Document:

Exhibit 4.1

 

EXECUTION VERSION

 

 

 

CASELLA WASTE SYSTEMS, INC.,

as Issuer,

 

 

the GUARANTORS named herein,

as Guarantors,

 

 

and

 

 

WILMINGTON TRUST COMPANY,

as Trustee

 

 

 

 

INDENTURE

 

 

 

Dated as of July 9, 2009

 

 

11% Senior Second Lien Notes due 2014

 

 

 

 

CROSS-REFERENCE TABLE

 

	
  TIA
  Section

  	
   

  	
  Indenture Section

  
	
  310(a)(1)

  	
   

  	
   

  	
  7.10

  
	
        (a)(2)

  	
   

  	
   

  	
  7.10

  
	
        (a)(3)

  	
   

  	
   

  	
  N.A.

  
	
        (a)(4)

  	
   

  	
   

  	
  N.A.

  
	
        (a)(5)

  	
   

  	
   

  	
  7.08;
  7.10

  
	
        (b)

  	
   

  	
   

  	
  7.08;
  7.10; 12.02

  
	
        (c)

  	
   

  	
   

  	
  N.A.

  
	
  311(a)

  	
   

  	
   

  	
  7.11

  
	
        (b)

  	
   

  	
   

  	
  7.11

  
	
        (c)

  	
   

  	
   

  	
  N.A.

  
	
  312(a)

  	
   

  	
   

  	
  2.05

  
	
        (b)

  	
   

  	
   

  	
  12.03

  
	
        (c)

  	
   

  	
   

  	
  12.03

  
	
  313(a)

  	
   

  	
   

  	
  7.06

  
	
        (b)

  	
   

  	
   

  	
  7.06, 10.06

  
	
        (c)

  	
   

  	
   

  	
  7.06; 12.02

  
	
        (d)

  	
   

  	
   

  	
  7.06

  
	
  314(a)

  	
   

  	
   

  	
  4.09; 4.19; 12.02

  
	
        (b)

  	
   

  	
   

  	
  N.A.

  
	
        (c)(1)

  	
   

  	
   

  	
  7.02; 12.04; 12.05

  
	
        (c)(2)

  	
   

  	
   

  	
  7.02; 12.04; 12.05

  
	
        (c)(3)

  	
   

  	
   

  	
  N.A.

  
	
        (d)

  	
   

  	
   

  	
  10.06

  
	
        (e)

  	
   

  	
   

  	
  12.05

  
	
        (f)

  	
   

  	
   

  	
  N.A.

  
	
  315(a)

  	
   

  	
   

  	
  7.01(b)

  
	
        (b)

  	
   

  	
   

  	
  7.05

  
	
        (c)

  	
   

  	
   

  	
  7.01

  
	
        (d)

  	
   

  	
   

  	
  6.05; 7.01(c)

  
	
        (e)

  	
   

  	
   

  	
  6.11

  
	
  316(a)(last
  sentence)

  	
   

  	
   

  	
  2.09

  
	
        (a)(1)(A)

  	
   

  	
   

  	
  6.02

  
	
        (a)(1)(B)

  	
   

  	
   

  	
  6.04

  
	
        (a)(2)

  	
   

  	
   

  	
  9.02

  
	
        (b)

  	
   

  	
   

  	
  6.07

  
	
        (c)

  	
   

  	
   

  	
  9.05

  
	
  317(a)(1)

  	
   

  	
   

  	
  6.08

  
	
        (a)(2)

  	
   

  	
   

  	
  6.09

  
	
        (b)

  	
   

  	
   

  	
  2.04

  
	
  318(a)

  	
   

  	
   

  	
  12.01

  
	
        (c)

  	
   

  	
   

  	
  12.01

  

 

N.A.
means Not Applicable

 

Note:                                     This
Cross-Reference Table shall not, for any purpose, be deemed to be a part of the
Indenture.

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  
	
  ARTICLE ONE

  
	
   

  	
   

  	
   

  
	
  DEFINITIONS AND INCORPORATION BY REFERENCE

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
  1

  
	
  SECTION 1.02.

  	
  Other Definitions

  	
  28

  
	
  SECTION 1.03.

  	
  Incorporation by Reference of TIA

  	
  29

  
	
  SECTION 1.04.

  	
  Rules of Construction

  	
  30

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWO

  
	
   

  	
   

  	
   

  
	
  THE NOTES

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Form and Dating

  	
  30

  
	
  SECTION 2.02.

  	
  Execution and Authentication

  	
  31

  
	
  SECTION 2.03.

  	
  Registrar and Paying Agent

  	
  32

  
	
  SECTION 2.04.

  	
  Paying Agent To Hold Assets in Trust

  	
  32

  
	
  SECTION 2.05.

  	
  Holder Lists

  	
  33

  
	
  SECTION 2.06.

  	
  Transfer and Exchange

  	
  33

  
	
  SECTION 2.07.

  	
  Replacement Notes

  	
  34

  
	
  SECTION 2.08.

  	
  Outstanding Notes

  	
  34

  
	
  SECTION 2.09.

  	
  Treasury Notes

  	
  34

  
	
  SECTION 2.10.

  	
  Temporary Notes

  	
  35

  
	
  SECTION 2.11.

  	
  Cancellation

  	
  35

  
	
  SECTION 2.12.

  	
  Defaulted Interest

  	
  35

  
	
  SECTION 2.13.

  	
  CUSIP Number

  	
  35

  
	
  SECTION 2.14.

  	
  Deposit of Moneys

  	
  36

  
	
  SECTION 2.15.

  	
  Book-Entry Provisions for Global Notes

  	
  36

  
	
  SECTION 2.16.

  	
  Special Transfer Provisions

  	
  37

  
	
  SECTION 2.17.

  	
  Limitation on Ownership of Notes

  	
  40

  
	
   

  	
   

  	
   

  
	
  ARTICLE THREE

  
	
   

  	
   

  	
   

  
	
  REDEMPTION

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Notices to Trustee

  	
  41

  
	
  SECTION 3.02.

  	
  Selection of Notes To Be Redeemed

  	
  41

  
	
  SECTION 3.03.

  	
  Notice of Redemption

  	
  41

  
	
  SECTION 3.04.

  	
  Effect of Notice of Redemption

  	
  42

  
	
  SECTION 3.05.

  	
  Deposit of Redemption Price

  	
  42

  
	
  SECTION 3.06.

  	
  Notes
  Redeemed in Part

  	
  43

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  
	
  ARTICLE FOUR

  
	
   

  
	
  COVENANTS

  
	
   

  
	
  SECTION 4.01.

  	
  Payment of Notes

  	
  43

  
	
  SECTION 4.02.

  	
  Maintenance of Office or Agency

  	
  43

  
	
  SECTION 4.03.

  	
  Corporate Existence

  	
  44

  
	
  SECTION 4.04.

  	
  Payment of Taxes and Other Claims

  	
  44

  
	
  SECTION 4.05.

  	
  Maintenance of Properties and Insurance

  	
  44

  
	
  SECTION 4.06.

  	
  Compliance Certificate; Notice of Default

  	
  45

  
	
  SECTION 4.07.

  	
  Compliance with Laws

  	
  45

  
	
  SECTION 4.08.

  	
  Waiver of Stay, Extension or Usury Laws

  	
  45

  
	
  SECTION 4.09.

  	
  Change of Control

  	
  46

  
	
  SECTION 4.10.

  	
  Incurrence of Indebtedness and Issuance of Preferred Stock

  	
  48

  
	
  SECTION 4.11.

  	
  Restricted Payments

  	
  50

  
	
  SECTION 4.12.

  	
  Liens

  	
  54

  
	
  SECTION 4.13.

  	
  Asset Sales

  	
  54

  
	
  SECTION 4.14.

  	
  Transactions with Affiliates

  	
  58

  
	
  SECTION 4.15.

  	
  Dividend and Other Payment Restrictions Affecting
  Subsidiaries

  	
  59

  
	
  SECTION 4.16.

  	
  Additional Subsidiary Guarantees

  	
  61

  
	
  SECTION 4.17.

  	
  Further Assurances

  	
  61

  
	
  SECTION 4.18.

  	
  Reports to Holders

  	
  62

  
	
  SECTION 4.19.

  	
  Designation of Restricted and Unrestricted Subsidiaries

  	
  63

  
	
  SECTION 4.20.

  	
  Sale and Leaseback Transactions

  	
  64

  
	
  SECTION 4.21.

  	
  Limitation on Issuances and Sales of Equity Interests in
  Wholly Owned Subsidiaries

  	
  64

  
	
  SECTION 4.22.

  	
  Business Activities

  	
  65

  
	
  SECTION 4.23.

  	
  Payments for Consent

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE FIVE

  
	
   

  
	
  SUCCESSOR CORPORATION

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Merger, Consolidation, or Sale of Assets

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE SIX

  
	
   

  
	
  DEFAULT AND REMEDIES

  
	
   

  
	
  SECTION 6.01.

  	
  Events of Default

  	
  67

  
	
  SECTION 6.02.

  	
  Acceleration

  	
  69

  
	
  SECTION 6.03.

  	
  Other Remedies

  	
  69

  
	
  SECTION 6.04.

  	
  Waiver of Past Defaults

  	
  70

  
	
  SECTION 6.05.

  	
  Control
  by Majority

  	
  70

  
	
  SECTION 6.06.

  	
  Limitation on Suits

  	
  70

  
				

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 6.07.

  	
  Rights of Holders To Receive Payment

  	
  71

  
	
  SECTION 6.08.

  	
  Collection Suit by Trustee

  	
  71

  
	
  SECTION 6.09.

  	
  Trustee May File Proofs of Claim

  	
  71

  
	
  SECTION 6.10.

  	
  Priorities

  	
  71

  
	
  SECTION 6.11.

  	
  Undertaking for Costs

  	
  72

  
	
  SECTION 6.12.

  	
  Appointment and Authorization of Wilmington Trust Company
  as Second Lien Agent

  	
  72

  
	
   

  
	
  ARTICLE SEVEN

  
	
   

  
	
  TRUSTEE

  
	
   

  
	
  SECTION 7.01.

  	
  Duties of Trustee

  	
  73

  
	
  SECTION 7.02.

  	
  Rights of Trustee

  	
  74

  
	
  SECTION 7.03.

  	
  Individual Rights of Trustee

  	
  76

  
	
  SECTION 7.04.

  	
  Trustee’s Disclaimer

  	
  76

  
	
  SECTION 7.05.

  	
  Notice of Default

  	
  76

  
	
  SECTION 7.06.

  	
  Reports by Trustee to Holders

  	
  76

  
	
  SECTION 7.07.

  	
  Compensation and Indemnity

  	
  77

  
	
  SECTION 7.08.

  	
  Replacement of Trustee

  	
  78

  
	
  SECTION 7.09.

  	
  Successor Trustee by Merger, Etc.

  	
  78

  
	
  SECTION 7.10.

  	
  Eligibility; Disqualification

  	
  79

  
	
  SECTION 7.11.

  	
  Preferential Collection of Claims Against Casella

  	
  79

  
	
  SECTION 7.12.

  	
  Second Lien Agent

  	
  79

  
	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT

  
	
   

  
	
  DISCHARGE OF INDENTURE; DEFEASANCE

  
	
   

  
	
  SECTION 8.01.

  	
  Termination of Casella’s Obligations

  	
  79

  
	
  SECTION 8.02.

  	
  Legal Defeasance and Covenant Defeasance

  	
  81

  
	
  SECTION 8.03.

  	
  Conditions to Legal Defeasance or Covenant Defeasance

  	
  82

  
	
  SECTION 8.04.

  	
  Application of Trust Money

  	
  83

  
	
  SECTION 8.05.

  	
  Repayment to Casella

  	
  84

  
	
  SECTION 8.06.

  	
  Reinstatement

  	
  84

  
	
   

  	
   

  	
   

  
	
  ARTICLE NINE

  
	
   

  
	
  AMENDMENTS, SUPPLEMENTS AND WAIVERS

  
	
   

  
	
  SECTION 9.01.

  	
  Without Consent of Holders

  	
  84

  
	
  SECTION 9.02.

  	
  With Consent of Holders

  	
  86

  
	
  SECTION 9.03.

  	
  [Reserved]

  	
  87

  
	
  SECTION 9.04.

  	
  Compliance with TIA

  	
  87

  
	
  SECTION 9.05.

  	
  Revocation and Effect of Consents

  	
  87

  
				

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.06.

  	
  Notation on or Exchange of Notes

  	
  88

  
	
  SECTION 9.07.

  	
  Trustee and Second Lien Agent To Sign Amendments, Etc.

  	
  88

  
	
   

  	
   

  	
   

  
	
  ARTICLE TEN

  
	
   

  
	
  RANKING OF LIENS; COLLATERAL AND SECURITY

  
	
   

  
	
  SECTION 10.01.

  	
  Relative Rights

  	
  89

  
	
  SECTION 10.02.

  	
  Security Documents

  	
  90

  
	
  SECTION 10.03.

  	
  Second Lien Agent

  	
  91

  
	
  SECTION 10.04.

  	
  Authorization of Actions To Be Taken

  	
  92

  
	
  SECTION 10.05.

  	
  Release of Second-Priority Liens

  	
  93

  
	
  SECTION 10.06.

  	
  Filing, Recording and Opinions

  	
  94

  
	
  SECTION 10.07.

  	
  Powers Exercisable by Receiver or Trustee

  	
  95

  
	
  SECTION 10.08.

  	
  No Impairment of the Security Interests

  	
  95

  
	
  SECTION 10.09.

  	
  Notes, Subsidiary Guarantees and Other Second Lien
  Obligations Not Subordinated

  	
  95

  
	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN

  
	
   

  
	
  SUBSIDIARY GUARANTEE 

  
	
   

  
	
  SECTION 11.01.

  	
  Unconditional Guarantee

  	
  96

  
	
  SECTION 11.02.

  	
  [Reserved]

  	
  97

  
	
  SECTION 11.03.

  	
  Limitation on Guarantor Liability

  	
  97

  
	
  SECTION 11.04.

  	
  Execution and Delivery of Subsidiary Guarantee

  	
  97

  
	
  SECTION 11.05.

  	
  Release of a Guarantor

  	
  98

  
	
  SECTION 11.06.

  	
  Waiver of Subrogation

  	
  99

  
	
  SECTION 11.07.

  	
  Immediate Payment

  	
  99

  
	
  SECTION 11.08.

  	
  No Set-Off

  	
  99

  
	
  SECTION 11.09.

  	
  Guarantee Obligations Absolute

  	
  99

  
	
  SECTION 11.10.

  	
  Guarantee Obligations Continuing

  	
  100

  
	
  SECTION 11.11.

  	
  Guarantee Obligations Not Reduced

  	
  100

  
	
  SECTION 11.12.

  	
  Guarantee Obligations Reinstated

  	
  100

  
	
  SECTION 11.13.

  	
  Guarantee Obligations Not Affected

  	
  100

  
	
  SECTION 11.14.

  	
  Waiver

  	
  102

  
	
  SECTION 11.15.

  	
  No Obligation To Take Action Against Casella

  	
  102

  
	
  SECTION 11.16.

  	
  Dealing with Casella and Others

  	
  102

  
	
  SECTION 11.17.

  	
  Default and Enforcement

  	
  103

  
	
  SECTION 11.18.

  	
  Amendment, Etc.

  	
  103

  
	
  SECTION 11.19.

  	
  Acknowledgment

  	
  103

  
	
  SECTION 11.20.

  	
  Costs and Expenses

  	
  103

  
	
  SECTION 11.21.

  	
  No Merger or Waiver; Cumulative Remedies

  	
  103

  
	
  SECTION 11.22.

  	
  Survival of Guarantee Obligations

  	
  103

  
	
  SECTION 11.23.

  	
  Guarantee in Addition to Other Guarantee Obligations

  	
  104

  
				

 

iv

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 11.24.

  	
  Severability

  	
  104

  
	
  SECTION 11.25.

  	
  Successors and Assigns

  	
  104

  
	
   

  	
   

  	
   

  
	
  ARTICLE TWELVE

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  
	
  SECTION 12.01.

  	
  TIA Controls

  	
  104

  
	
  SECTION 12.02.

  	
  Notices

  	
  104

  
	
  SECTION 12.03.

  	
  Communications by Holders with Other Holders

  	
  106

  
	
  SECTION 12.04.

  	
  Certificate and Opinion as to Conditions Precedent

  	
  106

  
	
  SECTION 12.05.

  	
  Statements Required in Certificate or Opinion

  	
  106

  
	
  SECTION 12.06.

  	
  Rules by Trustee, Paying Agent, Registrar

  	
  107

  
	
  SECTION 12.07.

  	
  Legal Holidays

  	
  107

  
	
  SECTION 12.08.

  	
  Governing Law

  	
  107

  
	
  SECTION 12.09.

  	
  No Adverse Interpretation of Other Agreements

  	
  107

  
	
  SECTION 12.10.

  	
  No Recourse Against Others

  	
  107

  
	
  SECTION 12.11.

  	
  Successors

  	
  108

  
	
  SECTION 12.12.

  	
  Duplicate Originals

  	
  108

  
	
  SECTION 12.13.

  	
  Severability

  	
  108

  
	
  SECTION 12.14.

  	
  Security Documents

  	
  108

  
	
  SECTION 12.15.

  	
  Designation as Designated Senior Debt

  	
  108

  
	
   

  	
   

  	
   

  
	
  Signatures

  	
   

  	
  S-1

  
	
   

  	
   

  	
   

  
	
  Exhibit A
      -

  	
  Form of Note

  
	
  Exhibit B
      -

  	
  Form of Legends

  
	
  Exhibit C
      -

  	
  Form of Certificate
  To Be Delivered in Connection with Transfers to Non-QIB Accredited Investors

  
	
  Exhibit D
      -

  	
  Form of Certificate
  To Be Delivered in Connection with Transfers Pursuant to Regulation S

  
	
  Exhibit E
      -

  	
  Form of Notation of
  Subsidiary Guarantee

  
				

 

Note:                                           This Table of
Contents shall not, for any purpose, be deemed to be part of the Indenture.

 

v

 

INDENTURE dated as of July 9, 2009 among
CASELLA WASTE SYSTEMS, INC., a Delaware corporation (“Casella”),
as issuer, and each of the Guarantors named herein, as Guarantors, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, as Trustee (the “Trustee”).

 

Casella has duly authorized the creation of an issue
of 11% Senior Second Lien Notes due 2014 and, to provide therefor, Casella has
duly authorized the execution and delivery of this Indenture.  All things necessary to make the Notes, when
duly issued and executed by Casella and authenticated and delivered hereunder,
the valid and binding obligations of Casella and to make this Indenture a valid
and binding agreement of Casella have been done.

 

Each party hereto agrees as follows for the benefit
of each other party and for the equal and ratable benefit of the Holders of the
Notes:

 

ARTICLE ONE

 

DEFINITIONS AND
INCORPORATION BY REFERENCE

 

SECTION 1.01.                                                     Definitions.

 

Set forth below are certain defined terms used in
this Indenture.

 

“Acquired
Debt” means, with respect to any specified Person:

 

(1)           Indebtedness
of any other Person existing at the time such other Person is merged with or
into or became a Restricted Subsidiary of such specified Person or which is
assumed by such specified Person at the time such specified Person acquires the
assets of such other Person, whether or not such Indebtedness is incurred in
connection with, or in contemplation of, such other Person merging with or
into, or selling its assets to, or becoming a Restricted Subsidiary of, such
specified Person; and

 

(2)           Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.

 

“Additional Interest”
has the meaning set forth in the Registration Rights Agreement.

 

“Additional Notes”
means Notes (other than the Notes issued on the Issue Date and any exchange
notes issued in exchange therefor pursuant to the Registration Rights Agreement)
issued from time to time under this Indenture in accordance with the last
paragraph of Section 2.01 hereof.

 

“Affiliate” of
any specified Person means any other Person directly or indirectly controlling
or controlled by or under direct or indirect common control with such specified
Person.

 

 

For purposes of this
definition, “control,” as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.  For purposes of this definition, the terms “controlling,”
“controlled by” and “under common control with” shall have correlative
meanings.

 

“Agent” means
any Registrar, Paying Agent or co-Registrar.

 

“amend” means
amend, modify, supplement, restate or amend and restate, including successively;
and “amending” and “amended” have correlative meanings.

 

“asset” means
any asset or property, whether real, personal or other, tangible or intangible.

 

“Asset Sale”
means:

 

(a)           the
sale, lease, conveyance or other disposition of any assets, other than sales of
inventory in the ordinary course of business consistent with past practices
(such inventory to include solid waste, recyclables and other by-products of
the wastestream collected by Casella and its Restricted Subsidiaries and sold
to, or disposed of with, third parties in the ordinary course of business
consistent with past practices); and

 

(b)           the
issuance of Equity Interests by any of Casella’s Restricted Subsidiaries or the
sale of Equity Interests in any of its Restricted Subsidiaries or the sale of
Equity Interests held by Casella or its Restricted Subsidiaries in any of its
Unrestricted Subsidiaries.

 

Notwithstanding the preceding, the following shall
not be deemed to be Asset Sales:

 

(1)           any
single transaction or series of related transactions that: (x) involves assets
having a fair market value of less than $5.0 million, or (y) results in
net proceeds to Casella and its Restricted Subsidiaries of less than $5.0
million;

 

(2)           a
transfer of assets between or among Casella and/or one or more of its Wholly
Owned Restricted Subsidiaries;

 

(3)           an
issuance of Equity Interests by, or a transfer of Equity Interests in, a Wholly
Owned Restricted Subsidiary to Casella or to another Wholly Owned Restricted
Subsidiary;

 

(4)           the
sale, lease, conveyance or other disposition of the assets or Equity Interests
of MERC for fair market value thereof to the extent of the aggregate Net
Proceeds thereof of up to $15.0 million (it being understood that the sale,
lease, conveyance or other disposition of the assets or Equity Interests of
MERC to the extent the Net Proceeds thereof exceed $15.0 million shall
constitute an Asset Sale with respect to such excess);

 

2

 

(5)           disposals
or replacements in the ordinary course of business of equipment that has become
worn-out, obsolete or damaged or otherwise unsuitable for use in connection
with the business of Casella and its Restricted Subsidiaries;

 

(6)           the
sale or disposition of cash or Cash Equivalents;

 

(7)           the
release, surrender or waiver of contract, tort or other claims of any kind as a
result of the settlement of any litigation or threatened litigation;

 

(8)           the
granting or existence of Liens (and foreclosure thereon) not prohibited by this
Indenture; and

 

(9)           a
Restricted Payment or a Permitted Investment that is not prohibited by Section 4.11.

 

“Attributable Debt”
in respect of a Sale and Leaseback Transaction means, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale and
Leaseback Transaction including any period for which such lease has been
extended or may, at the option of the lessor, be extended.  Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.

 

“Bankruptcy Law”
means Title 11, U.S. Code or any similar Federal, state or foreign law for the
relief of debtors.

 

“Beneficial Owner”
has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5
under the Exchange Act, except that in calculating the beneficial ownership of
any particular “person” (as such term is used in Section 13(d)(3) of
the Exchange Act), such “person” shall be deemed to have beneficial ownership
of all securities that such “person” has the right to acquire, whether such
right is currently exercisable or is exercisable only upon the occurrence of a
subsequent condition.

 

“Board of Directors”
means (1) in the case of a corporation, the board of directors and (2) in
all other cases, a body performing substantially similar functions as a board
of directors.

 

“Board Resolution”
means, with respect to any Person, a copy of a resolution certified by the
Secretary or an Assistant Secretary of such Person to have been duly adopted by
the Board of Directors of such Person and to be in full force and effect on the
date of such certification, and delivered to the Trustee.

 

“Business Day”
means any day other than a Saturday, Sunday or any other day on which banking
institutions in the City of New York or the State of Delaware are required or authorized
by law or other governmental action to be closed.

 

3

 

“Capital Lease Obligation”
means, at the time any determination thereof is to be made, the amount of the
liability in respect of a capital lease that would at that time be required to
be capitalized on a balance sheet in accordance with GAAP.

 

“Capital
Stock” means:

 

(1)           in
the case of a corporation, corporate stock;

 

(2)           in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock;

 

(3)           in
the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

 

(4)           any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

 

“Casella” means
the party named as such in this Indenture until a successor replaces it
pursuant to this Indenture and thereafter shall mean such successor
corporation.

 

“Cash
Equivalents” means:

 

(1)           a
marketable obligation, maturing within one year after issuance thereof, issued,
guaranteed or insured by the government of the United States of America or an
instrumentality or agency thereof;

 

(2)           demand
deposits, certificates of deposit, eurodollar time deposits, banker’s acceptances,
in each case, maturing within one year after issuance thereof, and overnight
bank deposits, in each case, issued by any lender under the Senior Credit
Facility, or a U.S. national or state bank or trust company or a European,
Canadian or Japanese bank having capital, surplus and undivided profits of at
least $500.0 million and whose long-term unsecured debt has a rating of “A” or
better by S&P or A2 or better by Moody’s or the equivalent rating by any
other nationally recognized rating agency (provided that the aggregate face
amount of all Investments in certificates of deposit or bankers’ acceptances
issued by the principal offices of or branches of such non-lender European or
Japanese banks located outside the United States shall not at any time exceed
33-1/3% of all Investments described in this definition);

 

(3)           open
market commercial paper, maturing within 270 days after issuance thereof, which
has a rating of A-2 or better by S&P or P-2 or better by Moody’s, or the
equivalent rating by any other nationally recognized rating agency;

 

(4)           repurchase
agreements and reverse repurchase agreements with a term not in excess of one
year with any financial institution which has been elected a primary government
securities dealer by the Federal Reserve Board or whose securities are rated
AA- or better by S&P or Aa3 or better by Moody’s or the equivalent rating
by any other nationally

 

4

 

recognized rating agency
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States of America or any agency or instrumentality thereof and
backed by the full faith and credit of the United States of America; and

 

(5)           shares
of any money market mutual fund rated at least AAA or the equivalent thereof by
S&P or at least Aaa or the equivalent thereof by Moody’s or any other
mutual fund at least 95% of the assets of which consist of the type specified
in clauses (1) through (4) above.

 

“Cash Management Bank”
means any First Lien Lender or an Affiliate of a First Lien Lender (together
with its successors and assigns) providing Cash Management Services to Casella
or any Guarantor.

 

“Cash Management
Obligations” means all obligations owing by Casella or any Guarantor
to any Cash Management Bank in respect of any Cash Management Services (including,
without limitation, indemnities, fees and interest thereon and all interest and
fees that accrue on or after the commencement of any Insolvency or Liquidation
Proceeding at the rate provided for in the respective documents governing the
Cash Management Services, whether or not a claim for post-petition interest or
fees is allowed or allowable in any such Insolvency or Liquidation Proceeding),
now existing or hereafter incurred under, arising out of or in connection with
such Cash Management Services, and the due performance and compliance by
Casella or such Guarantor with the terms, conditions and agreements of such
Cash Management Services.

 

“Cash Management Services”
means treasury, depository, bank product and/or cash management services or any
automated clearing house transfer services.

 

“Change of
Control” means the occurrence of any of the following:

 

(1)           any
“person” or “group” (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act) is or becomes the Beneficial Owner, directly or indirectly,
of securities representing 50% or more of the voting power of all Voting Stock
of Casella; or

 

(2)           Continuing
Directors shall cease to constitute at least a majority of the directors
constituting the Board of Directors of Casella; or

 

(3)           the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of Casella and its Restricted Subsidiaries
taken as a whole to any “person” or “group” (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act); or

 

(4)           Casella
consolidates with, or merges with or into, any Person, or any Person consolidates
with, or merges with or into, Casella, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of Casella is
converted into or exchanged for cash, securities or other property, other than
any such transaction where

 

5

 

the Voting Stock of Casella
outstanding immediately prior to such transaction is converted into or
exchanged for Voting Stock (other than Disqualified Capital Stock) of the
surviving or transferee Person or the parent of such surviving or transferee
Person representing a majority of the voting power of all Voting Stock of such
surviving or transferee Person or the parent of such surviving or transferee
Person immediately after giving effect to such issuance; or

 

(5)           the
adoption by the stockholders of Casella of a plan or proposal for the liquidation
or dissolution of Casella.

 

“Collateral”
means all of the assets of Casella and the Guarantors, whether real, personal
or mixed, with respect to which a Lien is granted (or purported to be granted)
as security for any Second Lien Obligations (including proceeds and products
thereof).

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Consolidated EBITDA”
means, with respect to any Person, for any period, the sum (without
duplication) of

 

(1)           Consolidated
Net Income, and

 

(2)           to
the extent Consolidated Net Income has been reduced thereby,

 

·                                          all income taxes of such
Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP
for such period (other than income taxes attributable to extraordinary gains or
losses or income taxes attributable to Asset Sales and other sales or dispositions
outside the ordinary course of business to the extent that gains or losses from
such transactions have been excluded from the computation of Consolidated Net
Income),

 

·                                          Consolidated Interest
Expense, and

 

·                                          Consolidated Non-cash
Charges less any non-cash items increasing Consolidated Net Income for such
period (except to the extent such non-cash item increasing Consolidated Net
Income relates to a cash benefit for any future period),

 

all as determined on a consolidated basis for
such Person and its Restricted Subsidiaries in accordance with GAAP.

 

“Consolidated Fixed Charge
Coverage Ratio” means, with respect to any Person, the ratio of (x) Consolidated
EBITDA of such Person during the four full fiscal quarters for which financial
statements are available (the “Four Quarter Period”)
ending on or prior to the Transaction Date to (y) Consolidated Fixed
Charges of such Person for the Four Quarter Period.

 

6

 

For purposes of this definition, “Consolidated
EBITDA” and “Consolidated Fixed Charges” shall be calculated after giving
effect on a pro forma basis in accordance with Regulation S-X under the
Exchange Act to the incurrence, repayment or redemption of any Indebtedness of
such Person or any of its Restricted Subsidiaries giving rise to the need to
make such calculation and any incurrence, repayment or redemption of other
Indebtedness, other than the incurrence, repayment or redemption of
Indebtedness in the ordinary course of business for working capital purposes
pursuant to working capital facilities, occurring during the Four Quarter Period
or at any time subsequent to the last day of the Four Quarter Period and prior
to the Transaction Date, as if such incurrence, repayment or redemption, as the
case may be, occurred on the first day of the Four Quarter Period.

 

In addition, Investments (including any Designation
of Unrestricted Subsidiaries), Revocations, acquisitions, dispositions, mergers
and consolidations that have been made by Casella or any of its Restricted
Subsidiaries during the Four Quarter Period or subsequent to the Four Quarter
Period and on or prior to the Transaction Date shall be given effect on a pro
forma basis in accordance with Regulation S-X under the Exchange Act, to the
extent applicable, assuming that all such Investments, Revocations,
acquisitions, dispositions, mergers and consolidations (and the reduction or
increase of any associated Consolidated Fixed Charges and the change in
Consolidated EBITDA, resulting therefrom) had occurred on the first day of the
Four Quarter Period.  If, since the
beginning of such period, any Person (that subsequently became a Restricted
Subsidiary or was merged with or into Casella or any Restricted Subsidiary
since the beginning of such period) shall have made any Investment, Revocation,
acquisition, disposition, merger or consolidation that would have required
adjustment pursuant to this definition, then the Consolidated Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect thereto for such
period as if such Investment, Revocation, acquisition, disposition, merger or
consolidation had occurred at the beginning of the applicable Four Quarter
Period.

 

If such Person or any of its Restricted Subsidiaries
directly or indirectly Guarantees Indebtedness of a Person other than Casella
or a Restricted Subsidiary, the preceding paragraph will give effect to the
incurrence of such Guaranteed Indebtedness as if such Person or any Restricted
Subsidiary of such Person had directly incurred or otherwise assumed such Guaranteed
Indebtedness.

 

Furthermore, in calculating “Consolidated Fixed
Charges” for purposes of determining the denominator (but not the numerator) of
this “Consolidated Fixed Charge Coverage Ratio,”

 

(1)           interest
on outstanding Indebtedness determined on a fluctuating basis as of the
Transaction Date and which will continue to be so determined thereafter shall
be deemed to have accrued at a fixed rate per annum equal to the weighted
average rate of interest during the Four Quarter Period;

 

(2)           if
interest on any Indebtedness actually incurred on the Transaction Date may
optionally be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then the
interest rate in effect

 

7

 

on the Transaction Date will
be deemed to have been in effect during the Four Quarter Period; and

 

(3)           notwithstanding
clause (1) above, interest on Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by agreements relating to Hedging
Obligations, shall be deemed to accrue at the weighted average rate per annum
during the Four Quarter Period resulting after giving effect to the operation
of such agreements.

 

“Consolidated Fixed Charges”
means, with respect to any Person for any period, the sum, without duplication,
of

 

(1)           Consolidated
Interest Expense, plus

 

(2)           the
amount of all dividend payments on any series of Preferred Stock of such Person
and its Restricted Subsidiaries (other than dividends paid in Qualified Capital
Stock and other than dividends paid to such Person or to a Restricted
Subsidiary of such Person) paid, accrued or scheduled to be paid or accrued
during such period (provided that
dividends paid by the increase in liquidation preference, or the issuance, of
Disqualified Capital Stock shall be valued at the amount of such increase in
liquidation preference or the value of the liquidation preference of such
issuance, as applicable).

 

“Consolidated Interest
Expense” means, with respect to any Person for any period, the sum
of, without duplication,

 

(1)           the
aggregate of the interest expense of such Person and its Restricted
Subsidiaries for such period determined on a consolidated basis in accordance
with GAAP, including, without limitation,

 

·                                          any amortization of debt
discount and amortization or write-off of deferred financing costs, excluding (x) the
write-off of deferred financing costs as a result of the prepayments of
Indebtedness on the Issue Date with the proceeds from the issuance and sale of
the Notes and the Senior Credit Facility and (y) the amortization of
deferred financing costs recorded as of the Issue Date in connection with the
Notes and the Senior Credit Facility;

 

·                                          the net costs under Hedging
Obligations;

 

·                                          all capitalized interest;
and

 

·                                          the interest portion of any
deferred payment obligation;

 

(2)           the
interest component of Capital Lease Obligations and Attributable Debt paid,
accrued and/or scheduled to be paid or accrued by such Person and its
Restricted Subsidiaries during such period as determined on a consolidated
basis in accordance with GAAP; and

 

8

 

(3)           all
interest on any Indebtedness of the type described in clause (a) or (b) of
the concluding sentence of the first paragraph of the definition of “Indebtedness.”

 

“Consolidated Net Income”
means, with respect to any Person (such Person, for purposes of this
definition, the “Referent Person”), for any period,
the net income (or loss) of the Referent Person and its Restricted Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded from such net income
(loss), to the extent otherwise included therein, without duplication,

 

(1)           after-tax
gains or losses on Asset Sales or other asset sales outside the ordinary course
of business or abandonments or reserves relating thereto;

 

(2)           after-tax
extraordinary gains or extraordinary losses determined in accordance with GAAP;

 

(3)           the
net income (but not loss) of any Restricted Subsidiary of the Referent Person
to the extent that the declaration of dividends or similar distributions by
that Restricted Subsidiary of that income is restricted;

 

(4)           the
net income or loss of any Person that is not a Restricted Subsidiary of the
Referent Person except to the extent of cash dividends or distributions paid to
the Referent Person or to a Wholly Owned Restricted Subsidiary of the Referent
Person (subject, in the case of a dividend or distribution paid to a Restricted
Subsidiary, to the limitation contained in clause (3) above);

 

(5)           any
restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made out of Consolidated Net Income accrued at
any time following the Issue Date;

 

(6)           the
net income of any Person earned prior to the date it becomes a Restricted
Subsidiary of the Referent Person or is merged or consolidated with the
Referent Person or any Restricted Subsidiary of the Referent Person;

 

(7)           in
the case of a successor to the Referent Person by consolidation or merger or as
a transferee of the Referent Person’s assets, any earnings of the successor
corporation prior to such consolidation, merger or transfer of assets;

 

(8)           gains
or losses from the cumulative effect of any change in accounting principles,
methods or interpretations;

 

(9)           the
write-off of deferred financing costs as a result of the prepayments of
Indebtedness on the Issue Date with the proceeds from the issuance and sale of
the Notes and the Senior Credit Facility; and

 

(10)         gains
or losses from the extinguishment of Indebtedness.

 

9

 

“Consolidated Non-cash
Charges” means, with respect to any Person, for any period, the
aggregate depreciation, amortization and other non-cash charges of such Person
and its Restricted Subsidiaries reducing the Consolidated Net Income of such
Person and its Restricted Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (excluding any such charges to the
extent requiring an accrual of or a reserve for cash charges for any future
period, but not excluding non-cash charges for closure, capping or post-closure
obligations with respect to any landfills to the extent such obligations are
not payable prior to the Maturity Date).

 

“Continuing Director”
means, as of any date of determination, any member of the Board of Directors of
Casella who:

 

(1)           was
a member of such Board of Directors on the date of this Indenture; or

 

(2)           was
nominated for election or elected to such Board of Directors with the approval
of a majority of the Continuing Directors who were members of such Board at the
time of such nomination or election.

 

“Corporate Trust Office”
means the corporate trust office of the Trustee located at Rodney Square North,
1100 North Market Street, Wilmington, DE 19890-1600, Attention: Corporate Trust
Department, or such other office, designated by the Trustee by written notice
to Casella, at which at any particular time its corporate trust business shall
be administered.

 

“Coverage Ratio Exception”
has the meaning set forth in the first paragraph of Section 4.10.

 

“Custodian” means
any receiver, trustee, assignee, liquidator, sequestrator or similar official
under any Bankruptcy Law.

 

“Default” means
any event that is, or with the passage of time or the giving of notice or both
would be, an Event of Default.

 

“Deposit Account Control
Agreement” means the Deposit Account Control Agreement dated on or
about the Issue Date among Casella, Bank of America, N.A., as first lien
collateral agent, the Trustee, as collateral agent for the benefit of the
Second Lien Secured Parties (as defined therein), Bank of America, N.A, as
control agent, and Bank of America, N.A., as bank.

 

“Depository”
means The Depository Trust Company, New York, New York, or a successor thereto
registered under the Exchange Act or other applicable statute or regulation.

 

“Discharge of First Lien
Obligations” means, subject to any reinstatement of First Lien
Obligations in accordance with the Intercreditor Agreement (and subject to Sections
5.6 and 6.5 thereof), (a) payment in full in cash of the principal of and
interest (including interest accruing on or after the commencement of any
Insolvency or Liquidation Proceeding at the rate provided for in the respective
First Lien Document, whether or not such interest would be 

 

10

 

allowed in any such
Insolvency or Liquidation Proceeding) and premium, if any, on all Indebtedness
under the First Lien Documents and termination of all commitments of the First
Lien Lenders to lend or otherwise extend credit under the First Lien Documents,
(b) payment in full in cash of all other First Lien Obligations (including
letter of credit reimbursement obligations) that are due and payable or
otherwise accrued and owing at or prior to the time such principal, interest,
and premium are paid (other than Cash Management Obligations and Secured
Hedging Obligations so long as arrangements satisfactory to the applicable Cash
Management Bank or Hedge Bank shall have been made), and (c) termination
or cash collateralization (in an amount and manner, and on terms, reasonably
satisfactory to the First Lien Agent) of all letters of credit issued under the
First Lien Credit Documents.

 

“Disinterested Director”
means, with respect to any transaction or series of related transactions, a
member of the Board of Directors of Casella who (1) does not have any material
direct or indirect financial interest in or with respect to such transaction or
series of related transactions and (2) is not an Affiliate, officer,
director or employee of any Person (other than Casella or any Restricted
Subsidiary) who has any direct or indirect financial interest in or with
respect to such transaction or series of related transactions.

 

“Disqualified Capital Stock”
means any class or series of Capital Stock of any Person that by its terms or
otherwise is

 

(1)           required
to be redeemed or is redeemable at the option of the holder of such class or
series of Capital Stock at any time on or prior to the date that is 91 days after
the Stated Maturity of the principal of the Notes; or

 

(2)           convertible
into or exchangeable at the option of the holder thereof for Capital Stock
referred to in clause (1) above or Indebtedness having a scheduled maturity on
or prior to the date that is 91 days after the Stated Maturity of the principal
of the Notes.

 

Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Capital Stock solely because
the holders of the Capital Stock have the right to require the issuer thereof
to repurchase such Capital Stock upon the occurrence of a “change of control”
or “asset sale” will not constitute Disqualified Capital Stock if such
requirement only becomes operative after compliance with such terms applicable
to the Notes, including the purchase of any Notes tendered pursuant thereto.

 

“Equity Interests”
means Capital Stock and all warrants, options or other rights to acquire
Capital Stock (but excluding any debt security that is convertible into, or
exchangeable for, Capital Stock).

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, or any successor statute
or statutes thereto.

 

11

 

“Existing Indebtedness”
means Indebtedness of Casella and its Restricted Subsidiaries in existence on
the Issue Date (after giving effect to the use of proceeds from the offering of
the Notes on the Issue Date and the initial borrowings under the Senior Credit
Facility as described in the Offering Memorandum under the caption “Use of
Proceeds”) other than Indebtedness under the Senior Credit Facility and
Indebtedness owed to Casella or any of its Subsidiaries, until such amounts are
repaid.

 

“First Lien Agent”
means the administrative agent under the Senior Credit Facility, which is Bank
of America, N.A. on the Issue Date.

 

“First Lien Credit
Documents” means the Senior Credit Facility, the other Loan
Documents (as defined in the Senior Credit Facility) and each of the other
agreements, documents and instruments providing for or evidencing any other
First Lien Obligation and any other document or instrument executed or
delivered at any time in connection with any First Lien Obligation (including
any intercreditor or joinder agreement among holders of First Lien Obligations
but excluding Secured Hedge Agreements and the documents governing the Cash Management
Obligations), to the extent such are effective at the relevant time, as each
may be amended, modified, restated, supplemented, replaced or refinanced from
time to time.

 

“First Lien Documents”
means the First Lien Credit Documents, the Secured Hedge Agreements and any and
all documents governing the Cash Management Obligations.

 

“First Lien Lenders”
means the “Lenders” from time to time party to, and as defined in, the Senior
Credit Facility, together with their respective successors and assigns; provided that the term “First Lien Lender” shall in any
event also include each agent, letter of credit issuer and swingline lender
under the Senior Credit Facility, including, without limitation, the “L/C Issuer”,
the “Swingline Lender” and any “Agent” under (and each as defined in) the
Senior Credit Facility.

 

“First Lien Obligations”
means (i) all Obligations under (and as defined in) the Senior Credit
Facility and under any other document relating to the Senior Credit Facility, (ii) all
Secured Hedging Obligations and (iii) all Cash Management Obligations; provided that the aggregate principal amount of, without
duplication, revolving credit loans, letters of credit, term loans, other
loans, notes or similar instruments (excluding, in any event, Cash Management Obligations
and Secured Hedging Obligations) provided for under the Senior Credit Facility
or any other document relating to the Senior Credit Facility (or any
refinancing thereof) in excess of the amount permitted under clause (1) of
the definition of “Permitted Debt” and any interest relating to such excess
amount, shall not constitute First Lien Obligations for purposes of this
Indenture.  “First Lien Obligations”
shall in any event include (a) all interest (other than interest on such excess
amount) accrued or accruing, or which would accrue, absent commencement of an
Insolvency or Liquidation Proceeding (and the effect of provisions such as Section 502(b)(2) of
the Bankruptcy Code), on or after the commencement of an Insolvency or Liquidation
Proceeding in accordance with the rate specified in the relevant First Lien
Document, whether or not the claim for such interest is allowed or allowable as
a claim in such Insolvency or Liquidation Proceeding, (b) any and all fees
and expenses (including attorneys’ and/or financial consultants’ fees and 

 

12

 

expenses) incurred by the
First Lien Agent and the First Lien Secured Parties on or after the commencement
of an Insolvency or Liquidation Proceeding, whether or not the claim for fees
and expenses is allowed or allowable under Section 502 or 506(b) of
the Bankruptcy Code or any other provision of the Bankruptcy Code or any
similar federal, state or foreign law for the relief of debtors as a claim in such
Insolvency or Liquidation Proceeding, and (c) all obligations and
liabilities of Casella and each Guarantor under each First Lien Document to
which it is a party which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due and payable (but in any event not
including any obligations excluded pursuant to the proviso in the preceding
sentence).

 

“First Lien Secured Parties”
has the meaning given to the term “First-Lien Creditors” in the Intercreditor
Agreement.

 

“First-Priority Liens”
means all Liens that secure the First Lien Obligations.

 

“Foreign Subsidiary”
means any Restricted Subsidiary of Casella organized under the laws of any
jurisdiction other than the United States of America or any State thereof or
the District of Columbia.

 

“Four Quarter Period”
has the meaning set forth in the definition of “Consolidated Fixed Charge
Coverage Ratio.”

 

“Freely Tradable”
has the meaning set forth in the Registration Rights Agreement.

 

“GAAP” means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other entity as
have been approved by a significant segment of the accounting profession, in
effect on the date of this Indenture.

 

“Global Note”
shall mean one or more IAI Global Notes, Regulation S Global Notes and 144A
Global Notes.

 

“GreenFiber” means
US GreenFiber LLC, a Delaware limited liability company.

 

“Guarantee”
means a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any
manner including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof, of all or any
part of any Indebtedness.

 

“Guarantors”
means:

 

(1)           each
borrower (other than Casella) or guarantor under the Senior Credit Facility as
of the Issue Date; and

 

13

 

(2)           each
other Subsidiary of Casella that executes a Subsidiary Guarantee in accordance
with the provisions of this Indenture;

 

and their respective successors and assigns,
and in each case, until such Person is released from its Subsidiary Guarantee
in accordance with the provisions of this Indenture.

 

“Hedge Bank”
means any Person that is a First Lien Lender or an Affiliate of a First Lien
Lender at the time it enters into a Secured Hedge Agreement, in its capacity as
a party thereto, and such Person’s successors and assigns.

 

“Hedging Obligations”
means, with respect to any Person, the obligations of such Person under:

 

(1)           interest
rate swap agreements, interest rate cap agreements and interest rate collar
agreements, foreign currency collar agreements, foreign currency hedging
agreements or foreign currency swap agreements or other similar arrangements or
agreements; and

 

(2)           forward
contracts, commodity swap agreements, commodity option agreements or other
similar agreements or arrangements.

 

“Holder” or “Noteholder” means the registered holder of any Note.

 

“IAI Global Note”
means a permanent global security in the form of Exhibit A hereto
bearing the legend in Exhibit B and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depository
or its nominee, issued in a denomination equal to the outstanding principal
amount of the Notes initially sold to the Initial Purchasers as set forth in
the Offering Memorandum.

 

“incur” means to directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to any Indebtedness and “incurrence”
shall have a correlative meaning.  For
the avoidance of doubt, the accrual of interest, accretion or amortization of
original issue discount and increase in the liquidation preference of Preferred
Stock in lieu of payment of cash dividends thereon shall not be an incurrence; provided, in each such case, that the amount thereof is
included in Consolidated Fixed Charges of Casella as accrued in the respective
period.  For the avoidance of doubt,
Existing Indebtedness shall be deemed to have been incurred prior to the date
of this Indenture.

 

“Indebtedness”
means, with respect to any specified Person, any indebtedness of such Person,
whether or not contingent:

 

(1)           in
respect of borrowed money;

 

(2)           evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof);

 

14

 

(3)           in
respect of banker’s acceptances;

 

(4)           representing
Capital Lease Obligations;

 

(5)           representing
the balance deferred and unpaid of the purchase price of any property, except
any such balance that constitutes an accrued expense or trade payable;

 

(6)           representing
any Hedging Obligations;

 

(7)           representing
any Disqualified Capital Stock of such Person and any Preferred Stock issued by
a Restricted Subsidiary of such Person; or

 

(8)           in
respect of Attributable Debt,

 

if and to the extent any of the preceding
items (other than letters of credit, Hedging Obligations, Disqualified Capital
Stock and Preferred Stock) would appear as a liability upon a balance sheet of
the specified Person prepared in accordance with GAAP.  In addition, the term “Indebtedness” includes
(a) all Indebtedness of others secured by a Lien on any asset of the specified
Person (whether or not such Indebtedness is assumed by the specified Person),
and (b) to the extent not otherwise included, the Guarantee by such Person
of any Indebtedness of any other Person.

 

The amount of any Indebtedness outstanding as of any
date shall be:

 

(1)           the
accreted value thereof, in the case of any Indebtedness issued with original
issue discount;

 

(2)           the
maximum fixed price upon the mandatory redemption or repurchase (including upon
the option of the holder), in the case of Disqualified Capital Stock of such
Person;

 

(3)           the
maximum voluntary or involuntary liquidation preferences plus accrued and
unpaid dividends, in the case of Preferred Stock of a Restricted Subsidiary of
such Person; and

 

(4)           the
principal amount thereof, together with any interest thereon that is more than
30 days past due and any premium thereon if such Indebtedness is redeemable at
the option of the holder, in the case of any other Indebtedness.

 

“Indenture”
means this Indenture, as amended or supplemented from time to time in
accordance with the terms hereof.

 

“Initial Purchasers”
means Banc of America Securities LLC, J.P. Morgan Securities Inc., Calyon
Securities (USA), Inc. and Comerica Securities, Inc.

 

“Insolvency or Liquidation
Proceeding” means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code with respect to Casella or any Guarantor, (b) any

 

15

 

other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to Casella or any Guarantor or with respect to a material portion
of its respective assets, (c) any liquidation, dissolution, reorganization
or winding up of Casella or any Guarantor, whether voluntary or involuntary and
whether or not involving insolvency or bankruptcy or (d) any assignment
for the benefit of creditors or any other marshalling of assets and liabilities
of Casella or any Guarantor.

 

“Insurance Subsidiary”
means a Wholly Owned Restricted Subsidiary of Casella organized and operated as
a captive insurance subsidiary under the laws of any State of the United
States.

 

“Intellectual Property
Security Agreement” means the Second Lien Intellectual Property
Security Agreement dated on or about the Issue Date among Casella, each of the
guarantors party thereto from time to time and the Trustee, as collateral agent
for the benefit of the Secured Parties (as defined therein).

 

“Intercreditor Agreement”
means the Intercreditor Agreement dated on or about the Issue Date among the
Second Lien Agent, the First Lien Agent, the Trustee, Casella and each other
Guarantor party thereto from time to time, as such agreement may be amended,
restated, supplemented or otherwise modified from time to time.

 

“interest”
means, with respect to the Notes, interest and any Additional Interest on the
Notes.

 

“Interest Payment Date”
means the Stated Maturity of an installment of interest on the Notes.

 

“Investments”
means, with respect to any Person, all investments by such Person in other
Persons (including Affiliates) in the forms of direct or indirect loans
(including guarantees of Indebtedness or other obligations), advances or
capital contributions, purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.  “Investment”
excludes (1) extensions of trade credit by Casella and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of Casella or such Restricted Subsidiary, as the case may be, and (2) any
purchase, redemption or other acquisition or retirement for value of any
Capital Stock of Casella or any warrants, options or other rights to purchase
or acquire any such Capital Stock.  If
Casella or any Restricted Subsidiary of Casella sells or otherwise disposes of
any Equity Interests of any direct or indirect Restricted Subsidiary of Casella
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of Casella, Casella shall be deemed to have
made an Investment on the date of any such sale or disposition equal to the
fair market value of the Equity Interests of such Restricted Subsidiary not
sold or disposed of in an amount determined as provided in the penultimate
paragraph of Section 4.11.  The
amount of any Investment shall be the original cost of such Investment, without
any adjustments for increases or decreases in value, or

 

16

 

write-ups, write-downs or
write-offs with respect to such Investment but less all cash distributions
constituting a return of capital.

 

“Issue Date”
means July 9, 2009, the date of original issuance of the Notes.

 

“Lien” means,
with respect to any asset, any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind in respect of such asset, whether or not
filed, recorded or otherwise perfected under applicable law, including any
conditional sale or other title retention agreement, any lease in the nature
thereof (other than an operating lease), any option or other agreement to sell
or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

 

“Maturity Date”
means July 15, 2014.

 

“MERC” means
Maine Energy Recovery Corporation, Limited Partnership, a limited partnership
formed under the laws of Maine.

 

“Moody’s” means
Moody’s Investors Service, Inc. or any successor thereto.

 

“Net Proceeds”
means the aggregate cash proceeds received by Casella or any of its Restricted
Subsidiaries in respect of any Asset Sale, net of (a) the direct costs
relating to such Asset Sale, including, without limitation, (i) legal,
accounting and investment banking fees, and sales commissions, (ii) any
relocation expenses incurred as a result thereof, and (iii) taxes paid or
payable as a result thereof, in each case after taking into account any
available tax credits or deductions and any tax sharing arrangements, (b) amounts
required to be applied to the repayment of Indebtedness, other than
subordinated Indebtedness, secured by a prior or senior Lien on the specific
asset or assets being financed that were the subject of such Asset Sale, which
Lien is permitted by this Indenture, (c) if the assets subject to such
Asset Sale were financed by industrial revenue bonds or solid waste disposal
bonds, amounts required to be applied to the repayment of such bonds (or to the
repayment of Indebtedness funded by such bonds) with the proceeds of such
disposition by the terms of such bonds or such Indebtedness and (d) appropriate
amounts to be provided by Casella or any Restricted Subsidiary, as the case may
be, as a reserve required in accordance with GAAP against any adjustment in the
sale price of such asset or assets or liabilities associated with such Asset
Sale and retained by Casella or any Restricted Subsidiary, as the case may be,
after such Asset Sale, including, without limitation, pensions and other
postemployment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as reflected in an Officer’s Certificate delivered to the
Trustee; provided, however,
that any amounts remaining after adjustments, revaluations or liquidations of
such reserves shall constitute Net Proceeds.

 

“Non-U.S. Person”
has the meaning assigned to such term in Regulation S.

 

“Notes” means,
collectively, Casella’s 11% Senior Second Lien Notes due 2014 (including
exchange notes issued therefor pursuant to the Registration Rights Agreement)
issued

 

17

 

in accordance with Section 2.02
(whether on the Issue Date or thereafter) treated as a single class of
securities under this Indenture, as amended or supplemented from time to time
in accordance with the terms of this Indenture.

 

“Obligations”
means, with respect to any Indebtedness, the principal, premium, if any,
interest, penalties, fees, indemnifications, reimbursements, damages and other
liabilities payable under the documentation governing such Indebtedness.

 

“Offering Memorandum”
means the offering memorandum of Casella and the Guarantors dated July 1,
2009 relating to the Notes issued on the Issue Date.

 

“Officer” means,
with respect to any Person, the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Chief Financial Officer, the Controller,
or the Secretary of such Person.

 

“Officer’s Certificate”
means a certificate conforming to the provisions of Section 12.05 signed
on behalf of Casella by any one of the following:  the Chief Executive Officer, the President,
the Vice President-Finance, the Chief Financial Officer, Treasurer, Controller
or the Secretary of Casella and delivered to the Trustee.

 

“144A Global Note”
means a permanent global security in registered form representing the aggregate
principal amount of Notes sold in reliance on Rule 144A under the Securities
Act.

 

“Opinion of Counsel”
means a written opinion conforming to the provisions of Section 12.05 from
legal counsel who is reasonably acceptable to the Trustee.  The counsel may be an employee of or counsel
to Casella, a Guarantor or the Trustee.

 

“Permitted Business”
means the business of Casella and its Restricted Subsidiaries conducted on the
Issue Date and businesses ancillary or reasonably related thereto, which, for
purposes hereof, shall include the business conducted by GreenFiber and businesses
ancillary or reasonably related thereto.

 

“Permitted Investments”
means:

 

(1)           any
Investment in Cash Equivalents;

 

(2)           any
Investment in Casella or any Guarantor;

 

(3)           any
Investment by Casella or any of its Restricted Subsidiaries in a Person, if as
a result of such Investment:

 

(a)           such
Person becomes a Guarantor; or

 

18

 

(b)           such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, Casella or a
Guarantor;

 

(4)           any
Investment made as a result of the receipt of non-cash consideration from an
Asset Sale that was made pursuant to and in compliance with the provisions of Section 4.13
or any transaction not constituting an Asset Sale by reason of the $5.0 million
threshold contained in clause (1) of the definition thereof; provided that non-cash consideration received in an Asset
Sale or an exchange or swap of assets shall be pledged as Collateral under the
Security Documents to the extent the assets subject to such Asset Sale or
exchange or swap of assets constituted Collateral, with the Lien on such Collateral
securing the Notes being of the same priority with respect to the Notes as the
Lien on the assets disposed of;

 

(5)           any
Investment acquired in exchange for the issuance of, or acquired with the net
cash proceeds of any substantially concurrent issuance and sale of, Qualified
Capital Stock; provided that no such issuance or
sale shall increase the Basket;

 

(6)           loans
and advances in the ordinary course of business to employees, officers or
directors of Casella or any of its Restricted Subsidiaries in an aggregate
amount, when taken together with all other Investments made pursuant to this
clause (6) since the date of this Indenture, not to exceed $2.0 million at
any one time outstanding;

 

(7)           Hedging
Obligations permitted by clause (6) of the second paragraph of Section 4.10;

 

(8)           Investments
in securities of trade creditors or customers received in settlement of
obligations or upon the bankruptcy or insolvency of such trade creditors or
customers pursuant to any plan of reorganization or similar arrangement;

 

(9)           other
Investments in any Person having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (9) since the date of this Indenture, not exceeding $15.0
million at any one time outstanding; and

 

(10)         Investments
in an Insurance Subsidiary having an aggregate fair market value (measured on
the date each such Investment was made and without giving effect to subsequent
changes in value), when taken together with all other Investments made pursuant
to this clause (10) since the date of this Indenture, not exceeding $20.0
million at any one time outstanding.

 

The amount of Investments outstanding at any time
pursuant to clause (9) above shall be deemed to be reduced, without
duplication:

 

19

 

(a)                                  upon the disposition or
repayment of or return on any Investment made pursuant to clause (9) above,
by an amount equal to the return of capital with respect to such Investment to
Casella or any of its Restricted Subsidiaries (to the extent not included in
the computation of Consolidated Net Income), less the cost of the disposition
of such Investment and net of taxes;

 

(b)                                 upon a redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary, by an amount equal to the
lesser of (x) the fair market value of Casella’s proportionate interest in
such Subsidiary immediately following such redesignation, and (y) the
aggregate amount of Investments in such Subsidiary that increased (and did not
previously decrease) the amount of Investments outstanding pursuant to clause (9) above;
and

 

(c)                                  upon the making of an
Investment in a Person that was not a Restricted Subsidiary of Casella
immediately prior to the making of such Investment but that subsequently
becomes a Restricted Subsidiary of Casella, by an amount equal to the lesser of
(x) the fair market value of Casella’s proportionate interest in such
Subsidiary immediately following such redesignation, and (y) the aggregate
amount of Investments in such Subsidiary that increased (and did not previously
decrease) the amount of Investments outstanding pursuant to clause (9) above.

 

“Permitted
Liens” means:

 

(1)                                  Liens on the Collateral
securing:

 

(a)                                  the Notes, the
Subsidiary Guarantees thereof and other Obligations under this Indenture and in
respect thereof and any obligations owing to the Trustee or the Second Lien
Agent under this Indenture or the Security Documents; or

 

(b)                                 the First Lien
Obligations;

 

(2)                                  Liens in favor of Casella or
any Restricted Subsidiary;

 

(3)                                  Liens on property of a
Person existing at the time such Person is merged with or into or consolidated
with Casella or any Restricted Subsidiary of Casella; provided
that such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with Casella or its Restricted Subsidiary;

 

(4)                                  Liens on property existing
at the time of acquisition thereof by Casella or any Restricted Subsidiary of
Casella; provided that such Liens were in existence
prior to the contemplation of such acquisition and do not extend to any assets
other than the property so acquired;

 

(5)                                  Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance bonds
or other obligations of a like nature incurred in the ordinary course of
business;

 

20

 

(6)                                  Liens to secure Indebtedness
permitted by clause (3) of the second paragraph of Section 4.10; provided that no such Liens shall extend to any asset other
than the specified asset being financed and additions and improvements thereon;

 

(7)                                  Liens existing on the date
of this Indenture and continuation statements with respect to such Liens filed
in accordance with the provisions of the Uniform Commercial Code or similar
state commercial codes;

 

(8)                                  judgment Liens not giving
rise to an Event of Default so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired;

 

(9)                                  Liens securing Permitted
Refinancing Indebtedness which is incurred to refinance any Indebtedness which
has been secured by a Lien permitted under this Indenture and which has been
incurred in accordance with the provisions of this Indenture; provided that such Liens (a) are not materially less
favorable to the Holders and are not materially more favorable to the
lienholders with respect to such Liens than the Liens in respect of the
Indebtedness being refinanced and (b) do not extend to or cover any property or
assets of Casella or any of its Restricted Subsidiaries not securing the
Indebtedness so refinanced;

 

(10)                            Liens upon specific items of
inventory or other goods and proceeds of any Person securing such Person’s
obligations in respect of bankers’ acceptances issued or created for the
account of such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;

 

(11)                            Liens securing reimbursement
obligations with respect to letters of credit which encumber documents and
other property relating to such letters of credit and products and proceeds
thereof;

 

(12)                            Liens for taxes, assessments
or governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate provision
as shall be required in conformity with GAAP shall have been made therefor;

 

(13)                            Liens securing Hedging
Obligations;

 

(14)                            deposits or pledges made in
connection with, or to secure payment of, workmen’s compensation, unemployment
insurance, old age pensions or other social security obligations;

 

(15)                            Liens of carriers,
warehousemen, mechanics and materialmen, and other like liens incurred in the
ordinary course of business;

 

21

 

(16)                            Liens on any landfill
acquired after the Issue Date securing reasonable royalty or similar payments
(determined by reference to volume or weight utilized) due to the seller of
such landfill as a consequence of such acquisition; and

 

(17)                            other Liens incurred in the
ordinary course of business of Casella or any Restricted Subsidiary of Casella
with respect to obligations that do not exceed $5.0 million at any one time
outstanding.

 

“Permitted Refinancing
Indebtedness” means any Indebtedness of Casella or any of its
Restricted Subsidiaries issued in exchange for, or the net proceeds of which
are used to refinance other Indebtedness of Casella or any of its Restricted
Subsidiaries; provided that:

 

(1)                                  the principal amount (or
accreted value, if applicable) or liquidation preference of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus accrued interest and premium, if any, on the Indebtedness,
or the liquidation preference, plus accrued dividends and premium, if any, on
the Preferred Stock, so refinanced (plus the amount of reasonable expenses
incurred in connection therewith);

 

(2)                                  such Permitted Refinancing
Indebtedness has a final maturity date, or mandatory redemption date, later
than the final maturity date, or mandatory redemption date as applicable, of,
and has a Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness or Preferred Stock being
refinanced;

 

(3)                                  if the Indebtedness being
refinanced is subordinated in right of payment to the Notes or the Subsidiary
Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of
payment to the Notes or the Subsidiary Guarantees, as applicable, on terms at
least as favorable to the Holders of Notes as those contained in the documentation
governing the Indebtedness being refinanced;

 

(4)                                  if the Indebtedness being
refinanced ranks pari passu with the Notes or the
Subsidiary Guarantees, such Permitted Refinancing Indebtedness ranks pari passu with, or is subordinated in right of payment to,
the Notes or the Subsidiary Guarantees, as applicable;

 

(5)                                  Preferred Stock shall be
refinanced only with Preferred Stock; and

 

(6)                                  the obligor(s) on the
Permitted Refinancing Indebtedness thereof shall include only obligor(s) on
such Indebtedness being refinanced, Casella and/or one or more of the
Guarantors.

 

“Person” means
an individual, partnership, corporation, limited liability company, firm,
association, joint stock company, unincorporated organization, trust, bank,
trust company, land trust, business trust or other enterprise, joint venture or
a governmental agency or political subdivision thereof or other entity.

 

22

 

“Pledge Agreement”
means the Second Lien Pledge Agreement dated on or about the Issue Date among
Casella, each of the guarantors from time to time party thereto and the
Trustee, as collateral agent for the benefit of the Secured Parties (as defined
therein).

 

“Preferred Stock”
of any Person means any Capital Stock of such Person that has preferential
rights to any other Capital Stock of such Person with respect to dividends or redemption
or upon liquidation.

 

“Private Placement Legend”
means the legends initially set forth on the Notes in the form set forth in Exhibit B.

 

“Public Equity Offering”
means any underwritten public offering of common stock of Casella.

 

“Purchase Money Obligations”
means Indebtedness of Casella or any of its Restricted Subsidiaries incurred
for the purpose of financing all or any part of the purchase price, or the cost
of construction or improvement, of any assets to be used in the business of
Casella or such Restricted Subsidiary; provided, however, that
(1) the aggregate amount of such Indebtedness shall not exceed such
purchase price or cost, (2) such Indebtedness shall be incurred no later
than 180 days after the acquisition of such assets or such construction or improvement
and (3) such Indebtedness shall not be secured by any assets of Casella or
any of its Restricted Subsidiaries other than the assets so acquired,
constructed or improved.

 

“Qualified Capital Stock”
means any Capital Stock of Casella that is not Disqualified Capital Stock.

 

“Qualified Institutional
Buyer” or “QIB” shall have
the meaning specified in Rule 144A under the Securities Act.

 

“Record Date”
means the applicable Record Date specified in the Notes; provided
that if any such date is not a Business Day, the Record Date shall be the first
day immediately preceding such specified day that is a Business Day.

 

“Redemption Date,”
when used with respect to any Note to be redeemed, means the date fixed for
such redemption pursuant to this Indenture and the Notes.

 

“Redemption Price,”
when used with respect to any Note to be redeemed, means the price fixed for
such redemption, payable in immediately available funds, pursuant to this Indenture
and the Notes.

 

“refinance”
means to extend, refinance, renew, replace, defease or refund, including
successively; and “refinancing” and “refinanced” shall have correlative
meanings.

 

“Registration Rights Agreement”
means (i) the Registration Rights Agreement dated as of the Issue Date
among Casella, the Guarantors and the Initial Purchasers and (ii) any

 

23

 

other registration rights
agreement entered into in connection with an issuance of Additional Notes in a
private offering after the Issue Date.

 

“Regulation S”
means Regulation S under the Securities Act.

 

“Regulation S Global Note”
means a permanent global security in registered form representing the aggregate
principal amount of Notes sold in reliance on Regulation S under the Securities
Act.

 

“Responsible Officer”
means, when used with respect to the Trustee, any officer in the Corporate
Trust Department of the Trustee to whom any corporate trust matter is referred
because of such officer’s knowledge of and familiarity with the particular
subject and shall also mean any officer who shall have direct responsibility
for the administration of this Indenture.

 

“Restricted Investment”
means an Investment other than a Permitted Investment.

 

“Restricted Security”
means a Note that constitutes a “Restricted Security” within the meaning of Rule 144(a)(3) under
the Securities Act; provided, however, that the Trustee shall be entitled to request and
conclusively rely on an Opinion of Counsel with respect to whether any Note
constitutes a Restricted Security.

 

“Restricted Subsidiary”
of a Person means any Subsidiary of the referent Person that is not an
Unrestricted Subsidiary.

 

“Rule 144A”
means Rule 144A under the Securities Act.

 

“S&P” means
Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc., or any successor thereto.

 

“Sale and Leaseback
Transaction” means an arrangement relating to property now owned or
hereafter acquired whereby Casella or a Restricted Subsidiary of Casella
transfers such property to a Person and Casella or a Restricted Subsidiary of
Casella leases it from such Person.

 

“Second Lien Agent”
means Wilmington Trust Company, as collateral agent for the benefit of the
Trustee and Holders of the Notes.

 

“Second Lien Obligations”
means all Indebtedness and other Obligations with respect to the Notes issued
under this Indenture and the Subsidiary Guarantees thereof.  “Second Lien Obligations” shall in any event
include (a) all interest accrued or accruing, or which would accrue,
absent commencement of an Insolvency or Liquidation Proceeding (and the effect
of provisions such as Section 502(b)(2) of the Bankruptcy Code), on
or after the commencement of an Insolvency or Liquidation Proceeding in accordance
with the rate specified in this Indenture, whether or not the claim for such
interest is allowed or allowable as a claim in such Insolvency or Liquidation
Proceeding, (b) any and all fees and expenses (including attorneys’ and/or

 

24

 

financial consultants’ fees
and expenses) incurred by the Second Lien Agent and the Holders on or after the
commencement of an Insolvency or Liquidation Proceeding, whether or not the
claim for fees and expenses is allowed or allowable under Section 502 or
506(b) of the Bankruptcy Code or any other provision of the Bankruptcy
Code or any similar federal, state or foreign law for the relief of debtors as
a claim in such Insolvency or Liquidation Proceeding, and (c) all obligations
and liabilities of Casella and each Guarantor under this Indenture, the Notes
or the Subsidiary Guarantees which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due and payable.

 

“Second-Priority Liens”
means all Liens on the Collateral that secure the Second Lien Obligations.

 

“Secured Hedge Agreements”
means each agreement that governs Hedging Obligations by and between Casella or
any Guarantor, on the one hand, and any Hedge Bank from time to time, but only
to the extent such agreement is permitted under the Senior Credit Facility and
constitutes an “Obligation” (as such term is defined under the Senior Credit
Facility); provided, however, that such Hedging
Obligations shall not, solely by virtue of constituting an “Obligation” (as so
defined), also constitute Indebtedness under the Senior Credit Facility.

 

“Secured Hedging
Obligations” means (i) obligations (including obligations
which, but for the automatic stay under Section 362(a) of the Bankruptcy
Code, would become due) and liabilities, whether now existing or hereafter
arising (including, without limitation, indemnities, fees and interest thereon
and all interest and fees that accrue on or after the commencement of any
Insolvency or Liquidation Proceeding at the rate provided for in the respective
Secured Hedge Agreement, whether or not a claim for post-petition interest or
fees is allowed in any such Insolvency or Liquidation Proceeding), of Casella
or any Guarantor owing to any Hedge Bank, now existing or hereafter incurred
under, or arising out of or in connection with, any Secured Hedge Agreement
(including all such obligations and Indebtedness under any guarantee of any
such Secured Hedge Agreement to which Casella or such Guarantor is a party) and
(ii) all performance and compliance obligations by Casella or any
Guarantor under any Secured Hedge Agreement.

 

“Security Agreement”
means the Second Lien Security Agreement dated on or about the Issue Date among
Casella, each of the guarantors from time to time party thereto and the
Trustee, as collateral agent for the benefit of the Secured Parties (as defined
therein).

 

“Security Documents”
means (i) the Intercreditor Agreement, (ii) the Security Agreement, (iii) the
Pledge Agreement, (iv) the Intellectual Property Security Agreement and (v) the
other security agreements, pledge agreements, mortgages, deeds of trust,
collateral assignments, control agreements and related agreements (including,
without limitation, financing statements under the UCC) granting a security
interest in any assets of any Person to secure the Second Lien Obligations as
each may be amended, restated, supplemented or otherwise modified from time to
time.

 

25

 

“Securities Act”
means the Securities Act of 1933, as amended, or any successor statute or
statutes thereto.

 

“Senior Credit Facility”
means the Second Amended and Restated Credit Agreement, dated on or about the
Issue Date, among Casella, the Guarantors, Bank of America, N.A., as
administrative agent, and the lenders and other agents party thereto, including
any notes, guarantees, collateral and security documents (including mortgages,
pledge agreements and other security arrangements), instruments and agreements
executed in connection therewith, and in each case as amended or refinanced
from time to time, including any agreement or agreements extending the maturity
of, refinancing or otherwise restructuring (including increasing the amount of
borrowings or other Indebtedness outstanding or available to be borrowed
thereunder) all or any portion of the Indebtedness under such agreement, and
any successor or replacement agreement or agreements with the same or any other
borrowers, agents, creditors, lenders or group of creditors or lenders.

 

“Senior Subordinated Notes”
means Casella’s 9.75% Senior Subordinated Notes due 2013 outstanding on the
Issue Date.

 

“Significant Subsidiary”
means (1) any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof or (2) any Restricted Subsidiary that, when aggregated with all
other Restricted Subsidiaries that are not otherwise Significant Subsidiaries
and as to which any event described in clause (7), (8) or (9) of Section 6.01
has occurred and is continuing, would constitute a Significant Subsidiary under
clause (1) of this definition.

 

“Specified Assets”
means K-C International Ltd., the brokerage business of Casella Recycling LLC
(f/k/a KTI Recycling of New England Inc.), U.S. GreenFiber, LLC, KTI New Jersey
Fibers, Inc., Atlantic Coast Fibers, Inc., Casella RTG Investors Co.
LLC and RecycleRewards, Inc. (the parent company of RecycleBank, LLC), and
the companies and assets comprising the FCR operating segment, or the
successors of the foregoing only with respect to the businesses conducted by
the foregoing on the date of this Indenture.

 

“Stated Maturity”
means, with respect to any installment of interest or principal on any
Indebtedness, the date on which such payment of interest or principal is
scheduled to be paid in the documentation governing such Indebtedness, and
shall not include any contingent obligations to repay, redeem or repurchase any
such interest or principal prior to the date originally scheduled for the
payment thereof.

 

“Subsidiary”
means, with respect to any Person:

 

(1)                                  any corporation, association
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees

 

26

 

thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or more of the
other Subsidiaries of that Person (or a combination thereof); and

 

(2)                                  any partnership (a) the
sole general partner or the managing general partner of which is such Person or
a Subsidiary of such Person or (b) the only general partners of which are
such Person or of one or more Subsidiaries of such Person (or any combination
thereof).

 

“Subsidiary Guarantee”
means the Guarantee by each Guarantor of Casella’s payment obligations under
this Indenture and the Notes, executed pursuant to this Indenture.

 

“TIA” means the
Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb), as amended, as in
effect on the date of the execution of this Indenture until such time as this
Indenture is qualified under the TIA, and thereafter as in effect on the date
on which this Indenture is qualified under the TIA, except as otherwise
provided in Section 9.04.

 

“Transaction Date”
means the date of the transaction giving rise to the need to calculate the
Consolidated Fixed Charge Coverage Ratio.

 

“transfer” means
to sell, assign, transfer, lease (other than pursuant to an operating lease
entered into in the ordinary course of business), convey or otherwise dispose
of, including by Sale and Leaseback Transaction, consolidation, merger or
otherwise.

 

“Trustee” means
the party named as such in this Indenture until a successor replaces it in
accordance with the provisions of this Indenture and thereafter means such successor.

 

“Uniform Commercial Code”
or “UCC” means the Uniform Commercial Code
as in effect in the applicable jurisdiction.

 

“Unrestricted
Subsidiary” of any Person means

 

·                  any Subsidiary of such Person that at the
time of determination has been designated an Unrestricted Subsidiary, and has
not been redesignated a Restricted Subsidiary, in accordance with Section 4.19;
and

 

·                  any Subsidiary of such Unrestricted
Subsidiary.

 

“U.S. Government
Obligations” means direct obligations of, and obligations guaranteed
by, the United States of America for the payment of which the full faith and
credit of the United States of America is pledged and which are not callable or
redeemable at the issuer’s option.

 

“U.S. Legal Tender”
means such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts.

 

27

 

“Voting Stock”
of any Person as of any date means the Capital Stock of such Person that is
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees of such Person.

 

“Weighted Average Life to
Maturity” means, when applied to any Indebtedness or Disqualified
Capital Stock at any date, the number of years obtained by dividing:

 

(1)                                  the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal or
liquidation preference, including payment at final maturity, in respect
thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such payment;
by

 

(2)                                  the then outstanding
principal amount or liquidation preference of such Indebtedness or Disqualified
Capital Stock.

 

“Wholly Owned Restricted
Subsidiary” of any Person means a Restricted Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors’ qualifying shares) shall at the time be owned by
such Person and/or by one or more Wholly Owned Restricted Subsidiaries of such
Person.

 

SECTION 1.02.                                                     Other
Definitions.

