants and agreements thereafter to be observed, or to assign or
pledge additional security for any of the Bonds, or to surrender any right or
power herein or therein reserved to or conferred upon the Authority or the
Borrower; provided, that no such covenant, agreement, assignment, pledge or
surrender shall materially adversely affect the interests of the holders of
the Bonds;
(b) to make such provisions for the purpose of curing any
ambiguity, inconsistency or omission, or of curing, correcting or
supplementing any defective provision contained in this Indenture or the
Agreement, or in regard to matters or questions arising under this Indenture
or the Agreement, as the Authority may deem necessary or desirable and not
inconsistent with this Indenture and which shall not materially adversely
affect the interests of the holders of the Bonds;
(c) to modify, amend or supplement this Indenture or any
indenture supplemental hereto in such manner as to permit the qualification
hereof or thereof under the Trust Indenture Act of 1939 or any similar federal
statute hereafter in effect, and, if they so determine, to add to this
Indenture or any indenture supplemental hereto such other terms, conditions
and provisions as may be permitted by said Trust Indenture Act of 1939 or
similar federal statute, and which shall not adversely affect the interests of
the holders of the Bonds;
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(d) to provide for any additional procedures, covenants or agreements
necessary to maintain the Tax-Exempt status of interest on the Bonds; provided
that such amendment or supplement shall not materially adversely affect the
interests of the holders of the Bonds;
(e) to modify or eliminate the book-entry registration system for any
of the Bonds;
(f) to provide for the procedures required to permit any Bondholder
to separate the right to receive interest on the Bonds from the right to
receive principal thereof and to sell or dispose of such rights, as
contemplated by Section 1286 of the Code;
(g) to provide for the appointment of a co-trustee or the succession
of a new Trustee, Registrar or Paying Agent;
(h) to change Exhibit A to the Agreement in accordance with the
provisions thereof and of the Tax Certificate;
(i) to comply with requirements of any Rating Agency in order to
obtain or maintain a rating on any Bonds; or
(j) in connection with any other change which, in the judgment of
the Trustee (which may be based upon an Opinion of Counsel), will not
adversely affect the security for the Bonds or the Tax-Exempt status of
interest thereon or otherwise materially adversely affect the holders of the
Bonds.
Notwithstanding the foregoing provisions of this Section 9.01, the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture, and the
Trustee shall not enter into any supplemental indenture or consent to any
Amendment without first obtaining the written consent of the Borrower. The
Trustee will give notice of the provisions of any supplemental indenture
authorized by the provisions of this Section 9.01 to the applicable Rating
Agencies. Any supplemental indenture or Amendment permitted pursuant to this
Section 9.01 may be approved by an Authorized Authority Representative and need
not be approved by resolution or other action of the Board of Directors of the
Authority.
Section 9.02. Modification with Consent of Bondholders. With the
consent of the holders of not less than sixty-six and two-thirds percent
(662/3%) in aggregate principal amount of the Bonds at the time Outstanding,
evidenced as provided in Section 11.06, if any, (i) the Authority and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for the purpose of adding any
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provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture; or (ii) the Trustee may consent
to any Amendment to the Agreement and any other matters for which its consent is
required pursuant to Section 6.04 hereof; provided, however, that no such
supplement or Amendment will have the effect of extending the time for payment
or reducing any amount due and payable by the Borrower pursuant to the Agreement
without the consent of all the holders of the Bonds; and that no such
supplemental indenture shall (1) extend the fixed maturity of any Bond or reduce
the rate of interest thereon or extend the time of payment of interest, or
reduce the amount of the principal thereof, without the consent of the holder of
each Bond so affected, or (2) reduce the aforesaid percentage of holders of
Bonds whose consent is required for the execution of such supplemental
indentures, or permit the creation of any lien on the Revenues prior to or on a
parity with the lien of this Indenture, except as permitted herein, or permit
the creation of any preference of any Bondholder over any other Bondholder,
except as permitted herein, or deprive the holders of the Bonds of the lien
created by this Indenture upon the Revenues, without the consent of the holders
of all the Bonds then Outstanding. Nothing in this paragraph shall be construed
as making necessary the approval of any Bondholder of any supplemental indenture
or Amendment permitted by the provisions of Section 9.01.
Upon receipt by the Trustee of a Certified Resolution authorizing the
execution of any such supplemental indenture or Amendment, and upon the filing
with the Trustee of evidence of the consent of the Bondholders, if any, as
aforesaid, the Trustee shall join with the Authority in the execution of such
supplemental indenture or shall consent to such Amendment; provided, however,
that (i) the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise, in which case the Trustee may in its sole
discretion, but shall not be obligated to, enter into such supplemental
indenture; and (ii) the Trustee shall not enter into such supplemental indenture
or Amendment without first obtaining the Borrower's written consent thereto.
It shall not be necessary for the consent of the Bondholders under this
Section to approve the particular form of any proposed supplemental indenture or
Amendment, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the parties thereto of any supplemental
indenture or Amendment as provided in this Section, the Trustee shall mail a
notice (prepared by the Borrower) setting forth in general terms the substance
of such supplemental indenture or such Amendment to each Bondholder at the
address contained in the bond register maintained by the Registrar. Any failure
of the Trustee to give such notice, or any defect therein, shall not, however,
in any way impair or
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affect the validity of any such supplemental indenture or such Amendment.
Section 9.03. Effect of Supplemental Indenture or Amendment. Upon the
execution of any supplemental indenture or any Amendment to the Agreement
pursuant to the provisions of this Article IX, this Indenture or the Agreement,
as the case may be, shall be and be deemed to be modified and amended in
accordance therewith, and the respective rights, duties and obligations under
this Indenture and the Agreement of the Authority, the Trustee, the Borrower and
all holders of Outstanding Bonds shall thereafter be determined, exercised and
enforced hereunder and under the Agreement subject in all respects to such
supplemental indentures and Amendments, and all the terms and conditions of any
such supplemental indenture or Amendment shall be part of the terms and
conditions of this Indenture or the Agreement, as the case may be, for any and
all purposes.
Section 9.04. Required and Permitted Opinions of Counsel. Subject to
the provisions of Section 8.01 hereof, the Trustee is entitled to receive an
Opinion of Counsel and rely on such Opinion of Counsel as conclusive evidence
that any supplemental indenture or Amendment executed pursuant to the provisions
of this Article IX complies with the requirements of this Article IX, that the
appropriate consents have been obtained and that such supplemental indenture or
Amendment has been duly authorized by the Authority.
Section 9.05. Notation of Modification on Bonds; Preparation of New
Bonds. Bonds authenticated and delivered after the execution of any supplemental
indenture pursuant to the provisions of this Article IX may bear a notation, at
the written request of the Authority, as to any matter provided for in such
supplemental indenture, and if such supplemental indenture shall so provide, new
Bonds, so modified as to conform, in the opinion of the Trustee and the
Authority, to any modification of this Indenture contained in any such
supplemental indenture, may be prepared by the Authority, authenticated by the
Registrar and delivered without cost to the holders of the Bonds then
Outstanding, upon surrender for cancellation of such Bonds in equal aggregate
principal amounts.
ARTICLE X
DEFEASANCE
Section 10.01. Discharge of Indenture. If the entire indebtedness on
all Bonds Outstanding shall be paid and discharged in any one or more of the
following ways:
(a) by the payment of the principal of, and interest on all
Bonds Outstanding, as and when the same become due and payable; or
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(b) by the delivery to the Registrar, for cancellation by it, of
all Bonds Outstanding;
and if all other sums payable hereunder by the Authority shall be paid and
discharged, then thereupon this Indenture shall cease, terminate and become null
and void except only as provided in Section 10.02 hereof, and thereupon the
Trustee shall, upon Written Request of the Authority, and upon receipt by the
Trustee of a Certificate of the Authority and an Opinion of Counsel, each
stating that in the opinion of the signers all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with, forthwith
execute proper instruments acknowledging satisfaction of and discharging this
Indenture. The satisfaction and discharge of this Indenture shall be without
prejudice to the rights of the Trustee to charge and be reimbursed by the
Borrower for any expenditures which it may thereafter incur in connection
herewith.
Any Bond or Authorized Denomination thereof shall be deemed to be paid
within the meaning of this Indenture when (a) payment of the principal of such
Bond or Authorized Denomination thereof, plus interest thereon to the due date
thereof (whether such due date is by reason of maturity or upon redemption as
provided herein) either (i) shall have been made or caused to be made in
accordance with the terms thereof, or (ii) shall have been provided for by
irrevocably depositing with the Trustee in trust and irrevocably setting aside
exclusively for such payment (1) moneys sufficient to make such payment and/or
(2) nonprepayable, noncallable Government Obligations maturing as to principal
and interest in such amount and at such time as will insure the availability of
sufficient moneys to make such payment, and (b) all necessary and proper fees,
compensation and expenses of the Trustee pertaining to any such deposit shall
have been paid or the payment thereof provided for to the satisfaction of the
Trustee. At such time as a Bond or Authorized Denomination thereof shall be
deemed to be paid hereunder, as aforesaid, such Bond or Authorized Denomination
thereof shall no longer be secured by or entitled to the benefits of this
Indenture, except for the purposes of any such payment from such moneys and/or
Government Obligations. The Trustee shall not be responsible for verifying the
sufficiency of funds provided to effect the defeasance of Bonds pursuant to this
Article X.
The Authority and the Borrower may at any time surrender to the
Registrar for cancellation by it any Bonds previously authenticated and
delivered which the Authority or the Borrower lawfully may have acquired in any
manner whatsoever, and such Bonds, upon such surrender and cancellation, shall
be deemed to be paid and retired.
Section 10.02. Discharge of Liability on Bonds. Upon the deposit with
the Trustee, in trust, at or before maturity, of money or securities in the
necessary amount (as provided in
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Section 10.04) to pay or redeem Outstanding Bonds, whether upon or prior to
their maturity or the redemption date of such Bonds, (provided that, if such
Bonds are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article IV provided or provision
satisfactory to the Trustee shall have been made for giving such notice), all
liability of the Authority and the Borrower in respect of such Bonds shall
cease, terminate and be completely discharged, except that the Authority and the
Borrower shall remain liable for such payment but only from, and the Bondholders
shall thereafter be entitled only to payment (without interest accrued thereon
after such redemption date or maturity date) out of, the money deposited with
the Trustee as aforesaid for their payment, subject, however, to the provisions
of Sections 6.06 and 10.03.
Section 10.03. Payment of Bonds after Discharge of Indenture.
Notwithstanding any provisions of this Indenture, and subject to applicable laws
of the State, any moneys deposited with the Trustee or any Paying Agent, in
trust for the payment of the principal of, or interest on, any Bonds remaining
unclaimed for two (2) years after the principal of any or all of the Outstanding
Bonds has become due and payable (whether at maturity or upon call for
redemption or by declaration as provided in this Indenture), shall then be
repaid to the Borrower upon its written request, and the holders of such Bonds
shall thereafter be entitled to look only to the Borrower for payment thereof,
and all liability of the Trustee or any Paying Agent with respect to such moneys
shall thereupon cease; provided, however, that before the repayment of such
moneys to the Borrower as aforesaid, the Trustee or Paying Agent, as the case
may be, shall (at the request and cost of the Borrower) first publish at least
once in a Qualified Newspaper a notice, in such form as may be deemed
appropriate by the Borrower and the Trustee, in respect of the Bonds so payable
and not presented and in respect of the provisions relating to the repayment to
the Borrower of the moneys held for the payment thereof. In the event of the
repayment of any such moneys to the Borrower as aforesaid, the holders of the
Bonds in respect of which such moneys were deposited shall thereafter be deemed
to be unsecured creditors of the Borrower for amounts equivalent to the
respective amounts deposited for the payment of such Bonds and so repaid to the
Borrower (without interest thereon).
