Document:

EXHIBIT 10.1

 

METRO ONE TELECOMMUNICATIONS,
INC.

RETENTION PLAN

 

PURPOSE

 

In the wake of the
current downsizing as a result of the loss of its Nextel business, Metro One
considers it in the best interests of the company to foster the continuous
employment of certain employees who possess specialized knowledge critical to
the company’s business.   This Retention
Plan is applicable only for the purpose of the current circumstances and does
not apply to other circumstances or events.

 

PARTICIPANTS

 

Employees eligible for
Retention Incentives will be selected by the Board of Directors or its designee
based on one or all of the following:

 

•                  Position held

•                  Skills

•                  Relative importance of skills to
required tasks

 

AGREEMENT

 

A written agreement
containing the eligibility criteria and terms of payment must be signed and
dated by the eligible employee and the CEO.

 

DURATION

 

The retention period will
be determined by the Board of Directors or its designee based on the
circumstances, the financial condition of the company, the specific tasks to be
provided by the employee, including any follow-up that may be required.

 

AMOUNT

 

Employees are eligible to
receive up to three weeks’ base pay per year of service at the employee’s
current rate, with a minimum payment of 26 weeks base pay at the employee’s
current rate.  Exceptions may be made by
the Board of Directors at the recommendation of the Chief Executive Officer.

 

PAYMENT
OF RETENTION

 

Retention will be paid in
three incremental installments during the term of the retention, provided the
following conditions are met: (1) the employee maintains adequate
performance during the specified retention period, (2) the employee
continues his/her employment with Metro One through the end of the retention
period; (3) the employee signs a release of claims in substantially the
same form as Exhibit A to the Retention Agreement.

 

 

The first payment of 25%
of the total retention incentive will be made on the first regular pay day
after the Retention Agreement is signed. 
The second payment of 25% will be paid half way through the retention
period.  The third payment of 50% will be
paid at the end of the retention period, after the Release has been signed and
the revocation period in the Release has expired.  If employment ends during the retention
period due to employee’s resignation, poor performance, or unacceptable
behavior, no retention will be paid.   If
Metro One terminates the employee’s employment without cause, or the employee
terminates his or her employment for Good Reason prior to the end of the
retention period, the remaining retention amount will be paid.  For the purpose of this plan, Good Reason
means:

 

•                  a reduction in the employee’s upward
reporting responsibility, titles, or offices in effect on the date the Retention
Agreement is signed by the employee (the Effective Date), or any change in
duties that has the effect of materially diminishing the employee’s
responsibility or authority;

 

•                  a reduction in the employee’s
compensation in effect on the Effective Date;

 

•                  a requirement that employee be based
anywhere other than within 25 miles of employee’s job location on the Effective
Date; or

 

•                  without replacement by plans or programs
which, taken as a whole, provide benefits similar to those discontinued or
adversely affected, a material reduction in any bonus, incentive, stock
ownership, purchase, option, life insurance, health, accident, disability, or
any other employee compensation or benefit plan or program in which the
employee is participating on the Effective Date.

 

2

 

(FORM OF)

 

RETENTION AGREEMENT

 

This
Retention Agreement (Agreement) is between Metro One Telecommunications, Inc.
(Company) and                                
 (Employee).

 

RECITALS

 

A.            Company considers
it in its best interests to foster the continuous employment of Employee in
his/her present position.

 

B.            Company
acknowledges the possibility that it may undergo further downsizing and other
changes that may foster uncertainty and questions by Employee that could result
in the departure or distraction of Employee to the detriment of Company.

 

C.            Company
has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of Employee to his/her assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the potential changes that may occur at Company.

 

Therefore,
in consideration of the mutual promises set forth below, the parties agree as
follows:

 

I.                                         AGREEMENT

 

1.             Term of Agreement.  The term of this Agreement is from                                                                                          
to                                                                                             
(the Retention Period).

 

2.             Retention Incentive.  The minimum Retention Incentive payable under
this Agreement shall be twenty-six weeks of base pay at Employee’s current
rate, provided Employee meets all eligibility criteria under paragraph 3.  Generally the maximum Retention
Incentive payable under this Agreement is equal to three weeks of the Employee’s
base pay at Employee’s current rate multiplied by the Employee’s years of
service.  Exceptions may be made by the
Board of Directors at the recommendation of the Chief Executive Officer.

 

3.             Eligibility for Retention
Incentive.  The
Retention Incentive, less applicable withholdings, will be paid in three
installments provided the following conditions are met: (1) Employee
continues his/her employment with Company through the end of the Retention
Period, (2) Employee maintains adequate attendance and performance during
the Retention Period, and (3) Employee signs a release of claims in
substantially the same form as Exhibit A to this Agreement.  If Company terminates Employee’s employment
without Cause (defined below) or Employee resigns for Good Reason (defined
below) prior to the end of the Retention Period, Employee will receive the full
Retention Incentive.  If Employee resigns
without Good Reason or is terminated for Cause during the Retention Period,
Employee is ineligible for further Retention Incentive payments.

 

3

 

4.             Timing of Payments.  Twenty-five percent (25%) of the Retention
Incentive will be paid on the first regular pay day after the Retention
Agreement is signed, another twenty-five percent (25%) will be paid half way
through the Retention Period, and the remaining fifty percent (50%) will be
paid upon expiration of the revocation period set forth in Exhibit A to
this Agreement.  If Employee is
terminated without Cause or resigns for Good Reason prior to the end of the
Retention Period, Employee will be paid any remaining installments in a lump
sum upon expiration of the revocation period set forth in Exhibit A to
this Agreement.

 

5.             Effect
of Termination.

 

(a)           Voluntary Resignation or Termination
for Cause.  Except as provided in
paragraph 5(b), Company will have no obligation to pay Employee any further
Retention Incentive in the event Employee resigns or Company terminates
Employee’s employment for Cause at any time through the end of the Retention
Period.  For the purpose of this
Agreement, Cause means:

 

(1)           Employee
is convicted of a felony;

 

(2)           Employee
engages in misappropriation of Company’s funds or assets;

 

(3)           Employee
engages in dishonesty, disloyalty, and/or fraud in connection with Company;

 

(4)           Employee
violates any agreement with Company regarding restrictions on competition, the
disclosure of confidential information and/or the assignment of intellectual
property or inventions;

 

(5)           Employee
engages in conduct which has or causes a diminishing effect on Company’s
reputation, goodwill or business;

 

(6)           Employee
fails to meet attendance and performance requirements under paragraph 3, refuses
to perform his/her assigned duties, or engages in conduct that violates written
Metro One policy.

 

(b)           Resignation for Good Reason.  If Employee terminates his or her employment
for Good Reason prior to the end of the Retention Period, the remaining Retention
Incentive will be paid.  For the purpose
of this plan, Good Reason means:

 

(1)                                  A
reduction in the employee’s upward reporting responsibility, titles, or offices
in effect on the effective date of this Agreement (the Effective Date), or any
change in duties that has the effect of materially diminishing the employee’s
responsibility or authority;

 

4

 

(2)           A
reduction in the employee’s compensation in effect on the Effective Date;

 

(3)           A
requirement that employee be based anywhere other than within 25 miles of
employee’s job location on the Effective Date of this Plan; or

 

(4)           Without
replacement by plans or programs which, taken as a whole, provide benefits
similar to those discontinued or adversely affected, a material reduction in
any bonus, incentive, stock ownership, purchase, option, life insurance,
health, accident, disability, or any other employee compensation or benefit
plan or program in which the employee is participating on the Effective Date.

 

5.             At Will Employment.  Nothing in this Agreement constitutes a
guarantee of continued employment or otherwise modifies the at will nature of
Employee’s employment with Company. 
Therefore, both Company and Employee retain the right to terminate the
employment relationship at any time, with or without Cause or notice.

 

6.             Confidentiality.  It is expressly understood
and agreed that Employee will keep both the fact and terms of this Agreement
and Exhibit A to this Agreement confidential, and that Employee may not
disclose the terms or conditions to anyone, except that Employee may disclose
the contents of this Agreement as required by law and (1) to his/her
immediate family, (2) to his/her lawyers, tax accountants and other
advisors in order to seek advice about its provisions, and properly account for
and report its effects, (3) to obtain enforcement of any of its
provisions; provided anyone to whom Employee is authorized to disclose this
Agreement agrees to be bound by the terms of this paragraph.

 

7.             Governing Law and Dispute
Resolution.  This
Agreement is governed by Oregon law, without regard to conflicts of law
principles.  The parties agree that any
dispute (1) concerning the interpretation, construction or breach of this
Agreement, (2) arising from Employee’s employment or service with Company,
or (3) relating to any compensation or benefits Employee may claim, shall
be submitted to a mediator agreed upon by the parties for nonbinding
confidential mediation in Portland, Oregon. 
Each party shall bear their own costs of mediation.  If the matter cannot be resolved with the aid
or the mediator, it shall be submitted to final and binding confidential
arbitration in Portland, Oregon, pursuant to the rules of the American
Arbitration Association or such other rules as agreed to by the
parties.  The prevailing party shall be
entitled to recover its reasonable costs, attorney fees and out-of pocket
expenses relating to arbitration.  Both
parties agree that the procedures outlined in this paragraph are the exclusive
methods of dispute resolution.

 

8.             Severability.  The provisions of this Agreement are
severable.  If any provision of this
Agreement or its application is held invalid, the invalidity shall not affect
other obligations, provisions, or applications of this Agreement which can be
given effect without the invalid obligations, provisions, or applications.

 

5

 

9.             Section Headings.  The section headings contained herein
are for reference purposes only and will not in any way affect the meaning or
interpretation of this Agreement.

 

10.          Entire Agreement.  This Agreement, including Exhibit A to
this Agreement, constitutes the entire agreement between the parties and
supersedes all prior or contemporaneous oral or written understandings,
statements, representations or promises with respect to its subject matter.

 

This
Agreement is not effective until it is signed by all parties.

 

	
  EMPLOYEE

  	
  METRO
  ONE TELECOMMUNICATIONS,

  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
						

 

6Exhibit 10.1

 

FINANCE AUTHORITY OF MAINE

 

and

 

CASELLA WASTE SYSTEMS, INC.