 

	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Affiliate
  Transaction”

  	
   

  	
  4.14

  	
   

  
	
  “Alternate
  Offer”

  	
   

  	
  4.09

  	
   

  
	
  “Asset
  Sale Offer”

  	
   

  	
  4.13

  	
   

  
	
  “Asset
  Sale Offer Amount”

  	
   

  	
  4.13

  	
   

  
	
  “Asset
  Sale Payment”

  	
   

  	
  4.13

  	
   

  
	
  “Asset
  Sale Payment Date”

  	
   

  	
  4.13

  	
   

  
	
  “Basket”

  	
   

  	
  4.11

  	
   

  
	
  “Change
  of Control Offer”

  	
   

  	
  4.09

  	
   

  
	
  “Change
  of Control Payment”

  	
   

  	
  4.09

  	
   

  
	
  “Change
  of Control Payment Date”

  	
   

  	
  4.09

  	
   

  

 

28

 

	
  Term

  	
   

  	
  Defined
  in Section

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Covenant
  Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Designation”

  	
   

  	
  4.19

  	
   

  
	
  “Event
  of Default”

  	
   

  	
  6.01

  	
   

  
	
  “Excess
  Proceeds”

  	
   

  	
  4.13

  	
   

  
	
  “Guarantee
  Obligations”

  	
   

  	
  11.01

  	
   

  
	
  “Institutional
  Accredited Investor”

  	
   

  	
  2.16

  	
   

  
	
  “Legal
  Defeasance”

  	
   

  	
  8.02

  	
   

  
	
  “Pari
  Passu Debt”

  	
   

  	
  4.13

  	
   

  
	
  “Participants”

  	
   

  	
  2.15

  	
   

  
	
  “Paying
  Agent”

  	
   

  	
  2.03

  	
   

  
	
  “Payment
  Default”

  	
   

  	
  6.01

  	
   

  
	
  “Permitted
  Debt”

  	
   

  	
  4.10

  	
   

  
	
  “Physical
  Notes”

  	
   

  	
  2.01

  	
   

  
	
  “Registrar”

  	
   

  	
  2.03

  	
   

  
	
  “Replacement
  Assets”

  	
   

  	
  4.13

  	
   

  
	
  “Restricted
  Payments”

  	
   

  	
  4.11

  	
   

  
	
  “Revocation”

  	
   

  	
  4.19

  	
   

  
	
  “Senior
  Subordinated Notes Indenture”

  	
   

  	
  12.15

  	
   

  
	
  “Surviving
  Person”

  	
   

  	
  5.01

  	
   

  

 

SECTION 1.03.                                                     Incorporation
by Reference of TIA.

 

Whenever this Indenture refers to a provision of the
TIA, such provision is incorporated by reference in, and made a part of, this
Indenture.  The following TIA terms used
in this Indenture have the following meanings:

 

“indenture securities” means the Notes.

 

“indenture security holder” means a Holder or
a Noteholder.

 

“indenture to be qualified” means this
Indenture.

 

“indenture trustee” or “institutional
trustee” means the Trustee.

 

“obligor” on the indenture securities means
Casella, any Guarantor or any other obligor on the Notes.

 

All other TIA terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
Commission rule and not otherwise defined herein have the meanings
assigned to them therein.

 

29

 

SECTION 1.04.                  Rules of Construction.

 

Unless the context otherwise requires:

 

(1)           a term has the meaning
assigned to it;

 

(2)           an accounting term not
otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(3)           “or” is not exclusive;

 

(4)           words in the singular
include the plural, and words in the plural include the singular;

 

(5)           provisions apply to
successive events and transactions;

 

(6)           “herein,” “hereof” and other
words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and

 

(7)           the words “including,” “includes”
and similar words shall be deemed to be followed by “without limitation.”

 

ARTICLE TWO

 

THE NOTES

 

SECTION 2.01.                  Form and
Dating.

 

The Notes and the Trustee’s certificate of
authentication shall be substantially in the form of Exhibit A
hereto.  The Notes may have notations,
legends or endorsements required by law, stock exchange rule or
usage.  Casella shall approve the form of
the Notes and any notation, legend or endorsement on them.  Each Note shall be dated the date of its issuance
and show the date of its authentication. 
Each Note shall have an executed Subsidiary Guarantee from each of the
Guarantors endorsed thereon substantially in the form of Exhibit E.

 

The terms and provisions contained in the Notes and
the Subsidiary Guarantees shall constitute, and are hereby expressly made, a
part of this Indenture and, to the extent applicable, Casella, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms and provisions and to be bound thereby.

 

Notes offered and sold in reliance on Rule 144A
and Notes offered and sold in reliance on Regulation S shall be issued
initially in the form of one or more Global Notes, substantially in the form
set forth in Exhibit A, deposited with the Trustee, as custodian
for the Depository, duly executed by Casella (and having an executed Subsidiary
Guarantee from each of the 

 

30

 

Guarantors endorsed thereon)
and authenticated by the Trustee as hereinafter provided and shall bear the
legends set forth in Exhibit B. 
Each Global Note shall represent such of the outstanding Notes as shall
be specified therein and shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be increased or decreased, as appropriate, to reflect exchanges, redemptions
and transfers of interests.  Any
endorsement of a Global Note to reflect the amount of any increase or decrease
in the amount of outstanding Notes represented thereby shall be made by the
Trustee in accordance with written instructions given by the Holder thereof as
required by Section 2.06 hereof.

 

Notes issued in exchange for interests in a Global
Note pursuant to Section 2.16 may be issued in the form of permanent
certificated Notes in registered form in substantially the form set forth in Exhibit A
(the “Physical Notes”).

 

Additional Notes ranking pari passu
with the Notes issued on the Issue Date may be created and issued from time to
time by Casella without notice to or consent of the Holders and shall be consolidated
with and form a single class with the Notes issued on the Issue Date and shall
have the same terms as to status, redemption or otherwise as the Notes issued
on the Issue Date (other than issue date, issue price, initial interest payment
date and initial interest record date); provided that Casella’s ability
to issue Additional Notes shall be subject to Casella’s compliance with Sections
4.10 and 4.12 hereof.

 

SECTION 2.02.                  Execution and
Authentication.

 

One Officer of Casella (who shall have been duly
authorized by all requisite corporate actions) shall sign the Notes for Casella
by manual or facsimile signature.

 

If an Officer whose signature is on a Note or
Subsidiary Guarantee, as the case may be, was an Officer at the time of such
execution but no longer holds that office at the time the Trustee authenticates
the Note, the Note shall nevertheless be valid.

 

A Note shall not be valid until an authorized
signatory of the Trustee manually signs the certificate of authentication on
the Note.  The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee shall authenticate Notes for original
issue on the Issue Date in the aggregate principal amount of $180,000,000 upon
a written order of Casella in the form of an Officer’s Certificate which shall
be in a form reasonably acceptable to the Trustee.  In addition, the Trustee shall authenticate
Additional Notes thereafter in unlimited amount (so long as not otherwise prohibited
by the terms of this Indenture, including without limitation, Sections 4.10 and
4.12) for original issue upon a written order of Casella in the form of an
Officer’s Certificate which shall be in a form reasonably acceptable to the
Trustee.  Each such Officer’s Certificate
shall specify the amount of Notes to be authenticated and the date on which the
Notes are to be authenticated.

 

31

 

The Trustee may appoint an authenticating agent
reasonably acceptable to Casella to authenticate Notes.  Unless otherwise provided in the appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do
so.  Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights
as an Agent to deal with Casella and Affiliates of Casella.

 

The Notes shall be issuable only in registered form
without coupons in denominations of $2,000 and integral multiples of $1,000 in
excess thereof.

 

SECTION 2.03.                  Registrar and
Paying Agent.

 

Casella shall maintain an office or agency where (a) Notes
may be presented or surrendered for registration of transfer or for exchange (“Registrar”), (b) Notes may be presented or surrendered
for payment (“Paying Agent”) and (c) notices
and demands to or upon Casella in respect of the Notes and this Indenture may
be served.  Casella may also from time to
time designate one or more other offices or agencies where the Notes may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or rescission shall in any
manner relieve Casella of its obligation to maintain an office or agency for
such purposes.  Casella may act as its
own Registrar or Paying Agent, except that for the purposes of Articles Three
and Eight and Sections 4.09 and 4.13, neither Casella nor any Affiliate of
Casella shall act as Paying Agent.  The
Registrar shall keep a register of the Notes and of their transfer and
exchange.  Casella, upon notice to the
Trustee, may have one or more co-Registrars and one or more additional paying
agents reasonably acceptable to the Trustee. 
The term “Paying Agent” includes any additional paying agent.  Casella initially appoints the Trustee as
Registrar and Paying Agent until such time as the Trustee has resigned or a
successor has been appointed.

 

Casella shall enter into an appropriate agency
agreement with any Agent not a party to this Indenture, which agreement shall
implement the provisions of this Indenture that relate to such Agent.  Casella shall notify the Trustee, in advance,
of the name and address of any such Agent. 
If Casella fails to maintain a Registrar or Paying Agent, the Trustee shall
act as such.

 

SECTION 2.04.                  Paying Agent To
Hold Assets in Trust.

 

Casella shall require each Paying Agent other than
the Trustee to agree in writing that each Paying Agent shall hold in trust for
the benefit of Holders or the Trustee all assets held by the Paying Agent for
the payment of principal of, or interest on, the Notes (whether such assets
have been distributed to it by Casella or any other obligor on the Notes), and
shall notify the Trustee of any Default by Casella (or any other obligor on the
Notes) in making any such payment. 
Casella at any time may require a Paying Agent to distribute all assets
held by it to the Trustee and account for any assets disbursed and the Trustee
may at any time during the continuance of any payment Default, upon written
request to a Paying Agent, require such Paying Agent to distribute all assets
held by it to the Trustee and to account for any assets distributed.  Upon 

 

32

 

distribution to the Trustee
of all assets that shall have been delivered by Casella to the Paying Agent,
the Paying Agent shall have no further liability for such assets.

 

SECTION 2.05.                  Holder Lists.

 

The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to it of the names and
addresses of Holders.  If the Trustee is
not the Registrar, Casella shall furnish to the Trustee at least two (2) Business
Days prior to each Interest Payment Date and at such other times as the Trustee
may request in writing a list in such form and as of such date as the Trustee
may reasonably require of the names and addresses of Holders, which list may be
conclusively relied upon by the Trustee.

 

SECTION 2.06.                  Transfer and
Exchange.

 

When Notes are presented to the Registrar or a
co-Registrar with a request to register the transfer of such Notes or to
exchange such Notes for an equal principal amount of Notes of other authorized
denominations, the Registrar or co-Registrar shall register the transfer or
make the exchange as requested if its requirements for such transaction are
met; provided, however,
that the Notes surrendered for transfer or exchange shall be duly endorsed or
accompanied by a written instrument of transfer in form satisfactory to
Casella, which Casella shall confirm to the Registrar or co-Registrar in
writing, and the Registrar or co-Registrar, duly executed by the Holder thereof
or his or her attorney duly authorized in writing.  To permit registrations of transfers and
exchanges, Casella shall prepare and execute new Notes if such transfer or
exchange is permitted hereunder and the Trustee shall, upon written order of
Casella in the form of an Officer’s Certificate, which shall be in a form
reasonably acceptable to the Trustee, authenticate Notes.  No service charge shall be made for any registration
of transfer or exchange, but Casella may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.

 

The Registrar or co-Registrar shall not be required
to register the transfer of or exchange of any Note (i) during a period
beginning at the opening of business 15 days before the mailing of a notice of
redemption of Notes and ending at the close of business on the day of such
mailing, (ii) selected for redemption in whole or in part pursuant to Article Three,
except the unredeemed portion of any Note being redeemed in part, and (iii) during
a Change of Control Offer, an Alternate Offer or an Asset Sale Offer if such
Note is tendered pursuant to such Change of Control Offer, Alternate Offer or
Asset Sale Offer and not withdrawn.

 

Any Holder of a beneficial interest in a Global Note
shall, by acceptance of such beneficial interest, agree that transfers of
beneficial interests in such Global Notes may be effected only through a
book-entry system maintained by the Holder of such Global Note (or its agent),
and that ownership of a beneficial interest in the Note shall be required to be
reflected in a book-entry system.

 

33

 

SECTION 2.07.                  Replacement
Notes.

 

If a mutilated Note is surrendered to the Trustee or
if the Holder of a Note claims that the Note has been lost, destroyed or
wrongfully taken, Casella shall issue and, upon written order of Casella in the
form of an Officer’s Certificate, which shall be in a form reasonably acceptable
to the Trustee, the Trustee shall authenticate a replacement Note if the
Trustee’s requirements are met.  Such
Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of both Casella and the Trustee, to protect Casella, the Trustee or
any Agent from any loss which any of them may suffer if a Note is
replaced.  Casella may charge such Holder
for its reasonable out-of-pocket expenses in replacing a Note pursuant to this Section 2.07,
including reasonable fees and expenses of counsel and of the Trustee.

 

Every replacement Note is an additional obligation
of Casella and every replacement Subsidiary Guarantee shall constitute an
additional obligation of the Guarantor thereof.

 

SECTION 2.08.                  Outstanding
Notes.

 

Notes outstanding at any time are all the Notes that
have been authenticated by the Trustee except those cancelled by it, those
delivered to it for cancellation and those described in this Section as
not outstanding.  A Note does not cease
to be outstanding because Casella, the Guarantors or any of their respective
Affiliates holds the Note (subject to the provisions of Section 2.09).

 

If a Note is replaced pursuant to Section 2.07
(other than a mutilated Note surrendered for replacement), it ceases to be
outstanding unless a Responsible Officer of the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide
purchaser.  A mutilated Note ceases to be
outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07.

 

If the principal amount of any Note is considered
paid under Section 4.01, it ceases to be outstanding and interest ceases
to accrue.  If on a Redemption Date or
the Maturity Date the Trustee or Paying Agent (other than Casella or an
Affiliate thereof) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Notes payable on
that date, then on and after that date such Notes cease to be outstanding and
interest on them ceases to accrue.

 

SECTION 2.09.                  Treasury Notes.

 

In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver or consent,
Notes owned by Casella or any of its Affiliates shall be disregarded, except
that, for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Notes that a Responsible
Officer of the Trustee actually knows are so owned shall be disregarded.

 

34

 

SECTION 2.10.                  Temporary Notes.

 

Until definitive Notes are ready for delivery,
Casella may prepare and the Trustee shall, upon written order of Casella in the
form of an Officer’s Certificate, which shall be in a form reasonably
acceptable to the Trustee, authenticate temporary Notes.  Temporary Notes shall be substantially in the
form of definitive Notes but may have variations that Casella considers
appropriate for temporary Notes.  Without
unreasonable delay, Casella shall prepare and the Trustee shall, upon written
order of Casella in the form of an Officer’s Certificate, which shall be in a
form reasonably acceptable to the Trustee, authenticate definitive Notes in
exchange for temporary Notes.  Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes. 
Notwithstanding the foregoing, so long as the Notes are represented by a
Global Note, such Global Note may be in typewritten form.

 

SECTION 2.11.                  Cancellation.

 

Casella at any time may deliver Notes to the Trustee
for cancellation.  The Registrar and the
Paying Agent shall forward to the Trustee any Notes surrendered to them for
transfer, exchange or payment.  The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent
(other than Casella or a Subsidiary), and no one else, shall cancel and, at the
written direction of Casella, shall dispose of all Notes surrendered for
transfer, exchange, payment or cancellation in accordance with its customary
procedures.  Subject to Section 2.07,
Casella may not issue new Notes to replace Notes that it has paid or delivered
to the Trustee for cancellation.  If
Casella or any Guarantor shall acquire any of the Notes, such acquisition shall
not operate as a redemption or satisfaction of the Indebtedness represented by
such Notes unless and until the same are surrendered to the Trustee for
cancellation pursuant to this Section 2.11.

 

SECTION 2.12.                  Defaulted
Interest.

 

If Casella defaults in a payment of interest on the
Notes, it shall, unless the Trustee fixes another record date pursuant to Section 6.10,
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest, in any lawful manner. 
Casella may pay the defaulted interest to the persons who are Holders on
a subsequent special record date, which date shall be the fifteenth day next
preceding the date fixed by Casella for the payment of defaulted interest or
the next succeeding Business Day if such date is not a Business Day.  At least 15 days before any such subsequent
special record date, Casella shall mail to each Holder, with a copy to the
Trustee, a notice that states the subsequent special record date, the payment
date and the amount of defaulted interest, and interest payable on such
defaulted interest, if any, to be paid.

 

SECTION 2.13.                  CUSIP Number.

 

Casella in issuing the Notes may use a “CUSIP”
number, and if so, the Trustee shall use the CUSIP number in notices of
redemption or exchange as a convenience to Holders; provided,
however, that any such notice may state
that no representation is made as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance 

 

35

 

may be placed only on the
other identification numbers printed on the Notes.  Casella will promptly notify the Trustee of
any change in the CUSIP numbers.

 

SECTION 2.14.                  Deposit of
Moneys.

 

Prior to 10:00 a.m. New York City time on each
Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Payment Date and Asset Sale Offer Payment Date, Casella shall have deposited
with the Paying Agent in immediately available funds money sufficient to make
cash payments, if any, due on such Interest Payment Date, Maturity Date, Redemption
Date, Change of Control Payment Date and Asset Sale Offer Payment Date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such Interest Payment Date, Maturity Date, Redemption Date,
Change of Control Payment Date and Asset Sale Offer Payment Date, as the case
may be.

 

SECTION 2.15.                  Book-Entry
Provisions for Global Notes.

 

(a)           The Global Notes initially shall (i) be
registered in the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Exhibit B.

 

Members of, or participants in, the Depository (“Participants”) shall have no rights under this Indenture
with respect to any Global Note held on their behalf by the Depository, or the
Trustee as its custodian, or under the Global Note, and the Depository may be
treated by Casella, the Trustee and any agent of Casella or the Trustee as the
absolute owner of the Global Note for all purposes whatsoever.  Notwithstanding the foregoing, nothing herein
shall prevent Casella, the Trustee or any agent of Casella or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and
Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Note.

 

(b)           Transfers of Global Notes shall be limited to
transfers in whole, but not in part, to the Depository, its successors or their
respective nominees.  Physical Notes
shall be issued to all beneficial owners in exchange for their beneficial
interests in Global Notes only if (i) the Depository notifies Casella that
it is unwilling or unable to continue as Depository for any Global Note and a
successor Depository is not appointed by Casella, with a copy to the Trustee,
within 90 days of such notice or (ii) an Event of Default has occurred and
is continuing and the Registrar has received a written request from the
Depository to issue Physical Notes.

 

(c)           In connection with any transfer or
exchange of a portion of the beneficial interest in a Global Note to beneficial
owners pursuant to paragraph (b) of this Section 2.15 upon
written order of Casella to do so, the Registrar shall (if one or more Physical
Notes are to be issued) reflect on its books and records the date and a
decrease in the principal amount of such Global Note in an amount equal to the
principal amount of the beneficial interest in the Global Note to be
transferred, and Casella shall prepare and execute the applicable Notes if such
transfer is permitted hereunder, and the Trustee shall, upon written order of
Casella in the form of an Officer’s 

 

36

 

Certificate, which
shall be in a form reasonably acceptable to the Trustee, authenticate and
deliver, one or more Physical Notes of authorized denominations in an aggregate
principal amount equal to the principal amount of the beneficial interest in
the Global Note so transferred.

 

(d)           In connection with the transfer of a Global Note as
an entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
such Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and (i) Casella shall prepare and execute, (ii) the
Guarantors shall execute notations of Subsidiary Guarantees on and (iii) the
Trustee shall, upon written order of Casella in the form of an Officer’s
Certificate, which shall be in a form reasonably acceptable to the Trustee,
authenticate and deliver, to each beneficial owner identified by the Depository
in exchange for its beneficial interest in such Global Note, an equal aggregate
principal amount of Physical Notes of authorized denominations.

 

(e)           Any Physical Note constituting a Restricted Security
delivered in exchange for an interest in a Global Note pursuant to paragraph (b) or
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.

 

(f)            The Holder of any Global Note may grant proxies and
otherwise authorize any Person, including Participants and Persons that may
hold interests through Participants, to take any action which a Holder is
entitled to take under this Indenture or the Notes.

 

SECTION 2.16.                  Special
Transfer Provisions.

 

(a)           Transfers to Non-QIB Institutional Accredited
Investors and Non-U.S. Persons.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security
to any “accredited investor” as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act (an “Institutional
Accredited Investor”) which is not a QIB or to any Non-U.S. Person:

 

(i)            the Registrar
shall register the transfer of any Restricted Security, whether or not such
Note bears the Private Placement Legend, if (x) the requested transfer is
after the date the Notes become Freely Tradable or (y) (1) in the
case of a transfer to an Institutional Accredited Investor which is not a QIB
(excluding Non-U.S. Persons), the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit C
hereto and, if requested by Casella, an opinion of counsel reasonably satisfactory
to Casella that an exemption from registration under the Securities Act is
available for such transfer and (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the Registrar a
certificate substantially in the form of Exhibit D hereto;

 

(ii)           if the proposed
transferee is a Participant and the Notes to be transferred consist of Physical
Notes which after transfer are to be evidenced by an interest in the IAI Global
Note or Regulation S Global Note, as the case may be, upon receipt by the
Registrar of the Physical Note and (x) written instructions given in
accordance with the Depository’s and the Registrar’s procedures and (y) the
appropriate certificate, if any, required 

 

37

 

by
clause (y) of paragraph (i) above, the Registrar shall register the
transfer and reflect on its books and records the date and an increase in the
principal amount of the IAI Global Note or Regulation S Global Note, as the
case may be, in an amount equal to the principal amount of Physical Notes to be
transferred, and the Registrar shall cancel the Physical Notes so transferred;
and

 

(iii)          if the proposed transferor
is a Participant seeking to transfer an interest in a Global Note, upon receipt
by the Registrar of (x) written instructions given in accordance with the
Depository’s and the Registrar’s procedures and (y) the appropriate certificate,
if any, required by clause (y) of paragraph (i) above, the Registrar
shall register the transfer and reflect on its books and records the date and (A) a
decrease in the principal amount of the Global Note from which such interests
are to be transferred in an amount equal to the principal amount of the Notes
to be transferred and (B) an increase in the principal amount of the IAI
Global Note or the Regulation S Global Note, as the case may be, in an
amount equal to the principal amount of the Notes to be transferred.

 

(b)           Transfers to QIBs.  The following provisions shall apply with
respect to the registration of any proposed transfer of a Restricted Security
to a QIB:

 

(i)            the Registrar
shall register the transfer of any Restricted Security, whether or not such
Note bears the Private Placement Legend, if (x) the requested transfer is
after the date the Notes become Freely Tradable or (y) such transfer is
being made by a proposed transferor who has checked the box provided for on the
form of Note stating, or has otherwise advised Casella and the Registrar in
writing, that the sale has been made in compliance with the provisions of Rule 144A
to a transferee who has signed the certification provided for on the form of
Note stating, or has otherwise advised Casella and the Registrar in writing,
that it is purchasing the Note for its own account or an account with respect
to which it exercises sole investment discretion and that it and any such
account is a QIB within the meaning of Rule 144A, and is aware that the
sale to it is being made in reliance on Rule 144A and acknowledges that it
has received such information regarding Casella as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A;

 

(ii)           if the proposed
transferee is a Participant and the Notes to be transferred consist of Physical
Notes which after transfer are to be evidenced by an interest in the 144A
Global Note, upon receipt by the Registrar of the Physical Note and written
instructions given in accordance with the Depository’s and the Registrar’s procedures,
the Registrar shall register the transfer and reflect on its book and records
the date and an increase in the principal amount of the 144A Global Note in an
amount equal to the principal amount of Physical Notes to be transferred, and
the Registrar shall cancel the Physical Notes so transferred; and

 

(iii)          if the proposed
transferor is a Participant seeking to transfer an interest in the IAI Global
Note or the Regulation S Global Note, upon receipt by the Registrar of 

 

38

 

written
instructions given in accordance with the Depository’s and the Registrar’s procedures,
the Registrar shall register the transfer and reflect on its books and records
the date and (A) a decrease in the principal amount of the IAI Global Note
or the Regulation S Global Note, as the case may be, in an amount equal to
the principal amount of the Notes to be transferred and (B) an increase in
the principal amount of the 144A Global Note in an amount equal to the
principal amount of the Notes to be transferred.

 

(c)           Restrictions on Transfer and Exchange of Global
Notes.  Notwithstanding any other
provisions of this Indenture, a Global Note may not be transferred as a whole
except by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.

 

(d)           Private Placement Legend.  Upon the transfer, exchange or replacement of
Notes not bearing the Private Placement Legend, the Holder shall be entitled to
receive new Notes that do not bear the Private Placement Legend.  Upon the transfer, exchange or replacement of
Notes bearing the Private Placement Legend, the Holder shall be entitled to
receive only new Notes that bear the Private Placement Legend unless (i) there
is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to
Casella and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act or (ii) such Note has been offered
pursuant to an effective registration statement under the Securities Act.

 

(e)           General.  By its acceptance of any Note bearing the
Private Placement Legend, each Holder of such a Note acknowledges the
restrictions on transfer of such Note set forth in this Indenture and in the
Private Placement Legend and agrees that it will transfer such Note only as provided
in this Indenture.

 

The Registrar shall retain copies of all letters,
notices and other written communications received pursuant to Section 2.15
or this Section 2.16.  Casella shall
have the right to inspect and make copies of all such letters, notices or other
written communications at any reasonable time upon the giving of reasonable
written notice to the Registrar.

 

The Trustee shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on
transfer imposed under this Indenture or under applicable law with respect to
any transfer of any interest in any Note (including any transfers between or
among Depository Participants or beneficial owners of interests in any Global
Note) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and
when expressly required by the terms of, this Indenture, and to examine the
same to determine substantial compliance as to form with the express requirements
hereof.

 

The Trustee shall have no responsibility for the
actions or omissions of the Depository, or the accuracy of the books and
records of the Depository.

 

39

 

(f)            Neither the Registrar nor the Trustee shall be
responsible for ascertaining whether any transfer of Notes complies with the
transfer restrictions hereunder (including, without limitation, the
restrictions in Section 2.16 hereof) or the registration provisions of or
any exemptions from the Securities Act, applicable state securities laws or the
applicable laws of any other jurisdiction; provided, that
if a certificate is specifically required to be delivered to the Registrar or
the Trustee by the express terms hereof, the Trustee or the Registrar shall be
under a duty to receive and examine the same to determine whether or not the
certificate substantially conforms on its face to the requirements of this
Indenture and shall promptly notify the party delivering the same if such
certificate does not comply with such terms.

 

(g)           In the event that any Note becomes Freely Tradeable
and the Holder thereof desires to transfer such Note, Casella agrees to
promptly take all reasonable actions requested by the Registrar or the Trustee
to permit the transfer of such Note, including without limitation, making any
applicable filings or submissions with the Depository and/or complying with any
applicable procedures to obtain a non-restricted CUSIP number for any such
Notes, if applicable.

 

SECTION 2.17.                  Limitation on
Ownership of Notes.

 

Each Person that is a beneficial holder of Notes
shall not knowingly acquire Notes such that, after giving effect thereto, such
Person owns 10% or more of the consolidated debt of Casella for which relevant
Subsidiaries of Casella are obligated (and to dispose of Notes or other debt of
Casella to the extent such Person becomes aware of exceeding such threshold),
if such ownership would require consent of any regulatory authority under
applicable law or regulation governing solid waste operators and such consent
has not been obtained.

 

Casella and the Guarantors will use commercially
reasonable efforts to obtain, as promptly as possible, all consents, permit
modifications, exemptions or other relief under any applicable laws or
regulations governing solid waste operators that limit the ownership of debt of
Casella or any of its Subsidiaries, or requires a permit modification or other
consent in connection with a change in the ownership of debt of Casella or any
of its Subsidiaries, such that such limitation or requirement shall not apply
to changes in the ownership of the debt outstanding under the Senior Credit
Facility or represented by the Notes and the Subsidiary Guarantees.  To the extent that Casella and the Guarantors
are unable to obtain any such consent, permit modification, exemption or relief
after use of commercially reasonable efforts, Casella and each Guarantor will
use commercially reasonable efforts to obtain the consent, permit modification,
exemption or other relief necessary for any Person that is a beneficial holder
or potential beneficial holder of Notes to exceed any applicable debt ownership
level under any such applicable law or regulation promptly following written
request by such Person that is a beneficial holder or potential beneficial
holder (provided that such Person that is a beneficial holder or potential
beneficial holder would qualify as an eligible or suitable holder under such
law or regulation); provided, however,
that nothing in this paragraph shall affect the provisions of the prior
paragraph requiring a beneficial holder to dispose of Notes or other debt if
such consent has not been obtained and the failure to have such consent would
constitute a violation of applicable law or regulation.

 

40

 

ARTICLE THREE

 

REDEMPTION

 

SECTION 3.01.                  Notices to
Trustee.

 

If Casella elects to redeem Notes pursuant to Section 5
or Section 6 of the Notes, it shall notify the Trustee in writing of the
Redemption Date, the Redemption Price and the principal amount of Notes to be
redeemed.  Casella shall give notice of
redemption to the Paying Agent and Trustee at least 30 days but not more than
60 days before the Redemption Date (unless a shorter notice shall be agreed to
by the Trustee in writing), together with an Officer’s Certificate stating that
such redemption will comply with the conditions contained herein.

 

SECTION 3.02.                  Selection of
Notes To Be Redeemed.

 

If less than all of the Notes are to be redeemed at
any time, the Trustee will select Notes for redemption as follows:

 

·              if the Notes
are listed on a national securities exchange, in compliance with the
requirements of the principal national securities exchange on which the Notes
are listed; or

 

·              if the Notes
are not so listed, on a pro rata basis
or on as nearly a pro rata basis
as practicable (subject, to the extent the Notes are then represented by one or
more global notes registered in the name of or held by The Depository Trust
Company or its nominee, to the procedures of The Depository Trust Company).

 

No Notes of $2,000 or less shall be redeemed in
part.

 

SECTION 3.03.                  Notice of
Redemption.

 

At least 30 days but not more than 60 days before a
Redemption Date, Casella shall mail a notice of redemption by first class mail,
postage prepaid, to each Holder whose Notes are to be redeemed at its
registered address.  At Casella’s
request, the Trustee shall forward in Casella’s name and at Casella’s expense
any notice of redemption prepared by Casella to each applicable Holder.  Each notice for redemption shall identify the
Notes (including the CUSIP number) to be redeemed and shall state:

 

(1)           the Redemption Date;

 

(2)           the Redemption Price and the
amount of accrued interest, if any, to be paid;

 

(3)           the name and address of the
Paying Agent;

 

41

 

(4)           that Notes called for
redemption must be surrendered to the Paying Agent to collect the Redemption
Price plus accrued interest, if any;

 

(5)           that, unless Casella
defaults in making the redemption payment, interest on Notes called for
redemption ceases to accrue on and after the Redemption Date, and the only
remaining right of the Holders of such Notes is to receive payment of the Redemption
Price upon surrender to the Paying Agent of the Notes redeemed;

 

(6)           if any Note is being redeemed
in part, the portion of the principal amount of such Note to be redeemed and
that, after the Redemption Date, and upon surrender of such Note, a new Note or
Notes in aggregate principal amount equal to the unredeemed portion thereof
will be issued;

 

(7)           if fewer than all the Notes
are to be redeemed, the identification of the particular Notes (or portion
thereof) to be redeemed, as well as the aggregate principal amount of Notes to
be redeemed and the aggregate principal amount of Notes to be outstanding after
such partial redemption; and

 

(8)           the Section of the
Notes pursuant to which the Notes are to be redeemed.

 

The notice, if mailed in a manner herein provided,
shall be conclusively presumed to have been given, whether or not the Holder
receives such notice.  In any case, failure
to give such notice by mail or any defect in the notice to the Holder of any
Note designated for redemption in whole or in part shall not affect the
validity of the proceedings for the redemption of any other Note.  Notices of redemption may not be conditional.

 

SECTION 3.04.                  Effect of
Notice of Redemption.

 

Once notice of redemption is mailed in accordance
with Section 3.03, Notes called for redemption become due and payable on
the Redemption Date and at the Redemption Price plus accrued interest, if
any.  Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at the Redemption
Price (which shall include accrued interest thereon to the Redemption Date),
but installments of interest, the maturity of which is on or prior to the
Redemption Date, shall be payable to Holders of record at the close of business
on the relevant Record Dates.  In
addition, if the Redemption Date is on or after a Record Date and on or before
the related Interest Payment Date, any accrued and unpaid interest shall be
paid to the Person in whose name a Note is registered at the close of business
on such Record Date.  On and after the
Redemption Date interest shall cease to accrue on Notes or portions thereof
called for redemption.

 

SECTION 3.05.                  Deposit of
Redemption Price.

 

On or before 10:00 a.m. New York time on the
Redemption Date, Casella shall deposit with the Paying Agent U.S. Legal Tender
sufficient to pay the Redemption Price plus accrued interest, if any, of all
Notes to be redeemed on that date.

 

42

 

If Casella complies with the preceding paragraph,
then, unless Casella defaults in the payment of such Redemption Price plus
accrued interest, if any, interest on the Notes to be redeemed will cease to
accrue on and after the applicable Redemption Date, whether or not such Notes
are presented for payment.

 

SECTION 3.06.                  Notes Redeemed
in Part.

 

If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
principal amount thereof to be redeemed. 
A new Note or Notes in principal amount equal to the unredeemed portion
of the original Note or Notes shall be issued in the name of the Holder thereof
upon cancellation of the original Note or Notes.

 

ARTICLE FOUR

 

COVENANTS

 

SECTION 4.01.                  Payment of
Notes.

 

Casella shall pay the principal of (and premium, if
any) and interest on the Notes in the manner provided in the Notes,
Registration Rights Agreement and this Indenture.  An installment of principal of or interest on
the Notes shall be considered paid on the date it is due if the Trustee or
Paying Agent (other than Casella or an Affiliate thereof) holds on that date
U.S. Legal Tender designated for and sufficient to pay the installment.  Interest on the Notes will be computed on the
basis of a 360-day year comprised of twelve 30-day months.

 

Casella shall pay interest on overdue principal
(including, without limitation, post petition interest in a proceeding under
any Bankruptcy Law), and overdue interest, to the extent lawful, at the same
rate per annum borne by the Notes.

 

SECTION 4.02.                  Maintenance of
Office or Agency.

 

Casella shall maintain the office or agency required
under Section 2.03.  Casella shall give
prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency.  If
at any time Casella shall fail to maintain any such required office or agency
or shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 12.02.

 

Casella may also from time to time designate one or
more other offices or agencies where the Notes may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations.  Casella will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.

 

43

 

Casella hereby initially designates Wilmington Trust
Company’s Corporate Trust Office as such office of Casella in accordance with Section 2.03.

 

SECTION 4.03.                  Corporate
Existence.

 

Except as otherwise permitted by Article Five,
Casella shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and the corporate, partnership
or other existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the rights (charter and statutory) and material franchises of Casella and each
of its Restricted Subsidiaries; provided, however, that Casella shall not be required to preserve any
such right, franchise or corporate existence with respect to each such
Restricted Subsidiary if the loss thereof would not, individually or in the
aggregate, have a material adverse effect on the business, financial condition
or results of operations of Casella and its Restricted Subsidiaries taken as a
whole.

 

SECTION 4.04.                  Payment of
Taxes and Other Claims.

 

Each of Casella and the Guarantors shall, and shall
cause each of the respective Subsidiaries to, pay or discharge or cause to be
paid or discharged, before the same shall become delinquent, (a) all
material taxes, assessments and governmental charges levied or imposed upon it
or any of its respective Subsidiaries or upon the income, profits or property
of it or any of its respective Subsidiaries and (b) all lawful claims for
labor, materials and supplies which, in each case, if unpaid, might by law
become a material liability or Lien upon the property of it or any of its
Restricted Subsidiaries; provided, however, that Casella and the Guarantors shall not be required
to pay or discharge or cause to be paid or discharged any such tax, assessment,
charge or claim whose amount the applicability or validity is being contested
in good faith by appropriate proceedings and for which appropriate provision
has been made.

 

SECTION 4.05.                  Maintenance of
Properties and Insurance.

 

(a)           Casella shall cause all material
properties owned by or leased by it or any of its Restricted Subsidiaries used
or useful to the conduct of its business or the business of any of its
Restricted Subsidiaries to be maintained and kept in normal condition, repair
and working order and supplied with all necessary equipment and shall cause to
be made all repairs, renewals, replacements, and betterments thereof, all as in
its judgment may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided, however, that
nothing in this Section 4.05 shall prevent Casella or any of its Restricted
Subsidiaries from discontinuing the use, operation or maintenance of any of
such properties, or disposing of any of them, if such discontinuance or
disposal is, in the judgment of the Board of Directors of Casella or any such
Restricted Subsidiary desirable in the conduct of the business of Casella or
any such Restricted Subsidiary, and if such discontinuance or disposal would
not, individually or in the aggregate, have a material adverse effect on the
ability of Casella or the Guarantors to perform each of their respective
obligations hereunder; provided, further, that nothing in this Section 4.05 shall
prevent Casella or any of its Restricted Subsidiaries 

 

44

 

from discontinuing
or disposing of any properties to the extent otherwise permitted by this
Indenture.

 

(b)           Casella shall maintain, and shall cause its
Restricted Subsidiaries to maintain, insurance with responsible carriers
against such risks and in such amounts, and with such deductibles, retentions,
self-insured amounts and co-insurance provisions, as are customarily carried by
similar businesses of similar size, including property and casualty loss,
workers’ compensation and interruption of business insurance.

 

SECTION 4.06.                  Compliance
Certificate; Notice of Default.

 

(a)           Casella shall deliver to the Trustee, within 120
days after the close of each fiscal year (which on the date hereof is April 30),
an Officer’s Certificate stating that a review of the activities of Casella and
its Subsidiaries has been made under the supervision of the signing Officers
with a view to determining whether Casella and each Guarantor has kept,
observed, performed and fulfilled its obligations under this Indenture and
further stating, as to each such Officer signing such certificate, that to the
best of such Officer’s knowledge, Casella and each Guarantor during such preceding
fiscal year has kept, observed, performed and fulfilled each and every such
covenant and no Default occurred during such year and at the date of such
certificate there is no Default that has occurred and is continuing or, if such
signers do know of such Default, the certificate shall describe its status with
particularity.  The Officer’s Certificate
shall also notify the Trustee should Casella elect to change the manner in
which it fixes its fiscal year end.

 

(b)           Casella shall deliver to the Trustee as soon as
possible and in any event within five days after Casella becomes aware of the
occurrence of any Default an Officer’s Certificate specifying the Default and
describing its status with particularity and the action proposed to be taken
thereto.

 

SECTION 4.07.                  Compliance with
Laws.

 

Casella shall comply, and shall cause each of its
Subsidiaries to comply, with all applicable statutes, rules, regulations,
orders and restrictions of the United States, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory authority,
bureau, agency and instrumentality of the foregoing, in respect of the conduct
of their respective businesses and the ownership of their respective
properties, except, in any such case, to the extent the failure to so comply
would not, individually or in the aggregate, have a material adverse effect on
the business, financial condition or results of operations of Casella and its Restricted
Subsidiaries taken as a whole.

 

SECTION 4.08.                  Waiver of Stay,
Extension or Usury Laws.

 

Each of Casella and each Guarantor covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon,
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law or any usury law or other law that would 

 

45

 

prohibit or forgive Casella
or such Guarantor from paying all or any portion of the principal of and/or
interest on the Notes or the Subsidiary Guarantee of any such Guarantor as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture, and (to
the extent that it may lawfully do so) each hereby expressly waives all benefit
or advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.

 

SECTION 4.09.                  Change of
Control.

 

If a Change of Control occurs, each Holder of Notes
will have the right to require Casella to repurchase all or any part (equal to
$2,000 or an integral multiple of $1,000 in excess thereof) of that Holder’s
Notes pursuant to a Change of Control Offer (the “Change of
Control Offer”).  In the
Change of Control Offer, Casella will offer to pay an amount in cash (the “Change of Control Payment”) equal to 101% of the aggregate
principal amount of Notes repurchased, plus accrued and unpaid interest
thereon, if any, to the date of purchase. 
Within 30 days following any Change of Control, Casella will mail a
notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes on the date
(the “Change of Control Payment Date”)
specified in such notice, which date shall be a Business Day no earlier than 30
days and no later than 60 days from the date such notice is mailed, pursuant to
the procedures required by this Indenture and described in such notice.  Such notice shall state:

 

(1)           that the Change of Control
Offer is being made pursuant to this Section 4.09 and that all Notes
tendered and not withdrawn will be accepted for payment;

 

(2)           the purchase price
(including the amount of accrued interest) and the Change of Control Payment
Date;

 

(3)           that any Note not tendered
will continue to accrue interest;

 

(4)           that, unless Casella defaults
in making payment therefor, any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Change of
Control Payment Date;

 

(5)           that Holders electing to
have a Note purchased pursuant to a Change of Control Offer will be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Note completed, to the Paying Agent at the address specified
in the notice prior to the close of business on the third Business Day prior to
the Change of Control Payment Date;

 

(6)           that Holders will be
entitled to withdraw their election if the Paying Agent receives, not later
than the second Business Day prior to the Change of Control Payment Date, a
telegram, facsimile transmission or letter setting forth the name of the
Holder, the 

 

46

 

principal
amount of the Notes the Holder delivered for purchase and a statement that such
Holder is withdrawing his election to have such Note purchased;

 

(7)           that Holders whose Notes are
purchased only in part will be issued new Notes in a principal amount equal to
the unpurchased portion of the Notes surrendered; and

 

(8)           the circumstances and
relevant facts regarding such Change of Control.

 

On or before the Change of Control Payment Date,
Casella will, to the extent lawful:

 

·      accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer;

 

·      deposit with
the Paying Agent U.S. Legal Tender sufficient to pay the Change of Control
Payment in respect of all Notes or portions thereof so tendered; and

 

·      deliver or
cause to be delivered to the Trustee the Notes so accepted together with an
Officer’s Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by Casella.

 

The Paying Agent will promptly mail to each Holder
of Notes so tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by book
entry) to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; provided that
each such new Note will be in a principal amount of $2,000 or an integral
multiple of $1,000 in excess thereof.

 

Casella will not be required to make a Change of
Control Offer upon a Change of Control if a third party makes the Change of
Control Offer in the manner, at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control
Offer made by Casella and purchases all Notes validly tendered and not
withdrawn under such Change of Control Offer.

 

Notwithstanding the foregoing, Casella shall not be
required to make a Change of Control Offer, as provided above, if, in connection
with or in contemplation of any Change of Control, it or a third party has made
an offer to purchase (an “Alternate Offer”)
any and all Notes validly tendered at a cash price equal to or higher than the
Change of Control Payment and has purchased all Notes properly tendered in
accordance with the terms of such Alternate Offer.  The Alternate Offer shall remain, if
commenced prior to the Change of Control, open for acceptance until the
consummation of the Change of Control, must permit Holders to withdraw any
tenders of Notes made into the Alternate Offer until the final expiration or consummation
thereof and must comply with all the other provisions applicable to the Change
of Control Offer.

 

47

 

Casella will comply, and will cause any third party
making a Change of Control Offer or an Alternate Offer to comply, with the
requirements of Rule 14e-1 under the Exchange Act and any other securities
laws and regulations thereunder to the extent such laws and regulations are
applicable in connection with a Change of Control Offer or an Alternate Offer.  To the extent the provisions of any
applicable securities laws or regulations conflict with the provisions of this
Indenture relating to a Change of Control Offer, Casella will not be deemed to
have breached its obligations under this Indenture by virtue of complying with
such laws or regulations.

 

SECTION 4.10.                  Incurrence of
Indebtedness and Issuance of Preferred Stock.

 

On or after the date of this Indenture (i) Casella
will not, and will not permit any of its Restricted Subsidiaries to, directly
or indirectly, incur any Indebtedness (including Acquired Debt), and (ii) Casella
will not issue any Disqualified Capital Stock and will not permit any of its
Restricted Subsidiaries to issue any shares of Preferred Stock; provided that Casella or any Guarantor may incur
Indebtedness (including Acquired Debt), and Casella may issue Disqualified
Capital Stock, if the Consolidated Fixed Charge Coverage Ratio is at least 2.0
to 1.0 (this proviso, the “Coverage Ratio Exception”).

 

The first paragraph of this Section 4.10 will
not prohibit the incurrence of any of the following items of Indebtedness
(collectively, “Permitted Debt”):

 

(1)           Indebtedness and letters of
credit under the Senior Credit Facility (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of Casella and
its Restricted Subsidiaries thereunder) in an aggregate principal amount not to
exceed $350.0 million less the
aggregate amount of all Net Proceeds of Asset Sales (other than up to $75.0
million of Net Proceeds from Asset Sales of Specified Assets) applied by
Casella or any of its Subsidiaries since the date of this Indenture to repay
Indebtedness under the Senior Credit Facility pursuant to clause (1) of
the third paragraph of Section 4.13;

 

(2)           the Notes issued on the
Issue Date and up to $50.0 million aggregate principal amount of Additional
Notes issued under this Indenture and the Subsidiary Guarantees thereof;

 

(3)           (a) Capital Lease
Obligations, (b) Purchase Money Obligations and (c) industrial
revenue bonds or solid waste disposal bonds issued by or at the request of
Casella or any Restricted Subsidiary, and Indebtedness funded by such bonds,
and Permitted Refinancing Indebtedness of any of the foregoing, in an aggregate
amount under this clause (3) not to exceed $50.0 million at any time
outstanding;

 

(4)           Permitted Refinancing
Indebtedness in exchange for, or the net proceeds of which are used to refinance,
(x) Existing Indebtedness or (y) Indebtedness incurred under the
Coverage Ratio Exception or clause (2) of this paragraph or this clause
(4);

 

48

 

(5)           Indebtedness owed by Casella
or any of its Restricted Subsidiaries to Casella or any of its Restricted
Subsidiaries; provided that:

 

(a)           if Casella or
any Guarantor is the obligor on such Indebtedness, such Indebtedness must be
expressly subordinated to the prior payment in full in cash of all Obligations
with respect to the Notes, in the case of Casella, or the Subsidiary Guarantee
of such Guarantor, in the case of a Guarantor; and

 

(b)           (x) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than Casella or a Wholly Owned
Restricted Subsidiary thereof and (y) any sale or other transfer of any
such Indebtedness to a Person that is not either Casella or a Wholly Owned
Restricted Subsidiary thereof shall be deemed, in each case, to constitute an
incurrence of such Indebtedness by Casella or such Restricted Subsidiary, as
the case may be, that was not permitted by this clause (5);

 

(6)           Hedging Obligations with
respect to (a) interest rates on any Indebtedness that is permitted by the
terms of this Indenture to be outstanding, (b) foreign currency exchange
rates, (c) prices of recycled paper, fiber, aluminum, tin, glass, rubber,
plastics or other recycled products or (d) the price of fuel required for
the operations of the businesses of Casella and its Restricted Subsidiaries; provided that (i) any such Hedging Obligation of the
type described in clauses (b) through (d) will be permitted by this
clause (6) only if it was entered into to protect Casella and its
Restricted Subsidiaries from fluctuations in foreign currency exchange rates,
the prices of recycled paper, fiber, aluminum, tin, glass, rubber, plastics or
other recycled products or fuel covered by such agreements, as applicable, and
not for speculative purposes, (ii) in the case of Hedging Obligations of
the type described in clause (a) above, any such Hedging Obligations will
be permitted by this clause (6) only to the extent the notional principal
amount of such Hedging Obligations, when incurred, does not exceed the
principal amount of the Indebtedness to which such Hedging Obligations relate
and (iii) in the case of Hedging Obligations of the type described in
clause (b) above, such Hedging Obligations do not increase the Indebtedness
of Casella and its Restricted Subsidiaries outstanding other than as a result
of fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;

 

(7)           obligations in
the ordinary course of business in respect of workers’ compensation claims,
self-insurance obligations, performance, surety and similar bonds and
completion bonds and bid guarantees with respect to the assets or business of
Casella or any of its Restricted Subsidiaries;

 

(8)           (x) the
Guarantee by Casella or any Guarantor of Indebtedness of Casella or a Guarantor
and (y) the guarantee by any Restricted Subsidiary that is not a Guarantor
of Indebtedness of any other Restricted Subsidiary that is not a Guarantor; provided that, in each case, the Indebtedness being
guaranteed is permitted to be incurred by another provision of this Indenture;

 

49

 

(9)           indemnification, adjustment
of purchase price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business or assets of Casella or any of
its Restricted Subsidiaries or Capital Stock of any of its Restricted
Subsidiaries; provided that the maximum
aggregate liability in respect of all of such obligations outstanding under
this clause (9) shall at no time exceed the gross proceeds including
non-cash proceeds (the fair market value of such non-cash proceeds being
measured at the time received and without giving effect to any subsequent
changes in value) actually received by Casella and its Restricted Subsidiaries
in connection with such dispositions;

 

(10)         Acquired Debt incurred by
the debtor prior to the time that the debtor thereunder was acquired by or
merged into Casella or any of its Subsidiaries, or prior to the time that the
related asset was acquired by Casella or any of its Subsidiaries, and was not
incurred in connection with, or in contemplation of, such acquisition or
merger, and Permitted Refinancing Indebtedness thereof, in an aggregate amount
under this clause (10) not to exceed $10.0 million at any time
outstanding;

 

(11)         Indebtedness arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently (except in the case of daylight overdrafts)
drawn against insufficient funds; provided that
such Indebtedness is extinguished within five business days of incurrence; and

 

(12)         additional Indebtedness in
an aggregate amount under this clause (12) not to exceed $20.0 million at any
time outstanding.

 

Notwithstanding any other provision in this Section 4.10,
the maximum amount of Indebtedness that Casella or any of its Restricted
Subsidiaries may incur pursuant to this covenant shall not be deemed to be
exceeded as a result of fluctuations in exchange rates of currencies.  The outstanding principal amount of any
particular Indebtedness shall be counted only once and any obligation arising
under any Guarantee, Lien, letter of credit or similar instrument supporting
such Indebtedness shall be disregarded, so long as the obligor is permitted to
incur such obligation.  For purposes of
determining compliance with this Section 4.10, in the event that an item
of proposed Indebtedness meets the criteria of more than one of the categories
of Permitted Debt described in clauses (1) through (12) above, or is
entitled to be incurred pursuant to the Coverage Ratio Exception, Casella will
be permitted to divide and classify such item of Indebtedness on the date of
its incurrence in any manner that complies with this covenant (provided that all Indebtedness outstanding under the Senior
Credit Facility on the Issue Date shall be deemed to have been incurred
pursuant to clause (1) of the preceding paragraph).

 

SECTION 4.11.                  Restricted
Payments.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly:

 

50

 

(i)            declare or pay any dividend
or make any other payment or distribution on account of Casella’s or any of its
Restricted Subsidiaries’ Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving Casella or any
of its Restricted Subsidiaries) or to the direct or indirect holders of Casella’s
or any of its Restricted Subsidiaries’ Equity Interests in their capacity as
such (other than dividends or distributions payable solely in Qualified Capital
Stock or dividends or distributions payable to Casella or any of its Restricted
Subsidiaries);

 

(ii)           purchase, redeem or
otherwise acquire or retire for value (including, without limitation, in
connection with any merger or consolidation involving Casella or any of its
Restricted Subsidiaries) any Equity Interests of Casella or any direct or
indirect parent of Casella or any Restricted Subsidiary of Casella (other than
any such Equity Interests owned by Casella or any of its Restricted
Subsidiaries);

 

(iii)          make any payment on or with
respect to, or purchase, redeem, prepay, decrease, defease or otherwise acquire
or retire for value, any Indebtedness that is expressly subordinated in right
of payment to the Notes or any Subsidiary Guarantee, except (x) any
payment of interest or principal at the Stated Maturity thereof, (y) any
payment made with Qualified Capital Stock and (z) any payment made to
Casella or any of its Restricted Subsidiaries; or

 

(iv)          make any Restricted
Investment

 

(all such payments and other actions set
forth in clauses (i) through (iv) above being collectively referred
to as “Restricted Payments”), unless, at the
time of and after giving effect to such Restricted Payment:

 

(1)           no Default has occurred and
is continuing or would occur as a consequence thereof;

 

(2)           Casella would, at the time
of such Restricted Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable Four
Quarter Period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Coverage Ratio Exception; and

 

(3)           such Restricted Payment,
together with the aggregate amount of all other Restricted Payments made by
Casella and its Restricted Subsidiaries after the date of this Indenture
(excluding Restricted Payments permitted by clauses (2), (3), (4) (only to
the extent payable to Casella or any of its Restricted Subsidiaries), (5) and
(7) of the next succeeding paragraph), is less than the sum (the “Basket”), without duplication, of

 

(a)           50% of the
Consolidated Net Income of Casella for the period (taken as one accounting
period) from the beginning of the first fiscal quarter commencing after the
Issue Date to the end of Casella’s most recently ended fiscal quarter for which
internal financial statements are available at the time of such 

 

51

 

Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, less
100% of such deficit); plus

 

(b)           100% of the
aggregate net cash proceeds received by Casella since the Issue Date from the
issuance and sale of Qualified Capital Stock or from the issuance and sale of
convertible or exchangeable Disqualified Capital Stock or Indebtedness of
Casella or any of its Restricted Subsidiaries that has been converted into or
exchanged for Qualified Capital Stock (other than any issuance and sale to a
Subsidiary of Casella), less the amount
of any cash, or the fair market value of any other assets, distributed by
Casella or any of its Restricted Subsidiaries upon such conversion or exchange
(other than to Casella or any of its Restricted Subsidiaries); plus

 

(c)           to the extent
not otherwise included in the calculation of Consolidated Net Income for
purposes of clause (a) above, 100% of (x) any amount received in
cash by Casella or any of its Restricted Subsidiaries as dividends, distributions
or return of capital from, or payment of interest or principal on any loan or advance
to, and (y) the aggregate net cash proceeds received by Casella or any of
its Restricted Subsidiaries upon the sale or other disposition of, the investee
(other than an Unrestricted Subsidiary of Casella) of any Investment made by
Casella and its Restricted Subsidiaries since the Issue Date; provided that the foregoing sum shall not exceed, in the
case of any investee, the aggregate amount of Investments previously made (and
treated as a Restricted Payment) by Casella or any of its Restricted Subsidiaries
in such investee subsequent to the Issue Date; plus

 

(d)           to the extent
not otherwise included in the calculation of Consolidated Net Income for
purposes of clause (a) above, 100% of (x) any amount received in
cash by Casella or any of its Restricted Subsidiaries as dividends, distributions
or return of capital from, or payment of interest or principal on any loan or
advance to, or upon the sale or other disposition of the Capital Stock of, an Unrestricted
Subsidiary of Casella and (y) the fair market value of the net assets of
an Unrestricted Subsidiary of Casella, at the time such Unrestricted Subsidiary
is redesignated as a Restricted Subsidiary or is merged, consolidated or amalgamated
with or into, or is liquidated into, Casella or any of its Restricted Subsidiaries,
multiplied by Casella’s proportionate interest in such Subsidiary; provided that the foregoing sum shall not exceed, in the
case of any Unrestricted Subsidiary, the aggregate amount of Investments
previously made (and treated as a Restricted Payment) by Casella or any of its
Restricted Subsidiaries in such Unrestricted Subsidiary subsequent to the Issue
Date; plus

 

(e)           to the extent
not otherwise included in the calculation of Consolidated Net Income for
purposes of clause (a) above, 100% of the amount of any Investment
made (and treated as a Restricted Payment) since the Issue Date in a Person
that subsequently becomes a Restricted Subsidiary of Casella.

 

52

 

The preceding provisions will not prohibit:

 

(1)                                  the payment of any dividend
within 60 days after the date of declaration thereof, if at said date of
declaration such payment would have complied with the provisions of this
Indenture;

 

(2)                                  the redemption, repurchase,
retirement, defeasance or other acquisition of (a) any Indebtedness of
Casella or any Guarantor that is expressly subordinated in right of payment to
the Notes or any Subsidiary Guarantee or (b) any Equity Interests of
Casella or any of its Restricted Subsidiaries in exchange for, or out of the
net cash proceeds of the substantially concurrent issuance and sale (other than
to a Subsidiary of Casella) of, Qualified Capital Stock; provided
that the amount of any such net cash proceeds that are utilized for any such
redemption, repurchase, retirement, defeasance or other acquisition shall not
increase the Basket;

 

(3)                                  the redemption, repurchase,
retirement, defeasance or other acquisition of Indebtedness of Casella or any
Guarantor which is expressly subordinated in right of payment to the Notes or
any Subsidiary Guarantee with the net cash proceeds from an incurrence of
Permitted Refinancing Indebtedness;

 

(4)                                  the payment of any dividend
or other distribution of earnings and profits by a Restricted Subsidiary of
Casella to the holders of all of its Equity Interests on a pro rata
basis or to the holders of the Equity Interests of GreenFiber in accordance
with the terms of the limited liability company agreement governing GreenFiber,
as in effect at the time of such payment;

 

(5)                                  the repurchase of Equity
Interests deemed to occur upon the exercise of stock options if such Equity
Interests represent a portion of the exercise price thereof;

 

(6)                                  as long as no Default has
occurred and is continuing or would be caused thereby, the redemption,
repurchase or other acquisition of Equity Interests constituting restricted
stock repurchased from an employee of Casella or any of its Restricted Subsidiaries
in connection with the termination of employment of such employee, in an amount
not to exceed the net cash proceeds received from such terminated employee upon
issuance of such Equity Interests; and

 

(7)                                  Restricted Payments not to
exceed $5.0 million in the aggregate since the Issue Date.

 

The amount of all Restricted Payments (other than
cash) shall be the fair market value on the date of the Restricted Payment of
the asset(s) or securities proposed to be transferred or issued by Casella
or such Restricted Subsidiary, as the case may be, pursuant to the Restricted
Payment.  The fair market value of any
assets or securities having a fair market value in excess of $5.0 million that
are required to be valued by this covenant shall be determined in good faith by
the Board of Directors, whose resolution with respect thereto shall be
delivered to the 

 

53

 

Trustee.  The Board of Directors’ determination must be
based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the fair market value exceeds
$10.0 million.  Not later than the date
of making any Restricted Payment, Casella shall deliver to the Trustee an
Officer’s Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section 4.11
were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.

 

In determining whether any Restricted Payment is
permitted by this Section 4.11, Casella may allocate or reallocate all or
any portion of such Restricted Payment between clauses (6) and (7) of
the second paragraph of this Section 4.11 or between such clauses and
the Basket; provided that at the time of such
allocation or reallocation, all such Restricted Payments, or allocated portions
thereof, would be permitted under such provisions.

 

SECTION 4.12.                                                     Liens.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt
or trade payables on any asset now owned or hereafter acquired, except Permitted
Liens.

 

SECTION 4.13.                                                     Asset Sales.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless:

 

·                  Casella or such Restricted Subsidiary, as the
case may be, receives consideration at the time of such Asset Sale at least
equal to the fair market value of the assets or Equity Interests issued, sold
or otherwise disposed of;

 

·                  such fair market value, if in excess of $5.0
million, is determined in good faith by Casella’s Board of Directors and
evidenced by a resolution of the Board of Directors set forth in an Officer’s
Certificate delivered to the Trustee; and

 

·                  at least 75% of the consideration therefor
received by Casella or such Restricted Subsidiary is in the form of cash or
Cash Equivalents and is received at the time of such Asset Sale.

 

For purposes of the last bullet in the preceding
paragraph, each of the following shall be deemed to be cash:

 

(a)                                  the amount of
any liabilities shown on Casella’s or such Restricted Subsidiary’s most recent
balance sheet (other than contingent liabilities and liabilities that are by
their terms subordinated to the Notes or any Subsidiary Guarantee) that are
assumed 

 

54

 

by another Person and from which Casella and its Restricted
Subsidiaries are released from further liability;

 

(b)                                 any securities,
notes or other obligations received by Casella or any such Restricted
Subsidiary from such transferee that are promptly (subject to ordinary settlement
periods) converted by Casella or such Restricted Subsidiary into cash (to the
extent of the cash received in that conversion); and

 

(c)                                  the fair market
value (as determined in good faith by the Board of Directors of Casella) of any
Replacement Assets received (provided that (except as permitted by clause (4) of
the definition of “Permitted Investments”) to the extent that the assets
disposed of in such Asset Sale were Collateral, such Replacement Assets are
pledged as Collateral under the Security Documents substantially simultaneously
with such sale, with the Lien on such Collateral securing the Notes being of
the same priority with respect to the Notes as the Lien on the assets disposed
of).

 

Within 365 days after the receipt of any Net
Proceeds from an Asset Sale, Casella may apply such Net Proceeds at its option:

 

(1)                                  to repay First
Lien Obligations;

 

(2)                                  to make an
investment in or expenditures for assets (excluding securities other than
Capital Stock of any Person that (A) is or becomes a Guarantor or (B) is
merged, consolidated or amalgamated with or into, or transfers all or
substantially all of its assets to, or is liquidated into, Casella or any
Guarantor) that replace the assets that were the subject of the Asset Sale or
that will be used in the Permitted Business (“Replacement
Assets”); provided that
to the extent that the assets disposed of in such Asset Sale were Collateral,
such assets are pledged as Collateral under the Security Documents with the
Lien on such Collateral securing the Notes being of the same priority with respect
to the Notes as the Lien on the assets disposed of; and/or

 

(3)                                  to redeem Notes
pursuant to Section 5 or Section 6 of the Notes.

 

Pending the final
application of any such Net Proceeds, Casella may temporarily reduce revolving
credit borrowings or otherwise invest such Net Proceeds in any manner that is
not prohibited by this Indenture.

 

Any Net Proceeds from Asset Sales that are not
applied as provided in the preceding paragraph will constitute “Excess Proceeds.” 
When the aggregate amount of Excess Proceeds exceeds $10.0 million,
Casella will make an offer to

 

·                  in the case of Net Proceeds from Collateral,
all Holders of Notes, and

 

·                  in the case of any other Net Proceeds, all
Holders of Notes and all holders of other Indebtedness that ranks pari passu with the Notes containing provisions similar to
those set forth in this Indenture with respect to offers 

 

55

 

to purchase or redeem with the proceeds of sales of assets (“Pari Passu Debt”).

 

in each case, to purchase
(an “Asset Sale Offer”) the maximum
principal amount of Notes or Notes and such Pari Passu  Debt,
as the case may be, that may be purchased out of the Excess Proceeds (the “Asset Sale Offer Amount”). 
The offer price in any Asset Sale Offer will be equal to 100% of the
principal amount of Notes or Notes and such Pari Passu Debt purchased, plus
accrued and unpaid interest, if any, to the date of purchase (the “Asset Sale Payment”), and will be payable in U.S. Legal
Tender.  If the aggregate principal
amount of Notes (in the case of Net Proceeds from Collateral) or Notes and such
Pari Passu Debt (in the case of any other Net Proceeds) tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes or Notes and such Pari Passu Debt, as the case may be, to be
purchased on a pro rata basis.  Upon completion of each Asset Sale Offer, the
amount of Excess Proceeds shall be reset at zero.  Accordingly, if any Excess Proceeds remain
after consummation of an Asset Sale Offer, Casella may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture.

 

When any non-cash consideration received by Casella
or any of its Restricted Subsidiaries in connection with any Asset Sale is
converted into or sold or otherwise disposed of for cash or Cash Equivalents, such
cash and Cash Equivalents must be applied in accordance with this Section 4.13.

 

Upon the commencement of an Asset Sale Offer,
Casella shall send, by first class mail, a notice to the Trustee and to each
Holder at its registered address.  The
notice shall contain all instructions and materials necessary to enable such
Holder to tender Notes pursuant to the Asset Sale Offer.  Any Asset Sale Offer shall be made to all
Holders.  The notice, which shall govern
the terms of the Asset Sale Offer, shall state:

 

(1)                                  that the Asset Sale Offer is
being made pursuant to this Section 4.13;

 

(2)                                  the Asset Sale Offer Amount,
the Asset Sale Payment and the date on which Notes tendered and accepted for
payment shall be purchased, which date shall be at least 30 days and no later
than 60 days from the date such notice is mailed (the “Asset Sale
Payment Date”);

 

(3)                                  that any Notes not tendered
or accepted for payment shall continue to accrete or accrue interest;

 

(4)                                  that, unless Casella
defaults in making such payment, any Notes accepted for payment pursuant to the
Asset Sale Offer shall cease to accrete or accrue interest after the Asset Sale
Payment Date;

 

(5)                                  that Holders electing to
have a Note purchased pursuant to the Asset Sale Offer may only elect to have
all of such Note purchased and may not elect to have only a portion of such
Note purchased;

 

56

 

(6)                                  that Holders electing to
have a Note purchased pursuant to any Asset Sale Offer shall be required to
surrender the Note, with the form entitled “Option of Holder to Elect Purchase”
on the reverse of the Notes completed, or transfer by book-entry transfer, to
Casella, a depository, if appointed by Casella, or the Paying Agent at the
address specified in the notice at least three days before the Asset Sale
Payment Date;

 

(7)                                  that Holders shall be
entitled to withdraw their election if Casella, the Depository or the Paying
Agent, as the case may be, receives, not later than the Asset Sale Payment
Date, a notice setting forth the name of the Holder, the principal amount of
the Note the Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;

 

(8)                                  that, if the aggregate
principal amount of Notes surrendered by Holders exceeds the Asset Sale Offer
Amount, Casella shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by Casella so that only Notes in denominations of $2,000, or
integral multiples of $1,000 in excess thereof, shall be purchased); and

 

(9)                                  that Holders whose Notes
were purchased only in part shall be issued new Notes equal in principal amount
to the unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).

 

On the Asset Sale Payment Date, Casella shall, to
the extent lawful:  (1) accept for
payment all Notes or portions thereof properly tendered pursuant to the Asset
Sale Offer; (2) deposit with the Paying Agent U.S. Legal Tender sufficient
to pay the Asset Sale Payment in respect of all Notes or portions thereof so
tendered; and (3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officer’s Certificate stating the aggregate
principal amount of Notes or portions thereof being repurchased by
Casella.  Casella shall publicly announce
the results of the Asset Sale Offer on the Asset Sale Payment Date.

 

The Paying Agent shall promptly mail to each Holder
of Notes so tendered the Asset Sale Payment for such Notes, and the Trustee
shall, upon receipt of new Notes prepared and executed by Casella and a written
order to do so, shall within one Business Day authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unrepurchased portion of the Notes surrendered, if any; provided that each such new Note shall be in a principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof.  However, if the Asset Sale Payment Date is on
or after an interest record date and on or before the related interest payment
date, any accrued and unpaid interest shall be paid to the Person in whose name
a Note is registered at the close of business on such record date, and no additional
interest shall be payable to Holders who tender Notes pursuant to the Asset
Sale Offer.

 

Casella will comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws and regulations are applicable in connection with an
Asset Sale Offer.  To the extent the
provisions of any applicable securities laws or regulations conflict with the
provisions of this Indenture relating to an 

 

57

 

Asset Sale Offer, Casella
will not be deemed to have breached its obligations under this Indenture by
virtue of complying with such laws or regulations.

 

SECTION 4.14.                                                     Transactions
with Affiliates.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any of its Affiliates (each, an “Affiliate Transaction”), unless:

 

(1)                                  such Affiliate
Transaction is on terms that are no less favorable to Casella or the relevant
Restricted Subsidiary than those that would have been obtained in a comparable
transaction by Casella or such Restricted Subsidiary with an unrelated Person;
and

 

(2)                                  Casella
delivers to the Trustee:

 

(a)                                  with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, a resolution of the Board of
Directors of Casella set forth in an Officer’s Certificate certifying that such
Affiliate Transaction complies with this covenant and that such Affiliate
Transaction has been approved by a majority of the Disinterested Directors of
Casella, if there are any such Disinterested Directors; and

 

(b)                                 with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, or in excess of $5.0
million if such transaction has not been approved by a majority of the
Disinterested Directors or if at such time there are no Disinterested Directors,
an opinion as to the fairness of such Affiliate Transaction from a financial
point of view issued by an accounting, appraisal or investment banking firm of
national standing.

 

The following items shall not be deemed to be
Affiliate Transactions and, therefore, will not be subject to the provisions of
the preceding paragraph:

 

(1)                                  transactions
exclusively between or among Casella and/or one or more of its Restricted
Subsidiaries; provided, in each case, such
transaction is not otherwise prohibited by this Indenture and that no Affiliate
of Casella (other than a Restricted Subsidiary) owns any Equity Interests in
any Restricted Subsidiary that is a party to such transaction;

 

(2)                                  any agreement
in effect on the Issue Date as in effect on the Issue Date or as thereafter
amended in a manner which is, taken as a whole, in the good faith judgment of
the Board of Directors of Casella not materially less favorable to Casella or
such Restricted Subsidiary than the original agreement as in effect on the
Issue Date;

 

58

 

(3)                                  any employment,
compensation, benefit or indemnity agreements, arrangements or plans in respect
of any officer, director, employee or consultant of Casella or any of its
Restricted Subsidiaries entered into in the ordinary course of business and
approved by the Board of Directors of Casella or an authorized committee
thereof;

 

(4)                                  loans and
advances permitted by clause (6) of the definition of “Permitted
Investments”;

 

(5)                                  transactions
between Casella or any of its Restricted Subsidiaries and GreenFiber; provided, in each case, that (i) such transaction (a) is
on terms that are no less favorable to Casella or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by Casella or such Restricted Subsidiary with an unrelated Person and (b) is
not otherwise prohibited by this Indenture and (ii) no Affiliate of
Casella (other than a Restricted Subsidiary) owns any Equity Interests in any
Person that is a party to such transaction;

 

(6)                                  the issuance
and sale of Qualified Capital Stock; and

 

(7)                                  Restricted Payments
(other than Investments) that are permitted by Section 4.11.

 

SECTION 4.15.                                                     Dividend and
Other Payment Restrictions Affecting Subsidiaries.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist
or become effective any consensual encumbrance or restriction on the ability of
any Restricted Subsidiary to:

 

(1)                                  pay dividends
or make any other distributions on or in respect of its Equity Interests to
Casella or any of Casella’s Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to Casella or any of Casella’s Restricted Subsidiaries;

 

(2)                                  make loans or
advances to Casella or any of Casella’s Restricted Subsidiaries; or

 

(3)                                  transfer any of
its properties or assets to Casella or any of Casella’s Restricted
Subsidiaries.

 

However, the preceding restrictions will not apply
to encumbrances or restrictions existing under or by reason of:

 

(1)                                  the Senior
Credit Facility or any Existing Indebtedness, in each case, as in effect on the
date of this Indenture and any amendments or refinancings thereof; provided that such amendments or refinancings are not
materially more restrictive, taken as a whole, with respect to such dividend
and other restrictions than those contained in the 

 

59

 

Senior
Credit Facility or such Existing Indebtedness, as in effect on the date of this
Indenture;

 

(2)                                  this Indenture
and the Notes;

 

(3)                                  applicable law,
rule, regulation or order of any governmental authority;

 

(4)                                  any instrument
governing Indebtedness or Capital Stock of a Person acquired by Casella or any
of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of this Indenture to be incurred;

 

(5)                                  customary
non-assignment provisions (and sublease restrictions) in leases entered into in
the ordinary course of business and consistent with past practices;

 

(6)                                  Purchase Money
Obligations that impose restrictions only on the property acquired of the
nature described in clause (3) of the preceding paragraph;

 

(7)                                  any agreement
for the sale or other disposition of a Restricted Subsidiary that restricts
distributions by such Restricted Subsidiary pending its sale or other disposition;
provided that such sale or disposition
is made in compliance with Section 4.13;

 

(8)                                  Permitted
Refinancing Indebtedness; provided that
such dividend and other restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are not materially more restrictive, taken
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced;

 

(9)                                  Liens securing
Indebtedness otherwise permitted to be incurred pursuant to Section 4.12 that
limit the right of Casella or any of its Restricted Subsidiaries to dispose of
the assets subject to such Lien;

 

(10)                            provisions with
respect to the disposition or distribution of assets or property in joint
venture agreements and other similar agreements entered into in the ordinary
course of business;

 

(11)                            customary
restrictions on cash or other deposits or net worth imposed by customers or
government authorities under contracts or other agreements entered into in the
ordinary course of business; and

 

(12)                            any agreement
relating to a Sale and Leaseback Transaction or Capital Lease Obligation, in
each case, otherwise permitted by this Indenture, but only on the property
subject to such transaction or lease and only to the extent that such
restrictions 

 

60

 

or
encumbrances are customary with respect to a Sale and Leaseback Transaction or
capital lease.

 

SECTION 4.16.                                                     Additional
Subsidiary Guarantees.

 

If Casella or any of its Restricted Subsidiaries
transfers, acquires or creates another Restricted Subsidiary (other than any
Foreign Subsidiary or Insurance Subsidiary) after the date of this Indenture or
transfers or causes to be transferred, in any one transaction or a series of
related transactions, any assets in excess of $1,000 to any Restricted
Subsidiary (other than a Foreign Subsidiary or Insurance Subsidiary) that is
not a Guarantor, or designates any Unrestricted Subsidiary (other than a
Foreign Subsidiary or Insurance Subsidiary) as a Restricted Subsidiary, or any
Restricted Subsidiary Guarantees the Senior Subordinated Notes or becomes a
guarantor or borrower of the Senior Credit Facility, then that Restricted
Subsidiary must become a Guarantor and shall, within ten Business Days of the
date on which it was so acquired, created, capitalized or designated (or within
one Business Day of the date it Guarantees the Senior Subordinated Notes or
becomes a guarantor or borrower of the Senior Credit Facility):

 

·                  execute and deliver to the Trustee a
supplemental indenture in form reasonably satisfactory to the Trustee pursuant
to which such Restricted Subsidiary shall unconditionally guarantee all of
Casella’s obligations under the Notes and this Indenture on the terms set forth
in this Indenture;

 

·                  execute and deliver a joinder to the
applicable Security Documents or new Security Documents and take all actions
necessary to perfect the liens created thereunder (to the extent required by
such Security Documents), all of such Liens to be junior to the Liens in favor
of the holders of the First Lien Obligations and to be subject to the
Intercreditor Agreement; and

 

·                  deliver to the Trustee an Opinion of Counsel
that such supplemental indenture and Security Documents have been duly
authorized, executed and delivered by such Restricted Subsidiary and constitute
valid and legally binding and enforceable obligations of such Restricted
Subsidiary, subject to customary exceptions.

 

Thereafter, such Restricted
Subsidiary shall be a Guarantor for all purposes of this Indenture.

 

Notwithstanding the preceding paragraph, any
Subsidiary Guarantee will provide by its terms that it will be automatically
and unconditionally released and discharged under the circumstances set forth
in Section 11.05.  The form of the
Subsidiary Guarantee is attached hereto as Exhibit E.

 

SECTION 4.17.                                                     Further
Assurances.

 

Subject to the Intercreditor Agreement, Casella
will, and will cause each of its existing and future Restricted Subsidiaries
to, execute and deliver such additional instruments, certificates 

 

61

 

or documents, and take all
such actions as, in the good faith opinion of Casella, may be reasonably required
from time to time in order to:

 

(1)                                  carry out more
effectively the purposes of the Security Documents;

 

(2)                                  create, grant,
perfect and maintain the validity, effectiveness and priority of any of the
Second-Priority Liens and the Security Documents and the Liens created, or
intended to be created, by the Security Documents; and

 

(3)                                  ensure the
protection and enforcement of any of the rights granted or intended to be
granted to the Trustee under any other instrument executed in connection
therewith.

 

SECTION 4.18.                                                     Reports to
Holders.

 

Whether or not required by the Commission, so long
as any Notes are outstanding, Casella will furnish to the Holders of Notes,
within the time periods specified in the Commission’s rules and
regulations:

 

(1)                                  all quarterly
and annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if Casella were required to
file such Forms, including a “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” and, with respect to the annual information
only, a report on the annual financial statements by Casella’s certified
independent accountants; and

 

(2)                                  all current
reports that would be required to be filed with the Commission on Form 8-K
if Casella were required to file such reports;

 

provided that any such
above information or reports filed with the Interactive Data Electronic
Applications (IDEA) system of the Commission (or successor system) and available
publicly on the Internet shall be deemed to be furnished to the Holders of
Notes.

 

Also, Casella has agreed that, for so long as any
Notes remain outstanding, Casella will furnish to the Holders of Notes, in each
quarterly and annual report, the dollar amount of debt of Casella that would
serve as the threshold for evaluating any Person that is a beneficial holder’s
compliance with the first paragraph of Section 2.17.