Section 10.04. Deposit of Money or Securities with Trustee. Whenever in
this Indenture it is provided or permitted that there be deposited with or held
in trust by the Trustee money or securities in the necessary amount to pay or
redeem any Bonds, the money or securities so to be deposited or held may include
money or securities held by the Trustee in the funds and accounts established
pursuant to this Indenture and shall be:
(a) Available amounts constituting lawful money of the United
States of America in an amount equal to the principal amount of such Bonds and
all unpaid interest thereon to
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maturity, except that, in the case of Bonds which are to be redeemed prior to
maturity and in respect of which notice of such redemption shall have been
given as provided in Article IV or provision satisfactory to the Trustee
shall have been made for the giving of such notice, the amount to be
deposited or held shall be the principal amount or redemption price of such
Bonds and all unpaid interest thereon to the redemption date; or
(b) nonprepayable, noncallable Government Obligations, the
principal of and the interest on which when due will provide money sufficient
to pay the principal or redemption price of and all unpaid interest to
maturity, or to the redemption date, as the case may be, on the Bonds to be
paid or redeemed, as such principal or redemption price and interest become
due, provided that, in the case of Bonds which are to be redeemed prior to the
maturity thereof, notice of such redemption shall have been given as provided
in Article IV or provision satisfactory to the Trustee shall have been made
for the giving of such notice;
provided, in each case, that the Trustee shall have been irrevocably instructed
(by the terms of this Indenture or by Written Request of the Authority) to apply
such money to the payment of such principal or redemption price and interest
with respect to such Bonds.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Successors of Authority. All the covenants,
stipulations, promises and agreements in this Indenture contained, by or on
behalf of the Authority, shall bind and inure to the benefit of its successors
and assigns, whether so expressed or not. If any of the powers or duties of the
Authority shall hereafter be transferred by any law of the State, and if such
transfer shall relate to any matter or thing permitted or required to be done
under this Indenture by the Authority, then the body or official of the State
who shall succeed to such powers or duties shall act and be obligated in the
place and stead of the Authority as provided in this Indenture.
Section 11.02. Limitation of Rights to Parties and Bondholders. Nothing
in this Indenture or in the Bonds expressed or implied is intended or shall be
construed to give to any person other than the Authority, the Trustee, the
Registrar, the Paying Agent, the Borrower and the holders of the Bonds issued
hereunder any legal or equitable right, remedy or claim under or in respect of
this Indenture or any covenant, condition or provision therein or herein
contained; and all such covenants, conditions and provisions are and shall be
held to be for the sole and exclusive benefit of the Authority, the Trustee, the
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Registrar, the Paying Agent, the Borrower and the holders of the Bonds issued
hereunder.
Section 11.03. Waiver of Notice. Whenever in this Indenture the giving
of Notice by Mail or otherwise is required, the giving of such notice may be
waived in writing by the person entitled to receive such notice and in any such
case the giving or receipt of such notice shall not be a condition precedent to
the validity of any action taken in reliance upon such waiver.
Section 11.04. Separability of Invalid Provisions. In case any one or
more of the provisions contained in this Indenture or in the Bonds shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
Section 11.05. Notices. It shall be sufficient service of any notice,
request, complaint, demand or other paper on the Authority, the Trustee, the
Borrower, the Registrar or the Paying Agent if the same shall be duly mailed
by first class mail, postage prepaid, addressed as follows:
To the Authority: California Pollution Control
Financing Authority
915 Capitol Mall, Room 470
Sacramento, California 95814
Attn: Executive Director
To the Trustee: U.S. Bank, a National Banking Association
Registrar and 107 South Main Street, Suite 303
Paying Agent Salt Lake City, Utah 84111
Attn: Corporate Trust Department
To the Borrower: Laidlaw Environmental Services, Inc.
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attn: Chief Financial Officer
The Authority, the Trustee, the Borrower, the Registrar and the Paying Agent
may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent. A
duplicate copy of each notice, certificate or other communication given
hereunder by the Authority or the Trustee to the other shall also be given to
the Borrower. Unless otherwise requested by the Authority, the Trustee, the
Borrower, the Registrar or the Paying Agent, any notice required to be given
hereunder in writing may be given by any form of telephonic or electronic
transmission capable of making a written record. Each such party shall file
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with the Trustee information appropriate to receiving such form of telephonic or
electronic transmission.
Section 11.06. Evidence of Rights of Bondholders.
(a) Any request, consent or other instrument required by this
Indenture to be signed and executed by Bondholders may be in any number of
concurrent writings of substantially similar tenor and may be signed or
executed by such Bondholders in person or by agent or agents duly appointed in
writing. Proof of the execution of any such request, consent or other
instrument or of a writing appointing any such agent, shall be sufficient for
any purpose of this Indenture and shall be conclusive in favor of the Trustee,
the Registrar and the Authority if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
request, consent or other instrument or writing may be proved by the affidavit
of a witness of such execution or by the certificate of any notary public or
other officer of any jurisdiction, authorized by the laws thereof to take
acknowledgments of deeds, certifying that the person signing such request,
consent or other instrument or writing acknowledged to him or her the execution
thereof.
(c) The ownership of registered Bonds shall be proved by the Bond
register maintained by the Registrar pursuant to Section 2.04 hereof. The fact
and the date of execution of any request, consent or other instrument may also
be proved in any other manner which the Trustee may deem sufficient. The Trustee
may nevertheless, in its discretion, require further proof in cases where it may
deem further proof desirable.
(d) Any request, consent or vote of the holder of any Bond shall bind
every future holder of the same Bond and the holder of any Bond issued in
exchange therefor or in lieu thereof, in respect of anything done or suffered to
be done by the Trustee or the Authority in pursuance of such request, consent or
vote.
(e) Except as otherwise provided herein, in determining whether the
holders of the requisite aggregate principal amount of Bonds have concurred in
any demand, request, direction, consent or waiver under this Indenture, Bonds
which are owned by the Authority, by the Borrower or by any other direct or
indirect obligor on the Bonds, or by any person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the Authority, the Borrower, or any other direct or indirect obligor on the
Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of
any such determination, provided that, for the purpose of determining whether
the Trustee shall be protected in relying on any such demand, request,
direction, consent or waiver, only Bonds which the Trustee knows to be so owned
shall be disregarded. Bonds so owned which have been pledged in good
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faith may be regarded as Outstanding for the purposes of this subsection (e) if
the pledgee shall certify to the Trustee the pledgee's right to vote such Bonds
and that the pledgee is not a person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Authority,
the Borrower or any other direct or indirect obligor on the Bonds. In case of a
dispute as to such right, any decision by the Trustee taken upon the advice of
counsel shall be full protection to the Trustee.
(f) In lieu of obtaining any demand, request, direction, consent or
waiver in writing, the Trustee may call and hold a meeting of the Bondholders
upon such notice and in accordance with such rules and regulations, including
the right of the Bondholders to be represented and vote by proxy, as the Trustee
considers fair and reasonable for the purpose of obtaining any such action.
Section 11.07. Waiver of Personal Liability. No member, officer, agent
or employee of the Authority, and no officer, official, agent or employee of the
State or any department, board or agency of the State shall be individually or
personally liable for the payment of the principal of or interest on the Bonds
or be subject to any personal liability or accountability by reason of the
issuance of the Bonds; but nothing herein contained shall relieve any such
member, officer, agent or employee from the performance of any official duty
provided by law or by this Indenture.
Section 11.08. Publication of Notices. Any publication of notice to be
made under the provisions of this Indenture may be made in each instance upon
any day, and, except as provided in Section 10.03, no such publication shall be
required if such notice is given by first class mail to the holders of all Bonds
then Outstanding.
Section 11.09. Governing Law; Venue. This Indenture shall be construed
in accordance with and governed by the Constitution and laws of the State
applicable to contracts made and performed in the State. This Indenture shall be
enforceable in the State, and any action arising out of this Indenture shall be
filed and maintained in the Sacramento County Superior Court, Sacramento,
California, unless the Authority waives this requirement.
Section 11.10. Execution in Several Counterparts. This Indenture may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original; and all such counterparts, or as many
of them as the Authority and the Trustee shall preserve undestroyed, shall
together constitute but one and the same instrument.
Section 11.11. Reserved.
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Section 11.12. Continuing Disclosure. Pursuant to Section 5.10 of the
Agreement, the Borrower shall undertake the continuing disclosure requirements
for the Bonds as promulgated under S.E.C. Rule 15c2-12, as it may from time to
time hereafter be amended or supplemented, and the Authority shall have no
liability to the holders of the Bonds or any other person with respect to such
disclosure matters. Notwithstanding any other provision of this Indenture,
failure of the Borrower to comply with the requirements of Rule 15c2-12
applicable to the Bonds, as it may from time to time hereafter be amended or
supplemented, shall not be considered an Event of Default hereunder or under the
Agreement; however, the Trustee may (and, at the request of the Placement Agent
or the holders of at least 25% aggregate principal amount of Outstanding Bonds
and upon receipt of indemnity satisfactory to the Trustee, shall) or any
Bondholder or beneficial owner (within the meaning of Rule 15c2-12) of any Bonds
may take such actions as may be necessary and appropriate, including seeking
mandate or specific performance by court order, to cause the Borrower to comply
with its obligations under Section 5.10 of the Agreement.
Section 11.13. Opinions of Bond Counsel. For so long as Orrick,
Herrington & Sutcliffe LLP (or its successor) is a nationally recognized Bond
Counsel, whenever in this Indenture it is required that prior to the taking of
any action (including but not limited to any modifications of arbitrage
covenants contained in Section 6.06 hereof) an opinion of Bond Counsel is
required to be delivered to the effect that such action will not adversely
affect the Tax-Exempt status of the Bonds, and such opinion is not given by
Orrick, Herrington & Sutcliffe LLP, the opinion of Bond Counsel shall instead
affirmatively state, in a manner acceptable to the Authority and the Trustee,
that interest on the Bonds is Tax-Exempt and will remain so after the action in
question. This Section shall apply in the same fashion with respect to the
affirmative opinion of any such successor Bond Counsel.
55
<PAGE> 60
IN WITNESS WHEREOF, the Authority has caused this Indenture to be
signed in its name and attested by its duly authorized officers, and the
Trustee, in token of its acceptance of the trust created hereunder, has caused
this Indenture to be signed in its name by its duly authorized signatory, all as
of the day and year first above written.
CALIFORNIA POLLUTION CONTROL
FINANCING AUTHORITY
By Matt Fong, Chairman
By
-----------------------------------
Deputy
Attest:
- ----------------------------------
Executive Director
U.S. BANK, a national banking
association, as Trustee
By
---------------------------------
Authorized Officer
56
<PAGE> 61
EXHIBIT A
[FORM OF BOND]
A-1
<PAGE> 62
$19,500,000 No.RA-1
CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY
POLLUTION CONTROL REFUNDING REVENUE BOND
(LAIDLAW ENVIRONMENTAL SERVICES, INC.)
1997 SERIES A
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE
OF CALIFORNIA OR ANY LOCAL AGENCY OR POLITICAL SUBDIVISION
THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR
INTEREST ON THIS BOND.
<TABLE>
<CAPTION>
INTEREST RATE DATED DATE MATURITY DATE CUSIP
<S> <C> <C> <C>
6.70% July 1, 1997 July 1, 2007 130534XK1
</TABLE>
REGISTERED HOLDER: CEDE & CO.
PRINCIPAL AMOUNT: NINETEEN MILLION FIVE HUNDRED THOUSAND
DOLLARS
CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY, a public
instrumentality and political subdivision of the State of California (the
"Authority"), for value received, hereby promises to pay (but only out of
Revenues as hereinafter provided) to the registered holder (the "holder")
identified above or registered assigns, on the maturity date set forth above,
the principal amount set forth above and to pay (but only out of the sources
hereinafter provided) interest on the balance of said principal amount from time
to time remaining unpaid from and including the date hereof (as provided herein)
until payment of said principal amount has been made or duly provided for, at
the interest rate set forth above, and to pay (but only out of the source
hereinafter provided) interest on overdue principal at the rate borne by this
Bond, except as the provisions hereinafter set forth with respect to redemption
or acceleration prior to maturity may become applicable hereto.