 

 

FINANCING AGREEMENT

 

Dated as of December 1, 2005

 

 

Relating to

 

$25,000,000

FINANCE AUTHORITY OF MAINE

SOLID WASTE DISPOSAL REVENUE BONDS

(CASELLA WASTE SERVICES, INC. PROJECT)

SERIES 2005

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  2

  
	
  Section 1.1

  	
  Definition of Terms

  	
  2

  
	
  Section 1.2

  	
  Number and Gender

  	
  2

  
	
  Section 1.3

  	
  Articles, Sections, Etc

  	
  2

  
	
  ARTICLE
  II

  	
  REPRESENTATIONS
  AND WARRANTIES OF THE AUTHORITY AND THE COMPANY

  	
  2

  
	
  Section 2.1

  	
  Representations of the
  Authority

  	
  2

  
	
  Section 2.2

  	
  Representations and
  Warranties of the Company

  	
  3

  
	
  ARTICLE
  III

  	
  ISSUANCE
  OF THE BONDS; APPLICATION OF PROCEEDS

  	
  5

  
	
  Section 3.1

  	
  Agreement to Issue Bonds;
  Application of Bond Proceeds

  	
  5

  
	
  Section 3.2

  	
  Disbursements from the
  Project Fund; Disbursements from the Costs of Issuance Fund

  	
  6

  
	
  Section 3.3

  	
  Establishment of Completion
  Date; Obligation of Company to Complete

  	
  7

  
	
  Section 3.4

  	
  Investment of Moneys in Funds

  	
  7

  
	
  Section 3.5

  	
  Limitation of Authority’s
  Liability

  	
  7

  
	
  ARTICLE
  IV

  	
  LOAN OF
  PROCEEDS; REPAYMENT PROVISION

  	
  8

  
	
  Section 4.1

  	
  Loan of Bond Proceeds;
  Issuance of Bonds

  	
  8

  
	
  Section 4.2

  	
  Loan Payments and Payment of
  Other Amounts

  	
  8

  
	
  Section 4.3

  	
  Unconditional Obligation

  	
  10

  
	
  Section 4.4

  	
  Assignment of Authority’s
  Rights

  	
  10

  
	
  Section 4.5

  	
  Amounts Remaining in Funds

  	
  10

  
	
  ARTICLE V

  	
  SPECIAL
  COVENANTS AND AGREEMENTS

  	
  11

  
	
  Section 5.1

  	
  Right of Access to the
  Project

  	
  11

  
	
  Section 5.2

  	
  Disposition of Project

  	
  11

  
	
  Section 5.3

  	
  The Company’s Maintenance of
  Its Existence

  	
  11

  
	
  Section 5.4

  	
  Records and Financial
  Statements of Company

  	
  12

  
	
  Section 5.5

  	
  Insurance

  	
  12

  
	
  Section 5.6

  	
  Maintenance and Repairs;
  Taxes; Utility and Other Charges

  	
  12

  
	
  Section 5.7

  	
  Qualification in Maine

  	
  13

  
	
  Section 5.8

  	
  Tax Covenant

  	
  13

  
	
  Section 5.9

  	
  Continuing Disclosure

  	
  13

  
	
  Section 5.10

  	
  Assignment by Company

  	
  13

  
	
  Section 5.11

  	
  Cooperation in Filings and
  Other Matters

  	
  14

  
				

 

i

 

	
  Section 5.12

  	
  Letter of Credit

  	
  14

  
	
  ARTICLE
  VI

  	
  [RESERVED]

  	
  15

  
	
  ARTICLE
  VII

  	
  LOAN
  DEFAULT EVENTS AND REMEDIES

  	
  15

  
	
  Section 7.1

  	
  Loan Default Events

  	
  15

  
	
  Section 7.2

  	
  Remedies on Default

  	
  16

  
	
  Section 7.3

  	
  Agreement to Pay Attorneys’
  Fees and Expenses

  	
  17

  
	
  Section 7.4

  	
  No Remedy Exclusive

  	
  17

  
	
  Section 7.5

  	
  No Additional Waiver Implied
  by One Waiver

  	
  18

  
	
  ARTICLE
  VIII

  	
  PREPAYMENT

  	
  18

  
	
  Section 8.1

  	
  Redemption of Bonds with
  Prepayment Moneys

  	
  18

  
	
  Section 8.2

  	
  Options to Prepay
  Installments

  	
  18

  
	
  Section 8.3

  	
  Mandatory Prepayment

  	
  18

  
	
  Section 8.4

  	
  Amount of Prepayment

  	
  18

  
	
  Section 8.5

  	
  Notice of Prepayment

  	
  19

  
	
  ARTICLE
  IX

  	
  NON-LIABILITY
  OF AUTHORITY; EXPENSES; INDEMNIFICATION

  	
  19

  
	
  Section 9.1

  	
  Non-liability of Authority;
  Limitations on Authority Actions and Responsibilities

  	
  19

  
	
  Section 9.2

  	
  Expenses

  	
  21

  
	
  Section 9.3

  	
  Indemnification

  	
  21

  
	
  ARTICLE X

  	
  MISCELLANEOUS

  	
  22

  
	
  Section 10.1

  	
  Notices

  	
  22

  
	
  Section 10.2

  	
  Matters to be Considered by
  Authority

  	
  23

  
	
  Section 10.3

  	
  Severability

  	
  23

  
	
  Section 10.4

  	
  Execution of Counterparts

  	
  23

  
	
  Section 10.5

  	
  Amendments, Changes and
  Modifications

  	
  23

  
	
  Section 10.6

  	
  Governing Law

  	
  23

  
	
  Section 10.7

  	
  Authorized Representative

  	
  23

  
	
  Section 10.8

  	
  Actions by Authority

  	
  23

  
	
  Section 10.9

  	
  Term of the Agreement

  	
  24

  
	
  Section 10.10

  	
  Binding Effect

  	
  24

  
	
  Section 10.11

  	
  Complete Agreement

  	
  24

  
	
  Section 10.12

  	
  Business Days

  	
  24

  
				

 

ii

 

	
  Section 10.13

  	
  Waiver of Personal Liability

  	
  24

  
	
  Section 10.14

  	
  Waivers

  	
  24

  

 

iii

 

FINANCING AGREEMENT

 

This FINANCING AGREEMENT (the “Agreement”),
dated as of December 1, 2005, between FINANCE AUTHORITY OF MAINE (the
“Authority”), and CASELLA WASTE SYSTEMS, INC., a corporation duly organized and
existing under the laws of the State of Delaware (the “Company”);

 

W I T N E S S E T H:

 

WHEREAS, the Authority is a body corporate
and politic and a public instrumentality of the State of Maine created under
Maine Revised Statutes Annotated (“MRSA”) Title 10, Section 963 and is
authorized pursuant to 10 MRSA Chapter 110 (the “Act”) to provide financing for
certain projects; and

 

WHEREAS, in accordance with the Act, the
Authority proposes to finance the costs of acquiring, constructing, improving,
installing or equipping of certain solid waste disposal, collection and
transfer facilities (collectively, the “Project”) more particularly described
in Exhibit A hereof, and to pay the costs of issuance in connection therewith;
and

 

WHEREAS, pursuant to and in accordance with
the Act, the Authority has authorized and undertaken to issue its Solid Waste
Disposal Revenue Bonds (Casella Waste Services, Inc. Project) Series 2005 (the
“Bonds”), pursuant to an Indenture (the “Indenture”) of even date herewith
between the Authority and LaSalle Bank National Association, as trustee (the
“Trustee”), in order to provide funds to finance the cost of the Project and to
pay the costs of issuance in connection therewith; and

 

WHEREAS, the Authority has undertaken to
finance the cost of the Project by loaning the proceeds derived from the sale
of the Bonds to the Company pursuant to this Agreement, under which the Company
is required to make loan payments sufficient to pay when due the principal of,
premium, if any, and interest on the Bonds and related expenses; and

 

WHEREAS, the Company has delivered to the
Authority its Note, in the form of Exhibit B attached hereto, dated
December 28, 2005 (the “Note”) as evidence of its obligations hereunder; and

 

WHEREAS, pursuant to the Indenture, the Bonds
will be issued and the Authority will assign to the Trustee its right to
receive payments, and certain but not all other rights, under this Agreement;
and

 

NOW, THEREFORE, for and in consideration of the
premises and the material covenants hereinafter contained, the parties hereto
hereby formally covenant, agree and bind themselves as follows:

 

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1            Definition
of Terms. 
Unless the context otherwise requires, the terms used in this Agreement
shall have the meanings specified in Section 1.1 of the Indenture, as
originally executed or as it may from time to time be supplemented or amended
as provided therein.

 

Section 1.2            Number and
Gender.  The
singular form of any word used herein, including the terms defined in
Section 1.1 of the Indenture, shall include the plural, and vice
versa.  The use herein of a word of any
gender shall include all genders.

 

Section 1.3            Articles,
Sections, Etc. 
Unless otherwise specified, references to Articles, Sections and other
subdivisions of this Agreement are to the designated Articles, Sections and
other subdivisions of this Agreement as amended from time to time.  The words “hereof,” “herein,” “hereunder” and
words of similar import refer to this Agreement as a whole.  The headings or titles of the several
articles and sections, and the table of contents appended to copies hereof,
shall be solely for convenience of reference and shall not affect the meaning,
construction or effect of the provisions hereof.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF

THE AUTHORITY AND THE COMPANY

 

Section 2.1            Representations
of the Authority. 
The Authority makes the following representations as the basis for its
undertakings herein contained:

 

(a)           The Authority is a body corporate and
politic and a public instrumentality of the State of Maine duly created under
10 MRSA, Section 963.

 

(b)           The Bonds will be issued under and
secured by an Indenture, pursuant to which the Authority’s interest in this
Agreement with respect to the Bonds (except certain rights of the Authority to
payment for expenses and indemnification) will be pledged to the Trustee as
security for payment of the principal of, premium, if any, and interest on the
Bonds.

 

(c)           All Revenues to be derived by the
Authority under this Agreement and the rights of the Authority hereunder and
under the Note (except for indemnification rights and the rights of the
Authority to receive fees and reimbursement of its expenses and to receive
notices) have been assigned to the Trustee pursuant to the Indenture to provide
for the payment of the Bonds.  The
Authority has not pledged and will not pledge any interest in this Agreement or
in the Note for any purpose other than to secure the Bonds under the Indenture.

 

(d)           The Authority has made the required
findings under the Act with respect to the issuance of the Bonds and the
execution of this Agreement.

 

(e)           No director of the Authority has any
pecuniary interest in the Company.

 

2

 

(f)            The Authority has designated a share
of the State ceiling on private activity bonds in connection with the issuance
of the Bonds.

 

(g)           The Authority makes no representation
or warranty concerning the suitability of the Project for the purpose for which
it is being undertaken by the Company. 
The Authority has not made any independent investigation as to the
feasibility or creditworthiness of the Company. 
Any bond purchaser, assignee of this Agreement or any other party with
any interest in this transaction, shall make its own independent investigation
as to the creditworthiness and feasibility of the Project, independent of any
representation or warranties of the Authority.