 

If Casella has designated any of its Subsidiaries as
Unrestricted Subsidiaries, and the Unrestricted Subsidiaries taken as a whole
account for at least 5.0% of the Consolidated EBITDA (calculated for Casella
and its Subsidiaries, not just Restricted Subsidiaries) for the period of the
most recent four consecutive fiscal quarters for which internal financial statements
are available, of Casella and its Subsidiaries, taken as a whole, then the
quarterly and annual financial information required by the preceding paragraph
shall include a reasonably detailed presentation, either on the face of the
financial statements or in the footnotes thereto, and in Management’s
Discussion and Analysis of Financial Condition and Results of Operations, of
the financial 

 

62

 

condition and results of
operations of Casella and its Restricted Subsidiaries separate from the
financial condition and results of operations of Casella’s Unrestricted Subsidiaries.

 

In addition, whether or not required by the
Commission, Casella will file a copy of all of the information and reports
referred to in clauses (1) and (2) above with the Commission for
public availability within the time periods specified in the Commission’s rules and
regulations (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request.  Casella agrees that it will not
take any action for the purpose of causing the Commission not to accept such
filings.  If, notwithstanding the
foregoing, the Commission will not accept such filings for any reason, Casella
will post the reports specified in the preceding sentence on its website within
the time periods that would apply if Casella were required to file those
reports with the Commission.

 

Casella and the Guarantors will furnish to Holders
of Notes and securities analysts and prospective investors, upon their request,
the information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.

 

Delivery of such reports, information and documents
to the Trustee is for informational purposes only and the Trustee’s receipt of
such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including Casella’s
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer’s Certificates).

 

SECTION 4.19.                                                     Designation of
Restricted and Unrestricted Subsidiaries.

 

The Board of Directors of Casella may designate (a “Designation”) any Restricted Subsidiary to be an
Unrestricted Subsidiary if such Designation would not cause a Default.  If a Restricted Subsidiary is designated as
an Unrestricted Subsidiary, all outstanding Investments owned by Casella and
its Restricted Subsidiaries in the Subsidiary so designated will be deemed to
be an Investment made as of the time of such Designation and will reduce the
amount available for Restricted Payments under the first paragraph of Section 4.11
or for Permitted Investments, as applicable. 
All such outstanding Investments will be valued at their fair market
value at the time of such Designation in accordance with the provisions of the
second to last paragraph of Section 4.11. 
Such Designation will be permitted only if such Investment would be a Permitted
Investment or otherwise would at the time of such Designation not be prohibited
under Section 4.11.

 

The Board of Directors of Casella may revoke any
Designation of a Subsidiary of Casella as an Unrestricted Subsidiary (a “Revocation”); provided that

 

(a)                                  no Default
exists at the time of or after giving effect to such Revocation; and

 

(b)                                 all Liens and
Indebtedness of such Unrestricted Subsidiary outstanding immediately after such
Revocation would, if incurred at such time, have been permitted

 

63

 

to be incurred (and shall be
deemed to have been incurred) for all purposes of this Indenture.

 

Any such Designation or Revocation by the Board of
Directors of Casella after the Issue Date shall be evidenced to the Trustee by
promptly providing to the Trustee a copy of the resolution of the Board of
Directors of Casella giving effect to such Designation or Revocation and an
Officer’s Certificate certifying that such Designation or Revocation complied
with the foregoing provisions.

 

SECTION 4.20.                                                     Sale and Leaseback
Transactions.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, enter into any Sale and Leaseback Transaction; provided that Casella or any Restricted Subsidiary of
Casella that is a Guarantor may enter into a Sale and Leaseback Transaction if:

 

(1)                                  Casella or that
Guarantor, as applicable, could have (a) incurred Indebtedness in an
amount equal to the Attributable Debt relating to such Sale and Leaseback
Transaction pursuant to Section 4.10 and (b) incurred a Lien to secure
such Indebtedness pursuant to Section 4.12;

 

(2)                                  the gross cash
proceeds of such Sale and Leaseback Transaction are at least equal to the fair
market value, as determined in good faith by the Board of Directors and set
forth in an Officer’s Certificate delivered to the Trustee, of the assets that
are the subject of such Sale and Leaseback Transaction; and

 

(3)                                  the transfer of
assets in such Sale and Leaseback Transaction is permitted by, and Casella
applies the proceeds of such transaction in compliance with, Section 4.13
(unless the sale of such assets would not constitute an Asset Sale under the
definition of “Asset Sale”).

 

SECTION 4.21.                                                     Limitation on
Issuances and Sales of Equity Interests in Wholly Owned Subsidiaries.

 

Casella will not, and will not permit any of its
Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose
of any Equity Interests in any Wholly Owned Restricted Subsidiary of Casella to
any Person (other than Casella or a Wholly Owned Restricted Subsidiary of Casella),
unless the transfer, conveyance, sale, lease or other disposition is of all the
Equity Interests in such Wholly Owned Restricted Subsidiary and the Net
Proceeds from such transfer, conveyance, sale, lease or other disposition are
applied in accordance with the provisions of Section 4.13 (unless the sale
of such assets would not constitute an Asset Sale under the definition of “Asset
Sale”).  In addition, Casella will not
permit any of its Wholly Owned Restricted Subsidiaries to issue any of their
Equity Interests (other than, if necessary, shares of their Capital Stock
constituting directors’ qualifying shares) to any Person other than Casella or
a Wholly Owned Restricted Subsidiary of Casella.  The prohibitions of this Section 4.21
will not 

 

64

 

apply with respect to the
Equity Interests of GreenFiber or any of its Subsidiaries or its direct parent
if or when GreenFiber becomes a Wholly Owned Restricted Subsidiary of Casella.

 

SECTION 4.22.                                                     Business
Activities.

 

Casella will not, and will not permit any Restricted
Subsidiary to, engage in any business other than Permitted Businesses.

 

SECTION 4.23.                                                     Payments for
Consent.

 

Casella will not, and will not permit any of its
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such
consideration is offered to be paid and is paid to all Holders of the Notes
that consent, waive or agree to amend in the time frame set forth in the
solicitation documents relating to such consent, waiver or amendment.

 

ARTICLE FIVE

 

SUCCESSOR CORPORATION

 

SECTION 5.01.                                                     Merger,
Consolidation, or Sale of Assets.

 

(a)                                  Casella may not, directly or
indirectly:  (1) consolidate or
merge with or into another Person (whether or not Casella is the surviving
corporation); or (2) sell, assign, lease, transfer, convey or otherwise
dispose of all or substantially all of Casella’s properties or assets
(determined on a consolidated basis for Casella and its Restricted
Subsidiaries), in one or more related transactions, to another Person, unless:

 

(1)                                  either:  (A) Casella is the surviving corporation;
or (B) the Person formed by or surviving any such consolidation or merger
(if other than Casella) or to which such sale, assignment, transfer, conveyance
or other disposition shall have been made (the “Surviving Person”)
is a corporation organized under the laws of the United States, any State
thereof or the District of Columbia;

 

(2)                                  the Surviving
Person assumes all the obligations of Casella under the Notes, this Indenture,
the Security Documents and the Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;

 

(3)                                  immediately
after such transaction no Default exists (including, without limitation, after
giving effect to any Indebtedness or Liens incurred, assumed or granted in connection
with or in respect of such transaction); and

 

65

 

(4)                                  immediately
after such transaction, Casella or the Surviving Person will be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Coverage Ratio
Exception.

 

The foregoing clauses (3) and (4) shall
not apply to (a) a merger or consolidation of any Restricted Subsidiary
with or into Casella or (b) a transaction solely for the purpose of and
with the effect of reincorporating Casella in another jurisdiction and/or
forming a holding company to hold all of the Capital Stock of Casella or
forming an intermediate holding company to hold all of the Capital Stock of
Casella’s Subsidiaries.

 

In the event of any transaction described in and
complying with the conditions listed in the preceding paragraph in which
Casella is not the continuing corporation, the successor Person formed or
remaining shall succeed to, and be substituted for, and may exercise every
right and power of, Casella and Casella will be discharged from all obligations
and covenants under this Indenture, the Notes and the Security Documents.

 

(b)                                 No Guarantor may, and
Casella will not cause or permit any Guarantor to, consolidate with or merge
with or into (whether or not such Guarantor is the surviving Person), another
Person unless:

 

(1)                                  immediately
after such transaction, no Default exists (including, without limitation, after
giving effect to any Indebtedness or Liens incurred, assumed or granted in
connection with or in respect of such transaction); and

 

(2)                                  the Person
formed by or surviving any such consolidation or merger (if other than such
Guarantor) assumes all the obligations of such Guarantor under its Subsidiary
Guarantee, this Indenture, the Security Documents and the Registration Rights
Agreement pursuant to agreements reasonably satisfactory to the Trustee.

 

The requirements of this clause (b) shall
not apply to (x) a consolidation or merger of any Guarantor with or into
Casella or any other Guarantor so long as Casella or a Guarantor survives such
consolidation or merger or (y) the sale by consolidation or merger of a
Guarantor, which sale is covered by and complies with Section 4.13.

 

(c)                                  Casella will deliver to the
Trustee prior to the consummation of each proposed transaction an Officer’s
Certificate certifying that the conditions set forth above are satisfied and an
Opinion of Counsel, which opinion may contain customary exceptions and qualifications,
that the proposed transaction and this supplemental indenture, if any, comply
with this Indenture.

 

66

 

ARTICLE SIX

 

DEFAULT AND REMEDIES

 

SECTION 6.01.                                                     Events of
Default.

 

Each of the following is an “Event of Default”:

 

(1)                                  default for a
continued period of 30 days in the payment when due of interest on the Notes;

 

(2)                                  default in
payment when due of the principal of or premium, if any, on the Notes;

 

(3)                                  failure by
Casella or any of its Subsidiaries to comply with Section 4.09 or 4.13;

 

(4)                                  failure by
Casella or any of its Restricted Subsidiaries to comply with any of the other
agreements or covenants in this Indenture, 
the Notes and the Security Documents for 60 days after delivery of
written notice of such failure to comply by the Trustee or Holders of not less
than 25% of the principal amount of the Notes then outstanding;

 

(5)                                  default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness whether such
Indebtedness now exists or is created after the date of this Indenture, if that
default:

 

(a)                                  is caused by a failure to
pay principal of or premium, if any, or interest on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a “Payment Default”); or

 

(b)                                 results in the acceleration
of such Indebtedness prior to its express maturity,

 

and, in each case, the
principal amount of any such Indebtedness, together with the principal amount
of any other such Indebtedness under which there has been a Payment Default or
the maturity of which has been so accelerated, aggregates $7.5 million or
more;

 

(6)                                  failure by
Casella or any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $7.5 million, which judgments are not paid,
discharged or stayed for a period of 60 days;

 

(7)                                  except as
permitted by this Indenture, any Subsidiary Guarantee of any Significant
Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid
or shall cease for any reason to be in full force and effect or any Guarantor,
or any 

 

67

 

Person
acting on behalf of any Guarantor, shall deny or disaffirm its obligations
under its Subsidiary Guarantee;

 

(8)                                  a court having
jurisdiction in the premises enters (a) a decree or order for relief in
respect of Casella or any of its Significant Subsidiaries in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (b) a decree or order
adjudging Casella or any of its Significant Subsidiaries as bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of Casella or any of
its Significant Subsidiaries under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator
or other similar official of Casella or any of its Significant Subsidiaries or
of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order of the type in clause (a) or
(b) above remains unstayed and in effect for a period of 60 consecutive
days;

 

(9)                                  Casella or any
of its Significant Subsidiaries:

 

(a)                                  commences a voluntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or any other case or proceeding to be
adjudicated a bankrupt or insolvent; or

 

(b)                                 consents to the entry of a
decree or order for relief in respect of Casella or any of its Significant
Subsidiaries in an involuntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against Casella
or any of its Significant Subsidiaries; or

 

(c)                                  files a petition, as debtor,
or answer or consent seeking reorganization or relief under any applicable
federal or state law; or

 

(d)                                 consents to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official of
Casella or any of its Significant Subsidiaries or of any substantial part of
its property; or

 

(e)                                  makes an assignment for the
benefit of creditors; or

 

(f)                                    admits in writing its
inability to pay its debts generally as they become due; or

 

(10)                            (x) with
respect to any Collateral having a fair market value in excess of $10.0
million, individually or in the aggregate, (a) the security interest under
any Security Document, at any time, ceases to be in full force and effect for
any reason other than in accordance with the terms of this Indenture, the
Security Documents and the Intercreditor Agreement, or (b) any security interest
created thereunder or under this Indenture is declared 

 

68

 

invalid
or unenforceable by a court of competent jurisdiction or (y) Casella or
any Guarantor asserts, in any pleading in any court of competent jurisdiction,
that any security interest in any Collateral is invalid or unenforceable.

 

SECTION 6.02.                                                     Acceleration.

 

In the case of an Event of Default arising from
either Section 6.01(8) or (9) with respect to Casella or any
Significant Subsidiary, all outstanding Notes will become due and payable
immediately without further action or notice. 
If any other Event of Default occurs and is continuing, the Trustee or
the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately.

 

At any time after a declaration of acceleration with
respect to the Notes as described in the preceding paragraph, the Holders of a
majority in principal amount of the Notes may rescind and cancel such declaration
and its consequences:

 

(1)                                  if the
rescission would not conflict with any judgment or decree;

 

(2)                                  if all existing
Defaults have been cured or waived except nonpayment of principal or interest
that has become due solely because of the acceleration;

 

(3)                                  to the extent
the payment of such interest is lawful, interest on overdue installments of
interest and overdue principal, which has become due otherwise than by such
declaration of acceleration, has been paid;

 

(4)                                  if Casella has
paid the Trustee its reasonable compensation and reimbursed the Trustee for its
expenses, disbursements and advances; and

 

(5)                                  in the event of
the cure or waiver of a Default of the type set forth in Section 6.01(8) or
(9), the Trustee shall have received an Officer’s Certificate and an Opinion of
Counsel that such Default has been cured or waived.

 

No such rescission shall affect any
subsequent Default or impair any right consequent thereto.

 

SECTION 6.03.                                                     Other Remedies.

 

If a Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect
the payment of principal of or interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

 

The Trustee may maintain a proceeding even if it
does not possess any of the Notes or does not produce any of them in the
proceeding.  A delay or omission by the
Trustee or any Noteholder in exercising any right or remedy accruing upon a
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Default.  No remedy
is exclusive of any other remedy.  All
available remedies are cumulative to the extent permitted by law.

 

69

 

SECTION 6.04.                                                     Waiver of Past
Defaults.

 

Subject to Sections 2.09, 6.07 and 9.02, the Holders
of a majority in principal amount of the outstanding Notes by notice to the
Trustee may waive an existing Default and its consequences, except a Default in
the payment of principal of or interest on any Note as specified in Section 6.01(1) or
(2).  Casella shall deliver to the
Trustee an Officer’s Certificate stating that the requisite percentage of
Holders have consented to such waiver and attaching copies of such
consents.  When a Default is waived, it
is cured and ceases.

 

SECTION 6.05.                                                     Control by
Majority.

 

The Holders of not less than a majority in principal
amount of the outstanding Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. 
Subject to Section 7.01, however, the Trustee may refuse to follow
any direction that conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Noteholder, or
that may involve the Trustee in personal liability; provided
that the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction.

 

In the event the Trustee takes any action or follows
any direction pursuant to this Indenture, the Trustee shall be entitled to
indemnification against any loss or expense caused by taking such action or
following such direction.

 

SECTION 6.06.                                                     Limitation on
Suits.

 

A Noteholder may not pursue any remedy with respect
to this Indenture or the Notes unless:

 

(1)                                  the Holder
gives to the Trustee written notice of a continuing Event of Default;

 

(2)                                  the Holder or
Holders of at least 25% in principal amount of the outstanding Notes make a
written request to the Trustee to pursue the remedy;

 

(3)                                  such Holder or
Holders offer and provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;

 

(4)                                  the Trustee
does not comply with the request within 45 days after receipt of the request
and the offer and the provision of indemnity; and

 

(5)                                  during such
45-day period the Holder or Holders of a majority in principal amount of the
outstanding Notes do not give the Trustee a direction which, in the opinion of
the Trustee, is inconsistent with the request.

 

A Noteholder may not use this Indenture to prejudice
the rights of another Noteholder or to obtain a preference or priority over
such other Noteholder.

 

70

 

SECTION 6.07.                                                     Rights of
Holders To Receive Payment.

 

Notwithstanding any other provision of this
Indenture, the right of any Holder to receive payment of principal of and
interest on a Note, on or after the respective due dates expressed in such
Note, or to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of the
Holder.

 

SECTION 6.08.                                                     Collection Suit
by Trustee.

 

If a Default in payment of principal or interest
specified in Section 6.01(1) or (2) occurs and is continuing,
the Trustee may recover judgment in its own name and as trustee of an express
trust against Casella or any other obligor on the Notes for the whole amount of
principal and accrued interest and fees remaining unpaid, together with
interest on overdue principal and, to the extent that payment of such interest
is lawful, interest on overdue installments of interest, in each case at the
rate per annum borne by the Notes and such
further amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.

 

SECTION 6.09.                                                     Trustee May File
Proofs of Claim.

 

The Trustee may file such proofs of claim and other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Noteholders allowed in any judicial proceedings relating to Casella, its
creditors or its property and shall be entitled and empowered to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same, and any Custodian in any such judicial proceedings
is hereby authorized by each Noteholder to make such payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due to it for the
compensation, expenses, disbursements and advances of the Trustee, its agent
and counsel, and any other amounts due the Trustee under Section 7.07.  Nothing herein contained shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf
of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Noteholder in any
such proceeding.  The Trustee shall be
entitled to participate as a member of any official committee of creditors in
the matters as it deems necessary or advisable.

 

SECTION 6.10.                                                     Priorities.

 

Subject to the terms of the Intercreditor Agreement
and the Security Documents, if the Trustee collects any money or property
pursuant to this Article Six or from the Second Lien Agent pursuant to any
Security Document, it shall pay out the money or property in the following order:

 

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First: 
to the Second Lien Agent for amounts due in accordance with the terms of
the Security Documents;

 

Second: 
to the Trustee for amounts due under Section 7.07;

 

Third: 
to Holders for interest accrued on the Notes, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Notes for interest;

 

Fourth: 
to Holders for principal amounts due and unpaid on the Notes, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal; and

 

Fifth: 
to Casella or, if applicable, the Guarantors, as their respective
interests may appear.

 

The Trustee, upon prior notice to Casella, may fix a
record date and payment date for any payment to Noteholders pursuant to this Section 6.10.

 

SECTION 6.11.                                                     Undertaking for
Costs.

 

In any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs,
including reasonable attorneys’ fees and expenses, against any party litigant
in the suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. 
This Section 6.11 does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.07, or a suit by a Holder or Holders of
more than 10% in principal amount of the outstanding Notes.

 

SECTION 6.12.                                                     Appointment and
Authorization of Wilmington Trust Company as Second Lien Agent

 

(a)                                  Wilmington Trust Company is
hereby designated and appointed as the Second Lien Agent of the Holders under
the Security Documents, and is authorized as the Second Lien Agent for such
Holders to execute and enter into each of the Security Documents and all other
instruments relating to the Security Documents and (i) to take action and
exercise such powers as are expressly required or permitted hereunder and under
the Security Documents and all instruments relating hereto and thereto and (ii) to
exercise such powers and perform such duties as are, in each case, expressly
delegated to the Second Lien Agent by the terms hereof and thereof, together
with such other powers as are reasonably incidental hereto and thereto.

 

(b)                                 Notwithstanding any
provision to the contrary elsewhere in this Indenture or the Security
Documents, the Second Lien Agent shall not have (i) any duties or
responsibilities except those expressly set forth herein or therein or (ii) any
fiduciary relationship with any Holder, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities 

 

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shall be read into this Indenture or any Security Document or otherwise
exist against the Second Lien Agent.

 

(c)                                  Before the Second Lien Agent
acts or refrains from acting, it may require an Officer’s Certificate or
Opinion of Counsel or both.  The Second
Lien Agent shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer’s Certificate or Opinion of Counsel.  The Second Lien Agent may consult with
counsel of the Second Lien Agent’s own choosing and the Second Lien Agent shall
be fully protected from liability in respect of any action taken, suffered or
omitted by it hereunder or under the Security Documents in good faith and in
reliance on the advice or opinion of such counsel or on any Opinion of Counsel.

 

ARTICLE SEVEN

 

TRUSTEE

 

SECTION 7.01.                                                     Duties of
Trustee.

 

(a)                                  If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

 

(b)                                 Except during
the continuance of an Event of Default:

 

(1)                                  The Trustee
need perform only those duties as are specifically set forth herein or in the
TIA and no duties, covenants, responsibilities or obligations shall be implied
in this Indenture against the Trustee.

 

(2)                                  In the absence
of bad faith on its part, the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
certificates (including Officer’s Certificates) or opinions (including Opinions
of Counsel) furnished to the Trustee and conforming to the requirements of this
Indenture.  However, in the case of any
such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the requirements of
this Indenture.

 

(c)                                  Notwithstanding anything to
the contrary herein, the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

 

(1)                                  This paragraph
does not limit the effect of paragraph (b) of this Section 7.01.

 

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(2)           The Trustee shall
not be liable for any error of judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was negligent in ascertaining the
pertinent facts.

 

(3)           The Trustee shall
not be liable with respect to any action it takes or omits to take in good
faith in accordance with a direction received by it pursuant to Section 6.05.

 

(d)           No
provision of this Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or to take or omit to take any action under this Indenture
or take any action at the request or direction of Holders if it shall have
reasonable grounds for believing that repayment of such funds is not assured to
it.

 

(e)           Whether
or not therein expressly so provided, every provision of this Indenture that in
any way relates to the Trustee is subject to this Section 7.01.

 

(f)            The
Trustee shall not be liable for interest on any money received by it except as
the Trustee may agree in writing with Casella. 
Money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law.

 

(g)           In
the absence of bad faith, negligence or willful misconduct on the part of the
Trustee, the Trustee shall not be responsible for the application of any money
by any Paying Agent other than the Trustee.

 

SECTION 7.02.                                                     Rights of
Trustee.

 

Subject to Section 7.01:

 

(a)           The
Trustee may rely conclusively on any document believed by it to be genuine and
to have been signed or presented by the proper Person.  The Trustee need not investigate any fact or
matter stated in the document.

 

(b)           Before
the Trustee acts or refrains from acting, it may require an Officer’s
Certificate and an Opinion of Counsel, which shall conform to the provisions of
Section 12.05.  The Trustee shall
not be liable for any action it takes or omits to take in good faith in
reliance on such certificate or opinion.

 

(c)           The
Trustee may act through its attorneys and agents and shall not be responsible
for the misconduct or negligence of any agent (other than an agent who is an
employee of the Trustee) appointed with due care.

 

(d)           The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it reasonably believes to be authorized or within its rights or
powers.

 

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(e)           The
Trustee may consult with counsel of its selection and the advice or opinion of
such counsel as to matters of law shall be full and complete authorization and
protection from liability in respect of any action taken, omitted or suffered
by it hereunder in good faith and in accordance with the advice or opinion of
such counsel.

 

(f)            The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request, order or direction of any of the
Holders pursuant to the provisions of this Indenture, unless such Holders shall
have offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which may be incurred therein or
thereby.

 

(g)           The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate (including any Officer’s Certificate),
statement, instrument, opinion (including any Opinion of Counsel), notice,
request, direction, consent, order, bond, debenture, or other paper or
document, but the Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled, upon reasonable notice to Casella, to examine the books, records, and
premises of Casella, personally or by agent or attorney at the sole cost of
Casella.

 

(h)           The
Trustee shall not be required to give any bond or surety in respect of the
performance of its powers and duties hereunder.

 

(i)            The
permissive rights of the Trustee to do things enumerated in this Indenture shall
not be construed as duties.

 

(j)            The
Trustee shall not be deemed to have notice of any Default unless a Responsible
Officer of the Trustee has actual knowledge thereof or unless written notice of
any event which is in fact such a default is received by the Trustee at the
Corporate Trust Office of the Trustee, and such notice references the Notes and
this Indenture.

 

(k)           The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to,
and shall be enforceable by, the Trustee in each of its capacities hereunder,
and to each agent, custodian and other Person employed to act hereunder.

 

(l)            The
Trustee shall incur no liability if, by reason of any provision of any present
or future law or regulation thereunder, or other action by a public authority,
or by any force majeure event, including but not limited to acts of God, war,
riot, invasion, acts of foreign enemy, foreign or domestic hostilities,
strikes, terrorist attacks (actual or threatened), loss of power, failure of
electronic communication or data processing systems which failure is not within
the reasonable control of the Trustee, natural disaster, or other circumstances
beyond its reasonable control, the Trustee shall be prevented or forbidden from
doing or performing any act or thing which the terms of this Indenture provide

 

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shall or may be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Indenture.

 

SECTION 7.03.                                                     Individual
Rights of Trustee.

 

The Trustee in its individual or any other capacity
may become the owner or pledgee of Notes and may otherwise deal with Casella,
its Subsidiaries or their respective Affiliates with the same rights it would
have if it were not Trustee.  Any Agent
may do the same with like rights. 
However, the Trustee must comply with Sections 7.10 and 7.11.

 

SECTION 7.04.                                                     Trustee’s
Disclaimer.

 

The Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for Casella’s use of the proceeds from the
Notes, and it shall not be responsible for any statement of Casella in this Indenture
or any document issued in connection with the sale of Notes or any statement in
the Notes other than the Trustee’s certificate of authentication.  The Trustee makes no representations with
respect to the effectiveness or adequacy of this Indenture.

 

SECTION 7.05.                                                     Notice of
Default.

 

If a Default occurs and is continuing and the
Trustee receives actual notice of such Default, the Trustee shall mail to each
Noteholder notice of the uncured Default within 60 days after such Default
occurs.  Except in the case of a Default
in payment of principal of, or interest on, any Note, including an accelerated
payment and the failure to make payment on the Change of Control Payment Date
pursuant to a Change of Control Offer or the Asset Sale Offer Payment Date pursuant
to an Asset Sale Offer, the Trustee may withhold the notice if and so long as
the Board of Directors, the executive committee, or a trust committee of directors
and/or Responsible Officers, of the Trustee in good faith determines that
withholding the notice is in the interest of the Noteholders.

 

SECTION 7.06.                                                     Reports by
Trustee to Holders.

 

Within 60 days after each July 15, beginning
with July 15, 2010, the Trustee shall, to the extent that any of the
events described in TIA § 313(a) occurred within the previous twelve
months, but not otherwise, mail to each Noteholder a brief report dated as of
such date that complies with TIA § 313(a). 
The Trustee also shall comply with TIA §§ 313(b), 313(c) and
313(d).

 

A copy of each report at the time of its mailing to
Noteholders shall be mailed to Casella and filed with the Commission and each
securities exchange, if any, on which the Notes are listed.

 

Casella shall notify the Trustee if the Notes become
listed on any securities exchange or of any delisting thereof and the Trustee
shall comply with TIA § 313(d).

 

76

 

SECTION 7.07.                                                     Compensation
and Indemnity.

 

Casella shall pay to the Trustee from time to time
such compensation as Casella and the Trustee shall from time to time agree in
writing for its services hereunder.  The
Trustee’s compensation shall not be limited by any law on compensation of a
trustee of an express trust.  Casella
shall reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including reasonable fees and expenses of counsel) incurred or
made by it in addition to the compensation for its services, except any such disbursements,
expenses and advances as may be attributable to the Trustee’s negligence, bad
faith or willful misconduct.  Such
expenses shall include the reasonable fees and expenses of the Trustee’s agents
and counsel.

 

Casella shall indemnify each of the Trustee or any
predecessor Trustee and its agents, employees, officers, stockholders and directors
for, and hold them harmless against, any and all loss, damage, claims including
taxes (other than taxes based upon, measured by or determined by the income of
the Trustee), liability or expense incurred by them except for such actions to
the extent caused by any negligence, bad faith or willful misconduct on their
part, arising out of or in connection with the acceptance or administration of
this trust including the reasonable costs and expenses of defending themselves
against or investigating any claim or liability in connection with the exercise
or performance of any of the Trustee’s rights, powers or duties hereunder.  The Trustee shall notify Casella promptly of
any claim asserted against the Trustee or any of its agents, employees,
officers, stockholders and directors for which it may seek indemnity.  Casella may, subject to the approval of the
Trustee (which approval shall not be unreasonably withheld), defend the claim
and the Trustee shall cooperate in the defense. 
The Trustee and its agents, employees, officers, stockholders and
directors subject to the claim may have separate counsel and Casella shall pay
the reasonable fees and expenses of such counsel; provided,
however, that Casella will not be
required to pay such fees and expenses if, subject to the approval of the
Trustee (which approval shall not be unreasonably withheld), it assumes the
Trustee’s defense and there is no conflict of interest between Casella and the
Trustee and its agents, employees, officers, stockholders and directors subject
to the claim in connection with such defense as reasonably determined by the
Trustee.  Casella need not pay for any
settlement made without its written consent. 
Casella need not reimburse any expense or indemnify against any loss or
liability to the extent incurred by the Trustee through its negligence, bad
faith or willful misconduct.

 

To secure Casella’s payment obligations in this Section 7.07,
the Trustee shall have a senior claim prior to the Notes against all money or
property held or collected by the Trustee, in its capacity as Trustee.

 

When the Trustee incurs expenses or renders services
after a Default specified in Section 6.01(8) or (9) occurs, such
expenses and the compensation for such services shall be paid to the extent
allowed under any Bankruptcy Law.

 

Notwithstanding any other provision in this
Indenture, the foregoing provisions of this Section 7.07 shall survive the
satisfaction and discharge of this Indenture or the appointment of a successor
Trustee.

 

77

 

SECTION 7.08.                                                     Replacement of
Trustee.

 

The Trustee may resign at any time by so notifying
Casella in writing.  The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying Casella and the Trustee and may appoint a successor Trustee.  Casella may remove the Trustee if:

 

(1)           the Trustee fails to
comply with Section 7.10;

 

(2)           the Trustee is
adjudged a bankrupt or an insolvent;

 

(3)           a receiver or other
public officer takes charge of the Trustee or its property; or

 

(4)           the Trustee becomes
incapable of acting.

 

If the Trustee resigns or is removed or if a vacancy
exists in the office of Trustee for any reason, Casella shall notify each
Holder of such event and shall promptly appoint a successor Trustee.  Within one year after the successor Trustee
takes office, the Holders of a majority in principal amount of the Notes may
appoint a successor Trustee to replace the successor Trustee appointed by
Casella.

 

A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to Casella.  Immediately after that, the retiring Trustee
shall at the expense of Casella transfer, after payment of all sums then owing
to the Trustee pursuant to Section 7.07, all property held by it as
Trustee to the successor Trustee, subject to the Lien provided in Section 7.07,
the resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture.  A
successor Trustee shall mail notice of its succession to each Noteholder.

 

If a successor Trustee does not take office within
60 days after the retiring Trustee resigns or is removed, the retiring Trustee,
Casella or the Holders of at least 10% in principal amount of the outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee at the expense of Casella.

 

If the Trustee fails to comply with Section 7.10,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.

 

Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, Casella’s obligations under Section 7.07 shall
continue for the benefit of the retiring Trustee.

 

SECTION 7.09.                                                     Successor
Trustee by Merger, Etc.

 

If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all of its corporate trust business to,
another corporation, the resulting, surviving or

 

78

 

transferee corporation
without any further act shall, if such resulting, surviving or transferee corporation
is otherwise eligible hereunder, be the successor Trustee; provided
that such corporation shall be otherwise qualified and eligible under this Article Seven.

 

SECTION 7.10.                                                     Eligibility;
Disqualification.

 

This Indenture shall always have a Trustee who
satisfies the requirement of TIA §§ 310(a)(1), 310(a)(2) and
310(a)(5).  The Trustee shall have a
combined capital and surplus of at least $150,000,000 as set forth in its most
recent published annual report of condition. 
In addition, if the Trustee is a corporation included in a bank holding
company system, the Trustee, independently of the bank holding company, shall
meet the capital requirements of TIA § 310(a)(2).  The Trustee shall comply with TIA
§ 310(b); provided, however,
that there shall be excluded from the operation of TIA § 310(b)(1) any
indenture or indentures under which other securities, or certificates of
interest or participation in other securities, of Casella are outstanding, if
the requirements for such exclusion set forth in TIA § 310(b)(1) are
met.  The provisions of TIA § 310
shall apply to Casella and any other obligor of the Notes.

 

SECTION 7.11.                                                     Preferential
Collection of Claims Against Casella.

 

The Trustee, in its capacity as Trustee hereunder,
shall comply with TIA § 311(a), excluding any creditor relationship listed
in TIA § 311(b).  A Trustee who has
resigned or been removed shall be subject to TIA § 311(a) to the
extent indicated.

 

SECTION 7.12.                                                     Second Lien
Agent.

 

The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Second Lien
Agent as if the Second Lien Agent were named as the Trustee herein and the
Security Documents were named as this Indenture herein.

 

ARTICLE EIGHT

 

DISCHARGE OF INDENTURE;
DEFEASANCE

 

SECTION 8.01.                                                     Termination of
Casella’s Obligations.

 

Casella may terminate its obligations under the
Notes, this Indenture and the Security Documents, except those obligations
referred to in the penultimate paragraph of this Section 8.01, and cause
the release of all Second-Priority Liens if all Notes previously authenticated
and delivered (other than destroyed, lost or stolen Notes which have been
replaced or paid) have been delivered to the Trustee for cancellation and
Casella has paid all sums payable by it hereunder, or if:

 

79

 

(a)           either
(i) pursuant to Article Three, Casella shall have given notice to the
Trustee and mailed a notice of redemption to each Holder of the redemption of
all of the Notes in accordance with the provisions hereof or (ii) all
Notes have otherwise become or will become due and payable within one (1) year
hereunder;

 

(b)           Casella
shall have irrevocably deposited or caused to be deposited with the Trustee or
a trustee satisfactory to the Trustee, under the terms of an irrevocable trust
agreement in form and substance satisfactory to the Trustee, as trust funds in
trust solely for the benefit of the Holders of that purpose, U.S. Legal Tender
or U.S. Government Obligations, or a combination thereof, in such amount as is,
in the opinion of a nationally recognized firm of independent public
accountants, sufficient without consideration of reinvestment of such interest,
to pay principal of, premium, if any, and interest on the outstanding Notes to
maturity or redemption; provided that
the Trustee shall have been irrevocably instructed to apply such U.S. Legal
Tender or U.S. Government Obligations, or a combination thereof, to the payment
of said principal, premium, if any, and interest with respect to the Notes;

 

(c)           no
Default with respect to this Indenture or the Notes shall have occurred and be
continuing on the date of such deposit or shall occur as a result of such
deposit (other than a Default resulting from borrowing of funds to be applied
to such deposit) and such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture, the Senior Credit Facility or
any other material agreement or instrument to which Casella or any of its
Subsidiaries is a party or by which it is bound;

 

(d)           Casella
shall have paid all other sums payable by it hereunder; and

 

(e)           Casella
shall have delivered to the Trustee an Officer’s Certificate and an Opinion of
Counsel, each stating that all conditions precedent providing for or relating
to the termination of Casella’s obligations under the Notes, this Indenture and
the Security Documents have been complied with. 
Such Opinion of Counsel shall also state that such satisfaction and
discharge does not result in a default under the Senior Credit Facility or any
other material agreement or instrument then known to such counsel that binds or
affects Casella.

 

Subject to the next sentence and notwithstanding the
foregoing paragraph, Casella’s obligations in Sections 2.05, 2.06, 2.07, 2.08,
2.17, 4.01, 4.02, 7.07, 8.05 and 8.06 shall survive until the Notes are no
longer outstanding pursuant to the last paragraph of Section 2.08.  After the Notes are no longer outstanding,
Casella’s obligations in Sections 7.07, 8.05 and 8.06 shall survive.

 

After Casella’s compliance with subsections (a) through
(e) of this Section 8.01, which Casella shall confirm to the Trustee
in writing, the Trustee upon request shall acknowledge in writing the discharge
of Casella’s obligations under the Notes and this Indenture except for those
surviving obligations specified above.

 

80

 

SECTION 8.02.                                                     Legal
Defeasance and Covenant Defeasance.

 

(a)           Casella
may, at its option by Board Resolution of the Board of Directors of Casella, at
any time, elect to have either paragraph (b) or (c) below be applied
to all outstanding Notes upon compliance with the conditions set forth in Section 8.03.

 

(b)           Upon
Casella’s exercise under paragraph (a) hereof of the option applicable to
this paragraph (b), Casella shall, subject to the satisfaction of the
conditions set forth in Section 8.03, be deemed to have been discharged
from its obligations with respect to all outstanding Notes, this Indenture and
the Security Documents and to have caused the release of all Second-Priority
Liens on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). 
For this purpose, Legal Defeasance means that Casella shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, which shall thereafter be deemed to be “outstanding” only for the purposes
of Section 8.04 hereof and the other Sections of this Indenture referred
to in (i) and (ii) below, and to have satisfied all its other obligations
under such Notes, this Indenture and the Security Documents, and the Guarantors
shall be deemed to have satisfied all of their obligations under the Subsidiary
Guarantees, this Indenture and the Security Documents (and the Trustee, on demand
of and at the expense of Casella, shall execute proper instruments
acknowledging the same), except for the following provisions which shall
survive until otherwise terminated or discharged hereunder:

 

(i)            the rights of
Holders of outstanding Notes to receive, solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section 8.04,
payments in respect of the principal of, premium, if any, and interest on such
Notes when such payments are due;

 

(ii)           Casella’s
obligations with respect to such Notes under Article Two and Section 4.02
hereof;

 

(iii)          the rights, powers,
trusts, duties and immunities of the Trustee hereunder and Casella’s
obligations in connection therewith; and

 

(iv)          this Article Eight.

 

Subject to compliance with this Article Eight,
Casella may exercise its option under this Section 8.02(b) notwithstanding the
prior exercise of its option under Section 8.02(c) hereof.

 

(c)           Upon
Casella’s exercise under paragraph (a) hereof of the option applicable to
this paragraph (c), Casella and the Guarantors shall, subject to the
satisfaction of the conditions set forth in Section 8.03 hereof, be
released from their respective obligations under the covenants contained in
Sections 4.03 (with respect to Restricted Subsidiaries only), 4.04, 4.05,
4.07 and 4.09 through 4.22 and clause (4) of Section 5.01(a) hereof
with respect to the outstanding Notes and the Second-Priority Liens shall be
released on and after the date the conditions set forth in Section 8.03
are satisfied (hereinafter, “Covenant Defeasance”),
and the Notes

 

81

 

shall thereafter be deemed not “outstanding” for the purposes of any
direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed “outstanding” for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes).  For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, Casella and the
Guarantors may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply or any release
of the Liens on the Collateral shall not constitute an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such Notes shall be unaffected thereby. 
In addition, upon Casella’s exercise under paragraph (a) hereof of
the option applicable to this paragraph (c), subject to the satisfaction of the
conditions set forth in Section 8.03 hereof, (i) any event described
in clause (3), (4), (5), (6), (7) or (10) of Section 6.01 will
no longer constitute an Event of Default with respect to the Notes and (ii) any
event described in clause (1), (2), (8) or (9) of Section 6.01
will continue to constitute an Event of Default with respect to the Notes.

 

SECTION 8.03.                                                     Conditions to
Legal Defeasance or Covenant Defeasance.

 

The following shall be the conditions to the
application of either Section 8.02(b) or 8.02(c) hereof to the
outstanding Notes:

 

In order to exercise either
Legal Defeasance or Covenant Defeasance:

 

(1)           Casella must
irrevocably deposit with the Trustee, in trust, for the benefit of the Holders
of the Notes, cash in U.S. Legal Tender, U.S. Government Obligations, or a
combination thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay the
principal of, premium, if any, and interest on the outstanding Notes on the
Stated Maturity or on the applicable redemption date, as the case may be, and
Casella must specify whether the Notes are being defeased to maturity or to a
particular redemption date;

 

(2)           in the case of an
election under Section 8.02(b) hereof, Casella shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming
that (a) Casella has received from, or there has been published by, the
Internal Revenue Service a ruling or (b) since the date of this Indenture,
there has been a change in the applicable federal income tax law, in either
case to the effect that, and based thereon such Opinion of Counsel shall
confirm that, the Holders of the outstanding Notes will not recognize income,
gain or loss for federal income tax purposes as a result of such Legal
Defeasance and will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the case if such Legal
Defeasance had not occurred;

 

82

 

(3)           in the case of an
election under Section 8.02(c) hereof, Casella shall have delivered
to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming
that the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant Defeasance
had not occurred;

 

(4)           no Default shall
have occurred and be continuing either: (a) on the date of such deposit
(other than a Default resulting from the borrowing of funds to be applied to
such deposit), or (b) insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the period ending on the 91st
day after the date of deposit; provided that
such Legal Defeasance or Covenant Defeasance, as the case may be, shall be
deemed to have occurred on the date of such deposit, subject to an Event of
Default from bankruptcy or insolvency within such 91-day period;

 

(5)           such Legal
Defeasance or Covenant Defeasance will not result in a breach or violation of,
or constitute a default under, any material agreement or instrument (other than
this Indenture) to which Casella or any of its Restricted Subsidiaries is a
party or by which Casella or any of its Restricted Subsidiaries is bound;

 

(6)           Casella must deliver
to the Trustee an Officer’s Certificate stating that the deposit was not made
by Casella with the intent of preferring the Holders of Notes over the other
creditors of Casella with the intent of defeating, hindering, delaying or
defrauding creditors of Casella or others; and

 

(7)           Casella must deliver
to the Trustee an Officer’s Certificate and an Opinion of Counsel stating that
all conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.

 

SECTION 8.04.                                                     Application of
Trust Money.

 

The Trustee or Paying Agent shall hold in trust U.S.
Legal Tender and U.S. Government Obligations deposited with it pursuant to this
Article Eight, and shall apply the deposited U.S. Legal Tender and the
money from U.S. Government Obligations in accordance with this Indenture to the
payment of principal of and interest on the Notes.  The Trustee shall be under no obligation to
invest said U.S. Legal Tender and U.S. Government Obligations except as it may
agree with Casella.

 

Casella shall pay and indemnify the Trustee against
any tax, fee or other charge imposed on or assessed against the U.S. Legal
Tender and U.S. Government Obligations deposited pursuant to Section 8.03
or the principal and interest received in respect thereof other than any such
tax, fee or other charge which by law is for the account of the Holders of the
outstanding Notes.

 

83

 

Anything in this Article Eight to the contrary
notwithstanding, the Trustee shall deliver or pay to Casella from time to time
upon Casella’s request any U.S. Legal Tender and U.S. Government Obligations
held by it as provided in Section 8.03 which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in excess of the amount
thereof that would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.

 

SECTION 8.05.                                                     Repayment to
Casella.

 

Subject to this Article Eight, the Trustee and
the Paying Agent shall promptly pay to Casella upon request any excess U.S.
Legal Tender and U.S. Government Obligations held by them at any time and
thereupon shall be relieved from all liability with respect to such money.  The Trustee and the Paying Agent shall pay to
Casella upon request any money held by them for the payment of principal or
interest that remains unclaimed for two years; provided
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of Casella cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after
a date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to Casella.  After payment to
Casella, Holders entitled to such money must look to Casella for payment as
general creditors unless an applicable law designates another Person.

 

SECTION 8.06.                                                     Reinstatement.

 

If the Trustee or Paying Agent is unable to apply
any U.S. Legal Tender and U.S. Government Obligations in accordance with this Article Eight
by reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, Casella’s obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article Eight until such time as the Trustee or Paying Agent is
permitted to apply all such U.S. Legal Tender and U.S. Government Obligations
in accordance with this Article Eight; provided that
if Casella has made any payment of interest on or principal of any Notes
because of the reinstatement of its obligations, Casella shall be subrogated to
the rights of the Holders of such Notes to receive such payment from the U.S.
Legal Tender and U.S. Government Obligations held by the Trustee or Paying
Agent.

 

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

 

SECTION 9.01.                                                     Without Consent
of Holders.

 

Casella, the Guarantors and the Trustee, together,
may amend or supplement this Indenture, the Notes or the Security Documents without
notice to or consent of any Noteholder:

 

84

 

(1)           to cure any
ambiguity, defect or inconsistency;

 

(2)           to provide for
uncertificated Notes in addition to or in place of certificated Notes;

 

(3)           to provide for the
assumption of Casella’s obligations to Holders of Notes in the case of a merger
or consolidation or sale of all or substantially all of Casella’s assets;

 

(4)           to make any change
that would provide any additional rights or benefits to the Holders of Notes or
that does not adversely affect the legal rights under this Indenture of any
Holder; or

 

(5)           to comply with
requirements of the Commission in order to effect or maintain the qualification
of this Indenture under the TIA;

 

(6)           to evidence and
provide for the acceptance of appointment under this Indenture by a successor
or replacement Trustee or under the Security Documents of a successor or
replacement Second Lien Agent; or

 

(7)           to add a Subsidiary
Guarantee or security to or for the benefit of the Second Lien Obligations and,
in the case of the Security Documents, to or for the benefit of the other
secured parties named therein or to confirm and evidence the release, termination
or discharge of any Subsidiary Guarantee of or Lien securing the Second Lien
Obligations when such release, termination or discharge is permitted by this
Indenture and the Security Documents;

 

provided that Casella
has delivered to the Trustee an Opinion of Counsel and an Officer’s Certificate,
each stating that such amendment or supplement complies with the provisions of
this Section 9.01.

 

Until the Discharge of First Lien Obligations has
occurred, the holders of the First-Priority Liens may change, waive, modify or
vary the security documents of such holders and, pursuant to the Intercreditor
Agreement, such changes will automatically apply to the Security Documents; provided that any such change, waiver,
modification or variance that is prejudicial to the rights of the Second Lien
Agent, the Trustee and the Holders of the Notes and does not affect the holders
of the First-Priority Liens in a like or similar manner shall not apply to the
Security Documents without the consent of the Second Lien Agent and the Trustee
(acting at the direction of the Holders of a majority of the aggregate
principal amount of the Notes) it being agreed that any release pursuant to Section 5.1
of the Intercreditor Agreement shall be deemed not to be prejudicial to the
rights of the Second Lien Agent, the Trustee and the Holders of the Notes.  Notice of such amendment, waiver or consent
shall be given to the Trustee by Casella, but any failure to provide such
notice will not affect the validity or effectiveness of any such amendment,
waiver or consent.  Subject to Section 9.07,
the Second Lien Agent and the Trustee shall enter into any amendment or
supplement to this Indenture, the Notes or the Security Documents

 

85

 

necessary to give effect to
any of the amendments and other changes described in this paragraph, provided that Casella has delivered to the Trustee and the
Second Lien Agent an Opinion of Counsel and an Officer’s Certificate, each
stating that such amendment or supplement complies with this paragraph and the
terms of any Security Document being amended.

 

No amendment of, or supplement or waiver to, this
Indenture, the Notes or the Security Documents (other than the Intercreditor
Agreement) shall be permitted to be effected which is in violation of or
inconsistent with the terms of the Intercreditor Agreement.  No amendment of, or supplement to, the
Intercreditor Agreement shall be permitted to be effected without the consent
of the First Lien Agent and the Second Lien Agent.

 

SECTION 9.02.                                                     With Consent of
Holders.

 

(a)           Subject
to Sections 6.07 and 9.03, Casella, the Guarantors and the Trustee, together,
with the written consent of the Holder or Holders of a majority in aggregate
principal amount of the outstanding Notes (including Additional Notes, if any),
may amend or supplement this Indenture, the Notes, the Subsidiary Guarantees or
the Security Documents, without notice to any other Noteholders.  Subject to Sections 6.07 and 9.03, the Holder
or Holders of a majority in aggregate principal amount of the outstanding Notes
(including Additional Notes, if any) may waive compliance with any provision of
this Indenture, the Notes, the Subsidiary Guarantees or the Security Documents
without notice to any other Noteholders.

 

(b)           Notwithstanding
Section 9.02(a), without the consent of each Noteholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 6.04,
may not (with respect to any Notes held by a non-consenting Holder):

 

(1)           reduce the principal
amount of Notes whose Holders must consent to an amendment, supplement or
waiver;

 

(2)           reduce the principal
of or change or have the effect of changing the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes (other than
provisions of Sections 4.09 and 4.13, subject to clause (9) below);

 

(3)           reduce the rate of
or change the time for payment of interest on any Note;

 

(4)           waive an uncured
Default in the payment of principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the Notes by the Holders of a
majority in aggregate principal amount of the Notes and a waiver of the payment
default that resulted from such acceleration);

 

(5)           make any Note
payable in money other than that stated in the Notes;

 

(6)           impair or affect the
right of any Holder of Notes to receive payment of principal of and interest on
the Notes on or after the due dates therefor or to institute suit for payment
for the enforcement of any such payment on or after the due dates therefor,

 

86

 

or
make any changes in the provisions of this Indenture permitting Holders of a
majority in principal amount of Notes to waive any past Default and its consequences;

 

(7)           waive a redemption
payment with respect to any Note (other than a payment required by one of the
provisions of Section 4.09 or Section 4.13, subject to clause (9) below);

 

(8)           release any
Guarantor from any of its obligations under its Subsidiary Guarantee or this
Indenture otherwise than in accordance with the terms of this Indenture;

 

(9)           in the event that a
Change of Control has occurred or an Asset Sale has been consummated, amend,
change or modify in any material respect the obligation of Casella to make and
consummate a Change of Control Offer or make and consummate an Asset Sale Offer
with respect to such Change of Control or Asset Sale;

 

(10)         make the Notes or the
Subsidiary Guarantees subordinated in right of payment to any obligations of
Casella or the Guarantors;

 

(11)         effect a release of
all or substantially all of the Collateral other than pursuant to the terms of
the Security Documents (including the Intercreditor Agreement) or as otherwise
permitted by this Indenture; or

 

(12)         make any change in
the preceding amendment and waiver provisions.

 

(c)           It
shall not be necessary for the consent of the Holders under this Section to
approve the particular form of any proposed amendment, supplement or waiver but
it shall be sufficient if such consent approves the substance thereof.

 

(d)           After
an amendment, supplement or waiver under this Section 9.02 becomes
effective, Casella shall mail to the Holders affected thereby a notice briefly
describing the amendment, supplement or waiver. 
Any failure of Casella to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such amendment,
supplement or waiver.

 

SECTION 9.03.                                                     [Reserved.]

 

SECTION 9.04.                                                     Compliance with
TIA.

 

From the date on which this Indenture is qualified
under the TIA, every amendment, waiver or supplement of this Indenture, the
Notes or the Subsidiary Guarantees shall comply with the TIA as then in effect.

 

SECTION 9.05.                                                     Revocation and
Effect of Consents.

 

Until an amendment, waiver or supplement becomes
effective, a consent to it by a Holder is a continuing consent by the Holder
and every subsequent Holder of a Note or portion

 

87

 

of a Note that evidences the
same debt as the consenting Holder’s Note, even if notation of the consent is
not made on any Note.  However, any such
Holder or subsequent Holder may revoke the consent as to his Note or portion of
his Note by notice to the Trustee or Casella received before the date on which the
Trustee receives an Officer’s Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver.

 

Casella may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to consent to
any amendment, supplement or waiver which record date shall be at least 30 days
prior to the first solicitation of such consent.  If a record date is fixed, then notwithstanding
the last sentence of the immediately preceding paragraph, those Persons who
were Holders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to revoke any consent previously given,
whether or not such Persons continue to be Holders after such record date.  No such consent shall be valid or effective
for more than 90 days after such record date. 
Casella shall inform the Trustee in writing of the fixed record date if
applicable.

 

After an amendment, supplement or waiver becomes
effective, it shall bind every Noteholder, unless it makes a change described
in any of clauses (1) through (11) of Section 9.02(b), in which case,
the amendment, supplement or waiver shall bind only each Holder of a Note who
has consented to it and every subsequent Holder of a Note or portion of a Note
that evidences the same debt as the consenting Holder’s Note; provided that any such waiver shall not impair or affect the
right of any Holder to receive payment of principal of and interest on a Note,
on or after the respective due dates therefor, or to bring suit for the enforcement
of any such payment on or after such respective dates without the consent of
such Holder.

 

SECTION 9.06.                                                     Notation on or
Exchange of Notes.

 

If an amendment, supplement or waiver changes the
terms of a Note, Casella may require the Holder of the Note to deliver it to
the Trustee.  Casella shall provide the
Trustee with an appropriate notation on the Note about the changed terms and
cause the Trustee to return it to the Holder at Casella’s expense.  Alternatively, if Casella so determines,
Casella in exchange for the Note shall issue and the Trustee shall, upon
receipt of a written instruction to do so, authenticate a new Note that
reflects the changed terms.  Failure to
make the appropriate notation or issue a new Note shall not affect the validity
and effect of such amendment, supplement or waiver.

 

SECTION 9.07.                                                     Trustee and
Second Lien Agent To Sign Amendments, Etc.

 

The Trustee and the Second Lien Agent shall execute
any amendment, supplement or waiver authorized pursuant to this Article Nine;
provided that the Trustee and the Second
Lien Agent may, but shall not be obligated to, execute any such amendment,
supplement or waiver which affects the Trustee’s or the Second Lien Agent’s own
rights, duties or immunities under this Indenture.  The Trustee and the Second Lien Agent shall
be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officer’s Certificate each stating that the execution
of any amendment, supplement or waiver authorized pursuant to this

 

88

 

Article Nine is
authorized or permitted by this Indenture and constituted the legal, valid and
binding obligations of Casella enforceable in accordance with its terms.  Such Opinion of Counsel shall be at the expense
of Casella.

 

ARTICLE TEN

 

RANKING OF LIENS; COLLATERAL
AND SECURITY

 

SECTION 10.01.                                               Relative Rights.

 

The Intercreditor Agreement defines the relative
rights, as lienholders, of holders of Second-Priority Liens and holders of
First-Priority Liens.  Nothing in this
Indenture or the Intercreditor Agreement will:

 

(a)           impair,
as between Casella and Holders of Notes, the obligation of Casella, which is
absolute and unconditional, to pay principal of, premium and interest on the
Notes in accordance with their terms or to perform any other obligation of
Casella or any other obligor under this Indenture, Notes, Subsidiary Guarantees
and Security Documents;

 

(b)           restrict
the right of any Holder of Notes to sue for payments that are then due and
owing;

 

(c)           prevent
the Trustee, the Second Lien Agent or any Holder of Notes from exercising
against Casella or any other obligor any of its other available remedies upon a
Default or Event of Default (other than its rights as a secured party and
certain other rights, as more fully set forth in and subject to the
Intercreditor Agreement); or

 

(d)           restrict
the right of the Trustee, the Second Lien Agent or any Holder of Notes:

 

(1)           to file and prosecute a petition
seeking an order for relief in an involuntary bankruptcy case as to any obligor
or otherwise to commence, or seek relief commencing, any Insolvency or
Liquidation Proceeding involuntarily against any obligor;

 

(2)           to make, support or oppose any
request for an order for dismissal, abstention or conversion in any Insolvency
or Liquidation Proceeding;

 

(3)           to make, support or oppose, in any
Insolvency or Liquidation Proceeding, any request for an order extending or terminating
any period during which the debtor (or any other Person) has the exclusive
right to propose a plan of reorganization or other dispositive restructuring or
liquidation plan therein;

 

(4)           to seek the creation of, or
appointment to, any official committee representing creditors (or certain of
the creditors) in any Insolvency or Liquidation

 

89

 

Proceedings and, if
appointed, to serve and act as a member of such committee without being in any
respect restricted or bound by, or liable for, any of the obligations under
this Article Ten;

 

(5)           to seek or object to the appointment
of any professional person to serve in any capacity in any Insolvency or
Liquidation Proceeding or to support or object to any request for compensation
made by any professional person or others therein;

 

(6)           to make, support or oppose any
request for order appointing a trustee or examiner in any Insolvency or
Liquidation Proceedings; or

 

(7)           except as set forth in the
Intercreditor Agreement, otherwise to make, support or oppose any request for
relief in any Insolvency or Liquidation Proceeding that it is permitted by law
to make, support or oppose:

 

(x)            if
it were a holder of unsecured claims; or

 

(y)           as
to any matter relating to any plan of reorganization or other restructuring or
liquidation plan or as to any matter relating to the administration of the
estate or the disposition of the case or proceeding.

 

SECTION 10.02.                                               Security
Documents.

 

(a)           The
payment of the principal of and interest and premium, if any, on the Notes when
due, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise and whether by Casella pursuant to the
Notes or by any Guarantor pursuant to its Subsidiary Guarantee, the payment of
all other Second Lien Obligations and the performance of all other obligations
of Casella and the Guarantors under the Indenture, the Notes, the Subsidiary
Guarantees and the Security Documents are secured by Liens on the Collateral,
subject to Permitted Liens, as provided in the Security Documents which Casella
and the Guarantors have entered into simultaneously with the execution of this
Indenture, or in certain circumstances, subsequent to the Issue Date, and will
be secured as provided in the Security Documents hereafter delivered as
required or permitted by this Indenture.

 

(b)           Casella
shall, and shall cause each Guarantor to, and each Guarantor shall, make all
filings (including filings of continuation statements and amendments to Uniform
Commercial Code financing statements that may be necessary to continue the
effectiveness of such Uniform Commercial Code financing statements) and take
all other actions as are necessary or required by the Security Documents to
maintain (at the sole cost and expense of Casella and the Guarantors) the
security interest created by the Security Documents in the Collateral (other
than with respect to any Collateral the security interest in which is not
required to be perfected under the Security Documents) as a perfected security
interest, subject only to Permitted Liens.

 

(c)           Subject
to the limitations in the Security Documents and the Intercreditor Agreement,
with respect to assets acquired by Casella or any Guarantor after the Issue
Date that

 

90

 

are intended to be subject to a Lien created by any Security Document
that are not so subject, Casella or the applicable Guarantor will take the
applicable actions necessary to cause such Lien to be duly perfected to the
extent required by the Security Documents, in each case subject to the Lien of
the First Lien Agent.

 

SECTION 10.03.                                               Second Lien
Agent.

 

(a)           Casella
hereby appoints Wilmington Trust Company to act as Second Lien Agent, and the
Second Lien Agent shall have the privileges, powers and immunities as set forth
herein and in the Security Documents. 
Casella and the Guarantors hereby agree that the Second Lien Agent shall
hold the Collateral in trust for the benefit of all of the Holders and the Trustee,
in each case, pursuant to the terms of the Security Documents and subject to
the terms of the Intercreditor Agreement and the Second Lien Agent is hereby
authorized to execute and deliver the Security Documents.  Subject to the Intercreditor Agreement, the
Second Lien Agent is authorized and empowered to appoint one or more co-Second
Lien Agents as it deems necessary or appropriate.

 

(b)           Subject
to Section 7.01, neither the Trustee nor the Second Lien Agent nor any of
their respective officers, directors, employees, attorneys or agents will be
responsible or liable for the existence, genuineness, value or protection of
any Collateral, for the legality, enforceability, effectiveness or sufficiency
of the Security Documents, for the creation, perfection, priority, sufficiency
or protection of any Second-Priority Lien, or for any defect or deficiency as
to any such matters, or for any failure to demand, collect, foreclose or
realize upon or otherwise enforce any of the Second-Priority Liens or Security
Documents or any delay in doing so.

 

(c)           The
Second Lien Agent will be subject to such directions as may be given it by the
Trustee from time to time (as required or permitted by this Indenture, and
subject to the terms of the Intercreditor Agreement).   Except as directed by the Trustee as
required or permitted by this Indenture or as required or permitted by the
Security Documents, the Second Lien Agent will not be obligated:

 

(i)            to act upon
directions purported to be delivered to it by any other Person;

 

(ii)           to foreclose upon
or otherwise enforce any Second-Priority Lien; or

 

(iii)          to take any other
action whatsoever with regard to any or all of the Second-Priority Liens,
Security Documents or Collateral.

 

(d)           The
Second Lien Agent will be accountable only for amounts that it actually
receives as a result of the enforcement of the Second-Priority Liens or the
Security Documents.

 

(e)           In
acting as Second Lien Agent or co-Second Lien Agent, the Second Lien Agent and
each co-Second Lien Agent may rely upon and enforce for its own benefit each
and all of the rights, powers, immunities, indemnities and benefits of the
Trustee under Article Seven hereof, each of which shall also be deemed to
be for the benefit of the Second Lien Agent.

 

91

 

(f)            At
all times when the Trustee is not itself the Second Lien Agent, Casella will
deliver to the Trustee copies of all Security Documents delivered to the Second
Lien Agent and copies of all documents delivered to the Second Lien Agent pursuant
to the Security Documents.

 

SECTION 10.04.                                               Authorization
of Actions To Be Taken.

 

(a)           Each
Holder of Notes, by its acceptance thereof, consents and agrees to the terms of
each Security Document (including the Intercreditor Agreement), as originally
in effect on the Issue Date and as amended, supplemented or replaced from time
to time in accordance with its terms or the terms of this Indenture, authorizes
and directs the Trustee and the Second Lien Agent to execute and deliver the
Security Documents to which it is a party and authorizes and empowers the Trustee
and the Second Lien Agent to bind the Holders of Notes and other holders of
Second Lien Obligations as set forth in the Security Documents to which it is a
party and to perform its obligations and exercise its rights and powers
thereunder.

 

(b)           The
Second Lien Agent and the Trustee are authorized and empowered to receive for
the benefit of the Holders of Notes any funds collected or distributed under
the Security Documents to which the Second Lien Agent or Trustee is a party and
to make further distributions of such funds to the Holders of Notes according
to the provisions of this Indenture.

 

(c)           Subject
to the provisions of Section 7.01, Section 7.02, this Article Ten
and the Intercreditor Agreement, the Trustee may, in its sole discretion and
without the consent of the Holders of Notes, direct, on behalf of the Holders
of Notes, the Second Lien Agent to take all actions it deems necessary or
appropriate in order to:

 

(i)            foreclose upon or
otherwise enforce any or all of the Second-Priority Liens;

 

(ii)           enforce any of the
terms of the Security Documents to which the Second Lien Agent or Trustee is a
party; or

 

(iii)          collect and receive
payment of any and all Second Lien Obligations.

 

Subject to the Intercreditor Agreement, Section 7.01,
Section 7.02 and this Article Ten, the Trustee is authorized and
empowered to institute and maintain, or direct the Second Lien Agent to
institute and maintain, such suits and proceedings as it may deem expedient to
protect or enforce the Second-Priority Liens or the Security Documents to which
the Second Lien Agent or Trustee is a party or to prevent any impairment of
Collateral by any acts that may be unlawful or in violation of the Security
Documents to which the Second Lien Agent or Trustee is a party or this
Indenture, and such suits and proceedings as the Trustee or the Second Lien
Agent may deem expedient to preserve or protect its interests and the interests
of the Holders of Notes in the Collateral, including power to institute and
maintain suits or proceedings to restrain the enforcement of or compliance with
any legislative or other governmental enactment, rule or order that may be
unconstitutional or otherwise invalid if the enforcement of, or compliance

 

92

 

with, such enactment, rule or
order would impair the security interest hereunder or be prejudicial to the
interests of Holders of Notes, the Trustee or the Second Lien Agent.  Each Holder of the Notes acknowledges and
agrees that the rights of the Trustee, the Second Lien Agent and the Holders of
the Notes in the Collateral are subject to the provisions of and limitations
set forth in the Intercreditor Agreement.

 

SECTION 10.05.                                               Release of
Second-Priority Liens.

 

(a)           Collateral
may be released from the Lien and security interest created by the Security
Documents at any time or from time to time in accordance with the provisions of
the Security Documents or the Intercreditor Agreement.  Upon the request of Casella pursuant to an
Officer’s Certificate and Opinion of Counsel certifying that all conditions
precedent hereunder have been met, Casella and the Guarantors will be entitled
to the release of assets included in the Collateral from the Liens securing the
Notes, and the Second Lien Agent and the Trustee (if the Trustee is not then
the Second Lien Agent) shall release the same from such Liens at Casella’s sole
cost and expense.

 

(b)           The
Security Documents provide that, to the extent that the holders of the First-Priority
Liens release their First-Priority Liens (including with respect to the
disposition of Collateral) on all or any portion of the Collateral, the
Second-Priority Liens on such Collateral will likewise be released; provided that if the First-Priority Liens are released in connection
with the Discharge of First Lien Obligations (without a contemporaneous
incurrence of a new or replacement Senior Credit Facility), the Second-Priority
Liens on the Collateral will not be released (except to the extent the
Collateral or any portion thereof was disposed of or otherwise transferred or
used in order to repay the First Lien Obligations secured by the Collateral),
and thereafter, the Trustee (acting at the direction of the holders of a
majority in outstanding principal amount of Notes) will have the right to
direct the Second Lien Agent to exercise remedies and to take other actions
with respect to the Collateral, all as provided in the Security Documents.

 

(c)           If, after the Second-Priority Liens on any
Collateral are released as contemplated above, the First Lien Obligations (or
any portion thereof) are thereafter secured by assets, the Notes will then be
secured by a Second-Priority Lien on such assets, to the same extent as they
were prior to such release, as provided pursuant to the Security Documents. If
Casella or any Guarantor subsequently incurs any new or replacement First
Lien Obligations permitted under the Indenture (including any refinancing or
replacement of the Senior Credit Facility), then (i) such new or
replacement First Lien Obligations shall automatically be treated as First Lien
Obligations for all purposes of the Intercreditor Agreement, including for
purposes of the Lien priorities and rights in respect of Collateral set forth
therein, and the related documents shall be treated as First Lien Documents and
(ii) the Trustee and the Second Lien Agent shall enter into a new
intercreditor agreement or confirmation of the terms of the Intercreditor
Agreement, in each case, as requested by the holders of such new or replacement
First Lien Obligations; provided that
the terms of any such new intercreditor agreement shall not be different than
those of the Intercreditor Agreement in any manner adverse to the Holders of
the Notes.

 

93

 

(d)           In
addition to the foregoing, the Second-Priority Liens will be released (a) upon
discharge, Legal Defeasance or Covenant Defeasance of this Indenture under Article 8,
and Casella delivers to the Trustee, in form and substance reasonably
acceptable to it, that the conditions to discharge, Legal Defeasance or
Covenant Defeasance have been satisfied, (b) with the consent of the
requisite Holders of the Notes in accordance with Section 9.02, including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, Notes, (c) with respect to any
Collateral, if such Collateral is or will be contemporaneously disposed, sold,
transferred or conveyed to any Person other than Casella or any of the
Restricted Subsidiaries (but excluding in any transaction subject to Section 5.01
where the recipient is required to become the obligor on the Notes or a
Subsidiary Guarantee) in a transaction that is permitted (including an Asset
Sale permitted by the first paragraph of Section 4.13) or not prohibited
by this Indenture (with respect to the Lien on such Collateral) or (d) with
respect to the Collateral of a Guarantor that is released under Section 11.05,
and Casella delivers to the Trustee, in form and substance reasonably
acceptable to it, an Officer’s Certificate certifying to such effect. Upon such
release, the Trustee shall promptly deliver to Casella and the Second Lien
Agent a notice stating that the Trustee, on behalf of the Holders, disclaims
and gives up any and all rights it has in or to the Collateral in the case of
clauses (a) and (b), and in or to such Collateral in the case of clauses (c) and
(d), and any rights therein it has under the Security Documents, and promptly
upon receipt by the Second Lien Agent of such notice, the Second Lien Agent
shall be deemed not to hold a Lien in the Collateral or such Collateral (as the
case may be) on behalf of the Trustee and shall do or cause to be done, at
Casella’s sole cost and expense, all acts reasonably necessary to release such
Lien as soon as is reasonably practicable.

 

SECTION 10.06.                                               Filing,
Recording and Opinions.

 

(a)           To
the extent applicable, Casella will comply with the provisions of TIA §313(b),
relating to reports, and, following qualification of this Indenture under the
TIA (if required), §314(d).  Any
certificate or opinion required by TIA §314(d) may be made by an Officer
of Casella except in cases where TIA §314(d) requires that such
certificate or opinion be made by an independent engineer, appraiser or other
expert, who shall be reasonably satisfactory to the Trustee.  Following the qualification of this Indenture
pursuant to the TIA, to the extent Casella is required to furnish to the
Trustee an Opinion of Counsel pursuant to TIA §314(b)(2), Casella will furnish
such opinion prior to each July 9. 
For the avoidance of doubt, if this Indenture is not qualified under the
TIA, Casella shall not be required to comply with §314(d) of the TIA.

 

(b)           Any
release of Collateral permitted or required by Section 10.05 or Section 10.09
hereof or the Security Documents will be deemed not to impair the Liens under
this Indenture and the Security Documents in contravention thereof and any
Person that is required to deliver a certificate or opinion pursuant to Section 314(d) of
the TIA or otherwise under this Indenture or the Security Documents, shall be
entitled to rely upon the foregoing as a basis for delivery of such certificate
or opinion.  The Trustee may, to the
extent permitted by Sections 7.01 and 7.02 hereof, accept as conclusive
evidence of compliance with the foregoing provisions the appropriate statements
contained in such documents and opinion.

 

94

 

(c)           Following
qualification of this Indenture under the TIA (if required), if any Collateral
is released in accordance with this Indenture or any Security Document at a
time when the Trustee is not itself also the Second Lien Agent and if Casella
has delivered the certificates and documents required by the Security Documents
and permitted to be delivered by Section 10.05 (if any), the Trustee will determine
whether it has received all documentation required by TIA §314(d) in connection
with such release and, based on such determination and the Opinion of Counsel
delivered pursuant to Section 10.05, if any, will, upon request, deliver a
certificate to the Second Lien Agent setting forth such determination.

 

(d)           Casella
shall deliver an Officer’s Certificate to the Second Lien Agent within 30
calendar days following the end of each six-month period beginning on each
Interest Payment Date, to the effect that all such releases and withdrawals
during the preceding six-month period (or since the Issue Date, in the case of
the first such Officer’s Certificate) under Section 10.05(c), were not
prohibited by this Indenture.

 

SECTION 10.07.                                               Powers
Exercisable by Receiver or Trustee.

 

In
case the Collateral shall be in the possession of a receiver or trustee,
lawfully appointed, the powers conferred in this Article 10 upon Casella or a
Guarantor with respect to the release, sale or other disposition of such
property may be exercised by such receiver or trustee, and an instrument signed
by such receiver or trustee shall be deemed the equivalent of any similar instrument
of Casella or a Guarantor or of any officer or officers thereof required by the
provisions of this Article 10; and if the Trustee shall be in the possession of
the Collateral under any provision of this Indenture, then such powers may be
exercised by the Trustee.

 

SECTION 10.08.                                               No Impairment
of the Security Interests.

 

Neither Casella nor any of the Guarantors will be
permitted to take any action, or knowingly or negligently omit to take any
action, which action or omission might or would have the result of materially
impairing the security interest with respect to the Collateral for the benefit
of the Trustee and the Holders of the Notes.

 

SECTION 10.09.                                               Notes,
Subsidiary Guarantees and Other Second Lien Obligations Not Subordinated.

 

The provisions of this Article 10 are intended
solely to set forth the relative ranking, as Liens, of the Second-Priority
Liens as against the First-Priority Liens. 
The Notes and the Subsidiary Guarantees are senior non-subordinated
obligations of Casella and the Guarantors. 
Neither the Notes, the Subsidiary Guarantees and other Second Lien
Obligations nor the exercise or enforcement of any right or remedy for the
payment or collection thereof (other than the exercise of rights and remedies
of a secured party or certain other rights as an unsecured party, which are
subject to the Intercreditor Agreement) are intended to be, or will ever be by
reason of the provisions of this Article 10, in any respect subordinated,
deferred, postponed, restricted or prejudiced.

 

95

 

ARTICLE ELEVEN

 

SUBSIDIARY GUARANTEE

 

SECTION 11.01.                                               Unconditional
Guarantee.

 

Subject to the provisions of this Article Eleven,
each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably guarantees, on a senior subordinated basis to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of this
Indenture, the Notes or the obligations of Casella or any other Guarantors to
the Holders or the Trustee hereunder or thereunder:  (a) (x) the due and punctual payment of the
principal of, premium, if any, and interest on the Notes when and as the same
shall become due and payable, whether at maturity, upon redemption or
repurchase, by acceleration or otherwise, (y) the due and punctual payment of interest
on the overdue principal and (to the extent permitted by law) interest, if any,
on the Notes and (z) the due and punctual payment and performance of all other
obligations of Casella and all other obligations of the other Guarantors
(including under the Subsidiary Guarantees), in each case, to the Holders or
the Trustee hereunder or thereunder (including amounts due the Trustee under Section
7.07 hereof), all in accordance with the terms hereof and thereof
(collectively, the “Guarantee Obligations”);
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other obligations, the due and punctual payment and performance of
Guarantee Obligations in accordance with the terms of the extension or renewal,
whether at maturity, upon redemption or repurchase, by acceleration or
otherwise.  Failing payment when due of
any amount so guaranteed, or failing performance of any other obligation of
Casella to the Holders under this Indenture or under the Notes, for whatever
reason, each Guarantor shall be obligated to pay, or to perform or cause the
performance of, the same immediately.  An
Event of Default under this Indenture or the Notes shall constitute an event of
default under the Subsidiary Guarantees, and shall entitle the Holders of Notes
to accelerate the obligations of the Guarantors thereunder in the same manner
and to the same extent as the obligations of Casella.

 

Each of the Guarantors hereby agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder of the Notes
with respect to any provisions hereof or thereof, any release of any other
Guarantor, the recovery of any judgment against Casella, any action to enforce
the same, whether or not a Subsidiary Guarantee is affixed to any particular
Note, or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. 
Each of the Guarantors hereby waives the benefit of diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of Casella, any right to require a proceeding first
against Casella, protest, notice and all demands whatsoever and covenants that
its Subsidiary Guarantee shall not be discharged except by complete performance
of the obligations contained in the Notes, this Indenture and this Subsidiary
Guarantee.  This Subsidiary Guarantee is
a guarantee of payment and not of collection. 
If any Holder or the Trustee is required by any

 

96

 

court or otherwise to return
to Casella or to any Guarantor, or any custodian, trustee, liquidator or other
similar official acting in relation to Casella or such Guarantor, any amount
paid by Casella or such Guarantor to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect.  Each Guarantor
further agrees that, as between it, on the one hand, and the Holders of Notes
and the Trustee, on the other hand, (a) subject to this Article Eleven, the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Six for the purposes of this Subsidiary Guarantee, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the obligations guaranteed hereby, and (b) in the event of any acceleration
of such obligations as provided in Article Six hereof, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Subsidiary Guarantee.

 

SECTION 11.02.                                               [Reserved]

 

SECTION 11.03.                                               Limitation on
Guarantor Liability.

 

Each Guarantor, and by its acceptance of Notes, each
Holder, hereby confirms that it is the intention of all such parties that the
Subsidiary Guarantee of such Guarantor not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to
the extent applicable to any Subsidiary Guarantee.  To effectuate the foregoing intention, the
Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations
of such Guarantor under its Subsidiary Guarantee and this Article Eleven shall
be limited to the maximum amount as will, after giving effect to such maximum
amount and all other contingent and fixed liabilities of such Guarantor that
are relevant under such laws, and after giving effect to any collections from,
rights to receive contribution from or payments made by or on behalf of any
other Guarantor in respect of the obligations of such other Guarantor under
this Article Eleven, result in the obligations of such Guarantor under its
Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.

 

SECTION 11.04.                                               Execution and
Delivery of Subsidiary Guarantee.

 

To further evidence its Subsidiary Guarantee set
forth in Section 11.01, each Guarantor hereby agrees that a notation of such
Subsidiary Guarantee, substantially in the form of Exhibit E hereto,
shall be endorsed on each Note authenticated and delivered by the Trustee.  Such Subsidiary Guarantee shall be executed
on behalf of each Guarantor by either manual or facsimile signature of one
Officer or other person duly authorized by all necessary corporate action of
each Guarantor who shall have been duly authorized to so execute by all
requisite corporate action.  The validity
and enforceability of any Subsidiary Guarantee shall not be affected by the
fact that it is not affixed to any particular Note.

