UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: December 31, 1994
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 0-11264
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WESTERN WASTE INDUSTRIES
(Exact name of registrant as specified in its charter)
California 95-1946054
-------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
21061 S. WESTERN AVENUE TORRANCE, CALIFORNIA 90501
-------------------------------------------------------------------------
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (310) 328-0900
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 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
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding as of January 31, 1995
--------------------------- ----------------------------------
Common Stock - No par value 14,490,019
Exhibit Index on Page 13
Page 1 of 44 <PAGE>
WESTERN WASTE INDUSTRIES
INDEX
PART I. FINANCIAL INFORMATION:
Consolidated Balance Sheets
June 30, 1994 - Audited
December 31, 1994 - Unaudited . . . . . . . . . . . . 3
Consolidated Statements of Income - Unaudited . . . . . 4
Consolidated Statements of Cash Flows -
Unaudited . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements -
Unaudited . . . . . . . . . . . . . . . . . . . . . . 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . 8
PART II. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . 12
EXHIBIT INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Page 2 of 44 <PAGE>
PART I. FINANCIAL INFORMATION
WESTERN WASTE INDUSTRIES
CONSOLIDATED BALANCE SHEETS
June 30, December 31,
1994 1994
-------- --------
(Unaudited)
ASSETS (dollars in thousands)
Current assets:
Cash and short-term investments $ 9,935 $ 5,817
Receivables, less allowance of $1,611 in
June 1994 and $1,641 in December 1994 31,367 34,447
Supplies 3,349 3,389
Prepaid expenses 2,842 3,475
Other current assets 1,323 1,559
Deferred income tax benefit 5,319 4,306
------- -------
Total current assets 54,135 52,993
Property and equipment, net 185,598 189,864
Purchased routes, net 9,410 8,352
Goodwill, net 21,818 21,447
Other assets (Note 4) 13,720 30,751
-------- --------
$284,681 $303,407
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current instalments of long-term debt $ 1,526 $ 1,143
Accounts payable 8,764 8,479
Accrued payroll and related costs 3,325 3,249
Other current liabilities 19,860 19,120
------- -------
Total current liabilities 33,475 31,991
Long-term debt, excluding current instalments
(Note 3) 91,864 101,521
Other liabilities 17,218 17,131
Deferred income taxes 2,947 3,398
Commitments and contingencies - -
Shareholders' equity:
Preferred stock, no par value; 2,000,000
shares authorized; none issued or outstanding - -
Common stock, no par value; 50,000,000
shares authorized; issued and outstanding
14,333,612 and 14,485,630 shares respectively 75,659 77,623
Retained earnings 63,518 71,743
-------- --------
Total shareholders' equity 139,177 149,366
-------- --------
$284,681 $303,407
======== ========
The accompanying notes are an integral part of these statements.
Page 3 of 44 <PAGE>
WESTERN WASTE INDUSTRIES
CONSOLIDATED STATEMENTS OF INCOME - UNAUDITED
Three Months Ended Six Months Ended
December 31, December 31,
------------------ -------------------
1993 1994 1993 1994
------ ------ ------ ------
(dollars in thousands except share data)
Revenue $63,323 $67,671 $126,234 $134,818
------- ------- -------- --------
Costs and expenses:
Operating 47,805 48,226 95,872 97,370
Selling, general and
administrative 9,612 9,992 19,255 19,546
------- ------- -------- --------
Total costs and expenses 57,417 58,218 115,127 116,916
------- ------- -------- --------
Income from operations 5,906 9,453 11,107 17,902
Nonoperating income (expense):
Interest expense ( 941) (1,401) (1,831) ( 2,539)
Other 191 (581) 380 (544)
------- ------- -------- --------
( 750) (1,982) (1,451) ( 3,083)
------- ------- -------- --------
Income before income taxes and
cumulative effect of
accounting change 5,156 7,471 9,656 14,819
Income taxes 2,320 3,324 4,259 6,594
------- ------- -------- --------
Income before cumulative effect
of accounting change 2,836 4,147 5,397 8,225
Cumulative effect of
accounting change - - 414 -
------- ------- -------- --------
Net Income $ 2,836 $ 4,147 $ 5,811 $ 8,225
======= ======= ======== ========
Primary and fully diluted
earnings per common share:
Income before cumulative
effect of accounting change $ .19 $ .27 $ .37 $ .53
Cumulative effect of
accounting change - - .03 -
------- ------- -------- --------
Net Income $ .19 $ .27 $ .40 $ .53
======= ======= ======== ========
The accompanying notes are an integral part of these statements.
Page 4 of 44 <PAGE>
WESTERN WASTE INDUSTRIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
Six Months Ended
December 31,
------- -------
1993 1994
------- -------
(dollars in thousands)
Operating Activities:
Net income $ 5,811 $ 8,225
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 10,364 12,983
Provision for doubtful accounts 890 769
Uninsured claims 1,199 557
Employer portion - 401(k) contribution 233 308
Cumulative effect of accounting change (414) -
Deferred income taxes 1,858 1,464
Loss on disposition of assets 1 1,084
Changes in operating assets and liabilities,
net of effects of purchased businesses:
Increase in receivables (6,051) (3,849)
Decrease (increase) in other assets 3,590 (1,851)
Decrease in accounts payable ( 767) ( 285)
Decrease in other liabilities (3,402) (1,460)
------ ------
Net cash provided by operating activities 13,312 17,945
Investing activities:
Purchases of property and equipment (27,491) (17,341)
Proceeds from sale of fixed assets 176 453
------- -------
Net cash used in investing activities (27,315) (16,888)
Financing activities:
Proceeds from revolving lines of credit and
long-term borrowings, net of restricted cash 15,000 7,894
Principal payments on borrowings ( 880) (14,725)
Proceeds from issuance of stock 1,283 1,656
------- -------
Net cash provided (used) by
financing activities 15,403 ( 5,175)
------- -------
Increase (decrease) in cash and
short-term investments 1,400 (4,118)
Cash and short-term investments
at beginning of period 2,259 9,935
------- -------
Cash and short-term investments
at end of period $ 3,659 $ 5,817
======= =======
The accompanying notes are an integral part of these statements.
Page 5 of 44 <PAGE>
WESTERN WASTE INDUSTRIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - Basis of presentation:
------------------------------
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. All adjustments made to the interim financial
statements were of a normal recurring nature. For further information,
refer to the consolidated financial statements and footnotes thereto
included in the Company's Annual Report on Form 10-K for the year ended
June 30, 1994.
NOTE 2 - Earnings per share:
---------------------------
Primary and fully diluted earnings per share are computed on the basis
of the weighted average number of shares outstanding plus the common stock
equivalents which would arise from the exercise of stock options using the
treasury stock method.
The average number of shares (in thousands) used for primary and fully
diluted calculations were as follows:
1993 1994
------ ------
Quarter ended December 31, 14,857 15,440
Six months ended December 31, 14,725 15,546
NOTE 3 - Long-term borrowings:
-----------------------------
The Company's revolving line of credit (the "agreement"), which
currently matures on June 1, 1997, permits borrowings up to $100,000,000.
At the Company's option, borrowings under the agreement bear interest at
the bank's prime rate (8.5% at December 31, 1994, no borrowings with this
option) and/or at the London Interbank Offered Rate (LIBOR) plus .75 to 2.0
per cent, depending upon certain ratios (6.69% to 7.06%, including the .75%
spread, at December 31, 1994, $68 million in borrowings). The agreement
has a $16.5 million quarterly commitment reduction commencing March 1,
1996. On or before the first day of October of each year, the Company has
an option to request an extension of the revolving period and the
termination date with the approval of its banks. The Company has exercised
this option and currently is awaiting the approval of its banks. If this
option is approved, the termination date shall be extended to June 1, 1999,
the quarterly commitment reduction date shall be extended to March 1, 1997,
and the quarterly commitment reduction will be reduced from $16.5 million
to $10 million. Thereafter, each extension request shall be for a period
of one year. The agreement requires no compensating balances. Under the
Page 6 of 44 <PAGE>
terms of the agreement, the Company is subject to various debt covenants
including maintenance of certain financial ratios, and in addition, it
limits the amount of cash dividends.
