Exhibit 10.32
EXECUTION VERSION
WASTE MANAGEMENT OF CANADA CORPORATION
as Borrower
- and -
WASTE MANAGEMENT, INC.
WASTE MANAGEMENT HOLDINGS, INC.
as Guarantors
- and -
BNP PARIBAS SECURITIES CORP.
SCOTIA CAPITAL
as Lead Arrangers and Book Runners
- and -
THE BANK OF NOVA SCOTIA
as Administrative Agent
- and -
THE LENDERS FROM TIME TO TIME
PARTY TO THIS AGREEMENT
 
CDN. $410,000,000 CREDIT FACILITY
CREDIT AGREEMENT
DATED AS OF 30 NOVEMBER 2005
 
(BORDEN LADNER GERVAIS LLP) [h32785h3278501.gif]
BORDEN LADNER GERVAIS LLP

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TABLE OF CONTENTS

 

                  Section     Description   Page   ARTICLE 1
        DEFINED TERMS
               
 
          1.1    
Defined Terms
    1     1.2    
Construction
    13     1.3    
References to U.S. Credit Agreement
    13     1.4    
Certain Rules of Interpretation
    14          
 
        ARTICLE 2
        CREDIT
               
 
          2.1    
Amount and Availment Options
    15     2.2    
Non-Revolving Credit and Availability Period
    15     2.3    
Use of the Credit
    15     2.4    
Term and Repayment
    15     2.5    
Voluntary Prepayments
    15     2.6    
Interest Rates, Fees and Commissions
    15     2.7    
Standby Fee
    16     2.8    
Agency and Assignment Fees
    16          
 
        ARTICLE 3
        SECURITY
               
 
          3.1    
Security
    17          
 
        ARTICLE 4
        DISBURSEMENT CONDITIONS
               
 
          4.1    
Conditions Precedent to Initial Advance
    17          
(1) Other Debt and Encumbrances
    17          
(2) Documentation and Ancillary Information
    17          
(3) Opinions
    18          
(4) Other Matters
    18     4.2    
Conditions Precedent to all Advances
    18          
 
        ARTICLE 5
        ADVANCES
               
 
          5.1    
Evidence of Indebtedness
    19     5.2    
Conversions
    19     5.3    
Notice of Advances and Payments
    19     5.4    
Prepayments and Reductions
    20     5.5    
Prime Rate Advances
    20     5.6    
Co-ordination of Prime Rate Advances
    21            
 
    (i)  

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                  Section     Description   Page     5.7    
Execution of Banker’s Acceptances
    21     5.8    
Sale of Banker’s Acceptances
    22     5.9    
Size and Maturity of Banker’s Acceptances and Rollovers
    22     5.10    
Co-ordination of BA Advances
    22     5.11    
Payment of Banker’s Acceptances
    24     5.12    
Deemed Advance — Banker’s Acceptances
    24     5.13    
Waiver
    24     5.14    
Degree of Care
    24     5.15    
Obligations Absolute
    25     5.16    
Shortfall on Drawdowns, Rollovers and Conversions
    25     5.17    
Payment by the Borrower
    25     5.18    
Prohibited Rates of Interest
    26          
 
        ARTICLE 6
        REPRESENTATIONS AND WARRANTIES
               
 
          6.1    
Representations and Warranties
    27          
(1) Corporate Authority
    27          
(2) Governmental and Other Approvals
    27          
(3) Title to Properties; Leases
    28          
(4) Financial Statements; Solvency
    28          
(5) No Material Changes, Etc.
    29          
(6) Franchises, Patents, Copyrights, Etc.
    29          
(7) Litigation
    29          
(8) No Materially Adverse Contracts, Etc.
    29          
(9) Compliance With Other Instruments, Laws, Etc.
    29          
(10) Tax Status
    29          
(11) No Event of Default
    30          
(12) Holding Company and Investment Company Acts
    30          
(13) Absence of Financing Statements, Etc.
    30          
(14) Environmental Matters
    30          
(15) Disclosure
    32          
(16) Permits and Governmental Authority
    32     6.2    
Survival of Representations and Warranties
    32          
 
        ARTICLE 7
        COVENANTS
               
 
          7.1    
Financial Covenants of Waste Management, Inc.
    32     7.2    
Positive Covenants
    33          
(1) Punctual Payment
    33          
(2) Chief Place of Business
    33          
(3) Records and Accounts
    33          
(4) Existence and Conduct of Business
    33          
(5) Maintenance of Properties
    34          
(6) Insurance
    34          
(7) Taxes
    34            
 
    (ii)  

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                  Section     Description   Page          
(8) Inspection of Properties, Books and Contracts
    34          
(9) Compliance with Laws, Contracts, Licenses and Permits; Maintenance of
Material Licenses and Permits
    35          
(10) Environmental Indemnification
    35          
(11) Further Assurances
    36          
(12) Notice of Potential Claims or Litigation
    36          
(13) Notice of Certain Events Concerning Environmental Claims
    36          
(14) Notice of Default
    37          
(15) Use of Proceeds
    37          
(16) Certain Transactions
    37     7.3    
Reporting Requirements
    37          
(1) Periodic Financial Reports
    37     7.4    
Negative Covenants
    38          
(1) Restrictions on Indebtedness
    38          
(2) Restrictions on Encumbrances
    38          
(3) Restrictions on Investments
    39          
(4) Mergers, Consolidations, Sales
    39          
(5) Restricted Distributions and Redemptions
    39     ARTICLE 8
        DEFAULT
               
 
          8.1    
Events of Default
    40     8.2    
Acceleration and Termination of Rights, Pre-Acceleration Rights
    41     8.3    
Payment of Banker’s Acceptances
    42     8.4    
Remedies
    42     8.5    
Saving
    43     8.6    
Perform Obligations
    43     8.7    
Third Parties
    43     8.8    
Remedies Cumulative
    43     ARTICLE 9
        THE AGENT AND THE LENDERS
               
 
          9.1    
Authorization of Agent
    44     9.2    
Disclaimer of Agent
    44     9.3    
Failure of Lender to Fund
    45     9.4    
Payments by the Borrower
    46     9.5    
Payments by Agent
    46     9.6    
Direct Payments
    47     9.7    
Administration of the Credit
    48     9.8    
Rights of Agent
    51     9.9    
Acknowledgements, Representations and Covenants of Lenders
    51     9.10    
Collective Action of the Lenders
    52     9.11    
Successor Agent
    53     9.12    
Provisions Operative Between Lenders and Agent Only
    53            
 
    (iii)  

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                  Section     Description   Page   ARTICLE 10
        ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS
               
 
          10.1    
Successors and Assigns
    54     10.2    
Assignments
    55     10.3    
Participations
    56     ARTICLE 11
        MISCELLANEOUS PROVISIONS
               
 
          11.1    
Defined Terms
    56     11.2    
Severability
    56     11.3    
Amendment, Supplement or Waiver
    57     11.4    
Governing Law
    57     11.5    
This Agreement to Govern
    57     11.6    
Currency
    57     11.7    
Liability of Lenders
    58     11.8    
Expenses and Indemnity
    58     11.9    
Manner of Payment and Taxes
    58     11.10    
Change in Law
    59     11.11    
Illegality
    61     11.12    
Interest on Miscellaneous Amounts
    61     11.13    
Address for Notice
    62     11.14    
Time of the Essence
    62     11.15    
Further Assurances
    62     11.16    
Term of Agreement
    62     11.17    
Payments on Business Day
    62     11.18    
Counterparts and Facsimile
    62     11.19    
Waiver of Jury Trial and Consequential Damages
    63     11.20    
Whole Agreement
    63     11.21    
English Language
    63     11.22    
Date of Agreement
    64  

         
SCHEDULE A
  -   FORM OF NOTICE OF ADVANCE OR PAYMENT  
SCHEDULE B
  -   FORM OF COMPLIANCE CERTIFICATE  
SCHEDULE C
  -   FORM OF ASSIGNMENT AGREEMENT  
SCHEDULE D
  -   FORM OF GUARANTEE  
SCHEDULE E
  -   APPLICABLE PERCENTAGES OF LENDERS

                           
 
    (iv)  

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THIS CREDIT AGREEMENT is dated as of 30 November 2005
B E T W E E N:
WASTE MANAGEMENT OF CANADA CORPORATION
a Nova Scotia unlimited liability company
as Borrower
- and -
WASTE MANAGEMENT, INC.
WASTE MANAGEMENT HOLDINGS, INC.
as Guarantors
- and -
THE LENDERS LISTED ON SCHEDULE E
TO THIS AGREEMENT FROM TIME TO TIME
as Lenders
- and -
THE BANK OF NOVA SCOTIA,
in its capacity as Administrative Agent
RECITALS:
A. BNP Paribas Securities Corp., BNP Paribas (Canada), The Bank of Nova Scotia
and the Borrower have entered into a Commitment Letter and Term Sheet dated and
accepted on 25 October 2005 under which BNP Paribas Securities Corp. and Scotia
Capital have agreed to arrange a credit facility in favour of the Borrower,
under which BNP Paribas (Canada) and The Bank of Nova Scotia have agreed to be
lenders.
B. The parties are entering into this Agreement to provide for the terms of such
credit facility.
FOR VALUE RECEIVED, and intending to be legally bound by this Agreement, the
parties agree as follows:
ARTICLE 1
DEFINED TERMS

1.1   Defined Terms

     In this Agreement, unless something in the subject matter or context is
inconsistent therewith:

1.1.1   “Advance” means an availment of the Credit by the Borrower by way of a
Prime Rate Advance, BA Equivalent Loan or acceptance of a Banker’s Acceptance,
including

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deemed Advances and conversions, renewals and rollovers of existing Advances,
and any reference relating to the amount of Advances shall mean the sum of all
outstanding Prime Rate Advances plus the face amount of all outstanding Banker’s
Acceptances and BA Equivalent Loans.

1.1.2   “Affiliate” means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.

1.1.3   “Agency Fee Letter” means the letter agreement dated as of 30
November 2005 between the Agent and the Borrower.

1.1.4   “Agent” or “Administrative Agent” means Scotia Capital in its capacity
as administrative agent for the Lenders, and any successor administrative agent
appointed in accordance with this Agreement.

1.1.5   “Agreement”, “hereof”, “herein”, “hereto”, “hereunder” or similar
expressions mean this Agreement, the Recitals hereto and any Schedules hereto,
as amended, supplemented, restated and replaced from time to time in accordance
with the provisions hereof, and not any particular Article, Section or other
portion hereof.

1.1.6   “Applicable Percentage” means with respect to any Lender, the percentage
of the total Commitments represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be the
percentage of the total outstanding Advances represented by such Lender’s
outstanding Advances. The Applicable Percentage of each Lender as of the date of
this Agreement is the percentage calculated based on the amounts set out in
Schedule E to this Agreement, which shall be amended and distributed to all
parties by the Agent from time to time as Applicable Percentages change in
accordance with this Agreement.

1.1.7   “Arrangers” means each of BNP Paribas Securities Corp. and The Bank of
Nova Scotia.

1.1.8   “Article” means the designated article of this Agreement.

1.1.9   “Assignment Agreement ” means an assignment agreement substantially in
the form of Schedule C or any other form approved by the Agent.

1.1.10   “Availability Period” has the meaning defined in Section 2.2.

1.1.11   “BA Discount Proceeds” means, in respect of any Banker’s Acceptance, an
amount calculated on the applicable Drawdown Date which is (rounded to the
nearest full cent, with one-half of one cent being rounded up) equal to the face
amount of such Banker’s Acceptance multiplied by the price, where the price is
calculated by dividing one by the sum of one plus the product of (a) the BA
Discount Rate applicable thereto expressed as a decimal fraction multiplied by
(b) a fraction, the numerator of which is the term of such Banker’s Acceptance
and the denominator of which is 365, rounded to the nearest multiple of 0.001%.

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1.1.12   “BA Discount Rate” means, (a) with respect to any Banker’s Acceptance
accepted by a Lender named on Schedule I to the Bank Act (Canada), the rate
determined by the Agent as being the arithmetic average (rounded upward to the
nearest multiple of 0.01%) of the discount rates, calculated on the basis of a
year of 365 days and determined in accordance with normal market practice at or
about 10:00 a.m. (Toronto time) on the applicable Drawdown Date, for banker’s
acceptances of the Schedule I Reference Lenders having a comparable face amount
and identical maturity date to the face amount and maturity date of such
Banker’s Acceptance, and (b) with respect to any Banker’s Acceptance accepted by
any other Lender, the lesser of (i) the rate determined in Section 1.1.12(a)
above plus 0.07% per annum, and (ii) the discount rate, calculated on the basis
of a year of 365 days and determined in accordance with normal market practice
at or about 10:00 a.m. (Toronto time) on the applicable Drawdown Date, for
banker’s acceptances of such other lender having a comparable face amount and
identical maturity date to the face amount and maturity date of such Banker’s
Acceptance.

1.1.13   “BA Equivalent Loan” has the meaning defined in Section 5.10(5).

1.1.14   “Balance Sheet Date” means 31 December 2004.

1.1.15   “Banker’s Acceptance” means a depository bill as defined in the
Depository Bills and Notes Act (Canada) in Canadian Dollars that is in the form
of an order signed by the Borrower and accepted by a Lender pursuant to this
Agreement or, for Lenders not participating in clearing services contemplated in
that Act, a draft or bill of exchange in Canadian Dollars that is drawn by the
Borrower and accepted by a Lender pursuant to this Agreement. Orders or drafts
that become depository bills, drafts and bills of exchange are sometimes
collectively referred to in this Agreement as “orders”.

1.1.16   “Banker’s Acceptance Fee” means, with respect to any Banker’s
Acceptance, the amount calculated by multiplying the face amount of the Banker’s
Acceptance by the applicable rate for the Banker’s Acceptance Fee specified in
Section 2.6, and then multiplying the result by a fraction, the numerator of
which is the duration of its term on the basis of the applicable actual number
of days to elapse from and including the date of acceptance of the Banker’s
Acceptance by the Lender up to but excluding the maturity date of the Banker’s
Acceptance and the denominator of which is the number of days in the calendar
year in question.

1.1.17   “Borrower” means Waste Management of Canada Corporation, a Nova Scotia
unlimited liability company, its successors and permitted assigns.

1.1.18   “Branch of Account” means WBO–Loan Administration & Agency Operations
of the Agent located at 720 King Street West, 4th Floor, Wholesale Banking
Operations, Toronto, Ontario, M5V 2T3, or such other branch or branches as may
be designated by the Agent from time to time.

1.1.19   “Business Day” means a day of the year, other than Saturday or Sunday,
on which the Arrangers are open for normal banking business at, as applicable,
their executive

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offices in Toronto, Ontario and Montreal, Quebec and the Agent is open for
normal banking business at the Branch of Account.

1.1.20   “Canadian Dollars”, “Cdn. Dollars”, “Cdn. $” and “$” mean the lawful
money of Canada.

1.1.21   “CDOR Rate” means, on any date, with respect to any Banker’s
Acceptance, the simple average of the rates shown on the display referred to as
the “CDOR Page” (or any display substituted therefor) on Reuters Domestic Money
Service (or any successor source from time to time) with respect to the banks
and other financial institutions named in such display at or about 10:00 a.m.
(Toronto time) on such date for banker’s acceptances having an identical
maturity date to the maturity date of such Banker’s Acceptance, as determined by
the Agent, or if such day is not a Business Day, then on the immediately
preceding Business Day; provided, however, that if such rates are not available,
then the CDOR Rate for any day shall be calculated as the average of the bid
rates (rounded upwards to the nearest 1/16th of 1%) quoted by each of the
Schedule I Reference Lenders for its own banker’s acceptances for the applicable
period as of 10:00 a.m. (Toronto time) on such day, as determined by the Agent,
or if such day is not a Business Day, then on the immediately preceding Business
Day.

1.1.22   “Change in Law” means the occurrence, after the date of this Agreement,
of any of the following: (a) the adoption or taking effect of any applicable
law, (b) any change in any Applicable Law or in the administration,
interpretation or application thereof by any Governmental Authority, or (c) the
making or issuance of any Applicable Law by any Governmental Authority.

1.1.23   “Closing Date” means 30 November 2005 or such other day as may be
agreed to by the parties which is not later than 15 December 2005.

1.1.24   “Collateral” means cash, a bank draft or a letter of credit issued by a
Canadian chartered bank, all in a form satisfactory to the Agent, acting
reasonably.

1.1.25   “Commitment” means in respect of each Lender from time to time, the
covenant to make Advances to the Borrower in the Lender’s Applicable Percentage
of the maximum amount of the Credit and, where the context requires, the maximum
amount of Advances which the Lender has covenanted to make.

1.1.26   “Compliance Certificate” means a certificate in the form of Schedule B,
signed by a senior officer of each of the Borrower and Waste Management, Inc.

1.1.27   “Consolidated Total Interest Expense” has the meaning defined in the
U.S. Credit Agreement, as such definition exists at the date of this Agreement.

1.1.28   “Constating Documents” means, with respect to any Person, its articles
or certificate of incorporation, amendment, amalgamation, continuance or
association, memorandum of association, by-laws, declaration of trust, trust
indenture, partnership agreement, limited liability company agreement or other
similar document, as

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applicable, and all unanimous shareholder agreements, other shareholder
agreements, voting trust agreements and similar arrangements applicable to the
Person’s capital stock, all as amended, supplemented, restated or replaced from
time to time. 1.1.29 “Contributing Lender” shall have the meaning defined in
Section 9.3(2).

1.1.30   “Control” means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
“Controlling” and “Controlled” have corresponding meanings.

1.1.31   “Credit” means the credit facility of up to Cdn. $410,000,000
established by the Lenders in favour of the Borrower pursuant to Article 2 of
this Agreement.

1.1.32   “Debt” means collectively, without duplication, whether classified as
Debt, an Investment or otherwise on the obligor’s balance sheet, (a) all
indebtedness for borrowed money (including the face amount of all bankers’
acceptances), (b) all obligations for the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of business
which either (i) are not overdue by more than 90 days, or (ii) are being
disputed in good faith and for which adequate reserves have been established in
accordance with GAAP), (c) all obligations evidenced by notes, bonds, debentures
or other similar debt instruments, (d) all obligations created or arising under
any conditional sale or other title retention agreement with respect to property
acquired (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations, liabilities and indebtedness under capital
leases, (f) all obligations, liabilities or indebtedness arising from the making
of a drawing under surety, performance bonds, or any other bonding arrangement,
(g) Guarantees of any Debt others referred to in clauses (a) through (f) above,
and (h) all Debt of others referred to in clauses (a) through (f) above secured
or supported by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured or supported by) any Encumbrance on the
property of any Obligor, even though the owner of the property has not assumed
or become liable, contractually or otherwise, for the payment of such Debt;
provided that if a Permitted Receivables Transaction is outstanding and is
accounted for as a sale of accounts receivable under generally accepted
accounting principles, Debt shall also include the additional Debt, determined
on a consolidated basis, which would have been outstanding had such Permitted
Receivables Transaction been accounted for as a borrowing.

1.1.33   “Defaulting Lender” has the meaning defined in Section 9.3(2).

1.1.34   “Designated Account” means, in respect of any Advance, the account or
accounts maintained by the Borrower at the Agent’s West Metro Commercial Banking
Centre, 2 Robert Speck Parkway, Mississauga, Ontario L4Z 1H8 that the Borrower
designates in its notice requesting an Advance.

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1.1.35   “Disclosure Documents” means the Borrower’s financial statements
referred to in Section 6.1(4)(a), and filings made by any Obligor with the
Securities and Exchange Commission that were publicly available prior to the
date of this Agreement.

1.1.36   “Distribution” means the declaration or payment of any dividend or
other return on equity on or in respect of any shares of any class of capital
stock, any partnership interests or any membership interests of any Person
(other than dividends or other such returns payable solely in shares of capital
stock, partnership interests or membership units of such Person, as the case may
be); the purchase, redemption, or other retirement of any shares of any class of
capital stock, partnership interests or membership units of such Person,
directly or indirectly through a Subsidiary or otherwise; the return of equity
capital by any Person to its shareholders, partners or members as such; or any
other distribution on or in respect of any shares of any class of capital stock,
partnership interest or membership unit of such Person.

1.1.37   “Drawdown Date” means the date, which shall be a Business Day, of any
Advance.

1.1.38   “EBIT” has the meaning defined in the U.S. Credit Agreement, as such
definition exists at the date of this Agreement.

1.1.39   “EBITDA” has the meaning defined in the U.S. Credit Agreement, as such
definition exists at the date of this Agreement.

1.1.40   “Encumbrance” means, with respect to any asset, (a) any mortgage, deed
of trust, lien (statutory or otherwise), pledge, hypothecation, encumbrance,
charge, security interest, assignment, deposit arrangement or other restriction
in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset, and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.

1.1.41   “Environmental Laws” has the meaning defined in Section 6.1(14)(a).

1.1.42   “Event of Default” means any of the events or circumstances described
in Section 8.1.

1.1.43   “Exchange Rate” means on any day, for the purpose of calculations under
this Agreement, the amount of Canadian Dollars into which another currency may
be converted, or vice versa, using the Bank of Canada noon spot rate for
converting the one currency into the other on that day or if that day is not a
Business Day, the preceding Business Day, or if such rate is not so published by
the Bank of Canada for any such day, then at the mid rate (i.e. the average of
the Agent’s spot buying and selling rates) quoted by the Agent at the Branch of
Account at approximately noon (Toronto time) on that day in accordance with its
normal practice for the applicable currency conversion in the wholesale market,
or if that day is not a Business Day, the preceding Business Day.