 

Section 2.2            Representations
and Warranties of the Company.  The Company represents and warrants to the
Authority that, as of the date of execution of this Agreement and as of the
date of delivery of the Bonds to the initial purchasers thereof (such
representations and warranties to remain operative and in full force and effect
regardless of the issuance of the Bonds or any investigations by or on behalf
of the Authority or the results thereof):

 

(a)           The Company has full legal right,
power and authority under the laws of the United States and the State of Maine
(i) to enter into this Agreement and the Note (collectively, the “Company Loan
Documents”), (ii) to agree to be bound by the terms of the Indenture, (iii) to
perform its obligations hereunder and thereunder, and (iv) to consummate the
transactions contemplated by the Tax Agreement and the Company Loan
Documents.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and qualified to do business in the State of Maine.  The Company has by proper corporate action
duly authorized the execution and delivery of the Company Loan Documents and
the Tax Agreement and the performance of its obligations thereunder.

 

(b)           This Agreement has been duly executed
and delivered by the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws or judicial decisions affecting the rights of creditors generally and by
judicial discretion in the exercise of equitable remedies.  Upon the execution and delivery thereof, each
of the Company Loan Documents will constitute valid and binding obligations of
the Company, enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws or
judicial decisions affecting creditors’ rights generally and by judicial
discretion in the exercise of equitable remedies.

 

(c)           The execution and delivery of the
Company Loan Documents and the performance by the Company of its obligations
thereunder and the consummation of the transactions contemplated thereby do not
and will not conflict with, or constitute a breach or result in a violation of,
the certificate of incorporation or bylaws of the Company, will not violate any
law, regulation, rule or ordinance applicable to the Company or the
transactions contemplated hereby or any material order, judgment or decree of
any federal, state or local court applicable to the Company and (with due
notice or the passage of time, or both), do not conflict with, or constitute a
breach of, or a default under, or result in the creation or imposition of any
prohibited lien, charge or encumbrance whatsoever upon any of the property or assets
of the 

 

3

 

Company under the terms of any material document, instrument or
commitment to which the Company is a party or by which the Company or any of
its property is bound.

 

(d)           No consent, approval or authorization
of, or the filing, registration or qualification with, any governmental
authority on the part of the Company is required in connection with the
execution, delivery and performance by the Company of the Company Loan
Documents or the offer, issue, sale or delivery by the Authority of the Bonds
other than those already obtained.

 

(e)           Except as disclosed in the
Underwriting Agreement, the Company has not been served with and, to the
knowledge of the Company there is no action, suit, proceeding, inquiry or
investigation by or before any court, governmental agency or public board or
body pending or threatened against the Company which (i) seeks to prohibit,
restrain or enjoin the issuance, sale or delivery of the Bonds or the loaning
of the proceeds of the Bonds to the Company or the execution and delivery of
the Company Loan Documents, (ii) questions the validity or enforceability of
the Company Loan Documents, (iii) questions the power or authority of the
Company to carry out the transactions contemplated by, or to perform its
obligations under the Company Loan Documents or the powers of the Company to
own, acquire, equip or operate the Project, or (iv) which would reasonably be
expected to materially impair its right to carry on business substantially as
now conducted or as now contemplated to be conducted, or would materially
adversely affect its financial condition.

 

(f)            The Company is not in default under
any document, instrument or commitment to which the Company is a party or to
which it or any of its property is subject which default would reasonably be
expected to affect the ability of the Company to carry out its obligations
under the Company Loan Documents.

 

(g)           Any certificate signed by the Company
or an Authorized Representative of the Company and delivered pursuant to the
Company Loan Documents or the Indenture shall be deemed a representation and
warranty by the Company to the Authority and the Trustee as to the statements
made therein.

 

(h)           The information contained in the
Official Statement pertaining to the Company, specifically including the
information under the heading “THE
PROJECT AND THE APPLICATION OF BOND PROCEEDS” and in Appendix A, does
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.

 

(i)            The Cost of the Project is as set
forth in the Company’s Tax Agreement dated the Date of Issuance and has been
determined in accordance with sound engineering/construction and accounting
principles.  All the information and
representations in the Company’s Tax Agreement are true and correct as of the
date thereof.

 

(j)            The Project consists and will
consist of those facilities described in Exhibit A and the Company shall not
make any changes to the Project or to the operation thereof which would
adversely affect the qualification of the Project under the Act or impair the 

 

4

 

exemption from federal income taxation of the interest on the
Bonds.  In particular, the Company shall
comply with all requirements set forth in the Company’s Tax Agreement.  The Company is fully familiar with the
physical condition of the Project and is not relying on any representation of
any kind by the Authority as to the nature or the condition thereof.

 

(k)           The Company or a “related party” as
defined in Treasury Regulations Section 1.150-1(b) (a “Related Party”) has or
will acquire title to the Project sufficient to carry out the purposes of this
Agreement.

 

(l)            All certificates, approvals, permits
and authorizations with respect to the construction of the Project of
applicable local governmental agencies, the State and the federal government
have been obtained, or if not yet obtained, are expected to be obtained in due
course.

 

(m)          No event has occurred and no condition
exists which would constitute an Event of Default (as defined in the Indenture)
or Loan Default Event (as defined herein) or which, with the passing of time or
with the giving of notice or both would become such an Event of Default or Loan
Default Event.

 

ARTICLE III

 

ISSUANCE OF THE BONDS; APPLICATION OF PROCEEDS

 

Section 3.1            Agreement
to Issue Bonds; Application of Bond Proceeds.  (a) To provide funds to finance costs of
the Project, the Authority agrees that it will issue under the Indenture, sell
and cause to be delivered to the purchasers thereof, the Bonds.  The Authority will thereupon apply the
proceeds received from the sale of the Bonds as provided in the Indenture.

 

(b)           The Company agrees
that it will, or will cause a Related Party to, acquire, construct and install,
or complete the acquisition, construction and installation of, the Project,
substantially in accordance with the description of the Project prepared by the
Company and submitted to the Authority, including any and all supplements,
amendments and additions or deletions thereto or therefrom, it being understood
that the approval of the Authority shall not be required for changes in such
description which do not substantially alter the purpose and description of the
Project as set forth in Exhibit A hereto. 
The Company further agrees to proceed with due diligence to complete the
Project within three years from the date hereof.  The Company shall not make any changes to the
Project or to the operation thereof which would affect the qualification of the
Project as an “eligible project” and in particular an “industrial enterprise”
under the Act or impair the exemption from federal income taxation of the
interest on the Bonds.  In particular,
the Company agrees to comply with all requirements set forth in the Tax
Agreement.  Contracts for carrying out
the Project and purchases in connection therewith shall be made by the Company
in its own name or in the name of a Related Party.

 

(c)           In the event that the Company desires to alter or change
the Project, and such alteration or change substantially alters the purpose and
description of the Project as described in Exhibit A hereto, the Authority
may consent (which consent shall not be unreasonably withheld) to such changes
in its discretion and, if it shall so consent, will instruct the Trustee to
consent to 

 

5

 

such amendment or supplement to Exhibit A as shall be required to
reflect such alteration or change to the Project upon receipt of:

 

(i)            a certificate of the Authorized
Representative of the Company describing in detail the proposed changes which
the Authority determines will not have the effect of disqualifying the Project
as facilities that may be financed pursuant to the Act;

 

(ii)           a copy of the proposed form of
amended or supplemented Exhibit A hereto; and

 

(iii)          an Approving Opinion relating to such
proposed changes.

 

Section 3.2            Disbursements
from the Project Fund; Disbursements from the Costs of Issuance Fund.  (a) The Company will authorize and
direct the Trustee, upon compliance with Section 3.3 of the Indenture, to
disburse the moneys in the Project Fund only for the following purposes (and
not for Costs of Issuance), subject to the provisions of Section 3.3
hereof:

 

(i)            Payment to the Company of such
amounts, if any, as shall be necessary to reimburse the Company in full for all
advances and payments made by it, prior to or after the delivery of the Bonds,
in connection with the acquisition, construction and installation of the
Project.

 

(ii)           Payment to any vendors, suppliers or
contractors to acquire, construct and install the Project, as provided in the
plans, specifications and work orders therefor; and payment of the
miscellaneous expenses incidental thereto.

 

(iii)          Payment of the fees, if any, of
architects, engineers, legal counsel and supervisors expended in connection
with the acquisition, construction and installation of the Project.

 

(iv)          Payment of taxes including property
taxes, assessments and other charges, if any, that may become payable during
the construction period with respect to the Project, or reimbursement thereof,
if paid by the Company.

 

(v)           Payment of any other Costs of the
Project permitted by the Tax Agreement (but not including any Costs of
Issuance).

 

Each of the payments referred to in this
Section 3.2(a) shall be made upon receipt by the Trustee of a written
requisition in the form prescribed by Section 3.3 of the Indenture, signed
by the Authorized Representative of the Company.

 

(b)           The Company will authorize and direct
the Trustee, upon compliance with Section 3.4 of the Indenture, to
disburse the moneys in the Costs of Issuance Fund to or on behalf of the
Company only for Costs of Issuance.  Each
of the payments referred to in this Section 3.2(b) shall be made upon
receipt by the Trustee of a written requisition in the form prescribed by
Section 3.4 of the Indenture, signed by the Authorized Representative of
the Company.

 

6

 

(c)           All disbursements from the Project
Fund and the Costs of Issuance Fund must comply with the requirements of the
Tax Agreement.

 

Section 3.3            Establishment
of Completion Date; Obligation of Company to Complete.  As soon as practicable after the construction
of the Project is completed, the Authorized Representative of the Company, on
behalf of the Company, shall evidence the Completion Date by providing a certificate
to the Trustee and the Authority (if so requested by the Authority) stating
that the construction of the Project has been completed substantially in
accordance with the plans, specifications and work orders therefor, and all
labor, services, materials and supplies used in the construction have been paid
or provided for.  Notwithstanding the
foregoing, such certificate may state that it is given without prejudice to any
rights of the Company against third parties for any claims or for the payment
of any amount not then due and payable which exists at the date of such
certificate or which may subsequently exist.

 

All moneys remaining in the Project Fund
after the Completion Date (other than moneys relating to provisional payments)
and after payment or provision for payment of all other Costs of the Project
have been provided for shall be transferred to the Surplus Account in
accordance with Section 3.3 of the Indenture and applied as provided therein.

 

In the event the moneys in the Project Fund
available for payment of the Costs of the Project are or will be insufficient
to pay the costs of acquisition, construction and installation of the Project
as contemplated in this Agreement, the Company agrees to pay directly, or to
deposit in the Project Fund moneys sufficient to pay, any costs of completing
the acquisition, construction and installation of the Project in excess of the
moneys available for such purpose in the Project Fund.  The Authority makes no express or implied
warranty that the moneys deposited in the Project Fund and available for
payment of the Costs of the Project, under the provisions of this Agreement,
will be sufficient to pay all the amounts which may be incurred for such Costs
of the Project.  The Company agrees that
if, after exhaustion of the moneys in the Project Fund, the Company should pay,
or deposit moneys in the Project Fund for the payment of, any portion of the
Costs of the Project pursuant to the provisions of this Section, it shall not
be entitled to any reimbursement therefor from the Authority, from the Trustee
or from the holders of any of the Bonds, nor shall it be entitled to any
diminution of the amounts payable under Section 4.2.