During the second quarter of fiscal 1995 the Company issued, through
the California Pollution Control Financing Authority, $24 million of tax
exempt bonds (the "bonds") with a term of twelve years. The bonds are
subject to a mandatory sinking fund redemption of $4,000,000 each
October 1, over the period of 2001 to 2006. The proceeds of the financing
are restricted to fund projects, including purchases of equipment, located
in California. As part of this financing, the Company established an
irrevocable letter of credit for the principal amount of $24 million plus
52 days accrued interest on the bonds to guarantee repayment. The bonds
bear interest at a floating rate (4.5% as of December 31, 1994) which is
set weekly by a remarketing agent. Simultaneously with the tax exempt bond
financing, the Company entered into an interest rate swap agreement with a
major bank whereby the Company will pay a fixed rate of 6.29% and the bank
will pay the floating rate for a period of five years. (See Note 5)
NOTE 4 - Other Assets:
---------------------
As of December 31, 1994, the Company had $16.1 million in restricted
cash combined with Other Assets on the Consolidated Balance Sheet. This
cash, which is related to the California Pollution Control Bonds discussed
above, is held in custody by a Trustee and is restricted as to withdrawal
or use. The Trustee reimburses the Company for qualified expenditures. As
of December 31, 1994, the Company had incurred and paid for qualified
expenditures of approximately $8 million (included in Property, Plant and
Equipment on the Consolidated Balance Sheet) for which reimbursement had
not yet been requested. The Company expects to request and receive
reimbursement of this $8 million in the third quarter and the balance of
$8.1 million in the fourth quarter. Based upon current cash flow from
operations, the receipt of the reimbursement proceeds discussed above, and
estimated capital expenditures, the Company intends to reduce revolving
credit agreement borrowings by $16.1 million.
Note 5 - Interest Rate Risk Management:
--------------------------------------
The Company has used an interest-rate swap agreement to effectively
convert a portion of its floating rate debt to a fixed rate basis, thus
reducing the impact of interest-rate volatility on future operations.
Approximately 24% ($24 million) of the Company's outstanding floating rate
debt was subject to this interest-rate swap agreement as of December 31,
1994.
The swap agreement requires the Company to pay a fixed rate to a major
bank, and the bank then pays the floating rate. The Company records the
fixed rate as interest expense.
Page 7 of 44 <PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATION
--------------------
Revenue
-------
Revenue for the second quarter and first six months of fiscal 1995
increased $4,348,000 and $8,584,000, or 7%, as compared with the same
periods in the prior year. The increase resulted primarily from price and
volume changes.
Operating Expenses
------------------
Operating expenses, consisting primarily of wages and benefits for
operating personnel, insurance costs, fuel costs, disposal site fees and
equipment operating costs, increased $421,000 and $1,498,000 for the second
quarter and first six months of fiscal 1995, respectively, over the
comparable periods in the prior fiscal year. As a percentage of revenue,
these expenses decreased from 75.5% to 71.3% and from 75.9% to 72.2% for
the second quarter and first six months, respectively, of fiscal 1995, as
compared to the same periods in fiscal 1994. The decrease in operating
expenses as a percentage of revenue was due primarily to revenue growth
discussed above in combination with the Company's overall profit
improvement efforts.
Selling, General and Administrative Expenses
--------------------------------------------
As a percentage of revenue, selling, general and administrative
expenses decreased from 15.2% to 14.8% and from 15.2% to 14.5% for the
second quarter and first six months of fiscal 1995, respectively, over
comparable periods in the prior fiscal year. The decrease in selling,
general and administrative expenses as a percentage of revenue occurred
primarily as a result of revenue growth discussed above in combination with
the Company's concerted effort to improve margins and profit.
Interest Expense
----------------
Interest expense increased $460,000 and $708,000 for the second
quarter and first six months of fiscal 1995, respectively, as compared to
the same periods in the prior fiscal year. The increase was due primarily
to increases in average borrowing rates. Interest rates on the Company's
revolving credit agreement averaged 6.2% for the six months ended
December 31, 1994 versus 4.8% for same period in the prior fiscal year.
Income Taxes
------------
The effective tax rates were 44.5% for the second quarter and first
six months of fiscal 1995, respectively, as compared to 45.0% and 44.1% for
the same periods in the prior fiscal year.
Page 8 of 44 <PAGE>
Liquidity and Capital Resources
-------------------------------
Working capital -
---------------
At December 31, 1994, working capital amounted to $21,002,000 compared
to $20,660,000 at June 30, 1994. The current ratio was 1.6 at June 30,
1994 and 1.7 at December 31, 1994.
The Company has an unsecured revolving credit agreement, which
provides for borrowings up to $100 million. At the Company's option,
borrowings under the agreement bear interest at the bank's prime rate
and/or at the London Interbank Offered Rate (LIBOR) plus .75% to 2.0%,
(.75% at December 31, 1994), depending upon certain ratios. Outstanding
borrowings under the Company's revolving credit agreement were $68 million
at December 31, 1994.
During the second quarter of fiscal 1995 the Company issued, through
the California Pollution Control Financing Authority, $24 million of tax
exempt bonds (the "bonds") with a term of twelve years. The bonds are
subject to mandatory sinking fund redemption of $4,000,000 each October 1,
over the period of 2001 through 2006. The proceeds of the financing are
restricted to fund projects, including purchases of equipment, located in
California. As part of this financing, the Company established an
irrevocable letter of credit for the principal amount of $24 million plus
52 days accrued interest on the bonds to guarantee repayment. The bonds
bear interest at a floating rate (4.5% as of December 31, 1994) which is
set weekly by a remarketing agent.
Simultaneously, as part of the overall tax exempt bond financing, the
Company entered into an interest rate swap agreement with a major bank,
with a term of five years. The Company entered into this interest rate
swap agreement to modify the interest characteristics of this debt from a
floating rate to a fixed rate of 6.29%. The Company's objective with this
swap agreement is to minimize the impact of increases in interest-rates
over the term of the swap agreement. The Company has entered into only
this interest rate swap (See Note 3).
As of December 31, 1994, the Company had $16.1 million in restricted
cash combined with Other Assets on the Consolidated Balance Sheet. This
cash, which is related to the California Pollution Control Bonds discussed
above, is held in custody by a Trustee and is restricted as to withdrawal
or use. The Trustee reimburses the Company for qualified expenditures. As
of December 31, 1994, the Company had incurred and paid for qualified
expenditures of approximately $8 million (included in Property, Plant and
Equipment on the Consolidated Balance Sheet) for which reimbursement had
not yet been requested. The Company expects to request and receive
reimbursement of this $8 million in the third quarter and the balance of
$8.1 million in the fourth quarter. Based upon current cash flow from
operations, the receipt of the reimbursement proceeds discussed above, and
estimated capital expenditures, the Company intends to reduce revolving
credit agreement borrowings by $16.1 million.
Page 9 of 44 <PAGE>
The Company's debt to equity ratio was .69 to 1.0 at December 31, 1994
and .67 to 1.0 at June 30, 1994. If the Company had received the
$8 million reimbursement mentioned above, prior to December 31, 1994, and
used these proceeds to reduce their revolving credit agreement borrowings,
the debt to equity ratio would have been .63 to 1.0.
Capital resources -
-----------------
During the six months ended December 31, 1994, the Company made
capital expenditures of approximately $17.3 million for property and
equipment. The Company estimates that total capital expenditures for
fiscal 1995 will be approximately $30 million. The Company believes that
cash provided by operations, cash provided by its $24 million tax-exempt
financing and cash available under its revolving credit agreement will be
sufficient for its capital expenditure requirements. As part of the
Company's renewed acquisition program, several potential acquisitions are
being considered. In addition, the Company is exploring various municipal
contract opportunities. These acquisitions will be purchased utilizing
stock, cash, or debt. The Company believes that cash provided by
operations, cash available under its revolving credit agreement, and cash
from other external sources will be sufficient for its cash acquisition
financing needs.
Inflation -
---------
Generally, inflation has had a minor impact on the Company's
operations for the periods referred to above as most of the Company's
collection operations are under contracts that provide for rate adjustments
based upon increases in the consumer price index. These contracts reduce
the Company's vulnerability to inflation. However, in the case of rapid
changes in costs such as fuel and disposal costs, rate increases may lag
behind cost increases.
Page 10 of 44 <PAGE>
PART II. OTHER INFORMATION
Items 1 through 5
-----------------
Items 1, 2, 3, 4 and 5 are not applicable.
Item 6 - Exhibits and Report on Form 8-K
------------------------------------------
a. Exhibits -
Exhibit 10.13, Reimbursement Agreement between Western Waste
Industries and California Pollution Control Financing Authority.
Exhibit 27, Financial Data Schedule.
b. Report on Form 8-K - There was no report on Form 8-K filed during
the quarter ended December 31, 1994.
Page 11 of 44 <PAGE>
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 as both a duly authorized officer and as the Chief
Financial Officer of the registrant.
WESTERN WASTE INDUSTRIES
By: LAWRENCE F. MCQUAIDE
-------------------------------
LAWRENCE F. MCQUAIDE
EXECUTIVE VICE PRESIDENT,
FINANCE
Date: FEBRUARY 13, 1995
-------------------------------
Page 12 of 44 <PAGE>
Exhibit Page
No. Description No.
--------------------------------------------------------------------------
10.13 Reimbursement Agreement between Western
Waste Industries and California Pollution
Control Financing Authority 14
27 Financial Data Schedule 44
Page 13 of 44 <PAGE>
Exhibit 10.13
REIMBURSEMENT AGREEMENT
______________
WESTERN WASTE INDUSTRIES
and
THE BANK OF CALIFORNIA, N.A.