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1.1.44   “Excluded Taxes” means any income or capital Tax now or hereafter
imposed, levied, collected, withheld or assessed on a Lender by any applicable
Governmental Authority in Canada or any other jurisdiction in which that Lender
is subject to Tax as a result of the Lender: (a) having a permanent
establishment in such jurisdiction, (b) being organized under the laws of such
jurisdiction, (c) being resident or deemed to be resident in such jurisdiction,
or (d) not dealing at arm’s length with an Obligor or any other Lender; but does
not include any sales, goods or services Tax payable under the laws of any such
jurisdiction with respect to any goods or services made available by a Lender to
the Borrower under this Agreement or any withholding tax.

1.1.45   “Fee Letter” means the confidential fee letter agreement dated 25
October 2005 from the Arrangers to the Borrower and the Guarantors providing for
the payment of certain fees in relation to the Credit, accepted and agreed to by
the Borrower and the Guarantors on 25 October 2005.

1.1.46   “GAAP” means, when used in this Agreement, whether directly or
indirectly through reference to a capitalized term used therein, means
(a) principles that are consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board (U.S.) and its predecessors, in effect
for the fiscal year ended on the Balance Sheet Date, and (b) to the extent
consistent with such principles, the accounting practice of Waste Management,
Inc. reflected in its financial statements for the year ended on 31
December 2003; provided, that in each of clause (a) and (b), such meaning shall
include the application of Financial Accounting Standards Board Interpretation
No. 46, Consolidation of Variable Interest Entities (revised December 2003)
(“FIN 46-R”), provided, further, that in each case referred to in this
definition of “GAAP” a certified public accountant would, insofar as the use of
such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.

1.1.47   “Governmental Authority” means the government of Canada or any other
nation, or of any political subdivision thereof, whether provincial, state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government, including any supra-national bodies.

1.1.48   “Guarantee” means any obligation, contingent or otherwise, of a Person
guaranteeing or having the economic effect of guaranteeing any Debt or other
obligation of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct or
indirect, (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Debt or other obligation of the payment thereof, (c) to
maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay

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such Debt or other obligation, or (d) as an account party in respect of any
letter of credit or letter of guarantee issued to support such Debt or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.

1.1.49   “Guarantors” means each of Waste Management, Inc., a Delaware
corporation, and Waste Management Holdings, Inc., a Delaware corporation, and
each other Person which delivers a guarantee hereunder, and becomes a party
hereto, from time to time.

1.1.50   “Hazardous Substances” has the meaning defined in Section 6.1(14)(b).

1.1.51   “Interbank Reference Rate” means, in respect of any currency, the
interest rate expressed as a percentage per annum which is customarily used by
the Agent when calculating interest due by it or owing to it arising from
correction of errors in transactions in that currency between it and other
chartered banks.

1.1.52   “Interest Coverage Ratio” means, at any time, the ratio calculated by
dividing (a) EBIT for the four most recently completed fiscal quarters of Waste
Management, Inc. by (b) Consolidated Total Interest Expense for such period.

1.1.53   “Interest Payment Date” means the 21st day of each calendar month.

1.1.54   “Interim Balance Sheet Date” means 30 September 2005.

1.1.55   “Investment” means all expenditures made by a Person and all
liabilities incurred (contingently or otherwise) by a Person for the acquisition
of stock of (other than the stock of Subsidiaries), or Debt of, or for loans,
advances, capital contributions or transfers of property to, or in respect of
any Guarantees or other commitments as described under Debt, or obligations of,
any other Person, including without limitation, the funding of any captive
insurance company (other than loans, advances, capital contributions or
transfers of property to any Subsidiaries or variable interest entities
consolidated in accordance with FIN 46-R, or Guaranties with respect to Debt of
any Subsidiary or variable interest entities consolidated in accordance with FIN
46-R). In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a Guarantee
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding, (b) there shall be included as an Investment
all interest accrued with respect to Debt constituting an Investment unless and
until such interest is paid, (c) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by partial or
full repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution), (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.

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1.1.56   “Lenders” means each of the Persons listed on Schedule E and other
lenders that agree from time to time to become Lenders in accordance with the
terms of this Agreement and “Lender” means any one of the Lenders.

1.1.57   “Loan Documents” means this Agreement, all Security, the Fee Letter,
the Agency Fee Letter, and all other documents from time to time relating to the
Credit.

1.1.58   “Material Adverse Effect” means any material adverse effect on (a) the
business, assets, operations or financial condition of the Obligors taken as a
whole, (b) the ability of either Guarantor to perform its obligations under any
Loan Document to which it is a party, or (c) the rights of, or remedies or
benefits available to, the Agent or any of the Lenders under any Loan Document.

1.1.59   “Maturity Date” means 30 November 2008.   1.1.60   “Moody’s” means
Moody’s Investor Services, Inc. and its successors.   1.1.61   “Non BA Lender”
has the meaning defined in Section 5.10(5).

1.1.62   “Obligations” means all obligations of the Borrower to the Agent and
Lenders under or in connection with this Agreement, including but not limited to
all debts and liabilities, present or future, direct or indirect, absolute or
contingent, matured or not, at any time owing by the Borrower to the Agent and
Lenders in any currency or remaining unpaid by the Borrower to the Agent and
Lenders in any currency under or in connection with this Agreement, whether
arising from dealings between the Agent and Lenders and the Borrower or from any
other dealings or proceedings by which the Agent and Lenders may be or become in
any manner whatever creditors of the Borrower under or in connection with this
Agreement, and wherever incurred, and whether incurred by the Borrower alone or
with another or others and whether as principal or surety, and all interest,
fees, legal and other costs, charges and expenses. In this definition, “the
Agent and Lenders” shall be interpreted as “the Agent and Lenders, or any of
them”.

1.1.63   “Obligors” means the Borrower and each of the Guarantors, and “Obligor”
means any of them.

1.1.64   “Pending Event of Default” means an event which would constitute an
Event of Default hereunder, except for satisfaction of any requirement for
giving of notice, lapse of time, or both, or other condition subsequent.

1.1.65   “Permitted Encumbrances” means, with respect to any Person, the
following:

  (a)   liens for taxes, assessments or governmental charges or levies which are
not yet due, or for which instalments have been paid based on reasonable
estimates pending final assessments, or the validity of which is being contested
in good faith by appropriate proceedings and for which the Person has recorded
the liability in accordance with GAAP and which do not have, and will not
reasonably be expected to have, a Material Adverse Effect;

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  (b)   inchoate or statutory liens of contractors, subcontractors, mechanics,
workers, suppliers, material men, carriers and others in respect of
construction, maintenance, repair or operation of assets of the Person, in
respect of which adequate holdbacks are being maintained as required by
applicable laws and (i) which have not at such time been filed or exercised and
of which none of the Lenders have been given notice, or (ii) which relate to
obligations not due or payable or if due, the validity of which is being
contested in good faith by appropriate proceedings and for which such Person has
recorded the liability in accordance with GAAP and which do not materially
reduce the value of the affected asset or materially interfere with the use of
such asset in the operation of the business of the Person and do not have, and
will not reasonably be expected to have, a Material Adverse Effect;     (c)  
easements, rights-of-way, licences, servitudes, restrictions, restrictive
covenants, and similar rights in real property comprised in the assets of the
Person or interests therein (including in respect of sewers, drains, gas and
water mains or electric light and power or telephone and telegraph conduits,
poles, wires and cables) which do not materially reduce the value of the
affected asset or materially interfere with the use of such asset in the
operation of the business of the Person and do not have, and will not reasonably
be expected to have, a Material Adverse Effect;     (d)   title defects or
irregularities which are of a minor nature and which do not materially reduce
the value of the affected asset or materially interfere with the use of such
asset in the operation of the business of the Person and do not have, and will
not reasonably be expected to have, a Material Adverse Effect;     (e)   the
Encumbrance resulting from the deposit of cash or securities in connection with
contracts, tenders or expropriation proceedings, or to secure workers’
compensation, employment insurance, surety or appeal bonds, costs of litigation
when required by applicable laws and other similar obligations, in each case in
the ordinary course of business;     (f)   the Encumbrance created by a judgment
of a court of competent jurisdiction; provided, however, that the Encumbrance is
in existence for less than 20 days after its creation or the execution or other
enforcement of the Encumbrance is effectively stayed or the claims so secured
are being actively contested in good faith and by proper legal proceedings and
do not result in the occurrence of an Event of Default;     (g)   the
reservations, limitations, provisos and conditions, if any, expressed in any
original grant from the Crown of any real property or any interest therein which
do not materially reduce the value of the affected asset or materially interfere
with the use of such asset in the operation of the business of the Person and do
not have, and will not reasonably be expected to have, a Material Adverse
Effect;

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  (h)   Encumbrances given to a public utility or any municipality or
governmental or other public authority when required by such utility or other
authority in connection with the operation of the business or the ownership of
the assets of the Person which do not materially reduce the value of the
affected asset or materially interfere with the use of such asset in the
operation of the business of the Person and do not have, and will not reasonably
be expected to have, a Material Adverse Effect;     (i)   servicing agreements,
development agreements, site plan agreements, and other agreements with
Governmental Authorities pertaining to the use or development of any of the
assets of the Person, provided same are complied with and do not materially
reduce the value of the affected asset or materially interfere with the use of
such asset in the operation of the business of the Person and do not have, and
will not reasonably be expected to have, a Material Adverse Effect;     (j)  
the right reserved to or vested in any Governmental Authority by any statutory
provision or by the terms of any lease, licence, franchise, grant or permit of
the Person, to terminate any such lease, licence, franchise, grant or permit, or
to require annual or other payments as a condition to the continuance thereof;  
  (k)   Encumbrances in favour of the Agent created by the Security, if any,
including Encumbrances over Collateral;     (l)   landlords’ rights of distraint
and similar rights of a landlord (including in Quebec a landlord’s hypothec) on
tangible personal or moveable property of the Person located solely on the
premises leased by the landlord to the Person and securing only the obligations
of the Person under the applicable lease of the premises, so long as the
exercise of such rights do not result in the occurrence of an Event of Default;
and     (m)   Permitted Liens, as such term is defined in the U.S. Credit
Agreement as at the date of this Agreement.

1.1.66   “Permitted Receivables Transaction” has the meaning defined in the U.S.
Credit Agreement, as such definition exists at the date of this Agreement.

1.1.67   “Person” means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.

1.1.68   “Prime Rate” means, on any day, the greater of:

  (a)   the average of the annual rates of interest expressed as a percentage
per annum on the basis of a 365 or 366 day year, as the case may be, announced
by each Schedule I Reference Lender on that day as its reference rate for
commercial loans made by it in Canada in Canadian Dollars; and

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  (b)   the CDOR Rate for one month Canadian Dollar banker’s acceptances on that
day plus 0.50% per annum.

1.1.69   “Prime Rate Advance” means an Advance in Canadian Dollars bearing
interest based on the Prime Rate and includes any deemed Prime Rate Advance
provided for in this Agreement.

1.1.70   “Real Property” has the meaning defined in the U.S. Credit Agreement,
as such definition exists at the date of this Agreement.

1.1.71   “Register” has the meaning defined in Section 10.2(3).

1.1.72   “Release” has the meaning defined in the U.S. Credit Agreement, as such
definition exists at the date of this Agreement.

1.1.73   “Relevant Rating” means, as of any date of determination, the ratings
as determined by S&P and Moody’s of Waste Management, Inc.’s non-credit
enhanced, senior unsecured long-term debt and in circumstances when the ratings
are not the same level (in the grid set forth in Section 2.6(1) ), then the
higher of the two ratings shall apply, provided however that if the higher
rating is more than one level higher than the lower rating, the Relevant Rating
shall be set at one level below the higher rating.

1.1.74   “Required Lenders” means a Lender or Lenders holding, in the aggregate,
a minimum of 50.1% of the amount of the Commitments (or the outstanding Advances
if the Commitments have terminated including after the occurrence of any
Default), excluding in all cases Commitments or Advances held by any Obligor or
any Affiliate or Related Party of any Obligor.

1.1.75   “S&P” means Standard & Poor’s Ratings Group, a division of McGraw-Hill,
Inc., or any of its successors.

1.1.76   “Schedule” means the designated Schedule of this Agreement.

1.1.77   “Schedule I Reference Lenders” means the Agent and such other
institutions as may be agreed upon by the Borrower and the Agent from time to
time, and “Schedule I Reference Lender” means any one of them.

1.1.78   “Scotia Capital” means The Bank of Nova Scotia, a bank to which the
Bank Act (Canada) applies.

1.1.79   “Section” means the designated section of this Agreement.

1.1.80   “Security” means the guarantees held from time to time by or on behalf
of the Agent and the Lenders supporting or intended to support, inter alia,
repayment of any of the Obligations, including, without limitation, the
guarantees described in Section 3.1 from time to time.

1.1.81   “Standby Fee” has the meaning defined in Section 2.7.

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1.1.82   “Subsidiary” means any Person of which the designated parent shall at
any time own directly or indirectly through one or more subsidiaries at least a
majority of the outstanding capital stock or other interests entitled to vote
generally and whose financial results are required to be consolidated with the
financial results of the designated parent in accordance with GAAP.

1.1.83   “Swap Contract” means all obligations in respect of interest rate,
currency or commodity exchange, forward, swap, or futures contracts or similar
transactions or arrangements entered into to protect or hedge any of the
Obligors against interest rate, exchange rate or commodity price risks or
exposure, or to lower or diversify their funding costs.

1.1.84   “Taxes” means all taxes, levies, imposts, stamp taxes, duties,
deductions, withholdings and similar governmental impositions payable, levied,
collected, withheld or assessed as of the date of this Agreement or at any time
in the future and all interest, charges and penalties in respect thereof, and
“Tax” shall have a corresponding meaning.

1.1.85   “Total Debt” has the meaning defined in the U.S. Credit Agreement, as
such definition exists at the date of this Agreement.

1.1.86   “Total Leverage Ratio” means, at any time, the ratio calculated by
dividing (a) Total Debt at that time by (b) EBITDA for Waste Management, Inc.’s
four most recently completed fiscal quarters.

1.1.87   “U.S. Credit Agreement” means the U.S. $2,400,000,000 revolving credit
agreement dated as of October 15, 2004 by and among Waste Management, Inc., as
borrower, Waste Management Holdings, Inc., as guarantor, various banks party
thereto from time to time, as lenders, Citibank, N.A., as administrative agent
and others, as amended by Amendment No. 1 dated October 15, 2004 between such
parties.

1.1.88   “U.S. Dollars” and “U.S. $” means lawful monies of the United States of
America.

1.2 Construction
     This Agreement has been negotiated by each party with the benefit of legal
representation and any rule of construction to the effect that any ambiguities
are to be resolved against the drafting party shall not apply to the
construction or interpretation of this Agreement.
1.3 References to U.S. Credit Agreement
     The provisions of the U.S. Credit Agreement that are incorporated by
reference or referred to in this Agreement shall continue to apply mutatis
mutandis to the Credit notwithstanding the termination of the U.S. Credit
Agreement for any reason.

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1.4   Certain Rules of Interpretation

In this Agreement:

  (a)   the division into sections and other subdivisions thereof and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Agreement; and     (b)   unless
specified otherwise or the context otherwise requires:

  (i)   references to any Section or Schedule are references to the Section of,
or Schedule to, this Agreement;     (ii)   “including” or “includes” means
“including (or includes) but not limited to” and shall not be construed to limit
any general statement preceding it to the specific or similar items or matters
immediately following it;     (iii)   references to contracts, agreements or
instruments, unless otherwise specified, are deemed to include all present and
future amendments, supplements, restatements or replacements to or of such
contracts, agreements or instruments, provided that such amendments,
supplements, restatements or replacements to or of such contracts, agreements or
instruments have been, if applicable, approved or consented to and otherwise
made in accordance with the provisions of this Agreement;     (iv)   references
to any legislation, statutory instrument or regulation or a section or other
provision thereof, unless otherwise specified, is a reference to the
legislation, statutory instrument, regulation, section or other provision as
amended, restated or re-enacted from time to time;     (v)   references to any
thing includes the whole or any part of that thing and a reference to a group of
things or Persons includes each thing or Person in that group;     (vi)  
references to a Person includes that Person’s successors and assigns;     (vii)
  all references to specific times are references to Toronto time; and    
(viii)   words in the singular include the plural and vice-versa and words in
one gender include all genders.

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ARTICLE 2
CREDIT
2.1 Amount and Availment Options

(1)   Upon and subject to the terms and conditions of this Agreement, the
Lenders severally agree to provide to the Borrower a non-revolving term credit
facility (the “Credit”) for the use of the Borrower in the amount of up to Cdn.
$410,000,000 (provided that each Lender’s obligation hereunder shall be limited
to its respective Applicable Percentage of the Credit).

(2)   At the option of the Borrower, the Credit may be utilized by the Borrower
by requesting that Prime Rate Advances be made by the Lenders or by presenting
orders to a Lender for acceptance as Banker’s Acceptances.

2.2 Non-Revolving Credit and Availability Period
     The Credit is a non-revolving credit. The principal amount of any Advance
under the Credit which is repaid from time to time may not be reborrowed. The
Credit shall be available in no more than five Advances, in minimum amounts of
Cdn. $25,000,000 during the period from the Closing Date to and including 31
December 2005 (the “Availability Period”). Any unused portion of the Credit
after the Availability Period will be immediately cancelled.
2.3 Use of the Credit
     The Credit shall be used for general corporate purposes including to
finance, in part, the payment of a dividend to be paid, ultimately, to Waste
Management, Inc. under the American Jobs Creation Act.
2.4 Term and Repayment
     All Obligations under the Credit shall be repaid in full, and the Credit
shall be cancelled, on the Maturity Date.
2.5 Voluntary Prepayments
     The Borrower may prepay Prime Rate Advances under the Credit upon prior
written notice given in accordance with Section 5.3 without premium or penalty
in minimum amounts of Cdn. $5,000,000 and integral multiples of Cdn. $1,000,000
except that no Banker’s Acceptance or BA Equivalent Loan may be paid prior to
its maturity date. The Borrower may cash collateralize outstanding Banker’s
Acceptances and BA Equivalent Loans.
2.6 Interest Rates, Fees and Commissions

(1)   Interest rates, Banker’s Acceptance Fees and Standby Fees will vary and be
calculated based on the Relevant Rating as follows:

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                              Applicable Margin             for Prime Rate  
Banker’s Acceptance         Advances   Fees   Standby Fee Relevant Rating   (%
per annum)   (% per annum)   (% per annum)
Greater than or equal to A-/A3
    0.0 %     0.275 %     0.085 %
BBB+/Baa1
    0.0 %     0.425 %     0.100 %
BBB/Baa2
    0.0 %     0.525 %     0.125 %
BBB-/Baa3
    0.0 %     0.650 %     0.150 %
Lower than or equal to BB+/Ba1
    0.0 %     0.850 %     0.200 %

(2)   Any increase or decrease in interest rates, Banker’s Acceptance Fees and
Standby Fees resulting from a change in the Relevant Rating shall be effective
on the day that the Relevant Rating changes. Waste Management, Inc. shall
immediately notify the Agent of any change in the Relevant Rating, or in the
rating of S&P or of Moody’s comprising the Relevant Rating.

(3)   All interest rates, Banker’s Acceptance Fees and Standby Fees set forth in
Section 2.6(1) are rates per annum. Interest on Prime Rate Advances shall be the
Prime Rate plus the relevant rate shown in the column of the table in
Section 2.6(1) headed “Applicable Margin for Prime Rate Advances”. The rate for
Banker’s Acceptance Fees shall be the relevant rate shown in the column of the
table in Section 2.6(1) headed “Banker’s Acceptance Fees”. Interest on Prime
Rate Advances, Banker’s Acceptances Fees and Standby Fees received by the Agent
shall be promptly distributed by the Agent to the Lenders in accordance with
their respective Applicable Percentages.

2.7 Standby Fee
     The Borrower shall pay a standby fee (“Standby Fee”) on the daily
unadvanced portion of the Credit at a rate per annum which shall vary and be
calculated based on the Relevant Rating as set out in the column of the table in
Section 2.6(1) headed “Standby Fee” during the Availability Period. The Standby
Fee shall be calculated daily beginning on the Closing Date and shall be payable
in arrears on the third Business Day following the end of the Availability
Period.
2.8 Agency and Assignment Fees
     The Borrower shall pay to the Agent, inter alia, the annual agency fee
provided for in the Agency Fee Letter.

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ARTICLE 3
SECURITY
3.1 Security
     The security shall comprise the unlimited and unconditional guarantees by
each of the Guarantors in favour of the Agent and the Lenders of the
Obligations, in the form annexed as Schedule D.
ARTICLE 4
DISBURSEMENT CONDITIONS

4.1   Conditions Precedent to Initial Advance

     The following conditions precedent must be satisfied at or before the time
of the initial Advance under this Agreement, unless waived by the Lenders. Where
delivery of documents is referred to, the documents shall be delivered to the
Agent for and on behalf of the Lenders and shall be in full force and effect and
in form and substance satisfactory to the Lenders.