 

Section 3.4            Investment
of Moneys in Funds. 
Any moneys in any fund or account held by the Trustee shall, at the
written request of the Authorized Representative of the Company, be invested or
reinvested by the Trustee as provided in the Indenture.  Such investments shall be held by the Trustee
and shall be deemed at all times a part of the fund or account from which such
investments were made, and the interest accruing thereon, and any profit or
loss realized therefrom, shall be credited or charged to such fund or
account.  The Company acknowledges that to
the extent regulations of the Comptroller of the Currency or other applicable
regulatory entity grant the Company the right to receive brokerage
confirmations of security transactions from the Trustee as they occur, the
Company specifically waives receipt of such confirmations to the extent permitted
by law.

 

Section 3.5            Limitation
of Authority’s Liability.  Anything contained in this Agreement to the
contrary notwithstanding, under no circumstances shall the Authority be 

 

7

 

obligated directly or
indirectly to pay Costs of the Project, principal of or premium, if any, and
interest on the Bonds, or expenses of operation, maintenance and upkeep of the
Project except from Bond proceeds or from funds received under this Agreement
and the Indenture, exclusive of funds received by the Authority for its own
use.  The Authority’s obligations under
the Indenture, this Agreement and the Bonds shall not constitute a debt or
liability of or a pledge of the faith and credit of the Authority, the State,
any political subdivisions thereof, or any municipality therein.  Nothing herein, in the Indenture or in the
Bonds, shall directly, indirectly or contingently obligate the Authority, the
State any political subdivision thereof or any municipality to levy or pledge
any form of taxation whatsoever or make any appropriation for the payment of
the Bonds.

 

ARTICLE IV

 

LOAN OF PROCEEDS; REPAYMENT PROVISION

 

Section 4.1            Loan of
Bond Proceeds; Issuance of Bonds.  The Authority covenants and agrees, upon the
terms and conditions in this Agreement, to make a loan to the Company from the
proceeds of the Bonds for the purpose of financing the Costs of the Project and
the Costs of Issuance.  The Authority
further covenants and agrees that it shall take all actions within its authority
to keep this Agreement in effect in accordance with its terms.  Pursuant to said covenants and agreements,
the Authority will issue the Bonds upon the terms and conditions contained in
this Agreement and the Indenture and will cause the Bond proceeds to be applied
as provided in Article III of the Indenture.

 

Section 4.2            Loan
Payments and Payment of Other Amounts.  (a) On or before 12:00 noon New
York City time on each Bond Payment Date (as hereinafter defined), until the
principal of, premium, if any, and interest on, the Bonds shall have been fully
paid or provision for such payment shall have been made as provided in the
Indenture, the Company covenants and agrees to pay to the Trustee as a
repayment on the loan made to the Company from Bond proceeds pursuant to
Section 4.1 hereof, a sum equal to the amount payable on such Bond Payment
Date as principal of, and premium, if any, and interest on, the Bonds as
provided in the Indenture.  Such Loan
Payments shall be made in federal funds or other funds immediately available at
the Corporate Trust Office of the Trustee. 
The term “Bond Payment Date” as used in this Section shall mean any date
upon which any such amounts payable with respect to the Bonds shall become due,
whether upon redemption, acceleration, maturity or otherwise.

 

Each payment made pursuant to this
Section 4.2(a) shall at all times be sufficient to pay the total amount of
interest and principal (whether at maturity or upon redemption or acceleration)
and premium, if any, becoming due and payable on the Bonds on each Bond Payment
Date; provided that any amount held by the Trustee in the Bond Fund on any due
date for a Loan Payment hereunder shall be credited against the Loan Payment
due on such date, to the extent available for such purpose; and provided
further that, subject to the provisions of this paragraph, if at any time the
amounts held by the Trustee in the Bond Fund 
are sufficient to pay all of the principal of and interest and premium,
if any, on the Bonds as such payments become due, the Company shall be relieved
of any obligation to make any further payments under the provisions of this
Section.  Notwithstanding the foregoing,
if on any date the amount held by the Trustee in the Bond Fund is insufficient
to make any required payments of principal of (whether 

 

8

 

at maturity or upon redemption or acceleration) and interest and
premium, if any, on, the Bonds as such payments become due, the Company shall
forthwith pay such deficiency as a Loan Payment hereunder.

 

The obligation of the Company to make any
payment required by this Section 4.2(a) shall be deemed to have been
satisfied to the extent of any corresponding payment made by a Credit Provider
to the Trustee pursuant to a Letter of Credit then in effect with respect to
the Bonds.

 

(b)           The Company further covenants that it
will make any payments required to be made pursuant to Sections 2.4, 4.6
and 4.8 of the Indenture at the applicable Purchase Price thereof by
2:45 p.m. New York City time in federal or other immediately available
funds; provided however the obligation to make such payments shall have been
deemed satisfied to the extent that such Purchase Price shall have been paid
from remarketing proceeds or from a draw under a Letter of Credit pursuant to
Section 4.7(D) of the Indenture.

 

(c)           The Company also agrees to pay
(i) the annual fee of the Trustee and the Tender Agent, if any, for their
ordinary services rendered as trustee or tender agent, respectively, and their
ordinary expenses incurred under the Indenture, as and when the same become
due, (ii) the reasonable fees, charges and expenses (including reasonable
legal fees and expenses) of the Trustee, as bond registrar and paying agent,
the reasonable fees of any other paying agent on the Bonds as provided in the
Indenture, and (iii) the reasonable fees, charges and expenses of the
Trustee for the necessary extraordinary services rendered by it and
extraordinary expenses incurred by it under the Indenture, as and when the same
become due.  The Trustee’s compensation
shall not be limited by any provision of law regarding the compensation of a
Trustee of an express trust.

 

(d)           Except to the extent paid or
reimbursed from Bond proceeds, the Company covenants and agrees, without notice
from the Authority, to pay when due the Authority’s Service Charge and to
prepay or reimburse the Authority within thirty days after notice for all
expenses (including reasonable attorney’s fees) incurred by the Authority in
connection with the issuance and carrying of the Bonds and all expenses
reasonably incurred or advances reasonably made in the exercise of the
Authority’s rights or the performance of its obligations under this Agreement,
the Bonds or the Indenture.  Any fees,
expenses, reimbursements or other charges which the Authority may be entitled
to receive from the Company hereunder or thereunder, if not paid when due,
shall bear a late charge equal to 5% of the amount overdue, and if not paid
within sixty (60) days, shall bear interest at twelve percent (12%) per annum.

 

“Authority’s Service Charge” means payments
to the Authority for its own use consisting of $77,500 (being $80,000 less a
credit for $2,500 paid at the time of initial approval of the Project), payable
on the date of original issuance of the Bonds.

 

(e)           The Company also agrees to pay the
reasonable fees, charges and expenses of the Remarketing Agent.  Such payments shall be made directly to the
Remarketing Agent.  The Authority shall
have no obligation whatsoever with respect to the payment of fees, charges and
expenses of the Remarketing Agent.

 

9

 

(f)            The Company agrees to pay any
amounts required to be deposited in the Rebate Fund to comply with the
provisions of the Tax Agreement and to pay the fees, charges and expenses of
any rebate analyst.

 

Section 4.3            Unconditional
Obligation.  The
obligations of the Company to make the Loan Payments and the other payments
required by Section 4.2 hereof and to perform and observe the other
agreements on its part contained herein shall be absolute and unconditional and
shall be binding and enforceable in all circumstances whatsoever, irrespective
of any defense or any rights of set-off, recoupment or counterclaim it might
otherwise have against the Authority, and during the term of this Agreement,
the Company shall pay all payments required to be made on account of this
Agreement (which payments shall be net of any other obligations of the Company)
as prescribed in Section 4.2 and all other payments required hereunder, free of
any deductions and without abatement, diminution or set-off.  The Company shall be obligated to make the
payments whether or not the Project has come into existence or become
functional and whether or not the Project has ceased to exist or to be
functional to any extent and from any cause whatsoever.  The Company shall be obligated to make such
payments regardless of whether the Company is in possession or is entitled to
be in possession of the Project or any part thereof.  Until such time as the principal of, premium,
if any, and interest on, the Bonds shall have been fully paid, or provision for
the payment thereof shall have been made as required by the Indenture, the
Company (i) will not suspend or discontinue any payments provided for in
Section 4.2; (ii) will perform and observe all of its other covenants
contained in this Agreement; and (iii) except as provided in
Article VIII hereof, will not terminate this Agreement for any cause,
including, without limitation, the occurrence of any act or circumstances that
may constitute failure of consideration, destruction of or damage to all or a
portion of those facilities or equipment comprising the Project, commercial
frustration of purpose, any change in the tax or other laws of the United
States of America or of the State or any political subdivision of either of
these, or any failure of the Authority or the Trustee to perform and observe
any covenant, whether express or implied, or any duty, liability or obligation
arising out of or connected with this Agreement or the Indenture, except to the
extent permitted by this Agreement.

 

Section 4.4            Assignment
of Authority’s Rights. 
As security for the payment of the Bonds, the Authority will under the
Indenture assign to the Trustee the Authority’s rights under this Agreement and
the Note, including the right to receive Loan Payments hereunder (except the
right of the Authority to receive certain payments, if any, with respect to
fees, expenses and indemnification, or to enforce its rights under
Sections 4.2(d), 7.3, 9.2 and 9.3 and its rights of indemnification and
consent).  The Authority hereby directs
the Company to make the Loan Payments required hereunder directly to the Trustee
for deposit as contemplated by the Indenture. 
The Authority hereby directs the Company to make the Purchase Price
Payments required hereunder directly to the Trustee or the Tender Agent as
contemplated by the Indenture.  The
Company hereby consents to such assignment and agrees to make payments directly
to the Trustee or the Tender Agent, as the case may be, without defense or
set-off by reason of any dispute between the Company and the Authority or the
Trustee.

 

Section 4.5            Amounts
Remaining in Funds. 
It is agreed by the parties hereto that after payment in full of (i) the
Bonds, or after provision for such payment shall have been made as provided in
the Indenture, (ii) the fees, charges and expenses of the Authority and the
Trustee and paying agents in accordance with the Indenture, (iii) all other
amounts required to be paid 

 

10

 

under this Agreement and the
Indenture, and (iv) if applicable, payment to the Credit Provider of any
amounts owed to the Credit Provider by the Company under the Reimbursement
Agreement, any amounts remaining in any fund held by the Trustee under the
Indenture (excepting the Rebate Fund) shall be paid as provided in Section 10.1
of the Indenture.  Notwithstanding any
other provision of this Agreement or the Indenture, under no circumstances
shall proceeds of a draw on a Letter of Credit or remarketing proceeds be paid
to the Authority or the Company.

