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HomeMy WebLinkAboutMINUTES - 02021999 - D3 a TO: BOARD OF SUPERVISORS Contra FROM: Dennis M. Barry, AICP � Is Costa ry Community Development Director g�b`��`A-�6ox%c'� yr CouCounty DATE: February 2, 1999 SUBJECT: ASSIGNMENT OF COUNTY FRANCHISE AGREEMENTS FROM BROWNING-FERRIS INDUSTRIES, INC. SUBSIDIARIES TO ALLIED WASTE INDUSTRIES, INC, FOR PLEASANT HILL BAYSHORE DISPOSAL, INC., PERMANENT TRANSFERSTATION AND KELLER CANYON LANDFILL SPECIFIC REQUEST(S) OR RECOMMENDATION(S) &. BACKGROUND AND JUSTIFICATION RECOMMENDATI ISS CONSENT to the assignment of the following County Franchise Agreements from Browning-Ferris Industries (BFI) subsidiaries to Allied Waste Industries, Inc, , subject to the terms set forth in the three Agreements regarding Conditional Consent to Franchise Assignment: E . Franchise Agreement with Pleasant Hill Bayshore Disposal, Inc, (solid waste and recycling collection), and 2. Permanent Transfer Station Franchise Agreement (alta Contra Costa Transfer & Recovery Station, for processing and transfer of solid waste); and B. First Amended Landfill Franchise Agreement (disposal of solid waste at Feller Canyon Landfill). DETERMINE that the Parent or Affiliate guaranties required by the three Franchise Agreements are not required in this instance because the contractor is a national company whose officers will be signing the agreements. AUTHORIZE the Chair of the Board of Supervisors to execute the three Agreements regarding Conditional Consent to Franchise Assignment (Attachments 1 , 2 and B). DIRECT the Community Development Department and the County Counsel's Office to consider developing amendments to these three Franchise Agreements, as convenient-, to modify terminology related to the contractor/operator, in appropriate sections (e.g. sections pertaining to Contractor, Assignability, Notices, Guaranty and Joint Several Responsibility) and schedule said amendments for Board consideration and possible approval following Allied Waste Industries, Inc.'s satisfaction of the requirements in the Agreements regarding Conditional Consent to Franchise Assignment. CONTINUED ON ATTACHMENT: V YES SIGNATURE ACTION OF BOARD ON � � °' . APPROVED AS RECOMMENDED . _ VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE UNANIMOUS (ABSENT i104 AND CORRECT COPY OF AN ACTION TAKEN AYES. NOES: AND ENTERED ON THE MINUTES OF THE BOARD ABSENT: ABSTAIN: OF SUPERVISORS ON THE [SATE SHOWN. Contact: Deidra Dingman (925/335-1224) ATTESTED County Administrator PHIL BATCH OR, LERK OF THE County Counsel BOARD OF SUPERVISORS AND Community Development Department (CDD) � COUNTY ADMINISTRATOR Browning-Ferris Industries (via CDD) Allied Waste Industries (via CDD) BY .,.: ...__. , DEPUTY DD14:BFIA9SGU.50 agree as follows . ARTICLE 1. INTRODUCTORY PROVISIONS Section 1. 1 RECITALS INCORPORATION. The Recitals set forth above, and all defined terms set forth in such Recitals and in the introductory paragraph preceding the Recitals, are hereby incorporated into this Agreement as if set forth herein in full. Section 3.2 EFFECTIVE DATE, EFFECT. This Agreement is effective on the date mentioned in the first paragraph of page one hereof, and as of the effective date, unless otherwise prohibited by court or other binding order, replaces and supersedes the Landfill Franchise Agreement. In any case, this Agreement does not nullify the Landfill Franchise Agreement for the period preceding the effective date of this Agreement. Section 1.3 CONDITIONS OF APPROVAL. Operator acknowledges and agrees that all of the terms and conditions of the Use Permit's Conditions of Approval and any amendments thereto, are reasonable, legal and valid and that Operator is barred from any action or proceeding or any defense of invalidity or unreasonableness of said Conditions of Approval and any amendments thereto, and related County decisions. Further, Operator agrees that operator will not attack or otherwise assail the reasonableness, legality or validity of any terms and conditions of the Use Permit, or of any provisions required to be included in this Agreement by the said Conditions of Approval and any amendments thereto. - The parties acknowledge that the agreement by Operator in this section is a material consideration Amended Landfill Franchise 3 September, 1994 for County's approval of this Agreement. Section 1.4 OPERATOR ACKNOWLEDGMENT. Operator acknowledges and agrees that this Agreement and the Use permit (by the incorporation herein of the Use permit) provide for and allow (among other things) funding for mitigation, provision of closure and post-closure costs, payment to County of annual franchise revenue fees, and otherwise payment to County and reimbursement of County costs for its governmental administration of the project entitlements. It is understood that, among other things, this Agreement provides for Operator's establishment of its proprietary rates to enable operator to compete in a solid waste disposal market that has became highly competitive as a result of recent United States Supreme Court decisions. This Agreement also acknowledges that sub-county service areas have not been established. Section 1.5 COUNTY DISCRETION ANIS INTEREST. Notwithstanding any other provision of this Agreement, Operator acknowledges that County's discretion to grant, approve or deny one or more nonexclusive or other franchises or similar agreements for others is not limited or abridged in any manner by this Agreement; and that this Agreement does not require the approval of any such other franchises or agreements by Operator. County reserves the rights as part of the negotiation and entry of any such other franchise or agreement to enter a public- private or public-public partnership with other landfill owners and/or to pursue any rights of the County to require ownership of Amended Landfill Franchise 4 September, 1994 e 9 those landfills or this Landfill . Section 1.6 USE PERMIT OPERATIVE. Upon the effective Date of the Landfill Franchise Agreement, the Use Permit became operative pursuant to the conditions of the Use Permit, entitling Operator to all rights and privilege thereunder. Section 1.7 NO PREFERENTIAL TREATMENT. With respect to material terms of the relationship between the County and Operator, the County shall offer to Operator terms at least as favorable as those agreed upon by the County with the operator of any other landfill within the County with whom the County is currently negotiating or may negotiate within the Term of this Agreement. If any such material terms are determined for such other operator subsequent to their determination with respect to Operator, the County shall offer to amend such terms with respect to operator. ARTICLE 2. DEFINITIONS Section 2. 1 AGREEMENT. "Agreement" shall refer to this Agreement and is synonymous for purposes of this Agreement with the word "Contract". Section 2.2 ACTIVITIES REPORT. The "Activities Report" is a summary document reporting Operator's activities and overall performance during the preceding Analysis Period or over such period of time as set by the County. The Activities Report shall summarize landfill related activities, including, but not limited to: compliance with the provisions of this Agreement and all applicable Permits and Regulatory Agency Requirements, complaints Amended Landfill Franchise 5 September, 1994 ...................... .........................................................._....... ....... ......... ......... ......... .. ....... .... ........ ......... .................. .... ..... .... .... ......... .......... ........ .... ......... ......... ........... .......................... ........... and corrective actions taken, litter management, landfill gas project update, wastestream volumes and analysis, operations and safety training, recycling/resource recovery efforts, Closure Trust Fund status and balance. Section 2.3 ANALYSIS PERIOD. "Analysis Period'" refers to the twelve (12) consecutive calendar months beginning the first day of' .7anuary of each year throughout the term of this Agreement. The first Analysis Period, for the purposes of this Agreement shall begin on January 11 1994. Section 2.4 BASE RATE. "Base Rate" shall mean the proprietary fees charged by operator to dispose of Solid Waste or ,any ether waste at the Landfill. Section 2.5 COMMENCEMENT DATE. "Commencement Date" shall mean the date upon which the Landfill first accepted Solid Waste for disposal under the terms of the Landfill Franchise Agreement and the Use Permit. Section 2.6 COUNTY. "County" shall mean the County of Contra Costa, a political subdivision of the State of California. Section 2.7 DIRECTOR. "Director" shall mean the County Administrator or his designated deputy, other County officer or employee. Section 2.8 EMERGENCY. "Emergency" shall mean a sudden, unexpected occurrence involving a clear and imminent danger, demanding immediate action to prevent or mitigate loss of, or damage to, life, health, property, or essential public services . Emergency includes such occurrences as fire, flood, earthquake, Amended Landfill Franchise 6 September, 1994 or other soil or geologic movements, as .well as such occurrences as riots, accident and sabotage. Section 2.9 GATE FEE COLLECTION SYSTEM. "The Gate Fee Collection System" shall consist of all equipment, hardware, and software utilized for purposes of assessing, collecting, and accounting for Tipping Fees for the disposal of Solid Waste at the Landfill. Section 2.10 GATE MATE. "Gate Rate" shall mean the fee charged per ton to dispose of Solid Waste, or other waste at the Landfill. The Gate Mate shall be the Base Rate plus Surcharge and Mandated Fees, if any. "Gate Rate" shall be synonymous with "Landfill. Tipping Fee" and "Tipping Fee." Section 2.11 HOURS OF OPERATION. "Hours of Operation" shall be those times during which the use of heavy equipment and other machinery necessary for operation of the Site in compliance with the Use Permit, the Solid Waste Facilities Permit and this Agreement will be allowed. Section 2. 12 HOURS OF ACCESS. "Hours of Access" shall be those times during which Solid Waste may be delivered to the Landfill for disposal. Section 2.13 LANDFILL. "Landfill" shall mean the Landfill described in Exhibit A where the disposal of Solid Waste will. occur, For purposes of this Agreement, "«Landfill•" shall be synonymous with "Site." Section 2.14 MANDATED FEES. *"Mandated Fees" shall be those monies required from Operator from time to time by any Regulatory Amended Landfill Franchise 7 September, 1994 Agengy for the purpose of funding (a) Federal, State or regional programs, (b) programs required by the Land Use Permit, or (c) other County established fees. Section 2. 15 OPERATOR. "Operator" shall mean the holder of the Use Permit or its assignee. Section 2.1.6 PERMITS. "Permits" shall mean any and all governmental approvals, entitlements, clearances or classifications, as they may be amended from time to time, including but not limited to, the Use Permit, general plan amendments, environmental impact reports, zoning approvals, conditional use permits, waste discharge permits and requirements, facilities permits, permits to operate, permits to construct, closure plans, building permits, encroachment permits, grading permits, tree removal permits, tract/parcel maps and all other governmental permits, consents or approvals as may be necessary to allow operator to construct and operate the Landfill.. Section 2. 17 POST-CLOSURE MAINTENANCE. "Post-Closure Maintenance" shall mean those activities as required by law to be undertaken at the Landfill., fallowing Site Closure to maintain the integrity of containment features and/or to monitor.- compliance with applicable performance standards as specified by law. Section 2.18 REGULATORY AGENCIES. "Regulatory Agencies" shall mean Federal., State and local agencies responsible for regulating the operation and maintenance of sanitary landfills, Amended Landfill Franchise 8 September, 1994 such .as, but not limited to, California Integrated Waste Management Hoard, California Regional Water Quality Control Board, California Department of Health Services, the Contra Costa County Department of Health Services as Local Enforcement Agency for handling and disposal of Solid Waste, the Bay Area Air Quality Management District and the County. Section 2. 19 SCHEDULE OF DISPOSAL CHARGES. The "Schedule of Disposal Charges" shall mean a list of waste types and corresponding fee amounts to be charged at the Landfill for disposal of waste types. Section 2.20 SITE CLOSURE. "Site Closure" shall be the cessation of Solid Waste disposal at all or portions of the Landfill and subsequent operations necessary to prepare the Site for Post-Closure Maintenance in accordance with law, Regulatory Agency requirements and Permits. Section 2.21 SOLID WASTE. "Solid Waste" shall have the meaning set forth in Section 40191 of the California Public Resources Code as it may be amended from time to time, as follows "40191(a) Except as provided in subdivision (b) , 'solid waste' means all putrescible and nonputrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, industrial wastes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or Amended Landfill Franchise 9 September, 1994 chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid � wastes, and other discarded solid and semisolid wastes. . "(b) 'Solid wastes" does not include hazardous waste or low-level radioactive waste regulated under Chapter 7.6 (commencing with Section 25800) of Division 20 of the Health and Safety Code. "(c) 'Solid Waste' does not include medical waste which is regulated pursuant to the Medical Waste Management Act (Chapter) 6.1 (commencing with Section 25015) of Division 20 of the Health and Safety Code) . Untreated medical waste shall not be disposed of in a solid waste landfill., as defined in Section 46027 . Medical waste which has been treated and which is deemed to be solid waste shall be regulated pursuant to this division." Section 2.22 SOLID WASTE PROGRAMS. "Solid Waste Programs" shall mean those programs directly related to solid waste which may include: transfer stations, household hazardous waste programs, recycling and resource recovery programs, Agreement and Use Permit administration costs (including legal, engineering, and accounting and other costs of the County) . Section 2.23 SPECIAL HANDLING WASTE. "Special Handling Waste" shall mean certain Solid Waste materials permitted for disposal at the Landfill which, because of their volume or type, Amended Landfill Franchise 10 September, 1994 will require special handling by operator such as, by example only, sewage sludge, tires, fencing, large appliances, large dead animals, concrete and asphalt. All Special Handling Wastes accepted at the Landfill shall be specifically identified in the Schedule of Disposal Charges. Section 2.24 SURCHARGE. "Surcharge" shall mean a special - charge as required by the County and this Agreement, for funding of Solid Waste Programs, closure of landfills in operation prior to 1990 and for franchise fees and other costs as deemed appropriate by the County. Section 2.25 SURCHARGE PAYMENTS. "Surcharge Payments" shall mean those monies received by operator as a Surcharge and remitted to the County in accordance with the terms of this Agreement and of the Permits. Section 2.26 USE PERMIT. "Use Permit" shall mean Contra Costa County Land Use Permit No. 2020-89, together with all Conditions of Approval applicable thereto, including any amendments thereof. ARTICLE 3. TERM OF AGREEMENT This Agreement shall remain in effect until 38.4 millions tons of waste have been disposed of in the Landfill, or such lesser time as may be prescribed by law. It is the parties intent that the term of this Agreement shall be the estimated life of the landfill expressed in terms of capacity as of this date: 38.4 million tons less the tonnage of waste disposed of prior to the effective date of this Agreement. Amended Landfill Franchise 11 September, 1994 ARTICLE 4. PERFORMANCE OF OPERATOR Section 4.1 OPERATION OF LANDFILL. Operator shall operate the Landfill, in strict compliance with, and subject to, the terms and conditions of this Agreement, the Permits and ether applicable requirements of Regulatory Agencies. Section 4.2 WASTE STREAM. Nothing in the terms and provisions of this Agreement shall be construed to grant rights of exclusivity with respect to Solid Waste generated in any geographical portion of the County; nor shall this Agreement preclude or in any way restrict the County from entering into substantially similar agreements with other parties for Solid Waste disposal operations at other locations; provided that the terns and conditions of such other agreements shall not be substantially more favorable to the other operators than the provisions of this Agreement. Section 4.3 WASTE TYPES. Operator shall operate the Site in strict compliance with the Permits and lawns; provided, however, Operator may refuse to allow the disposal of certain categories of Solid Waste after obtaining approval by the County, which approval shall not be unreasonably withheld. Operator shall provide sixty (60) days* notice to all affected parties prior to proposing County approval of Operator's tentative decision to disallow disposal of the affected Solid Waste. Section 4.4 UNACCEPTABLE WASTE. Operator shall not allow disposal at the Site of material other than waste allowed by and subject to the terms of all Permits and laws. It is recognized Amended Landfill Franchise 12 September, 1994 that -same non-approved materials, including certain hazardous wastes, may occasionally be unloaded at the Site by users thereof. Operator shall train its on-site employees to recognize such unacceptable wastes and materials. In the event that unacceptable waste is deposited at the Site, it shall be handled and removed by Operator in accordance with procedures which shall be developed by operator and submitted to the County for approval prior to the Commencement Date. Nothing herein is intended to relieve the person or persons depositing or causing to be deposited such unacceptable waste from any liability. Operator retains the right to use all legal means to recover costs of removal and alternate disposal or treatment from such person or persons. Section 4.5 INSPECTION, INVESTIGATION, AND EVALUATION OF SITE. Operator acknowledges that it has and shall continue to inspect, investigate, and evaluate the Site regarding its suitability as a Solid Waste disposal site. The Site shall be immediately accessible at all reasonable times to Regulatory Agency officials for any reasonable, lawful and proper purpose. County officials shall usually give reasonable notice to Operator of their intention to visit the Site or if such notice is not given, shall notify operator's on- site personnel of their presence on the Site. County shall not incur liability arising from the discharge of its inspection responsibilities, either by commission or by omission, except for its tortious conduct or breach of duty Amended Landfill Franchise 13 September, 1994 .................................................... .................................................................................................... ........ ......... ............... ... .............. .. .. _ ......... ......... ........... . ..._.. ............ ......... ....................... .............. ......... ......... ................................... ......... ..... ............. ...... resulting in death, injury or property damage while engaged in its inspection responsibilities. The inspection of the work shall not relieve Operator of any obligation to perform under this Agreement. Operator shall remove and replace or .repair any work not in compliance with those permits, laws, ordinances or a regulations applicable to the Site. Section 4.6 PERMITS. Operator shall obtain and maintain in force all necessary Permits and/or other approvals from the Regulatory Agencies for the Landfill. Upon receipt of each such Permit or approval, a copy thereof, together with all conditions or requirements attached thereto, shall be delivered by operator to the Director. Section 4.7 STATUS of TITLE. Prior to the Commencement Date, Operator shall provide to the County reasonable evidence sufficient to establish that Operator is in possession of and/or has the right to use the Site for the purpose contemplated. Section 4 .8 GATE FACILITIES. Operator shall supply, construct and thereafter maintain gate fee collection facilities. The facilities shall be designed and located as necessary so as to expedite the fee transactions and shall be attractively finished and landscaped. The facilities shall be consistent with the Use Permit for the Site. Operator shall supply, construct, and maintain truck scales as necessary to expedite the fee transactions, prevent traffic back-up, and allow for occasional maintenance and repair. The scales shall be compatible with the Gate Fee Collection System Amended Landfill Franchise 14 September, 1994 apprpved by the County, in accordance with Section 5.1 of this Agreement. The scales shall be open and in working order during all Hours of Access at the Landfill. The sole access to the Site for vehicles carrying solid waste shall be the Landfill entrance, and all waste disposal vehicles shall be recorded by the Gate Fee Collection System. Operator shall make provisions for quick repairs of the scales by competent technicians to minimize downtime. The scales shall meet all State requirements for design approval and accuracy for State certified scales. Only those scales functioning in accordance with all applicable regulations shall be used. Operator shall obtain the State of California certification for scale accuracy. Operator shall supply, deliver and maintain utilities to the Site and shall be responsible for all onsite and off-site costs and service charges in connection therewith. Section 4.9 OPERATION OF GATE FEE COLLECTION SYSTEM. Operator shall operate the Gate Fee Collection System, including the providing of all labor and materials necessary with respect thereto. Such operation shall be for all Hours of Access. Section 4.10 FEE COLLECTION. Operator shall collect, count and account for all Landfill Tipping Fees and waste quantities from each user at the Site. Said fees shall be collected in accordance with the rates applicable pursuant to Article 6 of this Agreement. In the event that no scale is operable at any Amended Landfill Franchise is September, 1994 ...................................... ...................................................................................................... _............................................................................................................................................_... _ ... ......... ......... ... ...... . .... ............. ......... ......... ......... ..... ....................................................._ ..............................I'll..........................._.....__.____. f given time, vehicles will be charged based upon the. weight certified by the originating transfer station or based upon a flat fee or volume fee schedule established by the parties in advance. Operator shall furnish the County Stith monthly reports on the number and types of vehicles and waste tonnages and/or volumes, as appropriate, of the various types and Gate revenue. Section 4.11 PAYMENT TO COUNTY". Operator shall pay the Surcharge Payments required by Article S to the County monthly in arrears. Operator shall pay the Surcharge Payments to County within thirty (30) calendar days after the close of the prior month in which they are collected. Section 4. 12 HOURS OF ACCESS. For purposes of this Agreement, unless otherwise required by the terms of the Permits, Hours of Access shall be those specified in the Solid Waste Facilities Permit. Should the Director declare that an emergency exists, operator shall keep the Landfill open as instructed to allow for the orderly disposal of Solid Waste generated or created by such emergency conditions at no additional charge or increase in the Gate Rate. The scheduled Hours of Access may be changed in a manner consistent with permit requirements. Operator may, in its sole discretion, observe the following holidays and close the Landfill: New 'Year's Day, Easter Sunday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day, or other major holiday as approved by the Director. Amended Landfill Franchise 16 September, 1994 Section 4 . 13 NONDISCRIMINATORY SERVICE. operator shall provide nondiscriminatory service for Solid Waste disposal to all users, and shall abide by all Federal, State and local laws and the Land Use Permit. Section 4. 14 ACCESS ROADS, HAUL ROADS AND SERVICE ROADS. It shall be Operator's responsibility to provide and maintain all roads required on the property for purposes of transporting refuse to the actual point of disposal, or transporting earth materials for fill within the Site, and such other roads as may be constructed for its convenience. Haul roads shall be well maintained. The surface shall be reasonably free from potholes and depressions. A safe, all weather access to a disposal area shall be provided at all times. Section 4. 15 LITTER MANAGEMENT. Operator shall maintain and keep the Site and its access road reasonably free of litter and other refuse. Operator shall be solely responsible for maintaining the Site in a clean and sanitary condition, and shall be responsible for any public nuisance created as a result of its operations. Operator shall control on-site and off-site litter or debris in accordance with the Use Permit and the Solid Waste Facilities Permit. Section 4 . 15 ENVIRONMENTAL MITIGATION. Operator shall comply with all environmental mitigation measures reasonably and lawfully imposed by Regulatory Agencies including those imposed by the Use Permit. Amended Landfill Franchise 17 September, 1994 Section 4.17 RECYCLING/RESOURCE RECOVERY PROGRAMS. Operator shall cooperate with the County and reasonably participate in satisfying the ancillary waste needs of the County, including participation in a County sponsored recycling/resource recovery plan and litter program, and/or any other activity which the County deems is appropriate for inclusion in the County Solid Waste Programs. Section 4.18 ACTIVITIES REPORT. Operator shall, by the first day of January of each year, assemble and provide to the County the Activities Report for the most recent Analysis Period. The Board may direct, upon ninety (90) days written notice to Operator, that the report provided in the Activities Report be Made semi-annually. Section 4. 19 PENALTY SCHEDULE FOR NONCOMPLIANCE. In the event that noncompliance by Operator with any condition or provision of this Agreement, or any applicable Permits or Regulatory Agency requirements is determined by the County, County shall notify Operator of the identified noncompliance. Following notification of noncompliance, the Director may impose penalties per noncompliance upon three (3) days notice to Operator in accordance with the following penalty schedule until such time as compliance is achieved: $ 500.00 per day during the first week of noncompliance 750.00 per day during the second week of noncompliance $1,000.00 per day during the third week of noncompliance Amended Landfill Franchise i8 September, 1994 ;1.,250.00 per day for each day thereafter. At the time the Director imposes any penalties, the amounts due for each day of noncompliance shall be the above amounts subject to annual CPI adjustments, the applicable index to be reasonably selected by the Director. Notwithstanding the above three paragraphs, no monetary penalties will be imposed by the County in the event that Operator and/or said Regulatory Agency are diligently pursuing the process of correction or mitigation of the event(s) causing noncompliance. Operator shall have the right to arbitrate any action taken by the County under this provision in accordance with Section 13.8 of this Agreement. Section 4.20 RECORDS. Operator shall keep separate and accurate records for the Landfill as provided in the Use Permit. The County may, at its own expense (which may be recovered as a Solid Waste program cost) , at any time during the term of this Agreement, have the books and records of the Operator examined for the sole purpose of verifying Operator's compliance with the requirements of this Agreement. County shall give thirty (30) days written notice to the Operator in advance of such examination date. Section 4 .21 HOST COMMUNITY. Operator agrees that an appropriate amount of the Surcharge as determined by the County's Board of Supervisors may and shall be utilized pursuant to Board Amended Landfill Franchise 19 September, 1994 ................................ ... ................................................................................................. .... ....... ......... .......... .................. .. . _....... ........ _....... ......._ ............_. ...... .................. ....... ......... ......._....................................... ......... ............ ................... ........................................................................................ Orders) for host community mitigation. ARTICLE 5. PERFORMANCE OF COUNTY Section 5.1 GATE FEE COLLECTION SYSTEM. The computerized Gate Fee Collection System, which shall be provided by Operator in accordance with Section 4.9 of this Agreement, shall be Y approved by the County, which approval shall not be unreasonably withheld. Section 5.2 INSPECTION OF SCALES. The County may, from time to time during regular business hours, inspect the scales and test the accuracy of same. ARTICLE 6. RATES Section 6.1 BASE RATE. The Base Rate shall be determined and established by Operator at its sole discretion. Notwithstanding section 4.13, it is understood that the Operator need not charge a uniform Base Rate to all customers, but may vary the Base Rate as between different customers based on various factors determined by Operator, including, but not limited to, the quantity and type of waste delivered by each customer ,to the facility and whether each customer has entered into a disposal agreement with the Operator in which the customer agrees to dispose of some or all of the customer's future waste stream at the Landfill.. Section 6.2 SURCHARGE. The County may determine and establish at least once every two years, effective on the date determined by the Board of Supervisors (but initially no sooner than two years from the effective date of this Agreement except Amended Landfill franchise 20 September, 1994 - � s for the purpose of decreasing the Surcharge in accordance with Section 6.4.d) , the Surcharge, which shall be added to the then applicable Base Rate, and collected as part of the Gate Rate. operator will be provided at least ninety (90) days' written notice of any newly established Surcharge. In the absence of the County establishing a particular Surcharge amount, the Surcharge to be collected by the operator for the County shall be thirty percent (30%) of the then applicable Base Rate. Section 6.3 GATE RATE. The Gate Rate shall consist of the Base Rate, Mandated Fees, and Surcharge. Section 6 .4 INITIAL SURCHARGE. Effective on the effective date of this Agreement, the Surcharge shall be as set forth in this section. a. Permanent Transfer Station. The Surcharge on Solid Waste received at the Landfill via the Acme Fill Waste Recovery and Transfer Station (commonly referred to as the "Acme Permanent Transfer Station," and hereinafter referred to as the "Transfer Station") shall be as set forth in Section 6.4 (Initial Surcharge) of the Franchise Agreement between the County and the operators of the Transfer Station, as follows. Amount. Twenty-five percent of the combined Transfer Station Proprietary Rate and the Landfill Base Rate. Funding of Programs from Surcharge. During the period covered by the above initial Surcharge, costs of County programs (required or authorized by the Use Permit or this Agreement) shall be funded from said combined 25% Transfer Station and Amended Landfill Franchise 21 September, 1994 ..................... ............................................................................... ......... ......... ..........1 .....1 ..1..1.. . .............. ... ... ......... ......... .................................. . ............ ....... ......... ......... .................................... ......... ......... ........ 1.11....1............... .........................................................._. ....................... 1.111 s Landfill Surcharge. In addition, any household hazardous waste fee imposed by the Board pursuant to Public Resources Code section 43213 shall be collected (deducted) from said combined Surcharge amount. Closure, Litigation. Operator agrees and acknowledges that an appropriate amount (five percent) of the Surcharge as determined by the County's Board of Supervisors may and shall be utilized pursuant to Board Order{s} and a trust account arrangement for any landfill closure or post-closure or related litigation expenses. Any amount not so expended may be otherwise utilized for other Surcharge purposes. Reconsideration. Within or approximately six months from the date of this Agreement, the County's Board of Supervisors intends to reconsider and re-evaluate the household hazardous waste programs, their levels of funding, whether one or more programs should be modified, reduced, or eliminated, and a Surcharge adjustment. Collection. For Solid Waste received at the Landfill via the Transfer Station, the combined Surcharge and any other Keller Mandated Fees may be collected at the Transfer Station. b. Other Wastes. The Surcharge on waste received at the Landfill other than via the Transfer Station shall be ten percent of the Base Rate. Section 6.5 DISPOSAL CONTRACTS. For all contracts for the disposal of Solid Waste entered by Operator, the Surcharge applicable at the time of the disposal contract shall apply for Amended Landfill Franchise 22 September, 1994 the life of said disposal contract. The parties agree that any later established surcharge amounts shall not apply to waste received pursuant to such Solid Waste disposal contract for the life of said disposal contract. Operator shall advise County of any disposal contract subject to the privileges of this section immediately upon execution. Operator shall provide County with any and all information requested by County concerning any such Contract, including providing County with copies of such contracts upon request. Section 6.6 SCHEDULE OF RATES. Operator shall at all times maintain on file with the County, a schedule of Base Rates and Gate Rates charged to each customer, including Solid Waste received via the Transfer Station. The schedule shall specify whether each customer delivers waste directly to the Landfill or whether it is delivered by way of the Transfer Station or other transfer or processing facility. The Schedule shall identify the components of the rates charged at the Facility. The schedule may include a standard Base and Gate Rate which Operator charges unless a disposal agreement is entered, or other arrangements made. Said schedule of Base and Gate Rates shall be updated within ten days of material modification thereof. Material modifications include, but are not limited to, changes to any customer's Base and Gate Rate, and entering of a disposal agreement or other agreement with new customer. The purpose of this section is to ensure that the rates Amended Landfill Franchise 23 September, 1994 { charged by Operator as well as fees and surcharges imposed by county as well as other governmental agencies are a matter of Public Record, so as to promote cooperation and trust between the Operator, the County, and the public. Towards this end, County may request, and Operator shall provide to County, all information reasonably necessary to effectuate the purpose of this section. ARTICLE 7. PERSONNEL, Operator shall assign qualified personnel to operate the site as may be required to assure a smooth and efficient operation in compliance with all applicable Permits. The County has the right to request, in writing, administrative action, including the removal of any employee of Operator who violates any provision of this Agreement, or who in the opinion of such requesting party is unsafe, negligent, or discourteous to the public or others in the performance of his/her duties. Upon receipt of such a request, Operator shall immediately take whatever administrative action, which, in its judgment, is necessary to resolve the situation. Such action may include removal of that employee from the Site. A Site Supervisor employed by operator shall be present at the Site at all times that any operations are being conducted thereon. Operator shall file with the Director the names, addresses, and telephone numbers of the Operator representatives who can be contacted at any time in case of emergency. These Amended Landfill Franchise 24 September, 1994 • � P t representatives shall be fully authorized to respond so as to resolve the emergency. ARTICLE S. LANDFILL GAS If at any time operator voluntarily pursues the sale of gas produced from the Landfill or the sale of electricity produced by burning said gas, County may require the payment of a Surcharge thereon. ARTICLE 9. CLOSURE AND POST CLOSURE Section 9.1 CLOSURE RESPONSIBILITIES. operator shall be responsible for Site Closure and Post Closure Maintenance of the Landfill according to all Permits and requirements of the Regulatory Agencies. Operator will hold the County harmless for the performance of its duties under this Article. The County and Operator recognize the inevitability of Site Closure. Both parties also recognize the existing uncertainties yet to be resolved which may impact the date and total cost of Site Closure and the need to commence closure activities promptly upon cessation of disposal activities in a discrete portion or phase of the Landfill. The parties intend to provide for the public interest by assuring that the appropriate financial mechanisms are put in place by operator to provide funds to pay the costs incurred for Site Closure and Post-Closure maintenance as required by law. Section 9.2 FINANCIAL ASSURANCES. operator shall provide all, financial assurances necessary to satisfy the provisions of Public Resources Code Section (formerly Section 66796.22 of the Amended Landfill Franchise 25 September. 1994 _........................................... ............................................................................................_.... .... ......... ......... ......... . . .................................. . . ......_.. .... ......... ......... ......... . ........ ......_............ ......... ......... ........ ...... ......... ......... .................................... California Government Code) , Title 14, California Cade of Regulations, Division 7, Chapter S, Article 3.5 and .all other applicable provisions of California and Federal law. The financial assurances shall include the establishment of a trust fund or equivalent financial arrangement as evidence of financial ability to provide for the cost of closure and post-closure maintenance as required by law. gator shall consult with the County with respect to proposals to be made to the State regarding the financial assurance to be provided. Operator shall provide the County with adequate notice of any filings with the State or hearings with respect to such proposals sufficient to allow the County to participate ,in and provide input to the State on the State's determinations on closure and post closure requirements, including financial assurances to be imposed on the Site. Section 9.3 PERFORMANCE. Operator acknowledges that under State and Federal law, Operator shall have the responsibility to perform both closure and post closure activities in a timely, cost-effective manner. Performance by Operator shall be determined in accordance with State and Federal statutes. The County and operator agree that, to the extent site closure ,and postclosure activities are funded from the Landfill rates, it is in the local public interest to assure timely, cost-- effective closure and postclosure activities. The County shall have the right to conduct such technical and financial review as it deems necessary to protect the local public interest. Amended Landfill Franchise 26 September, 1994 Section 9.4 SIGNING OF INSTRUMENTS AND DOCUMENTS. From time to time, either party shall at the request of the other party and without further consideration, execute and deliver such instruments and documents as may be reasonably necessary in order to effectuate the purposes of this Article 9. Section 9.5 FAILURE TO MEET CLOSURE AND POST-CLOSURE OBLIGATIONS. In the event that Operator fails to perform its obligations as set forth in this Article 91 or to enter upon performance of same with due diligence after the determination of an event of default in a manner described below in Article 11, the County may enter the Landfill and perform the Site Closure and Post-Closure activities required to remedy the default and expend Site Closure funds for the costs involved. ARTICLE 10. UNINTERRUPTED OPERATION Section 10. 1 ASSURANCE OF UNINTERRUPTED OPERATION. Operator, in entering into this Agreement, assures that it will provide from the Commencement Date for the operation of a Solid Waste disposal facility at the Landfill in an uninterrupted manner for as long as the Site is useful and usable, except as provided in Section 11.4 below. Operator acknowledges the hardship that would occur if the Landfill is not operated properly or is prematurely closed. The County and Operator recognize that in the ordinary course of events, certain unexpected events may result that may place a burden on the requirement of uninterrupted operation. However, it is the purpose of this Article 10 to establish that it is Operator's Amended Landfill Franchise 27 septesrl>er, 1994 obligation to avoid any interruption of operations except for those that are outside of Operator's control, as provided by Section 11.5 of this Agreement. Section 10.2 LABOR DISPUTES. In the event of a labor dispute, Operator shall use its best efforts to keep the Landfill open and to operate it in accordance with this Agreement unless a mutually ,acceptable disposal alternative is agreed upon by Operator and the County. ARTICLE 11. DEFAULT, REMEDIES Because of the complex nature of this Agreement and the work to be performed hereunder, together with the need for close cooperation and coordination between the parties, it is not anticipated that either party will declare the other in default under the terms and conditions of this Agreement except as a last resort. However, in the event of any such necessity, the following provisions are made a part hereof. Section 11. 1 FAILURE TO PROSECUTE WORK. Should operator fail. to prosecute the work or any severable part thereof in conformity with the requirements of this Agreement, the Director shall provide written notice to Operator specifying in detail the defect or default in performance (the "First Notice") and Operator shall have the right to cure same within a reasonable period of time. If after the First Notice is provided to Operator, the work is not performed in accordance with the Director's specified time frame and a reasonable time to cure so as to ensure its Amended Landfill Franchise 28 September, 1994 P completion in accordance with this Agreement, the Director shall serve further notice (the "Second Notice") upon Operator of the County's intention to take further action as provided by law. The Director shall make appropriate and detailed written findings of fact which specify the event of default. No earlier than thirty (30) days after the Second Notice, County shall have the power and ability, if Operator is still in default, to take such actions as provided in law for remedying the same, including the termination of this Agreement. Should the County fail to perform any of its obligations under this Agreement, Operator may declare the County in default after following the same two notice and findings provisions required of the County above. Thereafter, Operator shall have the power and ability, if the County is still in default, to take such actions as provided in law for remedying the same, including bringing suit in a court of appropriate jurisdiction for equitable or legal relief or both. The foregoing notwithstanding, neither party may bring an action seeking money damages unless it has first provided the other party with 30 days notice of its intention to do so together with written notification of the specific actions which the other party may take to remedy the default which will form the basis for the claim for monetary damages. If the other party in good faith commences the actions specified within the thirty (30) day period, the first party shall not bring the action for damages. Amended Landfill Franchise 29 September, 1994 .............................................. .......................................................................................................................... ...... ......... ......... _...................................... .... ......... ......... ....... ................................ ........................ ......... ......... ......... .......... ............................_ __ Section 11.2 CONVICTION OF CERTAIN CRIMES. Operator agrees that a single conviction of operator, its parent, subsidiaries or operators, or their officers or employees at the level of Site operations manager or above, acting within the scope of their employment, of bribery, antitrust, corruption or theft relating to or involving directly the Landfill Site shall constitute an event of a breach of this Agreement subject thereupon to the previsions of this Article unless Operator, promptly initiates and follows through with appropriate disciplinary procedures and action considering the nature of the offense and resolution by the Lourts. Section 31.3 CONDEMNATION. In addition to any other remedy available to the County, it has the right and authority under law to condemn the Site. Section 11.4 RIGHT TO TAKE/RIGHT TO POSSESSION. In the event that Operator chooses to no longer operate the Site, Operator agrees that it will give County notice of its intention to cease operation ninety (90) days prior to the cessation. If, after receiving such notice, County initiates eminent domain proceedings to acquire the Site, Operator agrees that it will not object to or contest County's right to take, or right of possession of, the Site. Nothing contained herein shall constitute a waiver of the right to contest valuation at any stage of the proceedings. County and Operator agree that the provisions of this paragraph may be enforced by means of the remedy of specific performance. Amended Landfill Franchise 30 September, 1994 Section 11.5 FORCE MAJEURE. Operator shall not be liable for a default if the failure to perform under the terms and conditions of the Agreement arise out of causes beyond the control or without the fault or negligence of Operator. Such causes may include, but are not limited to, acts of God, or the public enemy, acts of the County in either its sovereign or contractual capacity, fires, floods, earthquakes, epidemics, quarantine restrictions, suppliers• and vendors` strikes'and all other labor disputes, freight embargoes, and unusually severe weather; but in every case the failure to perform must be beyond the control and without substantial default or negligence of Operator. Operator shall make every reasonable effort to mitigate the effects of said causes. Section 11.5 SPECIFIC PERFORMANCE. Notwithstanding any other available remedies, the obligations duties and rights of each party under this Agreement shall be specifically enforceable by the other party. Section 11.7 NONEXCLUSIVE REMEDIES. The rights and remedies of either party to this Agreement as provided for in this Article 11 shall not be exclusive, and are in addition to any other rights and remedies provided by law or under this Agreement; except that the right of either party to seek monetary damages is limited as provided in Section 11.1 above. ARTICLE 12. INSURANCE AND BONDS Section 12.1 WORKERS' COMPENSATION. Operator hereby acknowledges that it is aware of the provisions regarding Amended Landfill Franchise 31 September, 1994 Workers' Compensation, Section 3700 of the Labor Gude. operator shall comply with the provisions of such Section as amended from time to time with regard to .its employees and shall supply to the County forthwith upon execution of this Agreement, and annually thereafter, evidence of such compliance. Section 12.2 PUBLIC LIABILITY. Operator shall obtain from a good- and responsible company or companies doing insurance business in the State of California, and pay for, maintain in full forcer and effect for the duration of this Agreement and any extension, a policy or replacement policy of comprehensive liability insurance for the Landfill, in which the County is named as an additional insured with Operator. Operator shall furnish a Certificate of Liability ,Insurance to the Director before execution of this Agreement by the County. Notwithstanding any inconsistent statement in the policy described by the Certificate of Liability Insurance or any subsequent endorsement attached thereto, the protection coffered by the policy shall: (a) Include the County, its officers, employees and agents while acting within the scope of their duties under this Agreement, the Use Permit, or any other County ordinance, resolution or other rule relating to the operation, maintenance or closure of the Landfill, as an additional insured covering ,said duties against all third party claims for negligence, and for indemnification of the County as provided by this Agreement. (b) Provide for a combined single limit policy not Amended Landfill Franchise 32 September, 1994 less than $10,000,000 per occurrence, combined bodily injury and property damage. At every fifth year of this Agreement, this $10,000,000 minimum limit shall be increased as directed by the County but not more than 30% for each such five year period. Section 12.3 OTHER INSURANCE PROVISIONS. All insurance policies required by this Agreement shall bear an endorsement, whereby it is provided that, in the event of expiration, or proposed cancellation of such policy for any reason whatsoever, the Director shall be notified in writing not less than thirty (30) days before expiration or cancellation is effective. Expiration, reduction or cancellation of any insurance policy required by this Agreement without obtaining a replacement policy pursuant to Section 12.2 to meet the requirements herein shall be considered a breach of this Agreement by operator. Operator shall also carry such other insurance as may be required by law. operator shall be solely liable for any claims or liabilities caused by its failure to maintain insurance required by law. Section 12.4 FAITHFUL PERFORMANCE SURETY. Operator shall, prior to acceptance of waste at the Site under this Agreement, provide to the County an irrevocable Performance Surety Letter of Credit in the form set forth in Exhibit S hereto guaranteeing Operator's performance of all provisions of this Agreement (except Article 9, relating to Site Closure, for which separate financial assurances are required by applicable law) in an amount of not less than $1,000,000.00. This Letter of Credit may also Amended Landfill Franchise 33 September, 1994 be utilized to meet the security and performance requirement of the Use Permit, except as to the closure requirements which will be separately ,secured. If Operator or an affiliate acceptable to the Director operates a transfer or processing station in the County, from which transfer or processing station solid waste is delivered to the Landfill, the Director may allow the Performance Surety-Letter of Credit required by this section to additionally guarantee Operator's performance of all provisions of said transfer station agreement or franchise. ARTICLE 13. GENERAL PROVISIONS Section 13. 1 GUARANTY BY PARENT OR AFFILIATE. Prior to the Commencement Date, and for all conditions and obligations of this Agreement, Operator shall provide to the Director, proof of guaranty by the parent or an affiliate of Operator acceptable to the County, of the performance by Operator of each provision of this Agreement to be performed by Operator. Proof of guaranty shall be in the form set forth in Exhibit C. Section 13.2 ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall pay and bear its own litigation expenses, including attorney's fees. Section 13.3 INDEMNITY AND BOLD HARMLESS AGREEMENT. (a) All work and performances by Operator covered by this Agreement shall be at the risk of operator (b) With respect to third-party claims, Operator agrees to save, indemnify and keep harmless the County, its officers, employees, agents and assign against any and all Amended Landfill Franchise 34 September, 1994 liability, claims, judgments, or demands, including demands arising from injuries or deaths of persons and damage to property, arising directly or indirectly out of the obligations herein undertaken by Operator, save and except claims or litigation arising through the sole negligence or willful misconduct of the County, and will make good to and reimburse the County for any expenditures, including reasonable attorney's fees, that the County may make by reason of such matters and, if requested by the County, shall defend any such suit at the sole cost and expense of Operator. (c) With respect to third-party claims, the County agrees to save, indemnify and keep harmless Operator, its officers, employees, agents and assigns against any and all liability, claims, judgments, or demands, including demands arising from injuries or deaths of persons and damage to property, arising directly or indirectly out of the sole negligence or willful misconduct of the County, and will make good to and reimburse Operator for any expenditures, including reasonable attorney's fees, that Operator may make by reason of such matters and, if requested by Operator, shall defend any such suit at the sole cost and expense of the County. (d) Should any party successfully challenge the validity of this Agreement or the procedure by which this Agreement was entered into or the validity of any County action which authorizes the County to enter into this Agreement, then in such case the Operator shall have no cause of action for damages Amended Landfill Franchise 35 September, 1994 .................................................................................... _............................................................................................................................................................................ f or any other relief against County as a result of such successful challenge. In the event of any such legal challenge, Operator shall defend such action or proceeding at its sale expenses and Operator shall save and ,hold County harmless from any claims or awards for third party attorneys' fees and costs. Section 13.4 ASSIGNMENT. (a) Voluntary. Operator shall not well, assign, subcontract or transfer this Agreement or any part hereof, or any obligation hereunder, without the written consent of County,- provided, ounty;provided, however, that Operator may assign this Agreement without the County's consent to any company which it controls, is controlled by, or which is under common control with gator. As used in this Section, the term "control" with resect to a company, means the beneficial ownership of more than 50% of the voting stock of the company. The term assignment shall include any dissolution, merger, consolidation or other reorganization of operator, which results in change of control of Curator, or any sale or other transfer of a controlling percentage of Operator's capital stack. Any attempted assignment not provided for above without such consent shall be void ab initio. (b) Involuntary. Except as may be permitted by paragraph (a) above, no interest of Operator in this Agreement shall be assignable by operation of law. Any such nonpermitted assignment and any of the following. acts, each of which are deemed an involuntary assignment, shall provide County with the right to Amended Landfill Franchise 36 September, 1994 elect to terminate the Agreement forthwith, without suit or other proceeding: (1) If Operator becomes insolvent, or makes an assignment for the benefit of creditors; (2) If Writ of Attachment or Execution is levied on this Agreement or other property of Operator such that would have a materially adverse effect on Operator's ability to perform its duties and obligations under this Agreement; (3) If in any proceeding to which Operator is a party, a Receiver is appointed with authority to take possession of operator's property such that would have a materially adverse effect on operator's ability to perform its duties and obligations under this Agreement. Section 13.5 COMPLETE AGREEMENT. No verbal agreement with any officer, agency, or employee of the County or of Operator nor any contract either before, during, or after the execution of this agreement shall affect or modify any of the terms or obligations herein contained unless a written agreement, signed by both parties, specifically provides that same is an amendment to this Agreement. Section 13.6 NO THIRD PARTY BENEFICIARY ENFORCEMENT. While this contract benefits the public interest throughout Contra Costa County, it is an Agreement between only Operator and the County and, accordingly, only Operator and the County may enforce same. No claims, demands, or causes of action by any entity, party, or person claiming to be a third party beneficiary Amended Landfill Franchise 37 September, 1994 ..................................... ........................................................................................................ ................................................................ ... ...._............................................. ..._............._.__.. .. ... ......... ........ .......... .................... . ........... ........... _ _ _ ......... ......... ......... ......... ..._ ..... _ __ ................... _ hereunder shall be enforceable. Section 13.7 SURVIVAL OF OBLIGATIONS. County's rights to any damages, remedies, insurance coverage and indemnification under this Agreement shall survive the termination of this Agreement. Section 13.8 ARBITRATION. Any controversy or claim submitted to arbitration pursuant to the express provisions of this Agreement, or by mutual subsequent agreement, and arising out of or relating to this Agreement, or the breach thereof, shall be governed by the provisions of Part III. , Title 9 of the Code of Civil Procedure, sections 1280 et seq. as amended from time to time. The arbitration shall be de novas and subject to a de novo appeal or challenge brought in the Centra Costa County Superior Court as to any alleged error of law or as to the admissibility of evidence. California judicial rules of evidence shall apply to the arbitration proceedings. The arbitration decision shall be decided under and in accordance with California law, supported by a preponderance of evidence and in writing in the form of a Statement of Decision pursuant to Code of Civil Procedure Section 532. Section 13.9 CONFLICT. (a) This Agreement is intended to implement prior Landfill approvals, including the Use Permit (and Ordinance No. 88-81 if applicable to the Landfill) . In the case of any apparent or potential conflict between the provisions of this Agreement and the previsions of the Use permit or any involved Amended Landfill Franchise 38 September. 