 

Each of the Guarantors hereby agrees that its
Subsidiary Guarantee set forth in Section 11.01 shall remain in full force and
effect notwithstanding any failure to endorse on each Note a notation of such
Subsidiary Guarantee.

 

97

 

If an Officer of a Guarantor whose signature is on
this Indenture or a Subsidiary Guarantee no longer holds that office at the
time the Trustee authenticates the Note on which such Subsidiary Guarantee is
endorsed or at any time thereafter, such Guarantor’s Subsidiary Guarantee of
such Note shall nevertheless be valid.

 

The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Subsidiary Guarantee set forth in this Indenture on behalf of each Guarantor.

 

SECTION 11.05.                                               Release of a
Guarantor.

 

The Subsidiary Guarantee of a Guarantor will be released:

 

(a)           upon
the sale or other disposition (including by way of merger or consolidation), to
any Person that is not an Affiliate of Casella, of all of the Capital Stock of
that Guarantor held by Casella or any of its Restricted Subsidiaries or of all
or substantially all of the assets of that Guarantor; provided
that such sale or other disposition is made in accordance with this Indenture
and, if Casella or any of its Restricted Subsidiaries intends to comply with
the provisions of Section 4.13 by purchasing Replacement Assets, Casella
delivers to the Trustee a written agreement that it will do so within the time
frame set forth in Section 4.13; or

 

(b)           if
Casella designates such Guarantor as an Unrestricted Subsidiary in accordance
with this Indenture;

 

provided, however, in either case that any such termination shall
occur only to the extent that all obligations of such Guarantor under all of
its Guarantees of any Indebtedness of Casella or any Indebtedness of any other
Guarantor shall also terminate upon such release and none of its Equity
Interests are pledged for the benefit of any holder of any Indebtedness of
Casella or any Indebtedness of any Restricted Subsidiary of Casella.

 

The Trustee shall execute an appropriate instrument
prepared by Casella evidencing the release of a Guarantor from its obligations
under its Subsidiary Guarantee upon receipt of a request by Casella or such
Guarantor accompanied by an Officer’s Certificate and an Opinion of Counsel
certifying as to the compliance with this Section 11.05; provided,
however, that the legal counsel
delivering such Opinion of Counsel may rely as to matters of fact on one or
more Officer’s Certificates of Casella.

 

Except as set forth in Articles Four and Five and
this Section 11.05, nothing contained in this Indenture or in any of the Notes
shall prevent any consolidation or merger of a Guarantor with or into Casella
or another Guarantor or shall prevent any sale or conveyance of the property of
a Guarantor as an entirety or substantially as an entirety to Casella or another
Guarantor.

 

98

 

SECTION 11.06.                                               Waiver of
Subrogation.

 

Until this Indenture is discharged and all of the
Notes are discharged and paid in full, each Guarantor hereby irrevocably waives
and agrees not to exercise any claim or other rights which it may now or
hereafter acquire against Casella that arise from the existence, payment,
performance or enforcement of Casella’s obligations under the Notes or this
Indenture and such Guarantor’s obligations under this Subsidiary Guarantee and
this Indenture, in any such instance including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution, indemnification, and
any right to participate in any claim or remedy of the Holders against Casella,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from Casella, directly or indirectly, in cash or other assets or by
set-off or in any other manner, payment or security on account of such claim or
other rights.  If any amount shall be
paid to any Guarantor in violation of the preceding sentence and any amounts
owing to the Trustee or the Holders of Notes under the Notes, this Indenture,
or any other document or instrument delivered under or in connection with such
agreements or instruments, shall not have been paid in full, such amount shall
have been deemed to have been paid to such Guarantor for the benefit of, and
held in trust for the benefit of, the Trustee or the Holders and shall
forthwith be paid to the Trustee for the benefit of itself or such Holders to
be credited and applied to the obligations in favor of the Trustee or the
Holders, as the case may be, whether matured or unmatured, in accordance with
the terms of this Indenture.  Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Indenture and that the waiver set
forth in this Section 11.06 is knowingly made in contemplation of such
benefits.

 

SECTION 11.07.                                               Immediate
Payment.

 

Each Guarantor agrees to make immediate payment to
the Trustee on behalf of the Holders of all Guarantee Obligations owing or
payable to the respective Holders upon receipt of a demand for payment therefor
by the Trustee to such Guarantor in writing.

 

SECTION 11.08.                                               No Set-Off.

 

Each payment to be made by a Guarantor hereunder in
respect of the Guarantee Obligations shall be payable in the currency or
currencies in which such Guarantee Obligations are denominated, and shall be
made without set-off, counterclaim, reduction or diminution of any kind or
nature.

 

SECTION 11.09.                                               Guarantee
Obligations Absolute.

 

The obligations of each Guarantor hereunder are and
shall be absolute and unconditional and any monies or amounts expressed to be
owing or payable by each Guarantor hereunder which may not be recoverable from
such Guarantor on the basis of a Guarantee shall be recoverable from such
Guarantor as a primary obligor and principal debtor in respect thereof.

 

99

 

SECTION 11.10.                                               Guarantee
Obligations Continuing.

 

The obligations of each Guarantor hereunder shall be
continuing and shall remain in full force and effect until all such obligations
have been paid and satisfied in full. 
Each Guarantor agrees with the Trustee that it will from time to time
deliver to the Trustee suitable acknowledgments of this continued liability
hereunder and under any other instrument or instruments in such form as counsel
to the Trustee may advise and as will prevent any action brought against it in
respect of any default hereunder being barred by any statute of limitations now
or hereafter in force and, in the event of the failure of a Guarantor so to do,
it hereby irrevocably appoints the Trustee the attorney and agent of such
Guarantor to make, execute and deliver such written acknowledgment or
acknowledgments or other instruments as may from time to time become necessary
or advisable, in the judgment of the Trustee on the advice of counsel, to fully
maintain and keep in force the liability of such Guarantor hereunder.

 

SECTION 11.11.                                               Guarantee
Obligations Not Reduced.

 

The obligations of each Guarantor hereunder shall
not be satisfied, reduced or discharged solely by the payment of such
principal, premium, if any, interest, fees and other monies or amounts as may
at any time prior to discharge of this Indenture pursuant to Article Eight be
or become owing or payable under or by virtue of or otherwise in connection
with the Notes or this Indenture.

 

SECTION 11.12.                                               Guarantee
Obligations Reinstated.

 

The obligations of each Guarantor hereunder shall
continue to be effective or shall be reinstated, as the case may be, if at any
time any payment which would otherwise have reduced the obligations of any
Guarantor hereunder (whether such payment shall have been made by or on behalf
of Casella or by or on behalf of a Guarantor) is rescinded or reclaimed from
any of the Holders upon the insolvency, bankruptcy, liquidation or reorganization
of Casella or any Guarantor or otherwise, all as though such payment had not
been made.  If demand for, or acceleration
of the time for, payment by Casella or any other Guarantor is stayed upon the
insolvency, bankruptcy, liquidation or reorganization of Casella or such
Guarantor, all such Indebtedness otherwise subject to demand for payment or
acceleration shall nonetheless be payable by each Guarantor as provided herein.

 

SECTION 11.13.                                               Guarantee
Obligations Not Affected.

 

The obligations of each Guarantor hereunder shall
not be affected, impaired or diminished in any way by any act, omission, matter
or thing whatsoever, occurring before, upon or after any demand for payment
hereunder (and whether or not known or consented to by any Guarantor or any of
the Holders) which, but for this provision, might constitute a whole or partial
defense to a claim against any Guarantor hereunder or might operate to release
or otherwise exonerate any Guarantor from any of its obligations hereunder or
otherwise affect such obligations, whether occasioned by default of any of the
Holders or otherwise, including, without limitation:

 

100

 

(a)           any
limitation of status or power, disability, incapacity or other circumstance
relating to Casella or any other Person, including any insolvency, bankruptcy,
liquidation, reorganization, readjustment, composition, dissolution, winding-up
or other proceeding involving or affecting Casella or any other Person;

 

(b)           any
irregularity, defect, unenforceability or invalidity in respect of any indebtedness
or other obligation of Casella or any other Person under this Indenture, the
Notes or any other document or instrument;

 

(c)           any
failure of Casella or any other Guarantor, whether or not without fault on its
part, to perform or comply with any of the provisions of this Indenture, the
Notes or any Subsidiary Guarantee, or to give notice thereof to a Guarantor;

 

(d)           the
taking or enforcing or exercising or the refusal or neglect to take or enforce
or exercise any right or remedy from or against Casella or any other Person or
their respective assets or the release or discharge of any such right or
remedy;

 

(e)           the
granting of time, renewals, extensions, compromises, concessions, waivers,
releases, discharges and other indulgences to Casella or any other Person;

 

(f)            any
change in the time, manner or place of payment of, or in any other term of, any
of the Notes, or any other amendment, variation, supplement, replacement or
waiver of, or any consent to departure from, any of the Notes or this Indenture,
including, without limitation, any increase or decrease in the principal amount
of or premium, if any, or interest on any of the Notes;

 

(g)           any
change in the ownership, control, name, objects, businesses, assets, capital
structure or constitution of Casella or a Guarantor;

 

(h)           any
merger or amalgamation of Casella or a Guarantor with any Person or Persons;

 

(i)            the
occurrence of any change in the laws, rules, regulations or ordinances of any
jurisdiction by any present or future action of any governmental authority or
court amending, varying, reducing or otherwise affecting, or purporting to
amend, vary, reduce or otherwise affect, any of the Guarantee Obligations or
the obligations of a Guarantor under its Subsidiary Guarantee; and

 

(j)            any
other circumstance, including release of a Guarantor pursuant to Section 11.05
(other than by complete, irrevocable payment) that might otherwise constitute a
legal or equitable discharge or defense of Casella under this Indenture or the
Notes or of a Guarantor in respect of its Subsidiary Guarantee hereunder.

 

101

 

SECTION 11.14.                                               Waiver.

 

Without in any way limiting the provisions of Section
11.01, each Guarantor hereby waives notice of acceptance hereof, notice of any
liability of any Guarantor hereunder, notice or proof of reliance by the
Holders upon the obligations of any Guarantor hereunder, and diligence,
presentment, demand for payment on Casella, protest, notice of dishonor or
non-payment of any of the Guarantee Obligations, or other notice or formalities
to Casella or any Guarantor of any kind whatsoever.

 

SECTION 11.15.                                               No Obligation
To Take Action Against Casella.

 

Neither the Trustee nor any other Person shall have
any obligation to enforce or exhaust any rights or remedies against Casella or
any other Person or any property of Casella or any other Person before the
Trustee is entitled to demand payment and performance by any or all Guarantors
of their liabilities and obligations under their Subsidiary Guarantees or under
this Indenture.

 

SECTION 11.16.                                               Dealing with
Casella and Others.

 

The Holders, without releasing, discharging,
limiting or otherwise affecting in whole or in part the obligations and
liabilities of any Guarantor hereunder and without the consent of or notice to
any Guarantor, may

 

(a)           grant
time, renewals, extensions, compromises, concessions, waivers, releases,
discharges and other indulgences to Casella or any other Person;

 

(b)           take
or abstain from taking security or collateral from Casella or from perfecting
security or collateral of Casella;

 

(c)           release,
discharge, compromise, realize, enforce or otherwise deal with or do any act or
thing in respect of (with or without consideration) any and all collateral,
mortgages or other security given by Casella or any third party with respect to
the obligations or matters contemplated by this Indenture or the Notes;

 

(d)           accept
compromises or arrangements from Casella;

 

(e)           apply
all monies at any time received from Casella or from any security upon such
part of the Guarantee Obligations as the Holders may see fit or change any such
application in whole or in part from time to time as the Holders may see fit;
and

 

(f)            otherwise
deal with, or waive or modify their right to deal with, Casella and all other
Persons and any security as the Holders or the Trustee may see fit.

 

102

 

SECTION 11.17.                                               Default and
Enforcement.

 

If any Guarantor fails to pay in accordance with Section
11.07 hereof, the Trustee may proceed in its name as trustee hereunder in the
enforcement of the Subsidiary Guarantee of any such Guarantor and such
Guarantor’s obligations thereunder and hereunder by any remedy provided by law,
whether by legal proceedings or otherwise, and to recover from such Guarantor
the obligations.

 

SECTION 11.18.                                               Amendment, Etc.

 

No amendment, modification or waiver of any
provision of this Indenture relating to any Guarantor or consent to any
departure by any Guarantor or any other Person from any such provision will in
any event be effective unless it is signed by such Guarantor and the Trustee.

 

SECTION 11.19.                                               Acknowledgment.

 

Each Guarantor hereby acknowledges communication of
the terms of this Indenture and the Notes and consents to and approves of the same.

 

SECTION 11.20.                                               Costs and
Expenses.

 

Each Guarantor shall pay on demand by the Trustee
any and all costs, fees and expenses (including, without limitation, legal fees
on a solicitor and client basis) incurred by the Trustee, its agents, advisors
and counsel or any of the Holders in enforcing any of their rights under any
Subsidiary Guarantee.

 

SECTION 11.21.                                               No Merger or
Waiver; Cumulative Remedies.

 

No Subsidiary Guarantee shall operate by way of
merger of any of the obligations of a Guarantor under any other agreement,
including, without limitation, this Indenture. 
No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, remedy, power or privilege hereunder or
under this Indenture or the Notes, shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege
hereunder or under this Indenture or the Notes preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges in the Subsidiary Guarantee and under this Indenture, the Notes
and any other document or instrument between a Guarantor and/or Casella and the
Trustee are cumulative and not exclusive of any rights, remedies, powers and
privilege provided by law.

 

SECTION 11.22.                                               Survival of
Guarantee Obligations.

 

Without prejudice to the survival of any of the
other obligations of each Guarantor hereunder, the obligations of each
Guarantor under Section 11.01 shall be enforceable against such Guarantor
without regard to and without giving effect to any defense, right of offset or
counterclaim available to or which may be asserted by Casella or any Guarantor.

 

103

 

SECTION 11.23.                                               Guarantee in
Addition to Other Guarantee Obligations.

 

The obligations of each Guarantor under its
Subsidiary Guarantee and this Indenture are in addition to and not in
substitution for any other obligations to the Trustee or to any of the Holders
in relation to this Indenture or the Notes and any guarantees or security at
any time held by or for the benefit of any of them.

 

SECTION 11.24.                                               Severability.

 

Any provision of this Article Eleven which is
prohibited or unenforceable in any jurisdiction shall not invalidate the
remaining provisions and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction unless its removal would substantially defeat the basic intent,
spirit and purpose of this Indenture and this Article Eleven.

 

SECTION 11.25.                                               Successors and
Assigns.

 

Each Subsidiary Guarantee shall be binding upon and
inure to the benefit of each Guarantor and the Trustee and the other Holders
and their respective successors and permitted assigns, except that no Guarantor
may assign any of its obligations hereunder or thereunder.

 

ARTICLE TWELVE

 

MISCELLANEOUS

 

SECTION 12.01.                                               TIA Controls.

 

If any provision of this Indenture limits,
qualifies, or conflicts with another provision which is required or deemed to
be included in this Indenture by the TIA, such required or deemed provision
shall control.

 

SECTION 12.02.                                               Notices.

 

Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if
made by hand delivery, by telex, by nationally recognized overnight courier
service, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:

 

104

 

if to Casella or a
Guarantor:

 

c/o Casella Waste Systems, Inc.

25 Greens Hill Lane

Rutland, Vermont 05701

Attention:  General Counsel

 

Telephone:                        (802) 775-0325

Facsimile:                             (802) 770-5030

 

with a copy to:

 

Wilmer Cutler Pickering Hale
and Dorr LLP

60 State Street

Boston, Massachusetts 02109

Attention:  Jeff A. Stein, Esq.

 

Telephone:                        (617) 526-6624

Facsimile:                             (617) 526-5000

 

if to the Trustee:

 

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

Attention:  Corporate Trust
Administration

 

Telephone:                        (302) 651-1118

Facsimile:                             (302) 636-4145

 

with a copy to:

 

Potter Anderson &
Corroon LLP

1313 North Market Street, 6th Floor

Wilmington, DE 19801

Attention:                             Scott E. Waxman

 

Telephone:                        (302) 984-6114

Facsimile:                             (302) 778-6114

 

Each of Casella and the Trustee by written notice to
each other such Person may designate additional or different addresses for
notices to such Person.  Any notice or
communication to Casella and the Trustee, shall be deemed to have been given or
made as of the date so delivered if personally delivered; when answered back;
when receipt is acknowledged, if telecopied; 

 

105

 

five (5) calendar days after
mailing if sent by registered or certified mail, postage prepaid (except that a
notice of change of address shall not be deemed to have been given until
actually received by the addressee); and next Business Day if by nationally
recognized overnight courier service.

 

Any notice or communication mailed to a Noteholder
shall be mailed to him by first class mail or other equivalent means at his
address as it appears on the registration books of the Registrar and shall be
sufficiently given to him if so mailed within the time prescribed.

 

Failure to mail a notice or communication to a
Noteholder or any defect in it shall not affect its sufficiency with respect to
other Noteholders.  If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.

 

SECTION 12.03.                                               Communications
by Holders with Other Holders.

 

Noteholders may communicate pursuant to TIA § 312(b)
with other Noteholders with respect to their rights under this Indenture, the
Notes or the Subsidiary Guarantees. 
Casella, the Trustee, the Registrar and any other Person shall have the
protection of TIA § 312(c).

 

SECTION 12.04.                                               Certificate and
Opinion as to Conditions Precedent.

 

Upon any request or application by Casella to the
Trustee to take any action under this Indenture, Casella shall furnish to the
Trustee at the request of the Trustee:

 

(1)           an Officer’s
Certificate, in form and substance satisfactory to the Trustee, stating that,
in the opinion of the signers, all conditions precedent to be performed or effected
by Casella, if any, provided for in this Indenture relating to the proposed
action have been complied with; and

 

(2)           an Opinion of
Counsel stating that, in the opinion of such counsel, any and all such
conditions precedent have been complied with.

 

SECTION 12.05.                                               Statements Required
in Certificate or Opinion.

 

Each certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture, other
than the Officer’s Certificate required by Section 4.06, shall include:

 

(1)           a statement that the
Person making such certificate or opinion has read such covenant or condition;

 

(2)           a brief statement as
to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;

 

106

 

(3)           a statement that, in
the opinion of such Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with or satisfied; and

 

(4)           a statement as to
whether or not, in the opinion of each such Person, such condition or covenant
has been complied with; provided, however, that with respect to matters of fact an Opinion of
Counsel may rely on an Officer’s Certificate or certificates of public
officials.

 

SECTION 12.06.                                               Rules by
Trustee, Paying Agent, Registrar.

 

The Trustee, Paying Agent or Registrar may make
reasonable rules for its functions.

 

SECTION 12.07.                                               Legal Holidays.

 

If a payment date is not a Business Day, payment may
be made on the next succeeding day that is a Business Day and no interest shall
accrue in respect of any such payment for the intervening period.

 

SECTION 12.08.                                               Governing Law.

 

This Indenture, the Notes and the Subsidiary Guarantees will be
governed by and construed in accordance with the laws of the State of New York,
as applied to contracts made and performed within the State of New York,
without regard to principles of conflicts of law.

 

SECTION 12.09.                                               No Adverse Interpretation
of Other Agreements.

 

This Indenture may not be used to interpret another
indenture, loan or debt agreement of any of Casella or any of its
Subsidiaries.  Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.

 

SECTION 12.10.                                               No Recourse
Against Others.

 

No director, officer, employee, incorporator or
stockholder of Casella or of any Guarantor, as such, shall have any liability
for any obligations of Casella or the Guarantors under the Notes, this
Indenture, the Guarantors’ Subsidiary Guarantees or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a Note
waives and releases all such liability. 
Such waiver and release are part of the consideration for issuance of
the Notes.

 

107

 

SECTION 12.11.                                               Successors.

 

All agreements of Casella and the Guarantors in this
Indenture, the Notes and the Subsidiary Guarantees shall bind their respective
successors.  All agreements of the Trustee
in this Indenture shall bind its successor.

 

SECTION 12.12.                                               Duplicate
Originals.

 

All parties may sign any number of copies of this
Indenture.  Each signed copy or
counterpart shall be an original, but all of them together shall represent the
same agreement.

 

SECTION 12.13.                                               Severability.

 

In case any one or more of the provisions in this
Indenture, in the Notes or in the Subsidiary Guarantees shall be held invalid,
illegal or unenforceable, in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.

 

SECTION 12.14.                                               Security
Documents.

 

The Trustee, the Second Lien Agent and the Holders
are bound by the terms of the Security Documents (including, without
limitation, the Intercreditor Agreement).

 

SECTION 12.15.                                               Designation as
Designated Senior Debt.

 

In accordance with and pursuant to the Indenture,
dated as of January 24, 2003, among Casella, the guarantors party thereto and
U.S. Bank National Association, as trustee (the “Senior
Subordinated Notes Indenture”), Casella hereby designates the Notes
as “Designated Senior Debt” under the Senior Subordinated Notes Indenture.

 

108

 

SIGNATURES

 

IN WITNESS WHEREOF, the
parties hereto have caused this Indenture to be duly executed all as of the
date first written above.

 

	
   

  	
  CASELLA
  WASTE SYSTEMS, INC.,

  
	
   

  	
  as Issuer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:
  John S. Quinn

  
	
   

  	
   

  	
  Title:
  Senior Vice President, Chief Financial Officer and Treasurer

  

 

S-1

 

	
   

  	
  GUARANTORS:

  
	
   

  	
   

  
	
   

  	
  ALL CYCLE WASTE, INC.

  
	
   

  	
  ATLANTIC COAST FIBERS, INC.

  
	
   

  	
  B. AND C. SANITATION CORPORATION

  
	
   

  	
  BRISTOL WASTE MANAGEMENT, INC.

  
	
   

  	
  C.V. LANDFILL, INC.

  
	
   

  	
  CASELLA ALBANY RENEWABLES, LLC

  
	
   

  	
  CASELLA MAJOR ACCOUNT SERVICES, LLC

  
	
   

  	
  CASELLA RECYCLING, LLC

  
	
   

  	
  CASELLA RENEWABLE SYSTEMS, LLC

  
	
   

  	
  CASELLA TRANSPORTATION, INC.

  
	
   

  	
  CASELLA WASTE MANAGEMENT OF MASSACHUSETTS, INC.

  
	
   

  	
  CASELLA WASTE MANAGEMENT OF N.Y., INC.

  
	
   

  	
  CASELLA WASTE MANAGEMENT OF PENNSYLVANIA, INC.

  
	
   

  	
  CASELLA WASTE MANAGEMENT, INC.

  
	
   

  	
  CASELLA WASTE SERVICES OF ONTARIO LLC

  
	
   

  	
  CHEMUNG LANDFILL LLC

  
	
   

  	
  COLEBROOK LANDFILL LLC

  
	
   

  	
  FAIRFIELD COUNTY RECYCLING, LLC

  
	
   

  	
  FCR CAMDEN, LLC

  
	
   

  	
  FCR FLORIDA, LLC

  
	
   

  	
  FCR GREENSBORO, LLC

  
	
   

  	
  FCR GREENVILLE, LLC

  
	
   

  	
  FCR MORRIS, LLC

  
	
   

  	
  FCR REDEMPTION, LLC

  
	
   

  	
  FCR TENNESSEE, LLC

  
	
   

  	
  FCR, LLC

  
	
   

  	
  FOREST ACQUISITIONS, INC.

  
	
   

  	
  GRASSLANDS INC.

  
	
   

  	
  HAKES C&D DISPOSAL, INC.

  
	
   

  	
  HARDWICK LANDFILL, INC.

  
	
   

  	
  HIRAM HOLLOW REGENERATION CORP.

  

 

 

	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  John
  S. Quinn

  
	
   

  	
   

  	
  Vice
  President and Treasurer

  

 

S-2

 

	
   

  	
  K-C INTERNATIONAL, LTD.

  
	
   

  	
  KTI BIO FUELS, INC.

  
	
   

  	
  KTI ENVIRONMENTAL GROUP, INC.

  
	
   

  	
  KTI NEW JERSEY FIBERS, INC.

  
	
   

  	
  KTI OPERATIONS, INC.

  
	
   

  	
  KTI SPECIALTY WASTE SERVICES, INC.

  
	
   

  	
  KTI, INC.

  
	
   

  	
  LEWISTON LANDFILL LLC

  
	
   

  	
  NEW ENGLAND WASTE SERVICES OF MASSACHUSETTS, INC.

  
	
   

  	
  NEW ENGLAND WASTE SERVICES OF ME, INC.

  
	
   

  	
  NEW ENGLAND WASTE SERVICES OF N.Y., INC.

  
	
   

  	
  NEW ENGLAND WASTE SERVICES OF VERMONT, INC.

  
	
   

  	
  NEW ENGLAND WASTE SERVICES, INC.

  
	
   

  	
  NEWBURY WASTE MANAGEMENT, INC.

  
	
   

  	
  NORTH COUNTRY ENVIRONMENTAL SERVICES, INC.

  
	
   

  	
  NORTHERN PROPERTIES CORPORATION OF PLATTSBURGH

  
	
   

  	
  NORTHERN SANITATION, INC.

  
	
   

  	
  PERC, INC.

  
	
   

  	
  PINE TREE WASTE, INC.

  
	
   

  	
  RESOURCE RECOVERY SYSTEMS, LLC

  
	
   

  	
  RESOURCE TRANSFER SERVICES, INC.

  
	
   

  	
  RESOURCE WASTE SYSTEMS, INC.

  
	
   

  	
  SCHULTZ LANDFILL, INC.

  
	
   

  	
  SOUTHBRIDGE RECYCLING & DISPOSAL PARK, INC.

  
	
   

  	
  SUNDERLAND WASTE MANAGEMENT, INC.

  
	
   

  	
  TRILOGY GLASS LLC

  
	
   

  	
  U.S. FIBER, LLC

  
	
   

  	
  WASTE-STREAM INC.

  
	
   

  	
  WINTERS BROTHERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  John
  S. Quinn

  
	
   

  	
   

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
  BLUE MOUNTAIN RECYCLING, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  FCR, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Vice President and Treasurer

  

 

S-3

 

	
   

  	
  CWM ALL WASTE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GROUNDCO LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE HYLAND FACILITY ASSOCIATES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MAINE ENERGY RECOVERY COMPANY, LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: KTI Environmental Group, Inc., general
  partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEWS OF WORCESTER LLC

  
	
   

  	
   

  
	
   

  	
  By: Casella Waste Systems, Inc., its sole
  member

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Senior Vice President, Chief Financial Officer and Treasurer

  

 

S-4

 

	
   

  	
  NEWSME LANDFILL OPERATIONS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PERC MANAGEMENT COMPANY LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By: PERC, Inc., general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TEMPLETON LANDFILL LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John S. Quinn

  
	
   

  	
   

  	
  John S. Quinn

  
	
   

  	
   

  	
  Duly Authorized Agent

  

 

S-5

 

	
   

  	
  WILMINGTON
  TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Lori L. Donahue

  
	
   

  	
   

  	
  Lori
  L. Donahue

  
	
   

  	
   

  	
  Assistant
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WILMINGTON
  TRUST COMPANY,

  
	
   

  	
  as Second Lien Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lori L. Donahue

  
	
   

  	
   

  	
  Lori L. Donahue

  
	
   

  	
   

  	
  Assistant Vice President

  

 

S-6

 

EXHIBIT A

 

[Insert the Global Note Legend,
if applicable pursuant to the provisions of the Indenture]

 

[Insert the Private Placement
Legend, if applicable pursuant to the provisions of the Indenture]

 

CASELLA WASTE SYSTEMS, INC.

11% Senior Second Lien Notes 2014

 

	
   

  	
   

  	
  CUSIP No.

  	
   

  
	
  No.

  	
   

  	
  $

  	
   

  

 

CASELLA WASTE SYSTEMS, INC., a Delaware corporation
(“Casella”, which term includes any successor corporation), for value received
promises to pay to CEDE & CO. or its registered assigns, the principal
sum of
                         
on July 15, 2014.

 

Interest Payment Dates:  January 15 and July 15, commencing January 15,
2010.

 

Record Dates: 
January 1 and July 1.

 

Reference is made to the further provisions of this
Note contained herein, which will for all purposes have the same effect as if
set forth at this place.

 

A-1

 

IN WITNESS WHEREOF, Casella has caused this Note to
be signed manually or by facsimile by its duly authorized officer.

 

Dated:

 

	
   

  	
  CASELLA WASTE SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

A-2

 

[FORM OF TRUSTEE’S CERTIFICATE OF AUTHENTICATION]

 

This is one of the 11% Senior Second Lien Notes due
2014 described in the within-mentioned Indenture.

 

Dated:

 

	
   

  	
  WILMINGTON TRUST COMPANY,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  

 

A-3

 

(Reverse of Note)

 

11% Senior Second Lien Notes due 2014

 

Capitalized terms used herein shall have the
meanings assigned to them in the Indenture referred to below unless otherwise
indicated.

 

SECTION 1.                                      Interest.  Casella Waste Systems, Inc., a Delaware
corporation (“Casella”), promises to pay
interest on the principal amount of this Note at 11% per annum from July 9,
2009 until maturity.  Casella will pay
interest semi-annually on January 15 and July 15 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each
an “Interest Payment Date”), commencing January 15,
2010.  Interest on the Notes will accrue
from the most recent date to which interest has been paid or, if no interest
has been paid, from the date of original issuance; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date. 
Casella shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand to the extent lawful at the interest rate
applicable to the Notes; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. 
Interest will be computed on the basis of a 360-day year of twelve
30-day months.

 

SECTION 2.                                      Method of
Payment.  Casella will pay interest on
the Notes (except defaulted interest) to the Persons who are registered Holders
of Notes at the close of business on the January 1 or July 1 next
preceding the Interest Payment Date, even if such Notes are canceled after such
record date and on or before such Interest Payment Date, except as provided in Section 2.12
of the Indenture with respect to defaulted interest. The Notes will be issued
in denominations of $2,000 and integral multiples of $1,000 in excess
thereof.  Casella shall pay principal,
premium, if any, and interest on the Notes in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts (“U.S. Legal Tender”).  Principal, premium, if any, and interest on
the Notes will be payable at the office or agency of Casella maintained for
such purpose or, at the option of Casella, payment of interest may be made by
check mailed to the Holders of the Notes at their respective addresses set
forth in the register of Holders of Notes; provided that
all payments of principal, premium and interest with respect to Notes the
Holders of which have given wire transfer instructions to Casella prior to the
Record Date will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders thereof.  Until otherwise designated by Casella, the
Corporate Trust Office of the Trustee will be the office of the Trustee
maintained for such purpose.

 

SECTION 3.                                      Paying Agent and
Registrar.  Initially,
Wilmington Trust Company, the Trustee under the Indenture, will act as Paying
Agent and Registrar.  Casella may change
any Paying Agent or Registrar without notice to any Holder.  Casella or any of its Sub-

 

A-4

 

sidiaries may act as
Registrar and, except under certain circumstances specified in the Indenture,
Paying Agent.

 

SECTION 4.                                      Indenture.  Casella issued the Notes under an Indenture
dated as of July 9, 2009 (“Indenture”) by
and among Casella, the Guarantors and the Trustee.  The terms of the Notes include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the
“TIA”). 
Casella shall be entitled to issue Additional Notes pursuant to Section 2.01
of the Indenture.  The Notes issued on
the Issue Date and any Additional Notes issued under the Indenture shall be
treated as a single class of securities under the Indenture.  The Notes are subject to all such terms, and
Holders are referred to the Indenture and the TIA for a statement of such
terms.  To the extent any provision of
this Note conflicts with the express provisions of the Indenture, the
provisions of the Indenture shall govern and be controlling.

 

SECTION 5.                                      Optional
Redemption.  On or after
July 15, 2012, Casella may from time to time redeem some or all of the
Notes, upon not less than 30 nor more than 60 days’ notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest thereon, if any, to the applicable redemption date,
if redeemed during the twelve-month period beginning on July 15 of the
years indicated below:

 

	
  Year

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2012

  	
   

  	
  105.500

  	
  %

  
	
  2013 and thereafter

  	
   

  	
  100.000

  	
  %

  

 

In addition, the Notes may be redeemed, in whole or
in part, at any time prior to July 15, 2012, at the option of Casella upon
not less than 30 nor more than 60 days’ notice, at a redemption price equal to
100% of the principal amount of the Notes redeemed plus the Applicable Premium
as of, and accrued and unpaid interest to, the applicable redemption date (subject
to the right of holders of record on the relevant interest record date to
receive interest due on the relevant interest payment date).  “Applicable Premium”
means, with respect to any Note on any applicable redemption date, the greater
of:

 

(1)                                  1.0% of the principal amount
of such Note; and

 

(2)                                  the excess, if any, of:

 

(a)                                  the present
value at such redemption date of (i) the redemption price of such Note at July 15,
2012 (such redemption price being set forth in the table appearing above in
this Section 5) plus (ii) all required interest payments (excluding
accrued and unpaid interest to such redemption date) due on such Note through July 15,
2012 computed using a discount rate equal to the Treasury Rate as of such
redemption date plus 50 basis points; over

 

(b)                                 the principal
amount of such Note.

 

A-5

 

“Treasury Rate”
means, as of any redemption date, the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the redemption date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the redemption date to July 15, 2012; provided, however, that if the period from the redemption date to July 15,
2012 is not equal to the constant maturity of a United States Treasury security
for which a weekly average yield is given, the Treasury Rate shall be obtained
by linear interpolation (calculated to the nearest one-twelfth of a year) from
the weekly average yields of United States Treasury securities for which such
yields are given, except that if the period from the redemption date to July 15,
2012 is less than one year, the weekly average yield on actually traded United
States Treasury securities adjusted to a constant maturity of one year shall be
used.

 

Casella may acquire Notes by means other than a
redemption, whether pursuant to an issuer tender offer, open market purchases,
negotiated transactions or otherwise, so long as such acquisition does not
otherwise violate the terms of the Indenture.

 

SECTION 6.                                      Optional
Redemption upon Public Equity Offering.  Prior to July 15, 2012, Casella may on
any one or more occasions redeem up to 35% of the aggregate principal amount of
Notes issued under the Indenture at a redemption price equal to 111.000% of the
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the redemption date, with the net cash proceeds of Public Equity Offerings by
Casella; provided that (i) at least 65% of
the aggregate principal amount of Notes issued under the Indenture remains
outstanding immediately after the occurrence of such redemption (excluding
Notes held by Casella and its Subsidiaries) and (ii) such redemption shall
occur within 90 days of the date of the closing of such Public Equity Offering
(disregarding the date of the closing of any over-allotment option with respect
thereto).

 

SECTION 7.                                      Mandatory
Redemption.  For the avoidance
of doubt, an offer to purchase pursuant to Section 8 hereof shall not be
deemed a redemption.  Casella shall not
be required to make mandatory redemption payments with respect to the Notes.

 

SECTION 8.                                      Repurchase at
Option of Holder.  Upon the
occurrence of a Change of Control, and subject to certain conditions set forth
in the Indenture, Casella will be required to offer to purchase all of the
outstanding Notes at a purchase price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, thereon to the date of repurchase.

 

Casella is, subject to
certain conditions and exceptions, obligated to make an offer to purchase Notes
at 100% of their principal amount, plus accrued and unpaid interest, if any,
thereon to the date of repurchase, with certain net cash proceeds of certain
sales or other dispositions of assets in accordance with the Indenture.

 

A-6

 

SECTION 9.                                      Notice of
Redemption.  Notice of
redemption will be mailed by first class mail at least 30 days but not more
than 60 days before the redemption date to each Holder of Notes to be redeemed
at its registered address.  Notes in
denominations larger than $2,000 may be redeemed in part.  If any Note is to be redeemed in part only,
the notice of redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. 
A new Note in principal amount equal to the unredeemed portion thereof
will be issued in the name of the Holder thereof upon cancellation of the
original Note.  On and after the
redemption date interest ceases to accrue on Notes or portions thereof called
for redemption.

 

SECTION 10.                                Denominations,
Transfer, Exchange.  The Notes
are in registered form without coupons in denominations of $2,000 and integral
multiples of $1,000 in excess thereof. 
The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture.  The Registrar
and the Trustee may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and Casella may require a Holder to pay any
taxes and fees required by law or permitted by the Indenture.  Casella or the Registrar is not required to
transfer or exchange any Note selected for redemption.  Also, Casella or the Registrar is not required
to transfer or exchange any Notes for a period of 15 days before a selection of
Notes to be redeemed.

 

SECTION 11.                                Persons Deemed
Owners.  The registered Holder of a
Note may be treated as its owner for all purposes.

 

SECTION 12.                                Amendment,
Supplement and Waiver. 
Subject to certain exceptions, the Indenture, the Notes or the Security
Documents may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Notes then
outstanding, and any existing Default or compliance with any provision may be
waived with the consent of the Holders of a majority in aggregate principal
amount of the Notes then outstanding. 
Without notice to or consent of any Holder, the parties thereto may
amend or supplement the Indenture, the Security Documents and the Notes to,
among other things, cure any ambiguity, defect or inconsistency in the
Indenture, provide for uncertificated Notes in addition to certificated Notes,
comply with any requirements of the Commission in connection with the
qualification of the Indenture under the TIA, or make any change that does not
adversely affect the legal rights under the Indenture of any Holder of a
Note.  The Security Documents may be amended
or modified in connection with the amendment or modification of the First Lien
Security Documents, as provided in the Indenture and the Security Documents.

 

SECTION 13.                                Defaults and
Remedies.  If an Event
of Default occurs and is continuing, the Trustee or the Holders of at least 25%
in principal amount of the then outstanding Notes generally may declare all the
Notes to be due and payable immediately. 
Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency as set forth in the
Indenture, with respect to Casella or any Significant Subsidiary, all outstanding
Notes will become due and payable without further action or notice.  Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture.  Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. 
The Trustee may withhold from Holders 

 

A-7

 

of the Notes notice of any
continuing Default (except a Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.  The Holders of a majority in aggregate
principal amount of the Notes then outstanding by notice to the Trustee may on
behalf of the Holders of all of the Notes waive any existing Default and its
consequences under the Indenture except a continuing Default in the payment of
interest on, or the principal of, or the premium on, the Notes.

 

SECTION 14.                                Restrictive
Covenants.  The
Indenture contains certain covenants that, among other things, limit the
ability of Casella and its Restricted Subsidiaries to make restricted payments,
to incur indebtedness, to create liens, to sell assets, to permit restrictions
on dividends and other payments by Restricted Subsidiaries of Casella, to
consolidate, merge or sell all or substantially all of its assets or to engage
in transactions with affiliates.  The limitations
are subject to a number of important qualifications and exceptions.  Casella must annually report to the Trustee
on compliance with such limitations.

 

SECTION 15.                                No Recourse
Against Others.  No
director, officer, employee, incorporator or stockholder of Casella or any
Guarantor, as such, shall have any liability for any obligations of Casella or
the Guarantors under the Notes, the Indenture, the Guarantors’ Subsidiary
Guarantees or for any claim based on, in respect of, or by reason of, such obligations
or their creation.  Each Holder of Notes
by accepting a Note waives and releases all such liability.  The waiver and release are part of the
consideration for issuance of the Notes.

 

SECTION 16.                                Subsidiary
Guarantees.  This Note
will be entitled to the benefits of certain Subsidiary Guarantees made for the
benefit of the Holders.  Reference is
hereby made to the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations thereunder of the Guarantors, the
Trustee and the Holders.

 

SECTION 17.                                Trustee
Dealings with Casella.  The
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Notes and may otherwise deal with Casella, its
Subsidiaries or their respective Affiliates as if it were not the Trustee.

 

SECTION 18.                                Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.

 

SECTION 19.                                Abbreviations.  Customary abbreviations may be used in the
name of a Holder or an assignee, such as: 
TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT
TEN (= joint tenants with right of survivorship and not as tenants in common),
CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

 

SECTION 20.                                Additional
Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.  Pursuant to, but subject to the exceptions
in, the Registration Rights Agreement, Casella and the Guarantors will be
obligated to consummate an exchange offer pursuant to which the Holder of this
Note shall have the right to exchange this Note for a 11% Senior Second Lien
Note due 2014 of Casella which shall have been registered under the Securities 

 

A-8

 

Act, in like principal
amount and having terms identical in all material respects to this Note (except
that such note shall not be entitled to Additional Interest).  The Holders shall be entitled to receive
certain Additional Interest in the event the Notes are not Freely Tradable,
such exchange offer is not consummated or the Notes are not offered for resale
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.

 

SECTION 21.                                CUSIP Numbers.  Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, Casella has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders.  No representation is made as to the accuracy
of such numbers either as printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the other identification numbers
placed thereon.

 

SECTION 22.                                Governing Law.  This Note shall be
governed by, and construed in accordance with, the laws of the State of New
York without giving effect to applicable principles of conflicts of laws to the
extent that the application of the laws of another jurisdiction would be
required thereby.

 

SECTION 23.                                Lien
Subordination.  These Notes
and the Subsidiary Guarantees are secured by Second-Priority Liens upon the
Collateral pursuant to certain Security Documents.  The Second-Priority Liens upon any and all
Collateral are, to the extent and in the manner provided in the Intercreditor
Agreement, subordinate in ranking to all present and future First-Priority
Liens as set forth in Article Ten of the Indenture and in the
Intercreditor Agreement.

 

Casella will furnish to any Holder upon written
request and without charge a copy of the Indenture.

 

A-9

 

ASSIGNMENT FORM

 

I
or we assign and transfer this Note to

 

	
   

  
	
   

  
	
   

  
	
  (Print
  or type name, address and zip code of assignee or transferee)

  
	
   

  
	
   

  
	
  (Insert
  Social Security or other identifying number of assignee or transferee)

  

 

and irrevocably appoint
                                                                              
agent to transfer this Note on the books of Casella.  The agent may substitute another to act for
him.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee:   

  	
   

  
	
   

  	
   

  	
  Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor program reasonably acceptable to the Trustee)

  
						

 

In connection with any transfer of this Note
occurring prior to the date which is the earlier of (i) the date of the
declaration by the Commission of the effectiveness of a registration statement
under the Securities Act of 1933, as amended (the “Securities Act”), covering resales
of this Note (which effectiveness shall not have been suspended or terminated
at the date of the transfer) and (ii) the date this Note becomes Freely
Tradable, the undersigned confirms that it has not utilized any general
solicitation or general advertising in connection with the transfer:

 

[Check
One]

 

	
  (1)

  	
  o

  	
  to
  Casella or a subsidiary thereof; or

  
	
   

  	
   

  	
   

  
	
  (2)

  	
  o

  	
  pursuant
  to and in compliance with Rule 144A under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
  (3)

  	
  o

  	
  to an institutional
  “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or
  (7) under the Securities Act) that has furnished to the Trustee a signed
  letter containing certain representations and agreements (the form of which
  letter can be obtained from the Trustee); or

  

 

A-10

 

	
  (4)

  	
  o

  	
  outside
  the United States to a “foreign purchaser” in compliance with Rule 904
  of Regulation S under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
  (5)

  	
  o

  	
  pursuant
  to the exemption from registration provided by Rule 144 under the Securities
  Act; or

  
	
   

  	
   

  	
   

  
	
  (6)

  	
  o

  	
  pursuant
  to an effective registration statement under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
  (7)

  	
  o

  	
  pursuant to another
  available exemption from the registration statement requirements of the
  Securities Act of 1933;

  

 

and unless the box below is checked, the
undersigned confirms that such Note is not being transferred to an “affiliate”
of Casella as defined in Rule 144 under the Securities Act (an “Affiliate”):

 

o            The transferee is an Affiliate of Casella.

 

Unless one of the items is checked, the Trustee will
refuse to register any of the Notes evidenced by this certificate in the name
of any person other than the registered Holder thereof; provided,
however, that if item (3), (4), (5) or
(7) is checked, Casella or the Trustee may require, prior to registering
any such transfer of the Notes, in their sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3) or
(4)) and other information as the Trustee or Casella has reasonably requested
to confirm that such transfer is being made pursuant to an exemption from, or
in a transaction not subject to, the registration requirements of the
Securities Act.

 

If none of the foregoing items are checked, the
Trustee or Registrar shall not be obligated to register this Note in the name
of any person other than the Holder hereof unless and until the conditions to
any such transfer of registration set forth herein and in Section 2.16 of
the Indenture shall have been satisfied.

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  
	
  Signature
  Guarantee:

  	
   

  
						

 

TO BE COMPLETED BY PURCHASER IF (2) ABOVE
IS CHECKED

 

The undersigned represents and warrants that it is
purchasing this Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a “qualified
institutional buyer” within the meaning of Rule 144A under the Securities
Act and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding Casella as the
undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned’s foregoing representations in order to claim the
exemption from registration provided by Rule 144A.

 

A-11

 

	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE:

  	
  To
  be executed by an executive officer

  

 

A-12

 

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by
Casella pursuant to Section 4.09 or Section 4.13 of the Indenture,
check the appropriate box:

 

Section 4.09 o                                      Section 4.13 o

 

If you want to elect to have only part of this Note
purchased by Casella pursuant to Section 4.09 or Section 4.13 of the
Indenture, state the amount:  $

 

 

	
  Dated:

  	
   

  	
   

  	
  Signed:

  	
   

  
	
   

  	
   

  	
   

  	
  (Sign
  exactly as name appears on the other side of this Note)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Signature Guarantee:   

  	
   

  
	
   

  	
   

  	
  Participant
  in a recognized Signature Guarantee Medallion Program (or other signature
  guarantor program reasonably acceptable to the Trustee)

  
						

 

A-13

 

SCHEDULE
OF EXCHANGES OF 11% SENIOR SECOND LIEN NOTES

 

The following exchanges of a part of this Global
Note for other 11% Senior Second Lien Notes have been made:

 

	
  Date
  of

  Exchange

  	
   

  	
  Amount of

  Decrease in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Amount of

  Increase in

  Principal

  Amount of this

  Global Note

  	
   

  	
  Principal

  Amount of this

  Global Note

  Following Such

  Decrease (or

  Increase)

  	
   

  	
  Signature of

  Authorized

  Officer of

  Trustee or 11%

  Senior Second

  Lien Note

  Custodian

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

A-14

 

EXHIBIT B

 

FORM OF LEGENDS

 

Each Global Note and Physical Note that constitutes
a Restricted Security or is sold in compliance with Regulation S shall
bear the following legend (the “Private Placement Legend”) on the face thereof
until the date such Note becomes Freely Tradable, unless otherwise agreed by
Casella and the Holder thereof:

 

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO
A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (4) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR (5) PURSUANT TO ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN
OPINION OF COUNSEL IF THE ISSUER SO REQUESTS) AND (B) IN ACCORDANCE WITH
ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.

 

Each Global Note authenticated and delivered
hereunder shall also bear the following legend:

 

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING
OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.  THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY
TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE
DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

B-1

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO CASELLA OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

TRANSFERS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE &
CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF
PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE
WITH THE RESTRICTIONS SET FORTH IN SECTION 2.16 OF THE INDENTURE.

 

[OID Legend]

 

THIS NOTE IS ISSUED WITH ORIGINAL ISSUE
DISCOUNT FOR PURPOSES OF SECTION 1271 ET SEQ. OF THE INTERNAL REVENUE
CODE.  THE ISSUE DATE IS JULY 9, 2009(1), INFORMATION REGARDING THE
ISSUE PRICE, THE YIELD TO MATURITY AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
UNDER THIS NOTE CAN BE PROMPTLY OBTAINED BY SENDING A WRITTEN REQUEST TO THE
TREASURER OF THE ISSUER AT 25 GREENS HILL LANE, RUTLAND, VERMONT 05701.

 

(1)                              For any
Additional Note, insert issue date for such Additional Note.

 

B-2

 

EXHIBIT C

 

Form of Certificate To Be

Delivered in Connection with

Transfers to Non-QIB Accredited Investors

 

[                  ],
[     ]

 

Wilmington
Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

 

Ladies
and Gentlemen:

 

In connection with our proposed purchase of 11%
Senior Second Lien Notes due 2014 (the “Notes”) of CASELLA WASTE SYSTEMS, INC.,
a Delaware corporation (“Casella”), we confirm that:

 

1.             We
have received a copy of the Offering Memorandum (the “Offering Memorandum”),
dated July 1, 2009, relating to the Notes and such other information as we
deem necessary in order to make our investment decision.  We acknowledge that we have read and agreed
to the matters stated in the section entitled “Notice to Investors” of such
Offering Memorandum, including the restrictions on duplication and circulation
of the Offering Memorandum.

 

2.             We
understand that any subsequent transfer of the Notes is subject to certain
restrictions and conditions set forth in the Indenture relating to the Notes
(the “Indenture”) as described in the Offering Memorandum and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise transfer the
Notes except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the “Securities Act”), and all applicable
State securities laws.

 

3.             We
understand that the offer and sale of the Notes have not been registered under
the Securities Act, and that the Notes may not be offered or sold except as
permitted in the following sentence.  We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell any Notes, we will do so only (i) to
Casella or any of its subsidiaries, (ii) inside the United States in
accordance with Rule 144A under the Securities Act to a “qualified
institutional buyer” (as defined in Rule 144A under the Securities Act), (iii) inside
the United States to an institutional “accredited investor” (as defined below)
that, prior to such transfer, furnishes (or has furnished on its behalf by a
U.S. broker-dealer) to the Trustee (as defined in the Indenture) a signed
letter containing certain representations and agreements relating to 

 

C-1

 

the restrictions on transfer
of the Notes (the form of which letter can be obtained from the Trustee), (iv) outside
the United States in accordance with Regulation S promulgated under the
Securities Act to non-U.S. persons, (v) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available),
(vi) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if
Casella so requests) or (vii) pursuant to an effective registration
statement under the Securities Act, and we further agree to provide to any
person purchasing any of the Notes from us a notice advising such purchaser
that resales of the Notes are restricted as stated herein.

 

4.             We
understand that, on any proposed resale of any Notes, we will be required to
furnish to the Trustee and Casella such certification, legal opinions and other
information as the Trustee and Casella may reasonably require to confirm that
the proposed sale complies with the foregoing restrictions.  We further understand that the Notes purchased
by us will bear a legend to the foregoing effect.

 

5.             We
are an institutional “accredited investor” (as defined in Rule 501(a)(1),
(2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Notes, and
we and any accounts for which we are acting are each able to bear the economic
risk of our or their investment, as the case may be.

 

6.             We
are acquiring the Notes purchased by us for our account or for one or more
accounts (each of which is an institutional “accredited investor”) as to each
of which we exercise sole investment discretion.

 

C-2

 

You, Casella, the Trustee and others are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative or legal proceeding
or official inquiry with respect to the matters covered hereby.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferee]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

C-3

 

EXHIBIT D

 

Form of Certificate To Be Delivered

in Connection with Transfers

Pursuant to Regulation S

 

[                ],
[     ]

 

Wilmington
Trust Company

Rodney Square North

1100 North Market Street

Wilmington, DE 19890

 

	
  Re:

  	
  Casella
  Waste Systems, Inc. (“Casella”) 11% Senior

  
	
   

  	
  Second
  Lien Notes due 2014 (the “Notes”)

  
	
   

  	
   

  

 

Ladies
and Gentlemen:

 

In connection with our proposed sale of $[         ] aggregate principal amount of the
Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S under the U.S. Securities Act of 1933, as amended
(the “Securities Act”), and, accordingly, we represent that:

 

(1)           the
offer of the Notes was not made to a person in the United States;

 

(2)           either
(a) at the time the buy offer was originated, the transferee was outside
the United States or we and any person acting on our behalf reasonably believed
that the transferee was outside the United States, or (b) the transaction
was executed in, on or through the facilities of a designated offshore
securities market and neither we nor any person acting on our behalf knows that
the transaction has been prearranged with a buyer in the United States;

 

(3)           no
directed selling efforts have been made in the United States in contravention
of the requirements of Rule 903(a) or Rule 904(a) of
Regulation S, as applicable;

 

(4)           the
transaction is not part of a plan or scheme to evade the registration requirements
of the Securities Act; and

 

(5)           we
have advised the transferee of the transfer restrictions applicable to the
Notes.

 

You, Casella and counsel for Casella are entitled to
rely upon this letter and are irrevocably authorized to produce this letter or
a copy hereof to any interested party in any administrative

 

D-1

 

or legal proceedings or
official inquiry with respect to the matters covered hereby.  Terms used in this certificate have the
meanings set forth in Regulation S.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  [Name of Transferor]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signature

  

 

D-2

 

EXHIBIT E

 

SUBSIDIARY GUARANTEE

 

For value received, each of the undersigned hereby
unconditionally guarantees, as principal obligor and not only as a surety, to
the Holder of this Note the cash payment in United States dollars of principal
of, premium, if any, and interest on this Note in the amounts and at the times
when due and interest on the overdue principal, premium, if any, and interest,
if any, of this Note, if lawful, and the payment or performance of all other
obligations of Casella under the Indenture (as defined below) or the Notes, to
the Holder of this Note and the Trustee, all in accordance with and subject to
the terms and limitations of this Note, Article Eleven of the Indenture
and this Subsidiary Guarantee.  This
Subsidiary Guarantee will become effective in accordance with Article Eleven
of the Indenture and its terms shall be evidenced therein.  The validity and enforceability of any
Subsidiary Guarantee shall not be affected by the fact that it is not affixed
to any particular Note.

 

Capitalized terms used but not defined herein shall
have the meanings ascribed to them in the Indenture dated as of July 9,
2009, among Casella Waste Systems, Inc., a Delaware corporation, as issuer
(“Casella”), the Guarantors named therein and Wilmington Trust Company, as
trustee (the “Trustee”), as amended or supplemented (the “Indenture”).

 

The obligations of the undersigned to the Holders of
Notes and to the Trustee pursuant to this Subsidiary Guarantee and the
Indenture are expressly set forth in Article Eleven of the Indenture and
reference is hereby made to the Indenture for the precise terms of the Subsidiary
Guarantee and all of the other provisions of the Indenture to which this Subsidiary
Guarantee relates.

 

No director, officer, employee, incorporator or
stockholder of any Guarantor, as such, shall have any liability for any
obligations of the Guarantors under the Guarantors’ Subsidiary Guarantees or
for any claim based on, in respect of, or by reason of, such obligations or
their creation.

 

This Subsidiary Guarantee shall be governed by, and construed in accordance
with, the laws of the State of New York without giving effect to principles of
conflicts of law.  The
undersigned Guarantor hereby agrees to submit to the jurisdiction of the courts
of the State of New York in any action or proceeding arising out of or relating
to this Subsidiary Guarantee.

 

This Subsidiary Guarantee is subject to release upon
the terms set forth in the Indenture.

 

E-1

 

IN WITNESS WHEREOF, each Guarantor has caused its
Subsidiary Guarantee to be duly executed.

 

	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
  [                                   ]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

E-2Exhibit 10.1

 

EXECUTION COPY

 

Published CUSIP Number:
[              ]

 

SECOND AMENDED AND RESTATED REVOLVING CREDIT AND TERM LOAN
AGREEMENT

 

Dated as of July 9,
2009

 

among

 

CASELLA WASTE SYSTEMS, INC.

and its Subsidiaries

(other than Excluded Subsidiaries and the Non-Borrower Subsidiaries)

as the Borrowers,

 

BANK OF AMERICA, N.A.

as Administrative Agent, Swing
Line Lender

and

L/C Issuer,

 

and

 

The Other
Lenders Party Hereto

 

BANC OF AMERICA SECURITIES LLC

as Sole Book Manager,

 

BANC OF AMERICA SECURITIES LLC

and

COMERICA BANK

as Joint Arrangers,

 

 

COMERICA BANK

as Syndication Agent,

 

and

 

JPMORGAN CHASE BANK, N.A.

and

CALYON NEW YORK BRANCH

as Co-Documentation Agents

 

 

TABLE OF CONTENTS

 

	
  Section

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I. DEFINITIONS AND
  ACCOUNTING TERMS

  	
  1

  
	
  1.01

  	
  Defined Terms

  	
  1

  
	
  1.02

  	
  Other Interpretive Provisions

  	
  30

  
	
  1.03

  	
  Accounting Terms

  	
  31

  
	
  1.04

  	
  Rounding

  	
  31

  
	
  1.05

  	
  Times of Day

  	
  32

  
	
  1.06

  	
  Letter of Credit Amounts

  	
  32

  
	
  ARTICLE II. THE COMMITMENTS AND
  CREDIT EXTENSIONS

  	
  32

  
	
  2.01

  	
  The Loans

  	
  32

  
	
  2.02

  	
  Borrowings, Conversions and Continuations of Loans

  	
  33

  
	
  2.03

  	
  Letters of Credit

  	
  34

  
	
  2.04

  	
  Swing Line Loans

  	
  43

  
	
  2.05

  	
  Prepayments

  	
  46

  
	
  2.06

  	
  Termination or Reduction of the Revolving Commitments;
  Termination of the Term B Loan

  	
  49

  
	
  2.07

  	
  Repayment of Loans

  	
  50

  
	
  2.08

  	
  Interest

  	
  50

  
	
  2.09

  	
  Fees

  	
  51

  
	
  2.10

  	
  Computation of Interest and Fees; Retroactive Adjustments
  of Applicable Rate

  	
  51

  
	
  2.11

  	
  Evidence of Debt

  	
  52

  
	
  2.12

  	
  Payments Generally; Administrative Agent’s Clawback

  	
  53

  
	
  2.13

  	
  Sharing of Payments by Lenders

  	
  55

  
	
  2.14

  	
  Increase in Aggregate Commitments; Term B Loan

  	
  55

  
	
  2.15

  	
  Currency of Account

  	
  58

  
	
  ARTICLE III. TAXES, YIELD
  PROTECTION AND ILLEGALITY

  	
  58

  
	
  3.01

  	
  Taxes

  	
  58

  
	
  3.02

  	
  Illegality

  	
  62

  
	
  3.03

  	
  Inability to Determine Rates

  	
  62

  
	
  3.04

  	
  Increased Costs

  	
  62

  
	
  3.05

  	
  Compensation for Losses

  	
  64

  
	
  3.06

  	
  Mitigation Obligations; Replacement of Lenders

  	
  65

  
	
  3.07

  	
  Survival

  	
  65

  
	
  ARTICLE IV. CONDITIONS PRECEDENT
  TO CREDIT EXTENSIONS

  	
  65

  
	
  4.01

  	
  Conditions of Initial Credit Extension

  	
  65

  
	
  4.02

  	
  Conditions to all Credit Extensions

  	
  68

  
	
  ARTICLE V. REPRESENTATIONS AND
  WARRANTIES

  	
  69

  
	
  5.01

  	
  Corporate Authority

  	
  69

  
	
  5.02

  	
  Governmental Approvals; Other Approvals

  	
  70

  
	
  5.03

  	
  Title to Properties; Leases

  	
  70

  
	
  5.04

  	
  Use of Proceeds

  	
  70

  
	
  5.05

  	
  Financial Statements; Solvency

  	
  70

  
	
  5.06

  	
  No Material Changes, Etc.

  	
  70

  
	
  5.07

  	
  Permits, Franchises, Patents, Copyrights, Etc.

  	
  71

  

 

i

 

	
  5.08

  	
  Litigation

  	
  71

  
	
  5.09

  	
  No
  Materially Adverse Contracts, Etc.

  	
  71

  
	
  5.10

  	
  Compliance
  With Other Instruments, Applicable Laws, Etc.

  	
  71

  
	
  5.11

  	
  Tax
  Status

  	
  71

  
	
  5.12

  	
  Employee
  Benefit Plans

  	
  72

  
	
  5.13

  	
  Subsidiaries;
  Equity Interests; Capitalization

  	
  73

  
	
  5.14

  	
  Margin
  Regulations; Holding Company and Investment Company Act

  	
  74

  
	
  5.15

  	
  Absence
  of Financing Statements, Etc.

  	
  74

  
	
  5.16

  	
  Environmental
  Compliance

  	
  74

  
	
  5.17

  	
  Perfection
  of Security Interests

  	
  74

  
	
  5.18

  	
  Certain
  Transactions

  	
  75

  
	
  5.19

  	
  True
  Copies of Charter and Other Documents

  	
  75

  
	
  5.20

  	
  Disclosure

  	
  75

  
	
  5.21

  	
  Guarantees
  of Excluded Subsidiaries

  	
  75

  
	
  5.22

  	
  Obligations
  Constitute Senior Debt

  	
  75

  
	
  5.23

  	
  Labor
  Matters

  	
  75

  
	
  ARTICLE VI. AFFIRMATIVE COVENANTS

  	
  76

  
	
  6.01

  	
  Punctual
  Payment

  	
  76

  
	
  6.02

  	
  Maintenance
  of Office

  	
  76

  
	
  6.03

  	
  Records
  and Accounts

  	
  76

  
	
  6.04

  	
  Financial
  Statements, Certificates and Information

  	
  76

  
	
  6.05

  	
  Legal
  Existence and Conduct of Business

  	
  80

  
	
  6.06

  	
  Maintenance
  of Properties

  	
  80

  
	
  6.07

  	
  Maintenance
  of Insurance

  	
  80

  
	
  6.08

  	
  Taxes

  	
  80

  
	
  6.09

  	
  Inspection
  of Properties, Books and Contracts

  	
  81

  
	
  6.10

  	
  Compliance
  with Applicable Laws, Contracts, Licenses and Permits; Maintenance of
  Material Licenses and Permits

  	
  81

  
	
  6.11

  	
  Environmental
  Indemnification

  	
  82

  
	
  6.12

  	
  Further
  Assurances

  	
  82

  
	
  6.13

  	
  Notice
  of Potential Claims or Litigation

  	
  82

  
	
  6.14

  	
  Notice
  of Certain Events Concerning Insurance, Environmental Claims and Accounting
  Practices

  	
  82

  
	
  6.15

  	
  Notice
  of Default or Material Adverse Effect

  	
  84

  
	
  6.16

  	
  Closure
  and Post Closure Liabilities

  	
  84

  
	
  6.17

  	
  Subsidiaries

  	
  84

  
	
  6.18

  	
  Interest
  Rate Protection

  	
  84

  
	
  6.19

  	
  Additional
  Borrowers

  	
  84

  
	
  ARTICLE VII. NEGATIVE COVENANTS

  	
  85

  
	
  7.01

  	
  Liens

  	
  85

  
	
  7.02

  	
  Investments

  	
  86

  
	
  7.03

  	
  Indebtedness

  	
  87

  
	
  7.04

  	
  Mergers;
  Consolidation; Sales

  	
  89

  
	
  7.05

  	
   

  	
  92

  
	
  7.06

  	
  Restricted
  Payments

  	
  92

  
	
  7.07

  	
  Change
  in Nature of Business

  	
  92

  

 

ii

 

	
  7.08

  	
  Transactions
  with Affiliates

  	
  93

  
	
  7.09

  	
  Burdensome
  Agreements; Negative Pledges

  	
  93

  
	
  7.10

  	
  Use of
  Proceeds

  	
  93

  
	
  7.11

  	
  Financial
  Covenants

  	
  93

  
	
  7.12

  	
  Sale
  and Leaseback

  	
  95

  
	
  7.13

  	
  No
  Other Senior Debt

  	
  96

  
	
  7.14

  	
  Actions
  Otherwise Prohibited By Subordinated Debt Or Second Lien Notes

  	
  96

  
	
  7.15

  	
  Employee
  Benefit Plans

  	
  96

  
	
  7.16

  	
  Prepayments
  of Certain Obligations; Modifications of Subordinated Debt

  	
  97

  
	
  7.17

  	
  Upstream
  Limitations

  	
  97

  
	
  7.18

  	
  Modifications
  of Second Lien Note Documents

  	
  97

  
	
  ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

  	
  98

  
	
  8.01

  	
  Events
  of Default

  	
  98

  
	
  8.02

  	
  Remedies
  Upon Event of Default

  	
  101

  
	
  8.03

  	
  Application
  of Funds

  	
  101

  
	
  ARTICLE IX. ADMINISTRATIVE AGENT

  	
  102

  
	
  9.01

  	
  Appointment
  and Authority

  	
  102

  
	
  9.02

  	
  Rights
  as a Lender

  	
  103

  
	
  9.03

  	
  Exculpatory
  Provisions

  	
  103

  
	
  9.04

  	
  Reliance
  by Administrative Agent

  	
  105

  
	
  9.05

  	
  Delegation
  of Duties

  	
  105

  
	
  9.06

  	
  Resignation
  of Administrative Agent

  	
  105

  
	
  9.07

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
  107

  
	
  9.08

  	
  No
  Other Duties, Etc.

  	
  107

  
	
  9.09

  	
  Administrative
  Agent May File Proofs of Claim

  	
  107

  
	
  9.10

  	
  Collateral
  Matters

  	
  108

  
	
  9.11

  	
  Secured
  Cash Management Agreements and Secured Hedge Agreements

  	
  108

  
	
  ARTICLE X. MISCELLANEOUS

  	
  109

  
	
  10.01

  	
  Amendments,
  Etc.

  	
  109

  
	
  10.02

  	
  Notices;
  Effectiveness; Electronic Communication

  	
  110

  
	
  10.03

  	
  No
  Waiver; Cumulative Remedies

  	
  113

  
	
  10.04

  	
  Expenses;
  Indemnity; Damage Waiver

  	
  113

  
	
  10.05

  	
  Payments
  Set Aside

  	
  116

  
	
  10.06

  	
  Successors
  and Assigns

  	
  116

  
	
  10.07

  	
  Treatment
  of Certain Information; Confidentiality

  	
  119

  
	
  10.08

  	
  Right
  of Setoff

  	
  120

  
	
  10.09

  	
  Interest
  Rate Limitation

  	
  121

  
	
  10.10

  	
  Counterparts;
  Integration; Effectiveness

  	
  121

  
	
  10.11

  	
  Survival
  of Representations and Warranties

  	
  121

  
	
  10.12

  	
  Concerning
  Joint and Several Liability of the Borrowers

  	
  122

  
	
  10.13

  	
  Severability

  	
  125

  
	
  10.14

  	
  Replacement
  of Lenders

  	
  125

  
	
  10.15

  	
  Collateral
  Security

  	
  126

  
	
  10.16

  	
  Existing
  Credit Agreement Superseded

  	
  127

  
	
  10.17

  	
  Governing
  Law; Jurisdiction; Etc.

  	
  127

  
	
  10.18

  	
  Waiver
  of Jury Trial

  	
  128

  

 

iii

 

	
  10.19

  	
  No
  Advisory or Fiduciary Responsibility

  	
  128

  
	
  10.20

  	
  USA
  PATRIOT Act Notice

  	
  129

  
	
  10.21

  	
  Designation
  of Parent as the Agent for the Borrowers

  	
  129

  

 

	
  SCHEDULES

  	
   

  
	
  1

  	
  Borrowers

  
	
  2.01

  	
  Commitments
  and Applicable Percentages

  
	
  5.07

  	
  Intellectual
  Property

  
	
  5.08

  	
  Litigation

  
	
  5.13(a)

  	
  Subsidiaries;
  Equity Interests; Capitalization

  
	
  5.13(c)

  	
  Options

  
	
  5.16

  	
  Environmental
  Compliance

  
	
  5.18

  	
  Certain
  Transactions

  
	
  5.23

  	
  Labor
  Matters

  
	
  7.01

  	
  Existing
  Liens

  
	
  7.02

  	
  Existing
  Investments

  
	
  7.03

  	
  Existing
  Indebtedness

  
	
  10.02

  	
  Administrative
  Agent’s Office; Certain Addresses for Notices

  
	
   

  	
   

  
	
  EXHIBITS

  	
   

  
	
   

  	
  Form of

  
	
   

  	
   

  
	
  A-1

  	
  Form of
  Committed Loan Notice

  
	
  A-2

  	
  Form of
  Term B Loan Notice

  
	
  B

  	
  Form of
  Swing Line Loan Notice

  
	
  C-1

  	
  Form of
  Term B Note

  
	
  C-2

  	
  Form of
  Revolving Note

  
	
  C-3

  	
  Form of
  Swing Line Note

  
	
  D

  	
  Form of
  Compliance Certificate

  
	
  E-1

  	
  Form of
  Assignment and Assumption

  
	
  E-2

  	
  Form of
  Administrative Questionnaire

  
	
  F

  	
  Form of
  Subordination Agreement

  
	
  G

  	
  Form of
  Joinder Agreement

  
	
  H

  	
  Form of
  Instrument of Accession

  
	
  I

  	
  Existing
  Letters of Credit

  
	
  J

  	
  Form of Perfection Certificate

  

 

iv

 

SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND TERM LOAN AGREEMENT

 

This SECOND AMENDED AND RESTATED REVOLVING CREDIT AND
TERM LOAN AGREEMENT (this “Agreement”) is entered into as of July 9,
2009, by and among CASELLA WASTE SYSTEMS INC., a Delaware corporation (the “Parent”),
its Subsidiaries (other than the Excluded Subsidiaries and the Non-Borrower
Subsidiaries) listed on Schedule 1 hereto (the Parent and such Subsidiaries
herein collectively referred to as the “Borrowers”), each lender from
time to time party hereto (collectively, the “Lenders” and individually,
a “Lender”), and BANK OF AMERICA, N.A., as Administrative Agent, Swing
Line Lender and L/C Issuer.

 

WHEREAS, certain of the Borrowers, the Administrative
Agent and certain of the Lenders are parties to that certain Amended and
Restated Revolving Credit and Term Loan Agreement, dated as of April 28,
2005 (as amended, the “Existing Credit Agreement”), pursuant to which
the lenders thereunder have made loans and other extensions of credit to the Borrowers;

 

WHEREAS, the Borrowers have requested, among other
things, that the Lenders amend and restate the Existing Credit Agreement, and
the Lenders are willing to do so on the terms and conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto covenant and agree that on the Closing Date, the Existing
Credit Agreement shall be amended and restated in its entirety by this
Agreement, the terms of which are as follows:

 

ARTICLE I.

DEFINITIONS AND
ACCOUNTING TERMS

 

1.01                        Defined
Terms.  As used in this Agreement, the
following terms shall have the meanings set forth below:

 

“Acceding Lender” has the meaning set forth in Section 2.14(c) hereof.

 

“Accountants” 
has the meaning set forth in Section 5.05(a) hereof.

 

“Acquired Business” means a business acquired
by any Borrower, whether through asset or stock purchases, merger, consolidation
or otherwise, during the period reported in the most recent financial
statements delivered to the Lenders pursuant to Section 6.04
hereof.

 

“Administrative Agent” means Bank of America in
its capacity as administrative agent under any of the Loan Documents, or any
successor administrative agent.

 

“Administrative Agent’s Office” means the
Administrative Agent’s address and, as appropriate, account as set forth on Schedule
10.02, or such other address or account as the Administrative Agent may
from time to time notify to the Borrowers and the Lenders.

 

1

 

“Administrative Questionnaire” means an
Administrative Questionnaire in substantially the form of Exhibit E-2
or any other form approved by the Administrative Agent.

 

“Affiliate” means, with respect to any 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.

 

“Agents” means, collectively, the
Administrative Agent, the Joint Arrangers and Bank of America, in its capacity
as sole book manager.

 

“Aggregate Commitments” means the Revolving
Commitments of the Revolving Lenders, as in effect from time to time, which
amount shall initially equal $177,500,000, as such amount may be reduced or
increased pursuant to the terms hereof.

 

“Agreement” means this Second Amended and
Restated Revolving Credit and Term Loan Agreement.

 

“Applicable Laws” means, collectively, all
international, foreign, federal, state and local statutes, treaties, rules,
guidelines, regulations, ordinances, codes and administrative or judicial
precedents or authorities, including the administration thereof by any
Governmental Authority charged with the enforcement, interpretation or
administration thereof, and all applicable administrative orders, directed
duties, licenses, authorizations and permits of, and agreements with, any
Governmental Authority, in each case whether or not having the force of law,
and with respect to each Borrower or Non-Borrower Subsidiary, such Applicable
Laws as are applicable to such Borrower and Non-Borrower Subsidiary.

 

“Applicable Control Percentage” means (i) as
of the Closing Date, 35%, (ii) in the event that the Senior Subordinated
Debt outstanding on the Closing Date is replaced or refinanced, such higher (or
lower, if applicable) percentage, but not to exceed 49% in any event or
circumstance, as is the percentage of voting power that gives rise to a “change
of control” under any such replacement or refinanced Senior Subordinated Debt
or any other Indebtedness of the Parent or the other Borrowers (whether
incurred as a replacement or refinancing of the Senior Subordinated Debt or
otherwise, and whenever incurred) and (iii) in the event that the Senior
Subordinated Debt outstanding on the Closing Date is retired but is not
replaced or refinanced, then until any such replacement or refinancing (or
other) Indebtedness is incurred (in which event, clause (ii) above shall
apply), 49% (it being the intention of the parties that in no circumstance
shall the Applicable Control Percentage be higher than the percentage of voting
power that gives rise to a “change of control” under any other Indebtedness of
the Parent or the other Borrowers).

 

“Applicable Percentage”
means the Revolving Percentage or the Term B Loan Percentage, as applicable.

 

“Applicable Rate” means (a) in respect of
the Term B Loan, (i) 4.00% per annum for Base Rate Loans and (ii) 5.00%
per annum for Eurodollar Rate Loans, (b) in respect of the Committed
Loans, (i) for the first two complete calendar quarters following the
Closing Date, (x) 3.50% per annum for Base Rate Loans and (y) 4.50%
per annum for Eurodollar Rate Loans and Letter of Credit Fees and (ii) thereafter,
the applicable percentage per annum set forth in the table 

 

2

 

below determined by
reference to the Ratio of Consolidated Total Funded Debt to Consolidated EBITDA
as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.04(c), and (c) in
respect of the Commitment Fee, (i) for the first two complete quarters
following the Closing Date, 0.750% per annum and (ii) thereafter, the
applicable percentage per annum set forth in the table below determined by
reference to the Ratio of Consolidated Total Funded Debt to Consolidated EBITDA
as set forth in the most recent Compliance Certificate received by the
Administrative Agent pursuant to Section 6.04(c):

 

Applicable Rate

 

	
  Pricing

  Level

  	
   

  	
  Ratio of Consolidated

  Total Funded Debt to

  Consolidated EBITDA

  	
   

  	
  Eurodollar Rate

  Loans (and

  Letters of

  Credit)

  	
   

  	
  Base Rate Loans

  	
   

  	
  Commitment Fee

  	
   

  
	
  I

  	
   

  	
  <3.00:1.00

  	
   

  	
  3.25

  	
  %

  	
  2.25

  	
  %

  	
  0.375

  	
  %

  
	
  II

  	
   

  	
  >3.00:1.00 but
  <3.50:1.00

  	
   

  	
  3.50

  	
  %

  	
  2.50

  	
  %

  	
  0.500

  	
  %

  
	
  III

  	
   

  	
  >3.50:1.00 but
  <4.00:1.00

  	
   

  	
  3.75

  	
  %

  	
  2.75

  	
  %

  	
  0.500

  	
  %

  
	
  IV

  	
   

  	
  >4.00:1.00 but
  <4.50:1.00

  	
   

  	
  4.00

  	
  %

  	
  3.00

  	
  %

  	
  0.500

  	
  %

  
	
  V

  	
   

  	
  >4.50:1.00 but
  <5.00:1.00

  	
   

  	
  4.25

  	
  %

  	
  3.25

  	
  %

  	
  0.750

  	
  %

  
	
  VI

  	
   

  	
  >5.00:1.00 but
  <5.50:1.00

  	
   

  	
  4.50

  	
  %

  	
  3.50

  	
  %

  	
  0.750

  	
  %

  
	
  VII

  	
   

  	
  >5.50:1.00

  	
   

  	
  4.75

  	
  %

  	
  3.75

  	
  %

  	
  0.750

  	
  %

  

 

Any increase or decrease in the Applicable
Rate resulting from a change in the ratio of Consolidated Total Funded Debt to
Consolidated EBITDA shall become effective as of the first Business Day
immediately following the date a Compliance Certificate is delivered pursuant
to Section 6.04(c); provided, however, that if a Compliance
Certificate is not delivered within ten (10) days after the time periods
specified in such Section 6.04(c), then Pricing Level VII (as set
forth in the table above for Committed Loans and the Commitment Fee) shall
apply as of the first Business Day thereafter, subject to prospective
adjustment upon actual receipt of such Compliance Certificate.

 

Notwithstanding anything to the contrary contained in
this definition, the determination of the Applicable Rate for any period shall
be subject to the provisions of Section 2.10(b).