(1)   Other Debt and Encumbrances – The Lenders shall have received:

  (a)   a true copy of the U.S. Credit Agreement together with all amendments
thereto up to the date of this Agreement;     (b)   the audited consolidated
financial statements of Waste Management, Inc. for the two most recent fiscal
years ended prior to the Closing Date; and     (c)   the unaudited consolidated
financial statements of Waste Management, Inc. for each quarterly period ended
subsequent to the date of the latest financial statements delivered pursuant to
Section 4.1(1)(b).

(2)   Documentation and Ancillary Information – The Agent:

  (a)   shall have received duly executed copies of this Agreement, the Security
and the other Loan Documents, accompanied by all consents, acknowledgments and
ancillary agreements as may be reasonably required by the Agent, all in form and
substance satisfactory to the Agent and the Lenders; and     (b)   shall have
received a certificate from each of the Obligors with copies of its Constating
Documents, a list of its officers, directors, trustees and/or partners, as the
case may be, who are executing Loan Documents on its behalf with specimens of
the signatures of those who are executing Loan Documents on its behalf, and
copies of the corporate proceedings taken to authorize it to execute, deliver
and perform its obligations under the Loan Documents.

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(3)   Opinions – The Agent shall have received the following favourable legal
opinions, each in form and substance satisfactory to it:

  (a)   the opinion of Borden Ladner Gervais LLP, counsel to the Lenders,
addressed to the Agent and the Lenders in relation to the Loan Documents which
are governed by Ontario law;     (b)   the opinion of Nova Scotia counsel to the
Borrower, addressed to the Agent, the Lenders and Borden Ladner Gervais LLP in
relation to, among other things, the existence of the Borrower, its corporate
power and authority and the due authorization, execution and delivery of the
Loan Documents and such other matters as the Agent may reasonably require; and  
  (c)   the opinion of in-house counsel to the Guarantors, addressed to the
Agent, the Lenders and Borden Ladner Gervais LLP in relation to, among other
things, the Guarantors and the enforceability of the Loan Documents governed by
U.S. law and such other matters as the Agent may reasonably require.

(4)   Other Matters – The following conditions must also be satisfied:

  (a)   all fees and expenses payable under the Loan Documents, the Fee Letter
and the Agency Fee Letter (including upfront fees, agency fees, and reasonable
legal fees and expenses of the Lenders’ counsel invoiced prior to the Closing
Date) shall have been paid; and     (b)   the conditions precedent in this
Section 4.1 shall be satisfied no later than 15 December 2005.

4.2   Conditions Precedent to all Advances

     The obligation of the Lenders to make any Advance (including the initial
Advance) is subject to the conditions precedent that:

  (a)   no Event of Default or Pending Event of Default has occurred and is
continuing on the Drawdown Date, or would result from making the Advance;    
(b)   the Agent has received timely notice as required under Section 5.3;    
(c)   the representations and warranties set out in Section 6.1 (other than the
representation and warranty in Section 6.1(5)), other than those expressly
stated to be made as of a specific date or otherwise expressly modified in
accordance with Section 6.2, are true and correct in all material respects on
the date of the Advance as if made on and as of the date of the Advance; and    
(d)   all other terms and conditions of this Agreement upon which an Advance may
be obtained are fulfilled.

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ARTICLE 5
ADVANCES

5.1   Evidence of Indebtedness

     The Agent will maintain records of the Obligations resulting from Prime
Rate Advances made by the Lenders and each Lender will maintain records
concerning those Advances it has made. The Agent shall also maintain records of
the Obligations resulting from Advances by way of Banker’s Acceptances and BA
Equivalent Loans, and each Lender shall also maintain records relating to
Banker’s Acceptances that it has accepted and BA Equivalent Loans it has made.
The records maintained by the Agent shall constitute, in the absence of manifest
error, prima facie evidence of the Obligations and all details relating thereto.
After a request by the Borrower, the Agent or the Lender to whom the request is
made will promptly advise the Borrower of the entries in such records. The
failure of the Agent or any Lender to correctly record any such amount or date
shall not, however, adversely affect the obligation of the Borrower to pay the
Obligations in accordance with this Agreement. The Agent shall, upon the
reasonable request of a Lender or the Borrower, provide any information
contained in its records of Advances to such Lender or the Borrower and the
Agent, each Lender and the Borrower shall cooperate in providing all information
reasonably required to keep all accounts accurate and up-to-date.

5.2   Conversions

     Subject to the other terms of this Agreement, the Borrower may from time to
time convert all or any part of the outstanding amount of any Advance into
another form of Advance.

5.3   Notice of Advances and Payments

(1)   The Borrower shall give the Agent irrevocable written notice, in the form
of Schedule A, of any request for any Advance to it under the Credit. The
Borrower shall also give the Agent irrevocable written notice in the same form
of any payment by it (whether resulting from a repayment, prepayment, rollover
or conversion of any Advance under the Credit) and each such payment shall be
for an amount no less than Cdn. $5,000,000 or the aggregate amount of the
Advances outstanding, whichever is less.   (2)   Notice in respect of a Prime
Rate Advance or payment thereof shall be given on the Business Day prior to any
such Advance or payment. Notices in respect of Advances by way of Banker’s
Acceptance shall be given two Business Days prior to any such Advance. Any
permanent reduction of the Credit shall only be effective on three Business Days
notice as required by Section 5.4.

(3)   Notices shall be given not later than 11:00 a.m. (Toronto time) on the
date for notice. Payments (other than those being made solely from the proceeds
of rollovers and conversions) must be made prior to 11:00 a.m. (Toronto time) on
the date for payment. If a notice or payment is not given or made by those
times, it shall be deemed to have been given or made on the next Business Day,
unless all Lenders affected by the late

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notice or payment agree, in their sole discretion, to accept a notice or payment
at a later time as being effective on the date it is given or made.

5.4   Prepayments and Reductions

(1)   Subject to giving notice required by Section 5.3, the Borrower may from
time to time repay Advances outstanding under the Credit without premium or
penalty, except that Banker’s Acceptances and BA Equivalent Loans may not be
paid prior to their respective maturity dates.

(2)   The Borrower may from time to time, by giving not less than three Business
Days express written notice to the Agent, irrevocably notify the Agent of the
cancellation of the Credit or of the permanent reduction of the committed amount
of the Credit by an amount which shall be a minimum of Cdn. $5,000,000 and a
whole multiple of Cdn. $1,000,000. The Borrower shall have no right to any
increase in the committed amount of the Credit thereafter.

5.5 Prime Rate Advances

(1)   Upon timely fulfilment of all applicable conditions as set forth in this
Agreement, the Agent, in accordance with the procedures set forth in
Section 5.6, will make the requested amount of a Prime Rate Advance available to
the Borrower on the Drawdown Date requested by the Borrower by crediting the
Designated Account with such amount. Each Prime Rate Advance shall be in an
aggregate minimum amount of Cdn. $5,000,000 and in a whole multiple of Cdn.
$1,000,000. The Borrower shall pay interest to the Agent for the account of the
Lenders at the Branch of Account on any such Advances outstanding from time to
time hereunder at the applicable rate of interest specified in Section 2.6.

(2)   Interest on Prime Rate Advances shall be calculated and payable monthly on
each Interest Payment Date. All interest shall accrue from day to day and shall
be payable in arrears for the actual number of days elapsed from and including
the date of Advance or the previous date on which interest was payable, as the
case may be, to but excluding the date on which interest is payable, both before
and after maturity, default and judgment, with interest on overdue interest at
the same rate payable on demand.

(3)   Interest calculated with reference to the Prime Rate shall be calculated
on the basis of a calendar year. Each rate of interest which is calculated with
reference to a period (the “deemed interest period”) that is less than the
actual number of days in the calendar year of calculation is, for the purposes
of the Interest Act (Canada), equivalent to a rate based on a calendar year
calculated by multiplying such rate of interest by the actual number of days in
the calendar year of calculation and dividing by the number of days in the
deemed interest period. Interest shall be calculated using the nominal rate of
calculation, and will not be calculated using the effective rate method of
calculation or any other basis that gives effect to the principle of deemed
reinvestment of interest.

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5.6   Co-ordination of Prime Rate Advances

Each Lender shall advance its Applicable Percentage of each Prime Rate Advance
in accordance with the following provisions:

  (a)   the Agent shall advise each Lender of its receipt of a notice from the
Borrower pursuant to Section 5.3 on the day such notice is received and shall,
as soon as possible, advise each Lender of such Lender’s Applicable Percentage
of any Advance requested by the notice;     (b)   each Lender shall deliver its
Applicable Percentage of the Advance to the Agent not later than 11:00 a.m.
(Toronto time) on the Drawdown Date; and     (c)   unless a Lender notifies the
Agent that a condition precedent to an Advance specified in this Agreement has
not been met, the Agent shall advance to the Borrower the amount delivered by
each Lender by crediting the Designated Account prior to 2:00 p.m. (Toronto
time) on the Drawdown Date, but if the conditions precedent to the Advance are
not met by 2:00 p.m. (Toronto time) on the Drawdown Date, the Agent shall return
the funds to the Lenders or invest them in an overnight investment as orally
instructed by each Lender until such time as the Advance is made.

5.7   Execution of Banker’s Acceptances

(1)   To facilitate the acceptance of Banker’s Acceptances hereunder, the
Borrower hereby appoints each Lender as its attorney to sign and endorse on its
behalf, as and when considered necessary by the Lender, an appropriate number of
orders in the form prescribed by that Lender.

(2)   Each Lender may, at its option, execute any order in handwriting or by the
facsimile or mechanical signature of any of its authorized officers, and the
Lenders are hereby authorized to accept or pay, as the case may be, any order of
the Borrower which purports to bear such a signature notwithstanding that any
such individual has ceased to be an authorized officer of the Lender. Any such
order or Banker’s Acceptance shall be as valid as if he or she were an
authorized officer at the date of issue of the order or Banker’s Acceptance.

(3)   Any order or Banker’s Acceptance signed by a Lender as attorney for the
Borrower, whether signed in handwriting or by the facsimile or mechanical
signature of an authorized officer of a Lender, may be dealt with by the Agent
or any Lender to all intents and purposes and shall bind the Borrower as if duly
signed and issued by the Borrower.

(4)   The receipt by the Agent of a request for an Advance by way of Banker’s
Acceptances shall be each Lender’s sufficient authority to execute, and each
Lender shall, subject to the terms and conditions of this Agreement, execute
orders in accordance with such request and the advice of the Agent given
pursuant to Section 5.10, and the orders so executed shall thereupon be deemed
to have been presented for acceptance.

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5.8   Sale of Banker’s Acceptances

(1)   It shall be the responsibility of each Lender to arrange, in accordance
with normal market practice, for the sale on each Drawdown Date of the Banker’s
Acceptances to be accepted by that Lender, failing which the Lender shall
purchase its Banker’s Acceptances.

(2)   In accordance with the procedures set forth in Section 5.10, the Agent
will make the net proceeds of the requested Advance by way of Banker’s
Acceptances received by it from the Lenders available to the Borrower on the
Drawdown Date by crediting the Designated Account with such amount.

(3)   Notwithstanding the foregoing, if in the determination of the Required
Lenders, acting reasonably, a market for Banker’s Acceptances does not exist at
any time, or the Lenders cannot for other reasons, after reasonable efforts,
readily sell Banker’s Acceptances or perform their other obligations under this
Agreement with respect to Banker’s Acceptances, then upon at least one Business
Day’s written notice by the Agent to the Borrower, the Borrower’s right to
request Advances by way of Banker’s Acceptances shall be and remain suspended
until the Agent notifies the Borrower that any condition causing such
determination no longer exists (and the Agent shall be obligated to so notify
the Borrower promptly following such occurrence).

5.9   Size and Maturity of Banker’s Acceptances and Rollovers

     Each Advance of Banker’s Acceptances shall be in a minimum amount of Cdn.
$5,000,000 and integral multiples of Cdn. $1,000,000 and the maximum number of
maturities of Banker’s Acceptances outstanding at any time shall not exceed
fifteen. Each Banker’s Acceptance shall have a term of 1, 2, 3, 6 or, if
available, or 12 months or such other periods after the date of acceptance of
the order by a Lender, but no Banker’s Acceptance may mature on a date which is
not a Business Day or after the Maturity Date. Subject to the terms and
conditions of this Agreement, the face amount at maturity of a Banker’s
Acceptance may be renewed as a Banker’s Acceptance (by repayment and reissue) or
converted (by repayment) into another form of Advance.

5.10   Co-ordination of BA Advances

     Each Lender shall advance its Applicable Percentage of each Advance by way
of Banker’s Acceptances in accordance with the provisions set forth below.

(1)   The Agent, promptly following receipt of a notice from the Borrower
pursuant to Section 5.3 requesting an Advance by way of Banker’s Acceptances,
shall advise each Lender of the aggregate face amount and term(s) of the
Banker’s Acceptances to be accepted by it, which term(s) shall be identical for
all Lenders. The aggregate face amount of Banker’s Acceptances to be accepted by
a Lender shall be determined by the Agent by reference to the respective
Commitments of the Lenders, except that, if the face amount of a Banker’s
Acceptance would not be Cdn. $1,000 or a whole multiple thereof, the face amount
shall be increased or reduced by the Agent in its sole discretion to the nearest
whole multiple of Cdn. $1,000.

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(2)   Each Lender shall transfer to the Agent at the Branch of Account for value
not later than 11:00 a.m. (Toronto time) on each Drawdown Date immediately
available Cdn. Dollars in an aggregate amount equal to the BA Discount Proceeds
of all Banker’s Acceptances accepted and sold or purchased by the Lender on such
Drawdown Date net of the applicable Banker’s Acceptance Fee and net of the
amount required to pay any of its previously accepted Banker’s Acceptances that
are maturing on the Drawdown Date or any of its other Advances that are being
converted to Banker’s Acceptances on the Drawdown Date.

(3)   Unless a Lender notifies the Agent that a condition precedent to an
Advance specified in this Agreement has not been met, the Agent shall advance to
the Borrower the amount delivered by each Lender by crediting the Designated
Account prior to 2:00 p.m. (Toronto time) on the Drawdown Date, but if the
conditions precedent to the Advance are not met by 2:00 p.m. (Toronto time) on
the Drawdown Date, the Agent shall return the funds to the Lenders or invest
them in an overnight investment as orally instructed by each Lender until such
time as the Advance is made.

(4)   Notwithstanding any other provision hereof, for the purpose of determining
the amount to be transferred by a Lender to the Agent for the account of the
Borrower in respect of the sale of any Banker’s Acceptance accepted by such
Lender and sold or purchased by it, the proceeds of sale thereof shall be deemed
to be an amount equal to the BA Discount Proceeds calculated with respect
thereto. Accordingly, in respect of any particular Banker’s Acceptance accepted
by it, a Lender in addition to its entitlement to retain the applicable Banker’s
Acceptance Fee for its own account (a) shall be entitled to retain for its own
account the amount, if any, by which the actual proceeds of sale thereof exceed
the BA Discount Proceeds calculated with respect thereto, and (b) shall be
required to pay out of its own funds the amount, if any, by which the actual
proceeds of sale thereof are less than the BA Discount Proceeds calculated with
respect thereto.

(5)   Whenever the Borrower requests an Advance that includes Banker’s
Acceptances, each Lender that is not permitted by applicable law or by customary
market practice to accept a Banker’s Acceptance (a “Non BA Lender”) shall, in
lieu of accepting its pro rata amount of such Banker’s Acceptances, make
available to the Borrower on the Drawdown Date a non-interest bearing loan (a
“BA Equivalent Loan”) in Canadian Dollars and in an amount equal to the BA
Discount Proceeds of its pro rata amount of the Banker’s Acceptances that the
Non BA Lender would have been required to accept on the Drawdown Date if it were
able to accept Banker’s Acceptances. The BA Discount Proceeds shall be
calculated based on the BA Discount Rate. Each Non BA Lender shall also be
entitled to deduct from the BA Equivalent Loan an amount equal to the Banker’s
Acceptance Fee that would have been applicable had it been able to accept
Banker’s Acceptances. The BA Equivalent Loan shall have a term equal to the term
of the Banker’s Acceptances that the Non BA Lender would otherwise have accepted
and the Borrower shall, at the end of that term, be obligated to pay the Non BA
Lender an amount equal to the aggregate face amount of the Banker’s Acceptances
that it would otherwise have accepted. All provisions of this Agreement
applicable to Banker’s Acceptances and Lenders that accept Banker’s Acceptances
shall apply

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mutatis mutandis to BA Equivalent Loans and Non BA Lenders and, without limiting
the foregoing, Advances shall include BA Equivalent Loans.

5.11   Payment of Banker’s Acceptances

(1)   The Borrower shall provide for the payment to the Agent at the Branch of
Account for the account of the applicable Lenders of the full face amount of
each Banker’s Acceptance accepted for its account on the earlier of (a) the date
of maturity of a Banker’s Acceptance, and (b) the date on which any Obligations
become due and payable pursuant to Section 8.2. The Lenders shall be entitled to
recover interest from the Borrower at a rate of interest per annum equal to the
rate applicable to Prime Rate Advances under the Credit under which the Banker’s
Acceptance was issued, compounded monthly, upon any amount payment of which has
not been provided for by the Borrower in accordance with this Section. Interest
shall be calculated from and including the date of maturity of each such
Banker’s Acceptance up to but excluding the date such payment, and all interest
thereon, is provided for by the Borrower, both before and after demand, default
and judgment.

(2)   If the Borrower provides cash in response to any Obligations becoming due
and payable under Section 8.2, it shall be entitled to receive interest on the
cash provided in accordance with Section 11.12 as long as the cash is held as
Collateral.

5.12   Deemed Advance – Banker’s Acceptances

     Except for amounts which are paid from the proceeds of a rollover of a
Banker’s Acceptance or for which payment has otherwise been funded by the
Borrower, any amount which a Lender pays to any third party on or after the date
of maturity of a Banker’s Acceptance in satisfaction thereof or which is owing
to the Lender in respect of such a Banker’s Acceptance on or after the date of
maturity of such a Banker’s Acceptance, shall be deemed to be a Prime Rate
Advance to the Borrower under this Agreement. Each Lender shall forthwith give
notice of the making of such a Prime Rate Advance to the Borrower and the Agent
(which shall promptly give similar notice to the other Lenders). Interest shall
be payable on such Prime Rate Advances in accordance with the terms applicable
to Prime Rate Advances.

5.13   Waiver

     The Borrower shall not claim from a Lender any days of grace for the
payment at maturity of any Banker’s Acceptances presented and accepted by the
Lender pursuant to this Agreement. The Borrower waives any defence to payment
which might otherwise exist if for any reason a Banker’s Acceptance shall be
held by a Lender in its own right at the maturity thereof, and the doctrine of
merger shall not apply to any Banker’s Acceptance that is at any time held by a
Lender in its own right.

5.14   Degree of Care

     Any executed orders to be used as Banker’s Acceptances shall be held in
safekeeping with the same degree of care as if they were the Lender’s own
property, and shall be kept at the place at which such orders are ordinarily
held by such Lender.

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5.15   Obligations Absolute

     The obligations of the Borrower with respect to Banker’s Acceptances 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 the following circumstances:

  (a)   any lack of validity or enforceability of any order accepted by a Lender
as a Banker’s Acceptance; or     (b)   the existence of any claim, set-off,
defence or other right which the Borrower may have at any time against the
holder of a Banker’s Acceptance, a Lender or any other Person, whether in
connection with this Agreement or otherwise.

5.16   Shortfall on Drawdowns, Rollovers and Conversions

     The Borrower agrees that:

  (a)   the difference between the amount of an Advance requested by the
Borrower by way of Banker’s Acceptances and the actual proceeds of the Banker’s
Acceptances;     (b)   the difference between the actual proceeds of a Banker’s
Acceptance and the amount required to pay a maturing Banker’s Acceptance, if a
Banker’s Acceptance is being rolled over; and     (c)   the difference between
the actual proceeds of a Banker’s Acceptance and the amount required to repay
any Advance which is being converted to a Banker’s Acceptance;

shall be funded and paid by the Borrower from its own resources, by 11:00 a.m.
on the day of the Advance or may be advanced as a Prime Rate Advance under the
Credit if the Borrower is otherwise entitled to an Advance under the Credit.

5.17   Payment by the Borrower

(1)   Except as otherwise provided herein, all payments made by or on behalf of
the Borrower pursuant to this Agreement shall be made to and received by the
Agent and shall be distributed by the Agent to the Lenders as soon as possible
upon receipt by the Agent. Except as otherwise provided in this Agreement
(including Section 9.3(2), the Agent shall distribute:

  (a)   payments of interest in accordance with each Lender’s Applicable
Percentage of the Credit;     (b)   repayments of principal in accordance with
each Lender’s Applicable Percentage of the Credit; or

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  (c)   all other payments received by the Agent including amounts received upon
the realization of Security, in accordance with each Lender’s Applicable
Percentage of the Credit provided, however, that with respect to proceeds of
realization, no Lender shall receive an amount in excess of the amounts owing to
it in respect of the Obligations.