The principal portion of this Bond is payable at final maturity or
earlier redemption in lawful money of the United States of America at the
corporate trust office of U.S. Bank, a national banking association, Salt Lake
City, Utah, or its successors in trust (the "Trustee"), which office is
initially located at 107 South Main Street, Suite 303, Salt Lake City, Utah
84111, Attention: Corporate Trust Department. Interest payments on this Bond,
shall be made by the Trustee as paying agent (the "Paying Agent"), on each July
1 and January 1, or if such day is not a business day, the immediately
succeeding Business Day, (as hereinafter defined), commencing January 1, 1998
(an "Interest Payment Date") to the person appearing on the bond registration
A-2
<PAGE> 63
books of the Registrar as the registered holder hereof as of the close of
business on the Record Date (as hereinafter defined), such interest to be paid
by the Paying Agent to such registered holder (i) in the event this Bond is held
in book-entry form, in immediately available funds on the Interest Payment Date
(as hereinafter defined) in accordance with the Representation Letter; and (ii)
in the event this Bond is not held in book-entry form, (A) in immediately
available funds (by wire transfer or by deposit to the account of the holder of
this Bond if such account is maintained with the Paying Agent), according to the
instructions given by such holder to the Registrar or (B) in all other cases, by
check mailed by first class mail to the holder at such holder's address as it
appears as of the Record Date on the registration books of the Registrar;
except, in each case, that, if and to the extent that there shall be a default
in the payment of the interest due on such Interest Payment Date, such defaulted
interest shall be paid to the holders in whose name this Bond is registered as
of a special record date to be fixed by the Trustee. The term "Record Date"
means the fifteenth day (whether or not a Business Day) of the month preceding
such Interest Payment Date. The term "Business Day" means a day on which banks
located in the cities in which the principal offices of the Trustee, the
Registrar and the Paying Agent are located are not required or authorized to be
closed and on which the New York Stock Exchange is not closed.
This Bond is one of a duly authorized issue of bonds of the Authority
designated as the "California Pollution Control Financing Authority Pollution
Control Refunding Revenue Bonds (Laidlaw Environmental Services, Inc.) 1997
Series A" (the "Bonds"), limited in aggregate principal amount as provided in,
and issued under and secured by, an Indenture of Trust, dated as of July 1, 1997
(the "Indenture"), between the Authority and the Trustee. Reference is hereby
made to the Indenture and all indentures supplemental thereto for a description
of the rights thereunder of the holders of the Bonds, of the nature and extent
of the security, of the rights, duties and immunities of the Trustee and of the
rights and obligations of the Authority thereunder, to all of the provisions of
which Indenture the holder of this Bond, by acceptance hereof, assents and
agrees. All capitalized terms used and not otherwise defined herein shall have
the meanings for such terms as are set forth in the Indenture.
The Bonds are authorized to be issued pursuant to the provisions of the
California Pollution Control Financing Authority Act, being Division 27
(commencing at section 44500) of the California Health and Safety Code, as
supplemented and amended (the "Act"). The Bonds are limited obligations of the
Authority and, as and to the extent set forth in the Indenture, are payable
solely from, and secured by a pledge of and lien on, the Revenues, consisting
primarily of installment repayments made by Laidlaw Environmental Services, Inc.
(the "Borrower") under the terms of a Loan Agreement, dated as of July 1, 1997
(the
A-3
<PAGE> 64
"Agreement"), between the Authority and the Borrower. The Bonds are all issued
under and equally and ratably secured by and entitled to the benefits of the
Indenture, including the security of a pledge and assignment of certain revenues
and receipts derived by the Authority pursuant to the Agreement and from any
other moneys held by the Trustee under the Indenture for such purpose, and there
shall be no other recourse against the Authority or any property now or
hereafter owned by it.
THE BONDS SHALL NOT CONSTITUTE A DEBT OR LIABILITY, OR A PLEDGE OF THE
FAITH AND CREDIT, OF THE STATE OF CALIFORNIA, BUT SHALL BE PAYABLE SOLELY FROM
THE FUNDS HEREIN PROVIDED THEREFOR. NO OWNER OF THIS OR ANY OTHER BOND SHALL
HAVE ANY RIGHT TO DEMAND PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR
INTEREST ON, THE BONDS BY THE AUTHORITY, THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF, OUT OF ANY FUNDS TO BE RAISED BY TAXATION OR APPROPRIATION.
The Bonds are subject to optional, mandatory and mandatory sinking fund
redemption prior to maturity upon mandatory or extraordinary optional prepayment
by the Borrower of amounts due under the Agreement, at the times, in the manner
and at the prices set forth in the Indenture.
Notice of any extraordinary optional or mandatory redemption shall be
given by first-class mail not less than 30 days nor more than 60 days prior to
the date fixed for redemption to, among others, the holders of Bonds to be
redeemed at their addresses appearing on the registration books of the
Registrar. If less than all of the Bonds are to be redeemed, the particular
Bonds to be redeemed shall be selected as provided in the Indenture.
This Bond shall bear interest from the last date to which interest has
been paid in full or duly provided for on this Bond, or, if no interest has been
paid or duly provided for on this Bond, from the Dated Date. Interest on the
Bonds shall be computed upon the basis of a 360-day year, consisting of twelve
30-day months.
This Bond shall be deliverable in the form of a registered Bond without
coupons in the denominations of $1,000,000 or any integral of $5,000 thereafter,
until such time (if any) as a Rating Agency assigns a Single A Rating (as
defined in the Indenture) to the Bonds, in which case, Bonds shall be
deliverable in denominations of $100,000 or any multiple of $5,000 in excess of
that amount (herein "Authorized Denominations").
No member, officer, agent or employee of the Authority, and no officer,
official, agent or employee of the State of California or any department, board
or agency of the State of California shall be individually or personally liable
for the payment of the principal of or interest on the Bonds or be
A-4
<PAGE> 65
subject to any personal liability or accountability by reason of the issuance of
the Bonds, and all such liability of any such member, officer, agent or employee
as such is hereby expressly waived and released as a condition of and in
consideration for the execution of the Indenture and the issuance of any of the
Bonds.
The holder of this Bond shall have no right to enforce the provisions
of the Indenture or to institute action to enforce the covenants therein, or to
take any action with respect to any Event of Default (as defined in the
Indenture) under the Indenture, or to institute, appear in or defend any suit or
other proceedings with respect thereto, except as provided in the Indenture. If
an Event of Default occurs and is continuing, the principal of all Bonds then
outstanding issued under the Indenture may be declared due and payable upon the
conditions and in the manner and with the effect provided in the Indenture.
Subject to the limitations and upon payment of the charges, if any,
provided in the Indenture, Bonds may be exchanged at the principal office of the
Trustee for a like aggregate principal amount of Bonds of like tenor in
Authorized Denominations.
This Bond is transferable by the holder hereof, in person, or by its
attorney duly authorized in writing, at the principal office of the Registrar,
but only in the manner, subject to the limitations and upon payment of the
charges provided in the Indenture, and upon surrender and cancellation of this
Bond. Upon such transfer a new fully registered Bond or Bonds of like tenor in
Authorized Denominations, for the same aggregate principal amount, will be
issued to the transferee in exchange herefor.
The Authority, the Registrar, the Trustee, the Paying Agent and any
agent of the Authority, the Registrar, the Trustee or the Paying Agent may treat
the person in whose name this Bond is registered as the holder hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Bond be overdue, and neither the Authority, the Registrar,
the Trustee, the Paying Agent nor any such agent shall be affected by notice to
the contrary.
The Indenture contains provisions permitting the Authority and the
Trustee, with the consent of the holders of a 662/3% in aggregate principal
amount of the Bonds at the time outstanding, evidenced as provided in the
Indenture, to execute supplemental indentures adding any provisions to, or
changing in any manner, or eliminating any of the provisions of, the Indenture;
provided, however, that no such supplemental indenture shall (1) extend the
fixed maturity of any Bond or reduce the rate of interest thereon or extend the
time of payment of interest, or reduce the amount of the principal thereof,
without the consent of the holder of each Bond so affected, or (2) reduce
A-5
<PAGE> 66
the aforesaid percentage of holders of Bonds whose consent is required for the
execution of such supplemental indentures, or permit the creation of any lien on
the Revenues prior to or on a parity with the lien of the Indenture, except as
permitted therein, or permit the creation of any preference of any Bondholder
over any other Bondholder, except as permitted in the Indenture, or deprive the
holders of the Bonds of the lien created by the Indenture upon the Revenues,
without the consent of the holders of all the Bonds then Outstanding. The
Indenture also contains provisions permitting the Authority and the Trustee,
without the consent of any holders of the Bonds, to execute supplemental
indentures for certain purposes specified in the Indenture.
The Indenture prescribes the manner in which it may be discharged and
after which the Bonds shall no longer be secured by or entitled to the benefits
of the Indenture, except for the purposes of registration and exchange of Bonds
and of payment of the principal of, and interest on the Bonds as the same become
due and payable, including a provision that under certain circumstances the
Bonds shall be deemed to be paid if Government Obligations maturing as to
principal and interest in such amounts and at such times as to insure the
availability of sufficient moneys to pay the principal of, and interest on the
Bonds and all necessary and proper fees, compensation and expenses of the
Trustee, shall have been deposited with the Trustee.
It is hereby certified that all of the conditions, things and acts
required to exist, to have happened and to have been performed precedent to and
in the issuance of this Bond do exist, have happened and have been performed in
due time, form and manner as required by the Act and by the Constitution and
statutes of the State of California and that the amount of this Bond, together
with all other indebtedness of the Authority, does not exceed any limit
prescribed by the Constitution or statutes of the State of California.
This Bond shall not be entitled to any benefit under the Indenture, or
become valid or obligatory for any purpose, until the certificate of
authentication hereon endorsed shall have been signed by the Registrar.
A-6
<PAGE> 67
IN WITNESS WHEREOF, the Authority has caused this Bond to be executed
in its name and on its behalf by the facsimile signature of its Chairman and
attested by the facsimile signature of its Executive Director and its seal to be
reproduced thereon, all as of the Dated Date set forth above.
CALIFORNIA POLLUTION CONTROL
FINANCING AUTHORITY
By
--------------------------------
Chairman
ATTEST:
- ----------------------------------
Executive Director
A-7
<PAGE> 68
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof Cede & Co., has an interest herein.
A-8
<PAGE> 69
CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the
within-mentioned Indenture of Trust.
Date of Authentication:
--------------------
U.S. BANK, a national banking
association, as Registrar
By
---------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the within bond and in the assignment below, shall be construed as though
they were written out in full according to applicable laws or regulations.
TEN COM-- as tenants in common
TEN ENT-- as tenants by the entireties
JT TEN-- as joint tenants with right of
survivorship and not as tenants in
common
Additional abbreviations may also be used
though not in the above list.
UNIF GIFT/TRAN MIN ACT-- Custodian
------- ---------------
(Cust) (Minor)
Under Uniform Gifts/Transfer to
Minors Act
---------------------------------------
(State)
A-9
<PAGE> 70
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
----------------------------------------------------
- --------------------------------------------------------------------------------
(Please Print or Typewrite Name
and Address of Assignee)
(Insert Social Security or other Identifying Number of Assignee)
- -----------------------------------------------------------------
the within Bond and hereby irrevocably constitutes and appoints
________________________________________________________________ attorney to
register the transfer of said Bond on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
----------------------------
Signature:
-------------------------
SIGNATURE GUARANTEED:
- -------------------------------------------------------
NOTICE: Signature guarantee shall be made
by a guarantor institution
participating in the Securities
Transfer Agents Medallion Program
or in such other guarantee program
acceptable to the Registrar.
- --------------------------------------------------------------------------------
A-10
<PAGE> 71
EXHIBIT B
TRUSTEE CERTIFICATE
Name of Trust Officer
Bank Address
Principal Bonds Outstanding
1. Name of Bond Issue Amount Issued [6/30/__] or [12/31/__]
2. During the past six months, did the Borrower make all required payments to
the Trustee at the proper time and in the manner required by the Indenture?
Yes No
----- -----
If no, please explain on a separate page.
3. If the Borrower failed to make required payments, please attach copies of any
correspondence between the Trustee and the Borrower discussing the failure and
any steps to correct such failure.
4. Has the Trustee received a copy of the latest annual financial statements of
the Borrower within 120 days of the close of the Borrower's fiscal year?
Yes No
----- -----
If no, please explain what steps have been taken to secure them.
5. Has the Trustee received a certificate of an officer of the Borrower,
signed within 120 days of the close of the fiscal year, stating whether there
exists any default under the terms of the Indenture, and if a default exists,
what steps will be taken to correct the default?
Yes No
----- -----
If no, please explain what steps have been taken to secure it.
6. If a letter of credit or other credit enhancement supports this bond issue,
will such letter of credit or other credit enhancement continue in full force
during the next 12 months?
Yes No Not Applicable
----- -----
If no, please explain on a separate paper.