 

“Approved Fund” means any Fund that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

 

“Assignee Group” means two or more Eligible
Assignees that are Affiliates of one another or two or more Approved Funds
managed by the same investment advisor.

 

3

 

“Assignment and Assumption” means an assignment
and assumption entered into by a Lender and an Eligible Assignee (with the
consent of any party whose consent is required by Section 10.06(b)),
and accepted by the Administrative Agent, in substantially the form of Exhibit E-1
or any other form approved by the Administrative Agent.

 

“Attributable Indebtedness” means, on any date,
(a) in respect of any Capitalized Leases of any Person, the capitalized
amount thereof that would appear on a balance sheet of such Person prepared as
of such date in accordance with GAAP, and (b) in respect of any
obligations under Synthetic Leases, the capitalized amount of the remaining
lease payments under the relevant lease that would appear on a balance sheet of
such Person prepared as of such date in accordance with GAAP if such lease were
accounted for as a Capitalized Leases.

 

“Audited Financial Statements” means the
audited consolidated balance sheet of the Parent and its Subsidiaries for the
fiscal year ended April 30, 2009, and the related consolidated statements
of operations and cash flows for such fiscal year, including the notes thereto.

 

“Availability Period” means, with respect to
the Committed Loans, the period from and including the Closing Date to the
earliest of (a) the Maturity Date for the Committed Loans, (b) the
date of termination of the Aggregate Commitments in full pursuant to Section 2.06,
and (c) the date of termination of the Revolving Commitment of each
Revolving Lender to make Committed Loans and of the obligation of the L/C Issuer
to make L/C Credit Extensions pursuant to Section 8.02.

 

“Balance Sheet Date” means April 30, 2009.

 

“Bank of America” means Bank of America, N.A.
and its successors.

 

“Base Rate” means for any day a fluctuating
rate per annum equal to the higher of (a) the Federal Funds Rate plus 1/2
of 1%, (b) the BBA Daily Floating Rate LIBOR, as determined by the
Administrative Agent for such day, plus 1.00%, and (c) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its “prime rate.”  The
“prime rate” is a rate set by Bank of America based upon various factors
including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of
America shall take effect at the opening of business on the day specified in
the public announcement of such change.

 

“Base Rate Committed Loan” means a Committed
Loan that is a Base Rate Loan.

 

“Base Rate Loan” means a Loan that bears
interest based on the Base Rate.

 

“BBA Daily Floating Rate LIBOR” means a
fluctuating rate of interest which can change on each banking day.  The rate will be adjusted on each banking day
to equal the British Bankers Association LIBOR Rate (“BBA Daily LIBOR”)
for U.S. Dollar deposits for delivery on the date in question for a one month
term beginning on that date.  The
Administrative Agent will use the BBA Daily LIBOR Rate as published by Reuters
(or other commercially available source providing quotations of BBA Daily LIBOR
as selected by the Administrative Agent from time to time) as determined at
approximately 11:00 a.m. London time two (2) London Banking Days 

 

4

 

prior to the date in
question, as adjusted from time to time in the Administrative Agent’s sole
discretion for reserve requirements, deposit insurance assessment rates and
other regulatory costs.  In the event that
the Board of Governors of the Federal Reserve System shall impose a LIBOR
Reserve Percentage with respect to LIBOR deposits of the Administrative Agent,
then for any period during which such LIBOR Reserve Percentage shall apply,
LIBOR shall be equal to the amount determined above divided by an amount equal
to 1 minus the LIBOR Reserve Percentage. 
If such rate is not available at such time for any reason, then the rate
will be determined by such alternate method as reasonably selected by the
Administrative Agent.  For the purposes
of this definition, “London Banking Day” means a day on which banks in London,
England are open for business and dealing in offshore dollars.

 

“Benefit Amount” has the meaning specified in Section 10.12(f) hereof.

 

“Borrowers” has the meaning specified in the
introductory paragraph hereto.

 

“Borrowers’ Materials” has the meaning
specified in Section 6.04.

 

“Borrowing” means a Committed Borrowing, a
Swing Line Borrowing or the Term B Loan Borrowing, as the context may require.

 

“Business Day” means any day other than a
Saturday, Sunday or other day on which commercial banks are authorized to close
under the Applicable Laws of, or are in fact closed in, the state where the
Administrative Agent’s Office is located and, if such day relates to any
Eurodollar Rate Loan, means any such day on which dealings in Dollar deposits
are conducted by and between banks in the London interbank eurodollar market.

 

“Capital Assets” means fixed assets, both
tangible (such as land, buildings, fixtures, machinery and equipment) and
intangible (such as patents, copyrights, trademarks, franchises and goodwill);
provided that Capital Assets shall not include any item customarily charged
directly to expense or depreciated over a useful life of twelve (12) months or
less in accordance with GAAP.

 

“Capital Expenditures” means amounts paid or
Indebtedness incurred by any Person in connection with (a) the purchase or
lease by such Person of Capital Assets that would be required to be capitalized
and shown on the balance sheet of such Person in accordance with GAAP or (b) the
lease of any assets by such Person as lessee under any Synthetic Lease to the
extent that such assets would have been Capital Assets had the Synthetic Lease
been treated for accounting purposes as a Capitalized Lease; provided  that
solely for purposes of this definition of Capital Expenditures, Capital Assets
shall not include (a) landfill operating and management leases (even if
required to be capitalized under GAAP), (b) any item obtained through a
Permitted Acquisition, (c) increases to Capital Assets as a result of the
application of FAS 143 to asset retirement obligations, (d) assets
acquired under “finance lease obligations” (as set forth in the
financial statements delivered by the Borrowers pursuant to Section 6.04
for the applicable period) and (e) capitalized interest that has been
excluded in connection with construction-in-progress.

 

5

 

“Capitalized Leases” means leases under which
any Borrower is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.

 

“Cash Collateral” has the meaning specified in Section 2.03(g) hereof.

 

“Cash Collateralize” has the meaning specified
in Section 2.03(g) hereof.

 

“Cash Equivalents” means:

 

(a)                                  a marketable
obligation, maturing within one year after issuance thereof, issued, guaranteed
or insured by the government of the United States or an instrumentality or
agency thereof;

 

(b)                                 demand
deposits, certificates of deposit, eurodollar time deposits, banker’s
acceptances, in each case, maturing within one year after issuance thereof, and
overnight bank deposits, in each case, issued by any Lender, or a U.S. national
or state bank or trust company or a European, Canadian or Japanese bank
having capital, surplus and undivided profits of at least $500,000,000 and
whose long-term unsecured debt has a rating of “A” or better by S&P or A2
or better by Moody’s or the equivalent rating by any other nationally
recognized rating agency (provided that the aggregate face amount of all
Investments in certificates of deposit or bankers’ acceptances issued by the
principal offices of or branches of such non-Lender European or Japanese banks
located outside the U.S. shall not at any time exceed 33 1/3% of all
Investments described in this definition);

 

(c)                                  open market
commercial paper, maturing within 270 days after issuance thereof, which
has a rating of A-2 or better by S&P or P-2 or better by Moody’s, or the
equivalent rating by any other nationally recognized rating agency;

 

(d)                                 repurchase
agreements and reverse repurchase agreements with a term not in excess of one
year with any financial institution which has been elected a primary government
securities dealer by the Federal Reserve Board or whose securities are rated
AA- or better by S&P or Aa3 or better by Moody’s or the equivalent
rating by any other nationally recognized rating agency relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America or any agency or instrumentality thereof and backed by the full faith
and credit of the United States of America; and

 

(e)                                  shares of any money market mutual fund
rated at least AAA or the equivalent thereof by S&P or at least Aaa or the
equivalent thereof by Moody’s or any other mutual fund at least 95% of the
assets of which consist of the type specified in clauses (a) through (d) above.

 

“Cash Management Agreement” means any agreement
with a Cash Management Bank to provide cash management services or other bank
products, including treasury, depository, overdraft, credit or debit card,
electronic funds transfer and other cash management arrangements.

 

6

 

“Cash Management Bank” means any Person that,
at the time it enters into a Cash Management Agreement, is a Lender or an
Affiliate of a Lender, in its capacity as a party to such Cash Management
Agreement.

 

“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 law, rule, regulation or treaty, (b) any change in
any law, rule, regulation or treaty or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or
issuance of any request, guideline or directive (whether or not having the
force of law) by any Governmental Authority.

 

“Change of Control” means an event or series of
events by which:

 

(a)                                  any “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person or group shall be deemed
to have “beneficial ownership” of all securities that such person or group has
the right to acquire, whether such right is exercisable immediately or only
after the passage of time (such right, an “option right”)), directly or
indirectly, of securities representing the Applicable Control Percentage or
more of the voting power of the equity securities of the Parent entitled to
vote (without regard to the occurrence of any contingency with respect to such
vote or voting power) for members of the board of directors or equivalent
governing body of the Parent;

 

(b)                                 during any
period of 12 consecutive months, a majority of the members of the board of
directors or other equivalent governing body of the Parent cease to be composed
of individuals (i) who were members of that board or equivalent governing
body on the first day of such period, (ii) whose election or nomination to
that board or equivalent governing body was approved by individuals referred to
in clause (i) above constituting at the time of such election or nomination
at least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority of
that board or equivalent governing body (excluding, in the case of both clause (ii) and
clause (iii), any individual whose initial nomination for, or assumption of
office as, a member of that board or equivalent governing body occurs as a
result of an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group other than
a solicitation for the election of one or more directors by or on behalf of the
board of directors); or

 

(c)                                  any Person or
two or more Persons acting in concert shall have entered into a contract or
agreement with the Parent (or Affiliate of the Parent) that, upon consummation
thereof, will result in its or their acquisition of 49% or more of the voting
power of the equity securities of the Parent entitled to vote (without regard
to the occurrence of any contingency with respect to such vote or voting power)
for members of the board of directors or equivalent governing body of the
Parent (and taking into account all such securities that such Person or Persons
have the right to acquire pursuant to any 

 

7

 

option
right) if such contract or agreement does not provide for the repayment in full
in cash of the Obligations simultaneously with the consummation of the
transactions contemplated by such contract or agreement; or

 

(d)                                 a “change of
control” or any comparable term under, and as defined in, any Subordinated
Debt, the Senior Subordinated Note Documents or the Second Lien Note Documents
(or any replacements or refinancing of any thereof) shall have occurred.

 

“Closing Date” means the first date all the
conditions precedent in Section 4.01 are satisfied or waived in
accordance with Section 10.01.

 

“Code” means the Internal Revenue Code of 1986,
as amended.

 

“Collateral” means all of the property, rights
and interests of the Borrowers that are or become subject to the security
interests and mortgages created by the Security Documents or in which the
Borrowers are required, pursuant to the terms of the Loan Documents, to grant a
security interest or mortgage in favor of the Administrative Agent or the
Lenders.

 

“Commitment Fee” has the meaning specified in Section 2.09(a) hereof.

 

“Committed Borrowing” means a Borrowing
consisting of simultaneous Committed Loans of the same Type and, in the case of
Eurodollar Rate Loans, having the same Interest Period, made by the Revolving
Lenders pursuant to Section 2.01(b) or Section 2.14.

 

“Committed Loan” has the meaning specified in Section 2.01(b).

 

“Committed Loan Notice” means a notice of (a) a
Committed Borrowing, (b) a conversion of Committed Loans from one Type to
the other, or (c) a continuation of Committed Loans that are Eurodollar
Rate Loans, pursuant to Section 2.02(a), which, if in writing,
shall be substantially in the form of Exhibit A.

 

“Commodity Derivatives Obligations” has the
meaning specified in Section 7.03(f) hereof.

 

“Compliance Certificate” means a certificate
substantially in the form of Exhibit D.

 

“Conforming Amendment” has the meaning set
forth in Section 2.14(e) hereof.

 

“Consolidated Adjusted Net Income” means, for
any period, Consolidated Net Income (or Loss) plus, to the extent
deducted and without duplication, (a) for the fiscal year ended April 30,
2009, as reflected in the Audited Financial Statements, (i) non-cash
goodwill impairment charges in an aggregate amount not to exceed $55,300,000, (ii) severance
and restructuring costs in an aggregate amount not to exceed $1,370,000 and (iii) environmental
charges relating to the Borrowers’ Potsdam facility in an aggregate amount not
to exceed $4,400,000; (b) the non-recurring, non-cash write-off of debt
issuance expenses related to the refinancing of Indebtedness under the Existing
Credit Agreement, such write-off not to exceed $878,000, (c) transaction
costs for acquisitions and development projects which are expensed rather than
capitalized (as a result of applying FASB Rule 141 treatment to such
transaction costs); (d) non-cash losses in 

 

8

 

connection with asset
sales, asset impairment charges and abandonment of assets in an aggregate
amount not to exceed $25,000,000 from and after the Closing Date; and (e) non-cash
stock-based compensation expenses under the Borrowers’ employee share-based
compensation plans; and (f) all other non-cash charges reasonably
acceptable to the Administrative Agent; minus (g) non-cash
extraordinary gains on the sale of assets including non-cash gains on the sale
of assets outside the ordinary course of business to the extent included in
Consolidated Net Income (or Loss),
and minus (h) non-cash extraordinary gains resulting from the
application of FAS 133 to the extent included in Consolidated Net Income (or
Loss).

 

“Consolidated EBITDA” means, for any period,
Consolidated Adjusted Net Income plus, to the extent that such charge
was deducted in determining Consolidated Adjusted Net Income in the relevant
period and without duplication, (a) interest expense (including accretion
expense, original issue discount and costs in connection with the early
extinguishment of debt) for such period; (b) income taxes for such period;
(c) amortization expense for such period; and (d) depreciation
expense and depletion expense for such period. 
For all purposes other than calculating the financial covenant set forth
in Section 7.11(a) hereof, the Borrowers may include in
Consolidated EBITDA the EBITDA for the prior twelve (12) months of companies
acquired by the Borrowers during the respective reporting period (without
duplication with respect to the adjustments set forth above) only if (A) the
financial statements of such Acquired Business or new Subsidiary have been
audited, for the period sought to be included, by an independent accounting
firm satisfactory to the Administrative Agent, or (B) the Administrative
Agent consents to such inclusion after being furnished with other acceptable
financial statements. Furthermore, the EBITDA may be further adjusted (other
than when calculating the financial covenant set forth in Section 7.11(a) hereof)
to add-back non-recurring private company expenses which are discontinued upon
such acquisition (such as owner’s compensation), as approved by the
Administrative Agent.  Simultaneously
with the delivery of the financial statements referred to in (A) and (B) above,
a Responsible Officer of the Borrowers shall deliver to the Administrative
Agent a Compliance Certificate and appropriate documentation certifying the
historical operating results, adjustments and balance sheet of the Acquired
Business.

 

“Consolidated Excess
Operating Cash Flow” means, for any fiscal year with respect to the Parent
and its Subsidiaries, an amount equal to the “net cash provided by operating
activities” (as set forth in the financial statements delivered by the
Borrowers pursuant to Section 6.04(a) for such fiscal year)
less $5,000,000, minus (a) Capital Expenditures made during such
fiscal year, minus (b) the cash purchase price paid in such fiscal
year in connection with Permitted Acquisitions made during such fiscal year, minus
(c) cash payments made under “landfill operating lease contracts” and
under “finance leases” (as set forth in the financial statements delivered by
the Borrowers pursuant to Section 6.04(a) for such fiscal
year) in such fiscal year, minus (d) regularly scheduled principal
amortization payments made in cash on any of the Borrowers’ Consolidated Total
Funded Debt, minus (e) mandatory repayments (whether scheduled or
otherwise) of principal of the Term B Loan or to the extent accompanied by a
permanent reduction in the Aggregate Commitments, the Committed Loans, minus
(f) any voluntary prepayments of the principal of the Term B Loan, or to
the extent accompanied by a permanent reduction in the Aggregate Commitments,
the Committed Loans.

 

“Consolidated Net Income (or Loss)” means the
consolidated net income (or loss) of the Parent and its Subsidiaries after
deduction of all expenses, taxes, and other proper charges 

 

9

 

determined in accordance
with GAAP, less (or plus, in the case of losses), to the extent included
therein, (i) gains (or loss) from extraordinary items, (ii) any
income (or loss) from discontinued operations, and (iii) income (or loss)
attributable to any Investment in any Excluded Subsidiaries; provided, however,
that consolidated net income shall not be reduced pursuant to this clause (iii) by
actual cash dividends or distributions received from any Excluded Subsidiary so
long as the amount of such cash dividends and distributions have not been
subsequently reinvested in an Excluded Subsidiary during the applicable period.

 

“Consolidated Senior Funded Debt” means, at any
time of determination, (a) Consolidated Total Funded Debt minus (b) Subordinated
Debt outstanding as of such date plus (c) any and all scheduled
principal payments in respect of Seller Subordinated Debt that will become due
and payable during the next successive period of four (4) fiscal quarters.

 

“Consolidated Total Assets” means the sum of
all assets (“consolidated balance sheet assets”) of the Parent and its
Subsidiaries determined on a consolidated basis in accordance with GAAP,
exclusive, without duplication, of Equity Interests in and the assets of the
Excluded Subsidiaries.

 

“Consolidated Total Funded Debt” means, at any
time of determination with respect to the Borrowers, collectively, without
duplication, whether classified as Indebtedness or otherwise on the
consolidated balance sheet of the Borrowers, (a) the aggregate amount of
Indebtedness for (i) borrowed money or credit obtained or other similar
monetary obligations, direct or indirect, (including (x) the face amount
of the Second Lien Notes and the Senior Subordinated Notes, (y) obligations
under “finance leases” and (z) any unpaid reimbursement obligations with
respect to letters of credit; but excluding any contingent obligations with
respect to letters of credit outstanding), (ii) all obligations evidenced
by notes, bonds, debentures or other similar debt instruments (other than
Performance Bonds and surety and other bonds contemplated by Section 7.03(l)),
(iii) the deferred purchase price of assets (other than trade payables
incurred in the ordinary course of business and holdbacks), (iv) all
Attributable Indebtedness, including, without limitation, Indebtedness with
respect to capitalization of landfill operating contract obligations, to the
extent capitalized under GAAP (but excluding landfill operating leases to the
extent they are characterized as operating leases and not capitalized), plus (b) Indebtedness
of the type referred to in clause (a) of another Person guaranteed by the
any of the Borrowers.

 

“Consolidated Total Interest Expense” means,
for any period, the aggregate amount of interest expense required to be paid or
accrued by the Borrowers during such period on all Indebtedness of the
Borrowers outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease or any Synthetic Lease, and including commitment fees, letter
of credit fees, agency fees, balance deficiency fees and similar fees or
expenses for such period in connection with the borrowing of money, but
excluding therefrom, without duplication, (a) the non-cash amortization of
debt issuance costs, including original issue discount and premium, if any, (b) the
write-off of deferred financing fees and charges in connection with the
repayment of any Indebtedness and in connection with the Existing Credit
Agreement, in each case, that are classified as interest under GAAP, (c) to
the extent financed in connection with any refinancing of Indebtedness, any
call premium required to be paid in cash in connection with such refinancing
and the interest component of any remaining 

 

10

 

original issue discount
on the Indebtedness so refinanced, and (d) dividends on preferred stock
(if any) paid by the Borrowers which are required by GAAP to be treated as
interest expense.

 

“Consulting Engineer” means an environmental
consulting firm reasonably acceptable to the Administrative Agent.

 

“Contractual Obligation” means, as to any Person,
any provision of any security issued by such Person or of any agreement,
instrument or other undertaking to which such Person is a party or by which it
or any of its property is bound.

 

“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 meanings correlative thereto.

 

“Credit Extension” means each of the following:
(a) a Borrowing and (b) an L/C Credit Extension.

 

“Debtor Relief Laws” means the Bankruptcy Code
of the United States, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement,
receivership, insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.

 

“Default” means any event or condition that constitutes
an Event of Default or that, with the giving of any notice, the passage of
time, or both, would be an Event of Default.

 

“Default Rate” means (a) with respect to
any Loan, the interest rate otherwise applicable to such Loan plus 2% per
annum, (b) with respect to the Letter of Credit Fee, the Letter of Credit
Percentage used in determining such Letter of Credit Fee plus 2% per annum, and
(c) with respect to all other Obligations under this Agreement, an
interest rate equal to the Base Rate plus the Applicable Rate otherwise
applicable to portions of the Term B Loan bearing interest based on the Base
Rate plus 2% per annum.

 

“Defaulting Lender” means any Lender that (a) has
failed to fund any portion of the Term B Loan, the Committed Loans, participations
in L/C Obligations or participations in Swing Line Loans required to be funded
by it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative
Agent or any other Lender any other amount required to be paid by it hereunder
within one Business Day of the date when due, unless the subject of a good
faith dispute, or (c) has been deemed insolvent or become the subject of a
bankruptcy, receivership or insolvency proceeding.

 

“De Minimis Subsidiaries” means any Subsidiary
of the Parent whose assets and annual gross revenues do not, in each case,
exceed $1,000,000; provided that (i) the aggregate assets of all
such Subsidiaries taken as a whole shall not exceed $2,000,000, and (ii) the
aggregate annual gross revenues of all such Subsidiaries taken as a whole shall
not exceed $2,000,000.  Schedule 5.13(a) lists
all of the De Minimus Subsidiaries as of the Closing Date.

 

11

 

“Disposition” or “Dispose” means the
sale, transfer, license, lease or other disposition (including any sale and
leaseback transaction) of any property by any Person (or the grant of any
option or other right to do any of the foregoing), including any sale,
assignment, transfer or other disposal, with or without recourse, of any notes
or accounts receivable or any rights and claims associated therewith.

 

“Distribution” means the declaration or payment
of any dividend or other distribution (whether in cash, securities or other
property) on or in respect of any Equity Interest of any Person, other than
dividends payable solely in shares of common stock of such Person; the
purchase, redemption, defeasance, retirement or other acquisition, cancellation
or termination of any Equity Interests of such Person, directly or indirectly
through a Subsidiary of such Person or otherwise and whether in the form of
increases in the liquidation value of such Equity Interests or otherwise
(including the setting apart of assets for a sinking or other analogous fund to
be used for such purpose); the return of capital by any Person to its
shareholders, partners or members (or the equivalent thereof) as such; or any
other distribution on or in respect of any Equity Interests of such Person.

 

“Dollar” and “$” mean lawful money of
the United States.

 

“Domestic Subsidiary” means any Subsidiary that
is organized under the laws of any political subdivision of the United States.

 

“Eligible Assignee” means (a) a Lender; (b) an
Affiliate of a Lender; (c) an Approved Fund; and (d) any other Person
(other than a natural person) approved by (i) the Administrative Agent and
(ii) with respect to an assignment of a Revolving Commitment only, the L/C
Issuer and the Swing Line Lender; provided that, unless an Event of
Default has occurred or is continuing, (1) no assignment to a Person
covered under clauses (a), (b) or (c) of this definition shall be
permitted without the approval of the Parent if it would result in increased
costs to the Borrowers, and (2) no assignment to a Person covered under
clause (d)  of this definition shall be permitted without the approval of
the Parent (each such approval not to be unreasonably withheld or delayed); and
provided, further, that notwithstanding the foregoing, in no
event shall any of the Borrowers or any of the Borrowers’ Affiliates or
Subsidiaries or a natural person be an “Eligible Assignee”.

 

“Employee Benefit Plan” means any employee
benefit plan within the meaning of §3(3) of ERISA maintained or contributed
to by any Borrower, any Non-Borrower Subsidiary or any ERISA Affiliate, other
than a Guaranteed Pension Plan or a Multiemployer Plan.

 

“Environmental Compliance Certificate” means a
certificate specifying the nature of a Default or Event of Default relating to
an Environmental matter, the period of existence thereof and what action the
Borrowers propose to take with respect thereto.

 

“Environmental Laws” has the meaning set forth
in Section 5.16(a) hereof.

 

“Environmental Liability” means any liability,
contingent or otherwise (including any liability for damages, costs of
environmental remediation, fines, penalties or indemnities) of any Borrower or
any Non-Borrower Subsidiary directly or indirectly resulting from or based upon
(a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, 

 

12

 

treatment or disposal of
any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the
release or threatened release of any Hazardous Materials into the environment
or (e) any contract, agreement or other consensual arrangement pursuant to
which liability is assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means, with respect to any
Person, all of the shares of capital stock of any class of, or other ownership
or profit interests in, such Person, all of the warrants, options or other
rights for the purchase or acquisition from such Person of shares of capital
stock of (or other ownership or profit interests in) such Person, all of the
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or acquisition from such Person of such shares (or
such other interests), and all of the other ownership or profit interests in
such Person (including partnership, member or trust interests therein), whether
voting or nonvoting, and whether or not such shares, warrants, options, rights
or other interests are outstanding on any date of determination.

 

“ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.

 

“ERISA Affiliate” means any Person which is
treated as a single employer with any Borrower or any Non-Borrower Subsidiary
under §414 of the Code.

 

“ERISA Reportable Event” means a reportable
event with respect to a Guaranteed Pension Plan within the meaning of §4043 of
ERISA and the regulations promulgated thereunder as to which the requirement of
notice has not been waived.

 

“Eurodollar Rate” means, for any Interest
Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the
British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by
Reuters (or other commercially available source providing quotations of BBA
LIBOR as designated by the Administrative Agent from time to time) at
approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.  If such rate is not available at
such time for any reason, then the “Eurodollar Rate” for such Interest Period
shall be the rate per annum determined by the Administrative Agent to be the
rate at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the Eurodollar
Rate Loan being made, continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of America’s London
Branch to major banks in the London interbank eurodollar market at its request
at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the commencement of such Interest Period. 
Notwithstanding the foregoing, in no event shall the Eurodollar Rate
applicable to the Term B Loan be less than 2.00%

 

“Eurodollar Rate Loan” means a Loan that bears
interest at a rate based on the Eurodollar Rate.

 

“Event of Default” has the meaning specified in
Section 8.01.

 

“Exchange Act” has the meaning specified in the
definition of “Securities Law”.

 

13

 

“Excluded Issuance” by any Borrower or any
Non-Borrower Subsidiary means an issuance and sale of Equity Interests in such
Borrower or such Non-Borrower Subsidiary: (a) in connection with, and as
consideration for, a Permitted Acquisition, (b) to another Borrower, (c) from
a Non-Borrower Subsidiary to another Non-Borrower Subsidiary or (d) to
employees, consultants or directors of such Borrower or such Non-Borrower
Subsidiary in connection with the exercise of options under a bona fide stock
option or similar equity incentive plan or in connection with other bona fide
stock related incentives approved by the Board of Directors of the Parent.

 

“Excluded Subsidiaries” means any Subsidiary,
and any joint venture, partnership or other Person in which the Parent or a
Subsidiary has a minority ownership interest, which in each case is designated
by the Parent as an “Excluded Subsidiary” on Schedule 5.13(a), and any
other Person from time to time designated by the Parent as an “Excluded
Subsidiary;” provided, that the Parent may not designate a Person as an
“Excluded Subsidiary” if (a) the Investment made in such Person by the
Borrowers and the Non-Borrower Subsidiaries, together with all Investments made
in other Excluded Subsidiaries by the Borrowers and the Non-Borrower
Subsidiaries would exceed that permitted by Section 7.02(j) hereof,
or (b) such Person would be required to be a guarantor of (i) the
Subordinated Debt or (ii) the Second Lien Notes.

 

“Excluded Taxes” means, with respect to the
Administrative Agent, any Lender, the L/C Issuer or any other recipient of any
payment to be made by or on account of any obligation of the Borrowers
hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net
income), by the jurisdiction (or any political subdivision thereof) under the
Applicable Laws of which such recipient is organized or in which its principal
office is located or, in the case of any Lender, in which its Lending Office is
located or by any jurisdiction as a result of a present or former connection
between such recipient and the jurisdiction imposing such tax (or any political
subdivision thereof), other than any such connection arising solely from such
recipient having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any other Loan Document, (b) any
branch profits taxes imposed by the United States or any similar tax imposed by
any other jurisdiction in which any of the Borrowers is located, (c) any
backup withholding tax that is required by the Code to be withheld from amounts
payable to a Lender that has failed to comply with clause (A) of Section 3.01(e)(ii),
and (d) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrowers under Section 10.14), any United
States withholding tax that (i) is required to be imposed on amounts
payable to such Foreign Lender pursuant to the Applicable Laws in force at the
time such Foreign Lender becomes a party hereto (or designates a new Lending
Office) or (ii) is attributable to such Foreign Lender’s failure or
inability (other than as a result of a Change in Law) to comply with clause (B) of
Section 3.01(e)(ii), except to the extent that such Foreign Lender
(or its assignor, if any) was entitled, at the time of designation of a new
Lending Office (or assignment), to receive additional amounts from the
Borrowers with respect to such withholding tax pursuant to Section 3.01(a)(ii).

 

“Existing Credit Agreement” has the meaning
specified in the first recital hereto.

 

“Existing Letters of Credit” means all “Letters
of Credit” (as defined in the Existing Credit Agreement) set forth in Exhibit I
hereto.

 

14

 

“Federal Funds Rate” means, for any day, the
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal Reserve Bank of
New York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is
so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate (rounded upward, if necessary, to a whole
multiple of 1/100 of 1%) charged to Bank of America on such day on such
transactions as determined by the Administrative Agent.

 

“Fee Letter” means the letter agreement, dated June 12,
2009, among the Borrowers, the Administrative Agent and Banc of America
Securities LLC.

 

“Foreign Lender” means any Lender that is
organized under the Applicable Laws of a jurisdiction other than that in which
the Borrowers are resident for tax purposes (including such a Lender when
acting in the capacity of the L/C Issuer) or any other Lender that is not a
“United States” person within the meaning of Section 7701(a)(30) of the
Code.  For purposes of this definition,
the United States, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.

 

“Foreign Subsidiary” means each Subsidiary of
any Borrower (whether direct or indirect, existing on the date hereof or
acquired or formed hereafter in accordance with the provisions hereof) which is
incorporated under the laws of a jurisdiction other than a state or other
jurisdiction of the United States of America.

 

“FRB” means the Board of Governors of the
Federal Reserve System of the United States.

 

“Fronting Fee” has the meaning specified in Section 2.03(i)(iii) hereto.

 

“Fund” means any Person (other than a natural
person) that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course of its business.

 

“GAAP” means generally accepted accounting
principles in the United States set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.

 

“Governmental Authority” means the government
of the United States or any other nation, or of any political subdivision
thereof, whether 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 such as the
European Union or the European Central Bank).

 

15

 

“Greenfiber” means U.S. GreenFiber LLC, a
Delaware limited liability company in which U.S. Fiber owns a 50% equity
interest.

 

“Guaranteed Pension Plan” means any employee
pension benefit plan within the meaning of §3(2) of ERISA maintained or
contributed to by any Borrower or any ERISA Affiliate the benefits of which are
guaranteed on termination in full or in part by the PBGC pursuant to Title IV
of ERISA, other than a Multiemployer Plan.

 

“Hazardous Materials” means 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) and any waste, hazardous waste, dangerous goods, contaminants,
pollutants, toxic substance, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws.

 

“Hedge Bank” means any Person that, at the time
it enters into a Swap Contract required or permitted under Article VI
or VII, is a Lender or an Affiliate of a Lender, in its capacity as a
party to such Swap Contract.

 

“Impacted Lender” means (i) a Defaulting
Lender or (ii) any Lender as to which (a) the Administrative Agent,
L/C Issuer or Swing Line Lender has a good faith belief that such Lender has
defaulted in fulfilling its obligations under one or more syndicated credit
facilities or (b) a Person that Controls such Lender has been deemed
insolvent or becomes the subject of a bankruptcy, receivership or insolvency
proceedings.

 

“Increase Closing Date” has the meaning set
forth in Section 2.14(d) hereof.

 

“Indebtedness” means, as to any Person and
whether recourse is secured by or is otherwise available against all or only a
portion of the assets of such Person and whether or not contingent, but without
duplication:

 

(a)                                  every
obligation of such Person for money borrowed,

 

(b)                                 every
obligation of such Person evidenced by bonds, debentures, notes issued by such
Person or other similar instruments, including such obligations incurred in
connection with the acquisition of property, assets or businesses,

 

(c)                                  every
reimbursement obligation of such Person with respect to letters of credit,
bankers’ acceptances or similar facilities issued for the account of such
Person,

 

(d)                                 every
obligation of such Person issued or assumed as the deferred purchase price of
property or services (including securities repurchase agreements but excluding (x) trade
accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue in accordance with their terms or the Borrowers’
normal or ordinary business practices or which are being contested in good
faith and holdbacks, and (y) guaranteed or contingent royalty payments
made in connection with the purchase or operation of landfills and other types
of disposal facilities),

 

(e)                                  every
obligation of such Person under any Capitalized Lease,

 

16

 

(f)                                    every
obligation of such Person under any Synthetic Lease,

 

(g)                                 all sales by
such Person of (i) accounts or general intangibles for money due or to
become due, (ii) chattel paper, instruments or documents creating or
evidencing a right to payment of money or (iii) other receivables
(collectively “receivables”), whether pursuant to a purchase facility or
otherwise, other than in connection with the disposition of the business
operations of such Person relating thereto or a disposition of defaulted
receivables for collection and not as a financing arrangement, and together
with any obligation of such Person to pay any discount, interest, fees,
indemnities, penalties, recourse, expenses or other amounts in connection
therewith,

 

(h)                                 every
obligation of such Person (an “equity related purchase obligation”) to
purchase, redeem, retire or otherwise acquire for value any Equity Interests of
any class issued by such Person, any warrants, options or other rights to
acquire any such shares, or any rights measured by the value of such shares,
warrants, options or other rights,

 

(i)                                     every
obligation of such Person under Swap Contracts,

 

(j)                                     every
obligation in respect of Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent that such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent that the terms of
such Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under Applicable Law,

 

(k)                                  every
obligation, contingent or otherwise, of such Person guaranteeing, or having the
economic effect of guarantying or otherwise acting as surety for, any
obligation of a type described in any of clauses (a) through (j) (the
“primary obligation”) of another Person (the “primary obligor”),
in any manner, whether directly or indirectly, and including, without
limitation, any obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase of) any security for the payment of such
primary obligation, (ii) to purchase property, securities or services for
the purpose of assuring the payment of such primary obligation, or (iii) to
maintain working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor to pay
such primary obligation.

 

The “amount” or “principal amount” of any Indebtedness
at any time of determination represented by (t) any Indebtedness, issued
at a price that is less than the principal amount at maturity thereof, shall,
except as otherwise expressly set forth herein, be the amount of the liability
in respect thereof determined in accordance with GAAP, (u) any Capitalized
Lease shall be the principal component of the aggregate of the rentals
obligation under such Capitalized Lease payable over the term thereof that is
not subject to termination by the lessee, (v) any sale of receivables
shall be the amount of unrecovered capital or principal investment of the
purchaser (other than the Borrowers or any of their wholly-owned Subsidiaries)
thereof, excluding amounts representative of yield or interest earned on such
investment, (w) any Synthetic Lease shall be the stipulated loss value,
termination value or other equivalent amount, (x) any Swap Contract on any
date shall be the Swap Termination Value thereof as of such date, 

 

17

 

(y) any equity related purchase obligation shall
be the maximum fixed redemption or purchase price thereof that is payable upon
a mandatory redemption or purchase of such equity inclusive of any accrued and
unpaid dividends to be comprised in such redemption or purchase price and (z) any
guarantee or other contingent liability referred to in clause (k) shall be
an amount equal to the stated or determinable amount of the primary obligation
in respect of which such guaranty or other contingent obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith based upon the principles set forth in
this paragraph.

 

“Indemnified Taxes” means Taxes other than
Excluded Taxes and Other Taxes.

 

“Indemnitee” has the meaning specified in Section 10.04(b).

 

“Information” has the meaning specified in Section 10.07.

 

“Information Memorandum” means the June, 2009
confidential information memorandum used by the Joint Arrangers in connection
with the syndication of the Loans.

 

“Instrument of Accession” has the meaning set
forth in Section 2.14(c) hereof.

 

“Insurance Authorization Letter” means any
letter from the Borrowers directing the carriers of its insurance (other than
liability insurance) to pay the proceeds of such insurance to the Administrative
Agent, as first loss payee thereunder.

 

“Insurance Subsidiary”
means any wholly-owned Subsidiary of the Parent organized and operated as a
captive insurance subsidiary under the laws of any state or jurisdiction of the
United States.

 

“Intellectual Property Security Agreement”
means the Intellectual Property Security Agreement, dated as of the Closing
Date, among the Borrowers and the Administrative Agent.

 

“Intercreditor Agreement” means the
Intercreditor Agreement, dated as of the Closing Date, by and among Bank of
America, as first lien agent, Wilmington Trust Company, as second lien agent,
and the Borrowers.

 

“Interest Payment Date” means, (a) as to
any Loan other than a Base Rate Loan, the last day of each Interest Period
applicable to such Loan and the Maturity Date applicable to such Loan; provided,
however, that if any Interest Period for a Eurodollar Rate Loan exceeds
three months, the respective dates that fall every three months after the
beginning of such Interest Period shall also be Interest Payment Dates; and (b) as
to any Base Rate Loan (including a Swing Line Loan), the last Business Day of
each March, June September and December and the Maturity Date
applicable to such Loan.

 

“Interest Period” means, as to each Eurodollar
Rate Loan, the period commencing on the date such Eurodollar Rate Loan is
disbursed or converted to or continued as a Eurodollar Rate Loan and ending on
the date one, two, three or six months thereafter, as selected by the Borrowers
in their Committed Loan Notice or Term B Loan Notice, as the case may be; provided
that:

 

18

 

(i)                                     any Interest
Period that would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;

 

(ii)                                  any Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and

 

(iii)                               no Interest
Period shall extend beyond the Maturity Date applicable to such Loan.

 

“Investment” means all expenditures made and
all liabilities incurred (contingently or otherwise) for the acquisition (or
assumption, as applicable in the case of Indebtedness or other liabilities) of
stock or other Equity Interests, assets constituting a business unit or all or
a substantial part of the business of, a Person, or Indebtedness of, or the
amount of loans, advances, capital contributions or transfers of property to,
or in respect of any guarantees (or other commitments as described under
Indebtedness), or obligations of, any Person. 
In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a
guaranty 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 Indebtedness 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 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 or (as the case may be) added
from the aggregate amount of Investments any decrease or increase in the value
thereof.

 

“IRBs” means industrial revenue bonds or solid
waste disposal bonds issued by or at the request of the Borrowers.

 

“ISP” means, with respect to any Letter of
Credit, the “International Standby Practices 1998” published by the Institute
of International Banking Law & Practice, Inc. (or such later
version thereof as may be in effect at the time of issuance).

 

“Issuer Documents” means with respect to any
Letter of Credit, the Letter of Credit Application, and any other document,
agreement and instrument entered into by the L/C Issuer and any Borrower (or
any Subsidiary) or in favor of the L/C Issuer and relating to any such Letter
of Credit.

 

“Joinder Agreement” has the meaning specified
in Section 6.19 hereof.

 

“Joint Arrangers” means, collectively, Banc of
America Securities LLC and Comerica Bank, each in their respective capacity as
a joint arranger.

 

19

 

“L/C Advance” means, with respect to any
Revolving Lender, such Revolving Lender’s funding of its participation in any
L/C Borrowing in accordance with its Revolving Percentage.

 

“L/C Borrowing” means an extension of credit
resulting from a drawing under any Letter of Credit which has not been
reimbursed on the date when made or refinanced as a Committed Borrowing.

 

“L/C Credit Extension” means, with respect to
any Letter of Credit, the issuance thereof or extension of the expiry date
thereof, or the increase of the amount thereof.

 

“L/C Issuer” means Bank of America in its
capacity as issuer of Letters of Credit hereunder, or any successor issuer of
Letters of Credit hereunder.

 

“L/C Obligations” means, as at any date of
determination, the aggregate Maximum Drawing Amount plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings.

 

“L/C Supported IRBs” means IRBs backed by
Letters of Credit issued hereunder.

 

“Lender” has the meaning specified in the
introductory paragraph hereto and, as the context requires, includes the Swing
Line Lender.

 

“Lending Office” means, as to any Lender, the
office or offices of such Lender described as such in such Lender’s
Administrative Questionnaire, or such other office or offices as a Lender may
from time to time notify the Borrowers and the Administrative Agent.

 

“Letter of Credit” means any commercial or
standby letter of credit issued hereunder and shall include the Existing
Letters of Credit.

 

“Letter of Credit Application” means an
application and agreement for the issuance or amendment of a Letter of Credit
in the form from time to time in use by the L/C Issuer.

 

“Letter of Credit Expiration Date” means the
day that is seven (7) days prior to the Maturity Date then in effect for
the Committed Loans (or, if such day is not a Business Day, the next preceding
Business Day).

 

“Letter of Credit Fee” has the meaning
specified in Section 2.03(i)(i).

 

“Letter of Credit Percentage” means the
percentage per annum equal to the Applicable Rate, as in effect from time to
time, as set forth in the column “Eurodollar Rate Loans (and Letters of
Credit)” in the table set forth in the definition of “Applicable Rate” above.

 

“Lien” means any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or other security interest or preferential arrangement in the
nature of a security interest of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, any easement, right of way
or other encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).

 

20

 

“Loan” means an extension of credit by a Lender
to the Borrowers under Article II in the form of the Term B Loan, a
Committed Loan or a Swing Line Loan, and “Loans” shall mean all of such
extensions of credit collectively.

 

“Loan Documents” means this Agreement, each
Note, each Issuer Document, the Letters of Credit, the Security Documents, the
Intercreditor Agreement, the Subordination Agreements, and any documents,
instruments or agreements executed in connection with any of the foregoing,
each as amended, modified, supplemented, or replaced from time to time.

 

“Loan Notice” means a Committed Loan Notice or
a Term B Loan Notice.

 

“Material Adverse Effect” means (a) a
material adverse change in, or material adverse effect upon, the operations,
business, properties or financial condition of the Borrowers taken as a whole; (b) a
material adverse impairment of the rights and remedies of the Administrative
Agent or any Lender under any Loan Document, or of the ability of the
Borrowers, taken as a whole, to repay the Loans; or (c) a material adverse
effect upon the legality, validity, binding effect or enforceability against
any Borrower of any Loan Document to which it is a party.

 

“Maturity Date” means (a) with respect to
the Committed Loans, December 31, 2012, and (b) with respect to the
Term B Loan, April 9, 2014 or such earlier date as may be required by Section 2.07(c) hereof.

 

“Maximum Drawing Amount” means the maximum
drawing amount that beneficiaries may at any time draw under Letters of Credit,
as such aggregate amount may be reduced from time to time pursuant to the terms
of such Letters of Credit.  For purposes
of computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“Multiemployer Plan” means any multiemployer
plan within the meaning of §3(37) of ERISA maintained or contributed to by any
Borrower or any ERISA Affiliate.

 

“NELS” means New England Landfill Solutions,
LLC.

 

“Net Cash Proceeds” means (1) the
aggregate cash proceeds received by any Borrower or Non-Borrower Subsidiary in
respect of any Disposition, net of (a) the direct costs relating to such
Disposition, including, without limitation, (i) legal, accounting and
investment banking fees, and sales commissions, (ii) any relocation
expenses incurred as a result thereof, and (iii) taxes paid or payable as
a result thereof, in each case after taking into account any available tax
credits or deductions and any tax sharing arrangements, (b) amounts
required to be applied to the repayment of Indebtedness, other than
subordinated Indebtedness, secured by a prior or senior Lien on the specific
asset or assets being financed that were the subject of such Disposition, which
Lien is permitted hereunder, (c) if the assets subject to such Disposition
were financed by IRBs, amounts required to be applied to the repayment of such
IRBs (or to the repayment of Indebtedness funded by such IRBs) with the
proceeds of such Disposition by the terms of such IRBs or such Indebtedness and
(d) appropriate amounts to be provided by any Borrower or Non-

 

21

 

Borrower Subsidiary, as
the case may be, as a reserve required in accordance with GAAP against any
adjustment in the sale price of such asset or assets or liabilities associated
with such Disposition and retained by any Borrower or Non-Borrower Subsidiary,
as the case may be, after such Disposition, including, without limitation,
pensions and other postemployment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations
associated with such Disposition, all as reflected in an Officers’ Certificate
delivered to the Administrative Agent,
provided, however,
that any amounts remaining after adjustments, revaluations or liquidations of
such reserves shall constitute Net Cash Proceeds; and (2) with respect to
the sale or issuance of any Equity Interests by any Borrower or any
Non-Borrower Subsidiary, or the incurrence or issuance of any Indebtedness by
any Borrower or any Non-Borrower Subsidiary, the excess of (i) the sum of
the cash and Cash Equivalents received in connection with such transaction over
(ii) the underwriting discounts and commissions, and other reasonable and
customary out-of-pocket expenses, incurred by such Borrower or such
Non-Borrower Subsidiary in connection therewith.

 

“Non-Borrower Subsidiary” means the De Minimis
Subsidiaries, the Foreign Subsidiaries and NELS, all of which as of the date
hereof are listed on Schedule 5.13(a) hereto, and any Insurance
Subsidiary formed after the date hereof and which is disclosed to the
Administrative Agent in writing; provided, that if any Non-Borrower
Subsidiary becomes, or is required to become, a guarantor under the Senior
Subordinated Notes or the Second Lien Notes it shall cease to be a Non-Borrower
Subsidiary hereunder.

 

“Note” means a Term B Note or a Revolving Note,
as the context may require.

 

“Obligations” means all advances to, and debts,
liabilities, obligations, covenants and duties of, any Borrower arising under
any Loan Document or otherwise with respect to any Loan or Letter of Credit,
whether direct or indirect (including those acquired by assumption), absolute
or contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against
any Borrower or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding and all
obligations of any Borrower under any Secured Cash Management Agreement and any
Secured Hedge Agreement.

 

“Organization Documents” means, (a) with
respect to any corporation, the certificate or articles of incorporation and
the bylaws (or equivalent or comparable constitutive documents with respect to
any non-U.S. jurisdiction); (b) with respect to any limited liability
company, the certificate or articles of formation or organization and operating
agreement; and (c) with respect to any partnership, joint venture, trust
or other form of business entity, the partnership, joint venture or other
applicable agreement of formation or organization and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation or organization with the applicable Governmental Authority in the
jurisdiction of its formation or organization, including any certificate or
articles of formation or organization of such entity.

 

“Other Taxes” means all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or 

 

22

 

under any other Loan
Document or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any other Loan Document, except for Excluded
Taxes.

 

“Outstanding Amount” means (i) with
respect to Committed Loans and Swing Line Loans on any date, the aggregate
outstanding principal amount thereof after giving effect to any borrowings and
prepayments or repayments of Committed Loans and Swing Line Loans, as the case
may be, occurring on such date; (ii) with respect to any L/C Obligations
on any date, the aggregate amount of all L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements by the Borrowers of Unreimbursed
Amounts; and (iii) with respect to the Term B Loan on any date, the
aggregate outstanding principal amount of the Term B Loan on such date.

 

“Parent” has the meaning specified in the
introductory paragraph hereto.

 

“Participant” has the meaning specified in Section 10.06(d).

 

“PBGC” means the Pension Benefit Guaranty
Corporation.

 

“Performance Bonds” has the meaning specified
in Section 7.03(d) hereto.

 

“Permitted Acquisitions” has the meaning
specified in Section 7.04(a) hereto.

 

“Permitted Investments” has the meaning
specified in Section 7.02 hereto.

 

“Permitted Liens” has the meaning specified in Section 7.01
hereto

 

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

 

“Platform” has the meaning specified in Section 6.04(h) hereof.

 

“Pledge Agreement” means the Second Amended and
Restated Pledge Agreement, dated as of the Closing Date, among the Borrowers
and the Administrative Agent.

 

“Real Property” means all real property
heretofore, now, or hereafter owned or leased by the Borrowers.

 

“Register” has the meaning specified in Section 10.06(c).

 

“Related Parties” means, with respect to any
Person, such Person’s Affiliates and the partners, directors, officers,
employees, agents, trustees and advisors of such Person and of such Person’s
Affiliates.

 

“Release” means the broader of (i) the
meaning specified for the term “Release” (or “Released”) in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
§§9601 et seq., as amended (“CERCLA”) and (ii) the meaning
specified for the term “Disposal” (or “Disposed”) in the Resource
Conservation and Recovery Act of 1976, 42 

 

23

 

U.S.C. §§6901 et seq., as
amended (“RCRA”) and regulations promulgated thereunder; provided, that
in the event either CERCLA or RCRA is amended so as to broaden the meaning of
any term defined thereby, such broader meaning shall apply as of the effective
date of such amendment and provided further, to the extent that the Applicable
Laws of a state or province (or the Applicable Laws of Canada applicable
therein) wherein the property lies establishes a meaning for “Release” or
“Disposal” or any analogous term which is broader than specified in either
CERCLA or RCRA, such broader meaning shall apply.

 

“Request for Credit Extension” means (a) with
respect to a Borrowing, conversion or continuation of Loans, a Committed Loan
Notice or Term B Loan Notice, as the case may be, (b) with respect to an
L/C Credit Extension, a Letter of Credit Application, and (c) with respect
to a Swing Line Loan, a Swing Line Loan Notice.

 

“Required Lenders” means, as of any date of
determination, any combination of Lenders having more than fifty percent (50%)
of the sum of (a) the Aggregate Commitments plus (b) the
outstanding principal amount of the Term B Loan (with the aggregate amount of
any Lender’s risk participation and funded participation in L/C Obligations and
Swing Line Loans being deemed “held” by such Lender for purposes of this definition);
provided that for purposes of this definition,  “Lender” shall not include any Defaulting
Lender; and provided, further, that if the Revolving Commitments
have been terminated or if the Maturity Date for the Committed Loans has
occurred, any combination of Lenders holding more than fifty percent (50%) of
the Total Outstandings.

 

“Responsible Officer” means the chief executive
officer, president, chief financial officer, director of finance, director of
financial operations, treasurer or assistant treasurer of the Parent.  Any document delivered hereunder that is
signed by a Responsible Officer shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the
part of any Borrower and such Responsible Officer shall be conclusively
presumed to have acted on behalf of such Borrower.

 

“Restricted Payment” means, in relation to the
Borrowers and the Non-Borrower Subsidiaries, any (a) Distribution, (b) payment
by any Borrower or Non-Borrower Subsidiaries to (i) such Borrower’s or
such Non-Borrower Subsidiary’s shareholders (or other equity holders), in each
case, other than to another Borrower, or (ii) to any Affiliate of such
Borrower or such Non-Borrower Subsidiary or any Affiliate of such Borrower’s or
such Non-Borrower Subsidiary’s shareholders (or other equity holders), in each
case, other than to another Borrower or (c) derivatives or other
transactions with any financial institution, commodities or stock exchange or
clearinghouse (a “Derivatives Counterparty”) obligating such Borrower or
such Non-Borrower Subsidiary to make payments to such Derivatives Counterparty
as a result of any change in market value of any capital stock of such Borrower
or such Non-Borrower Subsidiary.

 

“Revolving Commitment” means, as to each
Revolving Lender, its obligation to (a) make Committed Loans to the
Borrowers pursuant to Section 2.01(b), (b) purchase
participations in L/C Obligations, and (c) purchase participations in
Swing Line Loans, in an aggregate principal amount at any one time outstanding
not to exceed the amount set forth opposite such Revolving Lender’s name on Schedule
2.01 or in the Assignment and Assumption or the Instrument of 

 

24

 

Accession pursuant to which
such Revolving Lender becomes a party hereto, as applicable, as such amount may
be adjusted from time to time in accordance with this Agreement.

 

“Revolving Lenders” means the Lenders making
Committed Loans.

 

“Revolving Note” means a promissory note made
by the Borrower in favor of a Revolving Lender evidencing Committed Loans or
Swing Line Loans, as the case may be, made by such Revolving Lender,
substantially in the form of Exhibit C-2 or Exhibit C-3, as
applicable.

 

“Revolving Percentage” means with respect to
any Revolving Lender as of any date, such Revolving Lender’s portion of and
participating interest in, calculated as a percentage (carried out to the ninth
decimal place), of (a) the sum of (i) the outstanding principal
amount of all Committed Loans on such date, plus (ii) the
outstanding principal amount of all Swing Line Loans on such date, plus (iii) all
L/C Obligations on such date (collectively, the “Revolving Percentage”).  If the Revolving Commitment of any Revolving
Lender to make Committed Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to Section 8.02(a) or
if the Aggregate Commitments have expired, then the Revolving Percentage of
each Revolving Lender shall be determined based on the Revolving Percentage of
such Revolving Lender most recently in effect, giving effect to any subsequent
assignments.  The initial Applicable
Percentage of each Revolving Lender is set forth opposite the name of such
Revolving Lender on Schedule 2.01 or in the Assignment and Assumption or
Instrument of Accession, as the case may be, pursuant to which such Revolving
Lender becomes a party hereto, as applicable.

 

“Sarbanes-Oxley” means the Sarbanes-Oxley Act
of 2002, as amended.

 

“SEC” means the Securities and Exchange
Commission, or any Governmental Authority succeeding to any of its principal
functions.

 

“Second Lien Note Documents” means the Second
Lien Notes, the Second Lien Notes Indenture and the Second Lien Security
Documents, in each case including any successor or replacement agreements or
documents entered into pursuant to a renewal, extension or refinancing
permitted under Section 7.03(j).

 

“Second Lien Notes” means the Borrowers’ 11%
Senior Second Lien Notes Due 2014, issued pursuant to the Second Lien Notes
Indenture and any notes issued by the Borrowers in exchange for, and as
contemplated by, the Second Lien Notes and the related registration rights
agreement with substantially identical terms as the Second Lien Notes.

 

“Second Lien Notes Indenture” means the
Indenture under which the Second Lien Notes were issued, among the Borrowers
and the trustee named therein from time to time, as in effect on the Closing
Date and as amended, restated, supplemented or otherwise modified from time to
time in accordance with the requirements thereof and of this Agreement.

 

“Second Lien Notes Offering Memorandum” means
the Offering Memorandum, dated July 1, 2009, in respect of the Second Lien
Notes.

 

25

 

“Second Lien Security Documents” means the
“Security Documents” as defined in the Second Lien Notes Indenture.

 

“Secured Cash Management Agreement” means any
Cash Management Agreement that is entered into by and between any Borrower and
any Cash Management Bank.

 

“Secured Hedge Agreement” means any Swap
Contract required or permitted under Article VI or VII that
is entered into by and between any Borrower and any Hedge Bank.

 

“Security Agreement” means the Second Amended
and Restated Security Agreement, dated as of the Closing Date, among the
Borrowers and the Administrative Agent.

 

“Security Documents” means the Security
Agreement, the Pledge Agreement, the Intellectual Property Security Agreement,
each as amended and in effect from time to time, and any additional documents
evidencing or perfecting the Administrative Agent’s Lien on the assets of the
applicable Borrowers for the benefit of the applicable Lenders (including
Uniform Commercial Code financing statements).

 

“Securities Laws” means the Securities Act of
1933, the Securities Exchange Act of 1934 (the “Exchange Act”),
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

 

“Seller Subordinated Debt” means Indebtedness
of any of the Borrowers (other than the Senior Subordinated Debt) which has
been subordinated and made junior to the payment and performance in full in
cash of the Obligations, and evidenced as such by a subordination agreement
containing subordination provisions substantially in the form of Exhibit F
hereto (the “Subordination Agreement”); provided that (a) at
the time such Seller Subordinated Debt is incurred, no Default or Event of
Default has occurred or would occur as a result of such incurrence, and (b) the
documentation evidencing such Seller Subordinated Debt shall have been
delivered to the Administrative Agent and shall contain all of the following
characteristics:  (i) it shall be
unsecured, (ii) it shall bear interest at a rate not to exceed the market
rate, (iii) it shall not require unscheduled principal repayments thereof
prior to the maturity date of such debt, (iv) if it has any covenants,
such covenants (including covenants relating to incurrence of indebtedness)
shall be meaningfully less restrictive than those set forth herein, (v) it
shall have no restrictions on the Borrowers’ ability to grant liens securing
indebtedness ranking senior to such Seller Subordinated Debt, (vi) it
shall permit the incurrence of senior indebtedness under this Credit Agreement,
(vii) it may be cross-accelerated with the Obligations and other senior
indebtedness of the Borrowers (but shall not be cross-defaulted except for
payment defaults which the senior lenders have not waived) and may be
accelerated upon bankruptcy, (viii) it shall provide for the complete,
automatic and unconditional release of any and all guarantees of such Seller
Subordinated Debt granted by any Borrower in the event of the sale by any
Person of such Borrower or the sale by any Person of all or substantially all
of such Borrower’s assets (including in the case of a foreclosure), (ix) it
shall provide that (A) upon any payment or distribution of the assets of
the Borrowers (including after the commencement of a bankruptcy proceeding) of
any kind or character, all of the Obligations (including interest accruing
after the commencement of 

 

26

 

any bankruptcy proceeding
at the rate specified for the applicable Obligation, whether or not such
interest is an allowable claim in any such proceeding) shall be paid in full in
cash prior to any payment being received by the holders of the Seller
Subordinated Debt and (B) until all of the Obligations (including the interest
described in subclause (A) above) are paid in full in cash, any payment or
distribution to which the holders of the Seller Subordinated Debt would be
entitled but for the subordination provisions of the type described in clauses (x) and
(xi) hereof shall be made to the holders of the Obligations, (x) it shall
provide that in the event of a payment default under Section 8.01(a) and
(b) hereof, the Borrowers shall not be required to pay the
principal of, or any interest, fees and all other amounts payable with respect
to the Seller Subordinated Debt until the Obligations have been paid in full in
cash, (xi) it shall provide that in the event of any other Event of Default,
the Lenders shall be permitted to block with respect to the Seller Subordinated
Debt for a period of 180 days (A) payments of principal, interest, fees
and all other amounts payable, and (B) enforcement of remedies for Seller
Subordinated Debt in excess of $1,000,000, and (xii) it shall acknowledge that
none of the provisions outlined in part (b) of this definition can be
amended, modified or otherwise altered without the prior written consent of the
Required Lenders.

 

“Senior Subordinated Debt” means (a) the
existing senior subordinated Indebtedness of the Borrowers evidenced by the
Senior Subordinated Debt Documents in the original aggregate principal amount
of $195,000,000 and (b) any other senior subordinated debt permitted under
Section 7.03 hereof which shall be on market terms and otherwise
reasonably acceptable to the Required Lenders in all respects.

 

“Senior Subordinated Debt Documents” means the
Senior Subordinated Notes Indenture, the Senior Subordinated Notes and all
other documents, instruments and agreements entered into or executed in
connection therewith or in connection with other Senior Subordinated Debt.

 

“Senior Subordinated Notes” means the 9.75%
Senior Subordinated Notes due 2013 issued by the Parent pursuant to the Senior
Subordinated Notes Indenture.

 

“Senior Subordinated Notes Indenture” means the
Indenture, dated as of January 24, 2003, among the Parent, certain of its
Subsidiaries as guarantors and U.S. Bank National Association as trustee, with
respect to the Senior Subordinated Notes.

 

“Spot Rate” means, with respect to any “first
currency” (as defined in Section 2.15), at any date of
determination thereof, the spot rate of exchange in London that appears on the
display page applicable to such first currency on the Reuters System (or
such other page as may replace such page on such service for the
purpose of displaying the spot rate of exchange in London) for the conversion
of such first currency into the “second currency” (as defined in Section 2.15);
provided, however, that if there shall at any time no longer
exist such a page on such service, the Spot Rate shall be determined by
reference to another similar rate publishing service selected by the
Administrative Agent.

 

“Subordination Agreement” has the meaning specified
in the definition of “Seller Subordinated Debt”.

 

27

 

“Subordinated Debt” means, collectively, the
Senior Subordinated Debt and the Seller Subordinated Debt.

 

“Subsidiary” of a Person means a corporation,
partnership, joint venture, limited liability company or other business entity
of which a majority of the shares of securities or other interests having
ordinary voting power for the election of directors or other governing body
(other than securities or other interests having such power only by reason of
the happening of a contingency) are at the time beneficially owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.  Unless otherwise specified, all references
herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or
Subsidiaries of the Parent.

 

“Swap Contract” means (a) any and all rate
swap transactions, basis swaps, credit derivative transactions, forward rate
transactions, commodity swaps, commodity options, forward commodity contracts,
equity or equity index swaps or options, bond or bond price or bond index swaps
or options or forward bond or forward bond price or forward bond index transactions,
interest rate options, forward foreign exchange transactions, cap transactions,
floor transactions, collar transactions, currency swap transactions,
cross-currency rate swap transactions, currency options, spot contracts, or any
other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any
such transaction is governed by or subject to any master agreement, and (b) any
and all transactions of any kind, and the related confirmations, which are
subject to the terms and conditions of, or governed by, any form of master
agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master
agreement (any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.

 

“Swap Termination Value” means, in respect of
any one or more Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap Contracts, (a) for
any date on or after the date such Swap Contracts have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (b) for any date prior to the date referenced in clause (a),
the amount(s) determined as the mark-to-market value(s) for such Swap
Contracts, as determined based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in such Swap Contracts
(which may include a Lender or any Affiliate of a Lender).

 

“Swing Line” means the revolving credit
facility made available by the Swing Line Lender pursuant to Section 2.04(a).

 

“Swing Line Borrowing” means a borrowing of a
Swing Line Loan pursuant to Section 2.04.

 

“Swing Line Lender” means Bank of America in
its capacity as provider of Swing Line Loans, or any successor swing line
lender hereunder.

 

“Swing Line Loan” has the meaning specified in Section 2.04(a).

 

28

 

“Swing Line Loan Notice” means a notice of a
Swing Line Borrowing pursuant to Section 2.04(b), which, if in
writing, shall be substantially in the form of Exhibit B hereto.

 

“Swing Line Sublimit” means an amount equal to
the lesser of (a) $10,000,000 and (b) the Aggregate Commitments.  The Swing Line Sublimit is part of, and not
in addition to, the Aggregate Commitments.

 

“Synthetic Lease” means any lease of goods or
other property, whether real or personal, which is treated as an operating
lease under GAAP and as a loan or financing for U.S. income tax purposes or
which, upon the application of any Debtor Relief Laws, would be characterized
as indebtedness (without regard to accounting treatment).

 

“Taxes” means all present or future taxes,
levies, imposts, duties, deductions, withholdings (including backup
withholding), assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 

“Term B Lender” means any Lender holding a
portion of the Term B Loan, as set forth in Schedule 2.01 as of the
Closing Date (as such Schedule 2.01 may be amended from time to time),
together with any other Person who becomes an assignee of any rights and
obligations of a Term B Lender.

 

“Term B Loan” means the term loan advanced or
to be advanced in accordance with the Section 2.01(a) in the
original principal amount of $130,000,000, as such amount may be reduced or
increased pursuant to the terms hereof.

 

“Term B Loan Borrowing” means a borrowing
consisting of any portions of the Term B Loan of the same Type and, in the case
of Eurodollar Rate Loans, having the same Interest Period, advanced by the Term
B Lenders pursuant to Section 2.01(b).

 

“Term B Loan Notice” means a notice of (a) a
Term B Loan Borrowing, (b) a conversion of any portion of the Term B Loan
from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be
substantially in the form of Exhibit A-2.

 

“Term B Loan Percentage” means, with respect to
any Term B Lender at any time, the percentage (carried out to the ninth decimal
place) of the Term B Loan represented by the principal amount of such Term B
Lender’s portion of the Outstanding Amount of the Term B Loan at such
time.  The initial Term B Loan Percentage
of each Term B Lender is set forth in Schedule 2.01 or in the Assignment
and Assumption or Instrument of Accession pursuant to which such Term B Lender
becomes a party hereto, as applicable.

 

“Term B Note” means a promissory note made by
the Borrower in favor of a Term B Lender, evidencing a portion of the Term B
Loan made by such Term B Lender, substantially in the form of Exhibit C-1.

 

“Threshold Amount” means $5,000,000.

 

29

 

“Total Facility Amount” means, as at any date
of determination, the sum of (i) the Aggregate Commitments plus (ii) the
aggregate Outstanding Amount of the Term B Loan, as the same may be increased
from time to time pursuant to Section 2.14 hereof or reduced from
time to time in accordance with the terms hereof.  As of the Closing Date, the Total Facility
Amount is equal to $307,500,000, comprised of $177,500,000 in Aggregate Commitments
and $130,000,000 in Outstanding Amount of the Term B Loan.

 

“Total Outstandings” means the aggregate
Outstanding Amount of all Loans and all L/C Obligations.

 

“Total Revolving Outstandings” means the
aggregate Outstanding Amount of Committed Loans, Swing Line Loans and L/C
Obligations.

 

“Type” means, with respect to a Loan, its
character as a Base Rate Loan or a Eurodollar Rate Loan.

 

“UCC” means the Uniform Commercial Code as in
effect in the State of New York; provided that, if perfection or the effect of
perfection or non-perfection or the priority of any security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, “UCC” means the Uniform
Commercial Code as in effect from time to time in such other jurisdiction for
purposes of the provisions hereof relating to such perfection, effect of
perfection or non-perfection or priority.

 

“United States” and “U.S.” mean the
United States of America.

 

“Unreimbursed Amount” has the meaning specified
in Section 2.03(c)(i).

 

“U.S. Fiber” means U.S. Fiber, Inc., a
North Carolina corporation.

 

1.02        Other Interpretive Provisions.  With reference to this Agreement and each
other Loan Document, unless otherwise specified herein or in such other Loan
Document:

 

(a)           The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation.”  The word “will”
shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any
definition of or reference to any agreement, instrument or other document
(including any Organization Document) shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person’s permitted successors and permitted assigns, (iii) the
words “herein,” “hereof” and “hereunder,” and words of
similar import when used in any Loan Document, shall be construed to refer to
such Loan Document in its entirety and not to any particular provision thereof,
(iv) all references in a Loan Document to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, the Loan Document in which such references appear, (v) any
reference to any law 

 

30

 

shall include all statutory and regulatory provisions
consolidating, amending, replacing or interpreting such law and any reference
to any law or regulation shall, unless otherwise specified, refer to such law
or regulation as amended, modified or supplemented from time to time, and (vi) the
words “asset” and “property” shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts and contract rights.

 

(b)           In the computation of periods of time
from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to but
excluding;” and the word “through” means “to and including.”

 

(c)           Section headings herein and in
the other Loan Documents are included for convenience of reference only and
shall not affect the interpretation of this Agreement or any other Loan
Document.

 

1.03        Accounting
Terms.

 

(a)           Generally.  All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.

 

(b)           Changes in GAAP.  If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrowers or the Required Lenders shall so
request, the Administrative Agent and the Borrowers shall negotiate in good faith
to amend such ratio or requirement to preserve the original intent thereof in
light of such change in GAAP (subject to the approval of the Required Lenders);
provided that, until so amended, (i) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein
and (ii) the Borrowers shall provide to the Administrative Agent and the
Lenders financial statements and other documents required under this Agreement
or as reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP.

 

(c)           Consolidation of Variable Interest
Entities.  All references herein to
consolidated financial statements of the Parent and its Subsidiaries or to the
determination of any amount for the Borrowers and their Subsidiaries on a
consolidated basis or any similar reference shall, in each case, be deemed to
include each variable interest entity that the Parents and its Subsidiaries required
to consolidate pursuant to FASB Interpretation No. 46 — Consolidation of
Variable Interest Entities: an interpretation of ARB No. 51 (January 2003)
as if such variable interest entity were a Subsidiary as defined herein.

 

1.04        Rounding.  Any financial ratios required to be
maintained by the Borrowers pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such 

 

31

 

ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).

 

1.05        Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

 

1.06        Letter of Credit Amounts.
Unless otherwise specified herein, the amount of a Letter of Credit at any time
shall be deemed to be the stated amount of such Letter of Credit in effect at
such time; provided, however, that with respect to any Letter of
Credit that, by its terms or the terms of any Issuer Document related thereto,
provides for one or more automatic increases in the stated amount thereof, the
amount of such Letter of Credit shall be deemed to be the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

ARTICLE II.

THE COMMITMENTS AND CREDIT EXTENSIONS

 

2.01        The
Loans.

 

(a)           The Term B Loan Borrowing.  Subject to the terms and conditions set forth
herein, each Term B Lender severally agrees to make a single loan to the
Borrowers on the Closing Date in an amount not to exceed such Term B Lender’s
Term B Percentage, as set forth on Schedule 2.01, of the Term B Loan,
and all of such Term B Lenders’ loans so made constitute the Term B Loan.  Amounts borrowed under this Section 2.01(a) and
repaid or prepaid may not be reborrowed. 
Portions of the Term B Loan may be Base Rate Loans or Eurodollar Rate
Loans as further provided herein.

 

(b)           The Committed Borrowings.  Subject to the terms and conditions set forth
herein, each Revolving Lender severally agrees to make revolving loans (each
such loan, a “Committed Loan”) to the Borrowers from time to time, on
any Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender’s Revolving
Commitment; provided, however, that after giving effect to any
Committed Borrowing, (i) the Total Revolving Outstandings shall not exceed
the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of
the Committed Loans of any Lender, plus such Revolving Lender’s Revolving
Percentage of the Outstanding Amount of all L/C Obligations, plus such
Revolving Lender’s Revolving Percentage of the Outstanding Amount of all Swing Line
Loans shall not exceed such Revolving Lender’s Revolving Commitment.  Within the limits of each Revolving Lender’s
Revolving Commitment, and subject to the other terms and conditions hereof, the
Borrowers may borrow under this Section 2.01(b), prepay under Section 2.05,
and reborrow under this Section 2.01(b).  Committed Loans may be Base Rate Loans or
Eurodollar Rate Loans, as further provided herein.

 

32

 

2.02        Borrowings,
Conversions and Continuations of Loans.

 

(a)           Each Borrowing, each conversion of Loans from one Type
to the other, and each continuation of Eurodollar Rate Loans shall be made upon
the Borrowers’ irrevocable notice to the Administrative Agent, which may be
given by telephone.  Each such notice
must be received by the Administrative Agent not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing
of Base Rate Loans.  Each telephonic
notice by the Borrowers pursuant to this Section 2.02(a) must
be confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrowers.  Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof.  Except as provided in Sections 2.03(c) and
2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in
a principal amount of $500,000 or a whole multiple of $100,000 in excess
thereof.  Each Loan Notice (whether
telephonic or written) shall specify (i) whether the Borrowers are
requesting a Term B Loan Borrowing, a Committed Borrowing, a conversion of
Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the
requested date of the Borrowing, conversion or continuation, as the case may be
(which shall be a Business Day), (iii) the principal amount of Loans to be
borrowed, converted or continued, (iv) the Type of Loans to be borrowed or
to which existing Loans are to be converted, and (v) if applicable, the
duration of the Interest Period with respect thereto.  If the Borrowers fail to specify a Type of
Loan in a Loan Notice or if the Borrowers fail to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be
made as, or converted to, Base Rate Loans. 
Any such automatic conversion to Base Rate Loans shall be effective as
of the last day of the Interest Period then in effect with respect to the
applicable Eurodollar Rate Loans.  If the
Borrowers request a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Loan Notice, but fail to specify an Interest Period, it
will be deemed to have specified an Interest Period of one month.

 

(b)           Following receipt of a Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Applicable
Percentage of the applicable Loans, and if no timely notice of a conversion or
continuation is provided by the Borrowers, the Administrative Agent shall
notify each Lender of the details of any automatic conversion to Base Rate
Loans described in the preceding subsection. 
In the case of a Term B Loan Borrowing or a Committed Borrowing, each
applicable Lender shall make the amount of its Loan available to the Administrative
Agent in immediately available funds at the Administrative Agent’s Office not
later than 1:00 p.m. on the Business Day specified in the applicable Loan
Notice.  Upon satisfaction of the
applicable conditions set forth in Section 4.02 (and, if such Borrowing
is the initial Credit Extension, Section 4.01), the Administrative
Agent shall make all funds so received available to the Borrowers in like funds
as received by the Administrative Agent either by (i) crediting the
account of the Borrowers on the books of Bank of America with the amount of
such funds or (ii) wire transfer of such funds, in each case in accordance
with instructions provided to the Administrative Agent by the Borrowers; provided,
however, that if, on the date a Committed Loan Notice with respect to a
Committed Borrowing is given by the Borrowers, there are L/C Borrowings
outstanding, then the proceeds of such Committed Borrowing, first, shall
be applied

 

33

 

to the payment in full of any such L/C Borrowings, and
second, shall be made available to the Borrowers as provided above.

 

(c)           Except as otherwise provided herein, a Eurodollar Rate
Loan may be continued or converted only on the last day of an Interest Period
for such Eurodollar Rate Loan.  During
the existence of a Default, no Loans may be requested as, converted to or
continued as Eurodollar Rate Loans without the consent of the Required Lenders.

 

(d)           The Administrative Agent shall promptly notify the
Borrowers and the Lenders of the interest rate applicable to any Interest
Period for Eurodollar Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are
outstanding, the Administrative Agent shall notify the Borrowers and the
Lenders of any change in Bank of America’s prime rate used in determining the
Base Rate promptly following the public announcement of such change.

 

(e)           After giving effect to all Borrowings, all conversions
of Loans from one Type to the other, and all continuations of Loans as the same
Type, there shall not be more than ten (10) Interest Periods in effect
with respect to Loans.

 

2.03        Letters
of Credit.

 

(a)           The Letter of Credit Commitment.

 

(i)            Subject to the terms and conditions set
forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements
of the Revolving Lenders set forth in this Section 2.03, (1) from
time to time on any Business Day during the period from the Closing Date until
the Letter of Credit Expiration Date, to issue Letters of Credit for the
account of the Borrowers, and to amend or extend Letters of Credit previously
issued by it, in accordance with subsection (b) below, and (2) to
honor drawings under the Letters of Credit; and (B) the Revolving Lenders
severally agree to participate in Letters of Credit issued for the account of
the Borrowers and any drawings thereunder; provided that after giving
effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the
Total Revolving Outstandings shall not exceed the Aggregate Commitments, and (y) the
aggregate Outstanding Amount of the Committed Loans of any Revolving Lender, plus
such Revolving Lender’s Revolving Percentage of the Outstanding Amount of all
L/C Obligations, plus such Lender’s Revolving Percentage of the
Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s
Revolving Commitment.  Each request by
the Borrowers for the issuance or amendment of a Letter of Credit shall be
deemed to be a representation by the Borrowers that the L/C Credit Extension so
requested complies with the conditions set forth in the proviso to the
preceding sentence.  Within the foregoing
limits, and subject to the terms and conditions hereof, the Borrowers’ ability
to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers
may, during the foregoing period, obtain Letters of Credit to replace Letters
of Credit that have expired or that have been drawn upon and reimbursed.   All Existing Letters of Credit shall be
deemed to have been issued pursuant hereto, and from and after the Closing Date
shall be subject to and governed by the terms and conditions hereof.

 

(ii)           The L/C Issuer shall not issue any Letter
of Credit, if:

 

34

 

(A)          subject to Section 2.03(b)(iii),
the expiry date of such requested Letter of Credit would occur more than twelve
(12) months after the date of issuance or last extension, unless Revolving
Lenders holding in excess of fifty percent (50%) of the Aggregate Commitments
have approved such expiry date; or

 

(B)           the expiry date of such requested Letter
of Credit would occur after the Letter of Credit Expiration Date, unless
Revolving Lenders holding in excess of fifty percent (50%) of the Aggregate
Commitments have approved such expiry date (it being agreed that following the
Letter of Credit Expiration Date, any outstanding Letter of Credit would be
required to be cash collateralized by the Borrowers).

 

(iii)          The
L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

 

(A)          any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the L/C Issuer from issuing such Letter of Credit, or any Applicable
Law applicable to the L/C Issuer or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the
issuance of letters of credit generally or such Letter of Credit in particular
or shall impose upon the L/C Issuer with respect to such Letter of Credit any
restriction, reserve or capital requirement (for which the L/C Issuer is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the L/C Issuer in good faith deems
material to it;

 

(B)           the issuance of such Letter of Credit
would violate one or more policies of the L/C Issuer;

 

(C)           such Letter of Credit is to be
denominated in a currency other than Dollars; or

 

(D)          a default of any Revolving Lender’s
obligations to fund under Section 2.03(c) exists or any
Revolving Lender is at such time an Impacted Lender hereunder, unless the L/C
Issuer has entered into arrangements satisfactory to it with the Borrowers to
eliminate the L/C Issuer’s risk with respect to such Impacted Lender, including
by the Borrowers providing cash collateral or similar security in support of
such Impacted Lender’s Revolving Percentage of the L/C Obligations.  Any cash collateral provided by the Borrowers
under this Section 2.03(a)(iii)(D) shall be deemed to be “Cash
Collateral” under Section 2.03(g) and shall be governed by the
terms thereof.