______________
Dated as of November 1, 1994
______________
$24,000,000
California Pollution Control Financing Authority
Variable Rate Demand
Solid Waste Disposal Revenue Bonds
(Western Waste Industries Project)
Series 1994A
Page 14 of 44 <PAGE>
TABLE OF CONTENTS
_________________
Page
----
REIMBURSEMENT AGREEMENT . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . 2
1.1 CERTAIN DEFINED TERMS. . . . . . . . . . . . . . 2
SECTION 2 THE LETTER OF CREDIT . . . . . . . . . . . . . . 8
2.1 ISSUANCE. . . . . . . . . . . . . . . . . . . . . 8
2.2 REIMBURSEMENT OBLIGATION . . . . . . . . . . . . 8
2.3 TRANSFER . . . . . . . . . . . . . . . . . . . . 9
2.4 FEES . . . . . . . . . . . . . . . . . . . . . . 9
2.5 REINSTATEMENT. . . . . . . . . . . . . . . . . . 9
SECTION 3 PAYMENTS AND COMPUTATIONS . . . . . . . . . . . . 9
3.1 PAYMENTS AND COMPUTATIONS . . . . . . . . . . . . 9
3.2 NON-BUSINESS DAYS . . . . . . . . . . . . . . . . 10
3.3 EVIDENCE OF DEBT. . . . . . . . . . . . . . . . . 10
3.4 OBLIGATIONS ABSOLUTE. . . . . . . . . . . . . . . 10
3.5 UNIFORM CUSTOMS AND PRACTICE . . . . . . . . . . 11
SECTION 4 CONDITIONS PRECEDENT . . . . . . . . . . . . . . 11
4.1 THE CREDIT . . . . . . . . . . . . . . . . . . . 11
SECTION 5 REPRESENTATIONS AND WARRANTIES . . . . . . . . . 13
5.1 CORPORATE STATUS . . . . . . . . . . . . . . . . 13
5.2 CORPORATE AUTHORITY . . . . . . . . . . . . . . . 13
5.3 VALID OBLIGATIONS. . . . . . . . . . . . . . . . 13
5.4 NO GOVERNMENTAL APPROVAL . . . . . . . . . . . . 14
5.5 NO VIOLATIONS. . . . . . . . . . . . . . . . . . 14
5.6 NO LITIGATION. . . . . . . . . . . . . . . . . . 14
5.7 FINANCIAL CONDITION. . . . . . . . . . . . . . . 14
5.8 INFORMATION CORRECT. . . . . . . . . . . . . . . 14
5.9 MODIFICATION OF RELATED DOCUMENTS. . . . . . . . 15
5.10 TAXES. . . . . . . . . . . . . . . . . . . . . . 15
5.11 SUBSIDIARIES. . . . . . . . . . . . . . . . . . . 15
5.12 ERISA. . . . . . . . . . . . . . . . . . . . . . 15
5.13 REGULATION U. . . . . . . . . . . . . . . . . . . 15
SECTION 6 COVENANTS . . . . . . . . . . . . . . . . . . . . 16
6.1 FINANCIAL STATEMENTS. . . . . . . . . . . . . . . 16
6.2 BOOKS AND RECORDS. . . . . . . . . . . . . . . . 17
6.3 GOVERNMENTAL AUTHORITY. . . . . . . . . . . . . . 18
-i-
Page 15 of 44 <PAGE>
6.4 CORPORATE EXISTENCE. . . . . . . . . . . . . . . 18
6.5 MAINTENANCE OF BUSINESS. . . . . . . . . . . . . 18
6.6 PAYMENT OF TAXES. . . . . . . . . . . . . . . . . 18
6.7 INSURANCE. . . . . . . . . . . . . . . . . . . 18
6.8 CORPORATION CREDIT AGREEMENT. . . . . . . . . . . 19
6.9 MERGER AND CONSOLIDATION. . . . . . . . . . . . . 19
6.10 AMENDMENTS TO AGREEMENTS. . . . . . . . . . . . . 20
SECTION 7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . 20
7.1 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . 20
7.2 REMEDIES ON DEFAULT. . . . . . . . . . . . . . . 22
SECTION 8 MISCELLANEOUS . . . . . . . . . . . . . . . . . . 23
8.1 LIABILITY OF BANK. . . . . . . . . . . . . . . . 23
8.2 INDEMNIFICATION. . . . . . . . . . . . . . . . . 23
8.3 NOTICES. . . . . . . . . . . . . . . . . . . . . 24
8.4 NO WAIVER, CUMULATIVE REMEDIES. . . . . . . . . . 24
8.5 PAYMENT OF EXPENSES. . . . . . . . . . . . . . . 25
8.6 RIGHT OF SET OFF. . . . . . . . . . . . . . . . . 25
8.7 EXTENSION OF THE STATED TERMINATION DATE. . . . . 25
8.8 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . 26
8.9 COUNTERPARTS. . . . . . . . . . . . . . . . . . . 26
8.10 SEVERABILITY OF PROVISION. . . . . . . . . . . . 26
8.11 CONSENT TO JURISDICTION. . . . . . . . . . . . . 26
8.12 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . 26
8.13 GOVERNING LAW. . . . . . . . . . . . . . . . . . 27
EXHIBIT "A" AGENCY AGREEMENT
EXHIBIT "B" PLEDGE AND SECURITY AGREEMENT
EXHIBIT "C" IRREVOCABLE LETTER OF CREDIT
EXHIBIT "D" CORPORATION COUNSEL OPINION
Schedule 1 Subsidiaries
-ii-
Page 16 of 44 <PAGE>
REIMBURSEMENT AGREEMENT
This REIMBURSEMENT AGREEMENT (this "Agreement") is dated
as of November 1, 1994 between WESTERN WASTE INDUSTRIES, a
California corporation (the "Corporation"), and THE BANK OF
CALIFORNIA, N.A. (the "Bank").
RECITALS
A. The California Pollution Control Financing Authority
(the "Issuer") has agreed to issue its variable rate demand
solid waste revenue bonds to finance certain equipment and
capital expenditures (more specifically described in the Bond
Indenture, hereinafter referred to, as the "Project") of the
Corporation located in the State of California, including, but
not limited to, the construction of transfer stations and
recycling centers, the acquisition costs for certain equipment
and to pay the costs of issuance of the Bonds (as hereinafter
defined), pursuant to an Indenture dated as of November 1, 1994
(the "Bond Indenture") between the Issuer and The First
National Bank of Boston, as trustee (the "Bond Trustee"), of
the Issuer's Variable Rate Demand Solid Waste Disposal Revenue
Bonds (Western Waste Industries Project) Series 1994A (the
"Bonds") in the aggregate principal amount of $24,000,000.
B. The Issuer will lend the proceeds of the sale of the
Bonds to the Corporation pursuant to a Loan Agreement dated as
of November 1, 1994 (the "Loan Agreement").
C. The Corporation has requested the Bank to provide the
Bank's irrevocable letter of credit in favor of the Bond
Trustee in substantially the form of Exhibit "C" hereto (such
letter of credit, as amended, and any successor letter of
credit being the "Credit") in the amount of $24,410,302 (the
"Commitment") of which $24,000,000 supports the payment of
principal of the Bonds and $410,302 supports the payment of up
to 52 days' interest on the Bonds (computed for purposes of the
Commitment on the basis of a year of 365 or 366 days, as the
case may be, for the actual number of days at 12% per annum on
the principal thereof).
In consideration of the premises and in order to induce
the Bank to issue the Credit, the parties hereto agree as
follows:
-1-
Page 17 of 44 <PAGE>
SECTION 1
---------
DEFINITIONS
-----------
1.1 CERTAIN DEFINED TERMS. Unless otherwise defined
herein, capitalized terms used in this Agreement shall have the
meanings given to them in the Bond Indenture, in existence and
as effective at the Closing Date (as defined below). All
accounting terms not otherwise defined shall be construed in
accordance with GAAP (as defined below). As used in this
Agreement, the following terms shall have the following
meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Affiliate" of any Person means any other Person
directly or indirectly controlling, controlled by or under
common control with such Person. A Person shall be deemed
to control another Person if the Controlling Person
possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the
controlled Person, whether through ownership of stock by
contract or otherwise.
"Agency Agreement" means the Agency Agreement
executed by the Bank, the Bond Trustee and the Tender
Agent substantially in the form of Exhibit "A" hereto.
"Agency Fee" means the fee provided for in
Section 2.4(c) hereof.
"Agreement" means this reimbursement agreement, as it
may be amended or modified and in effect from time to
time.
"Authorized Representative" means the Corporation's
president, chief financial officer, chief operating
officer or any of its financial vice presidents or any
other person designated as an Authorized Representative of
the Corporation by a certificate signed by its Secretary
or Assistant Secretary and filed with the Bond Trustee or
the Bank.