By Date
--------------------------------- -------------------------------
Authorized Signature
Title Phone No. ]
------------------------------ -------------------------
B-1
<PAGE> 1
EXHIBIT 4(M)
Second Amendment to
Stock Purchase Agreement
This Second Amendment Agreement is made as of the 15th of May, 1997 among
Westinghouse Electric Corporation, a Pennsylvania corporation ("WEC"), Rollins
Environmental Services, Inc., a Delaware corporation ("RESI"), and Laidlaw,
Inc., a Canadian corporation ("Laidlaw").
Recitals
WEC and RESI entered into a Stock Purchase Agreement dated as of March 7,
1995 ("Purchase Agreement") wherein RESI purchased from WEC all of the stock of
National Electric, Inc., a Minnesota corporation ("NEI") and Aptus, Inc., a
Delaware corporation ("Aptus"), a wholly-owned subsidiary of NEI.
WEC and RESI executed an Amendment to Stock Purchase Agreement dated
September 22, 1995 ("First Amendment").
WEC, subject to the terms of the Purchase Agreement agreed to provide
letters of credit and reimburse RESI for letters pursuant to the terms of
Section 5.8 Closure and Post-Closure Costs and Financial Assurances ("Closure
LOC").
WEC, subject to the terms of the Purchase Agreement, further agreed to
provide a letter of credit ("Bond LOC") to support repayment of those certain
Variable Rate
-1-
<PAGE> 2
Hazardous Waste Treatment Revenue Bonds ("Rollins Environmental Services, Inc.,
Project"), Series A, issued by Tooele County, Utah such bonds having a face
amount of Forty-Seven Million Five Hundred Thousand Dollars ($47,500,000)
("Tax-Exempt Bonds").
WEC and RESI entered into that certain Side Letter Agreement dated May 31,
1995 dealing with the Remarketing of the Tax Exempt Bonds ("Side Agreement").
The Tax Exempt Bonds were originally issued as of June 1, 1990, remarketed
under the First Supplemental Indenture of Trust dated as of May 1, 1995 and
subsequently remarketed on December 5, 1996 supported by an LOC in the original
principal amount of $52,631,167 (U.S. Dollars) issued by ABN AMRO Bank N.W.
acting through its Pittsburgh Branch.
RESI has entered into a purchase agreement with Laidlaw, Inc. ("Laidlaw")
to purchase all of the stock Laidlaw Environmental Services Inc. ("LESI") and
Laidlaw Environmental Services Ltd. ("LESL"), both of which are wholly-owned
subsidiaries of Laidlaw, Inc. The surviving entity will be renamed Laidlaw
Environmental Services, Inc.
WEC wishes to be released from the obligations under Sections 5.8, 7.8 and
the Side Agreement and any other obligations associated with the Closure LOC and
the Bond LOC; and
-2-
<PAGE> 3
NOW THEREFORE, WEC, RESI and Laidlaw for good and valuable consideration
and intending to be legally bound hereby agree as follows:
1) WEC is released of any obligation to provide Closure LOCs pursuant
to Section 5.8 of the Purchase Agreement for the facilities of RESI located at
Aragonite, Utah, Coffeyville, Kansas and Lakeville, Minnesota.
2) WEC shall be reimbursed for any amounts it has paid in connection
with the providing of such Closure LOCs that has not been previously reimbursed
by RESI to WEC pursuant to 5.8 of the Purchase Agreement.
3) RESI and Laidlaw agree to cause the release cancellation and return
of the Closure LOC on the date that RESI and Laidlaw close the purchase
agreement that those parties have entered into for the stock of LESI and LESL
("Closing Date"); provided, however, RESI and Laidlaw may if needed and after
prior written notice to WEC, have an additional 30 days from the Closing Date to
replace such Closure LOC.
4) Laidlaw shall indemnify and hold WEC harmless from and against any
damages, liabilities, costs or expenses suffered or incurred by WEC in
connection with the Closure LOC, including such amounts under paragraph 2 above
and, including but not limited to, any claims against the Closure LOC if such
Closure LOC is not replaced on the Closing Date.
-3-
<PAGE> 4
5) WEC is released of any obligations to provide Bond LOC pursuant to
Section 7.8 of the Purchase Agreement in connection with the Tax Exempt Bonds.
6) WEC shall be reimbursed for any amounts it has paid in connection
with the providing of such Bond LOC that has not been previously reimbursed by
RESI to WEC.
7) RESI and Laidlaw agree to cause the release cancellation and return
of the Bond LOC on the Closing Date; provided, however, RESI and Laidlaw may if
needed and after prior written notice to WEC, have an additional 30 days from
the Closing Date to replace such Bond LOC.
8) Laidlaw shall indemnify and hold WEC harmless from and against any
damages, liabilities, costs and expenses suffered or incurred by WEC in
connection with the Bond LOC, including such amounts under Paragraph 6 above
and, including but not limited to, any claims against the Bond LOC if such Bond
LOC is not replaced on the Closing Date.
9) The failure to comply with the provisions of this Second Amendment
shall be a default under that Certain Promissory Note of even date herewith
having WEC as payee and RESI as obligor in the original principal amount of
$60,000,000.
-4-
<PAGE> 5
10) This Agreement shall be binding upon the successors and assigns
whether by contract, merger or operation of law of WEC, RESI and Laidlaw;
provided, however, Laidlaw shall not be permitted to transfer or assign its
obligations hereunder without the prior written consent of WEC.
11) RESI represents and warrants that:
(a) Corporate Existence and Authority. RESI is a corporation validly
incorporated and existing in good standing under the laws of its jurisdiction of
incorporation and is duly qualified and authorized to do business in each
jurisdiction where such qualification is necessary or where failure to be
qualified would have a material adverse effect on its doing business.
(b) Corporate Authority. RESI has the legal right corporate power
and corporate authority to enter into this Agreement and to do all acts and
things and execute and deliver all other documents and instruments as are
required hereunder or thereunder to be done, observed or performed by it in
accordance with the terms hereof and thereof.
(c) Valid Authorization of Credit Documents. RESI has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and the execution, delivery and performance of this Agreement
or any other Credit Document by such Borrower will not (i) require the consent
or approval of any governmental entity having jurisdiction over it, except such
as have already been obtained and are in full force and effect; (ii) contravene
or conflict with the articles, by-
-5-
<PAGE> 6
laws or resolutions of directors or shareholders of RESI or the provisions of
any judgment, order, statute, regulation, indenture, instrument, agreement or
undertaking to which RESI is a party or by which RESI is or may become bound; or
(iii) oblige RESI to grant, or will result in the creation of, security interest
in favour of any Person.
(d) Validity and Binding Effect. This Agreement constitutes a valid
and legally binding obligation of RESI enforceable against it in accordance with
their terms.
12) Laidlaw represents and warrants that:
(a) Corporate Existence and Authority. LAIDLAW is a corporation
validly incorporated and existing in good standing under the laws of its
jurisdiction of incorporation and is duly qualified and authorized to do
business in each jurisdiction where such qualification is necessary or where
failure to be qualified would have a material adverse effect on its doing
business.
(b) Corporate Authority. LAIDLAW has the legal right, corporate
power and corporate authority to enter into this Agreement and to do all acts
and things and execute and deliver all other documents and instruments as are
required hereunder or thereunder to be done. observed or performed by it in
accordance with the terms hereof and thereof.
(c) Valid Authorization of Credit Documents. LAIDLAW has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and the execution, delivery and performance of this agreement
or any other Credit Document by such Borrower will not (i) require the consent
or approval of any
-6-
<PAGE> 7
governmental entity having jurisdiction over it, except such as have already
been obtained and are in full force and effect; (ii) contravene or conflict with
the articles, bylaws or resolutions of directors or shareholders of LAIDLAW or
the provisions o~ any judgment, order, statute, regulation, indenture,
instrument, agreement or undertaking to which LAIDLAW is a party or by which
LAIDLAW is or may become bound; or (iii) oblige LAIDLAW to grant, or will result
in the creation of ? security interest in favour of any Person.
(d) Validity and Binding Effect. This Agreement constitutes a valid
and legally binding obligation of LAIDLAW enforceable against it in accordance
with their terms.
13) This Agreement shall be construed in accordance with and governed by
the laws of the State of New York to agreements made and to be performed wholly
within such state. All of the parties agree to the exclusive jurisdiction and
venue in the courts of the United States sitting in the City of New York, New
York.
IN WITNESS HEREOF, the Parties have executed this Agreement as of the date
first written above.
WESTINGHOUSE ELECTRIC COROCORPORATION (WEC)
a Pennsylvania corporation
By: /s/ C.E. Mort
-------------------------------------
Its: C.E. Mort
------------------------------------
Vice President
ROLLINS ENVIRONMENTAL SERVICES, INC. (RESI)
A Delaware corporation
By: /s/ John Rollins, Jr.
-----------------------------------
John Rollins, Jr.
Its:
----------------------------------
LAIDLAW INC. (Laidlaw)
a Canadian corporation
By: /s/ Ivan Cairns
-----------------------------------
Its: Senior Vice President
----------------------------------
-7-
<PAGE> 1
EXHIBIT 4(n)
PROMISSORY NOTE
$60,000,000 U.S. Dollars May 15, 1997
1. COVENANT TO PAY.
1.1 FOR VALUE RECEIVED, Laidlaw Environmental Services, Inc., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of WESTINGHOUSE
ELECTRIC CORPORATION, a Pennsylvania corporation, its successors and assigns
("WEC"), the principal sum of Sixty Million U.S. Dollars ($60,000,000), or so
much thereof as may be outstanding hereunder, together with interest on the
principal balance from time to time outstanding, from the date hereof, at the
fluctuating rate of the six month London Interbank Offered Rates ("6-Month
LIBOR") as determined on the First day of Such Interest Period appearing on
Bloomberg Page "LIBOR06 (Index) HP" two Business Days prior to the beginning of
such Interest Period ("Contract Rate"). In the event that such rate does not
appear on such Bloomberg Page, 6-Month LIBOR shall be determined by reference to
such other publicly available service for displaying 6-Month LIBOR as may be
agreed upon by WEC and the Borrower.
1.2. All interest accruing hereunder shall be computed by the "exact
method," that is, by multiplying the Contract Rate by the average daily
principal balance outstanding divided by 365, multiplied by the actual number of
days interest has accrued.
1.3. From and after maturity hereof, whether by acceleration or otherwise,
this Note shall bear interest at a rate per annum equal to the Contract Rate
plus five percent (5%), but not to exceed the highest rate permitted by law (the
"Default Rate").
1.4 Borrower agrees to pay at the execution of this Note the accrued
interest from the last scheduled interest pay date until the execution of this
Note due under i) the 7.75% Senior Unsecured Debentures of Rollins Environmental
Services, Inc. and ii) the 7.25% Convertible Subordinated Debentures of Rollins
Environmental Services, Inc. both currently held by WEC.
2. PAYMENT.
2.1. The principal balance of this Note, together with all accrued and
unpaid interest hereunder, and all unpaid late charges (if any), shall be due
and payable on May 15, 2003. Interest on the outstanding principal balance of
this Note computed according to the exact
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<PAGE> 2
method as set forth above shall be due and payable semi-annually ("Interest
Period") on May 30 and November 30 of each year with the first payment being
made on November 30, 1997, including the date of payment of this Note in full.
All payments hereunder shall be made in lawful money of the United States of
America, in immediately available funds, at 11 Stanwix Street, Pittsburgh,
Pennsylvania 15222, unless WEC notifies Borrower in writing of a different
address to which payments should be made.
2.2. If any payment required hereunder is not paid within fifteen (15)
days after it is due, a late charge of two percent (2%) of the amount of such
payment shall be paid by Borrower. All payments made on this Note shall be
applied first to any costs and expenses for which Borrower is obligated to
reimburse WEC, then to accrued and unpaid late charges, then to accrued and
unpaid interest and the remainder to principal.
3. MANDATORY PAYMENTS.
Borrower shall pay to WEC $10,000,000 as a principal reduction on both the
fourth and fifth anniversary dates of this Note. Such payments shall be in U.S.
Dollars in immediately available funds.