 

(iv)          The L/C Issuer shall not amend any Letter
of Credit if the L/C Issuer would not be permitted at such time to issue such
Letter of Credit in its amended form under the terms hereof.

 

35

 

(v)           The L/C Issuer shall be under no
obligation to amend any Letter of Credit if (A) the L/C Issuer would have
no obligation at such time to issue such Letter of Credit in its amended form
under the terms hereof, or (B) the beneficiary of such Letter of Credit
does not accept the proposed amendment to such Letter of Credit.

 

(vi)          The L/C Issuer shall act on behalf of the
Revolving Lenders with respect to any Letters of Credit issued by it and the
documents associated therewith, and the L/C Issuer shall have all of the
benefits and immunities (A) provided to the Administrative Agent in Article IX
with respect to any acts taken or omissions suffered by the L/C Issuer in
connection with Letters of Credit issued by it or proposed to be issued by it
and Issuer Documents pertaining to such Letters of Credit as fully as if the
term “Administrative Agent” as used in Article IX included the L/C
Issuer with respect to such acts or omissions, and (B) as additionally
provided herein with respect to the L/C Issuer.

 

(b)           Procedures for Issuance and Amendment of
Letters of Credit; Auto-Extension Letters of Credit.

 

(i)            Each Letter of Credit shall be issued or
amended, as the case may be, upon the request of the Borrowers delivered to the
L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of
Credit Application, appropriately completed and signed by a Responsible Officer
of the Borrowers.  Such Letter of Credit
Application must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two (2) Business Days (or such later date
and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in their sole discretion) prior to the proposed issuance
date or date of amendment, as the case may be. 
In the case of a request for an initial issuance of a Letter of Credit,
such Letter of Credit Application shall specify in form and detail satisfactory
to the L/C Issuer: (A) the proposed issuance date of the requested Letter
of Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the
documents to be presented by such beneficiary in case of any drawing
thereunder; (F) the full text of any certificate to be presented by such
beneficiary in case of any drawing thereunder; and (G) such other matters
as the L/C Issuer may reasonably require. 
In the case of a request for an amendment of any outstanding Letter of
Credit, such Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as the L/C
Issuer may reasonably require. 
Additionally, the Borrowers shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer or the Administrative Agent may require.

 

(ii)           Promptly after receipt of any Letter of
Credit Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received a copy
of such Letter of Credit Application from the Borrowers and, if not, the L/C
Issuer will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written
notice from any Revolving Lender,

 

36

 

the Administrative Agent or any Borrower, at least one (1) Business
Day prior to the requested date of issuance or amendment of the applicable
Letter of Credit, that one or more applicable conditions contained in Article IV
shall not then be satisfied, then, subject to the terms and conditions hereof,
the L/C Issuer shall, on the requested date, issue a Letter of Credit for the
account of the applicable Borrower or enter into the applicable amendment, as
the case may be, in each case in accordance with the L/C Issuer’s usual and
customary business practices. 
Immediately upon the issuance of each Letter of Credit, each Revolving
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to, purchase from the L/C Issuer a risk participation in such Letter of Credit
in an amount equal to the product of such Lender’s Revolving Percentage times
the amount of such Letter of Credit.

 

(iii)          If
the Borrowers so request in any applicable Letter of Credit Application, the
L/C Issuer may agree to issue a Letter of Credit that has automatic extension
provisions (each, an “Auto-Extension Letter of Credit”); provided that
any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent
any such extension at least once in each twelve-month period (commencing with
the date of issuance of such Letter of Credit) by giving prior notice to the
beneficiary thereof not later than a day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued.  Unless otherwise
directed by the L/C Issuer, the Borrowers shall not be required to make a
specific request to the L/C Issuer for any such extension.  Once an Auto-Extension Letter of Credit has
been issued, the Revolving Lenders shall be deemed to have authorized (but may
not require) the L/C Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the L/C Issuer shall not permit any such
extension if (A) the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.03(a) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is five (5) Business Days before the
Non-Extension Notice Date (1) from the Administrative Agent that Revolving
Lenders holding in excess of fifty percent (50%) of the Aggregate Commitments
have elected not to permit such extension or (2) from the Administrative
Agent, any Revolving Lender or the Borrowers that one or more of the applicable
conditions specified in Section 4.02 is not then satisfied, and in
each such case directing the L/C Issuer not to permit such extension.

 

(iv)          If the Borrowers so request in any
applicable Letter of Credit Application, the L/C Issuer may, in its sole and
absolute discretion, agree to issue a Letter of Credit that permits the
automatic reinstatement of all or a portion of the stated amount thereof after
any drawing thereunder (each, an “Auto-Reinstatement Letter of Credit”).  Unless otherwise directed by the L/C Issuer,
the Borrowers shall not be required to make a specific request to the L/C
Issuer to permit such reinstatement. 
Once an Auto-Reinstatement Letter of Credit has been issued, except as
provided in the following sentence, the Revolving Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to reinstate all or a
portion of the stated amount thereof in accordance with the provisions of such
Letter of Credit.  Notwithstanding the
foregoing,

 

37

 

if such Auto-Reinstatement Letter of Credit permits the L/C Issuer to
decline to reinstate all or any portion of the stated amount thereof after a
drawing thereunder by giving notice of such non-reinstatement within a
specified number of days after such drawing (the “Non-Reinstatement Deadline”),
the L/C Issuer shall not permit such reinstatement if it has received a notice
(which may be by telephone or in writing) on or before the day that is five (5) Business
Days before the Non-Reinstatement Deadline (A) from the Administrative
Agent that Revolving Lenders holding in excess of fifty percent (50%) of the
Aggregate Commitments have elected not to permit such reinstatement or (B) from
the Administrative Agent, any Revolving Lender or the Borrowers that one or
more of the applicable conditions specified in Section 4.02 is not
then satisfied (treating such reinstatement as an L/C Credit Extension for
purposes of this clause) and, in each case, directing the L/C Issuer not to
permit such reinstatement.

 

(v)           Promptly after its delivery of any Letter
of Credit or any amendment to a Letter of Credit to an advising bank with
respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrowers and the Administrative Agent a true and complete copy of such
Letter of Credit or amendment.

 

(c)           Drawings and Reimbursements; Funding of
Participations.

 

(i)            Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of Credit, the
L/C Issuer shall notify the Borrowers and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of
any payment by the L/C Issuer under a Letter of Credit, or within 2 hours after
notice, if such notice occurs after 11:00 a.m. (each such date, an “Honor
Date”), the Borrowers shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.  If the Borrowers fail to so reimburse the L/C
Issuer by such time, the Administrative Agent shall promptly notify each
Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Revolving Lender’s
Revolving Percentage thereof.  In such
event, the Borrowers shall be deemed to have requested a Committed Borrowing of
Base Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in Section
2.02 for the principal amount of Base Rate Loans, but subject to the amount
of the unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than Section 4.02(b) and
the delivery of a Committed Loan Notice). 
Any notice given by the L/C Issuer or the Administrative Agent pursuant
to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

 

(ii)           Each Revolving Lender shall upon any
notice pursuant to Section 2.03(c)(i) make funds available to
the Administrative Agent for the account of the L/C Issuer at the
Administrative Agent’s Office in an amount equal to its Applicable Percentage
of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to the
provisions of Section 2.03(c)(iii), each Revolving Lender that so
makes funds available

 

38

 

shall be deemed to have made a Base Rate Committed Loan to the
Borrowers in such amount.  The
Administrative Agent shall remit the funds so received to the L/C Issuer.

 

(iii)          With
respect to any Unreimbursed Amount that is not fully refinanced by a Committed
Borrowing of Base Rate Loans because the conditions set forth in Section 4.02
cannot be satisfied or for any other reason, the Borrowers shall be deemed to
have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate.  In such event, each
Revolving Lender’s payment to the Administrative Agent for the account of the
L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed
payment in respect of its participation in such L/C Borrowing and shall
constitute an L/C Advance from such Revolving Lender in satisfaction of its
participation obligation under this Section 2.03.

 

(iv)          Until each Revolving Lender funds its
Committed Loan or L/C Advance pursuant to this Section 2.03(c) to
reimburse the L/C Issuer for any amount drawn under any Letter of Credit,
interest in respect of such Revolving Lender’s Revolving Percentage of such
amount shall be solely for the account of the L/C Issuer.

 

(v)           Each Revolving Lender’s obligation to
make Committed Loans or L/C Advances to reimburse the L/C Issuer for amounts
drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense
or other right which such Revolving Lender may have against the L/C Issuer, the
Borrowers or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default, or (C) any other occurrence, event
or condition, whether or not similar to any of the foregoing; provided, however,
that each Revolving Lender’s obligation to make Committed Loans pursuant to
this Section 2.03(c) is subject to the conditions set forth in
Section 4.02 (other than delivery by the Borrowers of a Committed
Loan Notice).  No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the Borrowers to
reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer
under any Letter of Credit, together with interest as provided herein.

 

(vi)          If any Revolving Lender fails to make
available to the Administrative Agent for the account of the L/C Issuer any
amount required to be paid by such Revolving Lender pursuant to the foregoing
provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Revolving Lender (acting
through the Administrative Agent), on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which such
payment is immediately available to the L/C Issuer at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the L/C Issuer
in accordance with banking industry rules on interbank compensation, plus
any administrative, processing or similar fees customarily charged by the L/C
Issuer in connection with the foregoing. 
If such Revolving Lender pays such amount (with interest and fees as
aforesaid), the amount so paid shall constitute such Revolving Lender’s
Committed Loan included in the relevant Committed Borrowing or L/C Advance in

 

39

 

respect of the relevant L/C Borrowing, as the case may be.  A certificate of the L/C Issuer submitted to
any Revolving Lender (through the Administrative Agent) with respect to any
amounts owing under this clause (vi) shall be conclusive absent manifest
error.

 

(d)           Repayment of Participations.

 

(i)            At any time after the L/C Issuer has made
a payment under any Letter of Credit and has received from any Revolving Lender
such Revolving Lender’s L/C Advance in respect of such payment in accordance
with Section 2.03(c), if the Administrative Agent receives for the
account of the L/C Issuer any payment in respect of the related Unreimbursed
Amount or interest thereon (whether directly from the Borrowers or otherwise,
including proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Revolving Lender its
Revolving Percentage thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving Lender’s
L/C Advance was outstanding) in the same funds as those received by the
Administrative Agent.

 

(ii)           If any payment received by the
Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i)
is required to be returned under any of the circumstances described in Section 10.05
(including pursuant to any settlement entered into by the L/C Issuer in its
discretion), each Revolving Lender shall pay to the Administrative Agent for
the account of the L/C Issuer its Revolving Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Revolving Lender, at a rate per annum
equal to the Federal Funds Rate from time to time in effect.  The obligations of the Revolving Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)           Obligations Absolute. 
The obligation of the Borrowers to reimburse the L/C Issuer for each
drawing under each Letter of Credit and to repay each L/C Borrowing shall be
absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all circumstances, including,
without limitation, the following:

 

(i)            any lack of validity or enforceability of
such Letter of Credit, this Agreement, or any other Loan Document;

 

(ii)           the existence of any claim, counterclaim,
setoff, defense or other right that the Borrowers or any Subsidiary may have at
any time against any beneficiary or any transferee of such Letter of Credit (or
any Person for whom any such beneficiary or any such transferee may be acting),
the L/C Issuer or any other Person, whether in connection with this Agreement,
the transactions contemplated hereby or by such Letter of Credit or any
agreement or instrument relating thereto, or any unrelated transaction;

 

(iii)          any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any loss
or delay in the

 

40

 

transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;

 

(iv)          any payment by the L/C Issuer under such
Letter of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to be a
trustee in bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of such Letter of Credit, including any arising
in connection with any proceeding under any Debtor Relief Law; or

 

(v)           any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing, including any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrowers or any Subsidiary.

 

The Borrowers shall promptly examine a copy of each
Letter of Credit and each amendment thereto that is delivered to it and, in the
event of any claim of noncompliance with the Borrowers’ instructions or other
irregularity, the Borrowers will immediately notify the L/C Issuer.  The Borrowers shall be conclusively deemed to
have waived any such claim against the L/C Issuer and its correspondents unless
such notice is given as aforesaid.

 

(f)            Role of L/C Issuer. 
Each Revolving Lender and each of the Borrowers agree that, in paying any
drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the L/C Issuer shall be liable to any Revolving
Lender for (i) any action taken or omitted in connection herewith at the
request or with the approval of the Revolving Lenders or Revolving Lenders
holding in excess of fifty percent (50%) of the Aggregate Commitments, as
applicable; (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Issuer Document. 
The Borrowers hereby assume all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit; provided,
however, that this assumption is not intended to, and shall not,
preclude the Borrowers’ pursuing such rights and remedies as they may have
against the beneficiary or transferee under any Applicable Law or under any
other agreement.  None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable or
responsible for any of the matters described in clauses (i) through (v) of
Section 2.03(e); provided, however, that anything in
such clauses to the contrary notwithstanding, the Borrowers may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrowers, to
the extent, but only to the extent, of any direct, as opposed to consequential
or exemplary, damages suffered by the Borrowers which the Borrowers proves were
caused by the L/C Issuer’s willful misconduct or gross negligence or the L/C
Issuer’s willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s) strictly
complying with the terms and conditions of a Letter of Credit.  In furtherance and not in

 

41

 

limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.

 

(g)           Cash Collateral. 
Upon the request of the Administrative Agent, (i) if the L/C Issuer
has honored any full or partial drawing request under any Letter of Credit and
such drawing has resulted in an L/C Borrowing, or (ii) if, as of the
Letter of Credit Expiration Date, any L/C Obligation for any reason remains
outstanding, the Borrowers shall, in each case, immediately Cash Collateralize
the then Outstanding Amount of all L/C Obligations.  Sections 2.05(c) and 8.02(c) set
forth certain additional requirements to deliver cash collateral (“Cash
Collateral”) hereunder.  For purposes
of this Section 2.03, Section 2.05 and Section 8.02(c),
“Cash Collateralize” means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Revolving
Lenders, as collateral for the L/C Obligations, cash or deposit account
balances pursuant to the Security Documents. 
Derivatives of such term have corresponding meanings.  The Borrowers hereby grant to the
Administrative Agent, for the benefit of the L/C Issuer and the Revolving
Lenders, a security interest in all such cash, deposit accounts and all
balances therein and all proceeds of the foregoing.  Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.  If at any time the Administrative Agent
determines that any funds held as Cash Collateral are subject to any right or
claim of any Person other than the Administrative Agent (or the subordinated
claim of the collateral agent under the Second Lien Note Documents) or that the
total amount of such funds is less than the aggregate Outstanding Amount of all
L/C Obligations, the Borrowers will, forthwith upon demand by the
Administrative Agent, pay to the Administrative Agent, as additional funds to
be deposited as Cash Collateral, an amount equal to the excess of (x) such
aggregate Outstanding Amount over (y) the total amount of funds, if any,
then held as Cash Collateral that the Administrative Agent determines to be
free and clear of any such right and claim. 
Upon the drawing of any Letter of Credit for which funds are on deposit
as Cash Collateral, such funds shall be applied, to the extent permitted under
applicable Laws, to reimburse the L/C Issuer.

 

(h)           Applicability of ISP/UCP. 
Unless otherwise expressly agreed by the L/C Issuer and the Borrowers
when a Letter of Credit is issued (including any such agreement applicable to
an Existing Letter of Credit), (i) the rules of the ISP shall apply
to each standby Letter of Credit and (ii) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance shall apply to each
commercial Letter of Credit.

 

(i)            Letter of Credit Fees.

 

(i)            The Borrowers jointly and severally agree
to pay, at the times specified in this Section 2.03(i), a Letter of
Credit fee (the “Letter of Credit Fee”) to the Administrative Agent for
the benefit of the Revolving Lenders, equal to the product of (A) the
Letter of Credit Percentage multiplied by (B) the Maximum Drawing
Amount of each Letter of Credit on the date of calculation, to be shared pro
rata by each of such

 

42

 

Revolving Lenders in accordance with their respective Revolving
Percentages.  For purposes of computing
the daily Maximum Drawing Amount of any Letter of Credit, the amount of such
Letter of Credit shall be determined in accordance with Section 1.06.  The Letter of Credit Fee shall be payable
quarterly in arrears on the tenth (10th)
Business Day after the end of each calendar quarter for the immediately
preceding calendar quarter and on the Maturity Date for the Committed Loans
with respect to the daily Maximum Drawing Amount of Letters of Credit
outstanding during such calendar quarter or a portion thereof.  If there is any change in the Letter of Credit
Percentage during any quarter, the daily Maximum Drawing Amount of each Letter
of Credit shall be computed and multiplied by the Letter of Credit Percentage
separately for each period during such quarter that such Letter of Credit
Percentage was in effect. 
Notwithstanding anything to the contrary contained herein, upon the
request of Revolving Lenders holding in excess of fifty percent (50%) of the
Aggregate Commitments, while any Event of Default exists, the Letter of Credit
Fee shall accrue at the Default Rate.

 

(ii)           In addition, the Borrowers jointly and
severally agree to pay a fronting fee (the “Fronting Fee”) to the L/C
Issuer for its account (i) with
respect to each commercial Letter of Credit, in an amount equal to 0.125% per
annum of the Maximum Drawing Amount of such Letter of Credit, and payable upon
the issuance thereof, and (ii) with respect to each standby Letter of Credit, in an amount equal to 0.125% per annum of the
Maximum Drawing Amount of such Letter of Credit, payable quarterly basis
in arrears on the same day each quarter as the Letter of Credit Fee.  In addition, the Borrowers shall jointly a
severally agree to pay directly to the L/C Issuer for its own account the
customary issuance, presentation, amendment and other processing fees, and
other standard costs and charges, of the L/C Issuer relating to letters of
credit as from time to time in effect. 
Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.

 

(j)            Conflict with Issuer Documents. 
In the event of any conflict between the terms hereof and the terms of
any Issuer Document, the terms hereof shall control.

 

2.04        Swing
Line Loans.

 

(a)           The Swing Line.  Subject to
the terms and conditions set forth herein, the Swing Line Lender agrees, in
reliance upon the agreements of the other Revolving Lenders set forth in this Section 2.04,
to make loans (each such loan, a “Swing Line Loan”) to the Borrowers
from time to time on any Business Day during the Availability Period in an
aggregate amount not to exceed at any time outstanding the amount of the Swing
Line Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Revolving Percentage of the Outstanding Amount of Committed
Loans and L/C Obligations of the Revolving Lender acting as Swing Line Lender,
may exceed the amount of such Revolving Lender’s Revolving Commitment; provided,
however, that after giving effect to any Swing Line Loan, (i) the
Total Revolving Outstandings shall not exceed the Aggregate Commitments, and (ii) the
aggregate Outstanding Amount of the Committed Loans of any Revolving Lender,
plus such Revolving Lender’s Revolving Percentage of the Outstanding Amount of
all L/C Obligations at such time, plus such Revolving Lender’s Revolving
Percentage of the Outstanding Amount of all Swing Line Loans at such time shall
not exceed such Revolving Lender’s Revolving Commitment (other than a Swing
Line Lender (as

 

43

 

set forth above)), and provided, further,
that the Borrowers shall not use the proceeds of any Swing Line Loan to
refinance any outstanding Swing Line Loan. 
Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrowers may borrow under this Section 2.04,
prepay under Section 2.05, and reborrow under this Section 2.04.  Each Swing Line Loan shall bear interest only
at a rate based on the Base Rate plus the Applicable Rate for Base Rate
Loans that are Committed Loans and no Swing Line Loan may be converted to a
Eurodollar Rate Loan.  Immediately upon the
making of a Swing Line Loan, each Revolving Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing Line
Lender a risk participation in such Swing Line Loan in an amount equal to the
product of such Revolving Lender’s Revolving Percentage times the amount of
such Swing Line Loan.

 

(b)           Borrowing Procedures.  Each Swing
Line Borrowing shall be made upon the Borrowers’ irrevocable notice to the
Swing Line Lender and the Administrative Agent, which may be given by
telephone.  Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
2:30 p.m. on the requested borrowing date, and shall specify (i) the
amount to be borrowed, which shall be a minimum of $100,000, and (ii) the
requested borrowing date, which shall be a Business Day.  Each such telephonic notice must be confirmed
promptly by delivery to the Swing Line Lender and the Administrative Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a
Responsible Officer or other signatories of the Borrowers approved by the
Borrowers and the Administrative Agent. 
Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Administrative
Agent (by telephone or in writing) that the Administrative Agent has also
received such Swing Line Loan Notice and, if not, the Swing Line Lender will
notify the Administrative Agent (by telephone or in writing) of the contents
thereof.  Unless the Swing Line Lender
has received notice (by telephone or in writing) from the Administrative Agent
(including at the request of any Revolving Lender) prior to 2:30 p.m. on
the date of the proposed Swing Line Borrowing (A) directing the Swing Line
Lender not to make such Swing Line Loan as a result of the limitations set
forth in the first proviso to the first sentence of Section 2.04(a),
or (B) that one or more of the applicable conditions specified in Article IV
is not then satisfied, then, subject to the terms and conditions hereof, the
Swing Line Lender will, not later than 3:00 p.m. on the borrowing date
specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to the Borrowers at its office by crediting the account of the
Borrowers on the books of the Swing Line Lender in immediately available funds.

 

(c)           Refinancing of Swing Line Loans.

 

(i)            The Swing Line Lender at any time in its
sole and absolute discretion may request, on behalf of the Borrowers (which
hereby irrevocably authorize the Swing Line Lender to so request on its
behalf), that each Revolving Lender make a Base Rate Loan in an amount equal to
such Revolving Lender’s Revolving Percentage of the amount of Swing Line Loans
then outstanding.  Such request shall be
made in writing (which written request shall be deemed to be a Committed Loan
Notice for purposes hereof) and in accordance with the requirements of Section 2.02,
without regard to the minimum and multiples specified therein for the principal
amount of Base Rate Loans, but subject to the unutilized portion of the
Aggregate Commitments and the conditions set forth in Section 4.02.  The Swing Line Lender shall furnish the
Borrowers with a copy of the applicable

 

44

 

Committed Loan Notice promptly after delivering such notice to the
Administrative Agent.  Each Revolving
Lender shall make an amount equal to its Applicable Percentage of the amount
specified in such Committed Loan Notice available to the Administrative Agent
in immediately available funds for the account of the Swing Line Lender at the
Lending Office not later than 1:00 p.m. on the day specified in such
Committed Loan Notice, whereupon, subject to Section 2.04(c)(ii),
each Revolving Lender that so makes funds available shall be deemed to have
made a Base Rate Loan to the Borrowers in such amount.  The Administrative Agent shall remit the
funds so received to the Swing Line Lender.

 

(ii)           If for any reason any Swing Line Loan
cannot be refinanced by such a Committed Borrowing in accordance with Section 2.04(c)(i),
the request for Base Rate Loans submitted by the Swing Line Lender as set forth
herein shall be deemed to be a request by the Swing Line Lender that each of
the Revolving Lenders fund its risk participation in the relevant Swing Line
Loan and each Revolving Lender’s payment to the Administrative Agent for the
account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall
be deemed payment in respect of such participation.

 

(iii)          If
any Revolving Lender fails to make available to the Administrative Agent for
the account of the Swing Line Lender any amount required to be paid by such
Revolving Lender pursuant to the foregoing provisions of this Section 2.04(c) by
the time specified in Section 2.04(c)(i), the Swing Line Lender
shall be entitled to recover from such Revolving Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the greater of the Federal Funds Rate and a rate determined by the Swing Line
Lender in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Swing Line Lender in connection with the foregoing.  If such Revolving Lender pays such amount
(with interest and fees as aforesaid), the amount so paid shall constitute such
Revolving Lender’s Committed Loan included in the relevant Committed Borrowing
or funded participation in the relevant Swing Line Loans, as the case may
be.  A certificate of the Swing Line
Lender submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.

 

(iv)          Each Revolving Lender’s obligation to
make Committed Loans or to purchase and fund risk participations in Swing Line
Loans pursuant to this Section 2.04(c) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right which such Revolving
Lender may have against the Swing Line Lender, the Borrowers or any other Person
for any reason whatsoever, (B) the occurrence or continuance of a Default,
or (C) any other occurrence, event or condition, whether or not similar to
any of the foregoing; provided, however, that each Lender’s
obligation to make Committed Loans pursuant to this Section 2.04(c) is
subject to the conditions set forth in Section 4.02).  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrowers to repay Swing Line
Loans, together with interest as provided herein.

 

45

 

(d)           Repayment of Participations.

 

(i)            At any time after any Revolving Lender
has purchased and funded a risk participation in a Swing Line Loan, if the
Swing Line Lender receives any payment on account of such Swing Line Loan, the
Swing Line Lender will distribute to such Revolving Lender its Revolving
Percentage of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Revolving Lender’s
risk participation was funded) in the same funds as those received by the Swing
Line Lender.

 

(ii)           If any payment received by the Swing Line
Lender in respect of principal or interest on any Swing Line Loan is required
to be returned by the Swing Line Lender under any of the circumstances
described in Section 10.05 (including pursuant to any settlement
entered into by the Swing Line Lender in its discretion), each Revolving Lender
shall pay to the Swing Line Lender its Revolving Percentage thereof on demand
of the Administrative Agent, plus interest thereon from the date of such demand
to the date such amount is returned, at a rate per annum equal to the Federal
Funds Rate.  The Administrative Agent
will make such demand upon the request of the Swing Line Lender.  The obligations of the Revolving Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(e)           Interest for Account of Swing Line Lender. 
The Swing Line Lender shall be responsible for invoicing the Borrowers
for interest on the Swing Line Loans. 
Until each Revolving Lender funds its Base Rate Loan or risk
participation pursuant to this Section 2.04 to refinance such
Revolving Lender’s Revolving Percentage of any Swing Line Loan, interest in
respect of such Revolving Percentage shall be solely for the account of the
Swing Line Lender.

 

(f)            Payments Directly to Swing Line Lender. 
The Borrowers shall make all payments of principal and interest in
respect of the Swing Line Loans directly to the Swing Line Lender.

 

(g)           Impacted Lender. 
Notwithstanding anything to the contrary contained in this Section 2.04,
the Swing Line Lender will not make any Swing Line Loans at a time when the
Swing Line Lender has actual knowledge that any Revolving Lender is an Impacted
Lender, unless the Swing Line Lender has entered into arrangements satisfactory
to it with the Borrowers to eliminate the Swing Line Lender’s risk with respect
to such Impacted Lender, including by the Borrowers providing cash collateral
or similar security in support of such Impacted Lender’s Revolving Percentage
of all outstanding Swing Line Loans.  Any
cash collateral provided by the Borrowers under this Section 2.04(g) shall
be deemed to be “Cash Collateral” under Section 2.03(g) and
shall be governed by the terms thereof.

 

2.05        Prepayments.

 

(a)           Optional.

 

(i)            The Borrowers may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay the
Term B Loans and Committed Loans in whole or in part without premium or
penalty; provided that (A) such notice must be

 

46

 

received by the Administrative Agent not later than 11:00 a.m. (1) three
(3) Business Days prior to any date of prepayment of Eurodollar Rate Loans
and (2) on the date of prepayment of Base Rate Loans; (B) any such
prepayment shall be in a principal amount of $250,000 or a whole multiple of
$250,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding.  Each
such notice shall specify the date and amount of such prepayment, whether the
Loan to be prepaid is a Committed Loan or a Term B Loan, the Type(s) of
Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the
Interest Period(s) of such Loans. 
The Administrative Agent will promptly notify each Lender of its receipt
of each such notice, and of the amount of such Lender’s ratable portion of such
prepayment (based on such Lender’s Applicable Percentage).  If such notice is given by the Borrowers, the
Borrowers shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.  Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest on the amount prepaid, together
with any additional amounts required pursuant to Section 3.05.  Each prepayment of the outstanding Term B
Loans pursuant to this Section 2.05(a) shall be applied to the
principal repayment installments thereof in inverse order of maturity, and each
prepayment shall be paid to the Lenders in accordance with their respective
Applicable Percentages in respect of the applicable Loans being prepaid.

 

(ii)           The Borrowers may, upon notice to the
Swing Line Lender (with a copy to the Administrative Agent), at any time or
from time to time, voluntarily prepay Swing Line Loans in whole or in part
without premium or penalty; provided that (A) such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the date of the prepayment, and (B) any such prepayment
shall be in a minimum principal amount of $100,000.  Each such notice shall specify the date and
amount of such prepayment.  If such
notice is given by the Borrowers, the Borrowers shall make such prepayment and
the payment amount specified in such notice shall be due and payable on the
date specified therein.

 

(b)           Mandatory.

 

(i)            Excess Operating Cash Flow. 
Within ten (10) days after financial statements have been delivered
pursuant to Section 6.04(a) and the related Compliance
Certificate has been delivered pursuant to Section 6.04(c),
commencing with the fiscal year ending April 30, 2010 and for each fiscal
year thereafter, the Borrowers shall prepay an aggregate principal amount of
the Term B Loan equal to 50% of Consolidated Excess Operating Cash Flow for the
fiscal year covered by such financial statements; provided, that if, for
any fiscal year, the ratio of Consolidated Senior Funded Debt to Consolidated
EBITDA with respect to such fiscal year is less than or equal to 3.00 to 1.00,
as evidenced by the Compliance Certificate delivered by the Borrowers pursuant
to Section 6.04(c) with respect to the annual financial
statements, the mandatory prepayment otherwise owed by the Borrowers pursuant
to this Section 2.05(b)(i) shall be reduced to $0.00 for such
fiscal year.

 

(ii)           Dispositions. 
If any Borrower or any Non-Borrower Subsidiary Disposes of any assets
and such Disposition results in the realization by the Borrowers of Net Cash

 

47

 

Proceeds in excess of $15,000,000 in the aggregate for any fiscal year,
the Borrowers shall prepay an aggregate principal amount of the Term B Loan
equal to 100% of such Net Cash Proceeds in excess of the foregoing amount
immediately upon receipt thereof; provided, however, that, with
respect to Net Cash Proceeds realized under any Disposition described in this Section 2.05(b)(ii),
at the election of the Borrowers (as notified by the Borrowers to the
Administrative Agent on or prior to the date of such Disposition), and so long
as no Default shall have occurred and be continuing, the Borrowers may reinvest
all or any portion of such Net Cash Proceeds in operating assets so long as
within 330 days after the receipt of such Net Cash Proceeds, such reinvestment
shall have been consummated (as certified by the Borrowers in writing to the
Administrative Agent); and provided, further, however,
that any Net Cash Proceeds not so reinvested shall be immediately applied to
the prepayment of the Term B Loan as set forth in this Section 2.05(b)(ii).

 

(iii)          Equity Interests.   Upon the sale or issuance by any Borrower
or any Non-Borrower Subsidiary of any of its Equity Interests (other than
Excluded Issuances and any sales or issuances of Equity Interests to another
Borrower or Non-Borrower Subsidiary), the Borrowers shall prepay an aggregate
principal amount of the Term B Loan equal to 50% of all Net Cash Proceeds
received therefrom immediately following the receipt thereof by the applicable
Borrower or Non-Borrower Subsidiary.

 

(iv)          Indebtedness.       Without limitation of the provisions of Section 7.03,
upon the incurrence or issuance by any Borrower or any Non-Borrower Subsidiary
of any Indebtedness (other than Indebtedness expressly permitted to be incurred
or issued pursuant to Section 7.03), the Borrowers shall prepay an
aggregate principal amount of the Term B Loan equal to 100% of all Net Cash
Proceeds received therefrom immediately upon receipt thereof by such Borrower
or such Non-Borrower Subsidiary.

 

(v)           Application of Net Cash Proceeds.   Each prepayment of the Term B Loan
pursuant to the foregoing provisions of this Section 2.05(b) shall
be applied to the principal repayment installments thereof in inverse order of
maturity, and each prepayment shall be paid to the Lenders in accordance with
their respective Term B Loan Percentage.

 

(vi)          Total Revolving Outstandings. 
If for any reason the Total Revolving Outstandings at any time exceed
the Aggregate Commitments then in effect, the Borrowers shall immediately
prepay the Committed Loans and/or Cash Collateralize the L/C Obligations in an
aggregate amount equal to such excess; provided, however, that
the Borrowers shall not be required to Cash Collateralize the L/C Obligations
pursuant to this Section 2.05(b)(vi) unless after the
prepayment in full of the Committed Loans the Outstanding Amount of L/C
Obligations exceed the Aggregate Commitments then in effect.

 

(c)           Term B Opt-out. 
With respect to any prepayment of the Term B Loan pursuant to Section 2.05(b),
any Term B Lender, at its option, may elect not to accept such prepayment.  Upon receipt by the Administrative Agent of
any such prepayment of the Term B Loan, the amount of the prepayment that is
available to prepay the Term B Loan (the “Prepayment

 

48

 

Amount”) shall be deposited in a blocked, non-interest
bearing cash collateral deposit account at Bank of America on terms reasonably
satisfactory to the Administrative Agent and the Borrowers, pending application
of such amount on the Prepayment Date as set forth below and promptly after the
date of such receipt, the Administrative Agent shall notify the Term B Lenders
of the amount available to prepay the Term B Loans and the date on which such
prepayment shall be made (the “Prepayment Date”), which date shall be 5
Business Days after the date of such receipt. 
Any Lender declining such prepayment (a “Declining Lender”) shall
give written notice to the Administrative Agent by 11:00 a.m. on the
Business Day immediately preceding the Prepayment Date.  On the Prepayment Date, an amount equal to
that portion of the Prepayment Amount accepted by the Term B Lenders other than
the Declining Lenders (such Lenders being the “Accepting Lenders”) to
prepay a portion of the Term B Loan owing to such Accepting Lenders shall be
withdrawn from the applicable cash collateral deposit account and applied
ratably to prepay Term B Loans owing to such Accepting Lenders in the manner
described in Section 2.05(b), as applicable, for such
prepayment.  Any amounts that would
otherwise have been applied to prepay Term B Loans owing to Declining Lenders
shall instead be applied ratably to prepay the Committed Loans on a temporary
basis (subject to reborrowing and reinvestment in accordance with the terms of
this Agreement), provided that such amounts shall be held in the
applicable cash collateral deposit account until such time as such prepayment
can be made without causing the Borrowers to incur amounts due under Section 3.05.

 

2.06        Termination
or Reduction of the Revolving Commitments.

 

(a)           Revolving Commitments. 
The Borrower may, upon notice to the Administrative Agent, terminate or
reduce the Aggregate Commitments, or from time to time permanently reduce the
Aggregate Commitments; provided that (i) any such notice shall be
received by the Administrative Agent not later than 11:00 a.m. five
Business Days prior to the date of termination or reduction, (ii) any such
partial reduction shall be in an aggregate amount of $3,000,000 or any whole
multiple of $1,000,000 in excess thereof, (iii) the Borrowers shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Revolving Outstandings
would exceed the Aggregate Commitments, and (iv) if, after giving effect
to any reduction of the Aggregate Commitments, the Swing Line Sublimit exceeds
the amount of the Aggregate Commitments, such Sublimit shall be automatically
reduced by the amount of such excess. 
The Administrative Agent will promptly notify the Revolving Lenders of
any such notice of termination or reduction of the Aggregate Commitments.  Any reduction of the Aggregate Commitments
shall be applied to the Commitment of each Revolving Lender according to its
Applicable Percentage.  All fees accrued
until the effective date of any termination of the Aggregate Commitments shall
be paid on the effective date of such termination.

 

49

 

2.07        Repayment
of Loans.

 

(a)           Committed Loans. 
The Borrowers shall repay to the Revolving Lenders on the Maturity Date
for the Committed Loans the aggregate principal amount of all Committed Loans
outstanding on such date.

 

(b)           Swing Line Loans. 
The Borrowers shall repay each Swing Line Loan on the earlier to occur
of (i) the date ten (10) Business Days after such Loan is made and (ii) the
Maturity Date for the Committed Loans.

 

(c)           Term B Loans. 
The Borrowers shall repay to the Term B Lenders the principal amount of
the Term B Loan in an aggregate amount, in each fiscal year, equal to 1% of the
original principal amount of the Term B Loan (each, an “Annualized
Installment”), with each such Annualized Installment being due and payable
in four consecutive quarterly payments in each calendar year on the last
Business Day of each March, June, September and December , commencing
with September 30, 2009, with a final balloon payment on the Maturity Date
for the Term B Loans in an amount equal to the unpaid balance of the Term B
Loan plus accrued and unpaid interest; provided, that if the Borrowers
fail to refinance the Senior Subordinated Notes on or before October 31,
2012 in a manner reasonably satisfactory to the Administrative Agent and
permitted under this Agreement, the Maturity Date for the Term B Loan shall
automatically be deemed to be December 31, 2012 and all amounts
outstanding under the Term B Loan, plus accrued and unpaid interest thereon,
and all (if any) other amounts payable in connection therewith, shall be due
and payable in full on December 31, 2012.

 

2.08        Interest.

 

(a)           Subject to the provisions of Section 2.08(b) below,
(i) each Eurodollar Rate Loan shall bear interest on the outstanding
principal amount thereof for each Interest Period at a rate per annum equal to
the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate; and (iii) each Swing Line Loan shall bear
interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate plus the Applicable
Rate for Base Rate Committed Loans.

 

(b)           (i)            If any amount of principal of any Loan is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter
bear interest at a fluctuating interest rate per annum at all times equal to
the Default Rate to the fullest extent permitted by Applicable Laws.

 

(ii)           If any amount (other than principal of
any Loan) payable by the Borrowers under any Loan Document is not paid when due
(without regard to any applicable grace periods), whether at stated maturity,
by acceleration or otherwise, then upon the request of the Required Lenders,
such amount shall thereafter bear interest at a fluctuating interest rate per
annum at all times equal to the Default Rate to the fullest extent permitted by
Applicable Laws.

 

50

 

(iii)          Upon the request of the Required Lenders,
while any Event of Default exists, the Borrowers shall pay interest on the
principal amount of all outstanding Obligations hereunder (and, without
duplication, on any past due amount) at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
Applicable Law.

 

(iv)          Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.

 

(c)           Interest on each Loan shall be due and
payable in arrears on each Interest Payment Date applicable thereto and at such
other times as may be specified herein. 
Interest hereunder shall be due and payable in accordance with the terms
hereof before and after judgment, and before and after the commencement of any
proceeding under any Debtor Relief Law.

 

2.09        Fees.  In addition to certain fees described in Section 2.03(i):

 

(a)           Commitment Fee. 
The Borrowers jointly and severally in accordance with Section 10.12
agree (to the fullest extent permitted by Applicable Law) to pay to the
Administrative Agent for the benefit of the Revolving Lenders in accordance
with their respective Revolving Percentages, a commitment fee (the “Commitment
Fee”) calculated at the rate per annum equal to the Applicable Rate with
respect to the Commitment Fee as in effect from time to time, on the daily
amount during each calendar quarter or portion thereof from the Closing Date
until the Maturity Date for the Committed Loans by which the Aggregate
Commitments exceeds the sum of (i) the Outstanding Amount of Committed
Loans, plus (ii) the Outstanding Amount of L/C Obligations during such
calendar quarter.  The Commitment Fee
shall be payable quarterly in arrears on the last Business Day of each March,
June, September and December with a final payment on the Maturity
Date or any earlier date on which the Commitments shall terminate.  If there is any change in the Applicable Rate
during any quarter, the actual daily amount shall be computed and multiplied by
the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.

 

(b)           Other Fees.  The Borrowers
jointly and severally in accordance with Section 10.12 hereof shall
pay to each Joint Arranger and the Administrative Agent for their own
respective accounts fees in the amounts and at the times specified in the Fee
Letter.  Such fees shall be fully earned
when paid and shall not be refundable for any reason whatsoever.

 

2.10        Computation
of Interest and Fees; Retroactive Adjustments of Applicable Rate.

 

(a)           All computations of interest for Base
Rate Loans shall be made on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed.  All
other computations of fees and interest shall be made on the basis of a 360-day
year and actual days elapsed (which results in more fees or interest, as
applicable, being paid than if computed on the basis of a 365-day year).  Interest shall accrue on each Loan for the
day on which the Loan is made, and shall not accrue on a Loan, or any portion
thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to

 

51

 

Section 2.12(a), bear interest for one day.  Each determination by the Administrative
Agent of an interest rate or fee hereunder shall be conclusive and binding for
all purposes, absent manifest error.

 

(b)           If, as a result of any restatement of or
other adjustment to the financial statements of the Borrowers or for any other
reason, the Borrowers or the Administrative Agent determine that (i) the
ratio of Consolidated Funded Debt to Consolidated EBITDA as calculated by the
Borrowers as of any applicable date was inaccurate and (ii) a proper
calculation of such ratio would have resulted in higher pricing for such
period, the Borrowers shall immediately and retroactively be obligated to pay
to the Administrative Agent for the account of the applicable Lenders or the
L/C Issuer, as the case may be, promptly on demand by the Administrative Agent
(or, after the occurrence of an actual or deemed entry of an order for relief
with respect to a Borrower under any Debtor Relief Law, automatically and
without further action by the Administrative Agent, any Lender or the L/C
Issuer), an amount equal to the excess of the amount of interest and fees that
should have been paid for such period over the amount of interest and fees
actually paid for such period.  This
paragraph shall not limit the rights of the Administrative Agent, any Lender or
the L/C Issuer, as the case may be, under Sections 2.03(c)(iii), 2.03(i) or
2.08(b) or under Article VIII.

 

2.11        Evidence
of Debt.

 

(a)           The Credit Extensions made by each Lender
shall be evidenced by one or more accounts or records maintained by such Lender
and by the Administrative Agent in the ordinary course of business.  The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive absent manifest error
of the amount of the Credit Extensions made by the Lenders to the Borrowers and
the interest and payments thereon.  Any
failure to so record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Borrowers hereunder to pay any amount
owing with respect to the Obligations. 
In the event of any conflict between the accounts and records maintained
by any Lender and the accounts and records of the Administrative Agent in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error. 
Upon the request of any Lender made through the Administrative Agent,
the Borrowers shall execute and deliver to such Lender (through the
Administrative Agent) a Note, which shall evidence such Lender’s Loans in
addition to such accounts or records. 
Each Lender may attach schedules to its Note and endorse thereon the
date, Type (if applicable), amount and maturity of its Loans and payments with
respect thereto.

 

(b)           In addition to the accounts and records
referred to in subsection (a), each Lender and the Administrative Agent shall
maintain in accordance with its usual practice accounts or records evidencing
the purchases and sales by such Lender of participations in Letters of Credit
and Swing Line Loans.  In the event of
any conflict between the accounts and records maintained by the Administrative
Agent and the accounts and records of any Lender in respect of such matters,
the accounts and records of the Administrative Agent shall control in the
absence of manifest error.

 

52

 

2.12        Payments
Generally; Administrative Agent’s Clawback.

 

(a)           General.  All payments
to be made by the Borrowers shall be made without condition or deduction for
any counterclaim, defense, recoupment or setoff.  Except as otherwise expressly provided
herein, all payments by the Borrowers hereunder shall be made to the
Administrative Agent, for the account of the respective Lenders to which such
payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein.  The Administrative Agent will
promptly distribute to each Lender its Applicable Percentage (or other
applicable share as provided herein) of such payment in like funds as received
by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative
Agent after 2:00 p.m. shall be deemed received on the next succeeding Business
Day and any applicable interest or fee shall continue to accrue.  If any payment to be made by the Borrowers
shall come due on a day other than a Business Day, payment shall be made on the
next following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.

 

(b)           (i)  Funding by Lenders;
Presumption by Administrative Agent. 
Unless the Administrative Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in
the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date
of such Borrowing) that such Lender will not make available to the
Administrative Agent such Lender’s share of such Borrowing, the Administrative
Agent may assume that such Lender has made such share available on such date in
accordance with Section 2.02 or Section 2.14, as
applicable (or, in the case of a Borrowing of Base Rate Loans, that such Lender
has made such share available in accordance with and at the time required by Section 2.02)
and may, in reliance upon such assumption, make available to the Borrowers a
corresponding amount.  In such event, if
a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Borrowers
severally agree to pay to the Administrative Agent forthwith on demand, which,
in the case of the Borrowers, shall be made no earlier than three (3) Business
Days after the date of such Lender’s failure to fund, such corresponding amount
in immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrowers to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Administrative Agent in
connection with the foregoing, and (B) in the case of a payment to be made
by the Borrowers, the interest rate applicable to Base Rate Loans.  If the Borrowers and such Lender shall pay
such interest to the Administrative Agent for the same or an overlapping
period, the Administrative Agent shall promptly remit to the Borrowers the
amount of such interest paid by the Borrowers for such period.  If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Loan included in such Borrowing.  Any payment by the Borrowers shall be without
prejudice to any claim the Borrowers may have against a Lender that shall have
failed to make such payment to the Administrative Agent.

 

(ii)           Payments by Borrowers; Presumptions by
Administrative Agent.  Unless the Administrative Agent shall have
received notice from the Borrowers prior to the date 

 

53

 

on which any payment is due to the Administrative Agent for the account
of the Lenders or the L/C Issuer hereunder that the Borrowers will not make
such payment, the Administrative Agent may assume that the Borrowers have made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the appropriate Lenders or the L/C Issuer, as the
case may be, the amount due.  In such
event, if the Borrowers have not in fact made such payment, then each of the
appropriate Lenders or the L/C Issuer, as the case may be, severally agrees to
repay to the Administrative Agent forthwith on demand the amount so distributed
to such Lender or the L/C Issuer, in immediately available funds with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.

 

A notice of the Administrative Agent to any Lender or
the Borrowers with respect to any amount owing under this subsection (b) shall
be conclusive, absent manifest error.

 

(c)           Failure to Satisfy Conditions Precedent. 
If any Lender makes available to the Administrative Agent funds for any
Loan to be made by such Lender as provided in the foregoing provisions of this Article II,
and such funds are not made available to the Borrowers by the Administrative
Agent because the conditions to the applicable Credit Extension set forth in Article IV
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.

 

(d)           Obligations of Lenders Several. 
The obligations of the Lenders hereunder to make the Term B Loan and the
Committed Loans, to fund participations in Letters of Credit and Swing Line
Loans, and to make payments pursuant to Section 10.04(c) are
several and not joint.  The failure of
any Lender to make any Loan, to fund any such participation or to make any
payment under Section 10.04(c) on any date required hereunder
shall not relieve any other Lender of its corresponding obligation to do so on
such date, and no Lender shall be responsible for the failure of any other
Lender to so make its Loan, as the case may be, to purchase its participation
or to make its payment under Section 10.04(c).

 

(e)           Funding Source. 
Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.

 

(f)            Insufficient Funds. 
If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, L/C Borrowings,
interest and fees then due hereunder, such funds shall be applied (i) first,
toward payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, toward payment of principal and
L/C Borrowings then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of principal and L/C Borrowings then due to such
parties.

 

54

 

2.13        Sharing
of Payments by Lenders.  If
any Lender shall, by exercising any right of setoff or counterclaim or otherwise,
obtain payment in respect of (a) Obligations (other than in respect of
Secured Hedge Agreements and Secured Cash Management Agreements) (herein, the “Facility
Obligations”) due and payable to such Lender hereunder and under the other
Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations due and payable to such
Lender at such time to (ii) the aggregate amount of the Facility
Obligations due and payable to all Lenders hereunder and under the other Loan
Documents at such time) of payments on account of the Facility Obligations due
and payable to all Lenders hereunder and under the other Loan Documents at such
time obtained by all the Lenders at such time or (b) Facility Obligations owing
(but not due and payable) to such Lender hereunder and under the other Loan
Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing (but not due and
payable) to such Lender at such time to (ii) the aggregate amount of the
Facility Obligations owing (but not due and payable) to all Lenders hereunder
and under the other Loan Documents at such time) of payment on account of the
Facility Obligations owing (but not due and payable) to all Lenders hereunder
and under the other Loan Documents at such time obtained by all of the Lenders
at such time, then the Lender receiving such greater proportion shall (a) notify
the Administrative Agent of such fact, and (b) purchase (for cash at face
value) participations in the Loans and subparticipations in L/C Obligations and
Swing Line Loans of the other Lenders, or make such other adjustments as shall
be equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of Facility Obligations
then due and payable to the Lenders or owing (but not due and payable) to the
Lenders, as the case may be, provided that:

 

(i)            if any such participations or
subparticipations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations or subparticipations shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest; and

 

(ii)           the provisions of this Section shall
not be construed to apply to (A) any payment made by the Borrowers
pursuant to and in accordance with the express terms of this Agreement or (B) any
payment obtained by a Lender as consideration for the assignment of or sale of
a participation in any of its Loans or subparticipations in L/C Obligations or
Swing Line Loans to any assignee or participant, other than to the Borrowers or
any Subsidiary thereof (as to which the provisions of this Section shall
apply).

 

Each Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under Applicable Law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against such Borrower rights of setoff and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of such
Borrower in the amount of such participation.

 

2.14        Increase
in Aggregate Commitments; Term B Loan.

 

(a)           Request for Increase of in the Committed
Loans; Term B Loan.  Provided there exists no Default, upon notice
to the Administrative Agent (which shall promptly notify the

 

55

 

Lenders as set forth in this Section), and subject to
the terms of this Section, the Borrowers may from time to time, (i) request
an increase in the Aggregate Commitments in respect of Committed Loans and/or (ii) request
an increase in the Term B Loan; provided that the aggregate amounts so
requested under clauses (i) and (ii) above after the date hereof
shall not exceed $42,500,000; and provided, further, that, after
giving effect to any such increase, the Total Facility Amount shall not exceed
$350,000,000 (minus any and all previously effected reductions of the
Aggregate Commitments or mandatory prepayments of the Term B Loan with proceeds
of Dispositions).  With respect to any
increase in the Term B Loan pursuant to clause (ii) above, such increase
shall be subject to prevailing market terms (including prevailing market rates)
for Borrowers with similar credit profiles and ratings, and otherwise
acceptable to the Borrowers, the Administrative Agent and the new and
increasing Term B Lenders, as set forth in any applicable Conforming Amendment
(which such terms shall also apply to the outstanding Term B Loan, subject to
the provisions of Section 10.01).

 

(b)           Lender Election to Increase its Revolving
Commitment or Fund a Portion of an Increase to the Term B Loan. 
The Administrative Agent will promptly notify the Lenders following
receipt of a request by the Borrowers of, as the case may be, an increase in
the Aggregate Commitments in respect of Committed Loans or an increase to the
Term B Loan.  At the time of making such
request, the Borrowers (in consultation with the Administrative Agent) shall
specify the time period within which each Lender is requested to respond (which
shall not in any event be less than ten (10) Business Days from the date
of delivery of such notice to the Lenders). 
Each Lender shall notify the Administrative Agent within such time
period whether or not it agrees to participate in such requested increase and,
if so, (i) in the case of an increase in a Committed Lender’s Revolving
Commitment, whether by an amount equal to, greater than, or less than its
Revolving Percentage of such requested increase, (ii) in the case of the
funding of a portion of an increase to the Term B Loan by a Term B Lender,
whether by an amount equal to, greater than, or less than its ratable portion
(based on such Term B Lender’s Term B Loan Percentage in respect of the total
outstanding principal amount of the Term B Loan) of such requested increase, (iii) in
the case of a Committed Lender becoming a Term B Lender by virtue of electing
to fund a portion of an increase to the Term B Loan, the portion of such
increase it would commit to fund, and (iv) in the case of a Term B Lender
becoming a Committed Lender by virtue of electing to fund an increase to the
Committed Loans, the amount of such increase it would commit to fund.  Any Lender not responding within such time
period shall be deemed to have declined to increase its Revolving Commitment or
fund a portion of an increase to the Term B Loan, as the case may be.

 

(c)           Notification by Administrative Agent;
Acceding Lenders.  The Administrative Agent shall notify the
Borrowers and each Lender of the Lenders’ responses to each request made
hereunder.  To achieve the full amount of
a requested increase, in the event that the existing Lenders do not elect to
furnish the entire requested increase, and subject to the approval of the
Administrative Agent (and the L/C Issuer and Swing Line Lender only with
respect to an increase in the Aggregate Commitments), which approvals shall not
be unreasonably withheld, the Borrowers may also invite one or more additional
commercial banks, other financial institutions or other Persons (in each case,
an “Acceding Lender”) to become party to this Agreement as a Lender by
entering into an Instrument of Accession in substantially the form of Exhibit H
hereto (an “Instrument of Accession”) with the Borrowers and the Administrative
Agent and assuming thereunder the rights and obligations (as the case may be)
of a Revolving

 

56

 

Lender hereunder, including without limitation,
commitments to make Committed Loans and participate in the risk relating to
Letters of Credit and Swing Line Loans and/or of a Term B Lender with respect
to the obligation to fund a portion of an increase to the Term B Loan subject
to the terms of this Section, and the Aggregate Commitments and/or the increase
to the Term B Loan (as the case may be) shall be funded by the amount of such
Acceding Lender’s interest all in accordance with the provisions of this
Section.  The Borrowers shall indemnify
the Lenders and the Administrative Agent for any cost or expense incurred as a
consequence of the reallocation of any Eurodollar Rate Loans to an Acceding
Lender pursuant to the provisions of Section 3.05 hereof.

 

(d)           Closing Date and Allocations. 
Upon a request by the Borrowers for an increase in the Aggregate
Commitments or an increase to the Term B Loan in accordance with this Section,
the Administrative Agent and the Borrowers shall determine, as applicable, the
effective date of any such increase (any such date, the “Increase Closing
Date”) and the final allocation of any such increase.  The Administrative Agent shall promptly
notify the Borrowers and the Lenders and Acceding Lenders, if any, of the final
allocation of such increase.  On any
Increase Closing Date, Schedule 2.01 hereto shall be deemed to be amended
to reflect, as the case may be, (x) the name, address, and, as the case
may be, the Revolving Commitment of the Lenders and/or the amount of the
portion of the Term B Loan advanced or to be advanced by each Term B Lender
(and, if applicable, any Acceding Lender), (y) the amount of the Aggregate
Commitments and the Term B Loan (after giving effect to any such increase), and
(z) the changes to the respective Applicable Percentages of the Lenders.

 

(e)           Conforming Amendment. 
To the extent that conforming changes to this Agreement must be made to
effect the increase in the Aggregate Commitments or the funding of an increase
in the Term B Loan in accordance with this Section, the Administrative Agent
and the Borrowers may enter into an amendment (a “Conforming Amendment”)
effecting such changes.  Any such
Conforming Amendment shall not require the consent of any Person other than the
increasing Lenders or Acceding Lenders, as applicable, the Borrowers and the
Administrative Agent; provided, that upon the execution of any Conforming
Amendment, the Administrative Agent shall distribute a copy thereof to all of
the Lenders.

 

(f)            Conditions to Effectiveness of Increase. 
As a condition precedent to any such increase under this Section 2.14,
the Borrowers shall deliver to the Administrative Agent (i) upon the
request of any Lender, a Note evidencing such Lender’s aggregate portion, or
the applicable increase to such Lender’s portion, of the Term B Loan or such
Lender’s Revolving Commitment or any increase thereto, (ii) a certificate
dated as of any Increase Closing Date signed by a Responsible Officer of the
Parent (A) certifying and attaching the resolutions adopted by the
Borrowers approving or consenting to such increase, (B) certifying that,
before and after giving effect to such increase, (x) the applicable
conditions set forth in Section 4.02(a) and (b) will
be satisfied, (y) such increase is permitted senior Indebtedness under the
existing Senior Subordinated Debt Documents and First Lien Obligations under the
Second Lien Note Documents, and (z) no default under the existing Senior
Subordinated Debt Documents or the Second Lien Note Documents has occurred and
is continuing or would result after giving effect to the transactions
contemplated by such increase, (iii) a pro-forma Compliance Certificate
reflecting compliance with Section 7.11 after giving effect to such
increase, (iv) to the extent applicable, executed counterparts to a
Conforming Amendment, and (v) payment of (A) all of the

 

57

 

Administrative Agent’s legal fees and expenses
incurred in connection with such increase and (B) the fees set forth in
any applicable fee letter.  In addition,
the Borrowers shall prepay any Committed Loans outstanding on any Increase
Closing Date (and pay any additional amounts required under Article III
of this Agreement) to the extent necessary to keep the outstanding Committed
Loans ratable with any revised Revolving Percentages in respect of Committed
Loans arising from any nonratable increase in the Revolving Commitments.

 

(g)           Conflicting Provisions. 
This Section shall supersede any provisions in Section 2.13
or 10.01 to the contrary.

 

2.15        Currency
of Account.  All of the
Loans and Letters of Credit hereunder shall be denominated and payable in Dollars.  If, for the purpose of obtaining judgment in
any court it is necessary to convert a sum due hereunder in one currency (the “first
currency”) into any other currency (the “second currency”) the
conversion shall be made at the Spot Rate of exchange of the Administrative
Agent (as conclusively determined by the Administrative Agent absent manifest
error) on the Business Day preceding the day on which the final judgment is
given.  If, however, on the Business Day
following receipt by the Administrative Agent in the second currency of any sum
adjudged to be due hereunder (or any proportion thereof) the Administrative
Agent purchases the first currency with the amount of the second currency so
received and the first currency so purchased falls short of the sum originally
due hereunder in the first currency (or the same proportion thereof) the
Borrowers, shall, as a separate obligation and notwithstanding any judgment,
pay to the Administrative Agent in the first currency an amount equal to such
shortfall.

 

2.16        Designation
of Senior Debt..  The
Borrowers hereby designate the Obligations as “Designated Senior Debt” under
(and as defined in) the Senior Subordinated Notes Indenture.

 

ARTICLE III.

TAXES, YIELD PROTECTION AND ILLEGALITY

 

3.01        Taxes.

 

(a)           Payments Free of Taxes; Obligation to
Withhold; Payments on Account of Taxes.  (i) Any
and all payments by or on account of any obligation of the Borrowers hereunder
or under any other Loan Document shall to the extent permitted by Applicable
Laws be made free and clear of and without reduction or withholding for any
Taxes.  If, however, Applicable Laws
require the Borrowers or the Administrative Agent to withhold or deduct any
Tax, such Tax shall be withheld or deducted in accordance with such Applicable
Laws as determined by the Borrowers or the Administrative Agent, as the case
may be, upon the basis of the information and documentation to be delivered
pursuant to subsection (e) below.

 

(ii)           If the Borrowers or the Administrative
Agent shall be required by the Code to withhold or deduct any Taxes, including
both United States Federal backup withholding and withholding taxes, from any
payment, then (A) the Borrowers or the Administrative Agent, as
applicable, shall withhold or make such deductions as are determined by the
Borrowers or the Administrative Agent to be required based upon the information
and documentation it has received pursuant to subsection (e) below, (B) the

 

58

 

Borrowers or the Administrative Agent, as applicable, shall timely pay
the full amount withheld or deducted to the relevant Governmental Authority in
accordance with the Code, and (C) to the extent that the withholding or
deduction is made on account of Indemnified Taxes or Other Taxes, the sum
payable by the Borrowers shall be increased as necessary so that after any
required withholding or the making of all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or L/C Issuer, as the case may be, receives an
amount equal to the sum it would have received had no such withholding or
deduction been made.

 

(b)           Payment of Other Taxes by the Borrowers. 
Without limiting the provisions of subsection (a) above, the
Borrowers shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with Applicable Law.

 

(c)           Tax Indemnifications.  (i) 
Without limiting the provisions of subsection (a) or (b) above, the
Borrowers shall, and do hereby, jointly and severally, indemnify the
Administrative Agent, each Lender and the L/C Issuer, and shall make payment in
respect thereof within ten (10) days after demand therefor, for the full
amount of any Indemnified Taxes and Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) withheld or deducted by the Borrowers or the Administrative Agent
or paid by the Administrative Agent, such Lender or the L/C Issuer, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom
or with respect thereto, whether or not such Indemnified Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority.  The Borrowers shall also, and
do hereby, jointly and severally, indemnify the Administrative Agent, and shall
make payment in respect thereof within ten (10) days after demand
therefor, for any amount which a Lender or the L/C Issuer for any reason fails
to pay indefeasibly to the Administrative Agent as required by clause (ii) of
this subsection.  A reasonably detailed
certificate as to the amount of any such payment or liability delivered to the
Borrowers by a Lender or the L/C Issuer (with a copy to the Administrative
Agent), or by the Administrative Agent on its own behalf or on behalf of a
Lender or the L/C Issuer, shall be conclusive absent manifest error.

 

(ii)           Without limiting the provisions of
subsection (a) or (b) above, each Lender and the L/C Issuer shall,
and does hereby, indemnify the Borrowers and the Administrative Agent, and
shall make payment in respect thereof within 10 days after demand therefor,
against any and all Taxes and any and all related losses, claims, liabilities,
penalties, interest and expenses (including the fees, charges and disbursements
of any counsel for the Borrowers or the Administrative Agent) incurred by or
asserted against the Borrowers or the Administrative Agent by any Governmental
Authority as a result of the failure by such Lender or the L/C Issuer, as the
case may be, to deliver, or as a result of the inaccuracy, inadequacy or
deficiency of, any documentation required to be delivered by such Lender or the
L/C Issuer, as the case may be, to the Borrowers or the Administrative Agent
pursuant to subsection (e).  Each Lender
and the L/C Issuer hereby authorizes the Administrative Agent to set off and
apply any and all amounts at any time owing to such Lender or the L/C Issuer,
as the case may be, under this Agreement or any other Loan Document against any
amount due to the Administrative Agent under this clause (ii).  The agreements in this clause (ii) shall
survive the resignation and/or

 

59

 

replacement of the Administrative Agent, any assignment of rights by,
or the replacement of, a Lender or the L/C Issuer, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all other
Obligations.

 

(d)           Evidence of Payments. 
Upon request by the Borrowers or the Administrative Agent, as the case
may be, after any payment of Taxes by the Borrowers or the Administrative Agent
to a Governmental Authority as provided in this Section 3.01, the
Borrowers shall deliver to the Administrative Agent or the Administrative Agent
shall deliver to the Borrowers, as the case may be, the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of any return required by Applicable Laws to report such
payment or other evidence of such payment reasonably satisfactory to the
Borrowers or the Administrative Agent, as the case may be.

 

(e)           Status of Lenders; Tax Documentation.  (i) 
Each Lender shall deliver to the Parent and to the Administrative Agent, at the
time or times prescribed by Applicable Laws or when reasonably requested by the
Parent or the Administrative Agent, such properly completed and executed
documentation prescribed by Applicable Laws or by the taxing authorities of any
jurisdiction and such other reasonably requested information as will permit the
Borrowers or the Administrative Agent, as the case may be, to determine (A) whether
or not payments made hereunder or under any other Loan Document are subject to
Taxes, (B) if applicable, the required rate of withholding or deduction,
and (C) such Lender’s entitlement to any available exemption from, or
reduction of, applicable Taxes in respect of all payments to be made to such
Lender by the Borrowers pursuant to this Agreement or otherwise to establish
such Lender’s status for withholding tax purposes in the applicable
jurisdiction.

 

(ii)           Without limiting the generality of the
foregoing, if the Borrowers are residents for tax purposes in the United
States,

 

(A)          any Lender that is a “United States
person” within the meaning of Section 7701(a)(30) of the Code shall
deliver to the Parent and the Administrative Agent executed copies of Internal
Revenue Service Form W-9 or such other documentation or information
prescribed by Applicable Laws or reasonably requested by the Parent or the
Administrative Agent as will enable the Borrowers or the Administrative Agent,
as the case may be, to determine whether or not such Lender is subject to
backup withholding or information reporting requirements; and

 

(B)           each Foreign Lender that is entitled
under the Code or any applicable treaty to an exemption from or reduction of
withholding tax with respect to payments hereunder or under any other Loan
Document shall deliver to the Parent and the Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of the Parent or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:

 

60

 

(I)            executed originals of Internal Revenue
Service Form W-8BEN claiming eligibility for benefits of an income tax
treaty to which the United States is a party,

 

(II)           executed originals of Internal Revenue
Service Form W-8ECI,

 

(III)         executed originals of Internal Revenue
Service Form W-8IMY and all required supporting documentation,

 

(IV)         in the case of a Foreign Lender claiming
the benefits of the exemption for portfolio interest under section 881(c) of
the Code, (x) a certificate to the effect that such Foreign Lender is not (A) a
“bank” within the meaning of section 881(c)(3)(A) of the Code, (B) a “10
percent shareholder” of the Borrowers within the meaning of section 881(c)(3)(B) of
the Code, or (C) a “controlled foreign corporation” described in section
881(c)(3)(C) of the Code and (y) executed originals of  Internal Revenue Service Form W-8BEN, or

 

(V)           executed originals of any other form
prescribed by Applicable Laws as a basis for claiming exemption from or a
reduction in United States Federal withholding tax together with such
supplementary documentation as may be prescribed by Applicable Laws to permit
the Borrowers or the Administrative Agent to determine the withholding or
deduction required to be made.

 

(iii)          Each Lender shall promptly (A) notify
the Parent and the Administrative Agent of any change in circumstances which
would modify or render invalid any claimed exemption or reduction, and (B) take
such steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of Applicable
Laws of any jurisdiction that the Borrowers or the Administrative Agent make
any withholding or deduction for Taxes from amounts payable to such Lender.

 

(f)            Refunds.  Unless
required by Applicable Laws, at no time shall the Administrative Agent have any
obligation to file for or otherwise pursue on behalf of a Lender or the L/C
Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any
refund of Taxes withheld or deducted from funds paid for the account of such
Lender or the L/C Issuer, as the case may be. 
If the Administrative Agent, any Lender or the L/C Issuer determines, in
its sole discretion, exercised in good faith, that it has received a refund of
any Indemnified Taxes as to which it has been indemnified by the Borrowers or
with respect to which the Borrowers have paid additional amounts pursuant to
this Section, it shall pay to the Borrowers an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers under this Section with respect to the Indemnified Taxes
giving rise to such refund), net of all out-of-pocket expenses incurred by the
Administrative Agent, such Lender or the L/C Issuer, as the case may be, and
without interest (other than any interest paid by the

 

61

 

relevant Governmental Authority with respect to such
refund), provided that the Borrowers, upon the request of the
Administrative Agent, such Lender or the L/C Issuer, agree to repay the amount
paid over to the Borrowers (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent,
such Lender or the L/C Issuer in the event the Administrative Agent, such
Lender or the L/C Issuer is required to repay such refund to such Governmental
Authority.  This subsection shall not be
construed to require the Administrative Agent, any Lender or the L/C Issuer to
make available its Tax returns (or any other information relating to its Taxes
that it deems confidential) to the Borrowers or any other Person.

 

3.02        Illegality.  If any Applicable Law has made it unlawful,
or any Governmental Authority has asserted that it is unlawful, for any Lender
or its applicable Lending Office to make, maintain or fund Eurodollar Rate
Loans, or to determine or charge interest rates based upon the Eurodollar Rate
or any Governmental Authority has imposed material restrictions on the
authority of such Lender to purchase or sell, or to take deposits of, Dollars
in the London interbank market, then, on notice thereof by such Lender to the
Borrowers through the Administrative Agent, any obligation of such Lender to
make or continue Eurodollar Rate Loans or to convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until such Lender notifies the
Administrative Agent and the Borrowers that the circumstances giving rise to
such determination no longer exist.  Upon
receipt of such notice, the Borrowers shall, upon demand from such Lender (with
a copy to the Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Lender to Base Rate Loans, either on the last day
of the Interest Period therefor, if such Lender may lawfully continue to
maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender
may not lawfully continue to maintain such Eurodollar Rate Loans.  Upon any such prepayment or conversion, the
Borrowers shall also pay accrued interest on the amount so prepaid or
converted.

 

3.03        Inability
to Determine Rates.  If the
Required Lenders determine that for any reason in connection with any request
for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar
deposits are not being offered to banks in the London interbank eurodollar
market for the applicable amount and Interest Period of such Eurodollar Rate
Loan, (b) adequate and reasonable means do not exist for determining the
Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or (c) the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Required Lenders of funding such Loan, the
Administrative Agent will promptly so notify the Borrowers and each Lender.  Thereafter, the obligation of the Lenders to
make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such
notice, the Borrowers may revoke any pending request for a Borrowing of,
conversion to or continuation of Eurodollar Rate Loans or, failing that, will
be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.

 

3.04        Increased
Costs.

 

(a)           Increased Costs Generally.  If any Change in Law shall:

 

62

 

(i)            impose, modify or deem applicable any
reserve, special deposit, compulsory loan, insurance charge or similar
requirement against assets of, deposits with or for the account of, or credit
extended or participated in by, any Lender (except any reserve requirement
contemplated by Section 3.04(e)) or the L/C Issuer;

 

(ii)           subject any Lender or the L/C Issuer to
any Tax with respect to this Agreement, any Letter of Credit, any participation
in a Letter of Credit or any Eurodollar Rate Loan made by it, or change the
basis of taxation of payments to such Lender or the L/C Issuer in respect
thereof (except for Taxes covered by Section 3.01 and the imposition
of, or any change in the rate of, any Excluded Taxes of such Lender or L/C
Issuer); or

 

(iii)          impose on any Lender or the L/C Issuer or
the London interbank market any other condition, cost or expense affecting this
Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit
or participation therein;

 

and the result of any of the foregoing shall
be to increase the cost to such Lender of making or maintaining any Eurodollar
Rate Loan (or of maintaining its obligation to make any such Loan), or to
increase the cost to such Lender or the L/C Issuer of participating in, issuing
or maintaining any Letter of Credit (or of maintaining its obligation to
participate in or to issue any Letter of Credit), or to reduce the amount of
any sum received or receivable by such Lender or the L/C Issuer hereunder
(whether of principal, interest or any other amount) then, upon request of such
Lender or the L/C Issuer, the Borrowers shall pay to such Lender or the L/C
Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the L/C Issuer, as the case may be, for such
additional costs incurred or reduction suffered.

 

(b)           Capital Requirements. 
If any Lender or the L/C Issuer determines that any Change in Law
affecting such Lender or the L/C Issuer or any Lending Office of such Lender or
such Lender’s or the L/C Issuer’s holding company, if any, regarding capital
requirements has or would have the effect of reducing the rate of return on
such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or
the L/C Issuer’s holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
L/C Issuer, to a level below that which such Lender or the L/C Issuer or such
Lender’s or the L/C Issuer’s holding company could have achieved but for such
Change in Law (taking into consideration such Lender’s or the L/C Issuer’s
policies and the policies of such Lender’s or the L/C Issuer’s holding company
with respect to capital adequacy), then from time to time the Borrowers will
pay to such Lender or the L/C Issuer, as the case may be, such additional
amount or amounts as will compensate such Lender or the L/C Issuer or such
Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

 

(c)           Certificates for Reimbursement. 
A certificate of a Lender or the L/C Issuer setting forth the amount or
amounts necessary to compensate such Lender or the L/C Issuer or its holding
company, as the case may be, as specified in subsection (a) or (b) of
this Section and delivered to the Borrowers shall be conclusive absent
manifest error.  The Borrowers shall pay
such Lender or the L/C Issuer, as the case may be, the amount shown as due on
any such certificate within 30 days after receipt thereof.

 

63

 

(d)           Delay in Requests. 
Failure or delay on the part of any Lender or the L/C Issuer to demand
compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand
such compensation, provided that the Borrowers shall not be required to
compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of
this Section for any increased costs incurred or reductions suffered more
than 90 days prior to the date that such Lender or the L/C Issuer, as the case
may be, notifies the Borrowers of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or the L/C Issuer’s
intention to claim compensation therefor (except that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
90-day period referred to above shall be extended to include the period of
retroactive effect thereof).

 

(e)           Reserves on Eurodollar Rate Loans. 
The Borrowers shall pay to each Lender, as long as such Lender shall be
required to maintain reserves with respect to liabilities or assets consisting
of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each
Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
such Loan by such Lender (as determined by such Lender in good faith, which
determination shall be conclusive), which shall be due and payable on each date
on which interest is payable on such Loan, provided the Borrowers shall
have received at least 10 days’ prior notice (with a copy to the Administrative
Agent) of such additional interest from such Lender.  If a Lender fails to give notice 10 days
prior to the relevant Interest Payment Date, such additional interest shall be
due and payable 10 days from receipt of such notice.

 

3.05        Compensation
for Losses.  Upon demand
of any Lender (with a copy to the Administrative Agent) from time to time, the
Borrowers shall promptly compensate such Lender for and hold such Lender
harmless from any loss, cost or expense incurred by it as a result of:

 

(a)           any continuation, conversion, payment or
prepayment of any Loan other than a Base Rate Loan on a day other than the last
day of the Interest Period for such Loan (whether voluntary, mandatory,
automatic, by reason of acceleration, or otherwise);

 

(b)           any failure by the Borrowers (for a
reason other than the failure of such Lender to make a Loan) to prepay, borrow,
continue or convert any Loan other than a Base Rate Loan on the date or in the
amount notified by the Borrowers; or

 

(c)           any assignment of a Eurodollar Rate Loan
on a day other than the last day of the Interest Period therefor as a result of
a request by the Borrowers pursuant to Section 10.14;

 

including any loss of anticipated profits and
any loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained. 
The Borrowers shall also pay any customary administrative fees charged
by such Lender in connection with the foregoing.

 

For purposes of calculating amounts payable
by the Borrowers to the Lenders under this Section 3.05, each
Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at
the Eurodollar Rate for such Loan by a matching deposit or other borrowing in
the London interbank

 

64

 

eurodollar market for a comparable amount and
for a comparable period, whether or not such Eurodollar Rate Loan was in fact
so funded.

 

3.06        Mitigation
Obligations; Replacement of Lenders.

 

(a)           Designation of a Different Lending Office. 
If any Lender requests compensation under Section 3.04, or
the Borrowers are required to pay any additional amount to any Lender, the L/C
Issuer, or any Governmental Authority for the account of any Lender or the L/C
Issuer pursuant to Section 3.01, or if any Lender gives a notice
pursuant to Section 3.02, then such Lender or the L/C Issuer shall,
as applicable, use reasonable efforts to designate a different Lending Office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04,
as the case may be, in the future, or eliminate the need for the notice
pursuant to Section 3.02, as applicable, and (ii) in each
case, would not subject such Lender or the L/C Issuer, as the case may be, to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Lender or the L/C Issuer, as the case may be.  The Borrowers hereby agree to pay all
reasonable costs and expenses incurred by any Lender or the L/C Issuer in
connection with any such designation or assignment.

 

(b)           Replacement of Lenders. 
If any Lender requests compensation under Section 3.04 or is
unable to lend under Section 3.02, or if the Borrowers are required
to pay any additional amount to any Lender or any Governmental Authority for
the account of any Lender pursuant to Section 3.01, the Borrowers
may replace such Lender in accordance with Section 10.14.

 

3.07        Survival.  All of the Borrowers’ obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder, and resignation of the Administrative Agent.

 

ARTICLE IV.