"Available Amount" means, as of any date of
determination, the sum of (a) the Stated Amount, plus
(b) the aggregate amount of Reimbursement Obligations
outstanding as of such date.
"Availability Fee" means the fee provided for in
Section 2.4(a) hereof.
-2-
Page 18 of 44 <PAGE>
"Bank" has the meaning set forth in the first
paragraph above.
"Base Period Financial Statements" means the
consolidated balance sheet of the Corporation and its
Subsidiaries at June 30, 1994 and the related consoli-
dated statements of operations, changes in equity and
changes in financial position for the year then ended,
audited by Ernst & Young and delivered to the Bank prior
to the Closing Date.
"Bond Indenture" has the meaning specified in Recital
clause A above.
"Bonds" has the meaning specified in Recital clause A
above.
"Bond Trustee" has the meaning specified in Recital
clause A above.
"Business Day" means a day other than (i) a Saturday
or Sunday, (ii) a day on which commercial banks in
New York, New York, or the city or cities in which the
Corporate Trust Office of the Trustee or the Tender Agent
or the office of the Bank at which demands for payment
under the Letter of Credit are to be presented are
authorized or required by law to close or (iii) a day on
which the New York Stock Exchange is closed.
"Closing Date" means the date on which the documents
referred to in Section 4.1E shall be furnished to the
Bank.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time.
"Commitment" has the meaning specified in Recital
clause C above.
"Controlled Group" means all members of a controlled
group of corporations and all trades or businesses
(whether or not incorporated) under common control which,
together with the Corporation or any of its Subsidiaries,
are treated as a single employer under Section 414 of the
Code.
"Corporation" means Western Waste Industries, a
California corporation, and its successors and assigns.
"Corporation Credit Agreement" means the Revolving
Credit Agreement dated as of November 19, 1992 (the
"Citibank Agreement") among the Corporation, several
-3-
Page 19 of 44 <PAGE>
financial institutions party thereto and Citibank USA,
Inc., as Agent, as amended to the date hereof and as
amended hereafter from time to time. If, at any time,
such Citibank Agreement shall terminate, "Corporation
Credit Agreement" shall be deemed to refer to any new bank
credit agreement to which the Corporation is a party which
is substantially similar to the Citibank Agreement and
which contains financial covenants similar to Sec-
tions 6.01(e), (f), (g), (h), (i) and (j) of the Citibank
Agreement and which is not an asset-based financing. If
the Citibank Agreement shall terminate and no such
substantially similar bank credit agreement shall be
entered into by the Corporation, "Corporation Credit
Agreement" shall be deemed to refer to the last such
agreement in existence, regardless of any subsequent
termination.
"Credit" has the meaning specified in Recital
clause C above.
"Default" means any of the events specified in
Section 7 hereof, whether or not any requirements for the
giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Default Drawing" means a Drawing accompanied by a
certificate in the form of Annex D to the Credit.
"Default Rate" means a fluctuating interest rate
equal to 2% per annum above the Prime Rate in effect from
time to time.
"Drawing" means any presentation to the Bank by the
Bond Trustee, or any successor, of a draft and certificate
in substantial conformity with the requirements of the
Credit.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, and any rule or
regulation issued thereunder.
"Event of Default" means any of the events specified
in Section 7 hereof, provided that any requirement for the
giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Expiration Date" means the date when the Credit
expires in accordance with its terms.
"Fiscal Quarter" means any quarter in any Fiscal
Year.
-4-
Page 20 of 44 <PAGE>
"Fiscal Year" means the period of twelve consecutive
months, beginning on July 1 of each calendar year, and
ending on the last day of June of such calendar year, or
such other twelve month period as may from time to time be
designated in writing by an Authorized Representative.
"GAAP" means, at any time, generally accepted
accounting principles then in effect as consistently
applied by the Corporation in the preparation of its
financial statements.
"Governmental Authority" means any nation or govern-
ment, any state or other political subdivision thereof,
and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
"Issue Date" means the date on which the Credit is
issued and delivered to the Bond Trustee.
"Issuer" has the meaning specified in Recital
clause A above.
"L/C Fee" means the fee provided for Section 2.4(b)
hereof.
"Lien" means any lien (statutory or other), mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance or preference, priority or other security
agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the
interest of a vendor or lessor under any conditional sale,
Capitalized Lease or other title retention agreement).
"Liquidity Drawing" means a drawing accompanied by a
certificate in the form of Annex C to the Credit.
"Loan Agreement" has the meaning specified in Recital
clause B above.
"Loan Documents" means this Agreement, the Credit,
the Pledge Agreement, the Agency Agreement and related UCC
financing statements.
"Moody's" means Moody's Investors Service, a Delaware
corporation.
"Multiemployer Plan" means a Plan maintained pursuant
to a collective bargaining agreement or any other
arrangement to which the Corporation or any member of the
Controlled Group is a party to which more than one
employer is obligated to make contributions.
-5-
Page 21 of 44 <PAGE>
"Obligations" means all the obligations of the
Corporation to the Bank hereunder or under any of the Loan
Documents, whether for principal, interest, fees or
expenses, including without limitation, the Reimbursement
Obligations, the Availability Fee, the Agency Fee and the
L/C Fee.
"Payment Date" means the date on which a Drawing is
honored by the Bank.
"PBGC" means the Pension Benefit Guaranty
Corporation, or any successor thereto.
"Person" means an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.
"Plan" means at any time, an employee pension benefit
plan which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the
Code and is either (i) maintained by the Corporation for
employees of the Corporation or (ii) maintained pursuant
to a collective bargaining agreement or any other arrange-
ment under which more than one employer makes contribu-
tions and to which the Corporation is then making or
accruing an obligation to make contributions, or has
within the preceding five Plan years made contributions.
"Pledged Bonds" means Bonds held in the name of the
Corporation by the Tender Agent pursuant to a Liquidity
Drawing and pledged to the Bank pursuant to the Pledge
Agreement.
"Prime Rate" means a fluctuating rate set by the Bank
as its prime rate based upon various factors including
general economic and market conditions and is used as a
reference point for pricing certain loans and other
extensions of credit. The Bank may price its loans or
other extensions of credit at, above or below the Prime
Rate.
"Project" has the meaning set forth in Recital
clause A above.
"Regulation U" means Regulation U of the Board of
Governors of the Federal Reserve System as from time to
time in effect and any successor or other regulation or
official interpretation of said Board of Governors
relating to the extension of credit by banks for the
-6-
Page 22 of 44 <PAGE>
purpose of purchasing or carrying margin stocks applicable
to member banks of the Federal Reserve System.
"Reimbursement Obligation" and "Reimbursement
Obligations" have the respective meanings specified in
Section 2.2.
"Related Documents" means the Bonds, the Bond
Indenture, the Loan Agreement, the Underwriting Agreement
and the Remarketing Agreement.
"Remarketing Agreement" means the Remarketing
Agreement dated as of November 1, 1994 between the
Corporation and the Underwriter, as remarketing agent, as
such Remarketing Agreement may be further supplemented and
amended from time to time.
"Reportable Event" means a reportable event as
defined in Section 4043 of ERISA and the regulations
issued under such section, with respect to a Single
Employer Plan, excluding, however, such events as to which
the PBGC by regulation waived the requirement of Section
4043(a) of ERISA that it be notified within 30 days of the
occurrence of such event, provided, however, that a
failure to meet the minimum funding standard of Section
412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such
waiver of the notice requirement in accordance with either
Section 4043(a) of ERISA or Section 412(d) of the Code.
"Single Employer Plan" means a Plan maintained by the
Corporation or any member of the Controlled Group for
employees of the Corporation or any member of the
Controlled Group.
"Standard & Poor's" means Standard & Poor's Ratings
Group, a New York corporation.
"Stated Amount" means, at any time, the maximum
amount available for drawing under the Credit.
"Stated Termination Date" means September 30, 1999,
as such date may be extended from time to time pursuant to
Section 8.7 hereof.
"Subsidiary of a Person means (i) any corporation
more than 50% of the outstanding securities having
ordinary voting power of which at the time shall be owned
or controlled, directly or indirectly, by such Person or
by one or more of its Subsidiaries or by such Person and
one or more of its Subsidiaries, or (ii) any partnership,
association, joint venture or similar business
-7-
Page 23 of 44 <PAGE>
organization more than 50% of the ownership interests
having ordinary voting power of which at the time shall be
so owned or controlled. Unless otherwise expressly
provided, all references herein to a "Subsidiary" shall
mean Subsidiary of the Corporation.
"Tender Agent" means initially the Bond Trustee and
any successor tender agent appointed pursuant to the
Indenture.
"UCP" has the meaning specified in Section 3.5.
"Underwriter" means BA Securities, Inc.
"Underwriting Agreement" means the Bond Purchase
Contract dated November 14, 1994 among the Treasurer of
the State of California, the Issuer, the Corporation and
the Underwriter.