 

ARTICLE V

 

SPECIAL COVENANTS AND AGREEMENTS

 

Section 5.1            Right of
Access to the Project. 
The Company agrees that during the term of this Agreement the Authority,
the Trustee, and the duly authorized agents of either of them shall have the
right at all reasonable times during normal business hours to enter upon each
site where any part of the Project is located and to examine and inspect the
Project or, in the case of the Authority, to carry out its powers hereunder;
provided that reasonable notice shall be given to the Company at least five (5)
Business Days prior to such examination or inspection, and such inspection
shall not disturb the Company’s normal business operations.

 

Section 5.2            Disposition
of Project. 
Except as provided hereafter with respect to the portion of the Project
comprising equipment, without the prior consent of the Authority (i) the
Company will not sell, lease or otherwise dispose of (other than to a Related
Party), or place any other person (other than to a Related Party) in possession
of, the Project or any portion thereof or interest therein, or make any
material change in the purposes for which the Project is used, and (ii) the
portion of the Project comprising equipment shall remain at the respective
Project sites; provided, however, that nothing herein shall limit the right of
the Company to grant a mortgage and or security interest in all or any part of
the Project.  The Company may remove and
sell or otherwise dispose of any portion of the Project comprising equipment
when the same shall have become obsolete, worn out or unnecessary for its
business operations.

 

Section 5.3            The
Company’s Maintenance of Its Existence.  The Company covenants and agrees that during
the term of this Agreement it will maintain its existence as a corporation in
good standing in the State of Delaware and qualified to do business in the
State, will not dissolve, sell or otherwise dispose of all or substantially all
of its assets and will not combine or consolidate with or merge into another
entity so that the Company is not the resulting or surviving entity (any such
sale, disposition, combination or merger shall be referred to hereafter as a
“transaction”); provided that the Company may enter into such transaction, with
the prior consent of the Authority, which consent shall not be unreasonably
withheld, if (i) the surviving or resulting transferee, person or entity,
as the case may be, assumes and agrees in writing to pay and perform all of the
obligations of the Company hereunder, (ii) the surviving or resulting
transferee, person or entity, as the case may be, qualifies to do business in
the State and (iii) the Company shall deliver to the Authority and Trustee
prior to the consummation of the transaction an Approving Opinion.

 

If a merger, consolidation, sale or other
transfer is effected, as provided in this Section, all provisions of this
Section shall continue in full force and effect and no further merger, 

 

11

 

consolidation, sale or transfer shall be effected except in accordance
with the provisions of this Section.

 

Section 5.4            Records and
Financial Statements of Company.  The Company covenants and agrees at all times
to keep, or cause to be kept, proper books of record and account, prepared in
accordance with generally accepted accounting principles, in which complete and
accurate entries shall be made of all transactions of or in relation to the
business, properties and operations relating to the Project.  Such books of record and account shall be
available for inspection by the Authority or the Trustee during normal business
hours and under reasonable circumstances; provided that reasonable notice shall
be given to the Company at least five (5) Business Days prior to such
inspection and such inspection shall not disturb the Company’s normal business
operations..

 

Section 5.5            Insurance.  The Company agrees to insure the Project
during the term of this Agreement for such amounts and for such occurrences as
are customary for similar facilities of the Company within the State, by means
of policies issued by reputable insurance companies qualified to do business in
the State or through “self insurance” in accordance with the ordinary course of
business of the Company.

 

Section 5.6            Maintenance
and Repairs; Taxes; Utility and Other Charges.  The Company agrees to maintain the Project
during the term of this Agreement (i) in as reasonably safe condition as
its operations shall permit and as is customary in the industry and
(ii) in good order and repair and in good operating condition, ordinary
wear and tear excepted, and damage from casualty expressly not excepted, making
from time to time all necessary repairs thereto and renewals and replacements
thereof.  The Company agrees not to
permit or commit waste on the Project. 
In the acquisition, construction, maintenance, improvement and operation
of the Project, the Company will comply in all material respects with all
applicable building, zoning, subdivision, environmental protection, sanitary
and safety and other land use laws, rules and regulations and will not permit
any material nuisance thereon.  It shall
not be a breach of this section if the Company fails to comply with such laws,
rules and regulations during any period in which the Company shall in good
faith be diligently contesting the validity thereof.

 

The Company agrees to pay or cause to be paid
during the term of this Agreement all taxes, governmental charges of any kind
lawfully assessed or levied upon the Project or any part thereof or with
respect to the Company’s interest therein or use thereof, including any taxes
levied against any portion of the Project, all utility and other charges
incurred in the operation, maintenance, use, occupancy and upkeep of any
portion of the Project and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a lien on the
Project, provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, the Company shall be obligated to pay only such installments as are
required to be paid during the term of this Agreement.  The Company may, at the Company’s expense and
in the Company’s name, in good faith, diligently contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments or other charges so contested to remain unpaid during
that period of such contest and any appeal therefrom unless by such nonpayment
the Project or any part thereof will be subject to loss or forfeiture.

 

12

 

Nothing contained in this Agreement or the
Indenture shall be construed to require or authorize the Authority to operate
the Project itself or to conduct any business enterprise in connection
therewith.  The Authority shall not be liable
to the Company or to any other person for any latent or patent defect in the
Project.

 

Section 5.7            Qualification
in Maine.  The
Company agrees that throughout the term of this Agreement it, or any successor
or assignee as permitted by Section 5.2, will be qualified to do business
in the State.

 

Section 5.8            Tax
Covenant.  The
Company covenants and agrees that it shall at all times do and perform all acts
and things permitted by law and this Agreement and the Indenture which are
necessary in order to assure that interest paid on the Bonds (or any of them)
will be excluded from gross income of the Holders for federal income tax
purposes and shall take no action that would result in such interest not being
excluded from gross income for federal income tax purposes.  Without limiting the generality of the
foregoing, the Company agrees to comply with the provisions of the Tax
Agreement, which are hereby incorporated herein.  This covenant shall survive payment in full
or defeasance of the Bonds.

 

Section 5.9            Continuing
Disclosure. 
Pursuant to the federal Securities and Exchange Commission (“S.E.C.”)
Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended,
the Company hereby covenants and agrees to comply, or to cause compliance with,
when and if applicable, the continuing disclosure requirements promulgated
thereunder, as such rule may from time to time hereafter be amended or
supplemented.  Notwithstanding any other
provision of this Agreement, failure of the Company to comply with the requirements
of S.E.C. Rule 15c2-12, as it may from time to time hereafter be amended
or supplemented, shall not be considered a Loan Default Event; however, the
Trustee may (and, at the written request of any Holder of Outstanding Bonds,
shall, but only to the extent indemnified to its satisfaction from and against
any cost, liability or expense related thereto, including, without limitation,
fees and expenses of its attorneys and advisors and additional fees and
expenses of the Trustee or any Bondholder or beneficial owner of the Bonds)
take such actions as may be necessary and appropriate, including seeking
mandamus or specific performance by court order, to cause the Company to comply
with its obligations pursuant to this Section 5.9.

 

Section 5.10         Assignment by
Company.  The
rights and obligations of the Company under this Agreement may be assigned by
the Company to any person in whole or in part, subject, however, to each of the
following conditions:

 

(a)           No assignment other than pursuant to
Section 5.2 hereof shall relieve the Company from primary liability for
any of its obligations hereunder, and in the event of any assignment not
pursuant to Section 5.2 hereof the Company shall continue to remain
primarily liable for the payments specified in Section 4.2 hereof and for
performance and observance of the other agreements herein provided to be
performed and observed by it.

 

(b)           Any assignment from the Company shall
retain for the Company such rights and interests as will permit it to perform
its obligations under this Agreement, and any assignee from the Company shall
assume in writing the obligations of the Company hereunder to the extent of the
interest assigned.

 

13

 

(c)           Within 30 days after delivery
thereof, the Company shall furnish or cause to be furnished to the Authority
and the Trustee a true and complete copy of each such assignment together with
an instrument of assumption.

 

(d)           The Company shall furnish to the
Authority and the Trustee an Approving Opinion.

 

Section 5.11         Cooperation
in Filings and Other Matters.  The Authority and the Company agree to
cooperate, upon the request of either party, at the expense of the Company in
the filing and renewal of UCC-1 Financing Statements, if any.

 

Section 5.12         Letter of
Credit. 
(a)  The Credit Provider during
the initial Interest Rate Period will be Bank of America, N.A.  At any time the Company may, at its option,
provide for the delivery to the Trustee of an Alternate Letter of Credit
(hereafter collectively referred to with the Letter of Credit as a “Credit
Instrument”), and the Company shall, in any event, cause to be delivered an
Alternate Letter of Credit at least 20 days before the expiration date of any
existing Letter of Credit, unless otherwise permitted by the Indenture.  A Credit Instrument shall be an irrevocable
letter of credit or other irrevocable credit facility (including, if
applicable, a confirming letter of credit), issued by a Credit Provider, the
terms of which shall be acceptable to the Trustee and shall otherwise comply with
the requirements of the Indenture.  On or
prior to the date of the delivery of a Credit Instrument to the Trustee, the
Company shall cause to be furnished to the Trustee (i) an opinion of Bond
Counsel stating to the effect that the delivery of such Credit Instrument to
the Trustee is authorized under the Indenture and complies with the terms
hereof and will not in and of itself adversely affect the Tax-exempt status of
interest on the Bonds, (ii) an opinion of counsel to the Credit Provider
issuing such Credit Instrument stating to the effect that such Credit
Instrument is enforceable in accordance with its terms (except to the extent
that the enforceability thereof may be limited by bankruptcy, reorganization or
similar laws limiting the enforceability of creditors’ rights generally and
except that no opinion need be expressed as to the availability of any
discretionary equitable remedies), and (iii) written evidence from the
Rating Agency that the Bonds shall have a long-term rating of “A” (or equivalent)
or higher or, if the Bonds only have a short-term rating, such short-term
rating shall be in the highest short-term rating category (without regard to
“+”s or “-”s).

 

(b)           The Company shall provide to the
Trustee (with a copy to the Authority) a notice at least 15 days prior to the
effective date of any Alternate Letter of Credit (and in no event later than 35
days prior to the expiration of any existing Letter of Credit) identifying the
Alternate Letter of Credit, if any, and the rating which will apply to the
Bonds after the effective date.