4. INTEREST LIMITATION.
In no contingency or event whatsoever, whether by acceleration of maturity
of the debt evidenced hereby or otherwise, shall the amount paid or agreed to be
paid to WEC for the use, forbearance or detention of the money advanced or to be
advanced hereunder exceed the highest lawful rate permissible under the laws of
the Commonwealth of Pennsylvania or the United States of America as applicable
to Borrower. If, from any circumstances whatsoever, fulfillment of any provision
hereof or of any other agreement evidencing or securing the debt, at the time
performance of such provisions shall be due, shall involve the payment of
interest in excess of that authorized by law, the obligation to be fulfilled
shall be reduced to the limit so authorized by law, and if from any
circumstances, WEC shall ever receive as interest an amount which would exceed
the highest lawful rate applicable to Borrower, such amount which would be
excessive interest shall be applied to the reduction of the unpaid principal
balance of the debt evidenced hereby and not to the payment of interest. All
sums paid to WEC for the use, forbearance or detention of the money advanced or
to be advanced hereunder shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term of
this Note, so that the rate of interest on account of this Note is uniform
throughout the term hereof.
5. DEFAULT AND REMEDIES.
If Borrower fails to make any payment under this Note when due, then the
indebtedness evidenced by this Note, together with all other obligations of
Borrower to WEC, shall, at WEC's
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<PAGE> 3
sole option, become immediately due and payable without notice or demand of any
kind. Upon the occurrence of any such event, WEC may, in addition, exercise any
and all rights and remedies available under applicable law, all such rights and
remedies being cumulative and not exclusive of each other, and such rights and
remedies may be exercised concurrently or consecutively at WEC's sole option.
5.1 Borrower shall be in default under this Note upon the occurrence of
the following events ("Event of Default"):
a) Borrower fails to make any payment under this Note when due;
b) Laidlaw, Inc. fails to maintain an investment grade rating by both
Standard & Poors, Inc. and Moody's Institutional Services, Inc.
c) Borrower and Laidlaw fail to cause the return, release and
cancellation of the Closure LOC and the Bond LOC as provided in the Second
Amendment to the Stock Purchase Agreement of even date herewith;
d) Borrower, or Laidlaw Chem-Waste, Inc., or Laidlaw Environmental
Services (Canada) Ltd., is in default under any credit agreement entered into in
connection with or contemporaneously with the acquisition transaction between
Rollins Environmental Services Inc. and Laidlaw, Inc. and any of its affiliates
and any refinancing of such debt;
e) a default under any one or more indentures or instruments under
which there may be issued or by which there may be secured or evidenced any
indebtedness of the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw Environmental
Services (Canada) Ltd., or Laidlaw, Inc., (including this Note) having an
aggregate principal amount outstanding of at least Cdn. $10,000,000 whether such
indebtedness now exists or shall hereafter be created, which default (i) shall
constitute a failure to make any payment of principal at maturity or (ii) shall
have resulted in the acceleration of such indebtedness so that the same shall be
or become due and payable prior to the date on which the same would otherwise
have become due and payable or (iii) shall have resulted in the enforcement of
any security for such indebtedness; provided, however, that if such default
under such indentures or instruments shall be remedied or cured by the Borrower,
Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services (Canada) Ltd., or
Laidlaw, Inc. or waived by the holders of such indebtedness, then the Event of
Default thereof shall be deemed likewise to have been thereupon remedied, cured
or waived without further action upon the part of WEC;
f) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect to the Borrower, Laidlaw Chem-Waste, Inc.,
Laidlaw Environmental Services (Canada) Ltd., or Laidlaw, Inc. in an involuntary
case or proceeding under any applicable United States Federal, State or Canadian
Federal or Provincial bankruptcy,
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<PAGE> 4
insolvency, reorganization or other similar law or (B) a decree or order
adjudging the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., or Laidlaw, Inc. a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement (other than an
arrangement pursuant to Section 192 of the Canada Business Corporations Act or
any successor provision to such section or similar provision of any other
statute which does not compromise the claims of creditors), adjustment or
composition of or in respect of the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw
Environmental Services (Canada) Ltd., or Laidlaw, Inc. under any applicable
United States Federal, State or Canadian Federal or Provincial law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw
Environmental Services (Canada) Ltd., or Laidlaw, Inc. or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or
g) the commencement by the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw
Environmental Services (Canada) Ltd., or Laidlaw, Inc. of a voluntary case or
proceeding under any applicable United States Federal, State or Canadian Federal
or Provincial bankruptcy, insolvency, reorganization or other similar law or of
any other case or proceeding to be adjudicated a bankrupt or insolvent, or in
the consent by any of them to the entry of a decree or order for relief in
respect of the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw Environmental
Services (Canada) Ltd., or Laidlaw, Inc. in an involuntary case or proceeding
under any applicable United States Federal, State or Canadian Federal or
Provincial bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by any of them of a petition or answer to consent seeking
reorganization or relief under any applicable United States Federal, State or
Canadian Federal or Provincial law, or the consent by any of them to the filing
of such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Borrower, Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services
(Canada) Ltd., or Laidlaw, Inc. or of any substantial part of the property of
any of them, or the making by any of them of an assignment for the benefit of
creditors, or the admission by any of them in writing or its inability to pay
its debts generally as they become due, or the taking of corporate action by any
of them in furtherance of any such action.
6. PRIORITY AND SUBORDINATION
6.1 Borrower covenants and agrees that this Note is prior in time, right
and payment to any indebtedness of Borrower to Laidlaw, Inc. and any affiliated
entities. Borrower further covenants and agrees not to make any payment under
any indebtedness owed to Laidlaw, Inc. or its affiliates; provided however,
Borrower may i) make payments of interest on the acquisition indebtedness owed
to Laidlaw, Inc., in connection with the purchase agreement between Rollins
Environmental Services, Inc., and Laidlaw, Inc.; and ii) make payments to
Laidlaw, Inc., and its subsidiaries in connection with the providing of
administrative services to Borrower, such
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<PAGE> 5
payments to be at fair market rates similar to or below the rates Laidlaw, Inc.,
provides to its other subsidiaries. Borrower agrees not to make any payment of
principal on such acquisition financing until WEC is paid in full under this
Note.
6.2 WEC agrees that this Note is subordinate in right, time and payment to
the initial acquisition financing incurred by Borrower in the original principal
amount of $650,000,000.
7. MISCELLANEOUS.
7.1. If WEC institutes legal proceedings to enforce this Note, Borrower
agrees to pay to WEC in addition to any indebtedness due and unpaid, all costs
and expenses of such proceeding, including attorney fees and expenses.
7.2. WEC shall not by any act of omission or commission be deemed to waive
any of its rights, privileges or remedies hereunder or under the Loan Documents,
unless such waiver be in writing and signed by an authorized officer of WEC and
then only to the extent specifically set forth therein; a waiver on one occasion
shall not be construed as continuing or as a bar to or waiver of such right,
privilege or remedy on any other occasion.
7.3. Borrower hereby waives presentment for payment, demand, notice of
nonpayment of this Note, protest and notice of protest, trial by jury in any
litigation arising out of, relating to, or connected with this Note or any
instrument given as security herefor, and consents that WEC may extend the time
of payment of any part or the whole of the debt evidenced by this Note at any
time at the request of any other person liable for said debt.
7.4. Borrower shall remain liable for the payment of this Note, including
interest, notwithstanding any extension or extensions of time of payment, or any
indulgence of any kind or nature that WEC may grant or permit.
7.5. If this Note is signed by more than one person, firm, corporation or
combination thereof, all of the obligations herein contained shall be joint and
several obligations of each signer hereof. The liability of each such signer
shall be absolute and unconditional and without regard to the liability of any
other party hereto.
7.6. This Note is given and accepted as evidence of indebtedness only, and
not in payment or satisfaction of any indebtedness or obligation.
7.7. All questions with respect to the construction of this Note and the
rights and liabilities of the parties shall be determined in accordance with the
applicable provisions of the internal laws of the Commonwealth of Pennsylvania,
without regard to the principles of conflicts of law.
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<PAGE> 6
7.8 Time is of the essence with respect to all of Borrower's obligations
and agreements evidenced by this Note.
7.9 This Note and all the provisions, conditions, promises and covenants
hereof shall be binding upon the Borrower, its successors and assigns, provided
that Borrower shall not assign its obligations under this Note without the
express written consent of WEC.
7.10 The invalidity or unenforceability of any provision of this Note
shall not affect the other provisions hereof.
7.11 The captions used herein are for convenience only and are not
intended as limiting or defining the provisions hereof.
7.12 In any action brought with respect to this Note, the holder hereof
need not produce or file the original of this Note, but only need produce or
file a photocopy of this Note, certified by the holder to be a true and correct
copy of this Note.
7.13 WEC's books and records with respect to all matters relating to
advances and payments, interest and late charges, if any, under this Note,
shall, in the absence of manifest error, be conclusively presumed to be
accurate.
IN WITNESS WHEREOF, Borrower has duly executed and delivered this Note on
the date first above written.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
a Delaware corporation
By: /s/ Paul R. Humphreys
----------------------------
Its: Sen. VP and CFO
---------------------------
-6-
<PAGE> 7
EXHIBIT A
THIS EXHIBIT A IS ATTACHED TO AND MADE A PART OF THE PROMISSORY NOTE, DATED MAY
[ ] 15, 1997, MADE BY LAIDLAW ENVIRONMENTAL SERVICES, INC. TO WESTINGHOUSE
ELECTRIC CORPORATION (THE "NOTE").
I. For the purposes of Section 6.2 of the Note, "subordinate and junior
in right of payment" shall mean:
(i) In the event that any or all amounts owing under the Senior
Obligations have become, or have been declared to be, due and payable and
have not been paid in accordance with their terms (except in circumstances
when the succeeding paragraph (ii) shall be applicable), then and in any
such event, any payment or distribution of any kind or character, whether
in cash, property or securities, which, but for the subordination
provisions contained herein, would otherwise be payable or deliverable to
the holder of this Note upon or in respect of the Subordinated Obligations
shall instead be paid over or delivered to the Senior Creditor
Representative for the benefit of the Senior Creditors, and the holder of
the Note shall not in any such event receive any such payment or
distribution or any benefit therefrom unless and until the Senior
Obligations shall have been fully paid and satisfied.
(ii) In the event of any liquidation or other winding-up of the
Borrower or in the event of any receivership, insolvency, reorganization
or bankruptcy proceedings, assignment for the benefit of creditors or any
proceeding by or against the Borrower for any relief under any bankruptcy,
reorganization or insolvency law or laws, Federal or state, or any law,
Federal or state, relating to the relief of debtors, readjustment of
indebtedness, reorganization, composition or extension of indebtedness,
then, and in any such even, all Senior Obligations shall first be paid in
full before any payment or distribution is made in respect of the
Subordinated Obligations, and any payment or distribution of any kind or
character, whether in cash, property or securities, which but for the
subordination provisions contained herein, would otherwise by payable or
deliverable to the Subordinated Creditor upon or in respect of the
Subordinated Obligations, shall instead be paid over or delivered to the
Senior Creditor Representative for the benefit of the Senior Creditors,
and or distribution or any benefit therefrom unless and until the Senior
Obligations shall have been fully paid and satisfied.
(iii) If any payment, distribution or security, or the proceeds of
any thereof, is collected or received by the Subordinated Creditor in
respect of the Subordinated
<PAGE> 8
2
Obligations, and such collection or receipt is prohibited by paragraph (i)
or (ii) above, the Subordinated Creditor will forthwith turn over the same
to the Senior Creditor Representative for the benefit of the Lenders, in
each case in the form received (except for endorsement or the assignment
of the Subordinated Creditor when necessary) and, until so turned over,
the same shall be held in trust by the Subordinated Creditor as the
property of the Senior Creditors. Notwithstanding the above or anything
else contained in this Exhibit A, so long as no event [ ] described in
paragraph (i) or (ii) above has occurred, the Borrower shall make, and the
Subordinated Creditor shall be entitled to receive and keep, without
regard to these subordination provisions, [ ] all interest payments and
principal payments [ ] when due under the Note in accordance with the
terms thereof, and nothing herein shall require the disgorgement of any
such payments. In addition, the payment on the date of issuance of the
Note to Subordinated Creditor of the accrued interest due on the Rollins
Debentures is a permitted payment.
II. Subject to the payment in full of all Senior Obligations, the
Subordinated Creditor shall be subrogated to the rights of the holder(s) of the
Senior Obligations (to the extent of payments or distributions previously made
to such holders pursuant to the provisions of Section I above) to receive any
and all payments or distributions [ ] made respect of the Senior [ ] Obligations
until all amounts owing on the Subordinated Obligations shall be paid in full.