(2)   If the Agent does not distribute a Lender’s share of a payment made by the
Borrower to that Lender for value on the day that payment is made or deemed to
have been made to the Agent, the Agent shall pay to the Lender on demand an
amount equal to the product of (a) the Interbank Reference Rate per annum
multiplied by (b) the Lender’s share of the amount received by the Agent from
the Borrower and not so distributed, multiplied by (c) a fraction, the numerator
of which is the number of days that have elapsed from and including the date of
receipt of the payment by the Agent to but excluding the date on which the
payment is made by the Agent to such Lender and the denominator of which is 365.
The Agent shall be entitled to withhold any Tax applicable to any such payment
as required by applicable laws.

5.18   Prohibited Rates of Interest

     It is the intention of the parties to comply with applicable usury laws now
or hereafter enacted. Accordingly, notwithstanding any other provisions of this
Agreement or any other Loan Document, in no event shall any Loan Document
require the payment or permit the collection of interest or other amounts in an
amount or at a rate in excess of the amount or rate that is permitted by law or
in an amount or at a rate that would result in the receipt by the Lenders or the
Agent of interest at a criminal rate, as the terms “interest” and “criminal
rate” are defined under the Criminal Code (Canada). Where more than one such law
is applicable to any Obligor, such Obligor shall not be obliged to make payment
in an amount or at a rate higher than the lowest amount or rate permitted by
such laws. If from any circumstances whatever, fulfilment of any provision of
any Loan Document shall involve transcending the limit of validity prescribed by
any applicable law for the collection or charging of interest, the obligation to
be fulfilled shall be reduced to the limit of such validity, and if from any
such circumstances the Agent or the Lenders shall ever receive anything of value
as interest or deemed interest under any Loan Document in an amount that would
exceed the highest lawful rate of interest permitted by any applicable law, such
amount that would be excessive interest shall be applied to the reduction of the
principal amount of the Credit, and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of the Credit, the
amount exceeding the unpaid balance shall be refunded to the Borrower. In
determining whether or not the interest paid or payable under any specified
contingency exceeds the highest lawful rate, the Obligors, the Agent and the
Lenders shall, to the maximum extent permitted by applicable laws
(a) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof,
(c) amortize, prorate, allocate and spread the total amount of interest
throughout the term of such indebtedness so that interest thereon does not
exceed the maximum amount permitted by applicable laws, or (d) allocate interest
between portions of such indebtedness to the end that no such portion shall bear
interest at a rate greater than that permitted by applicable laws. For the
purposes of the application of the Criminal Code (Canada), the effective annual
rate of interest shall be determined in accordance with generally accepted
actuarial practices and principles and in the event of any dispute, a

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certificate of a Fellow of the Canadian Institute of Actuaries appointed by the
Agent shall be conclusive for the purpose of such determination.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES

6.1   Representations and Warranties

     Each of the Obligors represents and warrants, with respect to itself and
each other Obligor, to the Lenders as follows:

(1)   Corporate Authority

  (a)   Each of the Obligors (i) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation, (ii) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated, and (iii) is in good standing and is duly
authorized to do business in each jurisdiction in which its property or business
as presently conducted or contemplated makes such qualification necessary,
except where a failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect.     (b)   The execution, delivery and
performance of its Loan Documents and the transactions contemplated hereby and
thereby (i) are within the corporate authority of each of the Obligors,
(ii) have been duly authorized by all necessary corporate proceedings on the
part of each of the Obligors, (iii) do not conflict with or result in any breach
or contravention of any provision of law, statute, rule or regulation to which
any of the Obligors is subject, (iv) do not contravene any judgment, order,
writ, injunction, license or permit applicable to any Obligor so as to have a
Material Adverse Effect, and (v) do not conflict with any provision of the
Constating Documents of any of the Obligors or any agreement or other instrument
binding upon any Obligor, except for those conflicts with any such agreement or
instrument which could not reasonably be expected to have a Material Adverse
Effect.     (c)   The execution, delivery and performance of the Loan Documents
by each of the Obligors will result in valid and legally binding obligations of
each of the Obligors enforceable against each in accordance with the respective
terms and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors’ rights generally and general
principles of equity.

(2)   Governmental and Other Approvals

The execution, delivery and performance of the Loan Documents by each of the
Obligors and the consummation by each of the Obligors of the transactions
contemplated hereby and thereby do not require any approval or consent of, or
filing

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with, any governmental agency or authority or other third party other than those
already obtained and those required after the date hereof in connection with the
Obligors’ performance of the covenants contained in this Agreement.

(3)   Title to Properties; Leases

Waste Management, Inc. and its Subsidiaries own all of the assets reflected in
the consolidated balance sheet as at the Interim Balance Sheet Date (other than
those assets not owned by Waste Management, Inc. or its Subsidiaries, but
required to be consolidated under GAAP) or acquired since that date (except
property and assets operated under capital leases or sold or otherwise disposed
of in the ordinary course of business since that date), subject to no
Encumbrances except Permitted Encumbrances.

(4)   Financial Statements; Solvency

  (a)   There have been furnished to the Lenders consolidated balance sheets of
Waste Management, Inc. dated the Balance Sheet Date and consolidated statements
of operations for the fiscal periods then ended, certified by the independent
auditors permitted under the U.S. Credit Agreement from time to time. In
addition, there have been furnished to the Lenders consolidated balance sheets
of Waste Management, Inc. and its Subsidiaries (including the Borrower) dated
the Interim Balance Sheet Date and the related consolidated statements of
operations for the fiscal quarter ending on the Interim Balance Sheet Date. All
said balance sheets and statements of operations have been prepared in
accordance with GAAP (but, in the case of any of such financial statements which
are unaudited, only to the extent GAAP is applicable to interim unaudited
reports), and fairly present, in all material respects, the financial condition
of Waste Management, Inc. on a consolidated basis as at the close of business on
the dates thereof and the results of operations for the periods then ended,
subject, in the case of unaudited interim financial statements, to changes
resulting from audit and normal year-end adjustments and to the absence of
complete footnotes. There are no contingent liabilities of Waste Management,
Inc. and its Subsidiaries involving material amounts, known to the officers of
any of the Obligors, which have not been disclosed in said balance sheets and
the related notes thereto or otherwise in writing to the Lenders.     (b)   Each
of the Obligors on a consolidated basis (both before and after giving effect to
the transactions contemplated by this Agreement) is solvent (i.e., it has assets
having a fair value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured) and has,
and expects to have, the ability to pay its debts from time to time incurred in
connection therewith as such debts mature.

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(5)   No Material Changes, Etc.

Since the Balance Sheet Date, there have been no material adverse changes in the
consolidated financial condition, business, assets or liabilities (contingent or
otherwise) of Waste Management, Inc. and its Subsidiaries, taken as a whole,
other than changes in the ordinary course of business which have not had a
Material Adverse Effect.

(6)   Franchises, Patents, Copyrights, Etc.

Each of the Obligors possess all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of their business substantially as now conducted (other
than those the absence of which would not have a Material Adverse Effect)
without known conflict with any rights of others other than a conflict which
would not have a Material Adverse Effect.

(7)   Litigation

Except as disclosed in Schedule 6.7 of the U.S. Credit Agreement, as such
Schedule exists at the date of this Agreement, or in the Disclosure Documents,
there are no actions, suits, proceedings or investigations of any kind pending
or, to the knowledge of the Obligors, threatened against the Obligors before any
court, tribunal or administrative agency or board which, either in any case or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect.

(8)   No Materially Adverse Contracts, Etc.

None of the Obligors is subject to any restriction in its Constating Documents,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation which in the judgment of such Obligor’s officers has or could
reasonably be expected in the future to have a Material Adverse Effect. None of
the Obligors is a party to any contract or agreement which in the judgment of
such Obligor’s officers has or could reasonably be expected to have any Material
Adverse Effect, except as otherwise reflected in adequate reserves as required
by GAAP.

(9)   Compliance With Other Instruments, Laws, Etc.

None of the Obligor is (a) violating any provision of its Constating Documents,
or (b) violating any agreement or instrument to which any of them may be subject
or by which any of them or any of their properties may be bound or any decree,
order, judgment, or any statute, license, rule or regulation, in a manner which
could (in the case of such agreements or such instruments) reasonably be
expected to result in a Material Adverse Effect.

(10)   Tax Status

Each of the Obligors have filed all federal, state, provincial and territorial
income and all other tax returns, reports and declarations (or obtained
extensions with respect

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thereto) required by applicable law to be filed by them (unless and only to the
extent that such Obligor has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes as required by
GAAP); and have paid all taxes and other governmental assessments and charges
(other than taxes, assessments and other governmental charges imposed by
jurisdictions other than the United States, Canada or any political subdivision
thereof which in the aggregate are not material to the financial condition,
business or assets of any Obligor on an individual basis or of Waste Management,
Inc. on a consolidated basis) that are material in amount, shown or determined
to be due on such returns, reports and declarations, except those being
contested in good faith; and, as required by GAAP, have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
Except to the extent contested in the manner permitted in the preceding
sentence, there are no unpaid taxes in any material amount claimed by the taxing
authority of any jurisdiction to be due and owing by any Obligor, nor do the
officers of any Obligor know of any basis for any such claim.

(11)   No Event of Default

No Pending Event of Default or Event of Default has occurred hereunder and is
continuing.

(12)   Holding Company and Investment Company Acts

None of the Obligors is a “holding company”, or a “subsidiary company” of a
“holding company”, or an “affiliate” of a “holding company”, as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is any of them a
“registered investment company”, or an “affiliated company” or a “principal
underwriter” of a “registered investment company”, as such terms are defined in
the Investment Company Act of 1940.

(13)   Absence of Financing Statements, Etc.

Except as permitted by §8.1 of the U.S. Credit Agreement, as such provision
exists at the date of this Agreement, there is no Debt senior to the
Obligations, and except for Permitted Encumbrances, there are no Encumbrances,
or any effective financing statement, security agreement, chattel mortgage, real
estate mortgage or other document filed, registered or recorded with any filing
records, registry, or other public office, which purports to cover, affect or
give notice of any present or possible future Encumbrances on any assets or
property of any Obligor or right thereunder.

(14)   Environmental Matters

Each of the Obligors have taken all steps that they have deemed reasonably
necessary to investigate the past and present condition and usage of its Real
Property and the operations conducted by it and, based upon such diligent
investigation, have determined that, except as set forth in Schedule 6.15 to the
U.S. Credit Agreement, as such Schedule exists at the date of this Agreement,
and in the Disclosure Documents:

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(a)   None of the Obligors, nor any operator of their properties, is in
violation, or alleged violation, of any judgment, decree, order, law, permit,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and Recovery
Act, the Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended (“CERCLA”), the Superfund Amendments and Reauthorization Act of
1986, the Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any applicable international, federal, state,
provincial, territorial or local statute, regulation, ordinance, order or decree
relating to health, safety, waste transportation or disposal, or the environment
(the “Environmental Laws”), which violation, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

(b)   Except with respect to any such matters that could not reasonably be
expected to have a Material Adverse Effect, none of the Obligors has received
notice from any third party including, without limitation: any federal, state,
provincial, territorial or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection Agency
(“EPA”) as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B, (ii) that
any hazardous waste, as defined by 42 U.S.C. §6903(5), any hazardous substances
as defined by 42 U.S.C. §9601(14), any pollutant or contaminant as defined by 42
U.S.C. §9601(33) or any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws, excluding household
hazardous waste (“Hazardous Substances”), which any one of them has generated,
transported or disposed of, has been found at any site at which a federal,
state, provincial, territorial or local agency or other third party has
conducted or has ordered that an Obligor conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law, or
(iii) that it is or shall be a named party to any claim, action, cause of
action, complaint, legal or administrative proceeding arising out of any third
party’s incurrence of costs, expenses, losses or damages of any kind whatsoever
in connection with the Release of Hazardous Substances.

(c)   Except for those occurrences or situations that could not reasonably be
expected to have a Material Adverse Effect (i) no portion of the Real Property
or other assets of the Obligors has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with applicable
Environmental Laws, (ii) in the course of any activities conducted by the
Obligors or their respective operators of the Real Property or other assets of
the Obligors, no Hazardous Substances have been generated or are being used on
such properties except in accordance with applicable Environmental Laws, (iii)
there have been no unpermitted Releases or threatened Releases of Hazardous
Substances on, upon, into or from the Real Property or other assets of the
Obligors, and (iv) any Hazardous Substances that have been generated on the Real
Property or other assets of the Obligors have been transported offsite only by
carriers having an identification number

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issued by the EPA or other relevant Governmental Authority, treated or disposed
of only by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and facilities
have been and are, to the Obligors’ knowledge, operating in compliance with such
permits and applicable Environmental Laws.

(15)   Disclosure

No representation or warranty made by any Obligor in this Agreement or in any
agreement, instrument, document, certificate, or financial statement furnished
to the Lenders or the Agent by or on behalf of or at the request of the Borrower
and any other Obligor in connection with any of the transactions contemplated by
the Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein, taken as a whole, not misleading in light of the circumstances in which
they are made.

(16)   Permits and Governmental Authority

All permits (other than those the absence of which could not reasonably be
expected to have a Material Adverse Effect) required for the construction and
operation of all landfills currently owned or operated by Waste Management, Inc.
or the other Obligors have been obtained and remain in full force and effect and
are not subject to any appeals or further proceedings or to any unsatisfied
conditions that may allow material modification or revocation. None of the
Obligors, to the knowledge of any such Obligor, or the holder of such permits,
is in violation of any such permits, except for any violation which could not
reasonably be expected to have a Material Adverse Effect.

6.2   Survival of Representations and Warranties

         The representations and warranties made in this Agreement shall survive
the execution of this Agreement and all other Loan Documents until such time as
all of the Obligations have been paid in full, and unless expressly stated to be
made as of a specific date, shall be deemed to be repeated and made as of the
date of each Advance (including any deemed Advance) and as of the date of
delivery of each Compliance Certificate with the same force and effect as if
made on and as of each such date, subject to modifications communicated by the
Borrower to the Lenders in writing and accepted by the Required Lenders. The
Lenders shall be deemed to have relied upon such representations and warranties
at each such time as a condition of making an Advance hereunder or continuing to
extend the Credit hereunder.
ARTICLE 7
COVENANTS
7.1 Financial Covenants of Waste Management, Inc.
     Waste Management, Inc. shall at all times maintain:

  (a)   a Total Leverage Ratio of not greater than 3.50 to 1.00; and

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  (b)   an Interest Coverage Ratio of not less than 2.75 to 1.00.

     The foregoing ratios shall be calculated on a rolling four quarter basis,
based on the most recently completed four fiscal quarters of Waste Management,
Inc.

7.2   Positive Covenants

     During the term of this Agreement, each Obligor, as applicable, shall
perform the covenants specified below:

(1)   Punctual Payment

The Borrower shall duly and punctually pay and perform its indebtedness,
liabilities and obligations under this Agreement and under the other Loan
Documents to which it is a party and each Guarantor shall duly and punctually
pay and perform its indebtedness, liabilities and obligations under this
Agreement and under the other Loan Documents to which it is a party, in each
case, at the times and places and in the manner required by the terms hereof and
thereof.

(2)   Chief Place of Business

The Borrower’s place of business is located at 5045 South Service Road,
Suite 300, Burlington, Ontario L7L 5Y7. The Borrower will give 30 days’ prior
written notice to the Agent of any change in its place of business.

(3)   Records and Accounts

Each of the Obligors will keep true and accurate records and books of account in
which full, true and correct entries will be made in accordance with GAAP and
with the requirements of all regulatory authorities and maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence and amortization of its properties, all other
contingencies, and all other proper reserves.

(4)   Existence and Conduct of Business

Each of the Obligors will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
and effect and maintain its foreign qualifications (except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect),
licensing, domestication or authorization, except as any of the foregoing may be
terminated by its board of directors in the exercise of its reasonable judgment;
provided that such termination could not reasonably be expected to have a
Material Adverse Effect. None of the Obligors will become obligated under any
contract or binding arrangement which, at the time it was entered into, could
reasonably be expected to have a Material Adverse Effect. Each of the Obligors
will continue to engage primarily in any of the businesses now conducted by it
and in related, complementary or supplemental

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businesses, and any additional businesses acquired pursuant to the terms of
§8.4(a) of the U.S. Credit Agreement, as such provision exists at the date of
this Agreement.

(5)   Maintenance of Properties

Each of the Obligors will cause all material properties used or useful in the
conduct of its businesses to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in its judgment may
be necessary so that the businesses carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section 7.2(5) shall prevent any Obligor from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
its judgment, desirable in the conduct of its business and could not reasonably
be expected to have a Material Adverse Effect.

(6)   Insurance

Each Obligor shall maintain or cause to be maintained insurance on its property
that satisfies the covenants and conditions of the U.S. Credit Agreement
concerning insurance coverage from time to time. Whenever reasonably requested
in writing by the Agent, it shall cause certificates evidencing such policies of
insurance to be made available to the Agent to the same extent required to be
delivered to the administrative agent under the U.S. Credit Agreement.

(7)   Taxes

Each Obligor will duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labour, materials, or supplies, which if unpaid might by
law become an Encumbrances upon any of its property; provided, however, that any
such tax, assessment, charge, levy or claim need not be paid if the failure to
do so (either individually, or in the aggregate for all such failures) could not
reasonably be expected to have a Material Adverse Effect and the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if such Obligor shall have set aside on its books adequate
reserves with respect thereto as required by GAAP; and provided, further, that
each Obligor will pay all such taxes, assessments, charges, levies or claims
prior to the foreclosure on any Encumbrance which may have attached as security
therefor.

(8)   Inspection of Properties, Books and Contracts

Each Obligor will permit the Agent or any Lender or any of their respective
designated representatives, upon reasonable notice, to visit and inspect any of
its properties, to examine its books of account or contracts (and to make copies
thereof and extracts therefrom), and to discuss its affairs, finances and
accounts with, and to

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    be advised as to the same by, its officers, all at such times and intervals
as may be reasonably requested.   (9)   Compliance with Laws, Contracts,
Licenses and Permits; Maintenance of Material Licenses and Permits       Each
Obligor will (a) comply with the provisions of its Constating Documents,
(b) comply with all agreements and instruments by which it or any of its
properties may be bound except where non-compliance could not reasonably be
expected to have a Material Adverse Effect, (c) comply with all applicable laws
and regulations (including Environmental Laws), decrees, orders, judgments,
licenses and permits, including, without limitation, all environmental permits
(“Applicable Requirements”), except where non-compliance with such Applicable
Requirements could not reasonably be expected to have a Material Adverse Effect,
(d) maintain all operating permits for all landfills now owned or hereafter
acquired, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect, and (e) dispose of hazardous waste only at
licensed disposal facilities operating, to such Obligor’s knowledge, in
compliance with Environmental Laws, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. If at any time any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that any Obligor may fulfill any of its obligations hereunder or under any other
Loan Document, such Obligor will immediately take or cause to be taken all
reasonable steps within its power to obtain such authorization, consent,
approval, permit or license and furnish the Agent with evidence thereof.   (10)
  Environmental Indemnification       Each of the Obligors covenants and agrees
that it will indemnify and hold the Lenders and the Agent and their respective
affiliates, and each of the representatives, agents and officers of each of the
foregoing, harmless from and against any and all claims, expense, damage, loss
or liability incurred by the Lenders or the Agent (including all reasonable
costs of legal representation incurred by the Lenders or the Agent) relating to
(a) any Release or threatened Release of Hazardous Substances on any of its Real
Property, (b) any violation of any Environmental Laws or other Applicable
Requirements with respect to conditions of the Real Property or other assets of
the Obligors, or the operations conducted thereon, or (c) the investigation or
remediation of offsite locations at which any of the Obligors, or their
predecessors, are alleged to have directly or indirectly disposed of Hazardous
Substances. It is expressly acknowledged by the Obligors that this covenant of
indemnification shall survive the payment of the Obligations and termination of
the Credit and shall inure to the benefit of the Lenders, the Agent and their
affiliates, successors and assigns.

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(11)   Further Assurances       Each of the Obligors will cooperate with the
Agent and execute such further instruments and documents as the Agent shall
reasonably request to carry out to the Required Lenders’ satisfaction the
transactions contemplated by this Agreement.   (12)   Notice of Potential Claims
or Litigation       Waste Management, Inc. shall deliver to the Agent written
notice of the initiation of any action, claim, complaint, investigation or any
other notice of dispute or litigation against any Obligor that could reasonably
be expected to have a Material Adverse Effect, or which questions the validity
or enforceability of any Loan Document, together with a copy of each such
complaint or other notice received by such Obligor if requested by the Agent
within 30 days of receipt thereof or of the determination that such action could
reasonably be expected to have a Material Adverse Effect, whichever occurs later
(and such Obligor will make such determination in each case as promptly as
practicable).   (13)   Notice of Certain Events Concerning Environmental Claims
      Waste Management, Inc. shall promptly, and in any event within ten
Business Days of the Obligor obtaining knowledge thereof, notify the Agent of
any of the following events:

  (a)   any Obligor obtaining knowledge of any violation of any Environmental
Law regarding its Real Property or operations which violation could reasonably
be expected to have a Material Adverse Effect;     (b)   any Obligor obtaining
knowledge of any potential or known Release, or threat of Release, of any
Hazardous Substance at, from, or into any Real Property which could reasonably
be expected to have a Material Adverse Effect;     (c)   any Obligor receiving
any notice of any material violation of any Environmental Law or of any Release
or threatened Release of Hazardous Substance, including a notice or claim of
liability or potential responsibility from any third party (including any
Governmental Authority) and including notice of any formal inquiry, proceeding,
demand, investigation or other action with regard to (i) any Obligor’s or other
Person’s operation of the Real Property of such Obligor, (ii) contamination on,
from, or into the Real Property, or (iii) investigation or remediation of
offsite locations at which any Obligor, or its predecessors, are alleged to have
directly or indirectly disposed of Hazardous Substances, if any thereof could
reasonably be expected to have a Material Adverse Effect; or     (d)   any
Obligor obtaining knowledge that any expense or loss has been incurred by any
Governmental Authority in connection with the assessment, containment, removal
or remediation of any Hazardous Substance with respect to which any Obligor has
been alleged to be liable by such Governmental

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      Authority or for which an Encumbrance may be imposed on any Real Property
by such Governmental Authority, if any thereof could reasonably be expected to
have a Material Adverse Effect.