1994 development agreement, the provisions of this Agreement, the Use Permit and/or development agreement shall be read together and harmonized to the maximum extent possible to effectuate the intentions of the parties. In the case of any unresolved conflict between the provisions of this Agreement and the provisions of the Use Permit or any involved development agreement, the provisions of the Use Permit and/or development agreement shall control. Notwithstanding any other provision in this Agreement or in the Use Permit, importation of waste not originating in Contra Costa County shall be allowed as required by recent U.S. Supreme Court cases. (b) Operator has entered into an agreement with Contra Costa Water District (•'CCWD") the relevant portions of which are attached hereto as Exhibit D, which Exhibit is incorporated herein by this reference. If there is any conflict between this Agreement and Exhibit D, this Agreement shall prevail with respect to the relationship between Operator and the County. Section 13.10 CAPTIONS. The captions and headings used in this Agreement are for convenience and reference only and are not to be construed as controlling over the text of this Agreement. Section 13.11 DELEGATION BY BOARD. The Board may, in its discretion, delegate to a County employee or hearing officer any of its functions expressly or impliedly arising from this Agreement provided that in such case any decision made by such Board, County employee or officer may be appealed de novo to the Board. Amended Landfill Franchise 39 September, 1994 _ _ _ Section 13. 12 SEVERABILITY. If any term, provision, covenant or condition ("prevision") of the Agreement or the application of any provision of this Agreement to a particular situation is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect. Notwithstanding any other provision of this Agreement, if any provision of this Agreement in itself or as applied in any particular situation is held to be invalid, void or unenforceable, it is the intention of the parties that the remaining portions of this Agreement shall be continued in full force and effect and that the .invalid, void or unenforceable provision be severed therefrom. Section 13..13 MASCULINE GENDER USED. The masculine gender is sometimes used in this Agreement and is so used for convenience only and is not otherwise intended. Section 13.14 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 13.15 NOTICES. All notices or other communications ("Notice") to be given pursuant to this Agreement, including the notices required in Articles 6 and 10 hereof, shall be in writing and shall be deemed given when mailed by registered or certified United States mail, addressed to the parties as follows: To County: County of Centra Costa Attn: County Administrator Amended Landfill Franchise 40 September, 1994 To Operators Keller Canyon Landfill Company C/O: Browning Ferris Industries of California Attn: Ron Pfeifer, Regional Vice President 9188 Glen Oaks Blvd. , 3rd Floor Sun Valley, CA 91352 With Courtesy as designated by Browning-Ferris Industries of California. A change in address or a change in the person or title to which Notice is to be given shall be effectuated by Notice to the other party. IN WITNESS WHEREOF, this Agreement is effective on the date first provided on page one hereof. OPERATOR, Keller Canyon Landfill Company a California corporation By• . —e7?0-'CJ/M /"�_i�(�n Pres ent By: + ---y ce-P esident C CO RA C By. C air, Board of Supervisors ATTEST: By: OAM.A 0 lAtlpk clirk o e Board, Deputy v APPROVED AS TO FORM: By: Itfs 12.kc"4 County Counsel vim. COUNTY COUNSEL: RA COSTA COUWY. CALIF. Amended Landfill Franchise 41 September, 1994 . ����� ���� a 4 i• • F'IGUnE 2♦1 f PnOJECT SOLANO ` ttfidt1YV/1Y 1 `� LOCATION + r MAA(H • a''fi htr ti° . "rx•*tr �rY ` J� fJ .*� - COMMA 1.<r` �} i*. +l !fit" Tt' r'=rip +'•''t fta ` +}lt ."' 1s COSTA San Franci!CO ALAMED F 6 "j Fit J�:a rrr w..WweYrrrw.� f �! •.-"`• E p� tr Mrtrrrrrr.�r w 4 ,`• r }t,,'+ - ••! ' + t nEGIONAL LOCATION r": Cir 'j •t r* r ` ....iiw r......+. zx; i . t i..•4 , "� «.��Pt.'t� Fr'�♦y..`�+ � �+ •:^J'ry�' y l + `g f�• J ♦,c;�`r� ` y+ +�°' •+. •w: i't' !,•*.". " It w'•• tiJ +i�•;+:'r:, p " + :l. 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I* oar •,/".° J• ',} .::�i.y1..':.-r?.':y�:.5'�}r`� «, �' lflt! ! f! p�tCtfitilti� � t_ � *� �,� ..±."'`.•*� �i�»wwJr.rrr �YitYll �t`t>�Ilt:! f�ittJttt�itf+�",r • #nsii Pion •`� ;t �.��. }w•�l , + �% t Ver• ? t 's}. ;sop 0e101 sufftr,Ats• J �iMr «* +* •' 'r° �! J„ "`V / ` " �t�{("�'' ,/• Y r? �Y'i'rCy�.�a- �.�.Y;' "f�r•....J"'*`nF^t•kv ' *Wm • � r"'►,�•t, *4,`*•.....* ,X,..i�•.ya:.;.� ,}::..•, � ! �;;, �A * .w.wa.w s+� `rai+s+sr . r.. •1 *i,1 . �-_ �J`M �v �► .t':V4� ','c..�,.,.w,,..f.....h.,.. `�+;`••s tt .::.'.• .moi`:}1r •�.,. � � �•�,, to} �+v. Jr••a r " �' »�+ * r4_ 1`• r `vir{ �tid°" « iriIlrt JM�."par J+Jr JI"YD tri�! *ra trr 4�.•`�•. r v.'Yv'i ?``::::;:•r,.• .{7. iC!►�l E-IN FEET. EXHIBIT C GUAIt:"i,1.TY This Guaranty is made and entered Into this .O_ day of ate r- 1994 , by and between the County of Contra Costa (hereinafter "County") and , + ��, a corporation ("Guarantor"). RECITALS WHEREAS, Keller Canyon Landfill Company__ ("Operator"), an [indirect wholly owned subsidiary] of Guarantor desires to enter into a certain First Ameded Landfill Franchise Agreement with the County (the "Agreement") for the Keller Canyon Landfill; WHEREAS, pursuant to rection 13.1 of the Agreement, the County has demanded that Operator obtain certain assurances from Guarantor, as to all conditions and obligations of the Agreement to be fulfilled by Operator; and WHEREAS, in order to induce the County to enter into the Agreement with Operator, Guarantor desires to provide the County with said assurances as to all conditions and obligations of the ,Agreement to be fulfilled by Operator, NOW, THEREFORE, the County and Guarantor hereby agree as follows I. Guarantor hereby guarantees to the County the full performance by Operator of all conditions and obligations in the Agreement which are to be fulfilled by Operator, provided that the County has fulfilled all of its obligations under the: Agreement, and in particular, without limiting the foregoing, that the County has provided Operator with the requisite notice(s), opportunities to cure and any option to arbitrate notice(s), opportunities to cure and any option to arbitrate as provided for in the Agreement. 2. The County agrees to give Guarantor notice by certified mail, return receipt requested, at `I r 1-TX � ttention: General Counsel) each time that the County becomes aware of any fact or circumstance which may gide rise to an obligation of Guarantor to perform pursuant to this Guaranty. 3. The County shall not sell, assign or otherwise transfer this Guaranty, or its rights or obligations thereunder, without the written consent of Guarantor, which consent shall not be unreasonably withheld if the assignment is to a municipal corporation. IN WI'T`NESS WHEREOF, this Guaranty has been executed on the date first above written. LINTY CON RA COSTA By. GUARANTOR By: -� its: By: Its: df(a):1tf12:quaraaty.kc d EXHIBIT D tRelevant portions of Agreement between Operator and Conga Costa Water District] gGRE EMEH 1 THIS AGREEHENT ("Agreement" ) is entered into on June 20, 1990 by and between the Contra Costa Hater District, a district organized under Division 11 of the Hater Code ("District") , Browning-Ferris Industries, Inc. , a Delaware corporation and Keller Canyon Landfill Company, Inc. ("KCLC") , a California corporation and a wholly owned subsidiary of BFI. RECITALS This Agreement is entered into with reference to and reliance upon the following factual contexts (d) The District provides the drinking water for nearly 400,000 people residing in the District and is the water supplier r the major utility and industrial plants along the northern Contra Costa County shoreline, various municipal and industrial uses, landscape irrigation and irrigated agriculture. The District's present source of supply is through the Contra Costa canal ("Canal") , which presently carries 'water diverted from the Sacramento-San Joaquin Delta at two locations, Rock Slough near Knightsen, and Mallard Slough near Pittsburg, to the terminus of the Canal at. the Martinez Reservoir and points in between. The canal was completed in the 19401s and has been operated by the District since 1972. (e) on March It 1999, KCLC submitted to the County of Contra Costa ("the County") a Comprehensive Project Description of the proposed Keller Canyon Sanitary Landfill ('"Keller Canyon Landfill") to initiate the process of obtaining from the County the necessary land use permit and amendments required for the development and operation of the Keller Canyon Landfill. C. on February 20, 1990, the County board of Supervisors expressed its intent to approve Land Use Permit No. 2020-89 ("the Land Use Permit*) and related entitlemente , for the Keller Canyon Landfill if the referendum on the board's approval of the General Plan Amendment for the Kellar Canyon Landfill (Measure .C) is approved by the voters of Contra Costa County on June 8, 1990. The 'hand Use Permit will be subject to numerous conditions of approval (*the Conditions of Approval") , KCLC in proceeding or will proceed to apply for and obtain other County approvals and approvals from certain other agencies required for the development and operation of the Keller Canyon Landfill. D. The Keller Canyon Landfill site is located approximately 1 mile south of the Canal and within a surface water drainage basin that drains to the Sacramento River adjacent t© Mallard Slough. The Comprehensive Project Description for the Keller Canyon Landfill includes a permeable subdrain under the landfill liner to provide a secondary conduit and means of collection of leachate should any leachate escape from the landfill's containment system. L. . On duly 280, 1988, the District Board of Directors resolved to submit to the voters of the District a bond issue to finance the construction of a mater storage and supply system, including the Los Vaqueros Reservoir ("the Reservoir") , for the primary purpose of enhancing water quality and providing a source of emergency water supply for the District. F. On november 8, 1.988, the voters within they District approved the bond issue tci finance the construction of the Los Vaqueros Project. The District is proceeding to apply for and obtain permits required for the development and operation of the Reservoir. G. BFI is presently operating the Vasco Road Landfill, the working face of which is located about 1 wile from the Los Vaqueros watershed boundary. BFZ has applied for approvals from the County of Alameda and from certain other agencies required for the expansion of operation of the Vasco Road Landfill. H. KCLC staff and District staff have conferred and have determined that (1) additional provisions can be incorporated into the Conditions of Approval for the Keller Canyon Landfill to provide further protection and greater coordination regarding the ,ssues set forth herein, and (2) additional provisions can be Incorporated into operational procedures and present or future Conditions of Approval for the Vasco Road Landfill to provide further protection and greater coordination regarding the issues set forth herein. I. The District, KCLC, and BFI desire to provide for certain cooperative efforts, and to provide that (1) KCLC shall undertake certain obligations to insure that development of the Keller Canyon Landfill is compatible with the canal and Mallard Slough, and (2) BFI shall undertake certain obligations to insure that operation and development of the Vasco Road Landfill in compatible with the Reservoir. NON, THEREFORE, the parties hereto agree as follows: 1. mendmut t© Conditions cif Approvals KCLC shall use its best efforts to implement the Conditions of Approval of the Keller canyon Landfill in a manner which In- corporates the following contractual provisions hereby agreed upon by KCLC, BFI, and the District, KCLC shall also use its best efforts to incorporate the following contractual provisions into the Conditions of Approval of the Keller Canyon Landfill or a binding implementation program for the Conditions of Approval. BFI shall ,use its best efforts to implement the Conditions of Approval of the Vasco Road Landfill to incorporate the following .,ntractual *provisions hereby agreed upon by KCLC, BFI# and the District. BF1 shall also use its best efforts to ,incorporate the following contractual provisions into the Conditions of Approval of the Vasco Road Landfill or a binding implementation program for the conditions of Approval. The parties desire to seek to incorporate in the manner set forth in this paragraph the following obligations no these contractual obligations can be enforced by the respective Counties using all available remedies, in addition to the District's ability to enforce these provisions pursuant to thin Agreement. Keller Canyon _Land(t 1 1 (a) Rater Quality. KCLC shall, ,upon issuance of all 9 requisite regulatory approvals and permits, promptly pay to District the amount of $400000o to be used as Die trict may decide In its sole discretion to address water quality issues associated with the Canal or for potential Canal protection measures. At any time after the Keller Canyon Landfill commences operation, in the unlikely event that it is demonstrated that intrusion of water containing leachate-contaminated surface water or groundwater discharged from the landfill into the Canal is ` winent, then, KCLC at its cost shall Immediately take all steps reasonably necessary to provide protection against such intrusion, including Without limitation the repair, maintenance, replacement or reconstruction of Canal facilities (e.g. , replacement by enclosed pipeline, etc.) in accordance with the Districtle specifications and with Distriatts technical concurrence. ................................. ............................... ............................................................................................................................................._.......... ......... ......... ......... . ....................... ........................... . _ _ ......... ................. _ _ _ _ ...................................................... ....... _ _ M Droundwater Monitoring. KCLC shall install at least three (3) monitoring stations to ensure detection of movement of groundwater contaminants from the Keller Canyon Landfill site toward the Delta, the number, specificationA, and locations of, and the frequency of data collection from, which shall be agreed upon by the respective staff and consultants of KCLC and District, or in the alternative, KCLC shall agree to Install at least three (3) monitoring stations to ensure detection of movement of groundwater from the Keller Canyon Landfill site toward the Delta, the precise number, specifications, and locations of, and the frequency of data collection from, which shall be determined by the Regional Water Quality Control Board, San Francisco Say Region ("Regional Board") . M Data from C,roundwat+er Monitaring-St&t1ons. KCLC shall provide to the District simultaneously with the submission to the Regional Board all data collected from the groundwater monitoring rotations described above and shall provide to District staff and Its consultants the right to inspect each groundwater monitoring station at reasonable times to enable the District to verify the data collected. (d) Regional Board Submittals. KCLC shall forthwith provide thei District with all information and documentation submitted to date to the Regional Board in connection with its application for a Waste Discharge hermit for the Keller Canyon Landfill. KC'Lc shall immediately Notify the Regional Board of the —xisten+ce of this agreement and transmit a copy of this agreement to the Regional Board. With respect to information and documentation to be submitted in the future to the Regional Board, KCLC shall use its best efforts to provide the District with all such information and documentation to the District at least one (1) week prior to submittal to the Regional Board, and shall in any event provide the District with all ,such information and documentation no later than simultaneously with its submission to the Regional board. The District may generate comments pertaining to any topics discussed herein or in any modification hereof and KCLC shall forward such comments to the Regional Heard promptly upon KCLC's receipt of the comments. (e) Litter. if District notifies KCLC that litter generated by the Keller Canyon Landfill in adversely affecting the Canal or the Canal right-of-way, then KCLC shall Immediately ndertake such action as Is reasonably necessary to remedy the situation, including without limitation litter pickup in the affected areas, or installation of additional litter control measures at the landfill. if KCVO fails to take such action immediately. after receiving notice from the District, and if the problem arises as the result of the operation or development of the Keller Canyon Landfill, then (i) the district nay provide for litter pickup or other such measures at the Canal or the Canal right-of-way as the district determines are reasonably necessary to alleviate the identified problem; and (ii) KCLC shall reimburse the District for the reasonable cost of such litter pickup or other such measures. ................................................. ............................................................................................................................... ......... ......... . . .................................... .. ............................ ..... ..._ _ .............._........ ....................... . _ _ ...... .................................... _ __ _ ___ (f) HUlgatton-spf Bird Problems. If birds cause a potential water quality problem at the Reservoir in the judgment of the District or any regulatory body concerned with water quality, District and BFI shell jointly request the bounty Health Services Department to immediately investigate the scatter and determine what measures, including without limitation a contingency bird control program, are reasonably necessary in order to mitigate the adverse impacts of birds related to the Vasco Road Landfill. These mit!gation measures shall be carried out at the sole expense of BFI to the extent that the problem is attributed by the county Health Services Department to the Vasco Road Landfill. 2. 13elatihn sa Reaulatm- v » (a) This Agreement is not an approval 'of the Keller canyon Landfill or the Vasco Road Landfill or any aspect of the development, operation, or expansion of either landfill. The District does not have any authority to approve or disapprove either landfill except with regard to the provision of water service to, and the annexation into the District and Improvement, District No. 1 of either landfill site. Nothing in this Agreement shall be construed to in any way affect the District's discretionary determinations with respect to these matters or to require the District to petition the respective Local A4ency Formation Commissions for the counties of Alameda or Centra costa for such annexation. (b) The obligations set forth herein are in addition to, and independent of, KCLC's and BFI 's obligations pursuant to the Conditions of approval of the Keller Canyon Landfill and the Masco Road Landfill, respectively. Whether or not either County agrees to amend the respective Conditions of Approval to add the conditions set forth in paragraph 1, subparagraphs (a) through (e) for Keller Canyon Landfill and (a) througti (f) for Vasco Road -Landfill, or agrees to implement the Conditions of Approval in a manner which would incorporate the provisions of those subparagraphs, all obligations of KCLC and BFI set forth in those subparagraphs shall be enforceable obligations of KCLC and SFI by virtue of this Agreement. The obligations of KCLC under this Agreement shall be performed before the Keller Canyon Landfill receives any waste. (c) Nothing in this Agreement shall be construed to in .,..ty way limit any remedies which the District may have with regard to the matters discussed herein or to provide to the District any enforcement powers which the District does not otherwise possess with respect to the Conditions of Approval. The parties agree that the primary authority with responsibility for enforcing the Conditions of Approval is the county within whose jurisdiction the particular landfill lies. . (d) In their oral and written submittals for other county approvals and approvals from certain agencies required for the operation, development or future expansion of the Vasco Road Landfill, BFI shall at all times refer to the Los Vaqueros project as an existing project. Likewise, in its oral and written r imittals for approvals required for the development and operation of the Reservoir, the District shall at all times refer to the Vasco Road Landfill as an existing project. ..................................... .._......................................................................................................................... ..................................................................................................................................................._.... ..... ......... . ..................................... _ ......... _ _ ......... ......._ ................ r (e) KCLC staff and District staff have conferred regarding drinking water and groundwater protection Issues and available remedies. used on all information presently available and the additional, protection set forth In this agreement, District staff have determined that sufficient measures will be undertaken before the Keller Canyon Landfill accepts any waste to protect against contaminationof the waters in the canal. (f) pevertheless, to provide further protection against passible groundwater problems, KCLC and the District agree. that, If the Keller Canyon Landfill would render it impossible or impractical for the District to obtain or maintain all regulatory approvals necessary to continue to operate the Canal to provide lrinking voter in compliance with all applicable water quality standards, than the District shall be entitled to pursue any administrative or judicial remedies that it may have, including without limitation those set forth below in this subparagraph. similarly, SfI and the District agree that, if the operation or further development of the Vasco Road Sanitary Landfill, either independently or cumulatively in conjunction with the operation or further development of the Altamont Sanitary Landf ill and the Harsh canyon Landfill, would render it Impossible or impractical for the District to obtain all regulatory approvals necessary to construct and operate the Reservoir to provide high quality drinking water in compliance with all applicable water duality standards or to so cerate the Reservoir, then the District shall be entitled to pursue any administrative or judicial remedies that it may have, Including without limitation these get forth below in this subparagraph. Specifically, the District shall be entitled to seek any compliance, cease-and-desist, or other orders which may be imposed by any agency or court, including without limitation the Regional Board. Without limiting the foregoing, the district may seek any available orders from the Regional Board, including without 11mitation orders requiring additional detection monitoring, verification monitoring, corrective action, or closure of the landfill pursuant to 23 California Code of Regulations sections 2550-2559 and 2593 and other similar and successor regulations. The District, KCLC, and BF'1 acknowledge that these regulations apply to all existing and proposed landfills. The determination ' the appropriate order or remedy shall be made by the Regional Board, as provided by applicable state law and regulations. RCLC and BF1 shall consult promptly with the District regarding any such proceeding sought by the District, and shall provide the District with copies of all additional notices and documentation submitted to or received from the Regional Board in connection with any such proceeding. Finally the parties shall be entitled to seek any available judicial remedies at any time. This agreement does not constitute a waiver of any contentions, defenses, or objections that any party hereto may have regarding any regulatory or judicial proceeding commenced by any other party. 3. Smerctency Contacts For purposes of facilitating communication by the District to KCLC or an, RCLC and BFI shall each designate an emergency contact person for the District, and each shall provide the name and telephone number of such person. .................................................................. _................................................................................................................................................ .. ......... ................ .. _._...................... .... ............... .... ....._.. ..... .... ......... ........ ..._... . ........................... . _ _ _ ......... ......... ......................................... (a) The District shall be entitled to contact the emergency contact person, designated by KCLC directly if problems arise at or near the Canal or Mallard Slough relating to groundwater, litter s control, or other matters and such problems are or way be caused by development or operation of the Keller Canyon Landfill. Until another emergency contact person may be designated, the emergency contact person for KCLC shall be Boyd M. Olney, whose telephone number is (415) 655-4715. (b) The District shall be entitled to contact the emergency contact person designated by BF1 directly if problems arise at or near the Reservoir relating to groundwater, bird control, litter -*�ntrol, or ether smatters and such problems are: or may be caused by 'development or operation of the Vasco Road Landfill. Until another emergency contact person may be designated, the emergency contact person .for BF1 shall be Tim Cox, whose telephone number is (415) 147-0491. Noticee and demands made orally shall subsequently be confirmed in writing in the manner set forth in paragraph S herein. 4. Mater Treatment-Byoroducts. Neither KCLC nor BFI shall unreasonably. refuse to accept for disposal the District's water treatment byproducts generated by the Bollman Treatment plant or any water treatment plant that may commence operation in the future, assuming the byproducts comply with applicable regulatory requirements. S. general Froylsi ns. (a) F_ rIQr Aa eemints. This agreement contains the sole and only agreement of the parties hereto relating to the Canal, i successors, assigns, and subsidiaries. (i) Coyerningt�ay. This Agreement shall be governed by and construed according to the lags of the State of California. (j) Interpretation. This Agreement has been negotiated, reviewed, and revised by legal counsel for each of the parties hereto. This agreement shall not be subject to any rule of construction or inference that an agreement or any ambiguities in an agreement +shall be construed against the drafting party. (k) Narranty .of Authority+. Each party hereto warrants that the person executing this Agreement on its behalf is in fact duly authorized to do so. IN WITNESS HEREOF, the parties hereto have executed this 'agreement on the date first above written. CONTRA COSTA HATER DISTRICT KELLER CANYON LANDFILL COHPANY, INC. By: BY= q3 41e &te 8oat�aun, Pres dent Boyd H. Olney, Pr4raident Board of Directors KELLER CANYON LANDFILL COMPANY$ INC. Attes • • PROWMING-FERRIS INDUSTRIES, INC. 6 cretaryBy I f / r 'Rel I D. W se, Vce-Pres dent APPROVE© AS To FORHt BROWNING-FERRIS INDUSTRIES, INC. APPROV b AS TO FORM: By: elson r AND POL�.fiNER Ey To ruatt For TI'T`CHELL,. RALTZMAN , MARK, BASS, O11LEYER & HISHEL ................................................. ......................................................................................................................... ......... ......... ......... ............................................................... .. ......