 

14

 

ARTICLE VI

 

[RESERVED]

 

ARTICLE VII

 

LOAN DEFAULT EVENTS AND REMEDIES

 

Section 7.1            Loan
Default Events. 
Any one of the following which occurs and continues shall constitute a
Loan Default Event:

 

(a)           Failure of the Company to make any
Loan Payment required by Section 4.2(a) hereof or under the Note when due;
or

 

(b)           Failure of the Company to make any
Purchase Price Payment required by Section 4.2(b) hereof or under the Note
when due; or

 

(c)           Failure of the Company to observe and
perform any covenant, condition or agreement on its part required to be
observed or performed by this Agreement or under the Note other than as
provided in (a) or (b), which continues for a period of 60 days after written
notice by the Authority or the Trustee delivered to the Company and the Credit
Provider, if any, which notice shall specify such failure and request that it
be remedied, unless the Authority and the Trustee shall agree in writing to an
extension of such time; provided, however, that if the failure stated in the
notice cannot be corrected within such period, the Authority and the Trustee
will not unreasonably withhold their consent to an extension of such time if
corrective action is instituted within such period and diligently pursued until
the default is corrected;

 

(d)           The dissolution or liquidation of the
Company or the filing by the Company of a voluntary petition in bankruptcy, or
failure by the Company promptly to cause to be lifted any execution,
garnishment or attachment of such consequence as will materially impair the
Company’s ability to carry on its obligations hereunder, or the commission by
the Company of any act of bankruptcy, or adjudication of the Company as a bankrupt,
or if a petition or answer proposing the adjudication of the Company as a
bankrupt or its reorganization, arrangement or debt readjustment under any
present or future federal bankruptcy act or any similar federal or state law
shall be filed in any court and such petition or answer shall not be discharged
or denied within ninety days after the filing thereof, or if the Company shall
admit in writing its inability to pay its debts generally as they become due,
or a receiver, trustee or liquidator of the Company shall be appointed in any
proceeding brought against the Company and shall not be discharged within
ninety days after such appointment or if the Company shall consent to or
acquiesce in such appointment, or assignment by the Company for the benefit of
its creditors, or the entry by the Company into an agreement of composition
with its creditors, or a bankruptcy, insolvency or similar proceeding shall be
otherwise initiated by or against the Company under any applicable bankruptcy,
reorganization or analogous law as now or hereafter in effect and if initiated
against the Company shall remain undismissed (subject to no further appeal) for
a period of ninety days; provided, the term “dissolution or 

 

15

 

liquidation of the Company,” as used in this subsection, shall not be
construed to include the cessation of the existence of the Company resulting
either from a merger or consolidation of the Company into or with another
entity or a dissolution or liquidation of the Company following a transfer of
all or substantially all of its assets as an entirety or under the conditions
permitting such actions contained in Section 5.2 hereof; or

 

(e)           Existence
of an Event of Default under the Indenture.

 

Section 7.2            Remedies on
Default. 
Subject to Section 7.1 hereof, whenever any Loan Default Event
shall have occurred and shall be continuing,

 

(a)           The Trustee, by written notice to the
Authority, the Company and the Credit Provider, if any, may declare the unpaid
balance of the loan payable under Section 4.2(a) of this Agreement or the Note
to be due and payable immediately, provided that concurrently with or prior to
such notice the unpaid principal amount of the Bonds shall have been declared
to be due and payable under the Indenture. 
Upon any such declaration such amount shall become and shall be
immediately due and payable as determined in accordance with Section 7.01 of
the Indenture.

 

(b)           The Trustee may have access to and
may inspect, examine and make copies of the books and records relating to the
transactions contemplated hereby and any and all accounts, data and federal
income tax and other tax returns of the Company relating to the transactions
contemplated hereby.

 

(c)           The Authority or the Trustee may take
whatever action at law or in equity as may be necessary or desirable to collect
the payments and other amounts then due and thereafter to become due or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement.

 

(d)           Notwithstanding any contrary
provision in this Agreement or the Indenture, the Authority shall have the
right to take any action or make any decision with respect to proceedings for
indemnity against the liability of the Authority and for collection or
reimbursement from sources other than moneys or property held under this
Agreement or the Indenture.  The
Authority may enforce its rights under this Agreement and the Indenture which
have not been assigned to the Trustee by legal proceedings for the specific
performance of any obligation contained herein or for the enforcement of any
other appropriate legal or equitable remedy, and may recover damages caused by
any breach by the Company of its obligations to the Authority under this
Agreement or the Indenture, including court costs, reasonable attorney’s fees
and other costs and expenses incurred in enforcing such obligations.

 

(e)           If applicable, the Trustee shall have
the right to immediately draw upon any Letter of Credit, if permitted by its terms
and required by the terms of the Indenture, and apply the amount so drawn in
accordance with the Indenture and may exercise any remedy available to it
thereunder.

 

In case the Trustee or the Authority shall
have proceeded to enforce its rights under this Agreement and such proceedings
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee or the Authority, then, and in every such
case, the Company, the Trustee and the Authority shall be restored respectively
to their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the Authority shall continue as though
no such action had been taken.

 

16

 

The Company covenants that, in case a Loan
Default Event shall occur with respect to the payment of any Loan Payment
payable under Section 4.2(a) hereof, then, upon demand of the Trustee, the
Company will pay to the Trustee the whole amount that then shall have become
due and payable under said Section, with interest on the amount then overdue
with respect to principal at the rate then borne by the Bonds on the day prior
to the occurrence of such default.

 

In the case the Company shall fail forthwith
to pay such amounts upon such demand, the Trustee shall be entitled and
empowered to institute any action or proceeding at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any such action or
proceeding to judgment or final decree, and may enforce any such judgment or
final decree against the Company and collect in the manner provided by law the
moneys adjudged or decreed to be payable.

 

In case proceedings shall be pending for the
bankruptcy or for the reorganization of the Company under the federal
bankruptcy laws or any other applicable law, or in case a receiver or trustee
shall have been appointed for the property of the Company or in the case of any
other similar judicial proceedings relative to the Company, or the creditors or
property of the Company, then the Trustee shall be entitled and empowered, by
intervention in such proceedings or otherwise, to file and prove a claim or
claims for the whole amount owing and unpaid pursuant to this Agreement and, in
case of any judicial proceedings, to 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 allowed in such judicial proceedings relative to the Company, its
creditors or its property, and to collect and receive any moneys or other
property payable or deliverable on any such claims, and to distribute such
amounts as provided in the Indenture after the deduction of its reasonable
charges and expenses to the extent permitted by the Indenture.  Any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized to make such payments to the
Trustee, and to pay to the Trustee any amount due it for reasonable
compensation and expenses, including reasonable expenses and fees of counsel incurred
by it up to the date of such distribution.

 

In the event the Trustee incurs expenses or
renders services in any proceedings which result from a Loan Default Event
under Section 7.1(d) hereof, or from any default which, with the passage
of time, would become such Loan Default Event, the expenses so incurred and
compensation for services so rendered are intended to constitute expenses of
administration under the United States Bankruptcy Code or equivalent law.

 

Section 7.3            Agreement
to Pay Attorneys’ Fees and Expenses.  In the event the Company should default under
any of the provisions of this Agreement and the Authority or the Trustee should
employ attorneys or incur other expenses for the collection of the payments due
under this Agreement or the enforcement of performance or observance of any
obligation or agreement on the part of the Company herein contained, the
Company agrees to pay to the Authority or the Trustee the reasonable fees of
such attorneys and such other reasonable out-of-pocket expenses so incurred by
the Authority or the Trustee.

 

Section 7.4            No Remedy
Exclusive.  No
remedy herein conferred upon or reserved to the Authority or the Trustee is
intended to be exclusive of any other available remedy or remedies, but each
and every such remedy shall be cumulative and shall be in addition to every 

 

17

 

other remedy given under this
Agreement or now or hereafter existing at law or in equity or by statute.  No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall
be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient.  In order to entitle the Authority or the
Trustee to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice as may be expressly
required herein or by applicable law. 
Such rights and remedies as are given the Authority hereunder shall also
extend to the Trustee as the assignee of the Authority.

 

Section 7.5            No
Additional Waiver Implied by One Waiver.  In the event any agreement or covenant
contained in this Agreement should be breached by the Company and thereafter
waived by the Authority or the Trustee, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.

 

ARTICLE VIII

 

PREPAYMENT

 

Section 8.1            Redemption
of Bonds with Prepayment Moneys.  By virtue of the assignment of the rights of
the Authority under this Agreement to the Trustee as is provided in
Section 4.4 hereof, the Company agrees to and shall pay directly to the
Trustee any amount permitted or required to be paid by it under this Article VIII.
 Whenever Bonds are to be redeemed in
whole or in part, the Trustee shall give the Authority notice thereof at least
ten (10) business days before the redemption date specifying the date and
amount of redemption and the amount of accrued interest and premium, if
any.  The Trustee shall use the moneys so
paid to it by the Company to redeem the Bonds on the date set for such
redemption pursuant to Section 8.5 hereof or to reimburse any Credit
Provider for any draw under the Letter of Credit therefor.  The Authority shall at the expense of the
Company call Bonds for redemption as required by Article V of the
Indenture or as requested by the Company pursuant to the Indenture or this
Agreement.

 

Section 8.2            Options to
Prepay Installments. 
The Company shall have the option to prepay the Loan Payments payable
under Section 4.2(a) hereof by paying to the Trustee, for deposit in the
Bond Fund, the amount set forth in Section 8.4 hereof and to cause all or
any part of the Bonds to be redeemed at the times and at the prices set forth
in Section 4.1(B) of the Indenture if the conditions under said
Section 4.1(B) are met and at the times and at the prices set forth in
Sections 4.1(C) or 4.1(D) of the Indenture, as the case may be.

 

Section 8.3            Mandatory
Prepayment.  The
Company shall have and hereby accepts the obligation to prepay in whole the
Loan Payments required by Section 4.2(a), together with interest accrued,
but unpaid, thereon by paying to the Trustee, for deposit in the Bond Fund, the
amount set forth in Section 8.4 hereof, to be used to redeem all or a part
of the Outstanding Bonds if mandatory redemption is required by
Section 4.1(A) of the Indenture.

 

Section 8.4            Amount of
Prepayment.  In
the case of a prepayment of the entire amount due hereunder pursuant to Section 8.2
or 8.3, the amount to be paid shall be a sum sufficient, together with other
funds and the yield on any securities deposited with the Trustee 

 

18

 

and available for such purpose,
to pay (1) the principal of all Bonds Outstanding on the redemption date
specified in the notice of redemption, plus interest accrued and to accrue to
the payment or redemption date of the Bonds, plus premium, if any, pursuant to
the Indenture, (2) all reasonable and necessary fees and expenses of the
Authority, the Trustee and any paying agent accrued and to accrue through final
payment of the Bonds and (3) all other liabilities of the Company accrued
and to accrue under this Agreement.  In
the case of redemption of the Outstanding Bonds in part, the amount payable
shall be a sum sufficient, together with other funds deposited with the Trustee
and available for such purpose, to pay the principal amount of and premium, if
any, and accrued interest on the Bonds to be redeemed, as provided in the
Indenture, and to pay expenses of redemption of such Bonds.