"Unfunded Liabilities" means the amount (if any) by
which the present value of all vested nonforfeitable
benefits under all Single Employer Plans exceeds the fair
market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent
valuation date for such Plans.
SECTION 2
---------
THE LETTER OF CREDIT
--------------------
2.1 ISSUANCE. Subject to all of the terms and conditions
hereof, the Bank agrees to issue to the Bond Trustee the Credit
on the Issue Date in the amount of the Commitment and expiring
on or before the Stated Termination Date as provided in the
Credit.
2.2 REIMBURSEMENT OBLIGATION. The Corporation shall
reimburse, or cause the Bond Trustee to reimburse, the Bank for
the amount paid by the Bank pursuant to each Drawing under the
Credit, such reimbursement to be due and payable on the Payment
Date for such Drawing (each a "Reimbursement Agreement"). The
Corporation agrees to pay to the Bank interest on any
Reimbursement Obligation (each a "Reimbursement Obligation")
for any Drawing not paid on the Payment Date for such Drawing,
from such Payment Date until such Reimbursement Obligation is
paid in full, at a fluctuating rate of interest per annum equal
to the Default Rate in effect from time to time. Such interest
shall be payable on demand of the Bank.
-8-
Page 24 of 44 <PAGE>
2.3 TRANSFER. The Bank agrees to transfer the Credit to
any successor Trustee in accordance with, but subject to the
conditions of, Paragraph 11 of the Credit.
2.4 FEES. (a) AVAILABILITY FEE. The Corporation agrees
to pay to the Bank on the Issue Date an availability fee (the
"Availability Fee") equal to $25,000.
(b) LETTER OF CREDIT FEE. The Corporation agrees to
pay to the Bank quarterly in arrears on the day immediately
following the last day of each calendar quarter, commencing
January 1, 1995, until the Expiration Date, a letter of credit
fee (the "L/C Fee") equal to .7% per annum of the Available
Amount, determined as of the last day of the calendar quarter
then ended. Such fee shall be calculated on the basis of a
360-day year.
(c) AGENCY FEE. The Corporation agrees to pay to
the Bank on each anniversary of the Issue Date, until the
Expiration Date, an agency fee (the "Agency Fee") equal to
$5,000.
2.5 REINSTATEMENT. If at any time any Pledged Bond or
portion thereof shall be remarketed, the Corporation shall
cause the Tender Agent, on behalf of the Corporation, to pay to
the Bank, in immediately available funds at or before
11:00 a.m. San Francisco time on the date of such remarketing
an amount equal to the amount received by the Tender Agent in
connection with such remarketing. Such payment shall be
accompanied by a certificate, substantially in the form of
Annex F to the Credit, completed and signed by the Bond
Trustee, and shall be applied by the Bank as reimbursement to
the Bank for a Liquidity Drawing or Drawings honored under the
Credit (in the order in which such Liquidity Drawings were
made) in the manner described above. The Corporation
irrevocably authorizes the Bank to rely on the Bond Trustee's
certificate and to reinstate the Stated Amount of the Credit in
accordance therewith.
SECTION 3
---------
PAYMENTS AND COMPUTATIONS
-------------------------
3.1 PAYMENTS AND COMPUTATIONS. The Corporation shall
make each payment hereunder not later than 12:00 noon
(San Francisco time) on the day when due in lawful money of
the United States of America, to the Bank at its address at
550 South Hope Street, Attention: Hisako Sakamoto, Corporate
Banking Operations Department, Los Angeles, California 90071
(or at such other address of the Bank in Los Angeles as the
-9-
Page 25 of 44 <PAGE>
Bank may designate to the Corporation) in same day funds. The
Corporation authorizes the Bank, if and to the extent payment
is not made when due hereunder, to charge from time to time
against any or all of the Corporation's accounts with the Bank
any amount so due. Computations of interest based on the Prime
Rate hereunder shall be made by the Bank on the basis of a year
of 360 days for the actual number of days (including the first
day but excluding the last day) elapsed. Changes in the rate
of interest will take effect simultaneously with each change in
the Prime Rate.
3.2 NON-BUSINESS DAYS. Whenever any payment to be made
hereunder shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as
the case may be.
3.3 EVIDENCE OF DEBT. The Bank shall maintain in
accordance with its usual practice an account or accounts
evidencing the indebtedness of the Corporation resulting from
each Drawing under the Credit and the amounts of principal and
interest payable and paid from time to time hereunder. In any
legal action or proceeding in respect of this Agreement, the
entries made in such account or accounts shall be conclusive
evidence, absent manifest error, of the existence and amounts
of the obligations of the Corporation therein recorded.
3.4 OBLIGATIONS ABSOLUTE. The payment obligations of the
Corporation under this Agreement shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of
any of the Loan Documents or Related Documents;
(ii) any amendment or waiver of or any consent
to or departure from all or any of the Loan Documents
or Related Documents;
(iii) the existence of any claim, set-off,
defense or other right which the Corporation may have
at any time against the Bond Trustee or any other
beneficiary, or any transferee, of the Credit (or any
Persons for whom the Bond Trustee, any such bene-
ficiary or any such transferee may be acting), the
Bank, or any other Person whether in connection with
this Agreement, the transactions contemplated herein
or in the Loan Documents or Related Documents, or any
unrelated transaction;
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Page 26 of 44 <PAGE>
(iv) any statement or any other document
presented under the Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in
any respect;
(v) payment by the Bank under the Credit
against presentation of a draft or certificate which
does not strictly comply with the terms of the
Credit; or
(vi) any other circumstance or happening
whatsoever, whether or not similar to any of the
foregoing.
3.5 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs
and Practice for Documentary Credits, 1993 Revision,
International Chamber of Commerce Publication No. 500 ("UCP"),
excluding Subarticle 48(g), shall in all respects be deemed a
part of Section 2 and this Section 3 as if incorporated herein
and shall apply to the Credit. As to matters not covered by
the UCP, and to the extent not inconsistent with the UCP, the
Letter of Credit shall be governed by and construed in
accordance with the laws of the State of California.
SECTION 4
---------
CONDITIONS PRECEDENT
--------------------
4.1 THE CREDIT. The obligation of the Bank to issue the
Credit on the Issue Date is subject to the following conditions
precedent:
A. The Corporation shall have paid on or before the
Issue Date: (1) the Availability Fee; (2) the Agency Fee;
and (3) all fees, costs and expenses of Bank then payable.
B. The representations and warranties of the
Corporation in Section 5 hereof and in each certificate or
other writing delivered to Bank pursuant hereto in or
prior to the Issue Date shall be correct on and as of the
Issue Date.
C. No Default or Event of Default shall have
occurred and be continuing on the Issue Date or would
result from the issuance of the Credit on the Issue Date.
D. There shall have been no material adverse change
in the business, condition (financial or otherwise),
-11-
Page 27 of 44 <PAGE>
operations or prospects of the Corporation since June 30,
1994.
E. The Bank shall have received each of the
following in form and substance satisfactory to the Bank:
(1) RELATED DOCUMENTS. Executed copies of the
Bond Indenture, the Underwriting Agreement, the Loan
Agreement and the Remarketing Agreement, certified by
a Secretary or Assistant Secretary of the Corporation
as true and complete copies as of the Closing Date.
(2) LOAN DOCUMENTS. Executed copies of each of
the Loan Documents (provided, only one original
Letter of Credit shall be executed).
(3) INCUMBENCY CERTIFICATE. A certificate of
the Secretary or Assistant Secretary of the
Corporation setting forth the names and true signa-
tures of the Authorized Representatives of the
Corporation that are to sign on its behalf each Loan
Document to which it is or is to be a party and the
other documents delivered or to be delivered by it
hereunder (as to which the Bank may conclusively rely
until receipt by the Bank of a certificate from the
Secretary or Assistant Secretary of the Corporation
canceling or amending such authorization).
(4) ORGANIC DOCUMENTS. Copies of the Articles
of Incorporation and By-Laws of the Corporation,
certified as of the Closing Date by a Secretary or
Assistant Secretary thereof.
(5) GOOD STANDING. A certificate as to status
of the Corporation by the Secretary of the State of
California.
(6) OPINION OF COUNSEL FOR THE CORPORATION. A
written opinion of counsel for the Corporation
acceptable to the Bank in substantially the form of
Exhibit "D" hereto.
(7) RESOLUTION. A copy of the resolutions
adopted by the Board of Directors of the Corporation
certified as of the Closing Date by a Secretary or
Assistant Secretary of the Corporation, authorizing
the execution and delivery of this Agreement and the
other Loan Documents, and expressly approving the
form and content of the Credit.
(8) RATING AGENCY APPROVAL. Evidence of the
review and approval by Moody's or Standard & Poor's
-12-
Page 28 of 44 <PAGE>
and the assignment to the Bonds of a rating at least
equal to BBB- or Baa3.