_... ... ......... ......... ......... . .................................... ......... ......... ......... ............. ........................... .... ..........................................................._...... ....... EXHIBIT A2 COUNTY OF CONTRA COSTA, STATE OF CALirumv4ux AMENDMENT NO. 2 TO FIRST AMENDED FRANCHISE AGREEMENT FOR THE KELLER CANYON LANDFILL THIS AMENDMENT NO. 2 to the FIRST AMENDED FRANCHISE AGREEMENT FOR THE KELLER CANYON LANDFILL is made and entered into this February 27 , 1996, by and between the COUNTY OF CONTRA COSTA (hereinafter "County") and FELLER CANYON LANDFILL COMPANY, a California Corporation, (hereinafter referred to as "Operator"). RECITALS WHEREAS, on September 13, 1994, the Board of Supervisors of County took action adopting a first amended franchise agreement with Operator, and WHEREAS, on November 1, 1994, the Board of Supervisors of County and Operator entered into Amendment No. 1 to the first amended franchise agreement with Operator, and WHEREAS, for administrative convenience the County has requested, and Operator agrees, to amend the provisions in the franchise agreement regarding County surcharges and fees for special handling and/or direct haul waste, so that County surcharges and fees on these types of waste will be the same as County surcharges and fees on transferred solid waste, NOW THEREFORE, the County and Operator, for and in consideration of the covenants and agreements as hereinafter set forth and for other good and valuable Amend No,2 to First Amended Landfill Franchise,February,1996. consideration, the receipt and sufficiency of which is hereby acknowledged, do mutually agree as follows: SECTION i. AMENDMENT. Subsection b. Of Section 6.4, Initial Surcharge, of the First Amended Franchise Agreement is hereby amended as follows (by adding t~E' language and deleting the strieken language): "b. Special (direct haul) Wastes, The Surcharge WWWWWWWO C. on special handling and/or direct haul waste received at the Landfill other than via a transfer station shall be [-Cle-A the Base Rate pit all othef dames are chrgedttr#his frail € rent i1 trrerrsd ............ wa$ e pursuant tobsacttcat� of this: eptrn 5:4 SECTION 11. OPERATION. This amendment shall apply to special handling and/or direct haul received at the Landfill from and after November 1, 1994. SECTION III. EFFECT. This amendment is entered for administrative convenience, and is not a redetermination of the surcharge within the meaning of Section 6.2. Amend No.2 to First Amended Land rt!Franchise,February,1996. IN WITNESS WHEREOF, this Agreement is effective on the date first provided on page one hereof. OPERATOR KELLER CANYON LANDFILL COMPANY, a California corporation By: President s By: e; ` Vice-President COUNTY OF CON CO TA By: �,. _..�• February 27 , 1996 C , Board of Supervisors ATTEST: By: , I. /'1'r , (i , 4 CI rk of the Board APPROVED AS TO FORM: By: 00iffillpiw. G& County Counsel Amend No.2 to Fim Amended Landfill Franchise,February,1946. EXHIBIT Al COUNTY OF CONTRA COSTA, STATE OF CA.UIFORNIA .AMENDMENT NO. I TO FIRST AMENDED FRANCHISE AGREEMENT FOR THE KELLER CANYON LANDFILL THIS AMENDMENT NO. I to the FIRST AMENDED FRANCHISE AGREEMENT FOR THE KELLER CANYON LANDFILL is made and entered into this November 1 , 1994 , by and between the COUNTY OF CONTRA COSTA (hereinafter "County" ) and KELLER CANYON LANDFILL COMPANY, a California Corporation, (hereinafter referred to as "Operator" ) . RECITALS WHEREAS, on September 13, 1994 , the Board of Supervisors of County took action concerning a first amended franchise agreement with Operator, and WHEREAS, the parties have reached agreement on substantive issue: concerning the September 13, 1994 action and are prepared to compromise their differences by agreeing that, without either parties waiving any rights as to said September 13, 1994 first amended franchise agreement, that said First Amended Franchise Agreement may be amended as set forth herein, NOW THEREFORE, the County and Operator, for and in consideration of the covenants and agreements as hereinafter set forth and for other goad and valuable consideration, the receipt-- and eceiptand sufficiency of which is hereby acknowledged, do mutually agree as follows. SECTION I. AMENDMENTS_ The following sections of Amend. No. 1 to 7-1rrt Amended Landfill FranWnise. Nov. 1, 1994 a u the First Amended Franchise Agreement are hereby amended as shown in this section (by adding 3e language and deleting the etc-leke.n.- language) : Amendment to section 6.2, Surcharge: "Section 6 . 2 SURCHARGE. The County may determine and establish at least once every two years, effective on the date determined by the Board of Supervisors (but initially no sooner than two year& ghte n most s from the effective date of this Agreement except for the purpose of decreasing the Surcharge in accordance with Section 6 ) , the Surcharge, which shall be added to the then applicable Base Rate, and collected as part of the Gate Rate. Operator w.L.11 be provided at least ninety (90 ) days ' written notice of any newly established Surcharge. In the absence of -INF- County establishing a particular Surcharge amount, the Surcharge to be collected by the Operator for the County shall be thirty percent ( 30%) of the then applicable Base Rate. " Amendment to section 6.4, Initial Surcharge: "Section 6 .4 INITIAL SURCHARGE. Effective on the effective date of this Agreement, the Surcharge shall be as set forth in this section. Amend. No. 1 to First Amended Landfill Franchise,Nov. 1, 1994 2 a Waste. Lanfalcpt a ...pra�,� ed .n s3�bc .on oif this aect%c�nhe tial Surcharge on Solid Waste received at the Landfillvia the deme Fill WasteReeevery and ransfe ' Mien . shall be as set forth in thrsect: ,ori ►, (_x_TA ti_ ah -ge) of the Franchise Agreement between the County and the operators of the Transfer Gt-et:iert Landfill, as follows: 22 . Amount. Twenty-five percent of the eembined r£`ransfer £tatien PEqprietary Rate andthe Landfill Base Rate which is in ; dd tio:i .to any surcharge levied 'afid alieeteci>:based upon the acme-Perma ~;ent Transfer Station pxopr--etary .rate.. 3 . Funding of---Frogra-ms from Surcharge. During the period covered by the above initial Surcharge, casts of 1 ::-current County programs except for and .B fees (required or authorized by the Use Permit or this Agreement) shall be funded from said 25% Transfer Station and Landfill Surcharges. In addition, any household hazardous waste fee imposed by the Board pursuant to Public Resources Code section 43213 shall be collected (deducted) from said 25% Surcharge amounts. t� xttad�ng any ether prcvis oF. baa on r t3reemea' , any Board bf . Supero sosf deteda�daxed fees Amend. No. 1 to First Arnended'Land#ifl Franchise, Nov. 1, 1994 3 x;�cud#g amzng athess any titex.xd and regu=ed .fee, . c�ca1 �aacenent ed:-.16 X'Xatc ':. ..93�. . ee ...may t the ward's d� re*ctr� ox rhe cy arsid�t .c�n t a stair shed surcharge f+ esifge Closure, Litigation. Operator agrees and acknowledges that an appropriate amount (five percent) of the Surcharge as determined by the County's Board of Supervisors may and shall be utilized pursuant to Board Order(s ) and a trust account arrangement for any landfill closure or post-closure or related litigation expenses . Any amount not so expended may be otherwise utilized for other Surcharge purposes . 5 . Reconsideration. Within or approximately six months from the date of this Agreement, the County's Board of Supervisors intends to reconsider and re-evaluate the household hazardous waste and he J;ordfi1 z 3cssiire ari;dlc+ litigation excise programs, their levels off fundings, whether one or more ,programs should be modified, reduced, or eliminated, and a Surcharge adjustment. 6.4 Collection. For Solid Waste received at the Landfill via the Transfer Station, the eembined Width Surcharge' and any other Keller Mandated Fees may be collected at the Transfer Station. Amend. No. 1 to First Arnended Landfill Franchise, Nov. 1, 1994 4 b. :hAn L Wastes . The Surcharge on spe .a and l !ard or s aXoct hal waste received at the Landfill other than via -t�. -Stransfer 'cation shall be ten percent of the Base Ratelale dated Amendment to Section 6 .5, Contracts: "Section 6 . 5 CONTRACTS. For all contracts entered for the disposal of Solid Waste at the Transfer Station, the Surcharge ercentag applicable at the time of the disposal contract shall apply for the term of said contract. The parties agree that any later established sureharce amounts shall not apply to waste received pursuant to such Solid Waste contract for the term of said contract . Operator shall advise County of any disposal contract subject to the privileges of this section immediately upon execution. Operator shall provide County with any and all information requested by County concerning any such Contract, including providing County with copies of such contracts upon request. " SECTION II. EFFECT. Neither party, by its agreement and execution of this Amendment No. 1 to the first Amended Franchise ,Agreement, waives any of its rights existing prior to the Amend. No. 1 to Firs#Amended Landfill Franchise, Nov. 1, 1994 execution hereof, and nothing herein shall be construed as a waiver by either party of its rights or assertions, including, but not limited to, those set forth in the above recitals. Should any subsequent dispute arise between the County and the Operator concerning the action of September 13, 1994 on the franchise agreement, both parties agree that this Amendment, any action taken by the Board of Supervisors on November 1 Qr 8, 1994 , and any related action by Operator shall not be admissible in any administrative, equitable or legal proceeding to determine intent or effect of the action of September 13, 1994 . IN WITNESS WHEREOF, this Agreement is effective on the date firs* provided on page one hereof . OPERATOR KELLER CA14YON LANDFILL COMPANY, a California corporation y v President By• Vice-President CO NTY OF C TRA OST By: Chair, Board of Supervisors Amend.No. t to First Amended Landfili Franchise, Nov. t, 1994 6 ......................................................................................... ........................................................................................._.._.._............................................................................................................................................... ......... ......... ......... ................... ........ .......... ........................... ... _ ............... _............. . ..._.... .._...._. _ _ _ __ __ __ a+ Y ATTEST: By: f7 yr. Clerk of the Beard �t�^y �+-��y +�•� CUA*OunLtoyCounsel APPROVED 1"X.S 3.V FLJZSr�: gy ly I LN-' _ vjv_mem-ls kalcan.aml T>��'V ': ':'."::` :' Go:�'��•E� , Amend. No. 1 to First Amended Landfill Franchise, Nov. 1, t"�t 7 EXHIBIT B TO CONDITIONAL CONSENT TO FRANCHISE ASSIGNMENT AGREEMENT Keller has undertaken certain activities and made certain commitments with regard to its operations as rewired by the Franchise Agreement. The following is intended to set forth several of said operations, current activities and/or ongoing commitments of Keller which Allied agrees to continue, undertake and/or assume as required by the Franchise Agreement. Those activities or obligations include but are not necessarily limited to: I. Allied shall proceed in a timely manner with the land use permit reviews by the County of the Keller Canyon Landfill and Transfer Station and further agrees to correct any deficiencies discovered in the review. 2. Allied shall make such payments to County as required to pay for staff/contractors time in the implementation of the associated land use permit. Allied agrees to assume existing and future liabilities of Keller for such review and enforcement of land use permit conditions of approval and related costs. EXHIBIT C AP&LIED WASTE INDUSTRIESt INC . December 29, 1998 Ms. Janet Schneider Executive Director Central.Contra Costa Solid Waste Authority _ 1280 Civic Drive, Suite 314 c Walnut Creep, CA 94596 : Response to Request for Information - Assignment of Solid Wasteilleectiorm, ' r Transfer and Disposal Franchise Agreement i '3� c:) Dear Ms. Schneider: On. behalf of Browning-Ferris Industries (BFI), Allied Waste Industries, Inc. (Allied) is responding to your December 9, 1998 correspondence regarding assignment of the Solid Waste; Collection, Transfer and Disposal Franchise Agreement. With the majority of questions being centered around Allied's organizational structure, experience and plans for the Contra Costa/Solano service area, a direct response from Allied appeared to be the most appropriate. Responses are presented in a manner commensurate with the format of your.December 9, 1998 transmittal and represent the most complete information available at this time. Several Franchisors are in various stages of implementing diversion Rrogranis to assist them in attaining AB 939 goads. Therefore, some responses are contingent pan further development and evaluation of these programs with the various FranchisorsA While BFI has initiated numerous discussions with these entities, the specifics of the programs .and their implementation, has not been finalized and most likely will not be determined until the early part of 1999. As such,it would be difficult for Allied or.BFI to provide as specific a response as anticipated without the benefit of continued discussions with these Franchisors. In these instants,our response is intended to illustrate our commitment to assisting the Franchisors with achieving their diversion goals in a timely and efficient manner. A. Description of Acquiring Entity 1. The name of the acquiring entity will be Allied Waste Industries, Inc. , a Delaware corporation. The address noted in your transmittal is correct and notices for contractual matters should be forwarded to the Pleasant Hill Bayshore Disposal collection operation address which is as follows: Y SS80 N. Grecrlway-Hayden Loop, Ste. 100 /Scottsdale, AZ 8S260 /602A23_2.946 /602.42-3.9424 rAx 441 N. Buchanan Circle Pacheco, CA 94553 2-4. Response to Item A(l) eliminates the need for a responses to these items. 5. Allied Waste Industries is organized in a decentralized fashion placing the decision making power with the District Manager in the field. While a District Manager may have several people on a management team such as public sector and community involvement/education representatives, operations personnel and customer service managers, they are ultimately empowered to make the decisions which will impact the service provided to the Franchisors. The Contra Costa/Solano division will be part of Allied's Northern California District. The other operating entities within this district include (1) an operations contract with the South Napa Valley Waste Management Authority for transfer and disposal of waste (located in Napa, CA) and (2) a hauling company, composting facility and landfill in Stockton, CA. The Northern California District is one of six districts in Allied's Western Region located in Scottsdale,AZ. Allied has a total of five regions across the United States which are typically staffed by relatively few individuals. Typical position titles include a Regional Controller,Regional Landfill Engineer and Regional Safety Manager all of whom report to the Regional Vice President. District Managers report directly to the Regional Vice President for a specific Region. The Regional Vice Presidents report to the Vice President of Operations who in turn reports to the Chief Operating Officer(COO). The COO reports to Allied's President/Chairman of the Board. It is important to once again point out that the company's management philosophy is centered upon local managers being held responsible for decisions made in a given service area. While regional and corporate staff are contacted on various matters, their role is one of support and guidance versus policy making and taking the lead on issues that affect customers such as the Franchisors. B. Management 1. The names, occupations and addresses of key individuals within Allied's management structure are as follows: Michael Caprio District Manager (upon closure of the transaction District Manager's Northern California office will be located at Pleasant Hill Bayshore Hauling 1145 W. Charter Way company): Stockton, CA 95206 209-466-5192 Page 2 _. _... .............................................................................................. ........................................ ........ .__. ....... .. ................... Don Swierenga West Region Vice President Allied West Region Office 7201 B. Camelback Road, Suite 375 Scottsdale, AZ 85251 602-596-9596 Don Slager Vice President of Operations Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 Larry Henke Chief Operating Officer Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2.946 Tom Van Weldon President/Chairman of the Board Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 A complete listing of all officers for Allied'Waste.Industries, Inc. is included in Allied's 1997 Annual Report which was supplied to all of the Franchisors during the past month. 2. Allied is currently in the process of evaluating staffing levels and various personnel for the Contra Costa/Solano service area. It is our intent to proceed with the transition in an orderly and non-,disruptive manner and pmt of this entails utilizing as many of the existing personnel as is practical and efficient. However, it has been the practice of the company to not make decisions on personnel and staffing levels hastily. This can lead to unnecessary disruptions and customer service issues which could otherwise be avoided. Our intent is to assume control of the operations on February 1, 1999 and manage them for a period of 45-60 days, or longer, prior to making ultimate staffing decisions. By proceeding in this manner, Allied is better able to make informed, educated decisions in terms of staffing and operations. The end result is a smoother transition and a work force that was selected through evaluation of employees first hand and not through second hand information or faulty assumptions. Page 3 In terms of employees that may become employed by Allied from outside of BFI's Contra Costa/Solano service area,it would be premature and inappropriate to discuss the names and backgrounds of these individuals at this point in time. The names and experience levels of these individuals will most likely not be made public until after the transaction closes in late January due to the potentially awkward situation which could occur if the names of these individuals become public. A copy of the currently anticipated organizational chart for the Contra Costa/Solano service area is attached. Allied reserves the right to make adjustments to the structure based upon our evaluations over the next month during due diligence and our findings during the initial period of managing the operations. While we do not anticipate any material deviation from this structure, we trust that the Franchisors can respect our need for flexibility with the ultimate goal of providing timely and efficient service to our customers. 3. While Allied has made some decisions relative to former management employees of BFI, we believe that it would be inappropriate for these decisions to be discussed in the context of this transmittal. Although unlikely, it is also important for discretion to be utilized in in the event that the transaction does not close and.BFI remains the operator in the service area. Our goal during the transition, and afterwards, is to disrupt as little of the operations as possible and to simply improve upon the services currently being provided. At this point in time we do not envision engaging any former BFI employees through employment or consulting agreements. Any existing management employees that Allied wishes to retain will be hired as full-time personnel. To the best of our knowledge, the cost of these agreements are typically not allowable in the rates. Notwithstanding this, Allied has no plans to request an increase in rates should our position on engaging current BE employees in this manner change. C. Management Experience I. The following is a listing of publicly franchised solid waste collection operations presently operated by Allied. In the majority of these cases, Allied has become the operator through an acquisition or asset swap and has been required to transition into an existing contractual arrangement. The list includes information pertaining to the size of the city being served, the type of service, equipment utilized, dates when Allied began servicing the entity, an estimated number of households and commercial customers as well as contact information for the franchise representative. Page 4 _..............................................................._.................................................................................................................................................................................................. .......................................................................................................................................................................................................................................................................................................................... City of Chula Vista Mr. David Rollins City Manager 276 e Avenue Chula Vista, CA 91910 619-691-5031 * Residential refuse, greenwaste and curbside recyclables (approx. 30,000 households utilizing side load and rear load collection vehicles) • Commercial refuse and recycling(approx. 1500 customers utilizing front end load type collection vehicles-includes multi-family residences) * Population of approximately 150,000 * Allied began service through Laidlaw Waste Systems acquisition in Fall 1996 City of Stockton Mr. Gary Ingraham Assistant City Manager City Hall 425 N. El Dorado Street Stockton, CA 95202 209-937-8212 * Residential refuse and curbside recyclables(27,500 household utilizing rear loaders for refuse and semi-automated compartmentalized recycling vehicles) * Commercial refuse is collected competitively(multi-family is competitive as well) * Population of approximately 250,000 * Allied began service through an acquisition in June 1998 (Sunrise Sanitation is the name of entity which services the City) San,Joaquin County Mr. Torn Horton Director of Solid Waste 1810 E. Hazelton Street Stockton, CA 95201 209-468-3068 * Residential refuse and curbside recycling(19,000 households utilizing similar collection methodology as City of Stockton) Subscription greenwaste program for 2000 homes utilizing fully automated side loaders Commercial is competitive and includes multi-family residences Population of approximately 50,000 for the district served. Allied began service through acquisition noted under City of Stockton reference. Page 5 City of North Richland Hills (Dallas-Ft. Worth metropolitan area) Mr. Larry Cunningham City Manager 7301 N.E. Loop 820 North Richland Kills, TX 76180 817-581-5500 * Twice per week residential service for approximately 13,000 customers utilizing rear loaders and once per week collection utilizing semi-automated compartmentalized vehicles. * Commercial service to approximately 500 customers utilizing front end load and roll-off collection vehicles(includes multi-family). * Population of approximately 53,150 * Allied began service through Laidlaw Waste Systems acquisition in 1996 City of Bedford (Dallas-Ft. Worth metropolitan area) Chuck Barnett Assistant City Manager 2000 Forest Ridge Drive Bedford, TX 76021 817-952-2106 * Twice per week residential collection utilizing front load collection vehicles for 11,200 homes * Once per week residential collection for curbside recyclables utilizing semi-automated compartmentalized vehicles. * Commercial service to approx. 450 customers utilizing front load and roll-off collection trucks(includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 5 1,000 City of Euless (Dallas-Ft.Worth metropolitan area) Tom Hart City Manager 201 N. Ector Euless, TX 76039 817-685-1400 * Twice per week residential collection utilizing front load vehicles for 9500 customers * Commercial service to approx. 470 accounts utilizing front load and roll-off collection trucks(includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 40,850 Page 6 ...... ......... ........ ......... ......... ......... ......... .......................................................................................................................................................................................................................................................................................................................... ...... ......... _ _ _ __ 2. For the references listed above, Allied serves multiple jurisdictions within the Stockton division of the Northern California District (City of Stockton& San Joaquin County). Within this division, Allied also serves the City of Lathrop(approx. population 10,400) with a fully automated program for refuse,green waste and commingled recyclables. The China Vista hauling division also services the City of Imperial Beach(approx. population 15,000)with fully automated refuse, green waste and recyclables collection. All of the contracts in the Dallas-Ft. Worth metropolitan area are serviced. from Allied's Dallas district and involve extensive interaction with multiple entities. The District also services additional cities from this location which do not have a population of 50,000 people or more. 3-4. As noted previously,Allied is still in the process of identifying various individuals to fill management positions in the Contra Costa/Solano service area. Due to the fact that key individuals will most likely be hired externally and their employment will be contingent upon successful close of the transaction, it would be inappropriate for their identities to be provided. Additionally, providing a summary of their experience levels and backgrounds would also be inappropriate. While Allied understands the desire for the Franchisors to gain a comfort level with individuals placed in these key management positions, it would be irresponsible for our firm to jeopardize an individual's current employment situation by discussing any aspects of their background at this point in time. Due to their employment most likely being contingent upon successful closure of the asset swap, their identities may also not be divulged until the transaction has been consummated. Allied has every intent of employing competent experienced personnel to mage the operations and business base within the Contra Costa/Solano service area. We recognize the 'importance of retaining quality 'individuals not only to successfully manage our investment but also to build and maintain relationships with our employees and customers. As soon as practical and appropriate, Allied will notify the Franchisors who the key management personnel will be and what their background and experience levels are. Any input from the Franchisors will be welcomed at that point in time. 5. Same response as Items 3 &4. It is worth noting that as Northern California District Manager, I have responsibility for all collection, transfer, processing and disposal operations. Prior to becoming employed with Allied Waste Industries, Inc., I was employed by Browning-Ferris Industries primarily in the management of landfills and transfer operations. Of most interest to the Franchise cities is my experience as District Manager for N. California landfills at BFI where I worked at the Keller Canyon Landfill for a period of 2.5 years. As such,I am very familiar with the challenges presented by the facility from an engineering, environmental, political and operational standpoint. The role Page 7 of District Manager at BFI also included supervision of transfer operations which complemented the landfill. During my final year of employment with the company, I served as manager of BFI's public sector business in the Bay Area and became very familiar with the Contra Costa/Solano franchise contracts as well as the type of service provider that is envisioned by the Franchisors. This exposure provided me with not only a good working knowledge of the area but also of the expectations placed upon a solid waste service provider in terms of customer service,community involvement, labor relations and overall approach to managing a business in the area that provides a vital public service. Prior to my employment with BFI, I served as Regional Environmental Manager for Norcal Waste Systems Central Valley and Bay Area disposal facilities (five years). My primary responsibilities included permitting, compliance, construction management and interaction with municipal entities on contract issues. While the bulk of my experience has been in the transfer and disposal side of the industry, I have gained extensive experience with collection operations and have a strong working knowledge of the key elements required to run a successful hauling division. The primary areas of fogs for Allied at the Pleasant Hill Bayshore Disposal hauling company will be customer service, assisting the Franchisors in attaining their AB939 goals, labor relations, expenditure of capital necessary to provide all the service required contractually, maintenance of equipment, safety and risk management, efficient utilization of personnel and employee morale. Allied also believes that significant opportunities exist to work cooperatively with other local haulers in order to provide an improved service package to the Franchisors. D. Transition of Operations I. Allied anticipates a smooth and seamless transition of the operations. This is the case because of our intent to predominantly utilize existing employees and largely the same routing structure at the hauling division. As such, personnel in the field will be very familiar with the various nuances of a particular area. Within the past three to four years Allied Waste has grown substantially. The primary driving force of this growth has been through acquisitions and as such, the company has obtained a great deal of experience in integrating acquired entities into our system. It is important to note that the decentralized organizational structure of the company allows for a large degree of flexibility in the integration of acquisitions. While some components of the company's approach to managing a business, such as information systems, are constant,a large degree of flexibility exists in terms of how a division is staffed, customer service protocol, approach to community involvement and operational guidelines. Allied Page 8 _....