(14)   Notice of Default       The Borrower will promptly notify the Agent in
writing of the occurrence of any Pending Event of Default or Event of Default.
If any Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under this
Agreement or any other note, evidence of indebtedness, indenture or other
obligation evidencing indebtedness in excess of U.S. $25,000,000 as to which any
Obligor is a party or obligor, whether as principal or surety, such Obligor
shall promptly upon obtaining actual knowledge thereof give written notice
thereof to the Agent, describing the notice of action and the nature of the
claimed default.   (15)   Use of Proceeds       The proceeds of the Advances
shall be used as set forth in Section 2.3.   (16)   Certain Transactions      
Except as disclosed in the Disclosure Documents, and except for arm’s length
transactions pursuant to which any Obligor makes payments in the ordinary course
of business, none of such Obligor’s officers, directors, or employees (or any
affiliate of such officers, directors or employees) are presently or shall be a
party to any transaction with the Borrower or any Guarantor (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower or any Guarantor, any corporation, partnership, trust
or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.   7.3  
Reporting Requirements

     During the term of this Agreement, Waste Management, Inc. and the Borrower
shall deliver or cause the delivery of the periodic reports specified below and
shall give notices in the circumstances specified below, or cause notices to be
given. All financial statements and other reports shall be prepared in
accordance with GAAP applied on a consistent basis.

(1)   Periodic Financial Reports

  (a)   Waste Management, Inc. shall, as soon as practicable and in any event
within 60 days of the end of each of its fiscal quarters (excluding the fourth
fiscal quarter), cause to be prepared and delivered to the Agent, its interim
unaudited consolidated financial statements as at the end of such quarter.

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  (b)   Waste Management, Inc. shall, as soon as practicable and in any event
within 100 days after the end of each of its fiscal years, prepare and deliver
to the Agent its consolidated annual financial statements, audited by Ernst &
Young LLP or other independent auditors reasonably acceptable to the Lenders.  
  (c)   Waste Management, Inc. shall, concurrently with the delivery of its
quarterly financial statements and annual financial statements, provide the
Agent with a Compliance Certificate.     (d)   Waste Management, Inc. shall
provide to the Agent, promptly following the filing or mailing thereof, copies
of all material of a financial nature filed by Waste Management, Inc. with the
Securities and Exchange Commission or sent to the Waste Management Inc.’s
stockholders generally.     (e)   The Obligors shall promptly provide the Agent
with all other information, reports and certificates reasonably requested by the
Lenders from time to time concerning the business, financial condition and
property of the Borrower and each other Obligor.

7.4   Negative Covenants

     During the term of this Agreement, none of the Obligors shall, or shall
cause or permit any other Obligor, to do any of the things specified in this
Section 7.4.

(1)   Restrictions on Indebtedness       None of the Obligors (other than Waste
Management, Inc.) will create, incur, assume, or be or remain liable,
contingently or otherwise, with respect to any Debt, or become or be responsible
in any manner (whether by agreement to purchase any obligations, stock, assets,
goods or services, or to supply or advance any funds, assets, goods or services
or otherwise) with respect to any Debt of any other Person (other than Waste
Management, Inc. or any of its Subsidiaries), other than Debt which is permitted
under §8.1 of the U.S. Credit Agreement, as such provision (and all references
therein) exists at the date of this Agreement.   (2)   Restrictions on
Encumbrances

  (a)   None of the Obligors will create or incur or suffer to be created or
incurred or to exist any Encumbrance of any kind upon any property or assets of
any character, whether now owned or hereafter acquired, or upon the income or
profits therefrom; or transfer any of such property or assets or the income or
profits therefrom for the purpose of subjecting the same to the payment of Debt
or performance of any other obligation in priority to payment of its general
creditors; or acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; or suffer to exist for a period of more than
30 days after the same shall have been incurred any Debt or claim or demand
against it which if unpaid might by law or upon bankruptcy or insolvency, or

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      otherwise, be given any priority whatsoever over its general creditors; or
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles or chattel paper, with or without recourse, except for
Permitted Encumbrances.     (b)   Each Obligor covenants and agrees that if any
of them shall create or incur any Encumbrance upon any of their respective
property or assets, whether now owned or hereafter acquired, other than
Permitted Encumbrances (unless prior written consent shall have been obtained
from the Lenders), the Obligors will make or cause to be made effective
provision whereby the Obligations will be secured by such Encumbrance equally
and ratably with any and all other Debt thereby secured so long as such other
Debt shall be so secured; provided that the covenants of the Obligors contained
in this sentence shall only be in effect for so long as the Obligors shall be
similarly obligated under any other Debt; provided, further, that an Event of
Default shall occur for so long as such other Debt becomes secured
notwithstanding any actions taken by the Obligor to ratably secure the
Obligations hereunder.

(3)   Restrictions on Investments       None of the Obligors may make or permit
to exist or to remain outstanding any Investment, except to the extent that it
may do so in compliance with §8.3 of the U.S. Credit Agreement, as such
provision exists at the date of this Agreement,   (4)   Mergers, Consolidations,
Sales.

  (a)   No Obligor shall be a party to any amalgamation, merger, consolidation
or exchange of stock except to the extent that it may do so in compliance with
§8.4 of the U.S. Credit Agreement, as such provision exists at the date of this
Agreement.     (b)   None of the Obligors shall sell, transfer, convey or lease
any assets or group of assets, including the sale or transfer of any property
owned by such Obligor in order then or thereafter to lease such property or
lease other property which such Obligor intends to use for substantially the
same purpose as the property being sold or transferred, or sell or assign, with
or without recourse, any receivables, except to the extent that it may do so in
compliance with §8.4(b) of the U.S. Credit Agreement, as such provision exists
at the date of this Agreement.

(5)   Restricted Distributions and Redemptions       None of the Obligors will
(a) declare or pay any Distributions, or (b) redeem, convert, retire or
otherwise acquire shares of any class of its capital stock unless such action is
permitted under §8.5 of the U.S. Credit Agreement, as such provision exists at
the date of this Agreement.

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ARTICLE 8
DEFAULT

8.1   Events of Default

     The occurrence of any one or more of the following events shall constitute
an Event of Default under this Agreement:

  (a)   the Borrower fails to pay, whether by acceleration or otherwise, any
amount of principal (including any amount relating to a Banker’s Acceptance)
when due; or     (b)   the Borrower fails to pay any amount of interest, fees,
commissions or other Obligations (other than amounts on account of principal)
when due, and such failure continues for five Business Days after the date of
such default; or     (c)   there occurs a breach of any of the covenants in
Section 7.1 or Section 7.4; or     (d)   any Obligor makes any representation or
warranty in any Loan Document, or in any written statement or certificate made
or delivered pursuant to this Agreement which shall prove to have been false in
any material respect upon the date when made or deemed to be made; or     (e)  
there is a breach of any covenant, condition or other provision of any Loan
Document (other than a breach which is specifically dealt with elsewhere in this
Section 8.1), by any party thereto other than the Agent or the Lenders, and such
breach, if capable of being remedied, is not corrected or otherwise remedied
within 30 days after the Agent or any Lender gives written notice thereof to the
Borrower; or     (f)   any Obligor shall fail to pay when due, or within any
applicable period of grace, any Debt or obligations under Swap Contracts in an
aggregate amount greater than U.S. $50,000,000, or fail to observe or perform
any material term, covenant or agreement contained in any one or more agreements
by which it is bound, evidencing or securing any Debt or obligations under Swap
Contracts in an aggregate amount greater than U.S. $50,000,000 for such period
of time as would permit, or would have permitted (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof or terminate
its commitment with respect thereto; or     (g)   any Obligor makes an
assignment for the benefit of creditors, or admits in writing its inability to
pay or generally fails to pay its debts as they mature or become due, or
petitions or applies for the appointment of a trustee or other custodian,
liquidator or receiver of any Obligor, or of any substantial part of the assets
of any Obligor or commences any case or other proceeding relating to any Obligor
under any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law of any

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      jurisdiction, now or hereafter in effect, or takes any action to authorize
or in furtherance of any of the foregoing, or if any such petition or
application is filed or any such case or other proceeding is commenced against
any Obligor or any Obligor indicates its approval thereof, consent thereto or
acquiescence therein; or     (h)   if a decree or order is entered appointing
any such trustee, custodian, liquidator or receiver or adjudicating any Obligor
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of any Obligor
in an involuntary case under the bankruptcy laws of any jurisdiction as now or
hereafter constituted; or     (i)   if there shall remain in force,
undischarged, unsatisfied and unstayed, for more than 30 days, whether or not
consecutive, any final judgment against any Obligor which, with other
outstanding final judgments against any Obligor, exceeds in the aggregate U.S.
$25,000,000 after taking into account any undisputed insurance coverage; or    
(j)   if any of the Loan Documents shall be cancelled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Lenders, or any
action at law, suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on behalf of any
Obligor, or any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof; or     (k)   the Borrower
ceases to be directly or indirectly wholly-owned by Waste Management, Inc.; or  
  (l)   the occurrence of any Event of Default (as such term is defined in the
U.S. Credit Agreement as at the date of this Agreement) under the U.S. Credit
Agreement.

8.2   Acceleration and Termination of Rights, Pre-Acceleration Rights   (1)   If
any Event of Default occurs, no Lender shall be under any further obligation to
make Advances and the Required Lenders may instruct the Agent to give notice to
the Borrower (a) declaring the Lenders’ obligations to make Advances to be
terminated, whereupon the same shall forthwith terminate, (b) declaring the
Obligations or any of them to be forthwith due and payable, whereupon they shall
become and be forthwith due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower, and/or (c) demanding that the Borrower deposit forthwith with the
Agent for the Lenders’ benefit Collateral equal

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    to the full face amount at maturity of all Banker’s Acceptances then
outstanding for its account.   (2)   Notwithstanding the preceding paragraph, if
any Obligor becomes a bankrupt (voluntarily or involuntarily), or institutes any
proceeding seeking liquidation, dissolution, arrangement, winding-up, relief of
debtors or from creditors or the appointment of a receiver or trustee over any
material part of its property or analogous proceeding in any jurisdiction, then
without prejudice to the other rights of the Lenders as a result of any such
event, without any notice or action of any kind by the Agent or any Lender, and
without presentment, demand or protest, the Lenders’ obligation to make Advances
shall immediately terminate, the Obligations shall immediately become due and
payable and the Borrower shall be obligated to deposit forthwith with the Agent
for the Lenders’ benefit Collateral equal to the full face amount at maturity of
all Banker’s Acceptances then outstanding for its account   8.3   Payment of
Banker’s Acceptances   (1)   Immediately upon any Obligations becoming due and
payable under Section 8.2, the Borrower shall, without necessity of further act
or evidence, be and become thereby unconditionally obligated to deposit
forthwith with the Agent for the benefit of the Lenders, Collateral equal to the
full face amount at maturity of Banker’s Acceptances then outstanding for its
account and the Borrower hereby unconditionally promises and agrees to deposit
with the Agent immediately upon such demand Collateral in the amount so
demanded. The Borrower authorizes the Lenders, or any of them, to debit its
accounts with the amount required to pay such Banker’s Acceptances,
notwithstanding that such Banker’s Acceptances may be held by the Lenders, or
any of them, in their own right at maturity. Amounts paid to the Agent pursuant
to such a demand in respect of Banker’s Acceptances shall be applied against,
and shall reduce, pro rata among the Lenders, to the extent of the amounts paid
to the Agent in respect of Banker’s Acceptances, the obligations of the Borrower
to pay amounts then or thereafter payable under Banker’s Acceptances, at the
times amounts become payable thereunder.   (2)   The Borrower shall be entitled
to receive interest on cash held by the Agent as Collateral in accordance with
Section 11.12.   8.4   Remedies

     Upon the occurrence of any event by which any of the Obligations become due
and payable under Section 8.2, the Security shall become immediately enforceable
and the Required Lenders may instruct the Agent to take such action or
proceedings on behalf of the Lenders and in compliance with applicable laws as
the Required Lenders in their sole discretion deem expedient to enforce the
same, all without any additional notice, presentment, demand, protest or other
formality, all of which are hereby expressly waived by the Obligors.

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8.5   Saving

     Neither the Agent nor any Lender shall be under any obligation to any
Obligor or any other Person to realize any collateral or enforce the Security or
any part thereof or to allow any of the collateral to be sold, dealt with or
otherwise disposed of. None of the Agent or any Lender shall be responsible or
liable to any Obligor or any other Person for any loss or damage upon the
realization or enforcement of, the failure to realize or enforce the collateral
or any part thereof or the failure to allow any of the collateral to be sold,
dealt with or otherwise disposed of or for any act or omission on their
respective parts or on the part of any director, officer, agent, servant or
adviser in connection with any of the foregoing, except that the Agent and each
Lender may be responsible or liable for any loss or damage arising from its
wilful misconduct or gross negligence.

8.6   Perform Obligations

     If an Event of Default has occurred and is continuing and any Obligor has
failed to perform any of its covenants or agreements in the Loan Documents, the
Required Lenders, may, but shall be under no obligation to, instruct the Agent
on behalf of the Lenders to perform any such covenants or agreements in any
manner deemed fit by the Required Lenders without thereby waiving any rights to
enforce the Loan Documents. The reasonable expenses (including any legal costs)
paid by the Agent and/or the Lenders in respect of the foregoing shall be
secured by the Security.

8.7   Third Parties

     No Person dealing with the Lenders or any agent of the Lenders shall be
concerned to inquire whether the Security has become enforceable, or whether the
powers which the Lenders are purporting to exercise have become exercisable, or
whether any Obligations remain outstanding upon the security thereof, or as to
the necessity or expediency of the stipulations and conditions subject to which
any sale shall be made, or otherwise as to the propriety or regularity of any
sale or other disposition or any other dealing with the collateral charged by
such Security or any part thereof.

8.8   Remedies Cumulative

     The rights and remedies of the Lenders under the Loan Documents are
cumulative and are in addition to and not in substitution for any rights or
remedies provided by applicable laws. Any single or partial exercise by the
Lenders of any right or remedy for a default or breach of any term, covenant,
condition or agreement herein contained shall not be deemed to be a waiver of or
to alter, affect, or prejudice any other right or remedy or other rights or
remedies to which the Lenders may be lawfully entitled for the same default or
breach. Any waiver by the Lenders of the strict observance, performance or
compliance with any term, covenant, condition or agreement herein contained, and
any indulgence granted by the Lenders shall be deemed not to be a waiver of any
subsequent default.

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ARTICLE 9
THE AGENT AND THE LENDERS

9.1   Authorization of Agent

     Each Lender irrevocably designates and appoints the Agent as its agent
hereunder and under the other Loan Documents for all purposes of the Credit,
including for the purpose of holding and enforcing the Security in accordance
with and subject to the terms hereof and the terms of the other Loan Documents,
and authorizes it on behalf of such Lender to take such action and to exercise
such rights, powers and discretions as are expressly delegated to it under this
Agreement and the other Loan Documents and on the terms hereof or thereof
together with such other rights, powers and discretions as are reasonably
incidental thereto. The Agent may perform any of its duties hereunder or
thereunder by or through its agents, officers or employees, its Affiliates or
its Affiliates’ agents, officers or employees. The Agent hereby accepts each
such appointment. Each such appointment may only be terminated as expressly
provided in this Agreement. The Agent shall have only those duties and
responsibilities which are of a solely mechanical and administrative nature and
which are expressly specified in this Agreement, and it may perform such duties
by or through its agents or employees, but shall not by reason of this Agreement
have a fiduciary duty in respect of any Lender. As to any matters not expressly
provided for by this Agreement, the Agent is not required to exercise any
discretion or to take any action, but is required to act or to refrain from
acting (and is fully protected in so acting or refraining from acting) upon the
instructions of the Lenders or the Required Lenders, as the case may be. Those
instructions shall be binding upon all Lenders, but the Agent is not required to
take any action which exposes the Agent to personal liability or which is
contrary to this Agreement or applicable law.

9.2   Disclaimer of Agent

     The Agent makes no representation or warranty, and assumes no
responsibility with respect to the due execution, legality, validity,
sufficiency, enforceability or collectability of this Agreement or any other
Loan Document; provided, however, that the foregoing shall not be construed to
relieve the Agent from the performance of its own duties and responsibilities as
set forth herein. The Agent assumes no responsibility for the financial
condition of any Obligor, or for the performance of the obligations of any
Obligor under this Agreement or any other Loan Document. The Agent assumes no
responsibility with respect to the accuracy, authenticity, legality, validity,
sufficiency or enforceability of any documents, papers, materials or other
information furnished by or on behalf of any Obligor to the Agent on behalf of
the Lenders. The Agent shall not be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained herein or as to the use of the proceeds of the Credit or
(unless the officers or employees of the Agent active in their capacity as
officers or employees on the Borrower’s accounts have actual knowledge thereof,
or have been notified thereof in writing by an Obligor) of the existence or
possible existence of any Event of Default or Pending Event of Default. Neither
the Agent nor any of its directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them as Agent under
or in connection with the Agreement except for its or their own gross negligence
or wilful misconduct. With respect to its Commitment, the Advances made by the
Lender that is acting as Agent, and all amounts payable with respect thereto,
the Agent shall have

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the same rights and powers hereunder as any other Lender, and may exercise the
same as though it were not performing the duties and functions delegated to it
as Agent hereunder.

9.3   Failure of Lender to Fund

(1)   Unless the Agent has actual knowledge that a Lender has not made or will
not make available to the Agent for value on a Drawdown Date the applicable
amount required from such Lender pursuant to Sections 5.6 or 5.10, the Agent
shall be entitled to assume that such amount has been or will be received from
such Lender when so due and the Agent may (but shall not be obliged to), in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not in fact received by the Agent from such Lender on
such Drawdown Date and the Agent has made available a corresponding amount to
the Borrower on such Drawdown Date as aforesaid, such Lender shall pay to the
Agent on demand such amount together with an amount equal to the product of
(a) the Interbank Reference Rate per annum multiplied by (b) the amount that
should have been paid to the Agent by such Lender on such Drawdown Date and was
not, multiplied by (c) a fraction, the numerator of which is the number of days
that have elapsed from and including such Drawdown Date to but excluding the
date on which the amount is received by the Agent from such Lender and the
denominator of which is the number of days in the calendar year in which the
same is to be ascertained. A certificate of the Agent containing details of the
amounts owing by a Lender under this Section shall be binding and conclusive in
the absence of manifest error. If any such principal amount is not in fact
received by the Agent from such Lender on such Drawdown Date, the Agent shall be
entitled to recover from the Borrower, on demand, the related amount made
available by the Agent to the Borrower as aforesaid together with interest
thereon at the applicable rate per annum payable by the Borrower hereunder.

(2)   Notwithstanding the provisions of Section 9.3(1), if any Lender fails to
make available to the Agent its Applicable Percentage of any Advance (such
Lender being herein called the “Defaulting Lender”), the Agent shall forthwith
give notice of such failure by the Defaulting Lender to the Borrower and the
other Lenders. The Agent shall then forthwith give notice to the other Lenders
that any Lender may make available to the Agent all or any portion of the
Defaulting Lender’s Applicable Percentage of such Advance (but in no way shall
any other Lender or the Agent be obliged to do so) in the place of the
Defaulting Lender. If more than one Lender gives notice that it is prepared to
make funds available in the place of a Defaulting Lender in such circumstances
and the aggregate of the funds which such Lenders (herein collectively called
the “Contributing Lenders” and individually called the “Contributing Lender”)
are prepared to make available exceeds the amount of the Advance which the
Defaulting Lender failed to make, then each Contributing Lender shall be deemed
to have given notice that it is prepared to make available its Applicable
Percentage of such Advance based on the Contributing Lenders’ relative
commitments to advance in such circumstances. If any Contributing Lender makes
funds available in the place of a Defaulting Lender in such circumstances, then
the Defaulting Lender shall pay to each Contributing Lender making the funds
available in its place, forthwith on demand, each amount advanced on its behalf
together with interest thereon at the rate

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    applicable to such Advance from the date of advance to the date of payment,
against payment by the applicable Contributing Lender making the funds available
of all interest received in respect of the Advance from the Borrower. The
failure of any Lender to make available to the Agent its Applicable Percentage
of any Advance as required herein shall not relieve any other Lender of its
obligations to make available to the Agent its Applicable Percentage of any
Advance as required herein.   9.4   Payments by the Borrower   (1)   All
payments made by or on behalf of the Borrower pursuant to this Agreement shall
be made to and received by the Agent and shall be distributed by the Agent to
the Lenders as soon as possible upon receipt by the Agent. The Agent shall
distribute:

  (a)   payments of interest in accordance with each Lender’s Applicable
Percentage of the Credit;     (b)   repayments of principal in accordance with
each Lender’s Applicable Percentage of the Credit; and     (c)   all other
payments received by the Agent including amounts received upon the enforcement
of the Security in accordance with each Lender’s Applicable Percentage of the
Credit provided, however, that with respect to proceeds of realization, no
Lender shall receive an amount in excess of the amounts owing to it in respect
of the Obligations.