No payments or distributions applicable to Senior Obligations which the
Subordinated Creditor receives by reason of being subrogated to the rights of
the holders of Senior Obligations pursuant to the provisions of this Section II
shall, as among the Borrower, its creditors other than the holder(s) of Senior
Obligations and the Subordinated Creditor, be deemed to be a payment by the
Borrower, to or for the account of the Subordinated Obligations; and for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Obligations of any cash, property or securities to which the Subordinated
Creditor would be entitled to except for these subordination provisions, and no
payment over pursuant to these subordination provisions to the holders of Senior
Obligations by the Subordinated Creditor shall, as between the Borrower and its
creditors other than the holders of Senior Obligations and the Subordinated
Obligations, be deemed to be a payment by the Borrower to or for the account of
the Senior Obligations, it being understood that these subordination provisions
are intended solely for the purpose of defining the relative rights of the
Subordinated Creditor, on the one hand, and the Senior Creditors, on the other
hand, and nothing contained in this Section or elsewhere in these subordination
provisions is intended to or shall impair, as between the Borrower and its
creditors other than the Senior Creditors and the Subordinated Creditor, the
obligation of the Borrower, which
<PAGE> 9
3
is absolute and unconditional, to pay to the Subordinated Creditor, subject to
the rights of the Senior Creditors, the amounts due and owing under the
Subordinated Obligations as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the Subordinated Creditor and creditors of the Borrower, other than
the Senior Creditor.
III. By acceptance of the Note the Subordinated Creditor consents that,
without the necessity of any reservation of rights against the Subordinated
Creditor, and without notice to or further assent by the Subordinated Creditor,
(a) any demand for payment of any Senior Obligation may be rescinded in whole or
in part, and any Senior Obligation may be continued, and the Senior Obligations,
or the liability of the Borrower or any other party upon or for any part
thereof, or any collateral security or guaranty therefor, or right of offset
with respect thereto, may, from time to time, in whole or in part, be renewed,
extended, modified, accelerated, compromised, waived, surrendered, or released
and (b) the Credit Agreement, the other Load Documents referred to therein, and
any other document or instrument evidencing or governing the term of any other
Senior Obligations or any other collateral security documents or guaranties or
documents in connection with the Credit Agreement or the Senior Obligations may
be amended, modified, supplemented or terminated, in whole or in part, as the
Senior Creditor may deem advisable from time to time, and any collateral
security at any time held by the Senior Creditor for the payment of any of the
Senior Obligations may be sold, exchanged, waived, surrendered or released, in
each case, all without notice to or further assent by the Subordinated Creditor,
which will remain bound under these subordination provisions, and all without
impairing, abridging, releasing or affecting the subordination provided for
herein, notwithstanding any such renewal, extension, modification, acceleration,
compromise, amendment, supplement, termination, sale, exchange, waiver,
surrender or release. By acceptance of the Note the Subordinated Creditor waives
any and all notice of the creation, modification, renewal, extension or accrual
of any of the Senior Obligations and notice of or proof of reliance by the
Senior Creditors upon these subordination provisions, and the Senior Obligations
and any of them shall conclusively be deemed to have been created, contracted or
incurred in reliance upon these subordination provisions, and all dealings
between the Borrower, on the one hand, and the Senior Creditors, on the other,
shall be deemed to have been consummated in reliance upon these subordination
provisions. By acceptance of the Note the Subordinated Creditor acknowledges and
agrees that in entering into the Credit Agreement and in making funds available
thereunder the Senior Creditors have relied upon these subordination provisions.
<PAGE> 10
4
IV. Notwithstanding anything in this Exhibit A to the contrary, these
subordination provisions do not in any way restrict or prohibit Subordinated
Creditor's rights under that certain Guaranty Agreement in favor of the
Subordinated Creditor executed by Laidlaw, Inc. The Senior Creditor has no
rights in any of the monies which may be paid by Laidlaw, Inc. to the
Subordinated Creditor under that Guaranty, regardless of the source of such
monies, and the Subordinated Creditor is not prohibited from enforcing its
rights under the Guaranty notwithstanding this subordination. Such enforcement
and the receipt of any monies as a result thereof are not subject to this
subordination.
V. As used in this Exhibit A, (i) terms defined in the Note are used
herein with the meanings given such terms in the Note, (ii) the expressions
"prior payment in full," "payment in full," "paid in full," "fully paid and
satisfied" and any other similar terms or phrases when used with respect to the
Senior Obligations shall mean the indefeasible payment in full in cash, in
immediately available funds, of all of the Senior Obligations and (iii) the
following terms have the following meanings:
"Credit Agreement": the Credit Agreement, dated as of May 9, 1997, among
Laidlaw Chem-Waste, Inc., Laidlaw Environmental Services (Canada) Ltd.,
Toronto Dominion (Texas) Inc., as General Administrative Agent, and the
Lenders and other parties thereto.
"Senior Creditors": the holders from time to time of the Senior
Obligations.
"Senior Creditor Representative": Toronto Dominion (Texas) Inc., as
General Administrative Agent under the Credit Agreement, and any successor
in such capacity.
"Senior Obligations": all indebtedness, obligations and liabilities of the
Borrower or any of its subsidiaries under or in connection with the Credit
Agreement, now existing or hereafter incurred, including all obligations
of the Borrower as guarantor under the Guarantee and Collateral Agreement
referred to in such Credit Agreement, in each case as any such agreement
may be amended, extended, supplemented, restated, refinanced or otherwise
modified from time to time.
"Subordinated Creditor": WEC and any other holder from time to time of the
Subordinated Obligations.
"Subordinated Obligations": all indebtedness, obligations and liabilities
of the Borrower under or in connection with the Note, now existing or
hereafter incurred, as the Note may be amended, extended, supplemented,
restated, refinanced or otherwise modified from time to time.
<PAGE> 1
EXHIBIT 4(O)
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT ("Guaranty") made this 15th of May, 1997 by
Laidlaw, Inc., a Canadian corporation (hereinafter referred to as "Guarantor")
to, with, and for the benefit of WESTINGHOUSE ELECTRIC CORPORATION ("WEC"), a
Pennsylvania corporation, having its principal office at 11 Stanwix Street,
Pittsburgh, Pennsylvania 15222;
WITNESSETH, THAT:
WHEREAS, Laidlaw Environmental Services, inc., a Delaware corporation
("Borrower") is currently indebted to WEC in the principal amount of $60,000,000
under that certain Promissory Note of even date herewith ("Loan");
WHEREAS, WEC is unwilling to continue to make the Loan available to
Borrower unless Guarantor guarantees to WEC the full and timely payment and
satisfaction of all of the Obligations (as hereinafter defined) of Borrower to
WEC; and
WHEREAS, Guarantor acknowledges that the making of the Loan by WEC to
Borrower provides direct benefits to Guarantor;
NOW, THERFORE, in consideration of the mutual covenants and agreements
herein contained and of other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and in order it induce WEC to make
the Loan to Borrower, and intending to be legally bound, Guarantor does hereby
warrant, represent, and covenant unto WEC as follows:
1. GUARANTY AND SURETY.
1.1 Guarantor hereby absolutely, irrevocably, and unconditionally
guarantees as primary obliger and not as surety for, the full and timely payment
and performance of the Obligations to WEC.
1.2 All payments to be made by the Guarantor under this Guarantee shall
be make without set-off or counterclaim and without deduction for any taxes,
levies, duties, fee, deductions, withholdings, restrictions, or conditions of
any nature whatsoever. If at any time any applicable law or regulation requires
the Guarantor to make any such deduction or withholding from any such payment,
the amounts payable under this Guarantee shall be increased to the extent
necessary to ensure that, after the making of such deduction or withholding, the
Creditor receives net sum equal to the sum which it would have received had no
deduction or withholding been required.
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<PAGE> 2
2. OBLIGATIONS.
2.1 The word "Obligations" as used throughout this Guaranty means all
debts, obligations, and liabilities of Borrower arising out of or relating to
any of the following documents each of even date herewith:
2.1.1. Promissory Note ("Note") made by Borrower to the order of WEC in an
original face amount of $60,000,000;
2.1.2. Second Amendment to Stock Purchase Agreement dated May 15,1997;
(All of the foregoing, including any future modifications thereto, are
hereinafter collectively referred to as the "Documents"). Without limiting the
generality of the foregoing, "Obligations: is used herein in its most
comprehensive sense to include all debts, obligations, and indebtedness
described in the Documents, whether now or hereafter made, incurred, or created,
voluntary or involuntary, due or not due, absolute or contingent, liquidated or
unliquidated, determined or undetermined, and regardless of whether there is any
recourse with respect to any portion of such Obligations as against Borrower or
any partner of Borrower.
3. SUBSEQUENT ACTS BY WEC
WEC may, at its sole discretion and without notice to Guarantor, take any
action which might otherwise be deemed a legal or equitable release or discharge
of Guarantor's obligations hereunder without impairing, affecting, releasing,
discharging, or terminating the liability of Guarantor for payment of the
Obligations, which actions might include, by way of illustration and not
limitation:
3.1 the renewal, modification, amendment or extension of any of the
Obligations any payments hereunder;
3.2 the acceptance of partial payment of the Obligations;
3.3 the settlement, release, compounding, compromise, cancellation,
rearrangement, or consolidation of any of the Obligations;
3.4 the collection of or other liquidation of any claims WEC may have
in respect to the Obligations;
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<PAGE> 3
3.5 the granting of indulgences, forbearances, waivers, concessions,
compromises, extensions, or adjustments in respect to any covenant or agreement
under the Loan Documents;
3.6 the release from liability of any guarantor and/or any additional
parties who may guarantee payment of the Obligations or any portion thereof;
3.7 the release, surrender, exchange, or compromise of any lien,
security, or collateral held by WEC as security for the Obligations;
3.8 the release or compromise of any lien or security held by WEC as
security for the liability of any person who is guarantying the Obligations.
3.9 any invalidity, illegality, or unenforceability of the Obligations.
4. EXPENSES.
Guarantor agrees to reimburse WEC for all expenses (including reasonable
attorneys' fees and expenses) incurred by WEC in enforcing the Obligations,
pursuing any remedies set forth in the Loan Documents, and enforcing this
Guaranty.
5. PAYMENT BY GUARANTOR.
In the event of any default by Borrower on the Obligations,, Guarantor
agrees to pay or perform on demand (either oral or written) all the Obligations.
WEC shall not be required to liquidate any lien or any other form of security,
instrument, or note held by WEC prior to making such demand. THIS IS A GUARANTY
OF PAYMENT AND PERFORMANCE AND NOT OF COLLECTION, and Guarantor hereby waives
all rights that Guarantor may have, if any, to require that any action be
brought against Borrower (or any other person) or to requires that resort be
first made against any security prior to demanding payment or performance
hereunder. Guarantor agrees that this obligation is an obligation to WEC and
that it is obligated to make such payments to Westinghouse notwithstanding the
subordination language of the Note. Guarantor further agrees that if WEC is
obligated to pay any monies over to the Senior Creditor as that term is used in
the Subordination Exhibit to the Note that Guarantor is continued obligated to
make such payment to WEC.
6. CUMULATIVE REMEDIES.
Guarantor hereby agrees that all rights and remedies that WEC is afforded
by reason of this Guaranty are separate and cumulative and may be pursued
separately, successively, or
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<PAGE> 4
concurrently, as WEC deems advisable. In addition, all such rights and remedies
are non-exclusive and shall in no way limit or prejudice WEC's ability to pursue
any other legal or equitable rights or remedies that may be available. Without
limiting the generality of the foregoing, Guarantor agrees that in any action by
WEC by reason of the Obligations, WEC at its election may proceed (a) against
Guarantor together with Borrower, (b) against Guarantor and Borrower
individually, or (c) against Guarantor only without having commenced any action
against or having obtained any judgment against Borrower. WEC shall not be bound
to exhaust its recourse against the Borrower in respect of the Obligations but
may proceed against the Guarantor directly.