 

Section 8.5            Notice of
Prepayment.  To
exercise an option granted in or to perform an obligation required by this
Article VIII, the Company shall give written notice at least fifteen (15)
days prior to the last day by which the Trustee is permitted to give notice of
redemption pursuant to Section 4.3 of the Indenture, to the Authority and
the Trustee specifying the amount to be prepaid and the date upon which any
prepayment will be made.  If the Company
fails to give such notice of a prepayment in connection with a mandatory
redemption under this Agreement, such notice may be given by the Authority, by
the Trustee or by any Holder or Holders of 10% or more in aggregate principal
amount of the Bonds Outstanding.  The
Authority and the Trustee, at the request of the Company or any such Holder,
shall forthwith take all steps necessary under the applicable provisions of the
Indenture (except that the Authority shall not be required to make payment of
any money required for such redemption) to effect redemption of all or part of
the Bonds then Outstanding, as the case may be, on the earliest practicable
date thereafter on which such redemption may be made under applicable
provisions of the Indenture.  The
Authority hereby appoints the Company to give all notices and make all requests
to the Trustee with respect to the application of funds paid by the Company as
prepayments, including notices of optional redemption of the Bonds in conformity
with Article IV of the Indenture, provided, however, that the Company shall in
all such cases provide copies to the Authority of the notices so given.

 

ARTICLE IX

 

NON-LIABILITY OF AUTHORITY; EXPENSES; INDEMNIFICATION

 

Section 9.1            Non-liability
of Authority; Limitations on Authority Actions and Responsibilities.  The Authority shall not be obligated to pay
the principal of, or premium, if any, or interest on the Bonds, except from
Revenues.  The Company hereby
acknowledges that the Authority’s sole source of moneys to repay the Bonds will
be provided by the payments made by the Company pursuant to this Agreement,
together with other Revenues with respect to the Bonds, including amounts
received by the Trustee under the Letter of Credit, if any, and investment
income on certain funds and accounts held by the Trustee under the Indenture,
and hereby agrees that if the payments to be made hereunder shall ever prove
insufficient to pay all principal of, and premium, if any, and interest on the
Bonds as the same shall become due (whether by maturity, redemption,
acceleration or otherwise), then upon notice from the Trustee, the Company
shall pay such amounts as are required from time to time to prevent any
deficiency or default in the payment of such principal, premium or interest,
including, but not limited to, any deficiency caused by acts, omissions,
nonfeasance or malfeasance on the part of the Trustee, 

 

19

 

the Company, the Authority, the
Credit Provider, if any, or any third party, other than as a result of such
party’s willful misconduct.

 

The Authority’s obligations under the
Indenture, this Agreement and the Bonds shall not constitute a debt or
liability of or a pledge of the faith and credit of the Authority, the State,
any political subdivisions thereof, or any municipality therein.  Nothing herein, in the Indenture or in the
Bonds, shall directly, indirectly or contingently obligate the Authority, the
State any political subdivision thereof or any municipality to levy or pledge
any form of taxation whatsoever or make any appropriation for the payment of
the Bonds.

 

The Authority shall not be required to
monitor the financial condition of the Company, the investment or expenditure
of Bond proceeds, or the physical condition or use of the Project and, unless
otherwise expressly provided, shall not have any responsibility with respect to
notices, certificates or other documents filed with it.  The Authority shall not be required to take
notice of any breach or default except when given notice thereof by the Trustee
or the Holders, as the case may be.  The
Authority shall not be responsible for the payment of any rebate to the United
States under IRC § 148(f).  The Authority
shall not be required to take any action unless indemnity reasonably
satisfactory to it is furnished for expenses or liability to be incurred
therein (other than the giving of notice). 
The Authority, upon written request of the Holders or the Trustee, and
upon receipt of reasonable indemnity for expenses or liability, shall cooperate
to the extent reasonably necessary to enable the Trustee to exercise any power
granted to the Trustee by this Agreement or the Indenture.  The Authority shall be entitled to
reimbursement pursuant to Section 4.2(d) hereof to the extent that it acts
without previously obtaining full indemnity.

 

The Authority shall be entitled to the advice
of counsel (who may be counsel for any party or for any Holder) and shall be
wholly protected as to any action taken or omitted to be taken in good faith in
reliance on such advice.  The Authority
may rely conclusively on any notice, certificate or other document furnished to
it under this Agreement or the Indenture and reasonably believed by it to be
genuine.  The Authority shall not be
liable for any action taken by it in good faith and reasonably believed by it
to be within the discretion or power conferred upon it, or in good faith
omitted to be taken by it and reasonably believed to be beyond such discretion
or power, or taken by it pursuant to any direction or instruction by which it
is governed under this Agreement or the Indenture or omitted to be taken by it
by reason of the lack of direction or instruction required for such action
under this Agreement or the Indenture, or be responsible for the consequences
of any error of judgment reasonably made by it. 
When any payment, consent or other action by the Authority is called for
by this Agreement or the Indenture, the Authority may defer such action pending
such investigation or inquiry or receipt of such evidence, if any, as it may
reasonably require in support thereof.  A
permissive right or power to act shall not be construed as a requirement to
act, and no delay in the exercise of a right or power shall affect the subsequent
exercise thereof.  The Authority shall in
no event be liable for the application or misapplication of funds, or for other
acts or defaults by any person or entity except by its own directors, officers
and employees.  No recourse shall be had
by the Company, the Trustee or any Holder for any claim based on this Agreement
or the Indenture or the Bonds against any director, officer, employee or agent
of the Authority unless such claim is based upon the willful misconduct, bad
faith, fraud or deceit of such person. 
No covenant, obligation or agreement of the Authority contained in this
Agreement or the Indenture shall be deemed to be a covenant, obligation or
agreement of any present or future director, officer, employee or agent of the 

 

20

 

Authority in his individual capacity, and no person executing a Bond
shall be liable personally thereon or be subject to any personal liability or
accountability by reason of the issuance thereof.

 

Section 9.2            Expenses.  The Company covenants and agrees to reimburse
the Authority and the Trustee for all reasonable costs and charges, including,
without limitation, the Trustee’s compensation provided for in the Indenture
and including fees and disbursements of attorneys, accountants, consultants and
other experts, incurred in good faith in connection with this Agreement or the
Indenture.

 

Section 9.3            Indemnification.  The Company, regardless of any agreement to
maintain insurance, releases the Authority and the Trustee from, and covenants
and agrees that neither the Authority, the Trustee, the Tender Agent, the
Paying Agent nor the Registrar shall be liable for, and covenants and agrees,
to the extent permitted by law, to indemnify and hold harmless the Authority,
the Trustee, the Tender Agent, the Paying Agent and the Registrar and their
directors, officers, employees and agents from and against, any and all losses,
claims by any person, damages, liabilities or expenses, of every conceivable
kind, character and nature whatsoever arising out of, resulting from or in any
way connected with the participation of the Authority, the Trustee, the Tender
Agent, the Paying Agent and the Registrar in the transactions contemplated by
this Agreement and the Indenture, including without limitation (1) the
Project, or the conditions, occupancy, use, possession, conduct or management
of, work done, or any accident, injury or damage to any person occurring in or
about, or from the planning, design, acquisition, installation or construction
of the Project or any part thereof; (2) the issuance of the Bonds or any
certifications, covenants or representations made by or obligations of the
Company in connection therewith and the carrying out of any of the transactions
contemplated by the Bonds and this Agreement, including any act or omission of
the Company or any of its agents, contractors, servants, employees or
licensees; (3) the offering, issuance, sale or any resale of the Bonds;
(4) the Trustee’s acceptance or administration of the trusts under the
Indenture, or the exercise or performance of any of its powers or duties under
the Indenture; or (5) any untrue statement or alleged untrue statement of
any material fact or omission or alleged omission to state a material fact
necessary to make the statements made, in light of the circumstances under
which they were made, not misleading, in any official statement or other
offering circular utilized by the Authority or any underwriter or placement
agent in connection with the sale of the Bonds, provided that the Company shall
have no liability under this clause (5) in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based solely
upon any untrue statement or omission pertaining only to the Authority made in
the Official Statement under the headings “The Authority” or “Litigation” (but
only as to information concerning the Authority); provided further that the
foregoing release and indemnity in this Section 9.3 shall not be required for
damages that result from gross negligence or willful misconduct on the part of
the party seeking such release or indemnity. 
The indemnity required by this Section shall be only to the extent that
any loss sustained by the Authority or the Trustee exceeds the net proceeds the
Authority or the Trustee receives from any insurance carried with respect to
the loss sustained.  The Company further
covenants and agrees, to the extent permitted by law, to pay or to reimburse
the Authority, the Trustee, the Tender Agent, the Paying Agent and the
Registrar and their directors, officers, employees and agents for any and all
costs, reasonable attorneys fees and expenses, liabilities or expenses incurred
in connection with investigating, defending against or otherwise in connection
with any such losses, claims (whether asserted by the Authority, the Company, a
Holder, or any other person), damages, liabilities, expenses or actions, except
to the 

 

21

 

extent that the same arise out
of the gross negligence or willful misconduct of the party claiming such
payment or reimbursement. 
Notwithstanding any other provision of this Agreement, in case any
action or proceeding is brought against the Authority by reason of any claim
for which indemnity is granted hereby, the Company will defend the same at its
expense with counsel reasonably acceptable to the Authority upon notice from
the affected person, and such person will cooperate with the Company, at the
expense of the Company, in connection therewith.  The provisions of this Section shall survive
the discharge of the Indenture and the retirement of the Bonds.

 

ARTICLE X

 

MISCELLANEOUS

 

Section 10.1         Notices.  All notices, certificates or other
communications shall be deemed sufficiently given if sent by facsimile (receipt
confirmed) or if mailed by first-class mail, postage prepaid, addressed to the
Authority, the Company, or the Trustee, as the case may be, as follows:

 

To the Authority:

 

Finance Authority of Maine

5 Community Drive

P.O. Box 949

Augusta, Maine 04332-0949

Attention:  Chief Executive Officer

 

To the Company:

 

Casella Waste Systems, Inc.

25 Greens Hill Lane

Rutland, Vermont 05701

Attention:  Senior Vice President and
Chief Financial Officer

Phone:  (802) 775-0325

Facsimile:  (802) 770-5348

 

To the Trustee:

 

LaSalle Bank National Association

135 S. LaSalle, Suite 1960

Chicago, IL  60603

Attention:  Corporate Trust Service
Division

Phone:  (312) 904-1910

Facsimile:  (312) 904-2236

 

To the Credit Provider

 

As may be listed if applicable.