(9) OPINION OF BOND COUNSEL. A copy of the
opinion of Bond Counsel in form and substance
satisfactory to the Bank, together with a reliance
opinion relating thereto addressed to the Bank.
(10) NO DEFAULT CERTIFICATE. A certificate,
signed by an Authorized Representative, stating that
on the Closing Date no Default or Event of Default
has occurred and is continuing.
(11) OTHER DOCUMENTS. Such other documents as
the Bank or its counsel may have reasonably
requested.
SECTION 5
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
The Corporation hereby represents and warrants as follows:
5.1 CORPORATE STATUS. The Corporation is a corporation
incorporated under the laws of the State of California and is
in good standing in accordance with the laws of such State and
is duly qualified to do business in, and is duly qualified or
licensed as a foreign corporation and is in good standing in
each other jurisdiction in which its business requires it to be
so qualified or licensed except where the failure to be so
qualified or licensed does not have a material adverse affect
on the business, condition (financial or otherwise), operations
or prospects of the Corporation.
5.2 CORPORATE AUTHORITY. The execution, delivery and
performance by the Corporation of this Agreement and the other
Loan Documents, and the performance of the Related Documents to
which the Corporation is a party, are within its corporate
powers, have been fully authorized by all necessary corporate
action, and do not contravene (i) the Articles of Incorporation
or By-Laws of the Corporation or (ii) any law or (iii) any
contractual or legal restriction binding on or affecting the
Corporation.
5.3 VALID OBLIGATIONS. This Agreement, the other Loan
Documents and the Related Documents to which the Corporation is
a party are the legal, valid and binding obligations and
agreements of the Corporation enforceable against the
Corporation in accordance with their respective terms.
-13-
Page 29 of 44 <PAGE>
5.4 NO GOVERNMENTAL APPROVAL. The execution, delivery
and performance of this Agreement and the other Loan Documents
and the performance of the Related Documents to which the
Corporation is a party, are not subject to the approval or
consent of any federal, state or local Governmental Authority,
except as may heretofore have been obtained.
5.5 NO VIOLATIONS. Neither the execution, delivery and
performance of this Agreement nor the other Loan Documents, nor
the performance of the Related Documents to which the
Corporation is a party, nor the consummation of the trans-
actions contemplated hereby or thereby, will result in any
violation of the Corporation's Articles of Incorporation or
By-Laws now in effect, or result in the breach of any of the
terms, conditions or provisions of, or require a consent,
approval, authorization or notice under (except as to such
consents, approvals, authorizations, or notices that have been
received or made, as the case may be), or constitute a default
under, or result in the creation or imposition of any lien or
encumbrance upon any property or assets of the Corporation
pursuant to, any material contract or agreement (other than
this Agreement) to which the Corporation is a Party, or by
which it may be bound.
5.6 NO LITIGATION. Except as disclosed in writing to the
Bank, there are no actions, suits or proceedings pending or, to
the knowledge of the Corporation, threatened against or
affecting the Corporation, before any court or Governmental
Authority involving the possibility of any judgment or
liability that might result in a material adverse change in the
operations, properties, prospects or condition, financial or
otherwise, of the Corporation, and the Corporation has no
knowledge of any material default with respect to any order of
any court or Governmental Authority that might result in any
such material adverse change.
5.7 FINANCIAL CONDITION. The consolidated financial
statement of the Corporation and its Subsidiaries as of
June 30, 1994, a copy of which has been delivered to the Bank,
has been prepared in accordance with GAAP and fairly present
the financial condition of the Corporation as of such date and
the results of operations for the period then ended. Since
then there has been no material adverse change in the financial
condition or operations of the Corporation or its Subsidiaries.
5.8 INFORMATION CORRECT. No information, exhibit or
report furnished by the Corporation to the Bank in connection
with the negotiation of this Agreement contains any material
misstatement of facts or omits to state a material fact or any
fact necessary to make the statements contained therein not
misleading.
-14-
Page 30 of 44 <PAGE>
5.9 MODIFICATION OF RELATED DOCUMENTS. As of the
Closing Date, there has been no modification, amendment or
supplement to any of the Related Documents or to the
Corporation Credit Agreement (except for the First Amendment
dated as of June 28, 1993, the Second Amendment dated as of
October 14, 1993 and the Third Amendment dated as of
February 25, 1994).
5.10 TAXES. The Corporation and its Subsidiaries have
filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes
due pursuant to said returns or pursuant to any assessment
received by the Corporation or any of its Subsidiaries, except
such taxes, if any, as are being contested in good faith and as
to which adequate reserves have been provided. The United
States income tax returns of the Corporation and its
Subsidiaries have been audited by the Internal Revenue Service
through the fiscal year ended June 30, 1988. No tax liens have
been filed and no claims are being asserted with respect to any
such taxes which would be material to the condition (financial
or otherwise) of the Corporation. The charges, accruals and
reserves on the books of the Corporation and its Subsidiaries
in respect of any taxes or other governmental charges are
adequate.
5.11 SUBSIDIARIES. Schedule "1" hereto contains an
accurate list of all of the presently existing Subsidiaries of
the Corporation, setting forth their respective jurisdictions
of incorporation and the percentage of their respective capital
stock owned by the Corporation or other Subsidiaries. All of
the issued and outstanding shares of capital stock of such
Subsidiaries have been duly authorized and issued and are fully
paid and non-assessable.
5.12 ERISA. Except for the Corporation's 401(k) Plan,
neither the Corporation nor any member of the Controlled Group
maintains any Plan subject to ERISA. Neither the Corporation
nor any Subsidiary is a party to any Multiemployer Plan.
Neither the Corporation nor any Subsidiary has withdrawn from
any Multiemployer Plan.
5.13 REGULATION U. Margin stock (as defined in
Regulation U) constitutes less than 25% of those assets of the
Corporation and its Subsidiaries which are subject to any
limitation on sale, pledge, or other restriction hereunder.
-15-
Page 31 of 44 <PAGE>
SECTION 6
---------
COVENANTS
---------
The Corporation agrees that, until the later to occur of
the Expiration Date or the full and final payment of the
Obligations:
6.1 FINANCIAL STATEMENTS. The Corporation will deliver
to the Bank:
A. As soon as available and in any event
within one hundred twenty (120) days after the end of
each Fiscal Year of the Corporation, a copy of the
annual report for such year for the Corporation,
containing financial statements for such year,
certified by Ernst & Young (or other nationally
recognized certified public accounting firm),
prepared in accordance with GAAP, which report shall
be unqualified as to scope of audit and going
concern;
B. As soon as available and in any event
within sixty (60) days after the end of each of the
first three quarters of each Fiscal Year of the
Corporation, a consolidated balance sheet of the
Corporation and its Subsidiaries as of the end of
such quarter and statements of income and retained
earnings of the Corporation and its Subsidiaries for
the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter,
certified by the chief financial officer, or another
vice president in charge of financial matters of the
Corporation;
C. Simultaneously with the delivery of each
set of financial statements referred to in clause (A)
above, a certificate of the chief financial officer
or another vice president in charge of financial
matters of the Corporation demonstrating in
reasonable detail calculations required to establish
whether the Corporation was in compliance during and
at the end of such year with the requirements of the
Corporation Credit Agreement;
D. Promptly upon the occurrence of any Default
or Event of Default, a certificate of an Authorized
Representative of the Corporation setting forth the
details thereof and the action which the Corporation
is taking or proposes to take with respect thereto;
-16-
Page 32 of 44 <PAGE>
E. Promptly after the sending or filing
thereof, copies of all reports which the Corporation
sends to any of its security holders in their
capacities as such (other than responses to specific
inquiries regarding general information concerning
the Corporation), and copies of all reports and
registration statements which the Corporation or any
Subsidiary files with the Securities and Exchange
Commission or any national securities exchange;
F. As soon as practicable following receipt
thereof, copies of all environmental audits and
reports, whether prepared by personnel of the
Corporation and its Subsidiaries or agents of or
consultants to the Corporation, with respect to an
environmental claim that is reasonably likely to have
a material adverse effect on the financial condition,
prospects or operations of the Corporation and its
Subsidiaries; PROVIDED, HOWEVER, that the Corporation
need only comply with the provisions of this subpara-
graph for so long as similar reports are required to
be delivered by the Corporation pursuant to the
Corporation Credit Agreement;
G. Within 15 days following the execution of a
definitive agreement relating thereto, written notice
of any acquisition for which the consideration to be
paid PLUS the amount of any indebtedness or other
liabilities of such acquired Person to be assumed is
in excess of $5,000,000; PROVIDED, HOWEVER, that the
Corporation need only comply with the provisions of
this subparagraph for so long as similar notices are
required to be delivered by the Corporation pursuant
to the Corporation Credit Agreement;
H. Simultaneously with the delivery to the
agent or the lenders under the Corporation Credit
Agreement of any financial or other information
required to be delivered thereunder, copies of such
financial or other information; and
I. From time to time, such additional
information regarding the financial position or
business operations of the Corporation and its
Subsidiaries as the Bank may reasonably request.