7. WAIVERS BY GUARANTOR.
7.1 GUARANTOR HEREBY WAIVES:
7.1.3. Notice of acceptance of this Guaranty and of creation of the
Obligations;
7.1.4. presentment, notice of non-payment, and demand for payment
of the Obligations;
7.1.5. protest, notice of protest, and notice of dishonor or
default to Guarantor or to any other party with respect
to any of Obligations;
7.1.6. all other notices to which Guarantor might otherwise be
entitled;
7.1.7. the right to receive demand for payment under this Guaranty;
7.1.8. any defense or circumstance (including, without limitation,
disability, insolvency, lack or authority or power,
insanity, minority, death, or dissolution) which might
otherwise constitute a legal or equitable discharge of
Guarantor's liability hereunder;
7.1.9 any defense of Borrower to the Obligations;
7.1.10. any rights to extension, composition, or otherwise under
Applicable United States Federal, State or Canadian
Federal or Provincial bankruptcy, insolvency,
reorganization or similar law; and
7.1.11. the right to trial by jury in any litigation arising out of,
relating to, or connected with this Guaranty.
-4-
<PAGE> 5
7.2 It is expressly agreed that Guarantor shall remain liable heron
regardless of whether all or any portion of the obligations are "non-recourse"
or "limited recourse." It is agreed between Guarantor and WEC that the foregoing
waivers are of the essence of the Loan transaction and that, but for this
Guaranty and such waivers, WEC would decline to make the Loan.
8. WAIVER AND RELEASE OF SUBROGATION AND PARTICIPATION.
Guarantor shall have: (i) no right of subrogation in or under the Loan
Documents; (ii) no right to participate in any way in any of the collateral
which is conveyed under the Loan Documents as security for the Obligations; and
(iii) no right to seek or obtain reimbursement from Borrower, or any other party
primarily or secondarily liable for the Obligations, for any sums paid by
Guarantor hereunder. Guarantor hereby explicitly waives and release the
foregoing rights, whether contractual, statutory, or common law, of subrogation,
participation, and reimbursement, and any right to require the marshaling of
Borrower's assets under any circumstances.
9. SUBORDINATION.
Any obligation or debt of Borrower, Laidlaw Chem-Waste, Inc. Laidlaw
Environmental Services (Canada) Ltd., and Laidlaw, Inc., now or hereafter held
by Guarantor is hereby subordinated to the Obligations, and Guarantor shall not
enforce or collect any such indebtedness from Borrower, Laidlaw Chem-Waste,
Inc., Laidlaw Environmental Services (Canada) Ltd., and Laidlaw, Inc.
Nevertheless, upon request by WEC, Guarantor shall collect, enforce, and receive
such indebtedness of Borrower, Laidlaw Chem-Waste, Inc., Laidlaw Environmental
Services (Canada) Ltd., and Laidlaw, Inc., to Guarantor. Any sums collected at
WEC's request or collected in contravention of the prohibition set forth herein
shall be held by Guarantor as trustee for WEC and shall be paid over to WEC on
account of the Obligations; provided, however, such payments shall not impair,
reduce, or affect in any manner the liability of Guarantor under the other
provisions of this Guaranty.
10. REPRESENTATIONS AND WARRANTIES.
Guarantor hereby represents and warrants to WEC that:
10.1. Guarantor now has no defense whatever to any action, suit, or
proceeding whatsoever that may be instituted on this Guaranty including but not
limited to any defense based on Section 44 of the Canadian Business Compensation
Act (CBCA);
-5-
<PAGE> 6
10.2. No other agreement of special condition exists between Guarantor and
WEC regarding the liability of Guarantor hereunder;
10.3. This Guaranty constitutes a valid and binding obligation of
Guarantor, enforceable in accordance with its terms; and
10.4. Guarantor has reviewed each of the Loan Documents with the
assistance of legal counsel.
10.5. Guarantor is a corporation validly existing and in good standing
under the laws of Canada, with full power and authority to consummate the
transaction contemplated hereby.
11. FINANCIAL STATEMENTS.
Guarantor agrees to deliver to WEC a copy of Guarantor's annual financial
statement certified by Guarantor to be true and correct. While this Guaranty is
in effect, such statements shall be delivered to WEC no later than sixty (60)
days after the end of each fiscal year of Guarantor.
12. STRICT PERFORMANCE;WAIVERS.
No failure, delay, or omission by WEC to exercise any of the rights,
powers, remedies, and privileges hereunder shall be deemed a waiver thereof, and
every such right, power, remedy, and privilege may be exercised repeatedly. No
notice to or demand on Guarantor shall be deemed to be a waiver of the right of
WEC to take further action without notice or demand as provided herein. In no
event shall any modification or waiver of the provisions of this Guaranty be
effective unless in writing executed by WEC. Any waiver granted shall be
applicable only in the specific instance for which it is given. Failure of WEC
to insist upon strict performance or observance of any of the terms, provisions,
and covenants hereof or to exercise any right herein contained shall not be
construed as a waiver or relinquishment of the right to demand strict
performance at another time. Receipt by WEC of any payment or performance on the
Obligations shall not be deemed a waiver of the breach of any provision hereof
or of any of the Loan Documents.
13. CAPTIONS.
The captions appearing herein are used for reference only and shall not be
construed as limiting anything set forth herein.
-6-
<PAGE> 7
14. SEVERABILITY.
The invalidity or unenforceability of any provision of this Guaranty shall
not affect the other provisions hereof, and this Guaranty shall be construed as
if the invalid or unenforceable provision had never been a part of this
Guaranty.
15. GOVERNING LAW; INITIATION OF SUIT.
15.1. All questions with respect to the construction of this Guaranty and
the rights and liabilities of the parties hereto shall be determined in
accordance with the applicable provisions of the internal laws of the
Commonwealth of Pennsylvania without regard tot the principles of conflicts of
laws.
15.2. Guarantor hereby submits to the jurisdiction of any state or federal
curt in the state referred to in Section 16.1 and hereby agrees that service of
process against Guarantor in any action may be effected by any means permissible
under federal law or under the laws of such state. Without limiting the
foregoing, Guarantor further agrees that service of process may be made by
service upon Guarantor's agent for service of process in such state; Guarantor
hereby designates the following as such agent:
Paul Schwendeman
Kirkpatrick & Lockhart
1500 Oliver Building
Pittsburg, PA 15222-5379
Phone: (412) 355-6500
Fax: (412) 355-6301
16. ASSIGNMENT; DELEGATION; BINDING EFFECT.
This Guaranty is assignable and transferable by WEC. Each reference herein
to WEC shall be deemed to include its successors and assigns, in whose favor the
rights and privileges of this Guaranty shall also run. The duties and
obligations of Guarantor may not be delegated or transferred by Guarantor
without the prior written consent of WEC. The duties and obligations of
Guarantor shall bind Guarantor's heirs, personal representatives, executors,
successors, and assigns.
17. COUNTERPARTS.
-7-
<PAGE> 8
This Guaranty may be executed in one or more counterparts, each of which
shall for all purposes be deemed an original, and all of such counter parts
shall together constitute but one and the same document.
18. TERMINATION; REINSTATEMENT.
18.1. Guarantor's obligations hereunder shall terminate, and this Guaranty
shall be released, upon the payment and performance in full of the Obligations.
18.2. This Guaranty shall remain in full force and effect and continue to
be effective should any petition be filed by or against Borrower under the
Bankruptcy Code, as at any time amended, for liquidation or reorganization, or
should Borrower become insolvent or make an assignment for the benefit of
creditors or a receiver or trustee be appointed for all or any significant part
of Borrower's assets, and this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time payment of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by WEC, whether as a
"preferential transfer ,""voidable preference, "fraudulent conveyance," or
otherwise, as if the portion of such payment rescinded, reduced, restored, or
returned had never been made.
19. NOTICES.
All notices hereunder shall be in writing and shall be deemed to have been
duly given for all purposes when: (i) deposited in the United States mail (by
registered or certified mail, return receipt requested, postage prepaid); or
(ii) deposited with a nationally recognized overnight delivery service such as
Federal Express or Airborne. Each notice hereunder must be directed to the party
to receive the same at its address stated below or at such other address as may
be substituted by notice given as herein provided.
The addresses are:
WEC: Westinghouse Electric Corporation
11 Stanwix Street
Pittsburgh, Pennsylvania 15222
Attention: Chief Financial Officer
Guarantor: The address set forth beneath Guarantor's
signature.
-8-
<PAGE> 9
IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty the day and
year first above written.
ATTEST: Laidlaw, Inc.
a Canadian corporation
/s/ W.R. Cottick By: /s/ Ivan R. Cairns
- ---------------------- -----------------------------------
Name: Ivan R. Cairns
---------------------------------
Its: Senior Vice President
---------------------------------
Address: 322 North Road Service
------------------------------
Road, Burligton Ontario Canada L7r348
---------------------------------------
-9-
<PAGE> 10
CORPORATE ACKNOWLEDGEMENT
City OF BURLINGTON )
)SS:
Province OF ONTARIO)
On this, the 14th day of May, 1997, before me, the undersigned officer,
personally appeared Ivan Cairns who acknowledged himself/herself to be the
Senior Vice President of Laidlaw Inc., a corporation, and that that he as such
Sr. (Vice) President being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as Sr. (Vice) President.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
/s/W. R. Cottick
---------------------------------------
Notary Public
WILLIAM RAYMOND COTTIC
Notary Public: Regional Municipality of Halton,
Limited to the attestation of instruments and the
taking of affidavits for LAIDLAW INC., its
subsidiaries, associates and affiliates.
COMMISSION EXPIRES: September 26, 1999.
My Commission Expires:
--------------------------------
-10-
<PAGE> 1
EXHIBIT 10(E)
1996
MANAGEMENT
INCENTIVE PLAN
<PAGE> 2
Rev: September 12, 1995
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
I. OVERVIEW 1
II. PLAN OBJECTIVES 1
III. ATTAINING GOALS 2
IV. ELIGIBILITY FOR PLAN PARTICIPATION 3
V. PLAN STRUCTURE 3
A. Performance Measures 3
1. Revenue 3
2. Return on Assets 3
3. Individual Goals 4
Table 1: Performance Rating Qualitative Category 4
B. Performance Criteria and Target Bonuses 4
1. Target Bonus Level 4
2. Performance Weights 4
Table 2: Target Bonus and Goals by Position 5
3. Units of Measure 5
Table 3: Units of Measure and Weights by Position 6
C. Payout Schedule 6
Table 4: Schedule A: Payout Schedule for Annual
Revenue/ROA Achieved Against Committed
Targets 7
Table 5: Schedule B: Payout Schedule for Annual
Revenue/ROA Achieved Against Committed
Targets 8
VI. PAYMENT OF AWARDS 9
VII. PLAN ADMINISTRATION 9
VIII. SUMMARY AND CONCLUSION 10
</TABLE>
<PAGE> 3
I. OVERVIEW
--------
The Management Incentive Compensation Plan is a short-term cash incentive bonus
plan covering Corporate Executive Staff positions, Vice Presidents, Directors,
Facility Managers, Operations Managers, and other select key management
positions. The plan allows selected management employees to share directly in
the success of the company through the payment of annual incentive awards which
are in turn based on the attainment of business unit goals and individual
performance objectives.
The plan will provide the company with a mechanism to communicate its
expectations for Company performance while at the same time allowing the
management team the opportunity to earn a total compensation package that is
competitive for the industry.
II. PLAN OBJECTIVES
---------------
The purpose of a bonus compensation plan is to motivate key management
performance and to reward those individuals considered responsible for the
success of the business. Laidlaw Environmental Services, Inc. has developed a
Management Incentive Plan for key managerial personnel which will provide a
significant economic opportunity based on their business unit contribution to
the Corporation and on their own individual performance.
The objective of this Plan is to increase Laidlaw's market share, ensure
maximum cooperation between Sales and Operations through the creation of common
goals, sustain teamwork across operational units, and effectively manage
capital assets. In order to accomplish these objectives, a certain percentage
of a key management's total compensation package will be at risk. Therefore,
key managers must direct their efforts and set goals which will maximize the
success of their business unit as defined by the Plan.
<PAGE> 4
III. ATTAINING GOALS
---------------
The success of the Management Incentive Compensation Plan will be measured by
the success of attaining the preset goals for revenue, return on assets, and
qualitative goals as established at the beginning of the year. This can only
be accomplished by the combined support of the corporation's management team.
Each participant should understand that their earning opportunities are
dependent upon the attainment of these preset goals. To enhance this
understanding, each participant will be given an explanation of the plan along
with their individual goals and bonus potentials. This will allow the
participant to clearly understand that increased effort which increases results
will produce higher rewards.