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

4.01        Conditions
of Initial Credit Extension.  The obligation of the L/C Issuer and each
Lender to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:

 

(a)           The Administrative Agent’s receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each properly executed by a Responsible
Officer of the Borrowers, each dated the Closing Date (or, in the case of
certificates of governmental officials, a recent date before the Closing Date)
and each in form and substance satisfactory to the Administrative Agent and
each of the Lenders:

 

(i)            executed counterparts of this Agreement,
the Intercreditor Agreement and the Security Documents, sufficient in number
for distribution to the Administrative Agent, each Lender and the Borrowers;

 

65

 

(ii)           a Note executed by the Borrowers in favor
of each Lender requesting a Note;

 

(iii)          evidence that the Security Documents
shall be effective to create in favor of the Administrative Agent for the
benefit of the Lenders a legal, valid and enforceable first security interest
and Lien upon the Collateral, and in connection therewith the Administrative
Agent shall have received all such evidence of the completion of all actions,
recordings and filings of or with respect to the Security Documents that the
Administrative Agent may deem necessary or desirable in order to perfect the
Liens created thereby;

 

(iv)          such certificates of resolutions or other
action, incumbency certificates and/or other certificates of Responsible
Officers of each Borrower as the Administrative Agent may reasonably require
evidencing the identity, authority and capacity of each Responsible Officer
thereof authorized to act as a Responsible Officer in connection with this
Agreement, the Security Documents and the other Loan Documents to which such
Borrower is a party;

 

(v)           such documents and certifications as the
Administrative Agent may reasonably require to evidence that each Borrower is
duly organized or formed, and that each Borrower is validly existing, in good
standing and qualified to engage in business in each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect;

 

(vi)          a favorable opinion of Wilmer, Cutler,
Pickering, Hale and Dorr, LLP, and other counsel or special counsel to the
Borrowers, as applicable, addressed to the Administrative Agent and each
Lender, in form and substance satisfactory to the Administrative Agent;

 

(vii)         a certificate of a Responsible Officer of
each Borrower either (A) attaching copies of all consents, licenses and
approvals required in connection with the execution, delivery and performance
by such Borrower and the validity against such Borrower of the Loan Documents
to which it is a party, and such consents, licenses and approvals shall be in
full force and effect, or (B) stating that no such consents, licenses or
approvals are so required;

 

(viii)        a certificate signed by a Responsible
Officer of the Borrowers certifying (A) that the conditions specified in Sections
4.02(a) and (b) have been satisfied, and (B) that
there has been no event or circumstance since the date of the Audited Financial
Statements that has had or would be reasonably expected to have, either
individually or in the aggregate, a Material Adverse Effect;

 

(ix)           (A) the Audited Financial Statements
and (B) pro forma consolidated financial
statements of the Borrowers (based upon the Annual Financial Statements for the
fiscal year ending April 30, 2009) giving effect to all Indebtedness of
Borrowers incurred on the Closing Date (including Indebtedness under the Second
Lien Notes), and

 

66

 

forecasts prepared by management of the Borrowers of balance sheets,
income statements and cash flow statements on a quarterly basis for the twelve
(12) months following the Closing Date and on an annual basis for each year
thereafter through the Maturity Date, each in form satisfactory to the
Administrative Agent and the Lenders;

 

(x)            evidence that all insurance required to
be maintained pursuant to the Loan Documents has been obtained and is in effect,
together with insurance binders or other satisfactory certificates of insurance
naming the Administrative Agent, on behalf of the Lenders, as an additional
insured or loss payee, as the case may be, under all insurance policies
maintained with respect to the liabilities, assets and properties of the
Borrowers;

 

(xi)           satisfactory evidence of the payment of
certain Indebtedness under the Existing Credit Agreement in accordance with Section 10.16
herein;

 

(xii)          such other assurances, certificates,
documents, consents or opinions as the Administrative Agent, the L/C Issuer,
the Swing Line Lender or the Required Lenders reasonably may require;

 

(xiii)         a completed and fully-executed Perfection
Certificate in substantially the form attached hereto as Exhibit K
for each of the Borrowers, the results of UCC searches (and the equivalent
thereof in all applicable foreign jurisdictions) with respect to the
Collateral, indicating no Liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Administrative Agent; and copies of duly
filed UCC-1 forms for each of the Borrowers in each appropriate jurisdiction
and office under the Uniform Commercial Code;

 

(xiv)        a certificate signed by a Responsible
Officer, in form and substance reasonably satisfactory to the Administrative
Agent, certifying that (a) the Obligations and the Second Lien Notes are
permitted “Senior Debt” under (and as defined in) the existing Senior
Subordinated Indenture (including a certification as to the amount of Indebtedness
being refinanced under the Existing Credit Agreement which constitutes
Indebtedness incurred under the Coverage Ratio Exception (as defined in the
Senior Subordinated Debt Documents)), (b) no default has occurred and is
continuing under the existing Senior Subordinated Debt Documents or would
result thereunder after giving effect to the transactions contemplated by this
Agreement, the other Loan Documents and the Second Lien Note Documents, and (c) the
Second Lien Note Documents are effective as of the Closing Date;

 

(xv)         definitive copies of each of the Second
Lien Note Documents, duly executed by the parties thereto, together with all
other agreements, instruments and other documents delivered in connection
therewith as the Administrative Agent shall request;

 

(xvi)        a duly completed Compliance Certificate
in form and detail satisfactory to the Administrative Agent and the Lenders,
signed by a Responsible Officer, as of the last day of the fiscal year of the
Borrowers ended April 30, 2009 (based upon the Annual Financial Statements
for the fiscal year ending April 30, 2009), after giving effect to (i) the
Loans made hereunder on the Closing Date and (ii) the Second Lien Notes,
signed by

 

67

 

a Responsible Officer, evidencing pro forma
compliance with each of the financial covenants set forth in Section 7.11(b) and
(c) hereof (assuming such financial covenants were in effect on April 30,
2009); and

 

(xvii)       evidence that the Borrowers shall have
received net cash proceeds from the Second Lien Notes of at least $168 million,
and the terms and conditions of the Second Lien Notes (including terms and
conditions relating to the interest rate, fees, amortization, maturity,
security, covenants, defaults and remedies) shall be as set forth in the Second
Lien Notes Offering Memorandum or otherwise satisfactory to the Administrative
Agent.

 

(b)           Any fees and expenses required to be paid
to the Administrative Agent, the Joint Arrangers and/or the Lenders on or
before the Closing Date shall have been paid.

 

(c)           the Borrowers shall have paid all fees,
charges and disbursements of counsel (including any local counsel) to the
Administrative Agent (directly to such counsel if requested by the
Administrative Agent) to the extent invoiced prior to or on the Closing Date.

 

Without limiting the generality of the provisions of Section 9.04,
for purposes of determining compliance with the conditions specified in this Section 4.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

 

4.02        Conditions
to all Credit Extensions.  The
obligation of each Lender to honor any Request for a Credit Extension (other
than a Loan Notice requesting only a conversion of Loans to the other Type, or
a continuation of Eurodollar Rate Loans) is subject to the following conditions
precedent:

 

(a)           The representations and warranties of the
Borrowers contained in Article V or any other Loan Document, or
which are contained in any document furnished at any time under or in
connection herewith or therewith, shall be true and correct on and as of the
date of such Credit Extension, except to the extent that such representations
and warranties specifically refer to an earlier date, in which case they shall
be true and correct as of such earlier date and except to the extent of changes
resulting from transactions contemplated or permitted by this Agreement and
changes occurring in the ordinary course of business which singly or in the
aggregate do not have a Material Adverse Effect.  For purposes of this Section 4.02,
the representations and warranties contained in Section 5.05(a) shall
be deemed to refer to the most recent statements furnished pursuant to Section 6.04(a).

 

(b)           No Default shall exist, or would result
from such proposed Credit Extension or from the application of the proceeds
thereof.

 

(c)           The Administrative Agent and, if
applicable, the L/C Issuer or the Swing Line Lender shall have received a
Request for Credit Extension in accordance with the requirements hereof.

 

68

 

Each Request for Credit Extension (other than a Loan
Notice requesting only a conversion of Loans to the other Type or a
continuation of Eurodollar Rate Loans) submitted by the Borrowers shall be
deemed to be a representation and warranty that the conditions specified in Sections
4.02(a) and/or (b), as applicable, have been satisfied on and
as of the date of the applicable Credit Extension.

 

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

 

The Borrowers jointly and severally represent and
warrant to the Lenders, the L/C Issuer and the Administrative Agent that, on
and as of the date of this Agreement (any disclosure on a schedule pursuant to
this Article V shall be deemed to apply to all relevant
representations and warranties, regardless of whether such schedule is
referenced in each relevant representation):

 

5.01                        Corporate
Authority.

 

(a)                                  Incorporation; Good Standing. 
Each of the Borrowers (i) is a corporation (or similar business
entity) duly organized, validly existing and in good standing or in current
status under the laws of its respective jurisdiction of organization, (ii) has
all requisite corporate (or the equivalent company or partnership) power to own
its property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation (or
similar business entity) 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 would not have a material adverse effect on the business, assets or
financial condition of such Borrower.

 

(b)                                 Authorization. 
The execution, delivery and performance of the Loan Documents and the
transactions contemplated hereby and thereby (i) are within the corporate
(or the equivalent company or partnership) authority of each of the Borrowers, (ii) have
been duly authorized by all necessary corporate (or other) proceedings, (iii) do
not conflict with or result in any material breach or contravention of any
Applicable Law to which any of the Borrowers is subject or any judgment, order,
writ, injunction, license or permit applicable to any of the Borrowers so as to
materially adversely affect the assets, business or any activity of the
Borrowers, and (iv) do not conflict with any provision of the corporate
charter, articles or bylaws (or equivalent other entity or partnership
documents) of the Borrowers or any agreement or other instrument binding upon
the Borrowers, including, without limitation, the Senior Subordinated Notes
Indenture and the Second Lien Notes Indenture.

 

(c)                                  Enforceability. 
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by the Borrowers.  The execution, delivery and performance of
the Loan Documents will result in valid and legally binding obligations of the
Borrowers 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 Applicable Laws
relating to or affecting generally the enforcement of creditors’ rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief or other equitable remedy is subject to the discretion of the
court before which any proceeding therefor may be brought.

 

69

 

5.02                        Governmental
Approvals; Other Approvals.  The execution, delivery and performance by
the Borrowers of the Loan Documents and the transactions contemplated hereby
and thereby, and the execution by the Administrative Agent or the Lenders of
their respective rights and remedies thereunder do not require any approval or consent
of, or filing with, any Governmental Authority or other Person other than those
already obtained, and copies of which have been delivered to the Administrative
Agent.

 

5.03                        Title
to Properties; Leases.   The
Borrowers own all of the assets reflected in the consolidated balance sheet as
at the Balance Sheet Date or acquired since that date (except for assets shown
on such balance sheet under “finance leases” and except for property and assets
sold or otherwise disposed of in the ordinary course of business since that
date or in a Disposition permitted under Section 7.04(b)), subject
to no mortgages, Capitalized Leases, conditional sales agreements, title
retention agreements or Liens (except for Permitted Liens).

 

5.04                        Use of
Proceeds.  The
proceeds of the Loans shall be used (a) to refinance the existing
Indebtedness of the Borrowers under the Existing Credit Agreement, and (b) for
working capital, Permitted Acquisitions and other general corporate
purposes.  No proceeds of the Loans are
to be used, and no portion of any Letter of Credit is to be obtained, in any
way that will violate Regulations U or X of the Board of Governors of the
Federal Reserve System.  The Borrowers
will obtain Letters of Credit solely for general corporate purposes.

 

5.05                        Financial
Statements; Solvency.

 

(a)                                  Financial Statements. 
There has been furnished to the Lenders (i) consolidated balance
sheets of the Parent and its Subsidiaries dated as of the Balance Sheet Date
and consolidated statements of operations for the fiscal year then ended,
certified by Caturano and Company, P.C. or an independent accounting firm of
national standing (the “Accountants”). 
Said balance sheets and statements of operations have been prepared in
accordance with GAAP, fairly present in all material respects the financial
condition of the Parent and its Subsidiaries, on a consolidated basis as at the
close of business on the date thereof and the results of operations for the
period then ended.  There are no direct
or contingent liabilities of the Borrowers as of such dates involving material
amounts, known to the officers of the Borrowers which have not been disclosed
in said balance sheets and the related notes thereto, as the case may be, in
accordance with GAAP.

 

(b)                                 Solvency.  The Borrowers
as a whole (both before and after giving effect to the transactions
contemplated by this Agreement (including the Loans made on the Closing Date)
and the Second Lien Notes) are and will be solvent (i.e., they have assets
having a fair value in excess of the amount required to pay their probable
liabilities on their existing debts as they become absolute and matured) and
have, and expect to have, the ability to pay their debts from time to time
incurred in connection therewith as such debts mature.

 

5.06                        No
Material Changes, Etc. 
Since the Balance Sheet Date there have occurred no changes in the
financial condition or business of the Parent and its Subsidiaries (excluding
Excluded Subsidiaries) as shown on or reflected in the consolidated balance
sheet of the Parent and its Subsidiaries as of the Balance Sheet Date or the
consolidated statements of operations for the periods then ended, nor has there
occurred any event or circumstance, either individually or

 

70

 

in the aggregate, that have could reasonably be expected to have a
Material Adverse Effect.  Since the
Balance Sheet Date there has not been any Restricted Payment not otherwise
permitted under this Agreement.

 

5.07                        Permits,
Franchises, Patents, Copyrights, Etc.  Each of the Borrowers possesses all
franchises, patents, copyrights, trademarks, trade names, licenses and permits
(including environmental permits), and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others, except for such franchises, patents,
copyrights, trademarks, trade names, licenses and permits which the Borrowers’
failure to possess could not, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect and except for matters disclosed on Schedule
5.08 and Schedule 5.16.

 

5.08                        Litigation.  There are no actions, suits, proceedings or
investigations of any kind pending or, to the knowledge of the Borrowers,
threatened against any Borrower before any Governmental Authority which (a) question
the validity of any of the Loan Documents or any action taken or to be taken
pursuant hereto or thereto, or (b) except as shown on Schedule 5.08,
could be reasonably likely to have a Material Adverse Effect, and there has
been no adverse change in the status, or financial effect on any Borrower or
any Subsidiary thereof, of the matters described in Schedule 5.08 which
could reasonably expected to result in a Material Adverse Effect.

 

5.09                        No
Materially Adverse Contracts, Etc.  None of the Borrowers is subject to any
charter, corporate or other legal restriction, or any judgment, decree, order, rule or
regulation which in the judgment of the Borrowers’ officers has or is expected
in the future to have a Material Adverse Effect.  None of the Borrowers is a party to any
contract or agreement which in the judgment of the Borrowers’ officers has or
is expected to have any Material Adverse Effect.

 

5.10                        Compliance
With Other Instruments, Applicable Laws, Etc.  None of the Borrowers is violating any
provision of its charter documents or by-laws (or equivalent entity documents)
or any agreement or instrument by 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, license, rule or any Applicable Law, in a manner which could
result in the imposition of penalties in an amount material to the Borrowers
(taken as a whole) or have a Material Adverse Effect.

 

5.11                        Tax
Status.  The Borrowers have made or
filed all United States federal and state income and all Canadian federal and
provincial or territorial income, as applicable, and all other Tax returns,
reports and declarations required by any jurisdiction to which any of them are
subject (unless and only to the extent that any Borrower has set aside on its
books provisions reasonably adequate for the payment of all unpaid and
unreported Taxes), and have paid all Taxes 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 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 to the extent
required in accordance with GAAP.  All
Tax returns, report and declarations required by any jurisdiction accurately
disclose (except for discrepancies which are not material) the amount of Taxes
payable by the Borrowers in the relevant jurisdiction except for the amounts
being contested in good faith by the

 

71

 

Borrowers.  There are no unpaid
Taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Borrowers know of no basis for any such
claim.  There is no proposed Tax
assessment against the Borrowers or any of their respective Subsidiaries that
would, if made, have a Material Adverse Effect. 
Except as disclosed on Schedule 5.11, as of the Closing Date no
Borrower or any Subsidiary thereof is party to any tax sharing agreement.

 

5.12                        Employee
Benefit Plans.

 

(a)                                  In General.  Each Employee
Benefit Plan and each Guaranteed Pension Plan has been maintained and operated
in compliance in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of fiduciaries
and other Persons handling plan funds as required by §412 of ERISA.  Each Borrower has heretofore delivered to the
Administrative Agent the most recently completed annual report, Form 5500,
with all required attachments, and actuarial statement required to be submitted
under §103(d) of ERISA, with respect to each Guaranteed Pension Plan.

 

(b)                                 Terminability of Welfare Plans. 
No Employee Benefit Plan, which is an employee welfare benefit plan
within the meaning of §3(1) or §3(2)(B) of ERISA, provides benefit
coverage subsequent to termination of employment, except as required by Title
I, Part 6 of ERISA or the applicable state insurance laws (it being
acknowledged that, in certain circumstances, a Borrower may agree to provide
certain benefits beyond the date of an employees’ termination in connection
with severance arrangements or such employee’s part-time employment).  A Borrower may terminate each such Plan at
any time (or at any time subsequent to the expiration of any applicable
bargaining agreement) in the discretion of such Borrower without liability to
any Person other than for claims arising prior to termination (it being
acknowledged that, in certain circumstances, a Borrower may agree to provide
certain benefits beyond the date of an employees’ termination in connection
with severance arrangements or such employee’s part-time employment).

 

(c)                                  Guaranteed Pension Plans. 
Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of §302(f) of ERISA, or
otherwise, has been timely made.  No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and no
Borrower nor any ERISA Affiliate is obligated to or has posted security in
connection with an amendment to a Guaranteed Pension Plan pursuant to §307 of
ERISA or §401(a)(29) of the Code.  No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by any Borrower or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event (other than an ERISA Reportable Event as to which the
requirement of 30 days notice has been waived), or any other event or condition
which presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC.  Based on the latest valuation
of each Guaranteed Pension Plan (which in each case occurred within twelve
months of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of §4001 of ERISA did not
exceed the aggregate

 

72

 

value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.

 

(d)                                 Multiemployer Plans. 
No Borrower nor any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan under §4201 of
ERISA or as a result of a sale of assets described in §4204 of ERISA.  No Borrower nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or insolvent under
and within the meaning of §4241 or §4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan intends to
terminate or has been terminated under §4041A of ERISA.

 

5.13                        Subsidiaries;
Equity Interests; Capitalization.

 

(a)                                  Subsidiaries.  Schedule
5.13(a) hereto sets forth, as of the Closing Date, a complete and
accurate list of the Parent’s Subsidiaries, and, with respect to all Borrower
Subsidiaries, including the name of such Subsidiary, its jurisdiction of
incorporation, the address of its principal place of business and its U.S.
taxpayer identification number, together with the number of authorized and
outstanding Equity Interests of such Subsidiary.  Each Subsidiary (other than certain Excluded
Subsidiaries and NELS) is directly or indirectly wholly-owned by the Parent
and, as of the Closing Date, the Borrowers have no Equity Interests in any
other Person other than those specifically disclosed on Schedule 5.13(a).  The Parent or a Borrower Subsidiary has good
and marketable title to all of the Equity Interests it purports to own of each
Subsidiary (other than Excluded Subsidiaries), free and clear in each case of
any Lien other than Liens in favor of the Administrative Agent and the holders
of the Second Lien Notes (or any refinancing or replacement thereof permitted
hereby).  All such Equity Interests have
been duly issued and are fully paid and non-assessable.

 

(b)                                 Equity Interests. 
As of the April 30, 2009, the authorized capital stock of the
Parent consists of (i) 100,000,000 shares of Class A common stock
(par value $.01 per share) authorized of which 24,678,700 shares are
outstanding and (ii) 100,000,000 shares of Class B common stock (par
value $.01 per share) authorized of which 988,200 shares are outstanding.  All such outstanding shares have been duly
issued and are fully paid and non-assessable.

 

(c)                                  Options, Etc. 
As of April 30, 2009, except as set forth on Schedule 5.13(c), no
Person has outstanding any rights (either pre-emptive or other) or options
(except for the options for common stock or other forms of equity-based
compensation issued to employees, consultants or directors in accordance with a
bona fide compensation plan approved by the Board of Directors of the Parent)
to subscribe for or purchase from the Parent, or any warrants or other
agreements providing for or requiring the issuance by the Parent of, any Equity
Interests convertible into or exchangeable for its capital stock.

 

73

 

5.14                        Margin Regulations; Holding
Company and Investment Company Act. (a) The Borrowers are not engaged and will not engage,
principally or as one of their important activities, in the business of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the FRB), or extending credit for the purpose of purchasing or carrying
margin stock.

 

(b)                                 None of the Borrowers 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, as amended; nor is any of them an “investment company”, or
an “affiliated company” or a “principal underwriter” of an “investment company”,
as such terms are defined in the Investment Company Act of 1940, as amended.

 

5.15                        Absence
of Financing Statements, Etc.  Except with respect to Permitted Liens and as
set forth on Schedule 7.01 hereto, there is no effective financing
statement, security agreement, chattel mortgage, real estate mortgage or other
document filed or recorded with any filing records, registry, or other public
office, which covers, affects or gives notice of any present or possible future
Lien on any assets or property of any of the Borrowers or rights thereunder.

 

5.16                        Environmental
Compliance.

 

The Borrowers have taken all necessary steps to
investigate the past and present condition and usage of the Real Properties and
the operations conducted thereon and, based upon such diligent investigation,
have determined that, except as shown on Schedule 5.16:

 

(a)                                  none of the Borrowers or Non-Borrower
Subsidiaries, nor any operator of their properties, is in violation, or alleged
to be in violation, of any judgment, decree, order, license, rule or any
Applicable Law pertaining to environmental matters, including without
limitation, those arising under RCRA, 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 state or local or Canadian
federal or provincial statute, regulation, ordinance, order or decree relating
to health, safety or the environment (the “Environmental Laws”), which
violation would have a Material Adverse Effect; and

 

(b)                                 except where it would not have a Material
Adverse Effect, no portion of the Real Property has been used by the Borrowers
or Non-Borrower Subsidiaries for the handling, processing, storage or disposal
of Hazardous Materials and no underground tank or other underground storage
receptacle for Hazardous Materials is located on such properties; (ii) in
the course of any activities conducted by the Borrowers or Non-Borrower
Subsidiaries, or, to the Borrowers’ knowledge by any other operators of the
Real Property, no Hazardous Materials have been generated or are being used on
such properties; and (iii) to the Borrowers’ knowledge, there have been no
unpermitted Releases or threatened Releases of Hazardous Materials on, upon,
into or from the Real Property.

 

5.17                        Perfection
of Security Interests. The provisions of the Security Documents
are effective to create in favor of the Administrative Agent for the benefit of
the Lenders and the Agents a legal, valid and enforceable first priority Lien
(subject to Liens permitted by Section 7.01 and to Section 10.15)
on all right, title and interest of the respective Borrowers in the

 

74

 

Collateral described therein. 
All filings, assignments, pledges and deposits of documents or
instruments have been made or will be made and all other actions have been
taken or will be taken that are necessary under Applicable Law, or reasonably
requested by the Administrative Agent or any of the Lenders, to establish and
perfect the Administrative Agent’s security interests (as collateral agent for
the Lenders and the Agents) in the Collateral to the extent required pursuant
to Section 10.15 hereof.  The
Collateral and the Administrative Agent’s rights (as collateral agent for the
Lenders and the Agents) with respect to the Collateral are not subject to any
setoff, claims, withholdings or other defenses, except for Permitted
Liens.  The Borrowers are the owners of
the Collateral free from any Lien, except for Permitted Liens.

 

5.18                        Certain
Transactions.  Except as
set forth on Schedule 5.18 or as permitted in Section 7.08,
and except for arm’s length transactions pursuant to which the Borrowers make
payments in the ordinary course of business upon terms no less favorable than
the Borrowers could obtain from third parties, none of the officers, directors,
or employees of the Borrowers are presently a party to any transaction with the
Borrowers (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 Borrowers, 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, the value of such transaction, when aggregated with all
other such transactions occurring during the term of this Agreement, exceeds
the Threshold Amount.

 

5.19                        True
Copies of Charter and Other Documents.  The Borrowers have furnished the
Administrative Agent copies, in each case true and complete as of the Closing
Date, of (a) all charter and other incorporation or constituent documents
(together with any amendments thereto) and (b) by-laws (or equivalent
entity documents) (together with any amendments thereto).

 

5.20                        Disclosure.  No representation or warranty made by the
Borrowers in this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Lenders or the Administrative
Agent by or on behalf of or at the request of the Borrowers 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 not misleading in light of the
circumstances in which they are made.

 

5.21                        Guarantees
of Excluded Subsidiaries. 
Except as permitted under Section 7.03, no Borrower has
guaranteed Indebtedness or other financial obligations of any Excluded Subsidiary.

 

5.22                        Obligations
Constitute Senior Debt.  The
Obligations of the Borrowers hereunder (i) are and will continue to be “Senior
Debt” and “Designated Senior Debt” under and as defined in the Senior
Subordinated Notes Indenture and (ii) are “First Lien Obligations” under
and as defined in the Second Lien Notes Indenture.

 

5.23                        Labor
Matters.  Except as disclosed on Schedule
5.23, (a) as of the Closing Date there are no collective bargaining
agreements or Multiemployer Plans covering the employees of the Borrowers or
any of their Subsidiaries and (b) none of the Borrowers nor any of their

 

75

 

Subsidiaries have suffered any strikes, walkouts, work stoppages or
other material labor difficulty within the last five (5) years that could
reasonably be expected to have a Material Adverse Effect.

 

ARTICLE VI.

AFFIRMATIVE COVENANTS

 

The Borrowers covenant and agree that, so long as any
Obligation or any Letter of Credit is outstanding or the Lenders have any obligation
to make Loans or the L/C Issuer has any commitment or obligation to issue,
extend or renew any Letters of Credit hereunder, or the Lenders have any
obligations to reimburse the L/C Issuer for drawings honored under any Letter
of Credit hereunder:

 

6.01                        Punctual
Payment.  The Borrowers will duly and
punctually pay or cause to be paid the principal and interest on the Loans, all
reimbursement obligations under Section 2.03(c), and all fees and
other amounts provided for in this Agreement and the other Loan Documents for
which they are liable, all in accordance with the terms of this Agreement and
such other Loan Documents.

 

6.02                        Maintenance
of Office.  The
Borrowers will maintain their chief executive offices at the locations set
forth on the Perfection Certificates delivered pursuant to Section 4.01(a)(xiii),
or at such other place in the United States of America as each Borrower shall
designate upon thirty (30) days’ prior written notice to the Administrative
Agent.

 

6.03                        Records
and Accounts.  Each of the
Borrowers and the Non-Borrower Subsidiaries will (a) 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, (b) maintain adequate accounts and reserves for
all Taxes, depreciation, depletion, obsolescence and amortization of its
properties, all other contingencies, and all other proper reserves in
accordance with GAAP and (c) at all times engage the Accountants as the
independent certified public accountants of the Parent and its Subsidiaries.

 

6.04                        Financial
Statements, Certificates and Information.  The Borrowers will deliver to the
Administrative Agent and the Lenders the following:

 

(a)                                  as soon as practicable, but, in any event
not later than ninety (90) days after the end of each fiscal year of the
Borrowers, the consolidated balance sheets of the Parent and its Subsidiaries
as at the end of such year, statements of cash flows, and the related
consolidated statements of operations, setting forth in comparative form the
figures for the previous fiscal year, all such consolidated financial
statements to be in reasonable detail, prepared, in accordance with GAAP and
certified by the Accountants, which shall not be subject to any “going concern”
or similar qualification or exception (other than any such qualification that
is based solely upon the Indebtedness hereunder or under the Second Lien Notes
Indenture or the Senior Subordinated Debt becoming current as a result of not
having refinanced such Indebtedness prior to the date which is one year before
the respective maturity dates thereof, as applicable) or any qualification or
exception as to the scope of the Accountants’ audit if such qualification or
exception as to scope is based upon or results from any limitations imposed by

 

76

 

the Borrowers or any action (or inaction) of the
Borrowers with respect to the applicable audit. 
In addition, simultaneously therewith, the Borrowers will use their best
efforts to provide the Lenders with a written statement from such Accountants
to the effect that the Borrowers are in compliance with the financial covenants
set forth in Section 7.11 hereof, and that, in making the
examination necessary to said certification, nothing has come to the attention
of such Accountants that would indicate that any Default or Event of Default
exists, or, if such Accountants shall have obtained knowledge of any then
existing Default or Event of Default they shall disclose in such statement any
such Default or Event of Default; provided, that such Accountants shall
not be liable to the Lenders for failure to obtain knowledge of any Default or
Event of Default;

 

(b)                                 as soon as practicable, but in any event
not later than forty-five (45) days after the end of each fiscal quarter of the
Borrowers, copies of the consolidated balance sheets and statement of
operations of the Parent and its Subsidiaries as at the end of such quarter,
subject to year-end adjustments, and the related statement of cash flows, all
in reasonable detail and prepared in accordance with GAAP with a certification
by the principal financial or accounting officer of the Borrowers (the “CFO”)
that such consolidated financial statements were prepared in accordance with
GAAP and fairly present the consolidated financial condition of the Borrowers
and their Subsidiaries as at the close of business on the date thereof and the
results of operations for the period then ended;

 

(c)                                  simultaneously with the delivery of the
financial statements referred to in (a) and (b) above, a Compliance
Certificate certified by the CFO that the Borrowers are in compliance with the
covenants contained in Article VI and Article VII of
this Agreement as of the end of the applicable period setting forth in
reasonable detail computations evidencing such compliance, provided
that, if the Borrowers shall at the time of issuance of such certificate or at
any other time obtain knowledge of any Default or Event of Default, the Borrowers
will include in such Compliance Certificate or otherwise deliver forthwith to
the Lenders a certificate specifying the nature and period of existence thereof
and what action the Borrowers propose to take with respect thereto and
attaching, in the event such Default or Event of Default relates to
environmental matters, an Environmental Compliance Certificate;

 

(d)                                 contemporaneously with, or promptly
following, the filing or mailing thereof, copies of all material of a financial
nature filed with the SEC (including any copies of notices or other
correspondence (other than immaterial notices or correspondence) received from
the SEC concerning any investigation or other inquiry regarding financial or
other operational results of any Borrower) or sent to the stockholders of the
Parent or any of the Borrowers to the extent the same are not available on
EDGAR;

 

(e)                                  as soon as practicable, but in any event
not later than thirty (30) days after the commencement of each fiscal year of
the Borrowers and the Non-Borrower Subsidiaries, a copy of the annual budget,
projections and business plan for the Borrowers and the Non-Borrower
Subsidiaries for such fiscal year;

 

(f)                                    promptly upon receipt thereof from the
Accountants, but in any event within 60 days after the Closing Date, the
Audited Financial Statements reissued by the Accountants,

 

77

 

which such reissued Audited Financial Statements shall
not be subject to any “going concern” or like qualification or exception as to
the scope of the Accountants’ audit;

 

(g)                                 promptly after the furnishing thereof, (i) copies
of any documentation furnished to any holder of the Second Lien Notes or to any
trustee for their benefit pursuant to the terms of the Second Lien Notes Indenture
and not otherwise required to be furnished to the Administrative Agent and the
Lenders pursuant to this Section and (ii) copies of any notices
furnished by the trustee under the Second Lien Notes to any Borrower pursuant
to the Second Lien Notes Indenture and not otherwise required to be furnished
to the Administrative Agent and the Lenders pursuant to this Section (including
copies of any notices, requests, amendments, waivers or other modifications so
given or received under or pursuant to the Second Lien Note Documents regarding
any breach or default by any party thereto or regarding any other event that
could materially impair the rights of any Borrower or otherwise could have a
Material Adverse Effect);

 

(h)                                 from time to time such other financial data
and other information (including accountants’ management letters, audit reports
or recommendations regarding internal controls provided by the Accountants to
the board of directors of the Parent, or any committee thereof) as the Lenders
may reasonably request; and

 

(i)                                     simultaneously with the delivery of the
financial statements referred to in (a) and (b) above, the Borrower
shall provide the Administrative Agent with an updated copy of Schedule 5.13(a) hereto
or shall certify that Schedule 5.13(a) is true and correct on and
as of the date of such delivery.

 

The Borrowers hereby authorize the Lenders to disclose
any information obtained pursuant to this Agreement to all appropriate
Governmental Authorities where required by Applicable Law; provided, however,
that the Lenders shall, to the extent practicable and allowable under
Applicable Law, notify the Borrowers within a reasonable period prior to the
time any such disclosure is made; and provided further, this authorization
shall not be deemed to be a waiver of any rights to object to the disclosure by
the Lenders of any such information which any Borrower has or may have under
the federal Right to Financial Privacy Act of 1978, as in effect from time to
time.

 

Documents required to be delivered pursuant to this Section (to
the extent any such documents are included in materials otherwise filed with
the SEC and available in EDGAR) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
the Borrowers post such documents, or provide a link thereto on the Borrowers’
website on the Internet at the website address listed on Schedule 10.02;
or (ii) on which such documents are posted on the Borrowers’ behalf on an
Internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (i) the
Borrowers shall deliver paper copies of such documents to the Administrative Agent
or any Lender that requests the Borrowers to deliver such paper copies until a
written request to cease delivering paper copies is given by the Administrative
Agent or such Lender and (ii) the Borrowers shall notify the
Administrative Agent and each Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Administrative Agent by

 

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electronic mail
electronic versions (i.e., soft copies) of such documents.  Notwithstanding anything contained herein, in
every instance the Borrowers shall be required to provide paper copies of the
Compliance Certificates required by this Section to the Administrative
Agent.  Except for such Compliance
Certificates, the Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrowers with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

 

The Borrowers hereby acknowledge that (a) the
Administrative Agent and/or the Joint Arrangers will make available to the
Lenders and the L/C Issuer materials and/or information provided by or on
behalf of the Borrowers hereunder (collectively, the “Borrowers’ Materials”)
by posting the Borrowers’ Materials on IntraLinks or another similar electronic
system (the “Platform”) and (b) certain of the Lenders (each, a “Public
Lender”) may have personnel who do not wish to receive material non-public
information with respect to the Borrowers or their Affiliates, or the
respective securities of any of the foregoing and who may be engaged in
investment and other market-related activities with respect to such Person’s
securities.  The Borrowers hereby agree
that they will use commercially reasonable efforts to identify that portion of
the Borrowers’ materials that may be distributed to Public Lenders and that (w) all
Borrowers’ Materials that are to be made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrowers’ Materials “PUBLIC,” the Borrowers shall be deemed to have
authorized the Administrative Agent, the Joint Arrangers, the L/C Issuer and
the Lenders to treat such Borrowers’ Materials as not containing any material
non-public information (although it may be sensitive and proprietary) with
respect to the Borrowers or their securities for purposes of Securities Laws
(including state securities laws) (provided, however, that to the
extent such Borrowers’ Materials constitute Information, they shall be treated
as set forth in Section 10.07); (y) all Borrowers’ Materials
marked “PUBLIC” are permitted to be made available through a portion of the
Platform designated “Public Side Information”; and (z) the Administrative
Agent and the Joint Arrangers shall be entitled to treat any Borrowers’
Materials that are not marked “PUBLIC” as being suitable only for posting on a
portion of the Platform not designated “Public Side Information.”

 

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6.05                        Legal
Existence and Conduct of Business.  Except where the failure of a Borrower or
Non-Borrower Subsidiary to remain so qualified would not have a Material
Adverse Effect, and except as otherwise set forth in Section 7.04
hereof, each Borrower and each Non-Borrower Subsidiary will do or cause to be
done all things necessary to preserve and keep in full force and effect its
legal existence, legal rights and franchises; effect and maintain its foreign
qualifications, licensing, domestication or authorization except as terminated
by its Board of Directors in the exercise of its reasonable judgment; use its
reasonable best efforts to comply with all Applicable Laws; and shall not
become obligated under any contract or binding arrangement which, at the time
it was entered into would have a Material Adverse Effect on the Borrowers and
Non-Borrower Subsidiaries taken as a whole. 
Each Borrower and each Non-Borrower Subsidiary will continue to engage
primarily in the business now conducted by it and in any related business.

 

6.06                        Maintenance
of Properties.  The
Borrowers and the Non-Borrower Subsidiaries will cause all material properties
used or useful in the conduct of their businesses to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrowers and Non-Borrower Subsidiaries 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 shall
prevent any Borrower or Non-Borrower Subsidiary from discontinuing the
operation and maintenance of any of its properties if such discontinuance is,
in the judgment of such Borrower or Non-Borrower Subsidiary, desirable in the
conduct of its or their business and which does not in the aggregate have a
Material Adverse Effect or is permitted pursuant to Section 7.04
hereof.

 

6.07                        Maintenance
of Insurance.   The
Borrowers and the Non-Borrower Subsidiaries will maintain with financially
sound and reputable insurance companies, funds or underwriters’ insurance,
including self-insurance, of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Borrowers and Non-Borrower
Subsidiaries.  In addition, the Borrowers
and the Non-Borrower Subsidiaries will furnish from time to time, upon the
Administrative Agent’s request, a summary of the insurance coverage of each of
the Borrowers and Non-Borrower Subsidiaries, which summary shall be in form and
substance satisfactory to the Administrative Agent.  The Administrative Agent shall be named as
first loss payee on the Borrower’s policies of insurance (other than liability
policies) and the Borrowers shall instruct the carrier to make payment of
proceeds directly to the Administrative Agent, and the Administrative Agent
shall be named as an additional insured on the Borrowers’ liability insurance,
all in a manner satisfactory to the Administrative Agent, and, if requested by
the Administrative Agent, will furnish to the Administrative Agent copies of
the applicable policies of the Borrowers naming the Administrative Agent for
the benefit of the Lenders as a loss payee or additional insured, as the case
may be, thereunder.

 

6.08                        Taxes.  The Borrowers and the Non-Borrower
Subsidiaries will each duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all material Taxes (other
than Taxes imposed by jurisdictions other than the United States or Canada or a
political division thereof which in the aggregate are not material to the business
or assets of

 

80

 

any Borrower or Non-Borrower Subsidiary on an individual basis or of
the Borrowers and Non-Borrower Subsidiaries taken as a whole) imposed upon each
Borrower and its Real Properties, sales and activities, or any part thereof, or
upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies, which if unpaid might by Applicable Law become a Lien
or charge upon any of such Borrower’s property; provided, however, that any
such Tax or claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings and if such
Borrower or Non-Borrower Subsidiary shall have set aside on its books adequate
reserves with respect thereto; and provided, further, that such Borrower and
Non-Borrower Subsidiary will pay all such Taxes or claims forthwith upon the
commencement of proceedings to foreclose any Lien which may have attached as
security therefor.

 

6.09                        Inspection
of Properties, Books and Contracts.   The Borrowers shall permit the Lenders, the
Administrative Agent or any of their designated representatives, upon
reasonable notice, to visit and inspect any of the properties of the Borrowers,
to examine the books of account of the Borrowers (including the making of
periodic accounts receivable reviews), or contracts (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
the Borrowers with, and to be advised as to the same by, their directors,
officers and Accountants, all at such times and intervals as the Lenders or the
Administrative Agent may reasonably request; provided that the Lenders and the
Administrative Agent and their designated representatives shall be accompanied
by a representative of the Borrowers during any meeting with the Accountants
pursuant to this Section 6.09 (and the Borrowers agree to cooperate
with the Administrative Agent in facilitating the same) and provided, further,
that it shall not be a violation of this Section 6.09 if, despite
the request of the Borrowers, the Accountants decline to meet or discuss with
the Lenders and the Administrative Agent.

 

6.10                        Compliance
with Applicable Laws, Contracts, Licenses and Permits; Maintenance of Material
Licenses and Permits.  Each
Borrower will, and will cause the Non-Borrower Subsidiaries to, except where
noncompliance would not have a Material Adverse Effect (a) comply with the
provisions of its charter documents, articles of incorporation, other constituent
documents and by-laws and all agreements and instruments by which it or any of
its properties may be bound; (b) comply with all Applicable Laws
(including Environmental Laws), decrees, orders, and judgments, including,
without limitation, all environmental permits hereto; (c) comply in all
material respects with all agreements and instruments by which it or any of its
properties may be bound; (d) maintain all material operating permits for all
landfills now owned or hereafter acquired; and (e) dispose of Hazardous
Materials only at licensed disposal facilities operating, to the best of such
Borrower’s knowledge after reasonable inquiry, in compliance with Environmental
Laws.  If at any time while any Loan or
Letter of Credit is outstanding or any Lender, the L/C Issuer or the
Administrative Agent has any obligation to make Loans or issue Letters of
Credit hereunder, any authorization, consent, approval, permit or license from
any Governmental Authority shall become necessary or required in order that any
Borrower may fulfill any of its obligations hereunder, such Borrower will
immediately take or cause to be taken all reasonable steps within the power of
such Borrower to obtain such authorization, consent, approval, permit or
license and furnish the Lenders with evidence thereof.

 

81

 

6.11                        Environmental
Indemnification.  The
Borrowers covenant and agree that they will jointly and severally, in
accordance with Section 10.12, indemnify and hold the Agents, the
L/C Issuer and the Lenders, and their respective affiliates, agents, directors,
officers and shareholders, harmless from and against any and all claims,
expense, damage, loss or liability incurred by such indemnified parties
(including all costs of legal representation incurred by such indemnified
parties) relating to (a) any Release or threatened Release of Hazardous
Materials on the Real Property; (b) any violation of any Environmental
Laws with respect to conditions at the Real Property or the operations
conducted thereon; or (c) the investigation or remediation of offsite
locations at which the Borrowers, or their predecessors are alleged to have
directly or indirectly Disposed of Hazardous Materials.  It is expressly acknowledged by the Borrowers
that this covenant of indemnification shall survive any foreclosure or any
modification, release or discharge of any or all of the Security Documents or
the payment of the Loans and shall inure to the benefit of the Agents and the
Lenders and their respective successors and assigns.

 

6.12                        Further
Assurances.  The
Borrowers will cooperate with the Lenders and the Administrative Agent and
execute such further instruments and documents as the Lenders or the
Administrative Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Agreement or any of the Loan
Documents.

 

6.13                        Notice
of Potential Claims or Litigation.  The Borrowers shall deliver to the
Administrative Agent, within thirty (30) days of receipt thereof, written
notice of the initiation of, or any material development in, any action, claim,
complaint, or any other notice of dispute or potential litigation (including
without limitation any alleged violation of any Environmental Law or ERISA and
any matter that would have been required to be disclosed on Schedule 5.23
had it existed on the Closing Date (or within 5 years prior thereto)), wherein
the potential liability is in excess of $2,500,000, or could otherwise
reasonably be expected to have a Material Adverse Effect, together with a copy
of each such notice received by any Borrower.

 

6.14                        Notice
of Certain Events Concerning Insurance, Environmental Claims and Accounting
Practices.

 

(a)                                  The Borrowers will provide the
Administrative Agent with written notice as to any material cancellation or
material adverse change in any insurance of any of the Borrowers within ten (10) Business
Days after such Borrower’s receipt of any notice (whether formal or informal)
of such material cancellation or material change by any of its insurers.

 

(b)                                 The Borrowers will promptly notify the
Administrative Agent in writing of any of the following events:

 

(i)                                     upon any Borrower obtaining knowledge of
any violation of any Environmental Law which violation could have a Material
Adverse Effect;

 

(ii)                                  upon any Borrower obtaining knowledge of
any potential or known Release, or threat of Release, of any Hazardous
Materials at, from, or into the Real Property which could have a Material
Adverse Effect;

 

(iii)                               upon any Borrower’s receipt of any notice of any
material violation of any Environmental Law or of any Release or threatened Release
of Hazardous Materials,

 

82

 

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 (A) any Borrower’s or any Person’s operation of the Real
Property, (B) the presence or Release of Hazardous Materials on, from, or
into the Real Property, or (C) investigation or remediation of offsite
locations at which any Borrower or its predecessors are alleged to have
directly or indirectly Released Hazardous Materials, and, in each case, with
respect to which the liability associated therewith could be reasonably
expected to exceed the Threshold Amount;

 

(iv)                              upon any Borrower obtaining knowledge
that any expense or loss which individually or in the aggregate exceeds the
Threshold Amount has been incurred by such Governmental Authority in connection
with the assessment, containment, removal or remediation of any Hazardous
Materials with respect to which any Borrower may be liable or for which a Lien
may be imposed on the Real Property;

 

(v)                                 at least thirty (30) days prior to the
effectiveness thereof, any change in the fiscal year end of the Parent and its
Subsidiaries whereupon, notwithstanding the provisions of Section 10.01,
the Administrative Agent shall have the right to modify the timing of the
financial covenants hereunder accordingly in order to correspond to any such
change in fiscal year; or

 

(vi)                              the entering into any collective
bargaining agreement, Multiemployer Plan or tax sharing agreement after the
Closing Date and the opening of any deposit account or securities account after
the Closing Date.

 

(c)                                  The Borrowers will provide the Lenders
and the Administrative Agent with written notice of any material change in
accounting policies or financial reporting practices by any Borrower or any
Subsidiary thereof, including any determination by the Borrowers referred to in
Section 2.10(b).

 

83

 

6.15                        Notice
of Default or Material Adverse Effect.  The Borrowers will promptly notify the
Lenders and the Administrative Agent in writing of the occurrence of (a) any
Default or Event of Default, (b) any event or condition that has resulted
or could reasonably be expected to result in a Material Adverse Effect, or (c) any
event which would give rise to an obligation of the Borrowers to prepay, redeem
or repurchase any of the Second Lien Notes or the Senior Subordinated
Debt.  For the avoidance of doubt, clause
(c) above shall not apply to any regularly scheduled payment of the Second
Lien Notes on the Maturity Date (as defined in the Second Lien Notes Indenture
as in effect on the date hereof).  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 the Threshold Amount (including, without
limitation, the Senior Subordinated Notes Indenture and the Second Lien Notes
Indenture) as to which any Borrower is a party or obligor, whether as principal
or surety, the Borrowers shall forthwith give written notice thereof to the
Lenders and the Administrative Agent, describing the notice of action and the
nature of the claimed default.

 

6.16                        Closure
and Post Closure Liabilities.  The Borrowers shall at all times adequately
accrue, in accordance with GAAP, and fund, as required by applicable
Environmental Laws, all closure and post closure liabilities with respect to
the operations of the Borrowers and the Non-Borrower Subsidiaries.

 

6.17                        Subsidiaries.  The Parent shall at all times directly or
indirectly through a Subsidiary own all of the Equity Interests of each
Subsidiary (other than the Excluded Subsidiaries and NELS) other than as a
result of a transaction otherwise permitted by the terms of this Agreement.

 

6.18                        Interest
Rate Protection.  The
Borrowers will, within ninety (90) days of the Closing Date, have a minimum
aggregate amount of not less than 30% of the notional amount of Consolidated
Total Funded Debt as of the Closing Date on a fixed rate long term basis
(whether through Swap Contracts or as a result of having a fixed rate of
interest by its terms) on terms and conditions reasonably acceptable to the
Administrative Agent.

 

6.19                        Additional
Borrowers.  Without
limitation of any of the other provisions of this Agreement, any newly-created
or newly-acquired Subsidiary (other than Excluded Subsidiaries and Non-Borrower
Subsidiaries, as identified by the Borrowers to the Administrative Agent in
accordance with, and subject to, the terms hereof), and any Subsidiary that
ceases to be an Excluded Subsidiary or a Non-Borrower Subsidiary pursuant to
the terms hereof (including the definitions of De Minimus Subsidiary and
Non-Borrower Subsidiary), shall immediately (and in any event within 10
Business Days of such event) become a Borrower hereunder by, if applicable,
signing allonges to the Notes, entering into a joinder and affirmation to this
Agreement in substantially the form of Exhibit G attached hereto (a “Joinder
Agreement”) providing that such Subsidiary shall be a Borrower hereunder,
and providing such other documentation as the Lenders or the Administrative
Agent may reasonably request including, without limitation, documentation with
respect to conditions noted in Section 4.01 and 4.02 hereof
for the initial Borrowers.  In such
event, the Administrative Agent is hereby authorized by the parties to amend Schedule
1 hereto to include such Subsidiary as a Borrower hereunder.

 

84

 

ARTICLE VII.

NEGATIVE COVENANTS

 

So long as any Lender shall have any Commitment
hereunder, any Loan or other Obligation hereunder shall remain unpaid or
unsatisfied, or any Letter of Credit shall remain outstanding:

 

7.01                        Liens.  None of the Borrowers or the Non-Borrower
Subsidiaries shall, directly or indirectly, create or incur or suffer to be
created or incurred or to exist any Lien, of any kind upon any property or
assets of any character (including, without limitation, any of the Collateral),
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 Indebtedness
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 thirty (30) days after the same shall have become payable any
Indebtedness or claim or demand against it which if unpaid might by Applicable
Law or upon bankruptcy or insolvency, or 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 as follows (the “Permitted Liens”):

 

(a)                                  Liens on property to secure Indebtedness
permitted under Sections 7.03(e) and 7.03(o) hereof; provided
that such Liens (i) shall encumber only the specific assets being financed
or leased, (ii) shall not exceed the fair market value thereof and (iii) shall
not secure Indebtedness in excess of $50,000,000 in the aggregate, taking into
account Indebtedness outstanding at any time under both of such Sections
7.03(e) and 7.03(o);

 

(b)                                 Liens to secure Taxes or claims for
labor, material or supplies in respect of obligations not overdue and
government Liens in existence less than 90 days from the date of creation
thereof to secure Taxes, levies or claims being contested in good faith by
appropriate proceedings if the applicable Borrower shall have set aside on its
books adequate reserves with respect thereto;

 

(c)                                  Deposits or pledges made in connection
with, or to secure payment of, workmen’s compensation, unemployment insurance,
old age pensions or other social security obligations and deposits in escrow in
favor of states and municipalities to support the Borrower’s performance
obligations under contracts entered into in the ordinary course of business
with such states and municipalites;

 

(d)                                 Liens of carriers, warehousemen,
mechanics and materialmen, and other like Liens, in existence less than 120
days from the date of creation thereof in respect of obligations not overdue; provided,
that any such Lien may remain outstanding longer than 120 days if such Lien or
the obligations secured thereby are being contested by the applicable Borrower
in good faith by appropriate proceedings and such Borrower shall have set aside
on its books adequate reserves with respect thereto;

 

85

 

(e)                                  Encumbrances consisting of easements,
rights of way, zoning restrictions, restrictions on the use of Real Property
and defects and irregularities in the title thereto, landlord’s or lessor’s
Liens under leases to which any Borrower or Non-Borrower Subsidiary is a party,
and other minor Liens none of which in the opinion of the respective Borrower
or Non-Borrower Subsidiary interferes materially with the use of the Real
Property affected in the ordinary conduct of the business of such Borrower or
Non-Borrower Subsidiary, which defects do not individually or in the aggregate
have a material adverse effect on the business of such Borrower or Non-Borrower
Subsidiary individually or of the Borrowers and the Non-Borrower Subsidiaries
on a consolidated basis;

 

(f)                                    Liens existing as of the date hereof
securing Indebtedness permitted under Section 7.03 hereof and
listed on Schedule 7.01 hereto;

 

(g)                                 Liens granted pursuant to the Security
Documents to secure the Obligations (including secured Obligations hereunder
with respect to Commodity Derivatives Obligations with Lenders or their
Affiliates);

 

(h)                                 Reserved

 

(i)                                     Liens on the Equity Interests of the
Excluded Subsidiaries; and

 

(j)                                     Liens granted pursuant to the Second Lien
Security Documents to the extent such Liens are subject to the terms of the
Intercreditor Agreement.

 

7.02                        Investment.  None of the Borrowers or the Non-Borrower
Subsidiaries (other than the Insurance Subsidiary (if any)) shall, directly or
indirectly, make or permit to exist or to remain outstanding any other
Investment other than (collectively, “Permitted Investments”):

 

(a)                                  Investments in obligations of the United
States of America or Canada and agencies thereof and obligations guaranteed by
the United States of America or Canada that are due and payable within one (1) year
from the date of acquisition;

 

(b)                                 certificates of deposit, time deposits,
bankers’ acceptances or repurchase agreements which are fully insured or are
issued by commercial banks organized under the laws of the United States of
America or any state thereof or Canada and having total assets in excess of
$1,000,000,000;

 

(c)                                  commercial paper maturing not more than
nine (9) months from the date of issue, provided that, at the time
of purchase, such commercial paper is not rated lower than “P-1” by Moody’s or “A-1”
by S&P;

 

(d)                                 Investments associated with insurance
policies required or allowed by state or provincial law to be posted as
financial assurance for landfill closure and post-closure liabilities;

 

(e)                                  Investments by any Borrower in any other
Borrower;

 

(f)                                    Investments existing on the Closing Date
and listed on Schedule 7.02 hereto;

 

86

 

(g)                                 any money market account, short-term
asset management account or similar investment account maintained with one of
the Lenders;

 

(h)                                 loans made to employees of any of the
Borrowers in an aggregate amount not to exceed $2,000,000 at any time
outstanding;

 

(i)                                     Investments in the form of Permitted
Acquisitions permitted pursuant to Section 7.04(a) hereof and
Indebtedness permitted under Section 7.03 hereof; and

 

(j)                                     Investments in Excluded Subsidiaries and
Foreign Subsidiaries not to exceed $47,500,000 (the “Investment Basket”)
in the aggregate outstanding at any time (less the aggregate amount of
Indebtedness of Excluded Subsidiaries guaranteed by the Borrowers after the
Closing Date in accordance with Section 7.03(q)), provided that (x) fluctuations
in the book value of an Investment based upon non-cash earnings or losses of
the applicable Excluded Subsidiary will not impact the Investment Basket (it
being understood that any cash losses would not have the effect of reducing the
amount of the Investment or increasing the Basket) and (y) to the extent
that the Borrowers have received dividends or distributions in cash from any
Excluded Subsidiary or Foreign Subsidiary in connection with any such
Investment or have received Net Cash Proceeds in connection with the
Disposition of any such Investment, the amount of such cash or Net Cash
Proceeds may, without duplication, replenish the Investment Basket (provided
that in no event shall the aggregate outstanding Investments made by the
Borrowers and the Non-Borrower Subsidiaries in the Excluded Subsidiaries and
Foreign Subsidiaries, at any date of determination, exceed $47,500,000);

 

(k)                                  From and after April 30, 2011,
Investments in the Insurance Subsidiary not to exceed $20,000,000 at any time
outstanding; and

 

(l)                                     Temporary Investments in De Minimis
Subsidiaries made solely in connection with their liquidation or dissolution;

 

provided; that none of the Borrowers or Non-Borrower
Subsidiaries shall make any Investment in any Excluded Subsidiary unless both
before and after giving effect thereto there does not exist a Default or Event
of Default and no Default or Event of Default would be created by the making of
such Investment.

 

7.03                        Indebtedness.  None of the Borrowers or the Non-Borrower
Subsidiaries shall, directly or indirectly, become in any way obligated under a
guarantee or become or be a surety of, or otherwise create, incur, assume, or
be or remain liable, contingently or otherwise, with respect to any
Indebtedness, 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
undertaking or Indebtedness of any other Person, or incur any Indebtedness
other than:

 

(a)                                  Indebtedness of the Borrowers to the
Lenders, the L/C Issuer and the Administrative Agent arising under this
Agreement and the Loan Documents;

 

87

 

(b)                                 Subject to Section 7.08,
Seller Subordinated Debt not to exceed $15,000,000 in aggregate outstanding
principal amount at any time (less the aggregate principal amount of any
outstanding Indebtedness permitted under Section 7.03(h));

 

(c)                                  Existing Indebtedness of the Borrowers
with respect to loans and Capitalized Leases listed on Schedule 7.03
hereto, on the terms and conditions in effect as of the date hereof, together
with any renewals, extensions or refinancing thereof on terms which are not
materially different than those in effect as of the Closing Date;

 

(d)                                 Endorsements for collection, deposit or
negotiation and warranties of products or services (including unsecured
performance and payment bonds (“Performance Bonds”)), in each case
incurred in the ordinary course of business;

 

(e)                                  Indebtedness of the Borrowers incurred in
connection with the acquisition or lease of any equipment by the Borrowers
under any Synthetic Lease, Capitalized Lease or other lease arrangement or
purchase money financing; provided that the aggregate outstanding
principal amount of such Indebtedness of the Borrowers (together with the
Indebtedness outstanding under Section 7.03(c) and listed on Schedule
7.03 and permitted renewals, extensions and refinancings thereof) shall not
exceed $40,000,000 at any time (excluding Indebtedness with respect to any
Capital Leases that are landfill operating and management leases);

 

(f)                                    Indebtedness of the Borrowers to any of the
Lenders or any of their Affiliates under price swaps, price caps, and price
collar or floor agreements for fuel, aluminum, fiber and plastic, and similar
agreements or arrangements designed to protect against or manage price
fluctuations with respect to such commodities purchased in the ordinary course
of business of the Borrowers (“Commodity Derivatives Obligations”), provided
that the maturity of such agreements do not exceed thirty-six (36) months and
the terms thereof are consistent with past practices of the Borrowers;

 

(g)                                 Indebtedness of the Borrowers in respect
of non-speculative Swap Contracts on terms consistent with past practices of
the Borrowers (other than those described in subsection (f) above);

 

(h)                                 Other unsecured Indebtedness incurred in
connection with the acquisition by the Borrowers of real or personal property,
including any Indebtedness incurred with respect to non-compete payments in
connection with such acquisition(s), provided that the aggregate
outstanding principal amount of such Indebtedness of the Borrowers shall not
exceed $15,000,000 at any time (less the aggregate principal amount of any
outstanding Indebtedness permitted under Section 7.03(b));

 

(i)                                     Intercompany Indebtedness among the
Borrowers and the Non-Borrower Subsidiaries;

 

(j)                                     Second Lien Notes in an aggregate
principal amount not in excess of $180,000,000 and any renewals, extensions or
refinancings thereof; provided, that (i) the aggregate principal
amount is not increased at the time of such renewal, extension or refinancing
except by an amount equal to a reasonable premium paid, and fees and expenses
reasonably incurred (including original issue discount on applicable market
terms), (ii) the final maturity

 

88

 

date shall not be earlier than the final maturity of
the Second Lien Notes, (iii) the interest rate shall not exceed the then
applicable market interest rate and the optional redemption provisions shall be
pursuant to applicable market terms, (iv) the Liens, if any, securing such
renewal, extension or refinancing shall be subject to an intercreditor
agreement that is substantially consistent with and no less favorable to the
Lenders than the Intercreditor Agreement, (v) no performance related
financial covenants shall be included, (vi) the cross-default provisions
to this Agreement shall not be expanded, and (vii) the other terms, taken
as a whole, of any such renewal, extension or refinancing shall not be less
favorable to the Lenders than those contained in the Section Lien Notes
Documents, as reasonably determined by the Administrative Agent;

 

(k)                                  Senior Subordinated Debt not to exceed
$350,000,000 in aggregate principal amount;

 

(l)                                     Surety and similar bonds and completion
bonds and bid guarantees provided by or issued on behalf of the Borrowers with
respect to the closure, final-closure and post-closure liabilities related to
landfills owned or operated by the Borrowers; provided that the aggregate
amount of such Indebtedness shall not exceed $175,000,000 at any time
outstanding;

 

(m)                               Indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in connection
with the Permitted Acquisitions or permitted dispositions of Equity Interests
or assets of the Borrowers; provided that the maximum aggregate
liability in respect of all such obligations shall at no time exceed the gross
proceeds, including non-cash proceeds, (the fair market value of such non-cash
proceeds being measured at the time received or paid and without giving effect
to any subsequent changes in value) actually received or paid by the Borrowers
in connection with such Permitted Acquisition or disposition;

 

(n)                                 Reserved

 

(o)                                 Indebtedness with respect to IRBs, provided
that, other than with respect to L/C Supported IRBs, such Indebtedness
(including Indebtedness of such type listed on Schedule 7.03) shall not
exceed $75,000,000 at any time outstanding;

 

(p)                                 Guarantees of Indebtedness permitted
pursuant to this Section 7.03(a) to (o) made by
any of the Borrowers, provided that the amount of such guarantees does not
exceed the amount of the underlying Indebtedness and that any guarantees of
Subordinated Debt are equally subordinated; and

 

(q)                                 Guarantees of Indebtedness of the
Excluded Subsidiaries and Foreign Subsidiaries in an amount not to exceed
$47,500,000 in the aggregate outstanding at any time (less, but without
duplication, the aggregate amount of all outstanding Investments in Excluded
Subsidiaries in accordance with Section 7.02(j)).

 

7.04                        Mergers;
Consolidation; Sales.

 

(a)                                  Mergers and Acquisitions. None of the Borrowers or the
Non-Borrower Subsidiaries shall, directly or indirectly, become a party to any
merger, amalgamation, or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices or the

 

89

 

acquisition of Excluded Subsidiaries permitted under Section 7.02(j))
except the merger or consolidation of, or asset or stock acquisitions between
Borrowers and except as otherwise provided in this Section 7.04(a).  The Borrowers and the Non-Borrower
Subsidiaries may purchase or otherwise acquire all or substantially all of the
assets or stock or other equity interests of any other Person (a “Permitted
Acquisition”) provided that:

 

(i)                                     the Borrowers are in current compliance
with and, giving effect to the proposed acquisition (including any borrowings
made or to be made in connection therewith), will continue to be in compliance
with all of its covenants and agreements contained in this Agreement, including
the financial covenants in Section 7.11 hereof on a pro forma
historical combined basis as if the transaction occurred on the first day of
the period of measurement;

 

(ii)                                  at the time of such acquisition, no
Default or Event of Default has occurred and is continuing, and such
acquisition will not otherwise create a Default or an Event of Default
hereunder (including by way of cross-default to any other Indebtedness that
would constitute an Event of Default hereunder);

 

(iii)                               the business to be acquired is predominantly in the
same lines of business as the Borrowers, or businesses reasonably related or
incidental thereto (e.g., non-hazardous solid waste collection, transfer,
hauling, recycling, or disposal);

 

(iv)                              the business to be acquired operates
predominantly in the United States or Canada;

 

(v)                                 (A) in the case of an asset
acquisition, all of the assets acquired shall be acquired by an existing
Borrower or a newly-created wholly-owned Subsidiary of the Parent, which, if it
is a U.S. Subsidiary, shall become a Borrower hereunder in accordance with Section 6.19,
and 100% of the Equity Interests issued by such U.S. Subsidiary and its assets
(subject to the provisions of Section 10.15 with respect to Real
Property and Motor Vehicles) and shall be pledged simultaneously with such
acquisition to the Administrative Agent for the benefit of the Lenders and the
Agents in accordance with Section 10.15, (B) in the case of an
acquisition of Equity Interests of a U.S. company, the acquired company,
simultaneously with such acquisition, shall become a Borrower in accordance
with Section 6.19 and 100% of its Equity Interests and its assets
shall be pledged simultaneously with such acquisition to the Administrative
Agent for the benefit of the Lenders and the Agents or the acquired company
shall be merged or amalgamated with and into a wholly-owned Subsidiary that is
a Borrower and such newly-acquired or newly-created Subsidiary shall otherwise
comply with the provisions of Section 6.19 hereof; or (C) in
the case of acquisition of Equity Interests of a foreign Person that, in
connection therewith, becomes a Foreign Subsidiary, the acquiring Borrower
shall pledge the capital stock or other Equity Interests of such Foreign
Subsidiary simultaneously with such acquisition to the Administrative Agent for
the benefit of the Lenders and the Agents (provided that not more than 65% of
the total voting power of all outstanding capital stock or other Equity
Interest of any such first-tier Foreign Subsidiary shall be required to be so
pledged and no Equity Interests of any non-first-tier Foreign Subsidiary shall
be required to be pledged).

 

90

 

(vi)          if the total consideration in connection
with any such acquisition, including the aggregate amount of all liabilities
assumed, but excluding the payment of all fees and expenses relating to such
purchase, exceeds the Threshold Amount, then not later than seven (7) days
prior to the proposed acquisition date, the Borrowers shall furnish the
Administrative Agent with (i) a copy of the purchase agreement, (ii) its
audited (if available, or otherwise unaudited) financial statements for the
preceding two (2) fiscal years or such shorter period of time as such entity or
division has been in existence, (iii) a summary of the Borrowers’ results of
their standard due diligence review, (iv) in the case of a landfill acquisition
or if the target company owns a landfill, a review by a Consulting Engineer and
a copy of the Consulting Engineer’s report, (v) a Compliance Certificate
demonstrating compliance with Section 7.11 hereof on a pro forma
historical combined basis as if the transaction occurred on the first day of
the period of measurement, (vi) written evidence that the board of directors
and (if required by Applicable Law) the shareholders, or the equivalent
thereof, of the business to be acquired have approved such acquisition, and (vii)
such other information as the Administrative Agent may reasonably request,
which in each case shall be in form and substance acceptable to the
Administrative Agent;

 

(vii)         the
board of directors and (if required by Applicable Law) the shareholders, or the
equivalent thereof, of the business to be acquired shall have approved such
acquisition;

 

(viii)        if
such acquisition is made by a merger or amalgamation, a Borrower, or a
wholly-owned Subsidiary of the Parent (which may be the acquired company) which
shall become a Borrower in connection with such merger, shall be the surviving
entity, except with respect to an Excluded Subsidiary or Non-Borrower
Subsidiary; provided, that if the surviving entity is a Foreign
Subsidiary, the applicable Borrower shall pledge the capital stock or other
Equity Interests of each Foreign Subsidiary simultaneously with such merger or
amalgamation to the Administrative Agent for the benefit of the Lenders and the
Agents (provided that not more than 65% of the total voting power of all
outstanding capital stock or other Equity Interest of any first-tier Foreign
Subsidiary of a Borrower shall be required to be so pledged and no Equity
Interests of any non-first-tier Foreign Subsidiary shall be required to be so
pledged); and

 

(ix)           cash consideration to be paid by any
Borrower in connection with any acquisition or series of related acquisitions
(including cash deferred payments, contingent or otherwise, and the aggregate
amount of all Indebtedness assumed or, in the case of an acquisition of Equity
Interests, including all Indebtedness of the target company) shall not exceed
$20,000,000 without the consent of the Administrative Agent and the Required
Lenders.

 

(b)                                 Dispositions of Assets. 
Except as otherwise provided in this Section, none of the Borrowers or
the Non-Borrower Subsidiaries (other than the Insurance Subsidiary) shall,
directly or indirectly, become a party to or agree to or effect any disposition
of assets; provided that, subject to the mandatory repayment provisions in
respect of the Loans set forth in Section 2.05(b), so long as no Default
or Event of Default has occurred and is continuing, or would result therefrom
(including by way of cross-default to any other Indebtedness) during the term
of this

 

91

 

Agreement, the Borrowers and the Non-Borrower
Subsidiaries may sell or transfer assets (including in connection with an asset
swap) or Equity Interests from and after the Closing Date having an aggregate
fair market value not in excess of 5% of Consolidated Total Assets (the “Basket”)
(as measured at the end of the most recently ended fiscal quarter for which
financial statements have been furnished under Section 6.04(a) or (b)),
in each case for fair and reasonable value, as determined by the board of
directors of the Parent in good faith and evidenced by a resolution of such
directors which shall be delivered by the Parent to the Administrative Agent
prior to the consummation of such sale or transfer, along with a compliance
certificate evidencing compliance with the foregoing limitation and pro  forma
compliance with the covenants set forth in Section 7.11 after giving
effect to such sale or transfer, and such other information and documentation
related to such Disposition as is reasonably requested by the Administrative
Agent, and, in the case of an asset swap, so long as such asset swap in the
reasonable business judgment of the Parent does not have a Material Adverse
Effect; provided, however, that prior to the payment in full of
all of the Borrowers’ Obligations hereunder, the Administrative Agent and the
Lenders will be under no obligation to release their Lien on any of the
Collateral subject to a Disposition pursuant to the terms of this Section 7.04(b)
unless the Liens securing the Second Lien Notes in such Collateral are
simultaneously being (and are required to be) released by the holders of the
Second Lien Notes as and to the extent required by the Intercreditor
Agreement.  Upon a disposition permitted
by this Section 7.04(b) of all or substantially all of the assets of a
Borrower, such Borrower may be liquidated or dissolved so long as all (if any)
remaining assets held by such Borrower are transferred to an existing Borrower
and remain subject to a Lien of the Administrative Agent for the benefit of the
Lenders and the Agents.  The Borrowers
shall notify the Administrative Agent prior to any such liquidation or
dissolution.  Notwithstanding the
foregoing, the sale of inventory, the licensing of intellectual property and
the disposition of obsolete assets or assets that are no longer useful, in each
case in the ordinary course of business consistent with past practices, are
permitted hereunder without being charged against the Basket.

 

(c)           Notwithstanding anything to the contrary in this Section
7.04, the Borrowers and the Non-Borrower Subsidiaries may merge, amalgamate
or liquidate any De Minimis Subsidiaries (or consummate any transaction
permitted by Section 6.05 and/or Section 6.06).

 

7.06        Restricted Payments.  None of the Borrowers or the Non-Borrower
Subsidiaries (other than the Insurance Subsidiary (if any)) shall, directly or
indirectly, make any Restricted Payments except that, (a) any Subsidiary may
declare or pay Distributions to the Parent or its own parent, (b) the Borrowers
and the Non-Borrower Subsidiaries may make payments to Affiliates to the extent
that the transaction giving rise to any such payment is permitted under Section
7.08 and the payment is not accelerated or otherwise made other than as
initially contemplated under the original transaction with such Affiliate, and (c)
NELS may make ratable Distributions to its equity holders and make payments
under contracts or other arrangements entered into with any of its equity
holders.  In addition the Borrowers shall
not prepay, redeem, convert, retire, repurchase or otherwise acquire shares of
any class of Equity Interests of the Borrowers or Non-Borrower Subsidiaries
without the prior written consent of the Administrative Agent and the Required
Lenders.

 

7.07        Change in Nature of Business.  None of the Borrowers or the Non-Borrower
Subsidiaries shall, directly or indirectly, engage in any material line of
business substantially

 

92

 

different from those lines of business conducted by the Borrowers and
Non-Borrower Subsidiaries on the date hereof or any business substantially
related or incidental thereto.

 

7.08        Transactions with Affiliates.  None of the Borrowers or the Non-Borrower
Subsidiaries shall, directly or indirectly, enter into any transaction of any
kind with any Affiliate (other than for services as employees, officers and
directors of any of the Borrowers or Non-Borrower Subsidiaries), whether or not
in the ordinary course of business, other where the board of directors (or the
equivalent) of such Borrower or Non-Borrower Subsidiary has in good faith
determined that such transaction is on fair and reasonable terms substantially
as favorable to the Borrowers or Non-Borrower Subsidiaries as would be
obtainable by the Borrowers or Non-Borrower Subsidiaries at the time in a
comparable arm’s length transaction with a Person other than an Affiliate.

 

7.09        Burdensome Agreements; Negative
Pledges.  None of the Borrowers or the
Non-Borrower Subsidiaries shall, directly or indirectly, enter into any
Contractual Obligation (other than this Agreement, any other Loan Document, the
Senior Subordinated Debt Documents or the Second Lien Note Documents) that
limits the ability (a) of any Subsidiary (other than the Excluded Subsidiaries
or the Insurance Subsidiary, if any) to make Restricted Payments to the Parent
or to otherwise transfer property to the Parent, or (b) of any of the Borrowers
or Non-Borrower Subsidiaries (other than the Insurance Subsidiary, if any) to
create, incur, assume or suffer to exist Liens in favor of the Administrative
Agent on property of such Person; provided, however, that this
clause (ii) shall not prohibit any negative pledge incurred or provided in
favor of any holder of Indebtedness permitted under Section 7.03(e) and Section
7.03(o) (to the extent required by the terms of the documents evidencing
the applicable Indebtedness) hereof solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness.

 

7.10        Use of Proceeds.  None of the Borrowers shall use the proceeds
of any Credit Extension, whether directly or indirectly, and whether
immediately, incidentally or ultimately, to purchase or carry margin stock
(within the meaning of Regulation U of the FRB), except as set forth in Section
5.04 (provided it is not in violation of Regulation U of the FRB), or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund Indebtedness originally incurred for such purpose or for any purpose
other than as set forth in Section 5.04 hereof.

 

7.11        Financial Covenants.  For the avoidance of doubt, notwithstanding
anything to the contrary in the Agreement, it is understood that the following
financial covenants shall be calculated exclusive of the assets, liabilities
(except for liabilities of the Excluded Subsidiaries that are recourse to the
Borrowers), net worth and operations of the Excluded Subsidiaries.

 

(a)           Minimum Interest Coverage Ratio. 
As at the end of any fiscal quarter, the Borrowers shall not permit the
ratio of (a) Consolidated EBITDA for the period of four (4) consecutive fiscal
quarters then ending to (b) Consolidated Total Interest Expense for such period
to be less than the ratio set forth below opposite such fiscal quarter:

 

93

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Minimum Interest Coverage Ratio

  
	
  July
  31, 2009

  	
   

  	
  2.50:1.00

  
	
  October
  31, 2009

  	
   

  	
  2.20:1.00

  
	
  January
  31, 2010

  	
   

  	
  2.10:1:00

  
	
  April
  30, 2010

  	
   

  	
  1.85:1:00

  
	
  July
  31, 2010

  	
   

  	
  1.80:1.00

  
	
  October
  31, 2010

  	
   

  	
  1.80:1:00

  
	
  January
  31, 2011

  	
   

  	
  1.90:1:00

  
	
  April
  30, 2011

  through January 31, 2012

  	
   

  	
  1.95:1:00

  
	
  April
  30, 2012

  through January 31, 2013

  	
   

  	
  2.15:1:00

  
	
  April
  30, 2013

  through January 31, 2014

  	
   

  	
  2.25:1:00

  
	
  April
  30, 2014

  	
   

  	
  2.50:1:00

  

 

(b)           Maximum Consolidated Total Funded Debt to Consolidated
EBITDA.  As at the end of any fiscal quarter, the
Borrowers shall not permit the ratio of (a) Consolidated Total Funded Debt as
of such date to (b) Consolidated EBITDA for the period of four (4) consecutive
fiscal quarters then ending to exceed the ratio set forth below opposite such
fiscal quarter:

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum Consolidated Total

  Funded Debt to Consolidated

  EBITDA

  
	
  July
  31, 2009

  	
   

  	
  5.50:1.00

  
	
  October
  31, 2009

  	
   

  	
  5.90:1.00

  
	
  January
  31, 2010

  	
   

  	
  5.90:1.00

  
	
  April
  30, 2010

  	
   

  	
  5.75:1.00

  
	
  July
  31, 2010

  	
   

  	
  5.75:1.00

  
	
  October
  31, 2010

  	
   

  	
  5.60:1.00

  
	
  January
  31, 2011

  	
   

  	
  5.40:1.00

  
	
  April
  30, 2011

  through January 31, 2012

  	
   

  	
  5.25:1.00

  
	
  April
  30, 2012

  through January 31, 2013

  	
   

  	
  4.65:1.00

  
	
  April
  30, 2013

  through January 31, 2014

  	
   

  	
  4.50:1.00

  
	
  April
  30, 2014

  	
   

  	
  4.25:1.00

  

 

(c)           Maximum Consolidated Senior Funded Debt to
Consolidated EBITDA.  As at the end of any fiscal quarter, the
Borrowers shall not permit the ratio of (a) Consolidated Senior Funded Debt as
of such date to (b) Consolidated EBITDA for the period of four (4) consecutive
fiscal quarters then ending to exceed the ratio set forth below opposite such
fiscal quarter:

 

94

 

	
  Four Fiscal Quarters Ending

  	
   

  	
  Maximum
  Consolidated Senior

  Funded Debt to Consolidated

  EBITDA

  
	
  July 31, 2009

  	
   

  	
  3.65:1.00

  
	
  October 31, 2009

  	
   

  	
  3.95:1.00

  
	
  January 31, 2010

  	
   

  	
  3.95:1.00

  
	
  April 30, 2010

  	
   

  	
  3.90:1.00

  
	
  July 31, 2010

  	
   

  	
  3.90:1.00

  
	
  October 31, 2010

  	
   

  	
  3.75:1.00

  
	
  January 31, 2011

  	
   

  	
  3.60:1.00

  
	
  April 30, 2011

  through January 31, 2012

  	
   

  	
  3.50:1.00

  
	
  April 30, 2012

  through January 31, 2013

  	
   

  	
  3.25:1.00

  
	
  April 30, 2013

  through January 31, 2014

  	
   

  	
  3.00:1.00

  
	
  April 30, 2014 

  	
   

  	
  2.75:1.00

  

 

(d)           Maximum Capital Expenditures. 
During any fiscal year, the Borrowers and Non-Borrower Subsidiaries
shall not make any Capital Expenditure (or become legally obligated to make
such expenditures during such fiscal year) in any year other than Capital
Expenditures for properties and assets used in the operation of the Borrowers’
or Non-Borrowers’ business not exceeding, in the aggregate for the Borrowers
and Non-Borrower Subsidiaries during each fiscal year set forth below, the
amount set forth opposite such fiscal year:

 

	
  Fiscal Year

  	
   

  	
  Maximum Capital Expenditures

  	
   

  
	
  2010

  	
   

  	
  $

  	
  55,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  68,000,000

  	
   

  
	
  2012

  	
   

  	
  $

  	
  73,000,000

  	
   

  
	
  2013

  	
   

  	
  $

  	
  85,000,000

  	
   

  
	
  2014

  	
   

  	
  $

  	
  85,000,000

  	
   

  

 

provided, however, that so long as no Default has
occurred and is continuing or would result from such expenditure, any portion
of any amount set forth above, if not expended in the fiscal year for which it
is permitted above, may be carried over for expenditure in the next following
fiscal year; and provided, further, if any such amount is so carried over, it
will be deemed used in the applicable subsequent fiscal year before the amount
set forth opposite such fiscal year above.