__.... _................................................................................................................................................................................................................. ............................................................................................................................................................................................................................................................................................................................ understands that each service area is different from the next and that a one size fits all approach has proven to be ineffective in the solid waste industry. It has been Allied's practice to take a cautious approach to integrating acquisitions. During the due diligence stage ofacquiring a company, a great deal is Darned about how the operation functions and how well it is serving the customer base. however, it is often very difficult to truly gain a solid understanding of how a particular division functions without managing the operations for a period of time. By allowing for an adequate evaluation period, new management can be confident that the decisions being made in terms of staffing and organizational dynamics are appropriate and not based upon faulty assumptions. Our approach to integrating operations in the Contra Costa/Solano service area will be similar to that outlined above. While we have made some decisions on retention of management personnel, we anticipate that the majority of the workforce in place at the operating companies will remain constant. During the first 45-60 clays under Allied management, our personnel will evaluate the existing set of procedures and practices as well as personnel to determine whether there is a need for change in any key positions. Our assessment may conclude that the existing group of personnel is adequate and very little if any change is required. It may also lead us to conclude that some changes in terms of personnel and operational practices are necessary and these changes will be instituted so that the least amount of disruption occurs. It is worth noting that transition from one information system and biing/payables system can be an area where customer service is impacted the most. BFI and Allied have agreed to work closely and cooperatively in this area to ensure a smooth transition. Our experience with integrating multiple systems(including SAP)into our financial systems is extensive and preliminary assessments by our MIS team indicate that the Contra C,ostalSolano service area can be transitioned to Allied information systems with minimal difficulty. In order to assist in this process, Allied has retained as a full-time employee BFI's Bay Area Controller. Her knowledge of the Contra Costa/Solano accounting procedures and requirements is extensive and will be a great asset m ensuring that Allied's systems are formatted to satisfy all the reporting and customer service requirements of the Franchisors. She has been involved with the Contra Costa hauling operation prior to BFI's acquisition in the early 1990's and was intimately associated with it's integration into BFI's financial systems utilized at that point in time as well as their recent transition to SAP. Allied anticipates retaining BFI's billing system for a short period of time after the transition to ensure that proper billing is maintained. Allied has also received positive feedback from several key operations employees at all of the operating locations in relation to their desire to remain employed at the facilities. Page 9 All of these employees have been with the respective facilities for an extended period of time and have an extensive base of knowledge that will serve Allied well in maintaining a suitable level of service during the transition stage. I have been involved in the latter stages of integrating the Stockton division into Allied from an operational standpoint. My primary focus has been to evaluate operational practices and determine whether they can be made more efficient or customer friendly through the use of different technology or whether re-capitalization of a truck fleet/heavy equipment or site improvements will be more beneficial from an operating efficiency or customer service standpoint. As a case in point, these decisions were made only after careful assessment and review and were not the result of preliminary assessment. It is very likely that the vast majority offield employees servicing various Franchisors will remain in the same roles as those that were held while the company was managed by BFI. Their experience with various routes and needs of individual customers (ie. senior citizens) is invaluable and Allied would be remiss in upsetting this component of the operation. Our initial review of the administrative side of the operations leads us to believe that while some adjustments are necessary, the basics of the day to day functions of the company are relatively sound. As noted previously, these assumptions will be reviewed once Allied assumes management control of the entities. . In short, the overall approach of transition through evaluation and assessment during a change in management has allowed Allied to integrate numerous companies with minimal or no disruption to the customers being serviced. As noted in section C(1), many of the municipal contracts that are listed were obtained through acquisitions and it would be instructive for the Franchisors to inquire into how the transition phase of the acquisition proceeded. As with our response to several of the items in Sections B and C, it would be inappropriate to divulge the experience of potential employees in transitioning acquisitions. Allied's intent is to minimize the amount of disruption in all facets of the operation. Our knowledge of the expectations of the Franchisors in terms of customer service,operations, community involvement and interaction with city officials as well as the familiarity with the current accounting systems should allow for a trouble free and timely transfer of operations. 2. I will be the primary liaison between Allied and the Franchisors during the transition of operations. As noted previously,I have extensive experience through my tenure with BFI and Norcal in dealing with the public sector. In the past month I have taken the time to meet all of the City Managers and JPA directors in order to gain an understanding of their individual needs as well as provide them the opportunity to get to know myself and Allied. As noted during these meetings, should there be a need for further discussion or to have Page 10 ............................... ....... ......... ......... .. ........ .......... .............. ........... ..._.. ..._ .. ......... ....._.... ......... ....._............... ......... ........... ....... ......... myself or other Allied representatives meet with individual council and Beard members, we would be pleased to make ourselves available. 3. Allied Waste provided documentation to Teamsters Local 315 and Operating Engineers Local 3 of our intent to honor the existing obligations of BFI throughout the remaining term of the collective bargaining agreements. A copy of this letter was sent to all of the Franchisors. During my tenure with.BFI, I was involved in the successful resolution of several labor relations issues and contract negotiations. More specifically, I was BFI's primary contact during the beginning of thew negotiations with Kcal 3 at the Keller Canyon Landfill. An agreement was reached between the two parties with no disruption in service at the facility. The individuals who are being contemplated for some of the key management positions also have extensive experience in managing labor relations issues including negotiations from both sides of the bargaining table. 4. The response to Item D(1)should provide the Franchisors with an understanding of how Allied intends to approach the staffing of the Contra Costa/Solano operations. It is our intent to approach this area of the transition methodically and to evaluate our needs once we assume control of the operations. Making decisions on these issues prior to having the opportunity to evaluate the operations first hand would be inappropriate and could impact service levels to the Franchise cities. E. Litigation A transmittal from Allied's corporate legal department is attached and should provide a suitable response to this request. F. Contintent Envirornmental Liability 1. Based upon Allied's review of the environmental condition of the properties associated with the Contra Costa service area, we have not identified any contingent environmental liabilities. Typically these type of liabilities are associated with older disposal facilities. The Keller Canyon facility began operations in 1992 and has been constructed in accordance with state-of-the-art design criteria. To date, these environmental controls show no signs of malfunction and Allied anticipates continued positive performance in this area. Provisions for funding of closure/post-closure maintenance costs and compensation for any associated accrued future liabilities will be considered as part of the Definitive Agreement between the two companies. Page i l G. Insurance and Indemnity I. Allied's Legal & Corporate Secretary has prepared a letter which outlines the corporation's capabilities in terms of securing performance bonds and letters of credit. Upon assignment of the franchise agreements to Allied, performance bonds in the amounts specified in the agreements or if necessary,the individual Franchisor(Antioch and Clayton), will be forwarded to each of the Franchisors. With an extensive base of business in California, Allied has relationships with bonding companies within the state who would provide these assurances. 2--4. Copies of certificates of insurance are attached and indicate the various coverages available to the corporation. As with the performance bonds, upon assignment of the agreements Allied will provide individual certificates to the Franchisors which name them as additional insured, These coverages will not only apply to the hauling division but also to the STAN.Transfer Station and the Keller Canyon Landfill. 5. Allied and BE have both agreed to assume the liabilities of the other party as part of the Definitive Agreement currently being prepared. As a result both parties will assume the contractual obligations of the other in terms of indemnity obligations including CBRCLA, hazardous waste and other environmental liability claims. Assumption of any liability will also include actions or events which may have occurred prior to the assignment of the franchise agreements to Allied. BFT will not retain responsibility for any indemnity obligations to Franchisors after the transaction has closed. A copy of the Definitive Agreement for the transaction will be provided to the Franchisors upon it's completion which is anticipated to be two weeks. R. Acquisition Financing 1. As noted above, a Definitive Agreement is currently being finalized and should be available within two weeks. The responses to items (a) through (i) should provide the Franchisors with a general outline of how the transaction will be structured. (a) Purchase of company stock has been agreed upon for the Contra Costa/Solano component of the asset swap. (b) The total purchase price for the overall transaction is$142MM. The amount ascribed to the Contra Costa/Solano service area has yet to be determined. (c) A full monetary payment will be made to BFI from Allied at the close of the transaction. See attached letter from Allied's Corporate Secretary regarding financing sources for the corporation. (d) Cash at the close of the transaction. (e) There will be no consulting agreements offered to current BFI employees, (f) Terms to be contained in final Definitive Agreement associated with the transaction. Page 12 (g) Terms to be contained in final Definitive Agreement associated with the transaction. (h)Due diligence ends January 10, 1999. (i) At this point in time neither party envisions potential conflicts with the existing fianchise agreements. Allied has indicated to the Franchisors that they are willing to assume the terms and conditions of each individual agreement. . As noted in the preceding set of responses, a letter from Allies Corporate Secretary regarding corporate financing and bonding capabilities is attached. Working capital required during the transition will be financed through the line of credit referenced in this document. L Capital Re uirements 1. The vast majority of the capital expenditures in the service area over the next five years will be at the Feller Canyon facility. Our current projections indicate that approximately $1820 million will be expended to develop additional airspace to accommodate refuse flow from the Franchisors. The bulk of these expenditures will be for earthmoving, installation of composite lining systems and leachate management and is expected to occur in the first two years of Allied's operation of the landfill. These estimates will be refined as designs for individual cells are developed. As of this point in time, we do not anticipate any other major construction activities to occur at the landfill facilities with the exception of fitter fence installation and drainage improvements necessary for normal site operations(approx. $75,000 annually). Worth noting is that we anticipate on January 5, 1999, waste currently being diverted to the Potrero Hills Landfill will return to Keller Canyon. Current airspace that has been developed should provide approximately one year of capacity for waste from all of the Franchisors. Construction during the spring and summer of 1999 should provide suitable amounts of airspace for continued acceptance of these wastes. In terms of the transfer station and hauling operations there may be minor improvements made to the fitcifity that would be necessary during the normal course of operations over the next five years. However, at the present time we do not anticipate any major construction activities at either of the facilities. Some all weather surfacing of adjacent property may be necessary to accommodate bin and container storage. This is anticipated to cost approximately $75,000 (to occur in 1999). In addition, all weather areas for transfer and processing ofgreenwaste and recyclables may be constructed during 1999 to accomodate additional diversion programs established with the Franchisors or arrangements with other local haulers(approx. $100,000). The capital expenditures outlined above were identified and reviewed during the evaluation process prior to the announcement of the transaction and are ones that Allied views to be necessary in the normal course of doing business. As such, we do not Page 13 anticipate adjustments to rates as a result of these projects outside of what is allowed under the franchise agreements (ie. CPI's, pass-through of costs for compliance with new regulations, new regulatory surcharges, etc.). The source of funding for these projects will be the line of credit that discussed in Section H. 2. During the course of operating solid waste collection, transfer and landfill operations equipment will need to be replaced on a regular schedule. The costs associated with these replacements is viewed by Allied as those that are necessary to provide service to our customers and have already been considered in the existing rate base. Costs associated with the implementation of new programs may require capital expenditures and services outside of those covered under the existing agreements and as such, may require adjustments to the rate structure(ie. green waste collection programs, etc.). Allied's FY99 budget for capital expenditures in the Contra Costa/Solano service area, outside of landfill cell development is as follows: General site improvements(transfer station&collection co.) $ 220,000 Collection vehicles $2,195,000 Landfill equipment(new purchases&rebuilds) $1,375,000 Shop equipment, service trucks, maintenance upgrades $ 300,000 Containers, debris boxes, carts, compactors $ 605,000 Total $4,695,000 While we do not anticipate this level of capital expenditure on an annual basis, we do envision replacement of a certain number of collection vehicles, landfill heavy equipment, support vehicles and containers on a regular basis. We have not developed detailed budgets for years 2-5 but based on past experience and knowledge of the age of the fleet in all three locations, the capital expenditures on an annual basis would generally run 50-60% of those anticipated for FY99. The types of vehicles which will require replacement in FY99 are recycling collection equipment and rear loaders. All of the vehicles being replaced are nearing the end of their depreciation cycle (ie. 10 years). In addition,we anticipate that additional roll-off trucks may need to be purchased to satisfy demand and improve response times throughout the service area. It is important to note that all of the purchases outlined above are replacements. As such, Allied views these expenditures as those necessary to provide service under the framework of the existing contractual arrangements. As additional equipment reaches the end of it's anticipated life a decision will be made to either replace it with a new vehicle or perform a complete rebuild of the chassis and body of the truck. It is important to note that a large portion of the fleet(approx. 40%) consists of relatively new fully automated and front load vehicles purchased to service the CCCSWA Page 14 ......................... ... ............................................................................................................................................................................................................................. _. ......... ......... ......... ........... ........... ..._.... ... ...... .._.... _....._............................................................_._................................................................. service area and the City of Ant och's and Clayton's automated collection programs. As such, we do not anticipate that many of these vehicles will be replaced within the next five years. Only one vehicle associated with a new program(green waste in Clayton)is included in the preceding list. It is our understanding that a contract amendment has been negotiated and signed between BFI and Clayton to provide for this service and Allied has indicated to the City of Clayton that we plan to honer the terms of the contract amendment and initiate the service which is scheduled to begun on March 1, 1999. As noted previously, Allied is aware that a number of the Franchisors are interested in establishing green waste collection programs and we are very interested in providing these services to these areas. The framework and terms of these collection programs will be discussed and agreed to with each Franchisor,prior to the implementation of the programs. Any new services that are provided or negotiated that are outside the current terms of the collection agreements will be discussed with the individual Franchisors on a case by case basis. In terms of transfer station and landfill equipment, we do anticipate that some of the transfer trailers will be replaced in the next five years as well as some of the existing landfill equipment. We envision two transfer assemblies being-replaced on an annual basis and at least one piece of heavy equipment being replaced annually after 1999. Once again,these are expenditures that.Allied views to be necessary in the normal course of doing business and would not result in an additional request for funding or cost recovery from the Franchisors. J._Financim of Existing Operations Prior to entering into a Letter of Intent for acquisition of operating entities, Allied performed a thorough analysis of whether the operations will satisfy our financial benchmarks. Additional analysis and review is also performed during the due diligence stage of the acquisition process. Based upon our assessments of the Contra Costalgolano service area, Allied believes that projected revenues over the next five years under the existing Franchise agreements are sufficient for compliance with the obligations of each of the Franchisors' agreements. As noted previously,any new programs envisioned by the Franchisors may result in added costs but this will ultimately be determined through discussion with each individual entity. At this point in time we believe that it is premature to discuss any planned operating efficiencies that may occur as a result of a change in ownership. As stated above, it has and will be Allied's practice when assimilating acquisitions to proceed in a methodical and orderly manner so that decisions of this nature are based upon first hand experience versus assumptions arrived at through review of financial statements and cursory reviews. Page 15 Conversely, we do not anticipate any significant increases in costs as a result of the change in ownership. My knowledge of how the operating entities are currently staffed and managed as well as our review of year over year financial reports, do not indicate that significant increases in expenses will occur. At this point in time,Allied envisions rates being affected only through CPI's, new programs (ie. greenwaste collection)and other cost recovery items that are currently allowed under the existing franchise agreements. With the exception of CPI's, which in most agreements are specifically called out in terms of timing, it is difficult to provide a schedule for potential increases in rates due to the fact that so much of this schedule depends upon the individual Franchisors and the specifics of the programs they request. K, Other Considerations 1. As noted in the preceding section, Allied intends to provide service to the Franchisors within the fi-amework of the existing franchise agreements. We do not consider a change of ownership to be an opportunity to approach the Franchisors and request additional funding. As part of the due diligence process and our existing knowledge of the franchise agreements, Allied has a thorough understanding of the nature of the revenue base and the types of costs that are allowable under the terms and conditions of the agreements. Any future requests for increases will be handled in a manner commensurate with the terms of the individual franchise agreements(ie. CPI requests by certain dates). Any additional costs associated with the implementation of new programs (ie. greenwaste collection) will be determined through evaluation of the type of program desired by a Franchisor as well as the existing service offered. Statements regarding specific adjustments outside of the standard CPI increases would be inappropriate at this time as much of this will be decided by the needs of the individual Franchisors. Allied's intent is to provide as stable a rate base as possible to our customers while providing a high level of quality in terms of service. We believe the existing revenue base is sufficient to provide a reasonable profit on the services required in the franchise agreements. Costs associated with any new or expanded service will need to be determined through assessment of costs associated with the new programs and any synergies with the existing service package. 2. During our discussions with the various Franchisors concerning the asset swap, several issues related to customer service have been brought forth. Many of these issues center around the inability of customers to receive service in a timely fashion(ie. maximum 24 hour turnaround)as well as not being able to receive carts or containers when requested. These type of concerns can be addressed by investment of the capital discussed in Section I and servicing all back orders on container and cart requests. Based upon our Page 16 ....................................................................... ............................................ ........................................................................................................................................................................................................ preliminary evaluation, it is our sense that a large portion of the customer service complaints have stemmed from service representatives having to tell customers that their requests cannot be accommodated due to a lack of operational follow through. Allied believes this issue can be resolved relatively quickly and the capital budget for FY'99 envisions expenditures necessary to address the issue. As with ether facets of the operation, Allied intends to evaluate the existing personnel and customer service procedures during the initial stages of the transition. We believe it is important to review existing procedures and practices first hand and to not make assumptions based upon cursory review. Changes in customer,service procedures may occur only after a thorough review of procedures has occurred. These changes may be as simple as providing training to individuals on proper procedures for responding to issues in a fashion that is commensurate with the expectations of the Franchisors. Allied may also determine that the existing personnel staffing the customer service group are better suited to other rales. Our goal is to staff the customer service group with individuals who understand the importance of placing the customer's needs first and that when a negative response is appropriate, it is delivered in a polite and courteous manner. To a large degree, the approach to customer service is dictated by the example set by management and the performance benchmarks that are established. Customer service does not always entail saying "yes" but it does involve making every attempt to resolve a given issue in a timely and responsive manner. As noted previously,BFI and Allied have agreed to work cooperatively to ensure that the existing level of customer service is maintained. This may entail the use of BFI's current customer management system for a brief period of time to allow for an orderly transition to .Allied's customer management systems. Allied has also held discussions with existing customer service employees and the majority have indicated a willingness to remain with the company following the management transition. These employees will be evaluated during the initial 45.60 period and a determination will be made by both parties as to their ultimate disposition. 3. A number of the Franchisors have indicated a desire to implement green waste and mixed paper or commercial recycling programs within their jurisdictions. Allied has indicated their willingness to provide the service necessary to the Franchisors in working towards their AB939 goals. The timing for implementation of these programs is largely dependent upon the needs and goals of the individual Franchisors. Allied believes that any new diversion programs desired by the Franchisors can be implemented during 1999. As noted previously,costs associated with the implementation of these programs will be discussed on a case by case basis and will largely be dependent upon the type and level of service requested and hove it ties into the existing service package. Page 17 4. Based upon our initial review of the Pleasant Hill Bayshore hauling division, there appears to be a deficiency in the turnaround times for debris box service and commercial containers. Without having first hand experience running the operation on a daily basis, it is difficult to determine whether this issue is related to a shortage of containers or bins or whether additional routes need to be added to service the existing;customer base. The deficient turn around times may also be a product of routing or a combination of all three of these issues. Allied has indicated to all of the Franchisors that they intend to honor the terms of the existing franchise agreements and provide service in a timely manner to the customer base. Once the management transition has occurred and Allied has had the opportunity to evaluate the cause of this issue, appropriate changes will be instituted to ensure that . customers receive service generally within [24 hours of their request]. 5. Some of the franchise agreements require the service provider to offer commercial recycling services. In these instances, Allied plans to continue these programs and make every effort to increase diversion in the commercial sector. A review of the existing programs will occur once the management transition takes place and determinations will be made as to the relative success of the programs. Possible means of enhancing the programs could include greater efforts towards advertising the service and educating the community, increased service flexibility (ie. different commodities) and possible efficiencies gained through integration with other recycling programs. BFI currently provides street sweeping service to the City of Benicia and has had preliminary discussions with the City of Clayton regarding their desire to implement a similar program. Allied has indicated to both of these entities that we are willing to continue or initiate street sweeping services and would also be interested in discussing the program with other Franchisors. Allied's intent is to work cooperatively with all of the Franchisors and provide them with high quality service at a reasonable cost and to assist them in achieving their AB939 diversion goals. We are hopeful that this transmittal will respond to all of the issues put forward by the Franchisors. However, in the event that other areas exist which require further clarification,we would be pleased to provide additional responses. Sincerely, �\t4� 41�� Michael Caprio District Manager Northern California Page 18 ..................................................................................................................................................................................................................................... ......... ......... ......... ......... ......... ............ ....... .................... ...._....._ __ ......................_._........................................................................................................... MAC:mc enclosures cc: Richard mss , City of Clayton Joseph Tanner, City of Pleasant Hill Michael Ramsey, City of Antioch Marcia Raines, City of Martinez Otto Giuliani, City of Benicia Dennis M. Barry, Contra Costa.County Community Development Thomas Bruen, Esq. Kent Alm,Esq. . Paul Nelson, Browning-Ferris Industries Page 19 conY� C1 Cl .�.► .� C� eta ru ;� � �,� v- �--� Crf W cn •� cCt p � yt3 a> � U � � t C3 0 o' Cd a a� w `- �Or� s U 0 T ca DEC--30-1998 10:03 ALLIED WASTE NORTH AmER I C P.01/01 AAI" ULIED WASTE I N D STRI ES, INC. Memorandum Tw. Mwa Capdo Ric* ,iahn FIM Jo Lynn Write cc. Data IMMS Rot Com Costa—Response to Regulatory Agency Below is the suggested response for q n E 1.: In ft pmt five years,A ed Waste Industries, Im (Wliedl, Its affi` and s idieries. h not had any 1%g (cM, criminal or administrative} related to sfliid waste activities that tree reSUftd in an adverse resolution or gability in an amount in emm of$100,000, nor does Allied,its afMates or sub-AL-ides have any penning Ngatim miaW to Wid waste activities that s+nests reef in excess of$100,000. Page I TOTAL P.01 ALLIED WASTE INDUSTRIES , INC . December 21, 1998 To Whom It May Concern: Allied Waste North America (AWNA), a wholly owned subsidiary of Allied Waste Industries, Inc. (AWIN), maintain a $1.1 billion Credit Facility with Citibank, N.A., Citicorp USA, Inc., Credit Suisse First Boston, and Goldman Sachs Credit Partners, L.P. Part of this Credit Facility is a $800 million revolving Credit Facility that AWNA may draw upon to fund the acquisition, capital expenditures and working capital needs of the Company and its operating subsidiaries. Furthermore, AWNA and AWIN have the capability to provide performance bonds up to $100 million through third party bonding agents and brokers. In addition, AWNA and AWIN may provide letters of credit up to $150 million. Allied Waste Industries, Inc., headquartered in Scottsdale, Arizona, is a vertically integrated solid waste management company providing non-hazardous waste collection, transfer, recycling and disposal services to approximately 2.4 million residential, municipal and commercial customers located in 28 states. The company currently conducts its operations through 114 collection companies, 72 transfer stations, and 26 recycling facilities and 72 landfills. Y y, . Helm Vice President, Legal & Corporate Secretary GTR/ab Agtmb122198.1 15880 N. Greenway-Hayden Loop, Ste. 100 /Scottsdale. AZ 85260 /602.423.2946 !602.423.9424 FAx i, , if, �� axYu tea,s,s t gULtIrUbIOL WILLIS CORROON CtMMI, LNS � e002 . '. • .A. n y q 17-L2 098 143377 THS CERTIFICATE IS ISSUER AS A MATTER QC>Ft�RMyATION {vallis Corroon Corporation,09`'Arizons ONLY AND S NO R112M UP��1 N `TI'3E CERTIFICATE 7310 North 161th Street II+C))LUM THIS CERTIFICATE DOES NOT AMEND, EXTEND OR Suite 300 ALIEN THE COVERAGE AFFX) D3 BY THE POLICIES BEI.OW. Phoenix AZ 85021.5299 COMPANIES AFFORDING COVERAGE (602)870-7000 co' ,Afty Commerce&Industry Ins.Co. Becky'Still.CIC A acsnRr sD .,.American International SpeciakY Una$ S Allied Waste Industries,Inc, cowAmn 5AFECO Insurance Company of America 158:10 N.Greenway-Hayden C Loop,Suite 100! A Scottsdale AZ 85.60 rAmerican Guarantee&IJa�ty Insurance Company D rrM 13 TO COMFY THAT THE POLI=OF INMMNCE L=M 88.0W HAVE SEEN ISWW TO THE INSURED MMM ABCSV'E MR THE POLICY PER= IN10 CATED. MC)rW"SrAND(NG AW.REGU RIBAEM7. TSI CSR CONISMONN C7F ANY COMPACT OR OTHER DCJCXJ&M(r WITH RESPECT TO WHICH THIS CIN IFICATE,UAY SE =WED OR MAY !"AIN, THE INSURANCE AFFOMED BY THE POLICIES =CNBED HEREN 8S 7SL WVZT TO ALL THE T'ERIAS, W==*N3 AM C ONOMNS Cf=JCH I'CSUCIES. LIMITS ZHOWN MAY HAVE BEM REDUCM BY PAID C LAfl& TYPE CF adS#tRANCE -T POLICY NUitT3 li Com POLICY LOAM A GENERALLIAS&M L3408191l3A 14AUG4998 01-JAN-ISSS aEw-fuLAowwATE _ r 2.460.000 j sERCYAtaL L2xscLmr .. AMf1.CI O A.0 0 0 CLA MS MAM [-K OCCUR �AC V tNJUpY 3 1.400.0001 a. 0WNEr3et0NTRA s rr EAC}f _.�_ s 1.000.0001 FIRE E1A1�fAtt� aneisat d '�B.B 0 B i SaErSE3fP' a» � 6.000� A AUTtSfiiOS LC UAStLM 'S05332GRA 14-AUG-1998 01-JAN-1999 1.000.00[S aatraEtS s�Llt�atT # X ANYAUM ALLCSWNEC AUTOS SCOILYRAJURY SCHMULMOAMOS X NAED AUTM BWLY*UUF1Y s c AP-0 Z UAl dITY A=(X4Ly-EA^CCt0GKr S ANYALiM CMHMTHAHAUMCN F Sr... r �^•;^ f ACr s }f.�CiRES3AYE ffi t3 ExiCESSLt"UrrY E8185408 14-AUG-1998 01-IAN-1999 AACH 00MVF9DKZ s 50.i10A,000 tlN{ERE3.LAAFa A+QCiRF{�AtE � 511.440.41JI7 OTH"THAN UMM S U;M PSf7lT1i� � - - C WORKERS COMPeMATICM AIM C8780�432 14-AUG-1998131-JAIL-1993 X EMPL0v0wUAdILZrY EL EACH THERRCFRIETCRd MvU;M w-Pt�C.1GYi.it,6f' S 1 sX11111.$tlll iNOL OFMERS Me R 8M 400.000 0 o'"EaEaccess Uabil'rty EUOSIOSSS3 13-AUG-1398 01-JAN-1999 S0.0001000 50,000.000 tiEri►ttON CF OPEFFA'Ftt} i_CCA°SIOK'"..}Y€NICt. jSpEC�At.�sE?t5 SEE ATTACHED t r SHOULD ANY OF INC ABOVE OE:aC1US"POUCIES BE CANCELLED SNE THE EXPiRtAMN DATE THEMOF, THE. i UWQ COMPANY WILL ENDEAVOR TO UAtL U.S.Sank Trust NAtional.Assodatsan 30 DAYS WfUrTFU HOME TO THE CERTMATE HOLDER NAMED To THE LEFY, Furst Trust Can-tar BUT FAILURE TO MAIL SUCH NOTICE SHAD.NOOSE NO OBUGATION OR LIAMLrT ! 'ISO East Fifth Av'unua ANY WHO UPON E COMPAY. as AQEwrs OR Rl�f feTATTV"ES. St.Paul MEN 85101 RESEM7 J,G/dl1.JO tau iz.35 EA,1 6028706102 WILLIS CORROON COMML LNS 0004 .---- WU tS sssM tsAX V AijC rn1 -D 1998 H�Di€D EL f as A � C 1�C1C}�5i�t�T"��iT LiF fl��t 1�1.Tia���t��`t}V n AI $Y'THEUP �C1YY. MUM 13377 1 1 t±orrocts Corporatism of Arktons 7310 North 16th Street Allied Waste Industries.lnc. Suite 300 16880 N.Greenway4iayden Phoenix AZ 85020.5299 Loop,Suite 100 (502)870-7040 Scottsdale AZ €S260 Becky Stat.C1C TM IS To CERT"tFY rMr THE MMES OF INSL PAi ICE MTM MDW HAVE BEM OWED TO THE WSMED WAWD AWVE FOR THE FOGGY PE-9100 SNOMTEL). NOTWIT"HSTANOM ANY RMWFWAGNtT. TEAM OR CON ION OF ANY CON MAdC"C OR 071M DMANDIT W M RESPECT TO WHICH THIS CUMFICATE MAY SE ISSUED OR MAY MUM. THE 94SUPANiCE AFFORDED RY THE POLICIES DESMSED 1S SUEUMT TO All. THE TERMS, ECLUSIONS AND C ONDMOM OF SUCH POLXAES. 1.UMS MAY HAVE BEEN RMUCED BY PATO C WMS. T1fPL'Of8tlRAA POt iC4 NCENBER C►OLICY�ATE OVOUCY W"71" LIU= ! ATE Carriers Travelers Indemnity Co. of IL Policy #d KTJC'MB122D454 Term: 8114/98-1/1199 POLLUTION Coverages $5,000.000 Per Occurrence $5,000,000 Aggregate Limit $1 ,000.000 Deductible Coverage applies to Third Party Claims for on and off site Bodily Injury and Property Damage Liability and off-site glean up of nes conditions. Coverage is Claims Made Carriers American International Specialty Lines Ins. Co. Policy # PLS 8198100 Term: 1/1/98 -1/1/01 W40UL x ANY OF THE AWVX SEL PQUCW-%W CANC>11,EO BEFORE IME EXPtRAVW CATS THS'ME #AY WIM ENDEAVOR TO MAC U.S.Sank Trust National Aasociatirn 3.0._ DAYS WRITTER 1407=TO YMC LTE HOWER MAMED TO THE LEFT. First Twat Cantor WJF`FASIAM TO MAIL.SUCH WT"3"L WOSE.NO OW"T10H OR UALIAM ISO East Filth A~uo OF ANY WHO UPON TiT CO"MONnX AWMTS OR A€PAFsEWrATLYES. St.Paul MN 55101 A �.tt-��w.4.,dro.Ya.,.r-- ��yrr���...i��yq c��a�:y�r,sy.�,,�.^v.., �t�Hyym}��s • a 'C"...^"',"e4w}+»�ixs�+w+rw:-.-•-rrr :y±e :. .'2e',� �yp�,�" �yyrey g.,y,^�rS�s+.'2ex •7iiW.drY iTeiv?aJLx .J:�T i+!,Y .+}>i:.-»;... n_• h'Lhi .ssS:^.^:-`-`.o`:ia r.rw's;' ..a?!c.�:a:2::%c:. -eiMW ..w'�'.. 7ir�M",K:. i;1Ll. „",.ktiN.7.a.`."'v;?-ri 0 lid zi U � � -ai c� to o An, m 0 C`a -4-atb tn A) o '10 Q 't o _ "Cl 2,5 O o ................... ....................................................................... . .................................................................................................................... DEC-30--1998 10:03 ALLIED WASTE NORTH PMER I C P.01/0-1 P&- LI WASTE IND U STIR I E S, INC. Memorandum To: IV like Ceprio Rick VV*hn From Jo Lynn White CGs out= 12MM8 Ree Cwtm Costa-Response to Regutatory Agency Below is the suggested cesportse for question E.1.: In the pest five years,Aided 'Waste tndusWes, Inc. ("Allied*), Its affiliates and subsidiaries, haw not had any litigation (civil, criminal or adrninisttative) related to solid waste des that has resufted in an adverse resolution or fiablk in an amount in exom of$100,000. nor does Allied, its affWates or subsidiaries have any pending Ngation related to solid waste activilks that requests m ief in excess of$100,000. Page 1 TOTAL P.01 { AALILIED WASTE INDUSTRIES , INC . December 21, 1998 To Whom It May Concern: Allied Waste North America (AWNA), a wholly owned subsidiary of Allied Waste Industries, Inc. (AWIN), maintain a $1.1 billion Credit Facility with Citibank, N.A., Citicorp USA, Inc.,.Credit Suisse First Boston, and Goldman Sachs Credit Partners, L.P. Part of this Credit Facility is a $800 million revolving Credit Facility that AWNA may draw upon to fund the acquisition, capital expenditures and working capital needs of the Company and its operating subsidiaries. Furthermore, AWNA and AWIN have the capability to provide performance bonds up to $100 million through third party bonding agents and brokers. In addition, AWNA and AWIN may provide letters of credit up to $180 million. Allied Waste Industries, Inc., headquartered in Scottsdale, Arizona, is a vertically integrated solid waste management company providing non-hazardous waste collection, transfer, recycling and disposal services to approximately 2.4 million residential, municipal and commercial customers located in 28 states. The company currently conducts its operations through 114 collection companies, 72 transfer stations, and 26 recycling facilities and 72 landfills. /Respey, . Helm Vice President, Legal & Corporate Secretary GTR/ab Agtrab122198.1 15880 N. Greenway-Hayden Loop, Ste. 100 /Scottsdale, AZ 85260 /602.423.2946 /602.423.9424 FAX .... ............-............................................................................ ..................................................................................................................................................... ........ ......... ......._. _ .............................. ..... __ .. ......... ..._ _ e 1"ft t + t� Fed ► i ,r;,; +'a �. 'zra w+a,..��?^,x^eY* y •,�"x,f. • w,t. - R t- «t.,, • 143377 ' S ONS Mormon C'rww'tion of Arizona 6. Suite 300 I Phoenix AZ .T' ♦! :�' may..`+t.^.t 't t• L�.! 8602"299 trt •'F-.r ht ' (6 02) t Seek 11L CIC Alried Waste Industries. ._ ♦ N.Greenway-Hayden ♦♦ t Loop,SoAte ♦♦ Scottsdale AZ • h♦ t 3 '. £t t Y3r xx, sxcPROM ^ ° °%Sv ' vx €tuw'. ' Mz t twyxs� K.�s�,s,,.m, r acs�oa ',� e ' awx+ +'' Y � -! ++7•, `# •M # - - +:. ♦ # _ :IIF ! ♦ �R• .^.f', f,.•- li.• __ •• �"'.t! INN - - ` - ♦._ _ __ .+ ♦ - [cid. . rc..mac+.Sf' URI{ F F f tea"! i 11 i,4 Y R R4• r t { i t 19 I J IAI .fi wet .I-2♦ ^� <. Y } } f t f ♦ M.' M 13 ME x-- � f IF t♦ t to a!a nts :. ,�;, ff THE PAOMETOV tit tit .... ..AD SEE ATTACHED s z a :°�^ �,. - ?'"st7�.s �" •,�cx ° ,�ak. }a.�x -,¢' ��".+S° •` 6���`�"�`." �- '.:.t` ,..s�,wzk''t�-r�.cx e�','�..,k..Y ate.s,-�.,.�..,��'<•:..w .4•A+..,.#t tf� �. .firws' +r;« �..." -+'` ...a_rY"'�e.3"�^3:c;'w<< ar ♦ ar ! e•3^ ♦3^ St 12/17/98 THU 12.34 FAX 6028786102 WILLIS CORROON COMMI, LNS 0fl3 Ct1RROGl1 ¢ - $ME DATE THIS CR.TlFlCA S EI2 AS 1{ 11A A ENL! N 7 � G Is A MG YON P'OLlc"17-D-CIECAV HOLDER.THIS C>rR"rI1=KATE t1C�ES Nc�r�� LO hNSURd] 1+13377 PRODIIc.ER wills Corraoa Corporation of Ar ona 7310 North 16th Street Allied Waste Industries,Inc. Suite 300 15880 N.Greenwa"ayden Phoenix AZ 850.20.5299 Loop,Suite 100 (802)870-7000 Scottsdale AZ 85260 Becky Still,c1C THIS IS TO CirAi1FY THAT THE PC}t1C1ES OF 1Id31JFiANCE US—MD ea:Lr�vv ll+tVE SEEN iSSLIED TO THE INSi1RED MA IM ASWE FOR THE POLICY PEAl0i iNWATED, 1'IorM HSTANOINC, ANY REt7UIREM>rNt TERM OR CONO=N OF ANY CONTRACT' OR OTHER DOS VM RESPwr 717 WNCH THL CERMCATE MAY Be 1 rSfo OR MAY PERTAIN, THE MURANCE AFFOROED 8Y THE POUCiES DESCRIBED HERGN95 t ` EXCLlUMONS AND CON drrlO'M OF SUCH POUCIE5. UMIM MAY HAVE BI E{4 REDUCM BY PALO CX AIMS TYPE OF INSURANC€ PO=XUiMBER Pmx=urea Ihr14 I P*U=zxPfl%ATION DATEC OL UMCPS DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS Property Coverage: Insures against Risks of Direct Physical Loss subject to policy forms, conditions and exclusions_ Valuation: Actual Cash Value _ Equipment Replacement Cost - other Property Limits: Blanket Real . Personal Property & Equipment $352, 150,347 Blanket Business Interruption $ 13,944,000 Additional Coverages: Bailer & Machinery $150,000,000 Flood (other than Zane A) $ 25,000,000 Flood Zone A $ 2, 500.000 Earthquake other than California, Utah. Alaska Hawaii and Puerta Rico $ 25,000,000 Equipment limit per occurrence $ 7, 500,000 Equipment maximum limit per item$ 2, 500.000 Deductibles.- All eductibles.All Other Insured Lasses $10,000 Flood $50,000 Earthquake $50. 000 Windstorm in "Tier One" Counties 2% subject to minimum of $100,000 ............. wa . SHOULD ANY OF THE ABOW DESCHOW POUCM5 BE CANCE e D BEFORE THE EXP UtA'W" DATE THEREOF* THE ZMW C ONPANY WU-t ENOEAVOR TO MAIL U.S.Bank Trust National Association 30 DAY S VMrTEN NOTICE TO TREC E RTMATE NO(DM NAMED TO THE LF.Ff, First Trust Center BUT FACE TO MAIL.SUCH NOTICE SNALL IMPOSE go CetjoAnON OR UA8IU1Y 180 East Fifth Avenue OF AMY XOM UPON THE C 01WP m Am-'UM OR REPRESQMTWE5. SL Paul MN 55101 U7H R ESENfAA 1�tfIF�S CC3fifll?f� � . .. .. ....................... ........................................................................................................................ ......... ......... ......... ......... .......... ......... ......... ............._.......... ........ ......... ......... ......... ......... ......... ......... ..............._....................... .._........ ........... ....... ................. ......._... xcs La�yts wu iz:ss I`AK 6028706102 WILLIS CCIl ROON COMML LNS Q004 A"WILLIS K=E"TE PAVOon-r) �1 E . THIS A I� C TB DOES NOT AMEND A id R AL.` LTHE CdVEI��X '. BV THE i' 00. 1 tttsumm 143377 MOWER Witlis Conroon Corporation of Arimns 7310 North tSW Street Allied Waste industries.Inc. Suite 3001 16880 N.Greenway l-1aydon phoonoc AZ 85020-5299 Loop.suite 100 (602)870-7000 Scottsdale A2 85260 Rocky Still,CIC THIS a LS TO C6R"l FYY THAT THE €OLICIES OF INSURANCE LISTED BaJOW HAVE BEEN ISSUED TO THE INSURED WJAW ABOVE FOR THE POLICY PERIOD INDICATED. IJ0rWff146rAN tNG ANY ReQUIREMEN1: TERM OR CONDMON OF ANY CONTRACT OR OTHM DOaAlMr VATH RESPECT T40 Ydfow THIS CERTIFICATE MAY BE ISSUED OR MAY PERUIN. THE *1SURANCE AFFORDED 13Y THE POLICIES Ci BED-HMM IS 6UBI r To ALL THE TERMS, EXCLUMNS AND CONDITIONS of SUCH FK'i►..SCIES. UUrrS MAY HAVE BEEN REDLY BY PAID C LAIf+t& 1yPg # POLICY t HABERPOLICY EFfEC:3M POLICY E"ItA7M Ijtttia: DATE VA E Carrier: Travelers Indemnity Co. of IL Policy #s KTJCMB122D454 Term.- 8/14/98-1/1/99 POLLUTION Coverage.- $5.000,000 Per Occurrence $6.000,000 Aggregate Limit $1 ,000,000 Deductible Coverage applies to Third Party Claims for on and off site Bodily Injury and Property Damage Liability and off-site clean up of new conditions. Coverage is Claims Made ;. Carrier: American International Specialty Lines Ins. Co. £: Policy # PLS 8198100 ..til Term: 1/1/98 -1/1/01 sHOUM AW CF THE AWAM aEsMew reuccft W cAAtceum tiMRE T14E 9MRAT1C7M DATE TAE;.R&M, T#M MWnM COMPAW WI L ENDE'AYtla Tea MAIL U.S.Bank Trot Nallanwl Assodatson -3Q SAYS withtEM KOTA=TO THE SATE HOLOCR t(MED TO THE L First Trot Cerater WIT FAQ TO UAL SUCH WOME 3"JUL tIT NO 0GLIOATIott On UAEtUTY 180 East Fifth Avwetuw OF ANY BCWO UPON rtM C OMPA stz AGMTS OR HE'Pfi'E'SEitt'A'tiY'€Ss. 5t.Paul MN 55101 R A �.��. .�a.: ,. AGREEMENT REGARDING CONDITIONAL CONSENT TO FRANCHISE ASSIGNMENT €. Parties, Effective Date. Effective on February 2 , 1999, the County of Contra Costa, a political subdivision of the State of California ("County"), Browning-Ferris Industries of California, Inc., a California corporation ("BFIC"), Acme Fill Corporation, a California corporation („Acme") and Allied Waste Industries, Inc., a Delaware corporation ("Allied"), promise and agree as follows: 2. Background. a. County, Acme and BFIC are parties a franchise agreement entitled "Permanent Transfer Station Franchise Agreement", as amended by Amendment No. 1, attached hereto as Exhibit A and Exhibit Al and incorporated herein by this reference ("Franchise"). b. BFIC desires to assign its interest in the Franchise to Allied in connection with Browning-Ferris Industries, Inc.'s ("BFI") sale and transfer of certain assets to Allied, and BFIC is a subsidiary of BFI. C. Allied desires and agrees to assume, perform and discharge all obligations of BFIC under the Franchise. d. The consent of County is required for BFIC's assignment of its interest in the Franchise to Allied, and County is willing to provide such consent based on the promises and representations of Allied and BFIC herein and subject to the conditions set forth below. e. The Central Contra Costa Solid Waste Authority seat a Request For Information (on behalf of the County and other local jurisdictions) to Dennis Fenton of BFI, dated December 9, 1998, and Allied provided a substantive response to the Request For Information, dated December 29, 1998. f. County has relied, in part, on the responses provided in the December 29, 1998 response from Allied in the County's consideration of whether to consent to the assignment, particularly on the stated commitments of Allied with regard to high levels of customer service, adequacy of internal financing of operational and capital needs, and the assumption of all liabilities and responsibilities under the Franchise. 9. Allied has demonstrated knowledge of the level of services being provided by BFIC and has voiced a strong commitment to provide the levels of service being provided by BFIC, as more fully set forth in the Franchise and Exhibit B hereto. Pagel 3. Assignment. BFIC assigns and transfers to Allied, and Allied accepts such transfer and assignment from BFIC of all of BFIC's rights and obligations under the Franchise. 4. Representations of BFIC. BFIC represents and warrants to County as follows: as BFIC is not in default in any respect of any requirement of the Franchise, and no event has occurred in which with the passage of time would constitute a default under the Franchise; and b. BFIC has agreed to assign its interest in the Franchise to Allied; and C. This assignment is part of a multi-asset/sale transection expected to close in February 1999 ("closing"), wherein BFI is selling all of its Contra Costa and Solano County operations, including the collection franchises, the leased operations of the Contra Costa Transfer & Recovery Station and the Keller Canyon landfill; and d. BFIC's assignment of this Franchise is subject to the successful closing of the purchase/sale agreement. BFIC's assignment of this Franchise is not effective until the requirements set forth in paragraph 7 below have been met. 5. Representations of Allied. Allied represents and warrants to County as follows: a. Allied promises and agrees to assume, perform and discharge all obligations of BFIC under the Franchise from and after the effective date of the assignment (paragraph 7); and b. Allied has the professional competence, experience, resources and commitment to and shall carry out the obligations of BFIC in a manner which will meet or exceed the existing service and quality levels performed by BFIC, including those responsibilities set forth in Exhibit B, attached hereto and incorporated herein by this reference, and C. The information provided in that letter from Michael Caprio dated December 29, 1998 is true and correct, including, but not limited to, the ability of Allied to provide for the short and long term operating and capital needs of the Contra Costa/Solana Division and the Northern California District of Allied's operations. A copy of said letter is attached hereto as Exhibit C and is incorporated herein by this reference; and d. Allied agrees to assume existing and future liabilities of BFIC, including all, indemnity obligations provided for in the Franchise, for actions or events which may have occurred prior to and after the assignment of the franchise to Allied; and Page 2 e. Allied agrees to make such payments to County as may exist or be required as of the date of the closing, including required payments based on revenue or amount of waste accepted at the Contra Costa Transfer & Recovery Station (also mown as Acme Fill Waste Recovery and Transfer Station or Permanent Transfer Station). G. Consent of County. Subject to and in reliance on the representations set forth above, County hereby consents to the assignment of BFIC's interest in the Franchise to Allied and releases BFIC from any further obligations thereunder from and after the effective date set forth in paragraph 7 below. 7. Effective Date of Assignment. The assignment shall be effective upon the closing having occurred and upon Allied providing to the County, evidence acceptable to the County, all insurance required by Sections 10.1, 10.2 and 10.3 of the Franchise, and the Faithful Performance Surety required by Section 10.4 of the Franchise (Exhibit A). Said evidence must be provided to the County by April 5, 1999, unless such deadline is extended by the written agreement of the parties hereto. If evidence acceptable to the County of Allied's satisfaction with all of the requirements hereof is not provided by April 5, 1999 or such time as the parties may agree, this assignment shall be of no force or effect. ! ! ! ! ! 1 ! ! ! ! ! ! f ! ! ! ! ! ! ! Page 3 IN WITNESS WHEREOF, the parties have executed this Agreement regarding Conditional Consent to Franchise Assignment as of the day and year first written above. COUNTY OF CONTRA COSTA ATTESTED: ' ' By. J Canciamilla PHIL BATCHELOR, CLERK Off THE e: hair, Board of Supervisors BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR APPROVED AS TO FORM: V ictor J Westman, County Counsel of DEPUTY COUNTY COUN L BFIC, INC., a California corpo ion X" # f DeA By: c.-\ Title: Title: ` ACME FILL CORPORATION, a California corporation By: s - By: Talc: Title: ALLIED WASTE INDUSTRIES, INC., a Delaware corporation . S , nn Tale. ' Imo.. "ems' Tale. P SSI s-"ani' TO: BFIC, Inc., Acme Fill Corporation and Allied Waste Industries, Inc. This Agreement must be signed by two officers. One signature must be that of the Chairman of the Board, President or any Vice President. The other signature must be that of Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Treasurer (Civil Code Section 1190 and Corporations Code Section 313). All signatures must be acknowledged pursuant to Civil Code Section 1189). DD14:TSASSGN.D0C Page 4 EXHIBIT B TO CONSENT TO FRANCHISE ASSIGNMENT BFIC has undertaken certain activities and made certain commitments with regard to its operations as required by the Franchise Agreement. The following is intended to set forth several of said operations, current activities and/or ongoing commitments of BFIC which Allied agrees to continue; undertake and/or assume as required by the Franchise Agreement. Those activities or obligations include but are not necessarily limited to: 1. Allied shall proceed in a timely manner with the land use permit reviews by the County of the Transfer Station and further agrees to correct any deficiencies discovered in the review. 2. Allied shall make such payments to County as required to pay for staff/contractors time in the implementation of the associated land use permit. Allied agrees to assume existing and future liabilities of BFIC for such review and enforcement of land use permit conditions of approval and related costs. DQ 1 4:TsasscN.Doc CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT T No.5907 State of California County of Contra Costa On March 31, 1999 before me, Jane C. Forrettc y Notary Public , /'y q'y+ } appeared Michael y.,, yy 7� /� 9� NAME,TITLE OF OFFICER-E.G.,'JANE DOE,NOTARY PUBLIC' personally appeared Mic.hael. A• 4.+C��✓_r.io ,. NAME(S)CF SlGNER(S) Fid personally known to me - OR - D proved to me on the basis of satisfactory evidence to be the personks4 whose nameW ism subscribed to the within instrument and ac- knowledged to me that heAhay executed the same in his/her/their authorized WjP,1,4E C.FOqRETr5 capacity, and that by hisAiefA#e4r dOmv.jS8j0N 1172642 NWARY '3L-CAIIPW-414. signature{) on the instrument the person¢*, C9`r:71IA Oas1 A CO.;I�1Y COMM "E(P. or the entity upon behalf of which the person} acted, executed the instrument, WITNESS my hand;anZd , ictal seal, SIGNATURE OF NOTARY 3 OPTIONAL Though the data belay is not required by law,it may pave valuable to persons relying on the document and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT INDIVIDUAL i CORPORATE OFFICER TITLE OR TYPE OF DOCUMENT TITLE(S) PARTNER'S) E LIMITED C GENERAL ATTORNEY-IN-FACT NUMBER OF PAGES GUARDIAN/CONSERVATOR OTHER: DATE OF DOCUMENT SIGNER Is REPRESENTING- NAME OF PERSON(S)OR ENTITY(IES) SIGNER(S)OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION•8236 Remmet Ave.,P.O.Bax 7184•Canoga Park,CA 91309-7184 Apv---05-99 02 : 13P P . 02 ALL-PURPOSE ACKNOWLEDGMENT Nn M7 State of . Y - County of _ . .A On g , �� F��'�s before me, a. CAT.' NAME, 1TI F OF OFF;CCR•S Cs 3ANe b.NQT iC' personally appeared E_� ? rs Lt . _ < NAME(5)OF SIONEA(S) --- personally known to me - OR - proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and ac- knowledged to me that he/she/they executed the same in his/hefitheir authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. J;ANET L.WEEMS Notaq Pubilo-.Arizona WITNESS my hard and official seal. MARICOPA COUNTY y Commission Expires r JANUARY 14,2003 � f ,.... SIGNAruAE or N`JTAPY OPTIONAL Though the data below;s not required by law, it!mwj pave valuable to persons relying on the document and could prevent freudulant reattachment of this form, CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT u INDIVIDUAL CORPORATE OFFICER TTL OR TYPE OF DOCUMENT ss!Lk(�1 j PARTNER(S) 171 LIMITED L GENERAL ATTORNEY-IN-FACT NUMBER OF PAGES TRUSTEE(S) L-1 GUARDIANICONSERVATOR OTHER: _ DATE OF DOCUMENT SIGNER IS REPRESENTING: NAME OF gSt RON(;;:;.OR ENTITY{;?Si SIGNER(S)OT NEf I HAIN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION-8236 Remmel Ayo..9.0.BOX 71,OA•CifI ga Park,CA 91309 7154 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No.591.7 Mate ofFORNIA County of —CONTRA---COSTA On May S e 2000 before me, n C_ Fa -, Notar)z Pu1 ;f- , DATE NAME,TITLE OF OFRCER-E.G.,",SANE 00"NOTARY PUBLIC— personally UBLICpersonally appeared Dennis Pnon — NAME(S)OF S3GNER(S) 3 personally known to me e OR - D proved to me can the basis of satisfactory evidence to be the person(* whose nameW isA subscribed to the within instrument and ac- knowledged to me that he/~ executed Ac.�s f the sale in hls�4t-her authorized �r S&DN1172U2 capacity , and that by hist AW PL MC A rr signature(,} on the instrument the person(s), or the entity upon behalf of which the person( acted, executed the instrument, 5 WITNESS my hand and pfficial seal. o SIGNATURE OF NOTARY OPTIONAL S Though the data below is not required by lass,it May prove valuable to persons relying on the document and could prevent s fraudulent reattachment of this form. E CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACKED DOCUMENT IND;:VIDUAL. ty CORPORATE OFFICER TITLE OR TYPE OF DOCUMENT TITLY`S) i, PARTNER(S) C LIMITED e GENERAL ATTORNEY-IN-FACT NUMBER OF PAGES T RUSTEE;S; OTHER. DATE OF DOCUMENT SIGNER IS REPRESENTING: NAME OF PERSON(S)OR ENT;TY(IES) SIG1VEFl(S)OTHER THAM#l4AMEf7 ABOVE 1993 NATIONAL NOTARY ASSOCIATION-8238 Remmet Ave.,P.O.Bax 7184 Canoga Park,CA 91309-7184 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No.5907 State of CALIFORNIA y . . �h 6 - On Ma's L 2000 befr�re Ise, � a DATE NAME,TITLE OF OFFI ER-E.G., ,;ANS-4E,NOTARY PUSUC" persor Ily appeared DIANA McVEY � NAME(S)OF SEGNER(S) personally known to me R",�- proved to me on the basis of satisfactory evidence to be the person ) whose name(0) is/ subscribed to the within instrument and ac- = knowledged to me that he/she/tboy he/she/texecuted , the same in /her/t 'r authorized capacity(*), and that bybHS/her/thlair signatures on the instrument the person or the entity upon behalf of which tt person( ) acted, executed the instrument. A,ANN jON–ES t Cor"-t 7r,I s sl On# i i 7'J620 Notarsr Put)i :-CC fOM1Q y Ar:-ce es Ccunp WITNESSmy hard and official seal. � y CI-oss:-:71r'Wires Feb6,2X32 d . SIGNATURE_F J ARY . . OPTIONAL Though the data below is not required by law, it may prove valuable to persons rely€ng on the coc: rnen#and could prevent fraudulent reattachment of this form. CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACKED DOCUMENT E—! INDIVIDUAL77 � CORPORATE OFFICER TITLE OR TYPE OF DOCUMENT � } PARTNERIS) LIMITED � GENERAL ATTORNEY-IN-FACT NUMBER OF PAGES L_j TRUSTEE(S) I_ CC#ARDIAN/C;ONSERVATOR L OTHER: DATE OF DOCUMENT SIGNER IS REPRESENTING- NAME OF PERSON'(S)OP.ENTITY(EES) � SIGNER(S)OTHER THAN NAMED ABOVE s x 019931NATiONAL NOTARY ASSOCIATION a 8206 Remr�e4 Ave..P.O.Sex 7184 a Canoga Park,CA 91309-7184 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT No.5907 State of CALIFORNIA County of CONTRA COSTA On June 20, 2000 before me, Jane C. Forrette Notary Public DATE NAME,Tl L=OF OFFICER-E.G.,'JANE�9E,NOTARV PURL; jpersonally appeared BOYD M. OLNEY JR._ and BART BISIO � } NAME(S)OF SIGNEB(S) L7, personally known to me ® CFI - . ved to me on the basis of satisfactory evidence to be the person(s) whose name(s) mare subscribed to the within instrument and ac- knowledged to me that heisheftey executed the same in 4ieA /their authorized capacity(ies), and that by .,..'