6.2 BOOKS AND RECORDS. The Corporation will keep
accurate books of record and account for itself in which
entries will be made in accordance with GAAP consistently
applied and, upon request of the Bank, will give any repre-
sentative of the Bank access during normal business hours to,
and permit such representative to examine, copy or make
-17-
Page 33 of 44 <PAGE>
extracts from, any and all books, records and documents in its
possession, to inspect any of its properties and to discuss its
affairs, finances and accounts with any of its principal
officers, all at such times and as often as it may reasonably
be requested, subject, however to reasonable restrictions
imposed by the Corporation as to access to operational
facilities of the Corporation in accordance with safety and
security procedures.
6.3 GOVERNMENTAL AUTHORITY. The Corporation will comply
with the requirements of applicable laws, rules, regulations
and orders of any Governmental Authority, the non-compliance
with which would materially and adversely affect the business
or the financial condition of the Corporation.
6.4 CORPORATE EXISTENCE. The Corporation will preserve
its corporate existence and all its rights and licenses to the
extent necessary or desirable in the operation of its business
and affairs and be qualified to do business in the State of
California and in each such other jurisdiction wherein its
activities requires such qualification; provided, however, that
nothing herein contained shall be construed to obligate the
Corporation to retain or preserve any of its rights or licenses
no longer used or, in the judgment of the governing body of the
Corporation, useful in the conduct of its business.
6.5 MAINTENANCE OF BUSINESS. At all times, the
Corporation will cause its business to be carried on and
conducted and its properties to be maintained, preserved and
kept in good repair, working order and condition and all
needful and proper repairs, renewals and replacements thereof
to be made; PROVIDED, HOWEVER, that nothing herein contained
shall be construed to prevent it from ceasing to operate any
portion of its properties, if in its judgment, it is advisable
not to operate the same, or if it intends to sell or otherwise
dispose of the same and within a reasonable time endeavors to
effect such sale or other disposition, or to obligate it to
retain, preserve, repair, renew or replace any property,
leases, rights, privileges, or licenses no longer used or, in
the judgment of the governing body of the Corporation, useful
in the conduct of its business.
6.6 PAYMENT OF TAXES. The Corporation will promptly pay
all lawful taxes, governmental charges and assessments at any
time levied or assessed upon or against it or its properties;
PROVIDED, HOWEVER, that it shall have the right to contest in
good faith any such taxes, charges or assessments or the
collection of any such sums and pending such contest may delay
or defer payment thereof.
6.7 INSURANCE. The Corporation will, and will cause each
Subsidiary to, maintain, which may include one or more self-
-18-
Page 34 of 44 <PAGE>
insurance programs, insurance on all their property in such
amounts and covering such risks as is consistent with the kinds
customarily insured against by corporations of established
reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other
corporations ("industry standards") and may self insure to the
extent, but only to the extent, consistent with industry
standards.
6.8 CORPORATION CREDIT AGREEMENT. The provisions of
Sections 6.01(e), (f), (g), (h) and (i), or such substantially
similar provisions of the Corporation Credit Agreement are
hereby incorporated by reference and reaffirmed for the benefit
of the Bank. For purposes hereof, the provisions of such
Corporation Credit Agreement, together with related definitions
and ancillary provisions, are incorporated herein by reference,
MUTATIS MUTANDIS, and shall be deemed to continue in effect on
the date hereof as said provisions are amended, waived or
modified, provided, however, that each reference in the
Corporation Credit Agreement to "Lender" or "Majority Lenders"
or words of similar purport shall be deemed to read the Bank,
each reference to "Borrower" or words of similar purport shall
be deemed to read the Corporation and each reference to
"Advance" or words of similar import shall be deemed to read
"Obligation." The Corporation shall promptly give notice to
the Bank of any amendment, waiver or modification of any
incorporated provision.
6.9 MERGER AND CONSOLIDATION. The Corporation will not,
and will not permit any of its Subsidiaries to, merge or
consolidate with or into, or convey, transfer, lease or
otherwise dispose of whether in one transaction or in a series
of transactions all or substantially all of its assets (whether
now owned or hereafter acquired) to, or acquire all or
substantially all of the assets of, any Person, or permit any
of its Subsidiaries to do so, except that, so long as
immediately after giving effect thereto no Event of Default or
event which, with the giving of notice or lapse of time, or
both, would constitute an Event of Default would exist and
(i) in the case of any such merger to which the Corporation is
a party, the Corporation is the surviving corporation; (ii) any
Subsidiary of the Corporation may merge or consolidate with or
into, or transfer assets to, or acquire assets of, any other
Subsidiary of the Corporation; (iii) any Subsidiary of the
Corporation may merge or consolidate with or into, or transfer
assets to, the Corporation; or (iv) any Subsidiary of the
Corporation may merge or consolidate with or into, or transfer
assets to, any other Person.
-19-
Page 35 of 44 <PAGE>
6.10 AMENDMENTS TO AGREEMENTS. The Corporation will not
amend or terminate any Related Document without first obtaining
the written consent of the Bank.
SECTION 7
---------
EVENTS OF DEFAULT
-----------------
7.1 EVENTS OF DEFAULT. Each of the following and
continuing events shall be an "Event of Default" hereunder:
A. The Corporation shall fail to pay (i) when
due in accordance with the terms hereof any
Reimbursement Obligations or (ii) within five (5)
days after the due date any interest, fees or other
Obligations;
B. The Corporation or any of its Subsidiaries
shall fail to pay or default in any payment of any
Debt (as defined in the Corporation Credit Agreement)
that is outstanding in a principal amount of at least
$1,000,000 (or such other amount as may be set forth
in a similar provision of the Corporation Credit
Agreement) in the aggregate (excluding Debt under
this Agreement or any other Loan Document) of the
Corporation or such Subsidiary, when the same becomes
due and payable (whether by scheduled maturity,
required prepayment, acceleration, demand or
otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any
other event shall occur or condition shall exist
under any agreement or instrument relating to any
such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition
is to accelerate, or to permit the acceleration of,
the maturity of such Debt; or any such Debt shall be
declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an
offer to prepay, redeem, purchase or defease such
Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
C. Any representation or warranty made by the
Corporation pursuant to Section 5 hereof or in any
other agreement, certificate, document or financial
or other statement furnished at any time under or in
connection with this Agreement shall prove to have
-20-
Page 36 of 44 <PAGE>
been incorrect in any material respect on or as of
the date made or deemed made; or
D. The Corporation shall default in the
observance or performance of any agreement contained
in Section 6.11 and such failure shall remain
unremedied for thirty (30) days after written notice
thereof shall have been given to the Corporation by
the Bank; or
E. The Corporation shall default in the
observance or performance of any other covenant or
agreement contained in this Agreement or any other
Loan Document and such default shall continue
unremedied for a period of sixty (60) days after the
receipt of written notice from the Bank, or if notice
of such default shall have been given by the
Corporation to the Bank pursuant to Section 8.3
hereof, after the giving by the Corporation of such
notice; or
F. Any event of default, however defined,
shall occur under any of the Related Documents or
under the Corporation Credit Agreement; or
G. There shall be any modification, altera-
tion, amendment, addition or rescission of any term
or provision contained in the Bond Indenture which
would materially adversely affect the interests of
the Bank hereunder, unless the Bank consents in
writing; or
H. The Corporation or any of its Subsidiaries
shall generally not pay its debts as such debts
become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the
Corporation or any of its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its
property and, in the case of any such proceeding
instituted against it (but not instituted by it),
either such proceeding shall remain undismissed or
unstayed for a period of 60 days (or, if there is a
change in such number of days as set forth in the
-21-
Page 37 of 44 <PAGE>
Corporation Credit Agreement, such changed number of
days, up to 90 days), or any of the actions sought in
such proceeding (including, without limitation, the
entry of an order for relief against, or the
appointment of a receiver, trustee, custodian or
other similar official for, it or any substantial
part of its property) shall occur; or the Corporation
or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth
above in this paragraph H); or
I. The Corporation or any of its Subsidiaries
shall fail within 30 days to pay, bond or otherwise
discharge any judgment or order for the payment of
money in excess of $1,000,000 (or such other amount
as may be set forth in a similar provision of the
Corporation Credit Agreement) which is not, within
60 days thereof, stayed on appeal or otherwise being
appropriately contested in good faith; or
J. The Unfunded Liabilities of all Single
Employer Plans shall exceed in the aggregate
$1,000,000 (or such other amount as may be set forth
in a similar provision of the Corporation Credit
Agreement) or any Reportable Event shall occur in
connection with any Single Employer Plan which would
result in a material adverse effect.