 

7.12        Sale and Leaseback.  None of the Borrowers or the Non-Borrower
Subsidiaries (other than the Insurance Subsidiary, if any) shall, directly or
indirectly, enter into any arrangement, directly or indirectly, whereby any
Borrower or any such Non-Borrower Subsidiary shall sell or transfer any
property owned by it in order then or thereafter to lease such property or
lease other property which such Borrower or any such Non-Borrower Subsidiary
intends to use

 

95

 

for substantially the same purpose as the property being sold or
transferred, without the prior written consent of the Required Lenders.

 

7.13        No Other Senior Debt.  Except for the Second Lien Notes, none of the
Borrowers or the Non-Borrower Subsidiaries (a) have designated, or will
designate, any Indebtedness of the Borrowers or the Non-Borrower Subsidiaries
as “Designated Senior Debt” for purposes of (and as defined in) the Senior
Subordinated Notes Indenture, other than the Obligations and (b) have “Senior
Debt” as such term is defined in the Senior Subordinated Notes Indenture other
than the Obligations and any Indebtedness permitted under Section 7.03
which ranks pari passu (other than by virtue of any lien subordination) with
the Obligations.

 

7.14        Actions Otherwise Prohibited By
Subordinated Debt Or Second Lien Notes.  Notwithstanding anything contained in this Article
VII that permits the Borrowers or any of their Subsidiaries to enter into
transactions or take certain actions, the Borrowers shall not enter into such
transactions or take such actions if otherwise prohibited from so doing by the
terms of the Senior Subordinated Debt or the Second Lien Notes outstanding from
time to time.

 

7.15        Employee Benefit Plans.  None of the Borrowers or any ERISA Affiliate
shall, directly or indirectly:

 

(a)           engage in any “prohibited transaction” within the
meaning of §406 of ERISA or §4975 of the Code which could result in a material
liability for any Borrower; or

 

(b)           permit any Guaranteed Pension Plan to incur an “accumulated
funding deficiency”, as such term is defined in §302 of ERISA, whether or not
such deficiency is or may be waived; or

 

(c)           fail to contribute to any Guaranteed Pension Plan to
an extent which, or terminate any Guaranteed Pension Plan in a manner which,
could result in the imposition of a Lien on the assets of any Borrower pursuant
to §302(f) or §4068 of ERISA; or

 

(d)           amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to §307 of ERISA or §401(a)(29) of
the Code; or

 

(e)           permit or take any action which would result in the
aggregate benefit liabilities (within the meaning of §4001 of ERISA) of all
Guaranteed Pension Plans to exceed the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Guaranteed Pension Plan with assets in excess of benefit liabilities.

 

The Borrowers will (i) promptly upon filing the same
with the Department of Labor or Internal Revenue Service, furnish to the
Lenders a copy of the most recent actuarial statement required to be submitted
under §103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Lenders any notice, report or demand sent
or received in respect of a Guaranteed Pension Plan under §§302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under §§4041A, 4202, 4219, or 4245 of ERISA.

 

96

 

7.16        Prepayments of Certain
Obligations; Modifications of Subordinated Debt.  None of the Borrowers or the Non-Borrower
Subsidiaries shall, directly or indirectly, (a) amend, supplement or otherwise
modify the terms of any Subordinated Debt; provided, that the Borrowers may
amend, supplement or otherwise modify the terms of any Seller Subordinated Debt
with the consent of the Administrative Agent if, in the judgment of the
Administrative Agent, such amendments, supplements or modifications do not
adversely affect the rights of the Lenders, (b) prepay, redeem or repurchase or
issue any notice or offer of redemption with respect to, elect to make, or
effect, a defeasance with respect to, or take any other action which would
require the Borrowers or any of their Subsidiaries to, prepay, redeem or
repurchase any of the Subordinated Debt, (c) make any payments with respect to
any Seller Subordinated Debt other than scheduled payments of principal and
interest as and to the extent permitted under the applicable Subordination
Agreements, provided that no Default or Event of Default shall have
occurred or be continuing on the date of such payment, nor would be created by
the making of such payment, or (d) make any payments with respect to any Senior
Subordinated Debt other than (i) scheduled payments of interest as and to the
extent permitted under the Senior Subordinated Notes Indenture, (ii) subject to
the prior compliance with the mandatory prepayments required by Section 2.05(b)(iii),
payments of principal made from the Net Cash Proceeds of the sale or issuance
by any Borrower or any Non-Borrower Subsidiary of any of its Equity Interests
after the Closing Date or (iii) payments in connection with any refinancing or
replacement of the Senior Subordinated Notes otherwise permitted hereunder, provided,
in each case, that no Default or Event of Default shall have occurred or be
continuing on the date of such payment, nor would be created by the making of
such payment.

 

7.17        Upstream Limitations.  None of the Borrowers shall enter into any
agreement, contract or arrangement (excluding this Agreement, the other Loan
Documents, the Senior Subordinated Notes Indenture and the Second Lien Notes
Indenture) restricting the ability of (i) the Borrowers to amend or modify this
Agreement or any other Loan Document, or (ii) any Borrower to pay or make
dividends or distributions in cash or kind to any Borrower or to make loans,
advances or other payments of whatsoever nature to any Borrower or to make
transfers or distributions of all or any part of such Borrower’s assets to a
Borrower; in each case other than (x) restrictions on specific assets which
assets are the subject of purchase money security interests to the extent
permitted under Section 7.03(e), and (y) customary anti-assignment
provisions contained in leases and licensing agreements entered into by such
Borrower in the ordinary course of its business.

 

7.18        Modifications of Second Lien Note
Documents.  None of the
Borrowers shall, directly or indirectly, amend, supplement or otherwise modify
the terms of the Second Lien Notes except in a manner permitted by the terms of
the Intercreditor Agreement, provided that in no event may the Second Lien
Notes or the Second Lien Note Documents be amended, supplemented or otherwise
modified to include any provision that would be prohibited under Section 7.03(j)
in connection with any refinancing of any Second Lien Notes.

 

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ARTICLE VIII.

EVENTS OF DEFAULT AND REMEDIES

 

8.01        Events of Default.  If any of the following events (“Events of
Default”) shall occur:

 

(a)           if the Borrowers shall fail to pay any principal of
the Loans or any L/C Obligation hereunder when the same shall become due and
payable, whether at the Maturity Date or any accelerated date of maturity or at
any other date fixed for payment;

 

(b)           if the Borrowers shall fail to pay any interest or
fees or other amounts owing hereunder within five (5) Business Days after the
same shall become due and payable whether at the Maturity Date or any
accelerated date of maturity or at any other date fixed for payment;

 

(c)           if the Borrowers shall fail to comply with any of the
covenants contained in Sections 6.01, 6.04, 6.05, 6.10,
6.11, 6.13, 6.15, 6.19 or Article VII
hereof;

 

(d)           if the Borrowers shall fail to perform any term,
covenant or agreement contained herein or in any of the other Loan Documents
(other than those specified in subsections (a), (b), and (c) above) within
thirty (30) days after written notice of such failure has been given to the
Borrowers by the Lenders;

 

(e)           if any representation or warranty contained in this
Agreement or in any document or instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any material
respect upon the date when made or repeated;

 

(f)            if any Borrower or Non-Borrower Subsidiary shall fail
to pay at maturity, or within any applicable period of grace, any and all
obligations for borrowed money or any guaranty with respect thereto or credit
received or in respect of any Capitalized Leases, Synthetic Leases or Swap
Contracts, in each case, in an aggregate amount greater than the Threshold
Amount (including, without limitation, the Indebtedness evidenced by the Senior
Subordinated Notes Indenture and the Second Lien Notes Indenture), or fail to
observe or perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases in an aggregate amount greater
than the Threshold Amount (including, without limitation, the Senior
Subordinated Notes Indenture and the Second Lien Notes Indenture) for such
period of time as would permit, assuming the giving of appropriate notice if
required, the holder or holders thereof or of any obligations issued thereunder
to accelerate the maturity thereof;

 

(g)           if any Borrower or Non-Borrower Subsidiary 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, receiver or receiver/manager of any Borrower or Non-Borrower
Subsidiary or of any substantial part of the assets of any Borrower or
Non-Borrower Subsidiary or commences any case or other proceeding relating to
any Borrower or Non-Borrower Subsidiary under any Debtor Relief Law of any
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 Borrower
or Non-Borrower Subsidiary and any Borrower or Non-Borrower Subsidiary
indicates its approval thereof, consent thereto or acquiescence therein;

 

98

 

(h)           a decree or order is entered appointing any such
trustee, custodian, liquidator, receiver or receiver/manager or adjudicating
any Borrower or Non-Borrower Subsidiary 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 Borrower or Non-Borrower Subsidiary in an
involuntary case under Debtor Relief Laws as now or hereafter constituted, and
such decree or order remains in effect for more than sixty (60) days, whether
or not consecutive;

 

(i)            (i) one or more final judgments or orders for the
payment of money in an aggregate amount (as to all such judgments and orders)
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer is rated at least “A” by A.M.
Best Company, has been notified of the potential claim and does not dispute
coverage), or (ii) any one or more non-monetary final judgments that have, or
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order which are not promptly
stayed (and, if such required to perfect such stay pending appeal, bonded), or (B)
there is a period of 30 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or

 

(j)            any Borrower or Non-Borrower Subsidiary or any ERISA
Affiliate incurs any liability to the PBGC or similar Canadian authorities or a
Guaranteed Pension Plan (or any corresponding plan described in any Applicable
Canadian Pension Legislation) pursuant to Title IV of ERISA in an aggregate
amount exceeding the Threshold Amount, or any Borrower or Non-Borrower
Subsidiary or any ERISA Affiliate is assessed withdrawal liability pursuant to
Title IV of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding the Threshold Amount, or any of the following occurs with respect to
a Guaranteed Pension Plan (or any corresponding plan described in any Applicable
Canadian Pension Legislation): (i) an ERISA Reportable Event or similar event
under Applicable Canadian Pension Legislation, or a failure to make a required
installment or other payment (within the meaning of §302(f)(1) of ERISA),
provided that the Administrative Agent determines in its reasonable discretion
that such event (A) could be expected to result in liability of any Borrower or
Non-Borrower Subsidiary to the PBGC, similar Canadian authorities or such
Guaranteed Pension Plan in an aggregate amount exceeding the Threshold Amount
and (B) could constitute grounds for the termination of such Guaranteed Pension
Plan by the PBGC or similar Canadian authorities, for the appointment by the
appropriate United States District Court or Canadian Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition of a Lien in
favor of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court or Canadian Court of a trustee to administer such
Guaranteed Pension Plan; or (iii) the institution by the PBGC or similar
Canadian authorities of proceedings to terminate such Guaranteed Pension Plan;

 

(k)           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 the Borrowers or any of their respective stockholders, or any court
or any Governmental Authority 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 any Security Document

 

99

 

shall for any reason cease to create a valid and
perfected first priority Lien on the Collateral purported to be covered thereby
(subject to Section 7.04(b) and Section 10.15) or if, without the
consent of the Administrative Agent, the Borrowers shall revoke or rescind any
Insurance Authorization Letter;

 

(l)            (i) the subordination provisions of the Senior
Subordinated Debt Documents (or any permitted refinancing or replacement
thereof) and (ii) the Lien subordination or other provisions set forth in the
Intercreditor Agreement (collectively, the “Subordination Provisions”)
shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable against any holder of the Senior
Subordinated Debt or the Second Lien Notes, as applicable; or (ii) the
Borrowers shall, directly or indirectly, disavow or contest in any manner (A) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (B) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer or (C) subject to the
Intercreditor Agreement, that all proceeds realized from the liquidation of any
Collateral of any Borrower shall be subject to any of the Subordination
Provisions;

 

(m)          a Change of Control shall occur;

 

(n)           if (i) any (A) event or condition occurs that enables
or permits (with all applicable grace periods having expired) the holders of
the Second Lien Notes or any trustee or agent on their behalf to cause the
Second Lien Notes to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to their scheduled maturity date, or (B)
notice or offer with respect to any of the foregoing is issued under the terms
of the Second Lien Notes Indenture, or (ii) the Parent or any other Borrower
shall prepay, redeem or repurchase or issue any notice or offer of redemption
with respect to, any of the Second Lien Notes or shall elect to make, or
effect, a defeasance with respect to any of the Second Lien Notes; or

 

(o)           the Obligations shall fail to constitute (i) “Senior
Debt” and “Designated Senior Debt” under and as defined in the Senior
Subordinated Notes Indenture and (ii) “First Lien Obligations” under (and as
defined in) the Second Lien Notes Indenture;

 

then, and in any such event, so long as the same may
be continuing, the Administrative Agent shall upon the request of the Required
Lenders, by notice in writing to the Borrowers, declare all amounts owing with
respect to this Agreement and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrowers; provided that in the event of any Event of
Default specified in Section 8.01(g) or (h), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Administrative Agent or any Lender.

 

100

 

8.02        Remedies Upon Event of
Default.  If any Event of
Default occurs and is continuing, the Administrative Agent shall, at the
request of, or may, with the consent of, the Required Lenders, take any or all
of the following actions:

 

(a)           declare the commitment of each Lender
to make Loans and any obligation of the L/C Issuer to make L/C Credit
Extensions to be terminated, whereupon such commitments and obligation shall be
terminated;

 

(b)           declare the unpaid principal amount
of all outstanding Loans, all interest accrued and unpaid thereon, and all
other amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrowers;

 

(c)           require that the Borrowers Cash
Collateralize the L/C Obligations (in an amount equal to the then Outstanding
Amount thereof); and

 

(d)           exercise on behalf of itself and the
Lenders all rights and remedies available to it and the Lenders under the Loan
Documents;

 

provided, however, that upon the occurrence of an
actual or deemed entry of an order for relief with respect to the Borrowers
under any Debtor Relief Law, the obligation of each Lender to make Loans and
any obligation of the L/C Issuer to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrowers to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Administrative Agent or any Lender.

 

8.03        Application of Funds.  After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become
immediately due and payable and the L/C Obligations have automatically been
required to be Cash Collateralized as set forth in Section 8.02(c), any
amounts received on account of the Obligations shall be applied by the
Administrative Agent in the following order:

 

First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts (including fees,
charges and disbursements of counsel to the Administrative Agent and amounts
payable under Article III) payable to the Administrative Agent in its
capacity as such;

 

Second, to payment of that portion of the Obligations
constituting fees, indemnities and other amounts (other than principal,
interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer
(including fees, charges and disbursements of counsel to the respective Lenders
and the L/C Issuer) arising under the Loan Documents and amounts payable under Article
III, ratably among them in proportion to the respective amounts described
in this clause Second payable to them;

 

Third, to payment of that portion of the Obligations
constituting accrued and unpaid Letter of Credit Fees and interest on the
Loans, L/C Borrowings and other Obligations arising

 

101

 

under the Loan Documents,
ratably among the Lenders and the L/C Issuer in proportion to the respective
amounts described in this clause Third payable to them;

 

Fourth, to payment of that portion of the Obligations
constituting unpaid principal of the Loans, L/C Borrowings and Obligations then
owing under Secured Hedge Agreements and Secured Cash Management Agreements,
ratably among the Lenders, the L/C Issuer, the Hedge Banks and the Cash
Management Banks in proportion to the respective amounts described in this
clause Fourth held by them;

 

Fifth, to the Administrative Agent for the account of the
L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of
the aggregate undrawn amount of Letters of Credit; and

 

Last, the balance, if any, after all of the Obligations
have been indefeasibly paid in full, to the Borrower or as otherwise required
by Law.

 

Subject to Section 2.03(c), amounts used to
Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant
to clause Fifth above shall be applied to satisfy drawings under such
Letters of Credit as they occur.  If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.

 

Notwithstanding the foregoing, Obligations arising
under Secured Cash Management Agreements and Secured Hedge Agreements shall be
excluded from the application described above if the Administrative Agent has
not received written notice thereof, together with such supporting
documentation as the Administrative Agent may request, from the applicable Cash
Management Bank or Hedge Bank, as the case may be.  Each Cash Management Bank or Hedge Bank not a
party to the Credit Agreement that has given the notice contemplated by the
preceding sentence shall, by such notice, be deemed to have acknowledged and
accepted the appointment of the Administrative Agent pursuant to the terms of Article
IX hereof for itself and its Affiliates as if a “Lender” party hereto.

 

ARTICLE IX.

ADMINISTRATIVE AGENT

 

9.01        Appointment and Authority.

 

(a)           Each of the Lenders and the L/C
Issuer hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.  The provisions of
this Article are solely for the benefit of the Administrative Agent, the
Lenders and the L/C Issuer, and the Borrowers shall not have rights as a third
party beneficiary of any of such provisions.

 

(b)           The Administrative Agent shall also
act as the “collateral agent” under the Loan Documents and “first lien
agent” and “control agent” under the Intercreditor Agreement, and

 

102

 

each of the Lenders (including in its capacities as a
potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuer
hereby irrevocably appoints and authorizes the Administrative Agent to act as
the agent of such Lender and the L/C Issuer for purposes of acquiring, holding
and enforcing any and all Liens on Collateral granted by any of the Borrowers
to secure any of the Obligations, and as the “first lien agent” and “control
agent” under the Intercreditor Agreement, together with such powers and
discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent,
as “collateral agent”, “first lien agent” or “control agent” and any co-agents,
sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant
to Section 9.05 for purposes of holding or enforcing any Lien on the
Collateral (or any portion thereof) granted under the Security Documents, or
for exercising any rights and remedies thereunder at the direction of the Administrative
Agent), shall be entitled to the benefits of all provisions of this Article IX
and Article X (including Section 10.04(c)), as though such
co-agents, sub-agents and attorneys-in-fact were the “collateral agent” or “first
lien agent” under the Loan Documents) as if set forth in full herein with
respect thereto.

 

9.02        Rights as a Lender.  The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the
Person serving as the Administrative Agent hereunder in its individual
capacity.  Such Person and its Affiliates
may accept deposits from, lend money to, act as the financial advisor or in any
other advisory capacity for and generally engage in any kind of business with
the Borrowers or any Subsidiary or other Affiliate thereof as if such Person
were not the Administrative Agent hereunder and without any duty to account
therefor to the Lenders.

 

9.03        Exculpatory Provisions.  The Administrative Agent shall not have any
duties or obligations except those expressly set forth herein and in the other
Loan Documents.  Without limiting the
generality of the foregoing, the Administrative Agent:

 

(a)           shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing;

 

(b)           shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in writing by
the Required Lenders (or such other number or percentage of the Lenders as
shall be expressly provided for herein or in the other Loan Documents), provided
that the Administrative Agent shall not be required to take any action that, in
its opinion or the opinion of its counsel, may expose the Administrative Agent
to liability or that is contrary to any Loan Document or Applicable Law; and

 

(c)           shall not, except as expressly set
forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrowers or any of their Affiliates that is communicated to or obtained by
the Person serving as the Administrative Agent or any of its Affiliates in any
capacity.

 

103

 

(d)           The Administrative Agent shall not be
liable to the Lenders for any action taken or not taken by it (i) with the
consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 10.01 and 8.02) or (ii) in the absence of
its own gross negligence or willful misconduct. 
The Administrative Agent shall be deemed not to have knowledge of any
Default unless and until notice describing such Default is given to the
Administrative Agent by the Borrowers, a Lender or the L/C Issuer.

 

(e)           The Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, or the creation, perfection or
priority of any Lien purported to be created by the Security Documents, (v) the
value or sufficiency of any Collateral, or (vi) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

 

104

 

9.04        Reliance by Administrative Agent.  The Administrative Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person.  The Administrative Agent also may rely upon
any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying
thereon.  In determining compliance with
any condition hereunder to the making of a Loan, or the issuance of a Letter of
Credit, that by its terms must be fulfilled to the satisfaction of a Lender or
the L/C Issuer, the Administrative Agent may presume that such condition is
satisfactory to such Lender or the L/C Issuer unless the Administrative Agent
shall have received notice to the contrary from such Lender or the L/C Issuer
prior to the making of such Loan or the issuance of such Letter of Credit.  The Administrative Agent may consult with
legal counsel (who may be counsel for the Borrowers), independent accountants
and other experts selected by it, and shall not be liable for any action taken
or not taken by it in accordance with the advice of any such counsel,
accountants or experts.

 

9.05        Delegation of Duties.  The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Administrative Agent.  The Administrative
Agent and any such sub agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub agent and to the Related Parties of the Administrative
Agent and any such sub agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.

 

9.06        Resignation of Administrative Agent.  The Administrative Agent may resign at any
time by giving thirty (30) days prior written notice thereof, to the Lenders,
the L/C Issuer and the Borrowers.  Upon
receipt of any such notice of resignation, the Required Lenders shall have the
right, in consultation with the Borrowers, to appoint a successor, which shall
be a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States.  If
no such successor shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint a
successor Administrative Agent meeting the qualifications set forth above;
provided that if the Administrative Agent shall notify the Borrowers and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (a) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents (except that in
the case of any collateral security held by the Administrative Agent on behalf
of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring
Administrative Agent shall continue to hold such collateral security until such
time as a successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section.  Upon the acceptance of a successor’s
appointment as Administrative Agent hereunder, such successor shall succeed to
and

 

105

 

become vested with all of the rights, powers, privileges and duties of
the retiring (or retired) Administrative Agent, and the retiring Administrative
Agent shall be discharged from all of its duties and obligations hereunder or
under the other Loan Documents (if not already discharged therefrom as provided
above in this Section).  The fees payable
by the Borrowers to a successor Administrative Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrowers and
such successor.  After the retiring
Administrative Agent’s resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.

 

Any resignation by Bank of America as Administrative
Agent pursuant to this Section shall also constitute its resignation as L/C
Issuer and Swing Line Lender.  Upon the
acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer and Swing Line Lender, (ii) the
retiring L/C Issuer and Swing Line Lender shall be discharged from all of their
respective duties and obligations hereunder or under the other Loan Documents,
and (iii) the successor L/C Issuer shall issue letters of credit in
substitution for the Letters of Credit, if any, outstanding at the time of such
succession or make other arrangements satisfactory to the retiring L/C Issuer
to effectively assume the obligations of the retiring L/C Issuer with respect
to such Letters of Credit.

 

106

 

9.07        Non-Reliance on Administrative Agent and
Other Lenders.  Each Lender
and the L/C Issuer acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.  Each Lender and the L/C
Issuer also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Lender or any of their Related Parties
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.

 

9.08        No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, none of the Book Manager, Arrangers, Syndication Agents or
Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent,
a Lender or the L/C Issuer hereunder.

 

9.09        Administrative Agent May File Proofs of
Claim.  In case of the pendency of any
proceeding under any Debtor Relief Law or any other judicial proceeding
relative to any Borrower, the Administrative Agent (irrespective of whether the
principal of any Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrowers) shall be
entitled and empowered, by intervention in such proceeding or otherwise

 

(a)           to file and prove a claim for the
whole amount of the principal and interest owing and unpaid in respect of the
Loans, L/C Obligations and all other Obligations that are owing and unpaid and
to file such other documents as may be necessary or advisable in order to have
the claims of the Lenders, the L/C Issuer and the Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders, the L/C Issuer and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders, the
L/C Issuer and the Administrative Agent under Sections 2.03, 2.09
and 10.04) allowed in such judicial proceeding; and

 

(b)           to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the
same;

 

(c)           and any custodian, receiver,
assignee, trustee, liquidator, sequestrator or other similar official in any
such judicial proceeding is hereby authorized by each Lender and the L/C Issuer
to make such payments to the Administrative Agent and, if the Administrative
Agent shall consent to the making of such payments directly to the Lenders and
the L/C Issuer, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 2.09 and 10.04.

 

Nothing contained herein shall be deemed to authorize
the Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of

 

107

 

any Lender or the L/C Issuer
or to authorize the Administrative Agent to vote in respect of the claim of any
Lender or the L/C Issuer in any such proceeding.

 

9.10        Collateral Matters.  Each of the Lenders (including in its
capacities as a potential Cash Management Bank and a potential Hedge Bank) and
the L/C Issuer irrevocably authorize the Administrative Agent:

 

(a)           to release any Lien on any property
granted to or held by the Administrative Agent under any Loan Document (i) upon
termination of the Aggregate Commitments and payment in full of all Obligations
(other than (A) contingent indemnification obligations and (B) obligations and
liabilities under Secured Cash Management Agreements and Secured Hedge
Agreements as to which arrangements satisfactory to the applicable Cash Management
Bank or Hedge Bank shall have been made) and the expiration or termination of
all Letters of Credit (other than Letters of Credit as to which other
arrangements satisfactory to the Administrative Agent and the L/C Issuer shall
have been made), (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii) if
approved, authorized or ratified in writing in accordance with Section 10.01;

 

(b)           to subordinate any Lien on any
property granted to or held by the Administrative Agent under any Loan Document
to the holder of any Lien on such property that is permitted by Section 7.01(a);

 

(c)           to release any Borrower from its
Obligations hereunder if such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder.

 

Upon request by the Administrative Agent at any time,
the Required Lenders will confirm in writing the Administrative Agent’s
authority to release or subordinate its interest in particular types or items
of property, or to release a Borrower or its property from its obligations
hereunder pursuant to this Section 9.10.

 

9.11        Secured Cash Management Agreements and
Secured Hedge Agreements. 
Except as otherwise expressly set forth herein or in any Security Document,
no Cash Management Bank or Hedge Bank shall have any right to notice of any
action or to consent to, direct or object to any action hereunder or under any
other Loan Document or otherwise in respect of the Collateral (including the
release or impairment of any Collateral) other than in its capacity as a Lender
and, in such case, only to the extent expressly provided in the Loan
Documents.  Notwithstanding any other
provision of this Article IX to the contrary, the Administrative Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Obligations arising under Secured
Cash Management Agreements and Secured Hedge Agreements unless the
Administrative Agent has received written notice of such Obligations, together
with such supporting documentation as the Administrative Agent may request,
from the applicable Cash Management Bank or Hedge Bank, as the case may be.

 

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ARTICLE X.

MISCELLANEOUS

 

10.01      Amendments, Etc.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent to any departure by
any Borrower therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrowers or applicable Borrower, as the case may be,
and acknowledged by the Administrative Agent, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no such amendment, waiver or consent
shall:

 

(a)           waive any condition set forth in Section
4.01(a) without the written consent of each Lender;

 

(b)           extend or increase the Commitment of
any Lender (or reinstate any Commitment terminated pursuant to Section 8.02(a))
without the written consent of such Lender;

 

(c)           postpone any date fixed by this
Agreement or any other Loan Document for any payment (excluding mandatory
prepayments) of principal, interest, fees or other amounts due to the Lenders
(or any of them) or any scheduled reduction (other than as a result of
mandatory prepayments) of the Aggregate Commitments hereunder or under any
other Loan Document without the written consent of each Lender directly
affected thereby (it being understood that any vote to rescind any acceleration
of amounts owing with respect to the Loans and other Obligations under the Loan
Documents shall only require the approval of the Required Lenders);

 

(d)           reduce the principal of, or the rate
of interest specified herein on, any Loan or L/C Borrowing, or (subject to
clause (v) of the second proviso to this Section 10.01) any fees or
other amounts payable hereunder or under any other Loan Document, without the
written consent of each Lender directly affected thereby; provided, however,
that only the consent of the Required Lenders shall be necessary (i) to amend
the definition of “Default Rate” or to waive any obligation of any of the
Borrowers to pay interest or Letter of Credit Fees at the Default Rate or (ii) to
amend any financial covenant hereunder (or any defined term used therein) even
if the effect of such amendment would be to reduce the rate of interest on any
Loan or L/C Borrowing, to reduce any fee or to reduce any mandatory prepayment
payable hereunder;

 

(e)           change Section 2.13 or Section
8.03 in a manner that would alter the pro rata sharing of payments required
thereby without the written consent of each Lender;

 

(f)            change any provision of this Section
10.01 or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender; and

 

(g)           other than pursuant to a transaction
permitted by the terms of this Agreement, release (A) all or substantially all
of the Collateral (excluding, if any Borrower becomes a debtor under any Debtor
Relief Law, the release of “cash collateral”, as defined in Section 363(a) of
the federal Bankruptcy Code pursuant to a cash collateral stipulation with the
debtor approved by the Required Lenders) or (B) any Borrower from its
Obligations under the Loan Documents, without the written consent of each
Lender.

 

and, provided  further,
that (i) no amendment, waiver or consent shall, unless in writing and signed by
the L/C Issuer in addition to the Lenders required above, affect the rights or
duties of

 

109

 

the L/C Issuer under this
Agreement or any Issuer Document relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Lender in addition to the Lenders required above,
affect the rights or duties of the Swing Line Lender under this Agreement; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary
herein, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such Lender.

 

If any Lender does not consent to a proposed
amendment, waiver, consent or release with respect to any Loan Document that
requires the consent of each Lender and that has been approved by the Required
Lenders, the Borrower may repay such non-consenting Lender’s Loans on a
non-pro-rata basis (and, in the case of repayments of Committed Loans, reduce
such non-consenting Lender’s Revolving Commitment on a non-pro-rata basis in
connection therewith) or may replace such non-consenting Lender in accordance
with Section 10.14; provided that such amendment, waiver, consent
or release can be effected as a result of the assignment contemplated by such Section
and/or by such repayment (together with all other such repayments effected by,
or assignments required by, the Borrowers to be made pursuant to this
paragraph), and provided, further, that after giving effect to
any such repayment of Committed Loans (and corresponding reductions in the
Aggregate Commitments), the Borrowers have at least $20,000,000 in unused
Aggregate Commitments.  In addition, in
the event that the Borrowers determine that any Lender is the holder of 10% or
more of the consolidated debt of the Parent or relevant Subsidiaries of Parent,
as a result of which any Borrower would be in breach of any permit
issued by any regulatory authority in connection with such Borrower’s solid waste
operations, the Borrowers (i) shall be permitted to repay such Lender’s Loans on a non-pro-rata basis
(and, in the case of repayments of Committed Loans, reduce such Lender’s
Revolving Commitment on a non-pro-rata basis in connection therewith) to the extent
necessary (but only to the extent necessary) to reduce such Lender’s percentage
of the consolidated debt of the Parent to below such 10% in order to eliminate
such breach and/or (ii) may request such Lender to assign that portion of its
Loans to an Eligible Assignee that would bring such Lender’s Loans below such
10%, and such Lender agrees that it will make such assignment (to the extent an
Eligible Assignee has agreed to purchase the Loans requested to be so assigned)
so long as such Lender has received payment at par for such portion of its
Loans being so assigned (together with accrued interest thereon, accrued fees
and all other amounts payable to it hereunder with respect thereto) from such
Eligible Assignee (or the Borrowers, as applicable, with respect to accrued
interest, fees or other amounts) and such assignment does not conflict with
Applicable Laws.

 

10.02      Notices; Effectiveness; Electronic
Communication.

 

(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by

 

110

 

telecopier as follows, and all notices and other
communications expressly permitted hereunder to be given by telephone shall be
made to the applicable telephone number, as follows:

 

(i)            if
to the Borrowers, the Administrative Agent, the L/C Issuer or the Swing Line
Lender, to the address, telecopier number, electronic mail address or telephone
number specified for such Person on Schedule 10.02; and

 

(ii)           if
to any other Lender, to the address, telecopier number, electronic mail address
or telephone number specified in its Administrative Questionnaire.

 

Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next Business Day for the recipient).  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).

 

(b)           Electronic Communications.  Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided
that the foregoing shall not apply to notices to any Lender or the L/C Issuer
pursuant to Article II if such Lender or the L/C Issuer, as applicable,
has notified the Administrative Agent that it is incapable of receiving notices
under such Article by electronic communication. 
The Administrative Agent or the Borrowers may, in their discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.

 

Unless the Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended
recipient (such as by the “return receipt requested” function, as available,
return e-mail or other written acknowledgement), provided that if such
notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent
at the opening of business on the next Business Day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

 

(c)           The Platform.  THE PLATFORM IS PROVIDED “AS IS” AND “AS
AVAILABLE.”  THE AGENT PARTIES (AS
DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWERS’
MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR
ERRORS IN OR OMISSIONS FROM THE BORROWERS’ MATERIALS.  NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR

 

111

 

OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN
CONNECTION WITH THE BORROWERS’ MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or
any of its Related Parties (collectively, the “Agent Parties”) have any
liability to the Borrowers, the Excluded Subsidiaries, any Lender, the L/C
Issuer or any other Person for losses, claims, damages, liabilities or expenses
of any kind (whether in tort, contract or otherwise) arising out of the
Borrowers’ or the Administrative Agent’s transmission of Borrowers’ Materials
through the Internet, except to the extent that such losses, claims, damages,
liabilities or expenses are determined by a Governmental Authority of competent
jurisdiction by a final and nonappealable judgment to have resulted from the
gross negligence, breach in bad faith of the Administrative Agent’s obligations
under this subsection (c) or willful misconduct of such Agent Party; provided,
however, that in no event shall any Agent Party have any liability to
the Borrowers, the Excluded Subsidiaries, any Lender, the L/C Issuer or any
other Person for indirect, special, incidental, consequential or punitive
damages (as opposed to direct or actual damages).

 

(d)           Change of Address, Etc.  Each of the Administrative Agent, the L/C
Issuer, the Swing Line Lender and each of the Borrowers may change its address,
telecopier or telephone number for notices and other communications hereunder
by notice to the other parties hereto. 
Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrowers, the
Administrative Agent, the L/C Issuer and the Swing Line Lender.  In addition, each Lender agrees to notify the
Administrative Agent from time to time to ensure that the Administrative Agent
has on record (i) an effective address, contact name, telephone number,
telecopier number and electronic mail address to which notices and other
communications may be sent and (ii) accurate wire instructions for such Lender.

 

(e)           Reliance by Administrative Agent,
L/C Issuer and Lenders.  The Administrative
Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon
any notices (including telephonic Committed Loan Notices and Swing Line Loan
Notices) purportedly given by or on behalf of the Borrowers even if (i) such
notices were not made in a manner specified herein, were incomplete or were not
preceded or followed by any other form of notice specified herein, or (ii) the
terms thereof, as understood by the recipient, varied from any confirmation
thereof.  The Borrowers, jointly and
severally, shall indemnify the Administrative Agent, the L/C Issuer, each
Lender and the Related Parties of each of them from all losses, costs, expenses
and liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrowers.  All telephonic notices to and other
telephonic communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.

 

112

 

10.03      No Waiver; Cumulative
Remedies.  No failure by any
Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by
any such Person in exercising, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by Applicable Law.

 

Notwithstanding anything to the contrary contained
herein or in any other Loan Document, the authority to enforce rights and
remedies hereunder and under the other Loan Documents against the Borrowers or
any of them shall be vested exclusively in, and all actions and proceedings at
law in connection with such enforcement shall be instituted and maintained
exclusively by, the Administrative Agent in accordance with Section 8.02
for the benefit of all the Lenders and the L/C Issuer; provided, however,
that the foregoing shall not prohibit (a) the Administrative Agent from
exercising on its own behalf the rights and remedies that inure to its benefit
(solely in its capacity as Administrative Agent) hereunder and under the other
Loan Documents, (b) the L/C Issuer or the Swing Line Lender from
exercising the rights and remedies that inure to its benefit (solely in its
capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and
under the other Loan Documents, (c) any Lender from exercising setoff
rights in accordance with Section 10.08 (subject to the terms of Section 2.13),
or (d) any Lender from filing proofs of claim or appearing and filing
pleadings on its own behalf during the pendency of a proceeding relative to any
Borrower under any Debtor Relief Law; and provided, further, that
if at any time there is no Person acting as Administrative Agent hereunder and
under the other Loan Documents, then (i) the Required Lenders shall have
the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02
and (ii) in addition to the matters set forth in clauses (b), (c) and
(d) of the preceding proviso and subject to Section 2.13, any
Lender may, with the consent of the Required Lenders, enforce any rights and
remedies available to it under this Agreement and the other Loan Documents and
as authorized by the Required Lenders.

 

10.04      Expenses; Indemnity; Damage Waiver.

 

(a)           Costs and Expenses.  The Borrowers shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan Documents or
any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the
L/C Issuer in connection with the issuance, amendment, renewal or extension of
any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, any Lender or the
L/C Issuer (including the fees, charges and disbursements of any counsel for
the Administrative Agent, any Lender or the L/C Issuer), and shall pay all fees
and time charges for attorneys who may be employees of the Administrative
Agent, any Lender or the L/C Issuer, in connection with the enforcement or
protection of its rights (A) in connection with this Agreement and the
other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of

 

113

 

Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.

 

(b)           Indemnification by the Borrowers.  The Borrowers, jointly and severally, shall
indemnify the Administrative Agent (and any sub-agent thereof), each Lender and
the L/C Issuer, and each Related Party of any of the foregoing Persons (each
such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), and shall indemnify and hold harmless each Indemnitee from
all fees and time charges and disbursements for attorneys who may be employees
of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder, the
consummation of the transactions contemplated hereby or thereby, or, in the
case of the Administrative Agent (and any sub-agent thereof) and its Related
Parties only, the administration of this Agreement and the other Loan
Documents, (ii) any Loan or Letter of Credit or the use or proposed use of
the proceeds therefrom (including any refusal by the L/C Issuer to honor a
demand for payment under a Letter of Credit if the documents presented in
connection with such demand do not strictly comply with the terms of such
Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by any of the
Borrowers or any of their Subsidiaries, or any Environmental Liability related
in any way to any of the Borrowers or any of their Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory,
whether brought by a third party or by the Borrowers or any of the Borrowers’
directors, shareholders or creditors, and regardless of whether any Indemnitee
is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by any of the Borrowers against an Indemnitee for breach
in bad faith of such Indemnitee’s obligations hereunder or under any other Loan
Document, if such Borrower has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

 

(c)           Reimbursement by Lenders.  To the extent that the Borrowers for any
reason fail to indefeasibly pay any amount required under subsection (a) or
(b) of this Section to be paid by it to the Administrative Agent (or
any sub-agent thereof), the L/C Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to the Administrative Agent (or
any such sub-agent), the L/C Issuer or such Related Party, as the case may be,
such Lender’s Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred
by or asserted against the Administrative Agent (or any such sub-agent) or the
L/C Issuer in its capacity as such, or against any Related Party of any of the
foregoing acting for the Administrative Agent (or any such sub-agent) or L/C
Issuer in connection with such capacity.

 

114

 

The obligations of the Lenders under this subsection (c) are
subject to the provisions of Section 2.12(d).

 

(d)           Waiver of Consequential Damages,
Etc.  To the fullest extent permitted
by Applicable Law, none of the parties hereto shall assert, and each of the
parties hereto hereby waives, any claim against any Indemnitee, 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, this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby, the transactions contemplated hereby or thereby,
any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients
of any information or other materials distributed to such unintended recipients
by such Indemnitee through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby other than for
direct or actual damages resulting from the gross negligence or willful
misconduct of such Indemnitee as determined by a final and nonappeable judgment
of a court of competent jurisdiction.

 

(e)           Payments.  All amounts due under this Section shall
be payable not later than ten (10) Business Days after demand therefor.

 

(f)            Survival.  The agreements in this Section shall
survive the resignation of the Administrative Agent, the L/C Issuer, and the
Swing Line Lender the replacement of any Lender, the termination of the
Aggregate Commitments and the repayment, satisfaction or discharge of all the
other Obligations.

 

115

 

10.05      Payments Set Aside.  To the extent that any payment by or on
behalf of the Borrowers is made to the Administrative Agent, the L/C Issuer or
any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises
its right of setoff, and such payment or the proceeds of such setoff or any
part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to
the extent of such recovery, and to the extent permitted by Applicable Law, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such setoff had not occurred, and (b) each Lender and the L/C Issuer
severally agrees to pay to the Administrative Agent upon demand its applicable
share (without duplication) of any amount so recovered from or repaid by the
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect.  The obligations
of the Lenders and the L/C Issuer under clause (b) of the preceding
sentence shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

10.06      Successors and Assigns.

 

(a)           Successors and Assigns Generally.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that no Borrower may
assign or otherwise transfer any of its rights or obligations hereunder without
the prior written consent of the Administrative Agent and each Lender and no
Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the
provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of subsection (f) of this Section (and
any other attempted assignment or transfer by any party hereto shall be null
and void).  Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b)           Assignments by Lenders.  Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Revolving Commitment and the
Loans (including for purposes of this subsection (b), participations in L/C
Obligations and in Swing Line Loans) at the time owing to it); provided that

 

(i)            except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the Commitment is not
then in effect, the principal

 

116

 

outstanding balance of the Loans of the assigning Lender subject to
each such assignment, determined as of the date the Assignment and Assumption
with respect to such assignment is delivered to the Administrative Agent or, if
“Trade Date” is specified in the Assignment and Assumption, as of the Trade
Date, shall not be less than $5,000,000 (or $1,000,000, in the case of a Term B
Lender) unless each of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Parent otherwise consent (each such
consent not to be unreasonably withheld or delayed); provided, however,
that concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met; provided, further, that solely with respect to
assignments by a Term B Lender of all or any portion of the Term B Loan held by
it, in the event that the Borrowers have not objected to any such proposed
assignment within five (5) Business Days after the Term B Lender’s request
for consent thereto, the Borrower shall be deemed to have consented to such
assignment.

 

(ii)           each
partial assignment shall be made as an assignment of a proportionate part of
all the assigning Lender’s rights and obligations under this Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii) shall
not apply to rights in respect of Swing Line Loans;

 

(iii)          the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee in the amount of $3,500 (unless such assignment is by a Lender to an
Affiliate of a Lender or is to another Lender or is otherwise waived by the
Administrative Agent in its sole and absolute discretion), provided, however,
that only one fee shall be payable in the case of concurrent assignments to
members of an Assignee Group and concurrent assignments from members of an
Assignee Group to a single Eligible Assignee (or to an Eligible Assignee and
members of its Assignee Group); and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.

 

Subject to acceptance and
recording thereof by the Administrative Agent pursuant to subsection (c) of
this Section, from and after the effective date specified in each Assignment
and Assumption, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto) but shall continue to be entitled to
the benefits of Sections 3.01, 3.04, 3.05 and 10.04
with respect to facts and circumstances occurring prior to the effective date
of such assignment.  Upon request, the
Borrowers (at their expense) shall execute and deliver a Note to the Eligible
Assignee.  Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply
with this subsection shall be treated for purposes of

 

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this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with subsection (d) of this Section.

 

(c)           Register.  The Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Administrative
Agent’s Office a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans and L/C Obligations owing
to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary.  The Register
shall be available for inspection by each of the Borrowers, the L/C Issuer and
the Swing Line Lender at any reasonable time and from time to time upon
reasonable prior notice.  In addition, at
any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender may request and receive from the
Administrative Agent a copy of the Register. 
Upon its receipt of and, if required, consent to, a duly completed
Assignment and Assumption executed by an assigning Lender and an Eligible
Assignee, such Eligible Assignee’s completed Administrative Questionnaire and
any tax forms required by Section 3.01 (unless such assignee is already a
Lender), together with the fee payable under Section 10.06(b)(iii), the
Administrative Agent will, on the effective date thereof, record the Assignment
and Assumption on the Register.

 

(d)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrowers or the Administrative Agent, sell
participations to any Person (other than a natural person or the Borrowers or
any of the Borrowers’ Affiliates or Subsidiaries) (each, a “Participant”) in
all or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrowers, the Administrative Agent, the Lenders, the Swing
Line Lender and the L/C Issuer shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement.

 

Any agreement or instrument pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in Section 10.01
(other than under Section 10.01(a) and (b) and the
proviso to Section 10.01(d)) that affects such Participant.  Subject to subsection (e) of this
Section, the Borrowers agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section.  To the extent permitted by Applicable Law,
each Participant also shall be entitled to the benefits of Section 10.08
as though it were a Lender, provided such Participant agrees to be subject to Section 2.13
as though it were a Lender.

 

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(e)           Limitations upon Participant
Rights.  A Participant shall not be
entitled to receive any greater payment under Section 3.01, 3.04
or 3.05 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrowers’ prior written
consent.  A Participant shall not be
entitled to the benefits of Section 3.01 unless the Borrowers are
notified of the participation sold to such Participant and such Participant agrees,
for the benefit of the Borrowers, to comply with Section 3.01(e) as
though it were a Lender.

 

(f)            Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(g)           Reserved.

 

(h)           Reserved.

 

(i)            Resignation as L/C Issuer or
Swing Line Lender after Assignment. 
Notwithstanding anything to the contrary contained herein, if at any
time Bank of America assigns all of its Revolving Commitment and Committed
Loans pursuant to Section 10.06(b), Bank of America may, (i) upon
30 days’ notice to the Borrowers and the Lenders, resign as L/C Issuer and/or (ii) upon
30 days’ notice to the Borrowers, resign as Swing Line Lender.  In the event of any such resignation as L/C
Issuer or Swing Line Lender, the Borrowers shall be entitled to appoint from
among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided,
however, that no failure by the Borrowers to appoint any such successor
shall affect the resignation of Bank of America as L/C Issuer or Swing Line
Lender, as the case may be, and provided, further, that no Lender
shall be under any obligation to accept any such appointment as successor.  If Bank of America resigns as L/C Issuer, it
shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).  If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Loans or fund risk participations in outstanding Swing Line
Loans pursuant to Section 2.04(c). 
Upon the appointment of a successor L/C Issuer and/or Swing Line Lender,
(a) such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line
Lender, as the case may be, and (b) the successor L/C Issuer shall issue
letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to Bank of America to effectively assume the obligations of Bank
of America with respect to such Letters of Credit.

 

10.07      Treatment of Certain
Information; Confidentiality. 
Each of the Administrative Agent, the Lenders and the L/C Issuer agrees
to maintain the confidentiality of

 

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the Information (as defined below), except that Information may be
disclosed (a) to its Affiliates and to its and its Affiliates’ respective
partners, directors, officers, employees, agents, advisors and representatives
in connection with this Agreement (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to
the extent requested by any Governmental Authority purporting to have
jurisdiction over it (including any self-regulatory authority, such as the
National Association of Insurance Commissioners), (c) to the extent
required by Applicable Laws or by any subpoena or similar legal process, (d) to
any other party hereto, (e) in connection with the exercise of any
remedies hereunder or under any other Loan Document or any action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or any Acceding
Lender under Section 2.14(c) or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to any of the Borrowers and its obligations, (g) with
the consent of the Borrowers or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent, any Lender, the L/C Issuer or any of
their respective Affiliates on a nonconfidential basis from a source other than
the Borrowers.

 

For purposes of this Section, “Information”
means all information received from the Borrowers relating to the Borrowers or
any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the L/C Issuer on a
nonconfidential basis prior to disclosure by the Borrowers.  Any Person required to maintain the
confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.

 

Each of the Administrative Agent, the Lenders and the
L/C Issuer acknowledges that (a) the Information may include material
non-public information concerning the Borrowers or a Excluded Subsidiary, as
the case may be, (b) it has developed compliance procedures regarding the
use of material non-public information and (c) it will handle such
material non-public information in accordance with Applicable Laws, including
Securities Laws and state securities laws.

 

Notwithstanding the foregoing, unless specifically
prohibited by Applicable Law or court order, each of the Lenders, the L/C
Issuer and the Administrative Agent shall, prior to disclosure thereof, notify
the Borrowers of any request for disclosure of any such non-public information
by any Governmental Authority or representative thereof (other than any such
request in connection with an examination of the financial condition of such
Lender, the L/C Issuer or the Administrative Agent by such Governmental
Authority) or pursuant to legal process.

 

10.08      Right of Setoff.  If an Event of Default shall have occurred
and be continuing, each Lender, the L/C Issuer and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by Applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever

 

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currency) at any time held and other obligations (in whatever currency)
at any time owing by such Lender, the L/C Issuer or any such Affiliate to or
for the credit or the account of any of the Borrowers against any and all of
the obligations of any of the Borrowers now or hereafter existing under this
Agreement or any other Loan Document to such Lender or the L/C Issuer,
irrespective of whether or not such Lender or the L/C Issuer shall have made
any demand under this Agreement or any other Loan Document and although such
obligations of any of the Borrowers may be contingent or unmatured or are owed
to a branch or office of such Lender or the L/C Issuer different from the
branch or office holding such deposit or obligated on such indebtedness.  The rights of each Lender, the L/C Issuer and
their respective Affiliates under this Section are in addition to other
rights and remedies (including other rights of setoff) that such Lender, the
L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to
notify the Borrowers and the Administrative Agent promptly after any such
setoff and application, provided that the failure to give such notice
shall not affect the validity of such setoff and application.

 

10.09      Interest Rate Limitation.  Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under
the Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by Applicable Laws (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess interest
shall be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrowers.  In
determining whether the interest contracted for, charged, or received by the
Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to
the extent permitted by Applicable Laws, (a) characterize any payment that
is not principal as an expense, fee, or premium rather than interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) amortize, prorate,
allocate, and spread in equal or unequal parts the total amount of interest
throughout the contemplated term of the Obligations hereunder.

 

10.10      Counterparts; Integration;
Effectiveness.  This Agreement
may be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which
when taken together shall constitute a single contract.  This Agreement and the other Loan Documents
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof.  Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto.  Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or
other electronic imaging means shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

10.11      Survival of
Representations and Warranties. 
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in
connection herewith or therewith shall survive the execution and delivery
hereof and thereof.  Such representations
and warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the

 

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Administrative Agent or the Lenders may have had notice or knowledge of
any Default at the time of any Credit Extension unless notice of Default in
accordance with Section 6.15 has been received and shall continue
in full force and effect as long as any Loan or any other Obligation hereunder
shall remain unpaid or unsatisfied or any Letter of Credit shall remain
outstanding.

 

10.12      Concerning Joint and Several Liability of
the Borrowers

 

(a)           Each of the Borrowers is accepting
joint and several liability for all of the Obligations in consideration of the
financial accommodations to be provided by the Administrative Agent, the L/C
Issuer and the Lenders under this Agreement, for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the
undertakings of each other Borrower to accept joint and several liability for
the Obligations of the Borrowers.

 

(b)           Each of the Borrowers, jointly and
severally, hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the Obligations
of the Borrowers (including, without limitation, any Obligations arising under
this Section), it being the intention of the parties hereto that all of the
Obligations shall be the joint and several obligations of each of the Borrowers
without preferences or distinction among them.

 

(c)           If and to the extent that any of the
Borrowers shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event the other Borrowers will make such
payment with respect to, or perform, such Obligation.

 

(d)           The Obligations of each of the
Borrowers under the provisions of this Section 10.12 constitute
full recourse obligations of each such Borrower enforceable against each such
Borrower to the full extent of its properties and assets, to the fullest extent
permitted by Applicable Law, irrespective of the validity, regularity or
enforceability of this Agreement against any other Borrower or any other
circumstance whatsoever.

 

(e)           Except as otherwise expressly
provided in this Agreement, each of the Borrowers, to the fullest extent
permitted by Applicable Law, hereby waives notice of acceptance of its joint
and several liability, notice of any Loans made under this Agreement, notice of
any action at any time taken or omitted by the Administrative Agent, the L/C
Issuer or the Lenders under or in respect of any of the Obligations, and,
generally, to the extent permitted by Applicable Law and except as to notices
expressly provided for in the Loan Documents, all demands, notices and other
formalities of every kind in connection with this Agreement.  Each Borrower, to the fullest extent
permitted by Applicable Law, hereby waives all defenses which may be available
by virtue of any valuation, stay, moratorium law or other similar law now or
hereafter in effect, any right to require the marshaling of assets of the Borrowers
and any other entity or Person primarily or secondarily liable with respect to
any of the Obligations, and all suretyship defenses generally.  Each of the Borrowers, to the fullest extent
permitted by Applicable Law, hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Lenders, the Administrative Agent or the L/C Issuer at
any time or times in respect of any default

 

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by any of the Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Lenders, the Administrative
Agent or the L/C Issuer in respect of any of the Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or times,
of any security for any of the Obligations or the addition, substitution or
release, in whole or in part, of any of the Borrowers.  Without limiting the generality of the
foregoing, to the fullest extent permitted by law, each of the Borrowers
assents to any other action or delay in acting or failure to act on the part of
the Lenders, the Administrative Agent or the L/C Issuer with respect to the
failure by any of the Borrowers to comply with any of its respective
Obligations including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with Applicable
Laws or regulations thereunder, which might, but for the provisions of this
Section, afford grounds for terminating, discharging or relieving any of the
Borrowers, in whole or in part, from any of its Obligations under this Section,
it being the intention of each of the Borrowers that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of such Borrowers
under this Section shall not be discharged except by performance and then
only to the extent of such performance. 
The Obligations of each of the Borrowers under this Section shall
not be diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, re-construction or similar proceeding with respect to
any of the other Borrowers, the Lenders, the Administrative Agent or the L/C
Issuer.  The joint and several liability
of the Borrowers hereunder shall continue in full force and effect notwithstanding
any absorption, merger, amalgamation or any other change whatsoever in the
name, membership, constitution or place of formation of any of the other
Borrowers, the Lenders, the Administrative Agent or the L/C Issuer.

 

(f)            To the extent any Borrower makes a
payment hereunder in excess of the aggregate amount of the benefit received by
such Borrower in respect of the extensions of credit under the Credit Agreement
(the “Benefit Amount”), then such Borrower, after the payment in full,
in cash, of all of the Obligations, shall be entitled to recover from each
other Borrower such excess payment, pro  rata, in accordance with
the ratio of the Benefit Amount received by each such other Borrower to the
total Benefit Amount received by all Borrowers, and the right to such recovery
shall be deemed to be an asset and property of such Borrower so funding; provided,
that each of the Borrowers hereby agrees that it will not enforce any of its
rights of contribution or subrogation against the other Borrowers with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to any of the Lenders or the Administrative
Agent with respect to any of the Obligations or any collateral security
therefor until such time as all of the Obligations have been irrevocably paid
in full in cash.  Any claim which any
Borrower may have against any other Borrower with respect to any payments to
the Lenders or the Administrative Agent hereunder or under any other Loan
Document are hereby expressly made subordinate and junior in right of payment,
without limitation as to any increases in the Obligations arising hereunder or
thereunder, to the prior payment in full of the Obligations and, in the event
of any insolvency, bankruptcy, receivership, liquidation, reorganization or
other similar proceeding under the Applicable Laws of any jurisdiction relating
to any Borrower, its debts or its assets, whether voluntary or involuntary, all
such Obligations shall be paid in full before any payment or distribution of
any character, whether in cash, securities or other property, shall be made to
any other Borrower therefor.

 

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(g)           Each of the Borrowers hereby agrees
that it will not enforce any of its rights of contribution or subrogation
against the other Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
any of the Lenders, the L/C Issuer or the Administrative Agent with respect to
any of the Obligations or any collateral security therefor until such time as
all of the Obligations have been irrevocably paid in full in cash.  Any claim which any Borrower may have against
any other Borrower with respect to any payments to the Lenders, the L/C Issuer
or the Administrative Agent hereunder or under any other Loan Document are
hereby expressly made subordinate and junior in right of payment, without limitation
as to any increases in the Obligations arising hereunder or thereunder, to the
prior payment in full of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the Applicable Laws of any jurisdiction relating to any
Borrower, its debts or its assets, whether voluntary or involuntary, all such
Obligations shall be paid in full before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.

 

(h)           Each of the Borrowers hereby agrees
that the payment of any amounts due with respect to the Indebtedness owing by
any Borrower to any other Borrower is hereby subordinated to the prior payment
in full in cash of the Obligations.  Each
Borrower hereby agrees that after the occurrences and during the continuance of
any Default or Event of Default, such Borrower will not demand, sue for or
otherwise attempt to collect any Indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence,
such Borrower shall collect, enforce or receive any amounts in respect of such
Indebtedness before payment in full in cash of the Obligations, such amounts
shall be collected, enforced, received by such Borrower as trustee for the
Administrative Agent and be paid over to the Administrative Agent for the pro rata
accounts of the relevant Lenders (in accordance with each such Lender’s
Applicable Percentage) to be applied to repay (or be held as security for the
repayment of) the Obligations.

 

(i)            The provisions of this Section 10.12
are made for the benefit of the Administrative Agent, the L/C Issuer and the
Lenders and their successors and assigns, and may be enforced in good faith by
them from time to time against any or all of the Borrowers as often as the
occasion therefor may arise and without requirement on the part of the
Administrative Agent, the L/C Issuer or the Lenders first to marshal any of
their claims or to exercise any of their rights against any other Borrower or
to exhaust any remedies available to them against any other Borrower or to
resort to any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. 
The provisions of this Section 10.12 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise fully
satisfied.  If at any time, any payment,
or any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by the Administrative Agent, the L/C
Issuer or the Lenders upon the insolvency, bankruptcy or reorganization of any
of the Borrowers or is repaid in good faith settlement of a pending or
threatened avoidance claim, or otherwise, the provisions of this Section 10.12
will forthwith be reinstated in effect, as though such payment had not been
made.

 

(j)            Each of the Borrowers hereby
appoints the Parent, and the Parent hereby agrees, to act as its representative
and authorized signor with respect to any notices, demands,

 

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communications or requests under this Agreement or the
other Loan Documents, including, without limitation, with respect to any Loan
Notice, Letter of Credit Application and Compliance Certificates and pursuant
to Section 10.02 of this Agreement.

 

(k)           It is the intention and agreement of
the Borrowers and the Lenders that the obligations of the Borrowers under this
Agreement shall be valid and enforceable against the Borrowers to the maximum
extent permitted by Applicable Law. 
Accordingly, if any provision of this Agreement creating any obligation
of the Borrowers in favor of the Lenders shall be declared to be invalid or
unenforceable in any respect or to any extent, it is the stated intention and
agreement of the Borrowers and the Lenders that any balance of the obligation
created by such provision and all other obligations of the Borrowers to the Lenders
created by other provisions of this Credit Agreement shall remain valid and
enforceable.  Likewise, if by final order
a court of competent jurisdiction shall declare any sums which the Lenders may
be otherwise entitled to collect from the Borrowers under this Credit Agreement
to be in excess of those permitted under any Applicable Law (including any
federal or state fraudulent conveyance or like statute or rule of law)
applicable to the Borrowers’ obligations under this Agreement, it is the stated
intention and agreement of the Borrowers and the Lenders that all sums not in
excess of those permitted under such Applicable Law shall remain fully
collectible by the Lenders from the Borrowers.

 

10.13      Severability.  If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired
thereby and (b) the parties shall endeavor in good faith negotiations to
replace the illegal, invalid or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the illegal,
invalid or unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

 

10.14      Replacement of Lenders.  If any Lender requests compensation under Section 3.04
or is unable to lend under Section 3.02, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.01,
if any Lender is a Defaulting Lender or if any other circumstance exists
hereunder that gives the Borrowers the right to replace a Lender as a party
hereto, then the Borrowers may, at their sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.06), all of its
interests, rights and obligations under this Agreement and the related Loan
Documents to an Eligible Assignee that shall assume such obligations (which Eligible
Assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)           the Borrowers shall have paid to the
Administrative Agent the assignment fee specified in Section 10.06(b)(iii);

 

(b)           such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and L/C
Advances, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents (including any amounts 

 

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under Section 3.05) from the Eligible
Assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrowers (in the case of all other amounts);

 

(c)           in the case of any such assignment
resulting from a claim for compensation under Section 3.04 or
payments required to be made pursuant to Section 3.01, such
assignment will result in a reduction in such compensation or payments
thereafter; and

 

(d)           such assignment does not conflict
with Applicable Laws.

 

A Lender shall not be required to make any such
assignment or delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.

 

10.15      Collateral
Security.

 

(a)           The Obligations shall be secured by (a) a
perfected (except in Real Property and motor vehicles) first-priority security
interest (subject to Permitted Liens entitled to priority under Applicable Law)
in all assets of each Borrower, whether now owned or hereafter acquired,
pursuant to the terms of the Security Agreement to which each Borrower is a
party; (b) a pledge of 100% of the capital stock or other Equity Interests
of such Borrowers (other than the Parent) and of the Non-Borrower Subsidiaries
(other than the Foreign Subsidiaries and NELS) to the Administrative Agent on
behalf of the Lenders and the Agents pursuant to the Pledge Agreement; and (c) a
pledge of the capital stock or other Equity Interests of each Foreign
Subsidiary (provided that not more than 65% of the total voting power of all
outstanding capital stock or other Equity Interest of any such first-tier
Foreign Subsidiary of a Borrower shall be required to be so pledged and no
Equity Interests of any non-first-tier Foreign Subsidiary shall be provided to
be so pledged); provided that the Borrowers hereby agree, upon the
request of the Administrative Agent and the Required Lenders, to deliver, as
promptly as practicable, but in any event within sixty (60) days after request
therefor, or such other later time, if any, to which the Administrative Agent
may agree, (i) certificates of titles for all vehicles, trucks, trailers,
tractors, automobiles and any other equipment covered by certificates of title
owned by a Borrower (collectively, “Motor Vehicles”) with the
Administrative Agent listed as lienholder therein and, if required by the
Administrative Agent, the Borrowers shall have retained Corporation Service
Company (or other similar company satisfactory to the Administrative Agent)
pursuant to agreements reasonably satisfactory to the Administrative Agent
pursuant to which Corporation Service Company (or such other company) will
agree to act as agent for the Lenders and the Agents with respect to the
perfection of security interests in the Motor Vehicles; and (ii) mortgages
with respect to Real Property and to take such other steps and make such other
deliveries as may be reasonably requested by the Administrative Agent
(including, without limitation, the delivery of legal opinions, Consulting
Engineer’s reports, surveys, landlord consents and title insurance) so as to
provide the Administrative Agent, for the benefit of the Lenders and the
Agents, a perfected first-priority security interest in such assets, provided
that to the extent that any lease of (or operating/management agreement with
respect to) Real Property prohibits assignment of such lease (or
operating/management agreement) without the consent of the lessor or another
party thereunder, the Borrowers shall not be required to grant a mortgage on
the leasehold interest under such lease, but in such event, the Borrower agrees
to diligently and in good faith use its reasonable best efforts to obtain the
consent (which consent shall be in form 

 

126

 

and substance reasonably satisfactory to the
Administrative Agent) of the applicable lessor or other party to such leasehold
mortgage (and, upon the receipt of such consent, the Borrowers shall promptly
grant such leasehold mortgage and comply with the other provisions of this Section 10.15
with respect thereto).

 

(b)           In the event any Borrower disposes of
any assets as permitted under, and in compliance with, Section 7.04(b),
and so long as such Borrower shall have provided the Administrative Agent with
such certifications or documents, if any, as the Administrative Agent shall
reasonably request, the Administrative Agent will, at the Borrowers’ sole cost
and expense, and without recourse to or warranty by the Administrative Agent,
execute and deliver all such forms, releases, discharges, assignments,
termination statements, and similar documents as the Borrowers may reasonably
request in order to release the Liens granted to the Administrative Agent with
respect to such assets.

 

10.16      Existing
Credit Agreement Superseded.

 

(a)           Existing Credit Agreement
Superseded.  On the Closing Date,
this Agreement shall supersede the Existing Credit Agreement in its entirety,
except as provided in this Section.  On
the Closing Date, the rights and obligations of the parties hereto evidenced by
the Existing Credit Agreement shall be evidenced by this Agreement and the
other Loan Documents, the “Loans” as defined in the Existing Credit Agreement
shall be converted to Loans as defined herein and the Existing Letters of
Credit issued by the L/C Issuer (as defined in the Existing Credit Agreement)
for the account of the Borrowers prior to the Closing Date shall be deemed to
be Letters of Credit under this Credit Agreement, and shall bear interest and
be subject to such other fees as set forth in this Agreement.

 

(b)           Interest and Fees under Superseded
Agreement.  All interest and fees and
expenses, if any, owing or accruing under or in respect of the Existing Credit
Agreement through the Closing Date (including any breakage fees in respect of
Eurodollar Rate Loans as defined therein) shall be calculated as of the Closing
Date (pro-rated in the case of any fractional periods), and shall be paid on
the Closing Date.

 

10.17      Governing
Law; Jurisdiction; Etc.

 

(a)           GOVERNING LAW.  THIS AGREEMENT AND THE OBLIGATIONS ARISING
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPALS THEREOF (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW).

 

(b)           SUBMISSION TO JURISDICTION.  EACH OF THE BORROWERS IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT
FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR 

 

127

 

ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES
HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY
SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK
STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH
FEDERAL COURT.  EACH OF THE PARTIES
HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. 
NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY
RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE
HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AGAINST ANY OF THE BORROWERS OR THEIR PROPERTIES IN THE COURTS OF
ANY JURISDICTION.

 

(c)           WAIVER OF VENUE.  EACH OF THE BORROWERS IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS
SECTION.  EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

 

(d)           SERVICE OF PROCESS.  EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE
RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW.

 

10.18      Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY 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 AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT
IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

10.19      No Advisory or Fiduciary
Responsibility.  In connection
with all aspects of the transactions contemplated hereby (including in
connection with any amendment, waiver or other 

 

128

 

modification hereof or of any other Loan Document), each Borrower
acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (i) (A) the
arranging and other services regarding this Agreement provided by the
Administrative Agent and the Joint Arrangers are arm’s-length commercial
transactions between the Borrowers and their respective Affiliates, on the one
hand, and the Administrative Agent and the Joint Arrangers, on the other hand, (B) each
Borrower has consulted its own legal, accounting, regulatory and tax advisors
to the extent it has deemed appropriate, and (C) each Borrower is capable
of evaluating, and understands and accepts, the terms, risks and conditions of
the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the
Administrative Agent and each Joint Arranger each is and has been acting solely
as a principal and, except as expressly agreed in writing by the relevant
parties, has not been, is not, and will not be acting as an advisor, agent or
fiduciary for the Borrowers or any of their respective Affiliates, or any other
Person and (B) neither the Administrative Agent nor any Joint Arranger has
any obligation to the Borrowers or any of their respective Affiliates with
respect to the transactions contemplated hereby except those obligations
expressly set forth herein and in the other Loan Documents; and (iii) the
Administrative Agent and the Joint Arrangers and their respective Affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Borrowers and their respective Affiliates, and neither
the Administrative Agent nor any Joint Arranger has any obligation to disclose
any of such interests to the Borrowers or any of their respective Affiliates.  To the fullest extent permitted by Applicable
Law, each Borrower hereby waives and releases any claims that it may have
against the Administrative Agent and Joint Arrangers with respect to any breach
or alleged breach of agency or fiduciary duty in connection with any aspect of
any transaction contemplated hereby.

 

10.20      USA PATRIOT Act Notice.  Each Lender that is subject to the Act (as
hereinafter defined) and the Administrative Agent (for itself and not on behalf
of any Lender) hereby notifies the Borrowers that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Borrowers, which information includes the name
and address of each of the Borrowers and other information that will allow such
Lender or the Administrative Agent, as applicable, to identify the Borrowers in
accordance with the Act.  The Borrowers
shall, promptly following a request by the Administrative Agent or any Lender,
provide all documentation and other information that the Administrative Agent
or such Lender requests in order to comply with its ongoing obligations under
applicable “know your customer” an anti-money laundering rules and
regulations, including the Act.

 

10.21      Designation
of Parent as the Agent for the Borrowers

 

.  For purposes of this Agreement, the Borrowers
hereby designate the Parent as the agent and representative of each Borrower
for all purposes hereunder and the Parent hereby accepts each such
appointment.  The Administrative Agent
and each Lender may regard any notice or other communication pursuant to any
Loan Document from the Parent as a notice or communication from all the
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or the Borrowers hereunder to the Parent on behalf of
such Borrower or the Borrowers.  Each
Borrower agrees that each notice, election, representation and warranty, covenant,
agreement and undertaking made on its behalf by the Parent shall be deemed for
all purposes to have been made by such Borrower and shall be binding upon and 

 

129

 

enforceable
against such Borrower to the same extent as if the same had been made directly
by such Borrower.

 

[Signature pages follow]

 

130

 

IN WITNESS WHEREOF, the parties hereto have caused
this Second Amended and Restated Revolving Credit and Term Loan Agreement to be
duly executed as of the date first above written.

 

	
   

  	
  CASELLA
  WASTE SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John
  S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALL
  CYCLE WASTE, INC.

  
	
   

  	
  ATLANTIC
  COAST FIBERS, INC.

  
	
   

  	
  B.
  AND C. SANITATION CORPORATION

  
	
   

  	
  BRISTOL
  WASTE MANAGEMENT, INC.

  
	
   

  	
  C.V.
  LANDFILL, INC.

  
	
   

  	
  CASELLA
  ALBANY RENEWABLES, LLC

  
	
   

  	
  CASELLA
  MAJOR ACCOUNT SERVICES, LLC

  
	
   

  	
  CASELLA
  RECYCLING, LLC

  
	
   

  	
  CASELLA
  RENEWABLE SYSTEMS, LLC

  
	
   

  	
  CASELLA
  TRANSPORTATION, INC.

  
	
   

  	
  CASELLA
  WASTE MANAGEMENT OF MASSACHUSETTS, INC.

  
	
   

  	
  CASELLA
  WASTE MANAGEMENT OF N.Y., INC.

  
	
   

  	
  CASELLA
  WASTE MANAGEMENT OF PENNSYLVANIA, INC.

  
	
   

  	
  CASELLA
  WASTE MANAGEMENT, INC.

  
	
   

  	
  CASELLA
  WASTE SERVICES OF ONTARIO LLC

  
	
   

  	
  CHEMUNG
  LANDFILL LLC

  
	
   

  	
  COLEBROOK
  LANDFILL LLC

  
	
   

  	
  FAIRFIELD
  COUNTY RECYCLING, LLC

  
	
   

  	
  FCR
  CAMDEN, LLC

  
	
   

  	
  FCR
  FLORIDA, LLC

  
	
   

  	
  FCR
  GREENSBORO, LLC

  
	
   

  	
  FCR
  GREENVILLE, LLC

  
	
   

  	
  FCR
  MORRIS, LLC

  
	
   

  	
  FCR
  REDEMPTION, LLC

  
	
   

  	
  FCR
  TENNESSEE, LLC

  
	
   

  	
  FCR,
  LLC

  
	
   

  	
  FOREST
  ACQUISITIONS, INC.

  
	
   

  	
  GRASSLANDS
  INC.

  
	
   

  	
  HAKES
  C&D DISPOSAL, INC.

  
	
   

  	
  HARDWICK
  LANDFILL, INC.

  
	
   

  	
  HIRAM
  HOLLOW REGENERATION CORP.

  

 

131

 

	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:
  John S. Quinn

  
	
   

  	
   

  	
  Title:
  Vice President and Treasurer

  

 

132

 

	
   

  	
  K-C
  INTERNATIONAL, LTD.

  
	
   

  	
  KTI
  BIO FUELS, INC.

  
	
   

  	
  KTI
  ENVIRONMENTAL GROUP, INC.

  
	
   

  	
  KTI
  NEW JERSEY FIBERS, INC.

  
	
   

  	
  KTI
  OPERATIONS, INC.

  
	
   

  	
  KTI
  SPECIALTY WASTE SERVICES, INC.

  
	
   

  	
  KTI,
  INC.

  
	
   

  	
  LEWISTON
  LANDFILL LLC

  
	
   

  	
  NEW
  ENGLAND WASTE SERVICES OF MASSACHUSETTS, INC.

  
	
   

  	
  NEW
  ENGLAND WASTE SERVICES OF ME, INC.

  
	
   

  	
  NEW
  ENGLAND WASTE SERVICES OF N.Y., INC.

  
	
   

  	
  NEW
  ENGLAND WASTE SERVICES OF VERMONT, INC.

  
	
   

  	
  NEW
  ENGLAND WASTE SERVICES, INC.

  
	
   

  	
  NEWBURY
  WASTE MANAGEMENT, INC.

  
	
   

  	
  NORTH
  COUNTRY ENVIRONMENTAL SERVICES, INC.

  
	
   

  	
  NORTHERN
  PROPERTIES CORPORATION OF PLATTSBURGH

  
	
   

  	
  NORTHERN
  SANITATION INC.

  
	
   

  	
  PERC,
  INC.

  
	
   

  	
  PINE
  TREE WASTE, INC.

  
	
   

  	
  RESOURCE
  RECOVERY SYSTEMS, LLC

  
	
   

  	
  RESOURCE
  TRANSFER SERVICES, INC.

  
	
   

  	
  RESOURCE
  WASTE SYSTEMS, INC.

  
	
   

  	
  SCHULTZ
  LANDFILL, INC.

  
	
   

  	
  SOUTHBRIDGE
  RECYCLING & DISPOSAL PARK, INC.

  
	
   

  	
  SUNDERLAND
  WASTE MANAGEMENT, INC.

  
	
   

  	
  TRILOGY
  GLASS LLC

  
	
   

  	
  U.S.
  FIBER, LLC

  
	
   

  	
  WASTE-STREAM
  INC.

  
	
   

  	
  WINTERS
  BROTHERS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:
  John S. Quinn

  
	
   

  	
   

  	
  Title:
  Vice President and Treasurer

  

 

133

 

	
   

  	
  BLUE MOUNTAIN RECYCLING, LLC

  
	
   

  	
   

  
	
   

  	
  By: FCR, LLC, its sole manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CWM ALL WASTE LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GROUNDCO LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  THE HYLAND FACILITY ASSOCIATES

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MAINE ENERGY RECOVERY COMPANY, LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  KTI Environmental Group, Inc., general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Treasurer

  

 

134

 

	
   

  	
  NEWS OF WORCESTER LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Casella Waste Systems, Inc., its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President, Chief Financial Officer and Treasurer

  
	
   

  	
   

  
	
   

  	
  NEWSME LANDFILL OPERATIONS LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PERC MANAGEMENT COMPANY LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  PERC, Inc., general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President and Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TEMPLETON LANDFILL LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John S. Quinn

  
	
   

  	
   

  	
  Name:

  	
  John S. Quinn

  
	
   

  	
   

  	
  Title:

  	
  Duly Authorized Agent

  
					

 

135

 

	
   

  	
  BANK
  OF AMERICA, N.A.,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maria F. Maia

  
	
   

  	
   

  	
  Name:
  Maria F. Maia

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

136

 

	
   

  	
  BANK
  OF AMERICA, N.A., as a Revolving Lender, L/C Issuer and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maria F. Maia

  
	
   

  	
   

  	
  Name:
  Maria F. Maia

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

137

 

	
   

  	
  BANK
  OF AMERICA, N.A., as a Term B Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Maria F. Maia

  
	
   

  	
   

  	
  Name:
  Maria F. Maia

  
	
   

  	
   

  	
  Title:
  Managing Director

  
				

 

138

 

	
   

  	
  COMERICA
  BANK,

  
	
   

  	
  as
  a Revolving Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ian S. Mearns

  
	
   

  	
   

  	
  Name:
  Ian S. Mearns

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

139

 

	
   

  	
  JPMORGAN
  CHASE BANK, N.A.,

  
	
   

  	
  as
  a Revolving Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Scott McNamara

  
	
   

  	
   

  	
  Name:
  Scott McNamara

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

140

 

	
   

  	
  CALYON
  NEW YORK BRANCH,

  
	
   

  	
  as
  a Revolving Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Pamela Donnelly

  
	
   

  	
   

  	
  Name:
  Pamela Donnelly

  
	
   

  	
   

  	
  Title:
  Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Yuri Muzichenko

  
	
   

  	
   

  	
  Name:
  Yuri Muzichenko

  
	
   

  	
   

  	
  Title:
  Director

  

 

141

 

	
   

  	
  TD
  BANKNORTH, N.A.,

  
	
   

  	
  as
  a Revolving Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  E. Kirke Hart

  
	
   

  	
   

  	
  Name:
  E. Kirke Hart

  
	
   

  	
   

  	
  Title:
  S.V.P.

  

 

142

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