 

22

 

A duplicate copy of each notice, certificate
or other communication given hereunder by either the Authority or the Company
to the other shall also be given to the Trustee and the Credit Provider, if
applicable.  Notices to the Trustee are
effective only when actually received by the Trustee.  The Authority, the Company, the Trustee and
the Credit Provider, if applicable, may, by notice given hereunder, designate
any different addresses to which subsequent notices, certificates or other
communications shall be sent.

 

Section 10.2         Matters to be
Considered by Authority.  In approving, concurring in or consenting to
action or in exercising any discretion or in making any determination under
this Agreement or the Indenture, the Authority may consider the interests of
the public, which shall include the anticipated effect of any transaction on
tax revenues and employment, as well as the interests of the other parties and
the Holders; provided, however, nothing shall be construed as conferring on any
person other than the other parties and the Holders any right to notice,
hearing or participation in the Authority’s consideration, and nothing in this
section shall be construed as conferring on any of them any right additional to
those conferred elsewhere.  Subject to
the foregoing, the Authority will not unreasonably withhold any approval or
consent to be given by it hereunder.

 

Section 10.3         Severability.  If any provision of this Agreement shall be
held or deemed to be, or shall in fact be, illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.

 

Section 10.4         Execution of
Counterparts. 
This Agreement may be simultaneously executed in several counterparts,
each of which shall be an original and all of which shall constitute but one
and the same instrument.

 

Section 10.5         Amendments,
Changes and Modifications.  Except as otherwise provided in this
Agreement or the Indenture, this Agreement may not be effectively amended,
changed, modified, altered or terminated except by the written agreement of the
Authority and the Company and with the written consent of the Credit Provider,
if applicable, and of the Trustee if required in accordance with
Section 9.5 of the Indenture.

 

Section 10.6         Governing Law.  This Agreement shall be construed in
accordance with and governed by the Constitution and laws of the State
applicable to contracts made and performed in the State.

 

Section 10.7         Authorized
Representative. 
Whenever under the provisions of this Agreement the approval of the
Company is required or the Company is required to take some action at the
request of the Authority, such approval or such request shall be given on
behalf of the Company by the Authorized Representative, and the Authority and
the Trustee shall be authorized to act on any such approval or request and
neither party hereto shall have any complaint against the other or against the
Trustee as a result of any such action taken.

 

Section 10.8         Actions by
Authority.  Any
action which may be taken by the Authority shall be deemed sufficiently taken
if taken on its behalf by its Chief Executive Officer or by any other member,
director, officer or agent whom it may designate from time to time.

 

23

 

Section 10.9         Term of the
Agreement.  This
Agreement shall be in full force and effect from the date hereof and shall
continue in effect as long as any of the Bonds is outstanding or the Trustee
holds any moneys under the Indenture, whichever is later.

 

Section 10.10       Binding Effect.  This Agreement shall inure to the benefit of
and shall be binding upon the Authority, the Company and their respective
successors and assigns; subject, however, to the limitations contained in
Sections 5.2 and 5.10 hereof.

 

Section 10.11       Complete
Agreement.  The
parties agree that the terms and conditions of this Agreement supersede those
of all previous agreements between the parties, and that this Agreement,
together with the documents referred to in this Agreement, contains the entire
agreement between the parties hereto.

 

Section 10.12       Business Days.  If any payment is to be made hereunder or any
action is to taken hereunder on any date that is not a Business Day, such
payment or action otherwise required to be made or taken on such date shall be
made or taken on the immediately succeeding Business Day with the same force
and effect as if made or taken on such scheduled date and as to any payment;
provided, any such payment is made on such succeeding Business Day.

 

Section 10.13       Waiver of
Personal Liability. 
No member, director, officer, agent, attorney or employee of the
Authority or any director, officer, agent or employee of the Company or any
Subsidiary thereof shall be individually or personally liable for the payment
of any principal of and interest on the Bonds or any other sum hereunder or be
subject to any personal liability or accountability by reason of the execution
and delivery of this Agreement; but nothing herein contained shall relieve any
such member, director, officer, agent, attorney or employee from the
performance of any official duty provided by law or by this Agreement

 

Section 10.14       Waivers.  Each of the Company and the Authority hereby
(i) irrevocably and unconditionally waive, to the fullest extent permitted
by law, trial by jury in any legal action or proceeding relating to this
Agreement or the Project and for any counterclaim therein and (ii) irrevocably
waive, to the maximum extent not prohibited by law, any right it may have to
claim or recover in any such litigation any special, exemplary, punitive or
consequential damages, or damages other than, or in addition to, actual
damages.

 

24

 

IN WITNESS WHEREOF, FINANCE AUTHORITY OF
MAINE has caused this Agreement to be executed in its name and CASELLA WASTE
SYSTEMS, INC. has caused this Agreement to be executed in its name by a duly
authorized officer all as of the date first above written.

 

	
   

  	
  FINANCE AUTHORITY OF MAINE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ John C. Witherspoon

  	
   

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CASELLA WASTE SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ Richard A. Norris

  	
   

  
	
   

  	
   

  	
  Name: Richard A. Norris

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  

 

25

 

EXHIBIT A

 

Description of Project

 

The Project consists of landfill development
and construction, vehicle, container and related equipment acquisition for
solid waste collection and transportation services, improvement of existing
solid waste disposal, hauling, transfer station and other facilities and other
infrastructure improvements and machinery and equipment for solid waste
disposal operations; and certain costs of issuance at the following locations
in the State: 358 Emerson Mill Road, Hampden; Route 16, 2828 Bennoch Road, Old
Town; 3 Lincoln Street, Biddeford; 31 Freedom Park, Hermon; 299 Walkers Mills
Road, Bethel; 87 Pleasant Hill Road, Scarborough; Florence Avenue B&A Yard,
Houlton; 3 Robert LaFleur Road, Waterville; 64 A J Reno Sr. Road, West Bath; 30
Elm Street, Mechanic Falls; 38 Alfred Plourde Parkway, Lewiston; NEO Falmouth –
5 Fundy Road, Falmouth; NEO Hawk Ridge, RR #1 Reynolds Road, Unity; NEO Unity,
1100 Waterville Road, Unity; 13 Gibson Road, Scarborough; 110 Main Street,
Suite 1308, Saco; 424 River Road, Lewiston; 66 Andrews Road, Biddeford and 73
Main Street, Mars Hill.

 

A-1

 

EXHIBIT B

 

Promissory Note

 

 

	
  $25,000,000

  	
   

  	
  December 28, 2005

  

 

CASELLA WASTE SYSTEMS, INC., a Delaware
corporation (the “Company”), for value received, hereby promises to pay to
Finance Authority of Maine (the “Authority”), or assigns, on January 1, 2025,
the principal sum of $25,000,000, subject to prior payment in accordance with
the Indenture and the Agreement, as those terms are defined herein, with
interest on the unpaid principal sum, from the date hereof, until said
principal sum shall be paid or until the maturity of the Bonds (as hereinafter
defined) shall be accelerated pursuant to the Indenture (as hereinafter
defined), at the then interest rate provided in the Bonds, as hereinafter
defined.  Interest shall be payable at
the interest rates payable on the Bonds, and the principal of, premium, if any,
and interest on this Note shall be payable at the times as set forth in more
detail in the Agreement and the Indenture (as such terms are defined below).

 

Payments shall be made in lawful money of the
United States of America in immediately available funds on the date payment is
due, at the principal corporate trust office of LaSalle Bank National
Association, as trustee (the “Trustee”) in Chicago, Illinois, or at such other
place as the Trustee may direct in writing.

 

The Authority, by the execution of the
Indenture, as hereinafter defined, and the assignment form at the foot of this
Note, is assigning this Note and the payments thereon to the Trustee acting
pursuant to the Indenture dated as of December 1, 2005 (the “Indenture”),
between the Authority and the Trustee as security for the Authority’s
$25,000,000 in aggregate principal amount of Solid Waste Disposal Revenue Bonds
(Casella Waste Services, Inc. Project) Series 2005 (the “Bonds”), as issued
pursuant to the Indenture.  Payments of
principal of and interest on this Note shall be made directly to the Trustee
for the account of the Authority pursuant to such assignment and applied only
to the principal of and interest on the Bonds. 
All obligations of the Company hereunder shall terminate when all sums
due and to become due pursuant to the Indenture, this Note, the Agreement, as
hereinafter defined, and the Bonds have been paid.

 

In addition to the payments of principal and
interest specified in the first paragraph hereof, the Company shall also pay
such additional amounts, if any, which, together with other moneys available
therefor pursuant to the Indenture, may be necessary to provide for payment
when due (whether at maturity, by acceleration or call for redemption,
mandatory purchase, purchase upon optional tenders, sinking fund redemption or
otherwise) of principal and purchase price of, premium, if any, and interest on
the Bonds.

 

The Company shall have the option or may be
required to prepay this Note in whole or in part upon the terms and conditions
and in the manner specified in the Financing Agreement dated as of December 1,
2005 (the “Agreement”), between the Authority and the Company.

 

 

This Note is issued pursuant to the Agreement
as evidence of the Company’s payment obligation in Section 4.2(a) thereof and
is entitled to the benefits and subject to the conditions thereof, including
the provisions of Section 4.3 thereof that the Company’s obligations thereunder
and hereunder shall be unconditional. 
All the terms, conditions and provisions of the Agreement and the
applicable provisions of the Bonds and the Indenture are, by this reference
thereto, incorporated herein as a part of this Note.

 

In case a Loan Default Event, as defined in
the Agreement, shall occur, the principal of and interest on this Note may be
declared immediately due and payable as provided in the Agreement.  This Note shall be governed by, and construed
in accordance with, the laws of the State of Maine.

 

IN WITNESS WHEREOF, the Company has caused
this Note to be executed in its corporate name and its seal to be hereunto
affixed and attested by its duly authorized officers, all as of the date first
above written.

 

	
   

  	
  CASELLA WASTE SYSTEMS, INC.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Richard A. Norris

  	
   

  
	
   

  	
   

  	
  Richard A. Norris, Chief Financial Officer

  

 

B-2

 

ASSIGNMENT

 

Finance Authority of Maine (the “Authority”),
hereby irrevocably assigns, without recourse, the foregoing Note to LaSalle
Bank National Association, as Trustee under an Indenture dated as of December
1, 2005 (the “Indenture”), between the Authority and the Trustee and hereby
directs Casella Waste Systems, Inc. as the maker of the Note to make all
payments of principal of and interest thereon directly to the Trustee at its
principal corporate trust office in New York, New York, or at such other place
as the Trustee may direct in writing. 
Such assignment is made as security for the payment of the Authority’s
$25,000,000 in aggregate principal amount of Solid Waste Disposal Revenue Bonds
(Casella Waste Services, Inc. Project), Series 2005, issued pursuant to the
Indenture.

 

	
   

  	
  FINANCE AUTHORITY OF MAINE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C.
  Witherspoon

  	
   

  
	
   

  	
   

  	
  Chief
  Executive Officer

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