(2)   If the Agent does not distribute a Lender’s share of a payment made by the
Borrower to that Lender for value on the day that payment is made or deemed to
have been made to the Agent, the Agent shall pay to the Lender on demand an
amount equal to the product of (a) the Interbank Reference Rate per annum
multiplied by (b) the Lender’s share of the amount received by the Agent from
the Borrower and not so distributed, multiplied by (c) a fraction, the numerator
of which is the number of days that have elapsed from and including the date of
receipt of the payment by the Agent to but excluding the date on which the
payment is made by the Agent to such Lender and the denominator of which is the
number of days in the calendar year in which the same is to be ascertained.  
9.5   Payments by Agent   (1)   For greater certainty, the following provisions
shall apply to any and all payments made by the Agent to the Lenders hereunder:

  (a)   the Agent shall be under no obligation to make any payment (whether in
respect of principal, interest, fees or otherwise) to any Lender until an amount
in respect of such payment has been received by the Agent from the Borrower;    
(b)   if the Agent receives less than the full amount of any payment of
principal, interest, fees or other amount owing by the Borrower under this
Agreement, the Agent shall have no obligation to remit to each Lender any amount
other

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      than such Lender’s Applicable Percentage of the amount actually received
by the Agent;     (c)   if any Lender advances more or less than its Applicable
Percentage of a Credit, such Lender’s entitlement to payment shall be increased
or reduced, as the case may be, in proportion to the amount actually advanced by
such Lender;     (d)   if a Lender’s Applicable Percentage of an Advance has
been advanced, or a Lender’s Commitment has been outstanding, for less than the
full period to which any payment (other than a payment of principal) by the
Borrower relates, such Lender’s entitlement to such payment shall be reduced in
proportion to the length of time such Lender’s Applicable Percentage of the
relevant Credit or such Lender’s Commitment, as the case may be, has actually
been outstanding;     (e)   the Agent acting reasonably and in good faith shall,
after consultation with the Lenders in the case of any dispute, determine in all
cases the amount of all payments to which each Lender is entitled and such
determination shall, in the absence of manifest error, be binding and
conclusive; and     (f)   upon request, the Agent shall deliver a statement
detailing any of the payments to the Lenders referred to herein.

(2)   Unless the Agent has actual knowledge that the Borrower has not made or
will not make a payment to the Agent for value on the date in respect of which
the Borrower has notified the Agent that the payment will be made, the Agent
shall be entitled to assume that such payment has been or will be received from
the Borrower when due and the Agent may (but shall not be obliged to), in
reliance upon such assumption, pay the Lenders corresponding amounts. If the
payment by the Borrower is in fact not received by the Agent on the required
date and the Agent has made available corresponding amounts to the Lenders, the
Borrower shall, without limiting its other obligations under this Agreement,
indemnify the Agent against any and all liabilities, obligations, losses,
damages, penalties, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on or incurred by the Agent as a result, except
for those arising from the Agent’s gross negligence or wilful misconduct. A
certificate of the Agent with respect to any amount owing by the Borrower under
this Section shall be prima facie evidence of the amount owing in the absence of
manifest error. If the payment is not received by the Agent from the Borrower
within a reasonable time following the disbursement to the Lenders by the Agent,
the Lenders shall return the amounts received by them to the Agent with interest
at the Interbank Reference Rate.   9.6   Direct Payments

     The Lenders agree among themselves that, except as otherwise provided for
in this Agreement (including but not limited to Sections 11.9 and 11.10), and
except as necessary to adjust for Advances that are not in each Lender’s
Applicable Percentage under the Credit, all

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sums received by a Lender relating to this Agreement or by virtue of the
Security, whether received by voluntary payment, by the exercise of the right of
set off or compensation or by counterclaim, cross action or as proceeds of
realization of any Security or otherwise, shall be shared by each Lender in its
Applicable Percentage under the Credit and each Lender undertakes to do all such
things as may be reasonably required to give full effect to this Section,
including, all things as shall be necessary to cause the Lender in receipt of
such sum to share the excess amount rateably in its Applicable Percentage under
the Credit with the other Lenders. If any sum which is so shared is later
recovered from the Lenders who originally received it, the Lender shall restore
its Applicable Percentage under the Credit of such sum to such Lenders, without
interest. If any Lender shall obtain any payment of moneys due under this
Agreement as referred to above, it shall forthwith remit such payment to the
Agent and, upon receipt, the Agent shall distribute such payment in accordance
with the provisions of Section 9.5.

9.7   Administration of the Credit   (1)   Unless otherwise specified herein,
the Agent shall perform the following duties under this Agreement:

  (a)   take delivery of each Lender’s Applicable Percentage of an Advance and
make all Advances hereunder in accordance with the procedures set forth in
Sections 5.6 and 5.10;     (b)   use reasonable efforts to collect promptly all
sums due and payable by the Borrower pursuant to this Agreement;     (c)   make
all payments to the Lenders in accordance with the provisions hereof;     (d)  
hold the Security on behalf of the Lenders;     (e)   hold all legal documents
relating to the Credit, maintain complete and accurate records showing all
Advances made by the Lenders, all remittances and payments made by the Borrower
to the Agent, all remittances and payments made by the Agent to the Lenders and
all fees or any other sums received by the Agent and, except for accounts,
records and documents relating to the fees payable by the Borrower to the Agent
in its capacity as Agent under the Agency Fee Letter or the Arrangers under the
Fee Letter, allow each Lender and their respective advisors to examine such
accounts, records and documents at their own expense, and provide any Lender,
upon reasonable notice, with such copies thereof or information contained
therein as such Lender may reasonably require from time to time at the Lender’s
expense;     (f)   except as otherwise specifically provided for in this
Agreement, promptly advise each Lender upon receipt of each notice and deliver
to each Lender, promptly upon receipt, all other written communications
furnished by any Obligor to the Agent on behalf of the Lenders pursuant to this
Agreement, including copies of financial reports and certificates which are to
be furnished to the Agent; and

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  (g)   upon learning of same, promptly advise each Lender in writing of the
occurrence of an Event of Default or Pending Event of Default or the occurrence
of any event, condition or circumstance which would or could reasonably be
expected to have a Material Adverse Effect or of any material adverse
information coming to the attention of the Agent (using reasonable efforts)
relative to the Security or of the occurrence of any material adverse change in
the financial condition or property of any Obligor, provided that, except as
aforesaid, the Agent shall be under no duty or obligation whatsoever to provide
any notice to the Lenders and further provided that each Lender hereby agrees to
notify the Agent of any Event of Default or Pending Event of Default of which it
may become aware.

(2)   The Agent may take the following actions only with the prior consent of
the Required Lenders, unless otherwise specified in this Agreement:

  (a)   subject to Section 9.7(3), exercise any and all rights of approval
conferred upon the Lenders by this Agreement;     (b)   give written notice to
any Obligor in respect of any matter in respect of which notice may be required,
permitted, necessary or desirable in accordance with or pursuant to this
Agreement, promptly after receiving the consent of the Required Lenders, except
that the Agent shall, without direction from the Lenders, immediately give the
Borrower notice of any payment that is due or overdue under the terms of this
Agreement unless the Agent considers that it should request the direction of the
Required Lenders, in which case the Agent shall promptly request that direction;
    (c)   amend, modify or waive any of the terms of this Agreement, including
waiver of an Event of Default or Pending Event of Default, if such action is not
otherwise provided for in Section 9.7(3);     (d)   declare an Event of Default
or take, or cause to be taken by the Agent, action to enforce performance of the
Obligations and to realize upon the Security, including the appointment of a
receiver, the exercise of powers of distress, lease or sale given by the
Security or by law and the taking of foreclosure proceedings and/or the pursuit
of any other legal remedy necessary;     (e)   decide to accelerate the amounts
outstanding under the Credit; and     (f)   pay, or instruct the Agent to pay
insurance premiums, Taxes and any other sums as may be reasonably required to
protect the interests of the Lenders.

(3)   The Agent may take the following actions only if the prior unanimous
consent of the Lenders is obtained, unless otherwise specified herein:

  (a)   amend, modify, discharge, terminate or waive any of the terms of the
Security;

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  (b)   amend, modify, discharge, terminate or waive any of the terms of this
Agreement or the Security if such amendment, modification, discharge,
termination or waiver would increase the amount of the Credit, amend the purpose
of the Credit, reduce the interest rates and similar charges applicable to the
Credit, reduce the fees payable with respect to the Credit, extend any date
fixed for payment of principal, interest or any other amount relating to the
Credit or extend the term of the Credit; and     (c)   amend the definition of
“Required Lenders” or this Section 9.7(3).

    For greater certainty, no Lender’s Commitment or Applicable Percentage may
be amended without the consent of that Lender.   (4)   To the extent that any
Obligor or any Affiliate of a Obligor becomes a Lender, such Lender shall not be
permitted to vote on or consent to any matter under this Agreement on or to
which a Lender may vote or consent and the Commitment of such Lender shall be
deemed not to be outstanding for the purposes of determining whether a specified
majority has been achieved.   (5)   Notwithstanding Sections 9.7(2) and 9.7(3)
the Agent may, without the consent of the Lenders (but with the consent of the
Borrower), make, or cause to be made, amendments to the Loan Documents that are
for the sole purpose of curing any immaterial or administrative ambiguity,
defect or inconsistency, but shall immediately notify the Lenders of any such
action.   (6)   As between the Obligors, on the one hand, and the Agent and the
Lenders, on the other hand:

  (a)   all statements, certificates, consents and other documents which the
Agent purports to deliver on behalf of the Lenders or the Required Lenders shall
be binding on each of the Lenders, and none of the Obligors shall be required to
ascertain or confirm the authority of the Agent in delivering such documents;  
  (b)   all certificates, statements, notices and other documents which are
delivered by any Obligor to the Agent in accordance with this Agreement shall be
deemed to have been duly delivered to each of the Lenders;     (c)   all
payments which are delivered by the Borrower to the Agent in accordance with
this Agreement shall be deemed to have been duly delivered to each of the
Lenders; and     (d)   unless a Pending Event of Default or an Event of Default
has occurred and is continuing, the Borrower’s consent to the appointment of any
Successor Agent must be obtained, but the Borrower’s consent shall not be
unreasonably withheld.

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9.8   Rights of Agent   (1)   In administering the Credit, the Agent may retain,
at the expense of the Lenders if such expenses are not recovered from the
Borrower, such solicitors, counsel, auditors and other experts and agents as the
Agent may select, in its sole discretion, acting reasonably and in good faith
after consultation with the Lenders.   (2)   The Agent shall be entitled to rely
on any communication, instrument or document believed by it to be genuine and
correct and to have been signed by the proper individual or individuals, and
shall be entitled to rely and shall be protected in relying as to legal matters
upon opinions of independent legal advisors selected by it. The Agent may also
assume that any representation made by any Obligor is true and that no Event of
Default or Pending Event of Default has occurred unless the officers or
employees of the Lender acting as Agent, active in their capacity as officers or
employees responsible for the Borrower’s and the Guarantors’ accounts, have
actual knowledge to the contrary or have received notice to the contrary from
any other party to this Agreement.   (3)   The Agent may, without any liability
to account, accept deposits from and lend money to and generally engage in any
kind of banking, or other business with any Obligor, as if it were not the
Agent.   (4)   Except in its own right as a Lender, the Agent shall not be
required to advance its own funds for any purpose, and in particular, shall not
be required to pay with its own funds insurance premiums, taxes or public
utility charges or the cost of repairs or maintenance with respect to the assets
which are the subject matter of the Security, nor shall it be required to pay
with its own funds the fees of solicitors, counsel, auditors, experts or agents
engaged by it as permitted hereby.   (5)   The Agent shall be entitled to
receive a fee for acting as Agent as agreed between the Agent and the Borrower
from time to time.   9.9   Acknowledgements, Representations and Covenants of
Lenders   (1)   It is acknowledged and agreed by each Lender that it has itself
been, and will continue to be, solely responsible for making its own independent
appraisal of and investigations into the financial condition, creditworthiness,
property, affairs, status and nature of the Obligors. Accordingly, each Lender
confirms to the Agent that it has not relied, and will not hereafter rely, on
the Agent (a) to check or inquire on its behalf into the adequacy or
completeness of any information provided by any Obligor under or in connection
with this Agreement or the transactions herein contemplated (whether or not such
information has been or is hereafter distributed to such Lender by the Agent),
or (b) to assess or keep under review on its behalf the financial condition,
creditworthiness, property, affairs, status or nature of Obligors.   (2)   Each
Lender represents and warrants that it has the legal capacity to enter into this
Agreement pursuant to its charter and any applicable legislation and has not
violated its charter, constating documents or any applicable legislation by so
doing.

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(3)   Each Lender agrees to indemnify the Agent (to the extent not reimbursed by
the Borrower), rateably according to its Applicable Percentage from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
in any way relating to or arising out of the Loan Documents or the transactions
therein contemplated, provided that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent’s gross
negligence or wilful misconduct. Without limiting the generality of the
foregoing, each Lender agrees to reimburse the Agent for its Applicable
Percentage of any out of pocket expenses (including counsel fees) incurred by
the Agent in connection with the preservation of any rights of the Agent or the
Lenders under, or the enforcement of, or legal advice in respect of rights or
responsibilities under this Agreement, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. The obligation of the Lenders to
indemnify the Agent shall survive the termination of this Agreement and shall be
performed by the Lenders promptly upon demand by the Agent.   (4)   Each of the
Lenders acknowledges and confirms that in the event that the Agent does not
receive payment in accordance with this Agreement, it shall not be the
obligation of the Agent to maintain the Credit in good standing nor shall any
Lender have recourse to the Agent in respect of any amounts owing to such Lender
under this Agreement.   (5)   Each Lender acknowledges and agrees that its
obligation to advance its Applicable Percentage of Advances in accordance with
the terms of this Agreement is independent and in no way related to the
obligation of any other Lender hereunder.   (6)   Each Lender hereby
acknowledges receipt of a copy of this Agreement and the Security (to the extent
that the Security has been delivered) and acknowledges that it is satisfied with
the form and content of such documents.   9.10   Collective Action of the
Lenders

     Each of the Lenders hereby acknowledges that to the extent permitted by
applicable law, the Security and the remedies provided under the Loan Documents
to the Lenders are for the benefit of the Lenders collectively and acting
together and not severally and further acknowledges that its rights hereunder
and under the Security are to be exercised not severally, but by the Agent upon
the decision of the Required Lenders or Lenders as required by this Agreement.
Accordingly, notwithstanding any of the provisions contained herein or in the
Security each of the Lenders hereby covenants and agrees that it shall not be
entitled to take any action hereunder including any declaration of default
hereunder or thereunder but that any such action shall be taken only by the
Agent with the prior written agreement of the Required Lenders. Each of the
Lenders hereby further covenants and agrees that upon any such written agreement
being given by the Required Lenders, it shall co operate fully with the Agent to
the extent requested by the Agent. Notwithstanding the foregoing, in the absence
of instructions from the Lenders and where in the sole opinion of the Agent,
acting reasonably and in good

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faith, the exigencies of the situation warrant such action, the Agent may
without notice to or consent of the Lenders take such action on behalf of the
Lenders as it deems appropriate or desirable in the interest of the Lenders.

9.11   Successor Agent

     Subject to the appointment and acceptance of a Successor Agent as provided
in this Section, and subject to Section 9.7(6)(d), the Agent may resign at any
time by giving 30 days written notice thereof to the Lenders and the Borrower,
and may be removed at any time by the Required Lenders upon 30 days written
notice. Upon receipt of notice by the Lenders of the resignation of the Agent,
or upon giving notice of termination to the Agent, the Required Lenders may,
within 21 days, appoint a successor from among the Lenders or, if no Lender is
willing to accept such an appointment, from among other banks or authorized
foreign banks to which the Bank Act (Canada) applies, which have combined
capital and reserves in excess of $250,000,000, and which have offices in
Toronto (the “Successor Agent”). If no Successor Agent has been so appointed and
has accepted such appointment within 21 days after the retiring Agent’s giving
of notice of resignation or receiving of notice of termination, then the
retiring Agent may, on behalf of the Lenders, appoint a Successor Agent. Upon
the acceptance of any appointment as Agent hereunder by a Successor Agent, the
retiring Agent shall pay the Successor Agent any unearned portion of any fee
paid to the Agent for acting as such, and the Successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its further
duties and obligations as Agent under this Agreement and the other Loan
Documents (but for greater certainty, shall not be discharged from any existing
liabilities resulting from its own gross negligence or wilful misconduct). After
any retiring Agent’s resignation hereunder as Agent, the provisions of this
Article shall continue to enure to its benefit and be binding upon it as to any
actions taken or omitted to be taken by it while it was Agent hereunder. Each
Obligor shall, at its expense, at the request of the Successor Agent, do all
such further acts and execute and deliver all such further documents,
agreements, certificates and instruments as may, in the reasonable opinion of
the Successor Agent, be necessary or desirable in order to fully perform and
carry out the purpose and intent of this Section and to ensure that any Security
granted in favour of the Agent on behalf of the Lenders continues for the
benefit of the Successor Agent on behalf of the Lenders.

9.12   Provisions Operative Between Lenders and Agent Only

     Except for the provisions of Sections 9.7(6), 9.9 and this Section 9.12,
the provisions of this Article 9 relating to the rights and obligations of the
Lenders and the Agent inter se shall be operative as between the Lenders and the
Agent only, and no Obligor shall have any rights or obligations under or be
entitled to rely for any purpose upon such provisions.

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ARTICLE 10
ADDITIONAL LENDERS, SUCCESSORS AND ASSIGNS

10.1   Successors and Assigns   (1)   The Loan Documents shall be binding upon
and enure to the benefit of the Agent, each Lender, each Obligor and their
respective successors and permitted assigns, except that no Obligor shall assign
any rights or obligations with respect to this Agreement or any of the other
Loan Documents without the prior written consent of each Lender.   (2)   Any
Lender shall be entitled to assign in whole or in part its individual rights and
obligations hereunder or to permit other financial institutions to participate
in the Credit, all in accordance with the provisions of Sections 10.2 and 10.3
and the other terms of this Agreement. Each Obligor hereby consents to the
disclosure of any information relating to it to any Lender or participant or
potential Lender or participant provided that the Lender or participant or
potential Lender or participant agrees in writing to keep all non-public
information confidential except as may otherwise be required by applicable law
or Governmental Authority.   (3)   Notwithstanding any other provision of this
Agreement, each Lender agrees that it shall not assign any portion of its rights
and obligations under this Agreement, including any portion of its Commitment,
without the prior written consent of the Agent and the Borrower, which consent
of the Borrower shall not be unreasonably withheld, provided however that the
consent of the Borrower shall not be required if an Event of Default has
occurred and is continuing or in connection with an assignment to any existing
Lender or to any of their respective Affiliates. No consent of the Borrower is
required if any Lender offers to sell or sells a participation in any portion of
its rights and obligations under this Agreement pursuant to Section 10.3. If any
such assignment or participation is made to a Person which is a non resident of
Canada within the meaning of the Income Tax Act (Canada) for the purposes of the
withholding tax provisions in Part XIII of the Income Tax Act (Canada), the
Borrower will not be required to make any payment to such Person pursuant to
Section 11.9 which would otherwise have been payable by virtue of the residency
of such Person.   (4)   A participation by a Lender of its interest (or a part
thereof) hereunder or a payment by a participant to a Lender as a result of the
participation will not constitute a payment hereunder to the Lender or an
Advance to the Borrower. A payment made by an assignee to an assigning Lender in
order for the assignee to assume its Applicable Percentage of Advances made by
the assigning Lender will reduce the Advances owing by the Borrower to the
assigning Lender and will be deemed to be Advances by the assignee to the
Borrower as of the date that the payment is made, excluding in each case the
effect of any premium or discount.