7.2 REMEDIES ON DEFAULT. If any Event of Default occurs
and is continuing:
The Bank may (i) notify the Bond Trustee of an Event of
Default under this Agreement and to accelerate the Bonds under
Section 7.01(e) of the Bond Indenture and to make a Default
Drawing; (2) by notice to the Corporation, declare the
Obligations immediately due and payable, whereupon the same
shall be immediately due and payable; (3) exercise any or all
additional rights available to it under this Agreement, any
Loan Document, any Related Document or applicable law; and
(4) in the case of any Event of Default involving a failure by
the Corporation to pay an amount due under a Related Document,
the Bank may (but shall be under no obligation to) make on
behalf of the Corporation any payment necessary to cure such
failure, provided that (i) the amount of any such payment shall
become part of the Obligations and (ii) such action by the Bank
shall not be deemed a cure of such Event of Default or a waiver
of any right or remedy of the Bank hereunder.
In addition to the foregoing, the Bank may require the
Corporation to deposit at the Bank in an interest-bearing
account of the Corporation cash in an amount equal to the
Available Amount which the Bank may use to reimburse itself for
-22-
Page 38 of 44 <PAGE>
Drawings paid by the Bank and the Corporation hereby grants to
the Bank a continuing security interest in all right, title and
interest in such deposit as security for all Obligations now
existing or hereafter arising hereunder. Any earnings on such
account may be subject to arbitrage rebate under Section 1148
of the Code.
SECTION 8
---------
MISCELLANEOUS
-------------
8.1 LIABILITY OF BANK. The Corporation assumes all risks
of the acts or omissions of the Bond Trustee and any bene-
ficiary or transferee of the Credit with respect to its use of
the Credit. Neither the Bank nor any of its officers or
directors shall be liable or responsible for: (a) the use
which may be made of the Credit or any acts or omissions of
Bond Trustee and any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respect invalid,
insufficient, fraudulent or forged; (c) payment by the Bank
against presentation of documents which do not strictly comply
with the terms of the Credit, including failure of any
documents to bear any reference or adequate reference to the
Credit; or (d) any other circumstance whatsoever in making or
failing to make payment under the Credit, EXCEPT that the Bank
shall be liable to the Corporation, to the extent of any
direct, as opposed to consequential, damages suffered by the
Corporation which the Corporation proves were caused by (i) the
Bank's gross negligence in determining whether documents
presented under the Credit comply with the terms of the Credit
or (ii) the Bank's gross negligence in failing to make lawful
payment under the Credit after the presentation to it by the
Bond Trustee or a successor trustee under the Indenture of a
draft and certificate strictly complying with the terms and
conditions of the Credit. In furtherance and not in limitation
of the foregoing, the Bank may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the
contrary.
8.2 INDEMNIFICATION. The Corporation shall indemnify and
hold the Bank harmless from and against any and all claims,
demands, actions, damages, losses or liabilities, costs and
expenses (including reasonable attorney's fees and the
allocated costs of in-house counsel in connection therewith),
incurred by or claimed against Bank (a) arising out of any
Related Documents or (b) by reason of or in connection with the
-23-
Page 39 of 44 <PAGE>
Credit (except to the extent directly resulting from the gross
negligence or willful misconduct of the Bank).
8.3 NOTICES. All notices, requests and demands to or
upon the parties hereto to be effective shall be in writing or
by telegraph, telecopy or telex and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or
made when delivered by hand, or when sent by overnight courier
or first class mail, postage prepaid, addressed as follows, or
to such address or other address as may be hereafter notified
by the respective parties hereto:
Corporation:
WESTERN WASTE INDUSTRIES
21061 South Western Avenue
Torrance, California 90501
Attention: Chief Financial Officer
Telecopy: (310) 212-7092
Bank:
THE BANK OF CALIFORNIA, N.A.
400 California Street
San Francisco, California 94104
Attention: International Operations Department
Documentary Credit Services
Telecopy: (415) 765-2083
with a copy to:
THE BANK OF CALIFORNIA, N.A.
550 South Hope Street, Fifth Floor
Los Angeles, California 90071
Attention: Hisako Sakamoto,
Assistant Vice President
Telecopy: (213) 243-3552
8.4 NO WAIVER, CUMULATIVE REMEDIES. No failure to
exercise, and no delay in exercising, any right, remedy, power
or privilege hereunder, 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. No amendment, modification, supplement,
termination or waiver of any provision of this Agreement shall
be effective unless in writing and signed by the Corporation
and the Bank. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.
-24-
Page 40 of 44 <PAGE>
8.5 PAYMENT OF EXPENSES. (a) COSTS AND EXPENSES. The
Corporation agrees to pay or reimburse Bank for all its
reasonable out-of-pocket expenses (including, but not limited
to, wire transfer costs) incurred in connection with the
preparation and execution, and any amendment, supplement or
modification to, this Agreement, the Loan Documents and any
other documents prepared in connection herewith (other than
amendments, supplements or modifications requested solely by
the Bank), including, without limitation, the reasonable fees
and out-of-pocket expenses of counsel for the Bank and its
participants (which fees shall not, in any case, exceed $38,000
for the preparation of this Agreement and related documents),
and local counsel who may be retained by such counsel, with
respect thereto and, subsequent to a default hereunder, with
respect to advising the Bank and its participants as to its
rights and responsibilities under this Agreement and the
Credit, and all reasonable costs and expenses (including
reasonable counsel fees and expenses) in connection with
(i) the enforcement of this Agreement and the other Loan
Documents and such other documents which may be delivered in
connection with this Agreement or (ii) any action or proceeding
relating to a court order, injunction, or other process or
decree restraining or seeking to restrain the Bank from paying
any amount under the Credit.
8.6 RIGHT OF SET OFF. Upon the occurrence and during the
continuation of any Event of Default, the Bank is hereby
authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time
owing by the Bank to or for the credit or the account of the
Corporation against any and all of the Obligations of the
Corporation now or hereafter existing, irrespective of whether
or not the Bank shall have made any demand hereunder and
although such obligations may be contingent or unmatured.
The rights of the Bank under this Section are in addition
to other rights and remedies (including, without limitation,
other rights of set-off) which the Bank may have.
8.7 EXTENSION OF THE STATED TERMINATION DATE. At least
12 months but not more than 14 months before the existing
Stated Termination Date, the Corporation may request the Bank
in writing by overnight courier or by certified mail, return
receipt requested (each such request being irrevocable) to
extend for one year and one day the Stated Termination Date for
purposes of this Agreement and the Credit. If the Corporation
shall make such a request, the Bank shall, on or before 60 days
after such request has been made, notify the Corporation in
writing whether or not the Bank consents to such request and,
if the Bank does so consent, the conditions of such consent
-25-
Page 41 of 44 <PAGE>
(including conditions relating to legal documentation and the
consent of the Trustee). If the Bank shall not so notify the
Corporation, the Bank shall be deemed not to have consented to
such request. If extended, the new date shall become the
"Stated Termination Date" for all purposes hereof.
8.8 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the Corporation, the
Bank and their respective successors and assigns, except that
the Corporation may not assign or transfer any of its rights
under this Agreement without the prior written consent of Bank.
8.9 COUNTERPARTS. This Agreement may be executed by the
parties to this Agreement on any number of separate counter-
parts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be
retained by the Corporation and the Bank.
8.10 SEVERABILITY OF PROVISION. Any provision in any
Loan Document that is held to be inoperative, unenforceable, or
invalid in any jurisdiction shall, as to that jurisdiction, be
inoperative, unenforceable, or invalid without affecting the
remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan
Documents are declared to be severable.
8.11 CONSENT TO JURISDICTION. THE CORPORATION HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY
UNITED STATES FEDERAL OR CALIFORNIA STATE COURT SITTING IN
LOS ANGELES IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE CORPORATION HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE BANK TO BRING
PROCEEDINGS AGAINST THE CORPORATION IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE CORPORATION
AGAINST THE BANK OR ANY AFFILIATE OF THE BANK INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTION WITH ANY LOAN DOCUMENT SHALL BE
BROUGHT ONLY IN A UNITED STATES FEDERAL OR CALIFORNIA STATE
COURT IN LOS ANGELES, CALIFORNIA.
8.12 WAIVER OF JURY TRIAL. THE CORPORATION AND THE BANK
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLV-
ING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED
-26-
Page 42 of 44 <PAGE>
TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
8.13 GOVERNING LAW. This Agreement and the rights and
obligations of the parties under this Agreement shall be
governed by, and construed and interpreted in accordance with,
the internal laws of the State of California (except to the
extent the laws of the State of California are inconsistent
with the UCP).
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.
THE BANK OF CALIFORNIA, N.A. WESTERN WASTE INDUSTRIES
a California corporation
By: /s/ ILLEGIBLE By: /s/ RICH WIDRIG
------------------------ ------------------------
Vice President Title: Vice President
-27-
Page 43 of 44 <PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<S> <C>
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<PERIOD-END> DEC-31-1994
<CASH> 5,817
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<ALLOWANCES> 1,641
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<CURRENT-ASSETS> 52,993
<PP&E> 283,829
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