.. 'their signature(s) on the instrument the person(s), W�� or the entity upon behalf of which the NOTARY l*al ­cAttFOWM C!?zTs ACOSTACOUNTY person(s) acted, executed the instrument. WITNESS my hand and ficial seal, t8 f r .+'; SIGtiATUR G`F\r'iTAFY OPTIONAL Though`he data below is not required by lard, it may prove valuable to persons relying on the document and could prevent a fraudulent reattachment of this form. � CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACKED DOCUMENT t{ l( DiVI}UAL CORPORATE OFFICER TiTLE(S) TITLE OR TYPE OF DOCUMENT y PARTNER(S) l_i iTEo ._ � GENERAL El ATTORNEY-JN-T=ACT NUMBER OF PAGES s TRUSTEE(S) GUARDIAN/CONSERVATOR. 7 OTHER: DATE OF DOCUMENT a SIGNER IS REPRESENTING; NAME OF PERSON(S)OR;NT;n'(EE5) SIGNER(S)OTHER THAN NAMED ABOVE 01993 NATIONAL NOTARY ASSOCIATION•8236 Remmef Ave.,P.O.Box 7184 a Canoga Perk,CA 91309-7184 EXHIBIT A COUNTY OF CONTRA COSTA STATE OF CALIFORNIA PERMANENT TRANSFER STATION FRANCHISE AGREEMENT RECEED OCI 10 994 CO OS A�i7R5 September, 1994 TABLE OF CONTENTS - ACME WASTE RECOVERY AND TRANSFER STATION RECITALS 1 ARTICLE 1. INTRODUCTORY PROVISIONS 2 Section 1.1 RECITALS INCORPORA'T'ION• • .. . . • . . . . « 2 Section 1.2 EFFECTIVE DATE, EFFECT. . . . • . . . tl . « 2 Section 1.3 CONDITIONS OF APPROVAL. 4 4 4 4 4 4 . 4 2 Section 1.4 OPERATOR ACKNOWLEDGMENT. . . f « . « • i 3 Section 1.5 COUNTY DISCRETION AND INTEREST. « • . 3 ARTICLE 2. DEFINITIONS 4 Section 2.1 AGREEMENT. . . . . . .• « . . . 4 « « « 4 4 Section 2.2 ACTIVITIES REPORT. r . 4 . • • . • • • • « 4 Section 2.3 /ANALYSIS PERIOD. . . . . . . . . . • •� tl 5 Section 2.4 COUNTY. . • • • . . • . • • . . • . . 4 . . 5 Section/� /� � 2.5 D�I]�R`tEfC�'�T'FOR. . . . . . . . . . . . . . « » . 5 v Section 2.6 EMERGENCY« • i • . f « . • • • « 4 « « 4 • rJ Section 2.7 GATE FEE COLLECTION SYSTEM• « « . • . r 4 5 Section 2.S GATE RATE. . . . • r « . • « r • r « « 5 Section 2.9 HOURS OF C7OPERATION. « . • . • . . . . tl • • 6 Section 2.10 HOURS OF ACCESS. r . . . . . . . . . . . « 6 Section 2.11 KELLER LANDFILL• . . . • . . . . • . . . « 6 Section 2. 12 MANDATED FEES. . . . . . . . . . . . « w 6 Section 2.13 OPERATOR. • • . . . i . . . • . . . . a r ry6 Section 2.1+4 PERMITS. . • » . . . a . • . . • . . . « • Section 2. 15 REGULATORY AGENCIES. . • . . . . . . . . . 7 Section 2. 16 SCHEDULE OF CHARGES. . . . . . . . • . . . 7 Section .2.17 SOLID WASTE. . . . . . . . . . . . . a 7 Section 2. 18 SOLID WASTE PROGRAMS. . . . . . . . 4 . 9 Section 2.19 SURCHARGE. • r . • • . « . . . « . • . • w 9 Section 22.20 TRANSFER STATION. PAYM��ENTS. . . . . . . . . . . . 99 Section 2s 1 iiftil7t�6 ra itTATi1/Nr « . f a • . . 4 • 3 Section 2«22 'TRANSFER STATION 'PROPRIETARY RATE« « tl « « 9 Section 2.23 USE PERMIT. r r « « r • » . • 10 ARTICLE 3. TERM OF AGREEMENT 10 ARTICLE 4. PERFORMANCE OF OPERATOR 10 Section 4.1 OPERATION OF TRANSFER STATION• . . . . . . 10 Section 4.2 UNACCEPTABLE WASTE• • . . . . . . . • . r i 10 Section 4.3 IN'SPECTIONE INVESTIGATIONS AND EVALUATION OFSITE. . w . w . . . . . . . . . • r • • . . . w 11 Section 4.4 PERMITS. . w . . w . . • r . w . . a . f . 11 Section 4.5 STATUS OF TITLE. . . . • . . » . . . . . . 12 Section 4.6 GATE FACILITIES. . . . . . • r r . . • . . 12 Section 4.7 OPERATION OF GATE FEE COLLECTION SYSTEM. 13 Section 4 .8 FEE COLLECTION. . . . . . . . . . . . . . . 13 Section 4.9. PAYMENT To COUNTY. . . . . . . . . . . . . 13 Section 4. 10 HOURS OF ACCESS. . . . . . . . . . . . . . 13 Transfer Staticin Franchise i September, 1994 Section 4.11 NONDISCRIMINATORY SERVICE. . . . . . . . . 14 Section 4. 12 ACCESS ROADS HAUL ROADS AND SERVICE 14 ROADS. • • . . . . • . . • . . . . . . . . Section 4.13 LITTER MANAGEMENT. • • s • s a • s • s • • Section 4.14 ENVIRONMENTAL MITIGATION. • • 15 Section 4.15 RECYCLING/RESOURCE RECOVERY PROGRAMS. . 15 Section 4.16 ACTIVITIES REPORT. . . . . . . . . . 15 Section 4.17 PENALTY SCHEDULE FOR NONCOMPLIANCE. 15 Section 4.15 RECORDS. . . . . . . ' . . • • • . • 16 Section 4.19 HOST COMMUNITY 17 ARTICLE 5. PERFORMANCE OF COUNTY 17 Section 5.1 GATE FEE COLLECTION SYSTEM. . . . . . . . . 17 Section 5.2 INSPECTION OF SCALES. . • . . . . • • • 17 18 ARTICLE 6. RATES 1s Section 6, 1 PROPRIETARY RATE. . 18 Section 6 .2 SURCHARGE. . . . . . . . . . . . . . . . . Section 6.3 GATE RATE. . . . . . . . . . . . . . • • 19 Section 6.4 INITIAL SURCHARGE. • • . . . .. . ` . . 19 Section 6.5 CONTRACTS 20 Section 6.6 SCHEDULE OF RATES. . . . . . . . . . 20 21 Section 6.7 SELF-HAUL RATES. ARTICLE 7. PERSONNEL 21 ARTICLE S. UNINTERRUPTED OPERATION 22 Section 8.1 ASSURANCE OF UNINTERRUPTED OPERATION. 22 Section 8.2 LABOR DISPUTES. . . 23 ARTICLE 9 . DEFAULT, REMEDIES 23 Section 9 . 1 FAILURE TO PROSECUTE WORK. . . . . . . . 23 Section 9.2 CONVICTION OF CERTAIN CRIMES. . . . . 25 Section 9.3 CONDEMNATION. . . . . . . . . . . . . 25 Section 9.4 RIGHT TO TAKE/RIGHT TO POSSESSION. . 25 Section 9.5 FORCE MAJEURE. . . . . . . . . . • 26 Section 9.6 SPECIFIC PERFORMANCE. . . . . . . . . 26 Section 9.7 NONEXCLUSIVE REMEDIES. . . . . . . . . . . 26 ARTICLE 10. INSURANCE AND BONDS 27 Section 10. 1 WORKERS' COMPENSATION. . . . . . . . . . 27 Section 10.2 PUBLIC LIABILITY. . . . . . . . . . . . . 27 Section 10.3 OTHER INSURANCE PROVISIONS. . . . . . . . 28 Section 10.4 FAITHFUL PERFORMANCE SURETY. . . . . . . . 28 ARTICLE 11. GENERAL PROVISIONS 29 Section 11. 1 GUARANTY BY PARENT OR AFFILIATE. . . . . . 29 Section 11.2 ATTORNEY'S FEES. . . . . . . . . . . . . 29 Section 11.3 INDEMNITY AND HOLD HARMLESS AGREEMENT. . . 29 Section 11.4 ASSIGNMENT. . . . . . . . . . . . . . 31 Section 11.5 COMPLETE AGREEMENT. . . . . . . . . . . . 32 Section 11 .6 NO THIRD PARTY BENEFICIARY ENFORCEMENT. . 32 Transfer Station Franchise ii September, 1994 Section 11,7 SURVIVAL OR OBLIGATIONS. . . . . r , . . . 33 bection 11.8 ARBITRA'T'ION. . . . . . . . . . . . . . . 33 Section 11.9 CONFLICT. 0 33 Section 11. 10 CAPTIONS. r 34 Section 11.11 DELEGATION BY BOARD. . . 34 Section 11.12 SEVERABILITY. . . . . . . . . . . . . . . 34 Section 11.13 MASCULINE GENDER USED. . . . . . . . . . 35 Section 11.14 GOVERNING LAW. . . . . . . . . . . . . . 35 Section 11.15 NOTICES. . • . . . . . . . . . . 35 Section 11.16 JOINT AND SEVERAL REtPONSIBILITY. . » . 36 'transfer Station Franchise iii September, 1994 t c COUNTY OF CONTRA COSTA STATE OF CALIFORNIA FRANCHISE AGREEMENT FOR THE ACME FILL 'WASTE RECOVERY AND TRANSFER STATION THIS FRANCHISE AGREEMENT FOR THE A00' WASTE RECOVERY AND TRANSFER STATION (the "Agreement") is made and entered into this by and between the COUNTY OF CONTRA COSTA (hereinafter "County") and BFIC.. Inc. , a California Corporation, and ACME Fill CORPORATION, a California Corporation (hereinafter jointly referred to as "Operator") . RECITALS WHEREAS, the legislature of the State of California has adopted the California Integrated Waste Management Act of 1989, which assigns certain responsibilities for the County's solid waste planning, management, program implementation, and regulation to the Contra Costa County Board of Supervisors; and WHEREAS, on 1.5 December 1987, the Board of Supervisors of Contra *Costa County approved Land Use Permit No. 2122-88 for the Acme Fill Waste Recovery and Transfer Station ("Transfer Station") subject to the applicable conditions of approval, subject to subsequent amendments thereto by the Board of Supervisors; and WHEREAS, the County adopted Ordinance No. 88-81, which provides that a solid waste facility may be operated within the County only upon the approval of a franchise agreement by the County or upon the operator of a solid waste facility entering Transfer Station Franchise i September, 1994 r into a contract with the Contra Costa County Board of Supervisors to operate such facility; and WHEREAS, Operator has requested that the County enter a franchise Agreement with operator pursuant to Ordinance No. 88- 81; and WHEREAS, recent United States Supreme Court cases decided under the Commerce Clause of the United States Constitution generally prohibiting states and their political subdivisions from erecting barriers to the free flow of solid waste (and thereby discriminating against interstate commerce) significantly affects the solid waste industry, and affects the parties hereto; NOW, THEREFORE, the County and Operator, for and in consideration of the covenants and agreements as hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do mutually agree as follows: ARTICLE 1. INTRODUCTORY PROVISIONS Section 1.1 RECITALS INCORPORATION. The Recitals set forth above, and all defined terms set forth in such Recitals and in the introductory paragraph preceding the Recitals, are hereby incorporated into this Agreement as if set forth herein in full. Section 1.2 EFFECTIVE DATEr, EFFECT. This Agreement is effective on the date mentioned in the first paragraph of page one hereof. Section 1.3 CONDITIONS OF APPROVAL. Operator acknowledges and agrees that all of the terms and conditions of the Use Transfer Station Franchise 2 September, 1994 Permit's Conditions of Approval and any amendments thereto, are reasonable, legal and valid and that Operator is barred from any action or proceeding or any defense of invalidity or unreasonableness of said Conditions of Approval and any amendments thereto, and related County decisions. Further, Operator agrees that . . Ope g operator will not attack or otherwise assail the reasonableness, legality or validity of any terms and conditions of the Use Permit, or of any provisions included in this Agreement. The parties acknowledge that the agreement by Operator in this section is a material consideration for County's approval of this Agreement. Section 1.4 OPERATOR ACKNOWLEDGMENT. Operator acknowledges and agrees that this Agreement and the Use Permit (by the incorporation herein of the Use Permit) provide for and allow, among other things, funding for mitigation, provision of closure and post-closure costs, payment to County of annual franchise revenue fees, and otherwise payment to County and reimbursement of County costs for its governmental administration of the project entitlements. It is understood that, among other things, this Agreement provides for operator's establishment of its proprietary rates to enable operator to compete in a solid waste disposal market that has become highly competitive as a result of recent United States Supreme Court decisions. Section 1.5 COUN'T'Y DISCRETION AND INTEREST. Notwithstanding any other provision of this Agreement, Operator Transfer Station Franchise 3 September, 1994 i acknowledges that County's discretion to grant, approve or deny one or more nonexclusive or other franchises or similar agreements for others is not limited or abridged in any manner by this Agreement= and that this Agreement does not require the approval of any such other franchises or agreements- by Operator. i County reserves the rights as part of the negotiation and entry of any- such other franchise or agreement to enter a public- private or public-public partnership with other owners and/or to pursue any rights of the County to seek ownership of solid waste facilities. ARTICLE 2. DEFINITIONS Section 2.1 AGREEMENT. "Agreement" shall refer to this Agreement and is synonymous for purposes of this Agreement with the word "Contract". Section 2.2 ACTIVITIES REPORT. The "Activities Report" is a summary document reporting Operator's activities and overall performance during the preceding Analysis Period or over such period of time as set by the County. The Activities Report shall summarize transfer station related activities as directed by County and may include, but shall not be limited to: compliance with -the provisions of this Agreement and all applicable Permits and Regulatory Agency Requirements, complaints and corrective actions taken and any other matter the Board may reasonably require for the proper administration of this Agreement, including, but not limited to, reports relating to resource recovery goals and requirements in connection with the Integrated Transfer Station Franchise 4 September, 1994 5 Waste Management Act of 1989 or any other law, regulation, plan or program. Section 2.3 ANALYSIS PERIOD. "Analysis Period" refers to the twelve (12) consecutive calendar months beginning the first day of January of each year throughout the term of this Agreement. The first Analysis Period, for the purposes of this Agreement shall begin on the effective date of this Agreement and shall continue to December 31, 1995. Section 2.4 COUNTY. "County" shall mean the County of Contra Costa, a political subdivision of the State of California. Section 2.5 DIRECTOR. "Director" shall mean the County Administrator or his designated deputy, other County officer or employee. Section 2.6 EMERGENCY. "Emergency" shall mean a sudden, unexpected occurrence involving a clear and imminent danger, demanding immediate action to prevent or mitigate loss of, or damage to, life, health, property, or essential public services. Emergency includes such occurrences as fire, flood, earthquake, or other soil or geologic movements, as well as such occurrences as riots, accident and sabotage. Section 2.7 GATE FEE COLLECTION SYSTEM. The "Gate Fee Collection System" shall consist of all equipment,. hardware, and software utilized for purposes of assessing, collecting, and accounting for Tipping Fees for the receipt of Solid Waste at the Transfer Station. Section 2 .8 GATE RATE. "Gate Rate" shall mean the per ton Transfer Station Franchise 5 September, 1994 .... ....................... fee charged by Operator for Operator's receipt of Solid Waste at the Transfer Station. The Gate Rate shall be the Transfer Station Proprietary Rate plus Surcharge and Mandated Fees, if any, and disposal costs. "Gate Rate" shall be synonymous with "Tipping Fee." 6 Section 2.9 HOURS OF OPERATION. "Hours of Operation" shall be those times during which the use of heavy equipment and other machinery necessary for operation of the Site in compliance with the Use Permit, the Solid Waste Facilities Permit and this Agreement will be allowed. Section 2.10 HOURS OF ACCESS. "Hours of Access" shall be those times during which Solid Waste may be delivered to and received at the Transfer Station. Section 2.11 KELLER LANDFILL. "Keller Landfill" or "Landfill" shall mean the Keller Canyon Landfill, approved and operating pursuant to County Land Use Permit No. 2020-890 Solid Waste Facilities Permit No. 07-AA-0032 and other County and other governmental approvals as of the effective date of this Agreement. Section 2. 12 MANDATED FEES. "Mandated Fees" shall be those monies required from Operator from time to time by any Regulatory Agency for the purpose of funding (a) Federal, State or regional. programs, (b) programs required by the Land Use Permit, or (c) other County established fees. Section 2.13 OPERATOR. "Operator" shall mean the holder of the Use Permit or its assignee. Transfer Station Franchise 6 September, 1994 Section 2.14 PERMITS. "Permits" shall mean any and all governmental approvals, entitlements, clearances or classifications, as they may be amended from time to time, including but not limited to, the Use Permit, general plan amendments, environmental impact report, zoning approvals, conditional use permits, waste discharge permits and reguiraments, facilities permits, permits to operate, permits to construct, closure plans, building permits, encroachment permits, grading permits, tree removal permits, tract/parcel maps and all other governmental permits, consents or approvals as may be necessary to allow Operator to construct and operate the Transfer Station. Section 2.15 REGULATORY AGENCIES. "Regulatory Agencies" shall. Mean Federal, State and local agencies responsible for regulating the operation and maintenance of transfer stations or sanitary landfills, such as, but not limited to, California Integrated Waste Management Board, California Regional Vater Quality Control. Board, California Department of Health Services, the Contra Costa County Department of Health Services as Local. Enforcement Agency for handling and disposal of Solid Waster the Bay Area Air Quality Management District and the County. Section 2. 115 SCHEDULE OF CHARGES. The "Schedule of Charges" shall mean a comprehensive list of Tipping Fees charged at the Transfer Station. Section 2. 17 SOLID WASTE. "Solid Waste," "solid waste" or "waste" shall have the meaning set forth in Section 40191 of the Transfer Station Franchise 7 September, 1994 California Public Resources Code as it may be amended from time to time, as follows. 1140191(x) Except as provided in subdivision (b) , 'solid waste' means all putrescible and nonputrsecible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, industrial wastes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid wastes, and other discarded solid and semisolid wastes. "(b) 'Solid wastes' does not include hazardous waste or low-level radioactive waste regulated under Chapter 7.6 (commencing with Section 25800) of Division 20 of the Health and Safety Code. "(c) •Solid Waste' does not include medical waste which is regulated pursuant to the Medical Waste Management Act (Chapter) 6. 1 (commencing with Section 25015) of Division 20 of the Health and Safety Code) . Untreated medical waste shall not be disposed of in a solid waste landfill, as defined in Section 46027. Medical waste which has been treated and which is deemed to be solid waste shall be regulated pursuant to this division. " Transfer Station Franchise 8 September, 1994 Section 2.1.E SOLD WASTE PROGRAMS. "Solid Waste Programs" shall mean those programs directly related to solid waste which may includes transfer stations, household hazardous waste programs, recycling and resource recovery programs, Agreement and Use Permit administration costs (including legal, engineering, and accounting and other costs of the County) . Section 2. 19 SURCHARGE. "Surcharge" shall mean a special - charge as required by the County and this Agreement, for funding of Solid Waste Programs, closure of landfills in operation prior to 1990 and for franchl.se fees and other costs as deemed appropriate by the County. Section 2.20 SURCHARGE PAYMENTS. "Surcharge Payments" shall mean those monies received by Operator as a Surcharge and remitted to the County in accordance with the terms of this Agreement and of the Permits. Section 2.21 TRANSFER STATION. "Transfer Station" or "Site" shall mean the Acme Fill Waste Recovery and 'Transfer Station, commonly referred to as the "Acme Permanent Transfer Station," the operation of which is approved and authorized by, and'subject to, County band Use Permit No. 2122-86, as amended, this Agreement, Solid Waste Facilities Permit No. 07•-AA-0027, and other County and other regulatory agency requirements as of the effective date of this Agreement. Section 2.22 TRANSFER STATION PROPRIETARY RATE. "Transfer Station Proprietary Rate" shall mean the proprietary fees charged by Operator for the receipt and acceptance of Solid Waste at the Transfer Station Franchise 9 September, 1994 Transfer Station. Section 2.23 USE PERMIT. "Use Permit" shall mean Contra Costa County Land Use Permit No. 2122--86, together with all Conditions of Approval applicable thereto, including any amendments thereof. ARTICLE 3. TERM OF AGREEMENT ' This Agreement shall be coterminous with the Use Permit, or any such lesser period as may be prescribed by law. ARTICLE 4. PERFORMANCE OF OPERATOR Section 4.1 OPERATION OF TRANSFER STATION. Operator shall operate the Transfer Station for the receipt, processing and transfer of Solid Waste in strict compliance with, and subject to, the terms and conditions of this Agreement, the Permits and other applicable requirements of Regulatory Agencies. Section 4.2 UNACCEPTABLE WASTE. Operator shall not allow the receipt of material other than Solid Waste at the Transfer Station unless specially approved in writing by the Director and otherwise allowed by law. It is recognized that some non- approved materials, including hazardous wastes, may occasionally be unloaded at the Transfer Station by users thereof. Operator shall train its on-site employees to recognize such unacceptable wastes and materials. In the event that unacceptable waste is deposited at the 'Transfer Station, it shall be handled and removed by Operator in accordance with procedures which shall be developed by Operator and submitted to the County for approval prior to any receipt of Solid Waste at the Transfer Station. Transfer station Franchise 10 September, 1994 0 Nothing herein is intended to relieve the person or persons depositing or causing to be deposited such unacceptable waste from any liability. operator retains the right to use all legal means to recover costs of removal and alternate disposal or treatment from such person or persons. Suction 4.3 INSPECTION, INVESTIGATION, AND EVALUATION OF SITE. ' The Site shall be immediately accessible at all reasonable times to Regulatory Agency officials for any reasonable, lawful and proper purpose. County officials shall usually give reasonable notice to Operator of their intention to visit the Site or if such notice is not given, shah. not+ fy Operator's on- site personnel, of their presence on the Site. County shall not incur liability arising from the discharge of its inspection responsibilities, either by commission or by omission, except for its tortious conduct or breach of duty resulting in death, injury or property damage while engaged in its inspection responsibilities. The inspection of the work shall not relieve operator of any obligation to perforin► under this Agreement. Operator shall remove and replace or repair any work not in compliance with those Permits, laws, ordinances or regulations applicable to the Site. Section 4.4 PERMIT'S. Operator shall obtain and maintain in force all necessary Permits and/or other approvals from they Regulatory Agencies for the Transfer Station. Upon receipt of each such Permit or approval, a copy thereof, together with all conditions or requirements attached Transfer Station Franchise 11 September, 1994 thereto, shall be delivered by Operator to the Director. Section 4.5 STATUS OF TITLE. Operator shall provide to the County reasonable evidence sufficient to establish that Operator is in possession of and/or has the right to Operate the Transfer Station. Section 4.5 GATE FACILITIES. Operator shall supply, construct and thereafter maintain gate fee collection facilities. The facilities shall be designed and located as necessary so as to expedite the fee transactions and shall be attractively finished. The facilities shall be consistent with the Use Permit for the Site. Operator shall supply, construct, and maintain truck scales as necessary to expedite the fee transactions, prevent traffic back-up, and allow for occasional maintenance and repair. The scales shall be compatible with the Gate Fee Collection System approved by the County, in accordance with Section 5.1 of this Agreement. The scales shall be open and in working order during all Hours of Access. All waste disposal vehicles shall be recorded by the Gate Fee Collection System. Operator shall make provisions for quick repairs of the scales by competent technicians to minimize downtime. The scales shall meet all State requirements for design approval and accuracy for State certified scales. Only those scales functioning in accordance with all applicable regulations shall be used. Operator shall obtain the State of California Transfer Station Franchise 12 September, 1994 certification for scale accuracy. Operator shall, supply, deliver and maintain utilities to the Transfer Station and shall be responsible for all onsite and off-site costs and service charges in connection therewith. Section 4.7 OPERATION OF GATE FEE COLLECTION SYSTEM. Operator shall provide and operate the Gate Fee Collection Systeme including the providing of all labor and materials - necessary with respect thereto. Such operation shall be for all Hours of Access. Section 4.8 FEE COLLECTION. Operator shall collect, count and account for all Tipping Fees and waste quantities from each customer or user of the Transfer Station. Said fees shall be collected in accordance with all applicable requirements, including Article 6. In the event that no scale is operable at any given time, vehicles will be charged based upon a flat fee or volume fee schedule established by the parties or by operator in advance. Operator shall furnish the County with monthly reports on the number and types of vehicles and waste tonnages and/or volumes, as appropriate, of the various types and Gate revenue. Section 4.9. PAYMENT TO COUNTY. Operator shall pay the Surcharge Payments required and received in accordance with Article 6 to the County monthly in arrears. Operator shall pay the Surcharge Payments to County within thirty (30) calendar days after the close of the prior month in which they are collected. Section 4. 10 HOURS OF .ACCESS. Unless otherwise required by Transfer Station Franchise 13 September, 1994 the terms of other Permits, Hours of Access shall be those specified in the Solid Waste Facilities Permit. Should the Director declare that an Emergency exists, operator shall keep the Transfer Station open as instructed to allow for the orderly receipt, processing and transfer of Solid Waste generated or created by such emergency conditions at no additional charge or increase in the Gate Rate. The scheduled Hours of Access may be changed in a manner consistent with permit requirements. Operator may, in its sole discretion, observe the following holidays and close the Transfer Station: New Year's Day, Easter Sunday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day, or other major holiday as approved by the Director. Section 4.11 NONDISCRIMINATORY SERVICE. Operator shall provide nondiscriminatory service for Solid Waste receipt, processing and transfer to all users, and shall abide by all Federal, State and local laws and the Land Use Permit. Section 4.12 ACCESS ROADS, HAUL ROADS -AND SERVICE ROADS. It shall be Operator's responsibility to provide and maintain all roads required in connection with the operation of the Transfer Station. Haul roads shall be well maintained. The surface shall be reasonably free from potholes and depressions. Section 4. 13 LITTER MANAGEMENT. operator shall maintain and keep the Transfer Station and its access road reasonably free of litter and other refuse. Operator shall be solely responsible for maintaining the Site in a clean and sanitary condition, and Transfer Station Franchise 14 September, 1994 ......... ......... ......... ........................ ............................... _......................................................................................................__......... ......... ......... ......... .... .........._... ..... _. ......... ......... ............... ....... ......... ............... ............._....... _ ..................................................................... ......................................................11.11........_............____. shall be responsible for any public nuisance created as a result of its operations. Operator shall control on-site and offsite litter or debris in accordance with the Use Permit and the Solid Waste Facilities Permit. a Section 4.14 ENVIRONMENTAL MITIGATION. Operator shall comply with all environmental mitigation measures reasonably and lawfully imposed by Regulatory Agencies including those imposed by the Use Permit. Section 4.15 RECYCLING/RESOURCE RECOVERY PROGRAMS. Operator shall cooperate with the County and reasonably participate in waste reduction programs of the County, including participation in a County sponsored recycling/resource recovery ,plan and litter program, implementation of programs in conformance with any County recycling or resource recovery program, plan or element, and/or any other activity which the County deems is appropriate for inclusion in the County Solid Waste Programs. Section 4. 16 ACTIVITIES REPORT. Operator shall, by the first day of January of each year, assemble and provide to the County the Activities Report for the most recent Analysis Period. The Board may direct, upon ninety (90) days' written notice to Operator, that the report provided in the Activities Report be made semi-annually. Section 4 .17 PENALTY SCHEDULE FOR NONCOMPLIANCE. In the event that noncompliance by Operator with any condition or Transfer Station Franchise 15 September, 1994 provision of this Agreement, or any applicable Permits or Regulatory Agency requirements is determined by the County, County shall notify operator of the identified noncompliance. Following notification of noncompliance, the Director may impose penalties per noncompliance upon three (3) days notice to Operator in accordance with the following penalty schedule until such time as compliance is achieved: $ 500.00 per day during the first week of noncompliance $ 750.00 per day during the second week of noncompliance $1,000.00 per day during the third week of noncompliance $1,250.00 per day for each day thereafter. At the time the Director imposes any penalties, the amounts due for each day of noncompliance shall be the above amounts subject to annual CPI adjustments, the applicable index to be reasonably selected by the Director. Notwithstanding the above three paragraphs, no monetary penalties will be imposed by the County in the event that Operator and/or said Regulatory Agency are diligently pursuing the process of correction or mitigation of the event(s) causing noncompliance. Operator shall have the right to arbitrate any action taken by the County under this provision in accordance with Section 11.8 of this Agreement. Section 4 . 