In implementing and maintaining this plan, the following factors are of
critical importance:
- Performance goals will be quantitative and qualitative in
nature. The quantitative goals will be tied to the Company's annual
financial budget. The use of such goals will also help generate and
reinforce a commitment to the budgeting process. The qualitative
goals will be established through a goal setting exercise between the
immediate superior and participant. It will be of such a nature which
will drive the business forward strategically. Measurements of these
goals must be defined and agreed upon by both parties. Copies of
these goals must be forwarded to the respective Regional or Staff
Vice President.
- Incentive awards will be based upon the achievement of
aggressive objectives. These "stretch" objectives will help assure
that the plan pays for itself; and that stockholders receive an
appropriate return on investment in the incentive payments.
- The threshold of incentive awards will only be at a
"competent" level of performance but appreciably more award will
result from extra efforts and results achieved due to higher levels of
performance.
<PAGE> 5
IV. ELIGIBILITY FOR PLAN PARTICIPATION
----------------------------------
<TABLE>
<CAPTION>
For fiscal year 1996 participation in the plan will be limited to:
<S> <C>
* President * Regional Managers
* Senior Vice Presidents * Facility Managers
* Vice Presidents * Operations Managers
* Directors
</TABLE>
These positions are targeted because of their direct accountability for the
operating results of a major business unit, and/or their indirect impact on
total Company results, and their accountability for structuring a function
under them.
To receive an annual incentive award, a participant must be employed by the
Company at the time the checks are distributed and be a participant in the
Management Incentive Plan as of April 1, 1996. Participants who have not
occupied an incentive eligible position for the full fiscal year will be
prorated based on the number of full months of participation. These eligibility
criteria apply to current employees promoted to eligible positions, new hires
hired into eligible positions, or employees in positions subsequently selected
to participate in the Plan.
V. PLAN STRUCTURE
--------------
A. PERFORMANCE MEASURES
Participants will be judged against achieving three separate goals which will
be set at the beginning of the year. These are revenue, return on assets, and
qualitative goals.
1. Revenue
Revenue is defined as accrued and billed sales, including intercompany sales.
Intercompany sales are being included to encourage pass-through business. The
revenue goal will be judged against the year-end revenue as stated on the
appropriate FY96 Profit and Loss Statement.
2. Return on Assets
Return on assets is defined as earnings before interest and taxes divided by
average monthly assets. While EBIT will be obtained from the last monthly
Profit and Loss Statement, assets will be averaged across each ending month's
balance. Although assets could be averaged across each quarter or even across
beginning and ending year balance, averaging across each month has been chosen
as the best method to encourage timely asset management.
<PAGE> 6
V. PLAN STRUCTURE
(Continued)
3. Individual Goals
While the appropriate performance rating in this category of payout is more
subjective, definitions of ratings have been created to assist in the final
determination. The rating schedule has been established in such a way as to
encourage superior performance.
<TABLE>
<CAPTION>
DEFINITION:
-----------
<S> <C>
OUTSTANDING: Significantly beyond expectations, distinguished results.
SUPERIOR: Generally exceeded expectations.
GOOD: Results expected were met with some aspects above average.
SATISFACTORY: Results expected were met with some aspects needing attention.
UNACCEPTABLE: Outcomes did not meet expectations.
TABLE 1
PERFORMANCE RATING
------------------
QUALITATIVE CATEGORY
--------------------
1. Outstanding = 100% of points assigned
2. Superior = 80% of points assigned
3. Good = 60% of points assigned
4. Satisfactory = 40% of points assigned
5. Unacceptable = 0% of points assigned
</TABLE>
B. PERFORMANCE CRITERIA AND TARGET BONUSES
1. Target Bonus Level
The target bonus payout is the monetary award that will be paid if all goals
are achieved exactly as set. This will be calculated as a percentage of base
pay called the target bonus percent. For example, a participant whose base pay
is $50,000 and whose target bonus percent is 30% will receive a $15,000 award
if all the performance goals are met. This award can fluctuate if the goals
are missed or exceeded. The base pay level used to calculate bonus awards will
be the base annualized salary paid as of
<PAGE> 7
August 31, 1996. Target bonus percents are presented in Table 2 below.
2. Performance Weights
Each participant will be judged on a combination of the three separate goals:
Revenue, ROA, and individual goals. These goals do not carry equal weight in
determining the plan payout but are separately weighted according to each
position. These weights are outlined by position in Table 2. To obtain a full
incentive payout, all three goals must be fully achieved.
V. PLAN STRUCTURE
(Continued)
TABLE 2
TARGET BONUS AND GOALS
BY POSITION
<TABLE>
<CAPTION>
Goal
Target Payout Weights
Position Bonus Schedule Revenue ROA Indiv.
=============================================================================
<S> <C> <C> <C> <C> <C>
President 50% Table 4 40% 40% 20%
Senior VP 40% Table 5 40% 40% 20%
Regional VP 35% Table 5 40% 40% 20%
Staff VP 35% Table 4 40% 40% 20%
Ops Director 30% Table 5 40% 40% 20%
Staff Dir - Corp. 20% Table 4 40% 40% 20%
Staff Dir - Div. 20% Table 5 40% 40% 20%
Facility Manager 30% Table 5 40% 40% 20%
Operations Mgr 15% Table 5 40% 40% 20%
</TABLE>
3. Units of Measure
The performance criteria for each plan participant should focus upon the
appropriate areas in which the position has an opportunity to impact. The
following list defines the various units of measure against which the two
financial performance goals will be judged. It should be noted that these
weightings are not permanently fixed and could vary from year to year.
Corporate - All of Laidlaw Environmental Services, Inc.
<PAGE> 8
<TABLE>
<S> <C> <C>
Divisional - A specific division under the control of a Senior Vice President.
Regional - A territory or line of business within a division that is under the control of an
Operating Vice President, i.e., East Central, Western, et cetera.
District - A grouping of several facilities that is usually controlled by a Director.
Facility - A specific operating center.
</TABLE>
Each position will be judged against at least one of the units of measure
defined above. The unit of measure used and its associated weight is based
upon the position's level of control within the organization. These are
presented in Table 3 below:
V. PLAN STRUCTURE
(Continued)
TABLE 3
UNITS OF MEASURE AND WEIGHTS
BY POSITION
<TABLE>
<CAPTION>
Weights
Position Corporate Divisional Regional District Facility
<S> <C> <C> <C> <C> <C>
==============================================================================
President 100%
Senior VP 25% 75%
Regional VP 100%
Staff VP 100%
Ops Director 100%
Staff Dir - Corp. 100%
Staff Dir - Div. 100%
Facility Manager 100%
Operations Mgr 100%
</TABLE>
IN ORDER TO BE ELIGIBLE FOR ANY INCENTIVE AWARD, 90% OR MORE OF THE ROA GOAL
WITH THE UNIT OF MEASURE THAT CARRIES THE HIGHEST WEIGHT MUST FIRST BE
ACHIEVED. For example, SVPs have two ROA goals split 25/75 between the
corporation and their division. To be eligible for the rest of the plan, SVPs
must achieve at least 90% of the ROA goal for their division.
C. PAYOUT SCHEDULE
<PAGE> 9
The achievement level attained against each goal will determine how much of
each goal will be paid. The following schedules in Tables 4 and 5 presents the
payout percentages for various levels of achievement. Different payout
schedules are used depending upon the level of influence of the position. The
payout schedule associated with each position is presented in Table 2. In
order to be paid an award for a particular goal, at least 90% of the goal must
be achieved. This is called the threshold level. Achievement will not be
rounded to the next highest level. For example, if achievement against targets
is 92.9%, the payout will be based on 92%, not 93%.
Page 6
<PAGE> 10
V. PLAN STRUCTURE
(Continued)
TABLE 4
SCHEDULE A:
PAYOUT SCHEDULE FOR ANNUAL REVENUE/ROA
ACHIEVED AGAINST COMMITTED TARGETS
<TABLE>
<CAPTION>
INCENTIVE ACHIEVEMENT
STEP AGAINST PAYOUT LEVEL
COMMITTET TARGETS
===========================================================
<S> <C> <C>
21 110%+ 135%
20 109% 131%
19 108% 127%
18 107% 123%
17 106% 119%
16 105% 115%
14 103% 109%
13 102% 106%
12 101% 103%
11 100% 100%
10 99% 95%
9 98% 90%
8 97% 85%
7 96% 80%
6 95% 75%
5 94% 70%
4 93% 65%
3 92% 60%
2 91% 55%
1 90% 50%
0 <90% 0%
</TABLE>
Page 7
<PAGE> 11
V. PLAN STRUCTURE
(Continued)
TABLE 5
SCHEDULE B:
PAYOUT SCHEDULE FOR ANNUAL REVENUE/ROA
ACHIEVED AGAINST COMMITTED TARGETS
<TABLE>
<CAPTION>
Incentive Achievement Against Payout Level
Step Committet Targets
========================================================
<S> <C> <C>
21 110%+ 135%
20 109% 131%
19 108% 127%
18 107% 123%
17 106% 119%
16 105% 115%
15 104% 112%
14 103% 109%
13 102% 106%
12 101% 103%
11 100% 100%
10 99% 90%
9 98% 81%
8 97% 73%
7 96% 65%
6 95% 58%
5 94% 52%
4 93% 46%
3 92% 41%
2 91% 36%
1 90% 32%
0 <90% 0%
</TABLE>
Page 8
<PAGE> 12
V. PLAN STRUCTURE
(Continued)
An example of a bonus calculation is as follows:
Facility Manager
Annual Salary: $50,000
Target Bonus Percent: 30%
<TABLE>
<CAPTION>
Goal Achievement Payout Goal Target Annual Goal
Weight Bonus Salary Payout
==========================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dist. ROA 108.9% 127% x 40% x 30% x $50,000 = $7,620
Dist. Rev. 98.2% 81% x 40% x 30% x $50,000 = $4,860
Ind. Goals Superior 80% x 20% x 30% x $50,000 = $2,400
Total: $14,880
</TABLE>
VI. PAYMENT OF AWARDS
Each incentive award will be reviewed and approved by the appropriate most
senior Vice President, the Vice President - Administration, and the President.
Checks will be issued no later than November 15, 1996. Participants that
voluntarily terminate their employment with Laidlaw prior to awards being
issued will forfeit their right to receive the award.
Any adjustments to bonus amounts must be approved by the Vice President -
Administration, and the President.
VII. PLAN ADMINISTRATION
The President of Laidlaw Environmental Services, Inc. is the sole interpreter
and arbitrator of these provisions and has the right to amend, withdraw or
revoke them at any time.
<PAGE> 13
Page 9
VIII. SUMMARY AND CONCLUSION
The conceptual framework and basic guidelines covered in this Plan represent
those elements that necessarily must be examined to assure the value to the
Company of utilizing a short-term cash incentive compensation plan. Several
steps must be taken to ensure that those objectives which the plan is designed
to meet can be accomplished. These steps are described as follows:
Communication of the Plan
-------------------------
It is important that the Plan be effectively communicated to all
participants. This would include individual discussions with each
participant. These discussions should include a review of the measures
and standards that should be developed to assess personal and/or business
unit performance, as well as a clarification of the details of the plan
and individual opportunities.
Development of Performance Measures
-----------------------------------
Business unit and individual goals should be established and communicated
at the beginning of the fiscal year. Accepted standards are those that
are reasonable and realistic reflections of current opportunity, as well
as a striving for improvement. Measurements of performance should use
relevant quantitative criteria.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> MAY-31-1997
<CASH> 15,393
<SECURITIES> 0
<RECEIVABLES> 198,617
<ALLOWANCES> 0
<INVENTORY> 7,461
<CURRENT-ASSETS> 229,444
<PP&E> 1,237,379
<DEPRECIATION> 0
<TOTAL-ASSETS> 1,587,784
<CURRENT-LIABILITIES> 179,666
<BONDS> 875,050
0
0
<COMMON> 180,376
<OTHER-SE> 144,698
<TOTAL-LIABILITY-AND-EQUITY> 1,587,784
<SALES> 0
<TOTAL-REVENUES> 468,522
<CGS> 0
<TOTAL-COSTS> 429,517
<OTHER-EXPENSES> 331,697
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29,922
<INCOME-PRETAX> (320,485)
<INCOME-TAX> (128,934)
<INCOME-CONTINUING> (191,817)
<DISCONTINUED> 20
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (191,797)
<EPS-PRIMARY> (1.55)
<EPS-DILUTED> (1.55)
</TABLE>