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10.2   Assignments   (1)   Subject to Section 10.1 and the other terms of this
Agreement, each of the Lenders may assign to one or more assignees all or a
portion of their respective rights and obligations under this Agreement
(including all or a portion of their respective Commitments). No assignment by a
Lender of its Commitment hereunder shall be for an amount less than $5,000,000
unless the Commitment of such Lender at the time of such assignment is less than
that amount and the entirety of its Commitment is disposed of. The parties to
each such assignment shall execute and deliver an Assignment Agreement to the
Agent, for its consent and recording in the Register and, except in the case of
an assignment by a Lender to an Affiliate of that Lender, shall pay a processing
and recording fee of $2,500 to the Agent. After such execution, delivery,
consent and recording (a) the assignee thereunder shall be a party to this
Agreement and, to the extent that rights and obligations hereunder have been
assigned to it, have the rights and obligations of a Lender hereunder, and
(b) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights and be released from its obligations under this
Agreement, other than obligations in respect of which it is then in default and
liabilities arising from its actions prior to the assignment. In the case of an
Assignment Agreement covering all or the remaining portion of an assigning
Lender’s rights and obligations under this Agreement, such Lender shall cease to
be a party hereto.   (2)   The agreements of an assignee contained in an
Assignment Agreement shall benefit the assigning Lender thereunder, the other
Lenders, the Agent and the Borrower in accordance with the terms of the
Assignment Agreement.   (3)   The Agent shall maintain at its address referred
to herein a copy of each Assignment Agreement delivered to and acknowledged by
it and a register for recording the names and addresses of the Lenders and the
Commitment under the Credit of each Lender from time to time (the “Register”).
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error. The Borrower, the Agent, each of the Lenders and each of
the Guarantors may treat each person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement, and need not recognize any
person as a Lender unless it is recorded in the Register as a Lender. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.   (4)   Upon
its receipt of an Assignment Agreement executed by an assigning Lender and an
assignee and approved by the Agent and the Borrower, if applicable, the Agent
shall, if the Assignment Agreement has been completed and is in the required
form with such immaterial changes as are acceptable to the Agent:

  (a)   record the information contained therein in the Register; and     (b)  
give prompt notice thereof to the Borrower and the other Lenders, and provide
them with an updated version of Schedule E.

 

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10.3   Participations   (1)   Each Lender may (subject to the provisions of
Section 10.1) sell participations to one or more financial institutions or other
persons in or to all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment), but the participant
shall not become a Lender and:

  (a)   the Lender’s obligations under this Agreement (including its Commitment)
shall remain unchanged;     (b)   the Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations;     (c)   the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with the Lender in connection with the Lender’s rights and obligations
under this Agreement; and     (d)   no participant shall have any right to
approve any amendment or waiver of any provision of this Agreement, or any
consent to any departure by any Person therefrom (provided however that, for
greater certainty, the foregoing shall not limit or restrict a Lender from
agreeing with its participant that the Lender will not, without the consent of
its participant, consent to any amendment or waiver that would increase the
amount of any Credit, reduce the interest rates, fees or similar charges
applicable to any Credit, extend the date fixed for payment of any principal,
interest or other amount relating to any Credit, extend the term of any Credit
or, except as permitted in Section 9.7(5), discharge any Security).

(2)   Each participant shall have the right to be provided by the Lender from
whom it has obtained its participation with all information relating to each
Obligor which is provided to any Lender and shall have the benefit of
Sections 11.8, 11.10 and 11.11. No participant shall have the benefit of
Section 11.9 except to the extent that the Lender from whom it has obtained its
participation is itself entitled to compensation under that Section.

ARTICLE 11
MISCELLANEOUS PROVISIONS

11.1   Defined Terms

          All terms used in any of the Loan Documents (other than this
Agreement) which are defined in this Agreement shall have the meanings defined
herein unless otherwise defined in the other Loan Document.

11.2   Severability

          Any provision of this Agreement which is or becomes prohibited or
unenforceable in any relevant jurisdiction shall not invalidate or impair the
remaining provisions hereof which shall be deemed severable from such prohibited
or unenforceable provision and any such

 

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prohibition or unenforceability in any such jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. Should this
Agreement fail to provide for any relevant matter, the validity, legality or
enforceability of this Agreement shall not thereby be affected.

11.3   Amendment, Supplement or Waiver

          No amendment, supplement or waiver of any provision of the Loan
Documents, nor any consent to any departure by an Obligor therefrom, shall in
any event be effective unless it is in writing, makes express reference to the
provision affected thereby and is signed by the Agent for and on behalf of the
Lenders or the Required Lenders, as the case may be, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. In addition, any amendment or supplement shall require
the written consent of the other parties to the Loan Document in question. No
waiver or act or omission of the Agent, the Lenders, or any of them, shall
extend to or be taken in any manner whatsoever to affect any subsequent Event of
Default or breach by an Obligor of any provision of the Loan Documents or the
rights resulting therefrom.

11.4   Governing Law

          Each of the Loan Documents, except for those which expressly provide
otherwise, shall be conclusively deemed to be a contract made under, and shall
for all purposes be governed by and construed in accordance with, the laws of
the Province of Ontario and the laws of Canada applicable in Ontario. For the
purposes of all legal proceedings this Agreement will be deemed to have been
performed in the Province of Ontario and the courts of the Province of Ontario
will have jurisdiction to entertain any action arising under this Agreement.
Each party to this Agreement hereby irrevocably and unconditionally attorns to
the non exclusive jurisdiction of the courts of the Province of Ontario and all
courts competent to hear appeals therefrom.

11.5   This Agreement to Govern

          In the event of any conflict or inconsistency between the terms of
this Agreement and the terms of any other Loan Document, the provisions of this
Agreement shall govern to the extent necessary to remove the conflict or
inconsistency.

11.6   Currency   (1)   All payments made hereunder shall be made in the
currency in respect of which the obligation requiring such payment arose. Unless
the context otherwise requires, all amounts expressed in this Agreement in terms
of money shall refer to Canadian Dollars.   (2)   Except as otherwise expressly
provided in this Agreement, wherever this Agreement contemplates or requires the
calculation of the equivalent in one currency of an amount expressed in another
currency, the calculation shall be made on the basis of the Exchange Rate, at
the effective date of the calculation.

 

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11.7   Liability of Lenders

          The liability of the Lenders in respect of all matters relating to
this Agreement and the other Loan Documents is several and not joint or joint
and several. Without limiting that statement, the obligations of the Lenders to
make Advances is limited to their respective Applicable Percentages of any
Advance that is requested, and, in the aggregate, to their respective Applicable
Percentages of the total amounts of the Credit.

11.8   Expenses and Indemnity   (1)   All statements, reports, certificates,
opinions, appraisals and other documents or information required to be furnished
to the Lenders, the Agent, or any of them, by any Obligor under this Agreement
shall be supplied without cost to the Lenders, the Agent, or any of them. The
Borrower shall pay on demand all reasonable third party costs and expenses
(including the reasonable fees and expenses of counsel) for the Agent, on its
and the Lenders’ collective behalf, but not separately for individual Lenders
and the Agent, on a solicitor and own client basis, incurred in connection with
(a) the preparation, execution, delivery, and enforcement of the Loan Documents
and all amendments, waivers and consents with respect thereto and the
syndication of the Credit, (b) obtaining advice as to their rights and
responsibilities in connection with the Credit and the Loan Documents,
(c) reviewing, inspecting and appraising the collateral that is the subject of
the Security at reasonable intervals (but, unless an Event of Default has
occurred and is continuing, no more frequently than once each calendar year),
and (d) all other matters relating to the Credit, excluding any assignment or
participation of an interest in the Credit following the initial Advance under
this Agreement. Such costs and expenses shall be payable whether or not an
Advance is made under this Agreement.   (2)   The Borrower shall indemnify each
of the Agent, the Lenders and their respective agents, receivers, successors,
assigns, officers, directors and employees (collectively for the purpose of this
Section 11.8 the “Indemnitees”) (in respect of each of whom it is agreed that
the Agent and the Lenders are acting as agent for the purpose of agreeing to the
availability of such indemnity) from and against any claim, liability,
obligation, loss, damage or expense (including reasonable legal fees and
expenses) which any of them may sustain or incur as a consequence of the
consummation of the transactions contemplated by this Agreement, except any of
the foregoing which resulted from the gross negligence or wilful misconduct of
the Indemnitee.   (3)   The agreements in this Section 11.8 shall survive the
termination of this Agreement and repayment of the Obligations.   11.9   Manner
of Payment and Taxes   (1)   All payments to be made by or on behalf of each
Obligor (or in the case of upfront fees and indemnity fees, by the Agent or any
Lender to another Lender or to an assignee of an interest in the Credit) in
connection with the Loan Documents are to be made without set off, compensation
or counterclaim, free and clear of and without

 

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deduction for or on account of any Tax (other than Excluded Taxes), except if
such deduction is required by applicable law or the administration thereof. If
any Tax (other than Excluded Taxes) is deducted or withheld from any payments
under the Loan Documents (including the remittance provided for in this
Section), the Obligor making payment shall promptly remit to the Agent for the
Lenders’ benefit in the currency in which such payment was made, the equivalent
of the amount of Tax so deducted or withheld together with the relevant receipt
issued by the taxing or other receiving authority. Subject to Section 5.18, if
the Borrower is prevented by operation of law or otherwise from paying, causing
to be paid or remitting such Tax (other than Excluded Taxes), the interest or
other amount payable under the Loan Documents will be increased to such rates as
are necessary to yield and remit to the Lenders the principal sum advanced or
made available together with interest at the rates specified in the Loan
Documents after provision for payment of such Tax.

(2)   If any Lender or the Agent becomes liable for any Tax (other than Excluded
Taxes) in the jurisdiction in which the person making a payment under the Loan
Documents is located as a result of a payment being made without the required
Tax (other than Excluded Taxes) in that jurisdiction having been deducted or
withheld, the payer shall indemnify the Lender or the Agent, as the case may be,
for such Tax and any interest and penalties thereon, and the indemnity payment
shall be increased as necessary so that after the imposition of any such Tax in
that jurisdiction on the indemnity payment (including Tax in respect of any such
increase in the indemnity payment), the Lender or the Agent shall receive the
full amount of such Taxes, interest and penalties for which it is liable in that
jurisdiction as a result of the failure to deduct or withhold such Tax.   (3)  
None of the Obligors shall be required to pay any additional amounts under
Section 11.9 of this Agreement (a) to any Lender that is an original party to
this Agreement as at the Closing Date and is a non resident of Canada within the
meaning of the Income Tax Act (Canada) for the purposes of the withholding tax
provisions in Part XIII of the Income Tax Act (Canada), or (b) to any Lender
that was not a non resident of Canada within the meaning of the Income Tax Act
(Canada) for the purposes of the withholding tax provisions in Part XIII of the
Income Tax Act (Canada) as at the Closing Date who becomes such a non-resident
of Canada subsequent to the Closing Date.   11.10   Change in Law   (1)   If any
change in any applicable law, rule, guideline, treaty or official directive
(whether or not having the force of law) or in the interpretation or application
thereof by any court or by any governmental agency, central bank or other
authority or entity charged with the administration thereof which now or
hereafter:

  (a)   subjects any Lender to any Tax (except for Excluded Taxes) or changes
the basis of taxation, or increases any existing Tax (except for Excluded
Taxes), on payments of principal, interest, fees or other amounts payable by the
Borrower to the Lenders under this Agreement;

 

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  (b)   imposes, modifies or deems applicable any reserve, special deposit or
similar requirements against assets held by, or deposits in or for the account
of or loans by or any other acquisition of funds by, an office of any of the
Lenders; or     (c)   imposes on any of the Lenders or expects there to be
maintained by any of the Lenders any capital adequacy or additional capital
requirements in respect of any Advance or the Credit hereunder or any other
condition with respect to this Agreement,

and the result of any of the foregoing will be to increase the cost to, or
reduce the amount of principal, interest or other amount received or receivable
by any Lender hereunder or its effective return hereunder in respect of making,
maintaining or funding such Advance, the affected Lender will determine that
amount of money which will compensate the affected Lender for such increase in
cost or reduction in income (herein referred to as “Additional Compensation”).
Upon the affected Lender having determined that it is entitled to Additional
Compensation in accordance with the provisions of this Section 11.10, the
affected Lender will promptly so notify the Borrower and provide to the Borrower
a photocopy of the relevant law, rule, guideline, treaty or official directive
and a certificate of a duly authorized officer of the affected Lender setting
forth the Additional Compensation and the basis of calculation therefor, which
will be conclusive evidence of such Additional Compensation in the absence of
manifest error. The Borrower will pay to the affected Lender within 10 Business
Days of the giving of such notice the Additional Compensation calculated to the
date of such notification. The affected Lender will be entitled to be paid such
Additional Compensation from time to time to the extent that the provisions of
this Section 11.10 are then applicable notwithstanding that the affected Lender
has previously been paid any Additional Compensation. The affected Lender will
endeavour to limit the incidence of any such Additional Compensation, including
seeking recovery for the account of the Borrower, by appealing any assessment at
the expense of the Borrower upon the Borrower’s request. If the affected Lender
subsequently recovers all or a part thereof, it will repay an equal amount to
the Borrower.

(2)   If a Lender gives the notice provided for in Section 11.10(1) with respect
to any Advance (an “Affected Advance”), the Borrower may, upon 10 Business Days
notice to that effect given to such Lender (which notice shall be irrevocable),
either prepay in full without penalty the Affected Advance together with accrued
and unpaid interest on the principal amount so prepaid up to the date of such
prepayment, such compensation as may be payable pursuant to Section 11.10(1) to
the date of such prepayment and all costs, losses and expenses incurred by the
Lender by reason of the liquidation or re employment of deposits or other funds
or for any other reason whatsoever resulting from the repayment of such Affected
Advance or any part thereof on other than the last day of the applicable period,
or may arrange for another bank or financial institution to purchase all of the
interest of such Lender in the Advance represented by the Affected Advance (and,
in such event, such Lender shall sell, assign and transfer all of its interest
in the Advance represented by the Affected

 

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Advance to such other bank or financial institution upon payment to such Lender
by such other bank or financial institution of the same amount as would have
been payable by the Borrower if it had prepaid the Affected Advance) and upon
either such payment being made, that Lender’s obligation to make such Affected
Advance to the Borrower under this Agreement shall terminate. The other Lenders
shall be given the first opportunity to make any such purchase pro rata in
accordance with their respective Applicable Percentages or as they may otherwise
agree.

11.11   Illegality

          If the adoption of any applicable law, treaty or official directive
(whether or not having the force of law) or any change therein or in the
interpretation or application thereof by any court or by any governmental or
other authority or central bank or comparable agency or any other entity charged
with the interpretation or administration thereof or compliance by any Lender
with any request or direction (whether or not having the force of law) of any
such authority, central bank or comparable agency or entity, now or hereafter
makes it unlawful or impossible for such Lender to make, fund or maintain an
Advance or to give effect to its obligations in respect of such an Advance, such
Lender may, by notice thereof to the Borrower, declare its obligations under
this Agreement to be terminated whereupon the same will forthwith terminate, and
the Borrower will prepay within the time required by such law (or at the end of
such longer period as such Lender at its discretion has agreed) the principal of
such Advance together with accrued interest and such Additional Compensation as
may be applicable to the date of such payment. The Lender will also provide to
the Borrower a photocopy of the relevant law, treaty or directive. The Borrower
will be responsible for any costs, losses or expenses incurred by such Lender by
reason of the liquidation or re employment of deposits or other funds or for any
other reason whatsoever resulting from the repayment of such Advance or any part
thereof on other than the last day of the applicable period of such Advance. If
any such change will only affect a portion of such Lender’s obligations under
this Agreement which is, in the opinion of such Lender, severable from the
remainder of this Agreement so that the remainder of this Agreement may be
continued in full force and effect without otherwise affecting any of the
obligations of such Lender or the Borrower hereunder, such Lender will only
declare its obligations under that portion so terminated.

11.12   Interest on Miscellaneous Amounts   (1)   If the Borrower fails to pay
any amount payable hereunder on the due date (including principal, interest
thereon, interest upon interest or any other amount), the Borrower shall, on
demand, pay interest on such overdue amount to the Agent from and including such
due date up to but excluding the date of actual payment, both before and after
demand, default or judgment, at a rate of interest per annum equal to the sum of
the Prime Rate plus 2.0% per annum, compounded monthly.   (2)   If the Borrower
deposits cash as Collateral pursuant to a requirement under this Agreement, the
Agent, Lender or Lenders, as applicable, holding the cash shall pay the Borrower
interest on the cash while it continues to be held as Collateral at the rate
offered by the relevant Lender or Agent from time to time for deposits in the
relevant currency of comparable size and term.

 

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11.13   Address for Notice

          Notice to be given under the Loan Documents shall, except as otherwise
specifically provided, be in writing addressed to the party for whom it is
intended and, unless the law or a specific provision in another Loan Document
deems a particular notice to be received earlier, a notice shall not be deemed
received until actual receipt thereof by the other party. The addresses of the
parties hereto for the purposes hereof shall be the addresses specified beside
their respective signatures to this Agreement or on any Assignment Agreement, or
such other mailing, internet e-mail, secure internet website or telecopier
addresses as each party from time to time may notify the other as aforesaid.

11.14   Time of the Essence

          Time shall be of the essence in this Agreement.

11.15   Further Assurances

          Each Obligor shall, at its expense, at the request of the Agent acting
on the instructions of the Required Lenders, do all such further acts and
execute and deliver all such further documents, agreements, certificates and
instruments as may, in the reasonable opinion of the Required Lenders, be
necessary or desirable in order to fully perform and carry out the purpose and
intent of the Loan Documents.

11.16   Term of Agreement

          Except as otherwise provided herein, this Agreement shall remain in
full force and effect until the indefeasible payment and performance in full in
cash of all of the Obligations and the termination of the Commitments. The
obligations of the Obligors in Sections 7.2(10), 11.8 and 11.9 and of the
Lenders in Article 9 shall continue for the benefit of those to whom the
obligations are owed notwithstanding the termination of this Agreement or the
termination of any particular Person’s role as Obligor, Agent or Lender.

11.17   Payments on Business Day

          Whenever any payment or performance under the Loan Documents would
otherwise be due on a day other than a Business Day, such payment shall be made
on the following Business Day, unless the following Business Day is in a
different calendar month, in which case the payment shall be made on the
preceding Business Day.

11.18   Counterparts and Facsimile

          This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. For the
purposes of this Section, the delivery of a facsimile copy of an executed
counterpart of this Agreement shall be deemed to be valid execution and delivery
of this Agreement.

 

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11.19   Waiver of Jury Trial and Consequential Damages

(1)   Each party hereto hereby waives, to the fullest extent permitted by
applicable law, any right it may have to a trial by jury in any legal proceeding
directly or indirectly arising out of or relating to this the Loan Documents,
the transactions contemplated thereby or any course of conduct, course of
dealing, statements (whether oral or written) or actions of any party (whether
based on contract, tort or any other theory).   (2)   No party shall assert, and
each party hereby waives, to the fullest extent permitted by applicable law, any
claim against any other party on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, the Loan Documents, the
transactions contemplated thereby or any course of conduct, course of dealing,
statements (whether oral or written) or actions of any party (whether based on
contract, tort or any other theory).   (3)   Each Obligor acknowledges and
agrees that none of the Agent or the Lenders shall have any liability to them in
relation to any due diligence investigations conducted by any of them in
connection with the transactions contemplated hereby or be under any obligation
whatsoever to disclose to them any information received or facts disclosed by
any such investigations. Each Obligor further acknowledges and agrees that it is
not relying, will not rely, and will not be deemed, in any respect whatsoever,
to have relied upon the facts received by and information disclosed to any of
the Agent or the Lenders under or in connection with such due diligence
investigations.   (4)   Each party hereto (a) certifies that no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing provisions, and (b) acknowledges that it and the other parties hereto
have been induced to enter into this Agreement by, among other things, the
waivers, acknowledgments and certifications in this Section.

11.20   Whole Agreement

          Except in relation to matters contemplated by the other Loan
Documents, this Agreement constitutes the whole and entire agreement between the
parties hereto concerning the matters addressed in this Agreement, and cancels
and supersedes any prior agreements, undertakings, declarations, commitments or
representations, written or verbal, in respect thereof.

11.21   English Language

          The Loan Documents have been negotiated in English and will be or have
been executed in the English language. Les soussigné ont expressément demandé
que ce document soit rédigé en langue anglaise. All paper writings given or
delivered pursuant to this Agreement and the other Loan Documents shall, if
requested by the Agent, be in the English language or, if not, shall be
accompanied by a certified English translation thereof. The English language
version of any document shall, absent manifest error, control the meaning and
interpretation of the matters set forth therein.

 

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- 64 -

11.22   Date of Agreement

          This Agreement may be referred to as being dated 30 November 2005 or
as of 30 November 2005, notwithstanding the actual date of execution.
* * * *
[SIGNATURE PAGES FOLLOW]

 

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- S1 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   THE BANK OF NOVA SCOTIA, as Agent    
 
           
The Bank of Nova Scotia, as Agent
           
Scotia Capital
  By:   /s/ I. D. McKay    
Corporate Banking – Loan Syndications
     
 
I. D. McKay    
62nd Floor
      Director    
Scotia Plaza
           
40 King Street West
           
Toronto, ON M5W 2X6
  By:   /s/ J. Qi
 
J. Qi    
Attention: Unit Head
      Associate    
 
           
Facsimile: (416) 866-3329
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

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- S2 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   WASTE MANAGEMENT OF CANADA        
CORPORATION    
Waste Management of Canada Corporation
           
 
           
c/o Waste Management, Inc.
  By:   /s/ Cherie C. Rice    
1001 Fannin Street, Suite 4000
     
 
Name: Cherie C. Rice    
Houston, Texas 77002
      Title: Vice President and Treasurer    
 
           
Attention: Treasurer
           
 
           
 
  By:   /s/ Jay Clement
 
   
Facsimile: (713) 942-1580
      Name: Jay Clement    
 
      Title: Assistant Treasurer    
With copy to General
           
Counsel, facsimile number
           
(713) 209-9710
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

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- S3 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   WASTE MANAGEMENT, INC.    
 
           
Waste Management, Inc.
           
1001 Fannin Street, Suite 4000
  By:   /s/ Cherie C. Rice    
Houston, Texas 77002
     
 
Name: Cherie C. Rice    
 
      Title: Vice President and Treasurer    
Attention: Treasurer
           
 
           
Facsimile: (713) 942-1580
  By:   /s/ Jay Clement    
 
     
 
Name: Jay Clement    
With copy to General Counsel,
      Title: Assistant Treasurer    
facsimile number (713) 209-9710
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S4 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   WASTE MANAGEMENT HOLDINGS, INC.    
 
           
Waste Management Holdings, Inc.
           
1001 Fannin, Suite 4000
  By:   /s/ Cherie C. Rice    
Houston, Texas 77002
     
 
Name: Cherie C. Rice    
 
      Title: Vice President and Treasurer    
Attention: Treasurer
           
 
           
 
  By:   /s/ Jay Clement    
Facsimile: (713) 942-1580
     
 
Name: Jay Clement    
 
      Title: Assistant Treasurer    
With copy to General Counsel,
           
facsimile number (713) 209-9710
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S5 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   BNP PARIBAS (CANADA)    
 
           
BNP Paribas (Canada)
           
Royal Trust Tower
  By:   /s/ Don Lee    
77 King Street West
     
 
Don Lee    
Suite 4100
      Managing Director    
P.O. Box 31
           
T-D Centre
           
Toronto, ON M5K 1N8
  By:   /s/ Andrew Sclater    
 
     
 
Andrew Sclater    
Attention: Vice-President
      Vice President    
Facsimile: (416) 947-3538
           
 
           
With a copy to
           
 
           
BNP Paribas (Canada)
           
1981, McGill College Avenue
           
Montreal, QC H3A 2W8
           
 
           
Attention: Paula Fortin/AnnaCiolfi
           
Facsimile: (514) 285-2944
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S6 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   THE BANK OF NOVA SCOTIA    
 
           
The Bank of Nova Scotia, as Lender
           
West Metro Commercial Banking Centre
  By:   /s/ P. J. Armstrong    
2 Robert Speck Parkway
     
 
P. J. Armstrong    
Mississauga, ON L4Z 1H8
      Vice-President    
 
           
Attention: Unit Head
           
 
           
 
  By:   /s/ S. G. Zaki    
Facsimile: (905)276-4920
     
 
S. G. Zaki    
 
      Senior Relationship Manager    

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S7 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

          Address For Notice   BANK OF AMERICA, NATIONAL     ASSOCIATION (CANADA
BRANCH)
Bank of America, National Association
       
(Canada Branch)
       
200 Front Street West
       
Suite 2700
  By:   /s/ Medina Sales De Andrade
 
       
Toronto, Ontario M5V 3L2
      Medina Sales De Andrade         Assistant Vice President
 
       
Attention: Medina Sales De Andrade
       
                    Assistant Vice President
       
 
       
Facsimile: (416) 349-4282/4283
       
 
       
With a copy to:
       
 
       
Bank of America, National Association
       
100 Federal Street
       
Boston, MA 02110
       
 
       
Attention: Maria F. Maia
       
                    Managing Director
       
 
       
Facsimile: (617) 434-2160
       

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S8 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   MIZUHO CORPORATE BANK (CANADA)    
 
           
Mizuho Corporate Bank (Canada)
           
100 Yonge Street, Suite 1102, Box 29
  By:   /s/ Bill McFarland    
Toronto, ON M5C 2W1
     
 
Bill McFarland    
 
      Vice President    
Attention: Bill McFarland
           
 
           
Facsimile: (416) 367-3452
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S9 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   ABN AMRO BANK N.V.         (CANADA BRANCH)  
 
ABN AMRO Bank N.V., Canada Branch
           
79 Wellington Street West
           
Suite 1500
  By:   /s/ Lawrence J. Maloney    
Toronto-Dominion Centre
     
 
Lawrence J. Maloney    
Toronto, ON M5K 1G8
      Managing Director    
 
           
Attention: Vice President
           
 
           
 
  By:   /s/ H. Bayu Budiatimanto    
Facsimile: (416) 367-7937
     
 
H. Bayu Budiatimanto    
 
      Assistant Vice-President    

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S10 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   SUMITOMO MITSUI BANKING         CORPORATION
OF CANADA    
Sumitomo Mitsui Banking Corporation of
           
Canada
           
Ernst & Young Tower
  By:   /s/ E. R. Langley    
Toronto-Dominion Centre
     
 
E. R. Langley    
Suite 1400, P.O. Box 172
      Vice President    
222 Bay Street
           
Toronto, ON M5K 1H6
           
 
           
Attention: Mr. Elwood Langley
           
 
           
Facsimile: (416) 367-3565
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S11 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

          Address For Notice   U.S. BANK NATIONAL ASSOCIATION,     CANADA BRANCH
U.S. Bank National Association,
       
Canada Branch
       
2300-120 Adelaide Street West
  By:   /s/ Kevin Jephcott
 
       
Toronto, ON M5H 1T1
      Kevin Jephcott
 
      Principal Officer
Attention: Kevin Jephcott
       
 
       
Facsimile: (416) 306-3565
       

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S12 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

          Address For Notice   JPMORGAN CHASE BANK, NATIONAL     ASSOCIATION,
TORONTO BRANCH
JPMorgan Chase Bank, National
       
Association, Toronto Branch
       
200 Bay Street
  By:   /s/ Christine Chan
 
       
Royal Bank Plaza, South Tower
      Christine Chan
Suite 1800
      Vice President
Toronto, ON M5J 2J2
       
 
       
Attention: Ms. Christine Chan
       
 
       
Facsimile: (416) 981-9138
       
 
       
With a copy to:
       
 
       
JPMorgan Chase Bank, National
       
Association
       
270 Park Avenue
       
4th Floor
       
New York, NY      10017-2014
       
U.S.A.
       
Attention: Mr. Robert Sacks
       
                     Managing Director
       
 
       
Facsimile: (212) 270-6637
       

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

- S13 -
     IN WITNESS WHEREOF, the parties have duly executed this Agreement.

              Address For Notice   COMERICA BANK    
 
           
Comerica Bank
           
Suite 2210
  By:   /s/ Robert Rosen    
South Tower, Royal Bank Plaza
     
 
Robert Rosen    
200 Bay Street
      Vice-President    
Toronto, ON M5J 2J2
           
 
           
Attention: Mr. Robert Rosen
           
 
           
Facsimile: (416) 367-2460
           

[signature page for Credit Agreement relating to Waste Management of Canada
Corporation et al.]

 

--------------------------------------------------------------------------------

 

SCHEDULE A
FORM OF NOTICE OF ADVANCE OR PAYMENT
[see reference in Section 5.3]

                     
TO:
  The Bank of Nova Scotia
Scotia Capital
WBO – Loan Administration & Agency Operations
720 King Street West 4th Floor
Wholesale Banking Operations
Toronto, ON M5V 2T3     c.c. The Bank of Nova Scotia
West Metro Commercial Banking Centre 2 Robert Speck Parkway Mississauga, ON L4Z
1H8 Attention:      Unit Head Facsimile:      (905)276-4920     c.c. The Bank of
Nova Scotia
Scotia Capital
Corporate Banking – Loan Syndications
62nd Floor, Scotia Plaza
40 King Street West
Toronto, ON M5W 2X6  
 
  Attention:      Managing Director               Attention:      Unit
 
  Attention:      Managing Director               Head Facsimile:
     (416) 866-3329
 
  Facsimile:      (416) 866-5991                

     We refer to the credit agreement dated as of 30 November 2005 between Waste
Management of Canada Corporation, as Borrower, others, as Guarantors, The Bank
of Nova Scotia, as Administrative Agent and the Lenders named therein, as
amended, supplemented, restated or replaced from time to time (the “Credit
Agreement”). All terms used in this certificate and that are defined in the
Credit Agreement will have the meanings defined in the Credit Agreement.

1.   Request for Advance

     Notice is hereby given pursuant to Section 5.3 of the Credit Agreement that
the undersigned hereby irrevocably requests as follows:

             
 
  (a)   that an Advance be made under the Credit;    
 
           
 
  (b)   the requested Advance represents the following [check one or more]:    
 
           
 
      initial Advance under the Credit   ( )
 
           
 
      increase in an Advance under the Credit   ( )
 
           
 
      rollover of an existing Advance under the Credit   ( )
 
           
 
      conversion of an existing Advance to another type of Advance   ( )
 
           
 
  (c)   the Drawdown Date shall be __________________;    
 
           
 
  (d)   the Advance shall be in the form of [check one or more and complete
details]:    
 
           
 
                 Prime Rate Advance   ( )
 
                      Amount: $                                            

 

--------------------------------------------------------------------------------

 

- A2 -

             
 
  Banker’s Acceptances       ( )
 
             Face Amount:   $                                            
 
             Term:                                               

  (e)   the proceeds of the Advance shall be deposited in [specify Designated
Account].

2.   The undersigned hereby confirms as follows:

  (a)   the representations and warranties made in Section 6.1 of the Credit
Agreement, other than those expressly stated to be made as of a specific date or
otherwise expressly modified pursuant to the provisions of Section 6.2 of the
Credit Agreement, are true and correct on and as of the date hereof with the
same force and effect as if such representations and warranties had been made on
and as of the date hereof, but subject to the same qualifications as are
contained in Section 6.2 of the Credit Agreement;     (b)   no Event of Default
or Pending Event of Default has occurred and is continuing on the date hereof or
will result from the Advance(s) requested herein;     (c)   after due inquiry,
there is no reasonable expectation that the Borrower will not be in compliance
with all covenants contained in Section 7.1 of the Credit Agreement at the end
of its current fiscal quarter and was not in compliance with those covenants at
the end of its immediately preceding fiscal quarter if it has not yet delivered
its Compliance Certificate for that quarter;     (d)   the undersigned will
immediately notify you if it becomes aware of the occurrence of any event which
would mean that the statements in the immediately preceding paragraphs (a),
(b) and (c) would not be true if made on the Drawdown Date; and     (e)   all
other conditions precedent set out in Section 4.2 [and Section 4.1 as
applicable] of the Credit Agreement have been fulfilled.

3.   Notice of Payment

     Pursuant to Section 5.3 of the Credit Agreement, the undersigned hereby
irrevocably notifies you of the following:

  (a)   that a payment will be made under the Credit;     (b)   the payment
represents the following [check one or more]:

         
 
  reduction in Advances under the Credit   ( )
 
       
 
  payment of existing Advances which will be rolled over as the same type of
Advance under the Credit   ( )
 
       
 
  payment of existing Advances which will be converted to   ( )

 

--------------------------------------------------------------------------------

 

- A3 -
another type of Advance under the Credit

(c)   the payment date shall be __________________

(d)   the Advance to be paid shall be in the form of [check one or more and
complete details]:

             
 
  Prime Rate Advance       ( )
 
       Amount:   $__________________      
 
  Banker’s Acceptances       ( )
 
       Face Amount:   $__________________    
 
       Maturity Date:   ___________________    

DATED ___________________________.

                  WASTE MANAGEMENT OF CANADA
CORPORATION    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

 

--------------------------------------------------------------------------------

 

SCHEDULE B
FORM OF COMPLIANCE CERTIFICATE
[see references in Sections 4.2 and 7.3(1)(c)]
TO:            THE LENDERS (as defined in the Credit Agreement referred to
below)
AND TO:            THE BANK OF NOVA SCOTIA, as Agent
          We refer to Sections 4.2 and 7.3(1)(c) of the credit agreement dated
as of 30 November 2005 between Waste Management of Canada Corporation, as
Borrower, Waste Management, Inc. and others, as Guarantors, The Bank of Nova
Scotia, as Administrative Agent and the Lenders named therein, as amended,
supplemented, restated or replaced from time to time (the “Credit Agreement”).
All terms used in this certificate that are defined in the Credit Agreement will
have the meanings defined in the Credit Agreement.
The undersigned hereby certify that:
I, ___, [Chief Financial Officer] [Chief Accounting Officer] [Corporate
Treasurer] of WASTE MANAGEMENT, INC. certify that no Pending Event of Default or
Event of Default exists and that the Obligors are in compliance with
Sections 7.1, 7.2 and 7.4 of the Credit Agreement, [as of the end of the quarter
ended ___]. Computations to evidence compliance with the financial covenants are
detailed below.
Interest Coverage Ratio

         
Consolidated Net Income (or Deficit) Plus (without duplication):
       
interest expense
  $                      (i)
equity in losses (earnings) of
  $                    (ii)
unconsolidated entities
  $                    (iii)
income tax expense
  $                    (iv)
non-cash writedowns or writeoffs of assets
  $                      (v)
Minus non-cash extraordinary gains on the sale of assets
  $                    (vi)
 
       
EBIT (sum of (i) through (v))
  $                      (a)
 
       
Consolidated Net Income of Acquired Businesses Plus (without duplication):
  $                      (i)
interest expense
  $                    (ii)
equity in losses (earnings) of
  $                    (iii)
unconsolidated entities
  $                    (iv)
income tax expense
  $                      (v)
non-cash writedowns or write-offs of assets
  $                    (vi)
non-recurring extraordinary charges
       

 

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- B2 -

         
EBIT of Acquired Businesses (sum of (i) through (vi)
  $                      (b)
 
       
Sum of (a) plus (b)
  $                      (c)
 
       
Consolidated Total Interest Expense
  $                      (d)
 
       
Ratio of (c) to (d)
    ___:____  
 
       
Minimum ratio
    2.75:1  
 
       
§9.2 Total Debt to EBITDA
       
 
       
EBIT (from §9.1 item (c) above)
  $                      (i)
 
       
Plus:
       
Depreciation expense
  $                    (ii)
Amortization expense
  $                    (iii)
 
       
EBITDA (sum of (i) through (iii))
  $                    (iv)
 
       
The sum of the following (calculated on a consolidated basis for Waste
Management Inc. and its Subsidiaries):
       
Indebtedness for borrowed money
  $                    (v)
Obligations for deferred purchase price of property or services (other than
trade payables)
  $                    (vi)
Obligations evidenced by debt instruments
  $                    (vii)
Obligations under conditional sales
  $                    (viii)
Obligations, liabilities and indebtedness under Capitalized Leases
  $                    (ix)
Obligations, liabilities and indebtedness under bonding arrangements
  $                    (x)
(to the extent that a surety has been called upon to make payment on a bond)
Guaranties of the Indebtedness of others
  $                    (xi)
Indebtedness secured by liens or encumbrances on property
  $                    (xii)
Reimbursement obligations with respect to letters of credit
  $                    (xiii)
 
       
Total Debt (sum of v — xiv)
  $                    (xiv)
 
       
Ratio of (xv) to (iv)
    ___ : ___  
 
       
Maximum ratio:
    3.50:1.00  

DATED ___________________________________________.

 

--------------------------------------------------------------------------------

 

- B-3

                  WASTE MANAGEMENT, INC.    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
                WASTE MANAGEMENT OF CANADA
CORPORATION    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

 

--------------------------------------------------------------------------------

 

SCHEDULE C
FORM OF ASSIGNMENT AGREEMENT
[see references in Sections 1.1.9 and 10.2]
     The undersigned refer to the credit agreement dated as of 30 November 2005
between Waste Management of Canada Corporation, as Borrower, Waste Management,
Inc. and Waste Management Holdings, Inc., as Guarantors, The Bank of Nova
Scotia, as Administrative Agent and the Lenders named therein, as amended,
supplemented, restated or replaced from time to time (the “Credit Agreement”).
All terms used in this Assignment Agreement that are defined in the Credit
Agreement will have the meanings defined in the Credit Agreement.
     For value received, the “Assignor” and the “Assignee” named below hereby
agree as follows:

1.   The Assignor hereby sells and assigns, without recourse, to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, the
Proportionate Share specified on Appendix 1 in and to the Assignor’s rights and
obligations under the Credit Agreement, the Security and all other Credit
Documents.

2.   The Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder, that such
interest is free and clear of any lien or security interest and that it is
entitled to enter into this Assignment Agreement, (b) makes no representation or
warranty, other than as provided in this Assignment Agreement and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other Credit Document, and (c) makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Obligor or the performance or observance by any Obligor of any of the
obligations under the Credit Agreement or any other Credit Document.

3.   The Assignee, for the benefit of the Borrower, the Guarantors, the other
Obligors, the Agent and all Lenders from time to time, including the Assignor,
(a) acknowledges receipt of any upfront fee payable by the Assignor,
(b) confirms that it has received a copy of the Credit Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement,
(c) agrees that it will, independently and without reliance upon the Agent, the
Assignor 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, (d) appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers and discretion under the Credit Agreement as are delegated to the Agent
by the terms thereof, together with such powers and discretion as are reasonably
incidental thereto, (e) ratifies and adopts the powers of attorney and related
powers given to the Agent and the Collateral Agent under the Credit Agreement,
(f) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are

 

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- C2 -
required to be performed by it as a Lender, (g) agrees to be bound by the terms
of all Intercreditor Agreements, and (h) specifies as its address for notice and
payments its office at the address set forth on Appendix 1 hereto.

4.   Following the execution of this Assignment Agreement, it shall immediately
be delivered to the Agent, together with the processing and recording fee
specified in Section 10.2 of the Credit Agreement if applicable, for approval
and recording by the Agent, the Issuing Lender and the Borrower, if applicable.
The Assignee’s agreement to become a Lender, as constituted by this Assignment
Agreement, is irrevocable, unless the Assignee is not approved by the Agent, the
Issuing Lender or the Borrower, if applicable. The Assignee shall become a
Lender, and shall be bound by the obligations and entitled to the benefits in
the Credit Agreement, immediately upon this Assignment Agreement being approved
and recorded by the Agent, the Issuing Lender and the Borrower, if applicable
(the “Effective Date”). On the Effective Date, the Assignee (a) shall pay the
Assignor an amount equal to the Assignee’s Proportionate Share of Prime Rate
Advances made by the Assignor as of the Effective Date, and (b) shall become
entitled to receive standby fees in accordance with the Credit Agreement in
respect of its Proportionate Share of the aggregate amount of the Credit that
has not been advanced by the Lenders.

5.   If Advances made by the Assignee to the Borrower are for any reason less
than the Assignee’s Proportionate Share of the aggregate Advances made by all
Lenders under the Credit Agreement, the Assignee shall, on demand, indemnify the
Assignor in respect of the principal amount of the corresponding Advances made
by the Assignor in excess of the Assignor’s Proportionate Share. The Advances by
the Assignor in respect of which the Assignee is bound to indemnify the Assignor
are set out on Appendix 2 to this Assignment Agreement. The Assignor shall pay
the Assignee indemnity fees during the period in which the Assignee is obliged
to indemnify the Assignor. The fee shall be in the amount specified on
Appendix 2 and shall be payable on the Effective Date in respect of Advances by
way of Banker’s Acceptances.

6.   This Assignment Agreement shall be governed by, and construed in accordance
with the laws of the Province of Ontario, Canada.

 

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- C3 -

7.   This Assignment Agreement may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Delivery of an executed counterpart of
this Assignment Agreement by telecopier shall be effective as delivery of a
manually executed counterpart of this Assignment Agreement.

     IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment Agreement to be executed by their duly authorized officers as of the
dates specified below.

         
 
  Assignor:    
 
       
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
       
 
  Date:    
 
       
 
       
 
  Assignee:    
 
       
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
       
 
  Date:    
 
       

             
Approved on
      [If applicable] Approved on    
 
           

              THE BANK OF NOVA SCOTIA, as Agent   WASTE MANAGEMENT OF CANADA
CORPORATION
 
           
By:
      By:    
 
           
 
  Name:       Name:
 
  Title:       Title:
 
           
By:
      By:    
 
           
 
  Name:       Name:
 
  Title:       Title:

 

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- C4 -

             
Effective Date:
      Date:    
 
           

 

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APPENDIX 1
TO
ASSIGNMENT AGREEMENT

     
Proportionate Share assigned by Assignor:
   
 
   
 
   
Proportionate Share retained by Assignor:
   
 
   
 
   
Payment Details, including address of Assignee for notices:
   

 

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APPENDIX 2
TO
ASSIGNMENT AGREEMENT
Advances in respect of which the Assignee is to indemnify the Assignor, as of
the Effective Date:

         
Type of Advance
 
Maturity Date of Advance
 
Principal Amount of Advance
         

 
Indemnity fee:

 

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SCHEDULE D
FORM OF GUARANTEE

 

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SCHEDULE E
APPLICABLE PERCENTAGES OF LENDERS
[see references in Section 1.1]

              Lender   Commitment   Applicable Percentage
The Bank of Nova Scotia
  Cdn. $99,000,000     24.146 %
 
           
BNP Paribas (Canada)
  Cdn. $75,000,000     18.293 %
 
           
Mizuho Corporate Bank (Canada)
  Cdn. $50,000,000     12.195 %
 
           
U.S. Bank National Association
  Cdn. $50,000,000     12.195 %
 
           
Bank of America, National Association
  Cdn. $45,000,000     10.976 %
 
           
ABN AMRO Bank N.V.
  Cdn. $35,000,000     8.537 %
 
           
Sumitomo Mitsui Banking Corporation of Canada
  Cdn. $25,000,000     6.098 %
 
           
JPMorgan Chase Bank, National Association
  Cdn. $20,000,000     4.878 %
 
           
Comerica Bank
  Cdn. $11,000,000     2.683 %