18 RECORDS. operator shall keep separate and Transfer Station Franchise 16 September, 1994 ............................................... .. ......... ......... _.. ......... ........ ... .. ...... ....................... .................. ......................................................................................... __ accurate records for the Transfer Station as reasonably directed by County for purposes of administering this Agreement. The County may, at its own expense (which may be recovered as a Solid Waste program cost) , at any time during the term of this Agreement, have the books and records, of the Operator examined for the sole purpose of verifying Operator's compliance with the requirements of this Agreement. County shall give thirty (30) days' written notice to the Operator in advance of such examination date. Section 4.19 HOST COMMUNITY. Operator agrees that an appropriate amount of the Surcharge as determined by the County's Hoard of Supervisors may and shall be utilized pursuant to Hoard Order(s) for host community mitigation commensurate with any other similar provisions. Section 4.20 COMMITMENT OF TRANSFER STATION WASTE. To the extent allowed by law, and so long as the Keller Landfill is receiving Solid Wastes, Operator agrees to deliver all Solid Waste received at the Transfer Station to the Keller Landfill for disposal. ARTICLE 5. PERFORMANCE OF COUNTY Section 5.1 GATE .FEE COLLECTION ;SYSTEM. The computerized Gate Fee Collection System, which shall be provided by Operator in accordance with Section 4.6 of this Agreement, shall be approved by the County, which approval shall not be unreasonably withheld. Section 5.2 INSPECTION OF SCALES. The County may, from Transfer Station Franchise 17 September, 1994 time to time during regular business hours, inspect the scales and test the accuracy of same. ARTICLE 6. RATES Section 6.1 PROPRIETARY RATE•. Except as provided in Section 6.71 the Transfer Station Proprietary Rate, shall be determined and established by operator at its sole discretion. Notwithstanding section 4.11, it is understood that the Operator need not charge a uniform Transfer Station Proprietary Rate to all customers, but may vary the Transfer Station Proprietary Rate as between different customers based on various factors determined by Operator, including, but not limited to, the quantity and type of waste delivered by each customer to the facility and whether each customer has entered into an agreement with the operator in which the customer agrees to deliver some or all of the customers future waste stream to the Transfer Station. Section 6.2 SURCHARGE_. The County may determine and establish at least once every two years, effective on the date determined by the Board of Supervisors, (but initially no sooner than two years from the effective date of this Agreement except for the purpose of decreasing the Surcharge in accordance with Section 6.4.d) , the Surcharge, which shall be added to the then applicable Transfer Station Proprietary Rate, and collected as part of the Gate Rate. operator will be provided at least ninety (90) days written notice of any newsy established Surcharge. In the absence of the County establishing a particular Surcharge Transfer Station Franchise 1s September, 1994 amount, the Surcharge to be collected by the Operator for the County shall be thirty percent (30%) of the then applicable Transfer Station Proprietary Rate. Section 5.3 GATE RATE. The Gate Rate shall consist of the Transfer Station Proprietary Rate, Mandated Fees, Surcharge and disposal costs. Section 5.4 INITIAL SURCHARGE. a. Amount. Effective on the effective date of this Agreement, the Surcharge shall be twenty-five percent (25%) of the combined Transfer Station Proprietary Rate and the Keller Landfill Base Rate. b. Funding of Programs from Surcharge. wring the period covered by the above initial Surcharge, costs of all County programs (rewired or authorized by the Use Permit or this Agreement) shall be funded from said combined 35% Transfer Station and Keller Landfill Surcharge. In addition, any household hazardous waste fee imposed by the Board pursuant to Public .Resources Code section 43213 shall be collected (deducted) from said combined Surcharge amount. c. Closure, Litigation. Operator agrees and acknowledges that an appropriate amount (five percent) of the Surcharge as determined by the County's Board of Supervisors may and shall be utilized pursuant to Board Order(s) and a trust account arrangement for any landfill closure or post-closure or related litigation expenses. Any amount not so expended may be otherwise utilized for other Surcharge purposes. Transfer Station Franchise 19 September, 1994 d. Reconsideration. Within or approximately six months from the date of this Agreement, the County's Board of Supervisors intends to reconsider and re-evaluate the household hazardous waste and the landfill closure and/or litigation expense programs, their levels of funding, .whether one or more programs should be* modified, reduced, or eliminated, and a surcharge adjustment. Section 6.5 CONTRACTS. For all contracts entered for the delivery to and receipt of Solid Waste at the Transfer Station, the Surcharge applicable at the time of the contract shall apply for the term of said contract. The parties agree that any later established surcharge amounts shall not apply to waste received pursuant to such Solid Waste contract for the term of said contract. Operator shall advise County of any contract subject to the privileges of this section immediately upon execution. operator shall provide County with any and all information requested by County.concerning any such Contract, including providing County with copies of such contracts upon request. operator shall also provide to County upon request, copies of all contracts for the transportation (hauling) and/or disposal of Solid Waste transferred at or processed through the Transfer Station. Section 6.6 SCHEDULE OF RATES. operator shall at all times maintain on file with the County, a schedule of Transfer Station Proprietary Rates and Gate Rates, including disposal rates, Transfer station Franchise 20 September, 1994 charged to each customer. The schedule may include a standard Transfer Station Proprietary Rate and Gate Rate which Operator charges unless an agreement is entered, or other arrangements made. Said schedule of Base and Gate Rates shall be updated within ten days of material modification thereof. Material . . modifications include, but are not limited to, changes to any custom4r's Transfer Station Proprietary Rate and Gate Rate, and entering of an agreement with a new customer. The schedule shall specify and distinguish between the Transfer Station Proprietary Rate and the Gate Rate, and shall include all elements of the Gate Rate, including disposal costs. The purpose of this section is to ensure that the rates charged by Operator as well as fees and surcharges imposed by County as well as other governmental agencies are a matter of Public Record, so as to promote cooperation and trust between the Operator, the County, and the public. Towards this end, County may request, and Operator shall provide to County, all information reasonably necessary to effectuate the purpose of this section. Section 6.7 SELF-HAUL RATES. Notwithstanding Section 6.1, the Gate Rate charged to customers delivering less than one ton of solid waste per day shall not exceed the average of the charges of all other transfer stations and landfills in Contra Costa County. ARTICLE 7. PERSONNEL Operator shall assign qualified personnel to operate the Transfer Station Franchise 21 September, 1994 site as may be required to assure a smooth and efficient operation in compliance with all applicable Permits. The County has the right to request, in writing, administrative action, including the removal of any employee of Operator who violates any provision of this Agreement, or who in the opinion of such requesting party is unsafe, negligent, or discoutteous to the public or others in the performance of his/her duties. Upon receipt of such a request, Operator shall immediately take whatever administrative action, which, in its judgment, is necessary to resolve the situation. Such action may include removal of that employee from the Site. A Site Supervisor employed by Operator shall be present at the Site at all times that any operations are being conducted thereon. Operator shall file with the Director the names, addresses, and telephone numbers of the Operator representatives who can be contacted at any time in case of emergency. These representatives shall be fully authorized to respond so as to resolve the emergency. ARTICLE 8. UNINTERRUPTED OPERATION Section 8.1 ASSURANCE OF UNINTERRUPTED OPERATION. Operator, in entering into this Agreement, assures that it will provide for the operation of the Transfer Station in an uninterrupted manner for as long as the is useful and usable, except as provided in Section 9.4 below. Operator acknowledges the hardship that would occur if the Transfer Station is not Transfer Station Franchise 22 September, 1994 operated properly or is prematurely closed. The County and Operator recognize that in the ordinary course of events, certain unexpected events may result that may glace a burden on the requirement of uninterrupted operation. However, it is the purpose of this Article 8 to establish that it is Operator's obligation to avoid any interruption of operations except for those that are outside of Operator's control, as provided by Section 9.5 of this Agreement. Section 8.2 LABOR DISPUTES. In the event of a labor dispute, Operator shall use its best efforts to keep the Transfer Station open and to operate it in accordance with this Agreement unless a mutually acceptable alternative is agreed upon by Operator and the County. ARTICLE 9. DEFAULT, REMEDIES Because of the complex nature of this Agreement and the work to be performed hereunder, together with the need for close cooperation and coordination between the parties, it is not anticipated that either party will declare the other in default under the terms and conditions of this Agreement except as a last resort. However, in the event of any such necessity, the following provisions are made a part hereof. Section 9. 1 FAILURE TO PROSECUTE WORK. Should Operator fail to prosecute the work or any severable part thereof in conformity with the requirements of this Agreement, the Director shall provide written notice to Operator specifying in detail the defect or default in performance (the "First Notice") and Transfer Station Franchise 23 September, 1994 operator shall have the right to cure same within a reasonable period of time. if after the First Notice is provided to operator, the work is not performed in accordance with the Director's specified time frame and a reasonable time to cure so as to ensure its completion in accordance with this Agreement, the Director shall serve further notice (the "Second Notice") upon operator of the County's intention to take further action as provided by law. The Director shall make appropriate and detailed written findings of fact which specify the event of default. No earlier than thirty (30) days after the Second Notice, County shall have the power and ability, if operator is still in default, to take such actions as provided in law for- remedying the same, including the termination of this Agreement. Should the County fail to perform any of its obligations under this Agreement, operator may declare the County in default after following the same two notice and findings provisions required of the County above. Thereafter, operator shall have the power and ability, if the County is still in default, to take such actions as provided in law for remedying the same, including bringing suit in a court of appropriate jurisdiction for equitable or legal relief or both. The foregoing notwithstanding, neither party may bring an action seeking money damages unless it has first provided the other party with 30 days notice of its intention to do so together with written notification of the specific actions which Transfer Station Franchise 24 September, 1994 _................................................................. ........................__..... ........................................................................ ...... .._. ..... ......... . ................ ..... ............ _. .. ....__....__....... ......... .............................................................................................. the other party may take to remedy the default which will form the basis for the claim for monetary damages. If the other party in good faith commences the actions specified within the thirty (30) day period, the first party shall not bring the action for damages. Section 9.2 CONVICTION OF CERTAIN CRIMES. gator agrees that a single conviction of Operator, its parent, subsidiaries or operators, or their officers or employees at the level of Site operations manager or above, acting within the scope of their employment, of bribery, antitrust, corruption or theft relating to or involving directly the Transfer Stetion shall constitute an event of a breach of this Agreement subject thereupon to the provisions of this Article unless Operator, promptly initiates and follows through with appropriate disciplinary procedures and action considering the nature of the offense and resolution by the courts. Section 9.3 CONDEMNATION. In addition to any other remedy available to the County, it has the right and authority under law to condemn the Site. Section 9.4 RIGHT TO TAKE/RIGHT TO POSSESSION. In the event that Operator chooses to no longer operate the Site, Operator agrees that it will give County notice of its intention to cease operation ninety (90) days prior to the cessation. If, after receiving such notice, County initiates eminent domain proceedings to acquire the Site, Operator agrees that it will not object to or contest County's right to take, or right of Transfer Station Franchise 25 September, 1994 possession of, the Site. Nothing contained herein shall constitute a waiver of the right to contest valuation at any stage of the proceedings. County and operator agree that the provisions of this paragraph may be enforced by means of the remedy of specific performance. Section 9.5 FORCE MAJEURE. Operator shall not be liable for a default if the failure to perform under the terms and conditions of the Agreement arise out of causes beyond the control or without the fault or negligence of Operator. Such causes may include, but are not limited to, acts of God, or the public enemy, acts of the County in either its sovereign or contractual capacity, fires, floods, earthquakes, epidemics, quarantine restrictions, suppliers' and vendors' strikes and all other labor disputes, freight embargoes, and unusually severe weather; but in every case the failure to perform must be beyond the control and without substantial default or negligence of Operator. operator shall make every reasonable effort to mitigate the effects of said causes. Section 9.6 SPECIFIC PERFORMANCE. notwithstanding any other available remedies, the obligations duties and rights of each party under this Agreement shall be specifically enforceable by the other party. Section 9.7 NONEXCLUSIVE REMEDIES. The rights and remedies of either party to this Agreement as provided for in this Article 9 shall not be exclusive, and are in addition to any other rights and remedies provided by law or under this Agreement; except that Transfer Station Franchise 26 September, 1994 the right of either party to seek monetary damages is limited as provided in Section 11.1 above. ARTICLE 10. INSURANCE AND BONDS Section 10.1 WORKERS• COMPENSATION. Operator hereby acknowledges that it is aware of the prgvisions regarding Workers' Compensation, Section 3700 of the Labor Code. Operator shall comply with the provisions of such Section as amended from time to time with regard to its employees and shall supply to the County forthwith upon execution of this Agreement, and annually thereafter, evidence of such compliance. Section 10.2 PUBLIC LIABILITY. Operator shall obtain from a good .and responsible company or companies doing insurance business in the State of California, and pay for, maintain in full force and effect for the duration of this Agreement and any extension, a policy or replacement policy of comprehensive liability insurance for the Transfer Station, in which the County is named as an additional insured with Operator. Operator shall furnish a Certificate of Liability Insurance to the Director before execution of this Agreement by the County. Notwithstanding any inconsistent statement in the policy •described by the Certificate of Liability Insurance or any subsequent endorsement attached thereto, the protection offered by the policy shall: (a) Include the County, its officers, employees and agents while acting within the scope of their duties under this Agreement, the Use Permit, or any other County ordinance, Transfer Station Franchise 27 September, 1994 resolution or other rule relating to the operation of the Transfer Station, as an additional insured covering said duties against all third party claims for negligence; and for indemnification of the County as provided by this Agreement. (b) Provide for a combined single limit policy not less than ;10,000,000 per occurrence, combined bodily injury and property damage. At every fifth year of this Agreement, this $10,000,000 minimum limit shall be increased as directed by the County but not more than 30% for each such five year period. Section 10.3 OTHER INSURANCE PROVISIONS. All insurance policies required by this Agreement shall bear an endorsement, whereby it is provided that, in the event of expiration, or proposed cancellation of such policy for any reason whatsoever, the Director shall be notified in writing not less than thirty (30) days before expiration or cancellation is effective. Expiration, reduction or cancellation of any insurance policy required by this Agreement without obtaining a replacement policy .pursuant to Section 12.2 to meet the requirements herein shall be considered a breach of this Agreement by operator. Operator shall also carry such other insurance as may be required by law. Operator shall be solely liable for any claims or liabilities caused by its failure to maintain insurance required by law. Section 10.4 FAITHFUL PERFORMANCE SURETY. Operator shall, prior to acceptance of waste at the Site under this Agreement, provide to the County an irrevocable Performance Surety Letter of Transfer Station Franchise 28 September, 1994 a Credit in the form set forth in Exhibit B hereto guaranteeing operator's performance of all provisions of this Agreement in an amount of not less than $1,000,.000.00. This Letter of Credit may also be utilized to meet the security and performance requirement of the Use Permit. 9 The Director may allow the Performance Guarantee Letter of Credit required pursuant to a franchise between the County and Operator for the operation of the Keller Landfill to additionally guarantee Operator's performance of all provisions of this Agreement. ARTICLE 11. GENERAL PROVISIONS Section 11.1 GUARANTY BY PARENT OR AFFILIATE. Prior to the Commencement Date, and for all conditions and obligations of this Agreement, Operator shall provide to the Director, proof of guaranty by the parent or an affiliate of Operator acceptable to the County, of the performance by Operator of each provision of this Agreement to be performed by Operator. Proof of guaranty shall be in the form set forth in Exhibit C. Section 11.2 ATTORNEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall pay and bear its own litigation expenses, including attorney's fees. Section 11.3 INDEMNITY AND HOLD HARMLESS AGREEMENT. (a) All work and performances by Operator covered by this Agreement shall be at the risk of operator (b) With respect to third-party claims, operator agrees to save, indemnify and keep harmless the County, its Transfer Station Franchise 29 September, 1994 officers, employees, agents and assign against any and all liability, claims, judgments, or demands, including demands arising from injuries or deaths of persons and damage to property, arising directly or indirectly out of the obligations herein undertaken by Operator, save and except claims or litigation arising through the sole negligence or willful misconduct of the County, and will make good to and reimburse the County for any expenditures, including reasonable attorney's fees, that the County may make by reason of such matters and, if requested by the County, shall defend any such suit at the sole cost and expense of Operator. (c) With respect to third-party claims, the County agrees to save, indemnify and keep harmless Operator, its officers, employees, agents and assigns against any and all liability, claims, judgments, or demands, including demands arising from injuries or deaths of persons and damage to property, arising directly or indirectly out of the sole negligence or willful misconduct of the County, and will make good to and reimburse Operator for any expenditures, including reasonable attorney's fees, that operator may make by reason of such/matters and, if requested by Operator, shall defend any such suit at the sole cost and expense of the County. (d) Should any party successfully challenge the validity of this Agreement or the procedure by which this Agreement was entered into or the validity of any County action which authorizes the County to enter into this Agreement, then in Transfer Station Franchise 30 September, 1994 ti • such case the Operator shall have no cause of action- for damages or any other relief against County as a result of such successful challenge. In the event of any such legal challenge, Operator shall defend such action or proceeding at its sole expense and Operator shall save and hold County harmless from any claims or awards for third party attorneys' fees and costs. Section 11.4 ASSIGNMENT. (a) Voluntary. Operator shall not sell, assign, subcontract or transfer this Agreement or any part hereof, or any obligation hereunder, without the written consent of County; provided, however, that Operator may assign this Agreement without the County's consent to any company which it controls, is controlled by, or which is under common control with Operator. As used in this Section, the term "control" with respect to a company, means the beneficial ownership of mote than 50% of the voting stock of the company. The term assignment shall include any dissolution, merger, consolidation or other reorganization of Operator, which results in change of control of Operator, or any sale or other transfer of a controlling percentage of Operator's capital stock. Any attempted assignment not provided for above without such consent shall be void ab initio. (b) Involuntary. Except as may be permitted by paragraph (a) above, no interest of Operator in this Agreement shall be assignable by operation of law. Any such nonpermitted assignment and any of the following acts, each of which are deemed an Transfer Station Franchise 31 September, 1994 involuntary assignment, shall provide County with the right to elect to terminate the Agreement forthwith, without suit or other proceeding: (1) If Operator becomes insolvent, or makes an assignment for the benefit of creditoral (2) If Writ of Attachment or Execution is levied on this Agreement or other property of Operator such that would have a materially adverse effect on Operator's ability to perform its duties and obligations under this Agreement; (3) If in any proceeding to which Operator is a part;, a Receiver is appointed with authority to take possession of Operator's property such that would have a materially adverse effect on Operator's ability to perform its duties and obligations under this Agreement. Section 11.5 COMPLETE AGREEMENT. No verbal agreement with any officer, agency, or employee of the County or of Operator nor any contract either before, during, or after the execution of this agreement shall affect or modify any of the terms or obligations herein contained unless a written agreement, signed by both parties, specifically provides that same is an amendment to this Agreement. Section 11.6 NO THIRD PARTY BENEFICIARY ENFORCEMENT. While this contract benefits the public interest throughout Contra Costa County, it is an Agreement between only Operator and the County and, accordingly, only Operator and the County may enforce same. No claims, demands, or causes of action by any entity, Transfer station Franchise 32 September, 1594 ..............._... _ _......................................................................................................... .1.1.1.1_ ......... ......... ......... ............ ................ . ....... .... ......... ......... ......... . ........ . .. ........................ . ......... ......... . .................................................... _...................................................................1.111 party, or person claiming to be a third party beneficiary hereunder shall be enforceable. Section 11.7 SURVIVAL OF OBLIGATIONS. County's rights to any damages, remedies, insurance coverage and indemnification under this Agreement shall survive the t9rmination of this Agreement. section 11.8 ARBITRATION. Any controversy or claim submitted to arbitration pursuant to the express provisions of this Agreement, or by mutual subsequent agreement, and arising out of or relating to this Agreement, or the breach thereof, shall be governed by the provisions of Part III. , Title 9 of the Code of Civil Procedure, sections 1280 et seq. as amended from time to time. The arbitration shall be de novo and subject to a de novo appeal or challenge brought in the Contra Costa County Superior Court as to any alleged error of law or as to the admissibility of evidence. California judicial rules of evidence shall apply to the arbitration proceedings. The arbitration decision shall be decided under and in accordance with California law, supported by a preponderance of evidence and in writing in the form of a Statement of Decision pursuant to Code of Civil Procedure Section 632. Section 11.9 CONFLICT. This Agreement is intended to comply with ordinance No. 88-81. In the case of any apparent or potential conflict between the provisions of this Agreement and the provisions of the Use Permit or any .involved development agreement, the provisions of this Agreement and the Use Permit Transfer station Franchise . 33 September, 1994 r shall. be read together and harmonized to the maximum extent possible to effectuate the intentions of the parties. In the case of any unresolved conflict between the provisions of this Agreement and the provisions of the Use Permit, the provisions of the Use Permit shall control. Notwithstanding any other provision in this Agreement or in the Use Permit, importation of waste not originating in Contra Costa County shall be allowed as required by recent U.S. Supreme Court cases. Section 11.10 CAPTIONS. The captions and headings used in this Agreement are for convenience and reference only and are not to be construed as controlling over the text of this Agreement. Section 11. 11 DELEGATION BY BOARD. The Board may, in its discretion, delegate to a County employee or hearing officer any of its functions expressly or impliedly arising from this Agreement provided that in such case any decision made by such Board, County employee or officer may be appealed de novo to the Board. Section 31.12 SEVERABILITY. If any term, provision, covenant or condition ("provision") of the Agreement or the application of any provision of this Agreement to a particular situation is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this Agreement, or the application of this Agreement to other situations, shall continue in full force and effect. Notwithstanding any other provision of this Agreement, if any provision of this Agreement in itself or as applied in any Transfer Station Franchise 34 September, 1994 particular situation is held to be invalid, void or unenforceable, it is the intention of the parties that the remaining portions of this Agreement shall be continued in full force and effect and that the invalid, void or unenforceable provision be severed therefrom. Section 11.13 MASCULINE GENDER USED. The masculine gender is sometimes used in this Agreement and is so used for convenience only and is not otherwise intended. Section 11.14 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Section 11. 15 NOTICES. All notices or other communications ("Notice") to be given pursuant to this Agreement shall be in writing and shall be deemed given when mailed by registered or ' certified United States mail, addressed to the parties as follows: To County: County of Contra Costa Attn: County Administrator To Operator: BFIC, Inc. C/O: Browning Ferris Industries of California Attn: Ron Pfeifer, Regional Vice President 9188 Glen Oaks Blvd. , 3rd Floor Sun Valley, CA 91352 With Courtesy as designated by Browning-Ferris Industries of California. A change in address or a change in the person or title to which Notice is to be given shall be effectuated by Notice to the other party. Transfer Station Franchise 35 September, 1994 .Section 11. 16 JOINT AND SEVERAL RESPONSIBILITY. The obligations of Operator herein are joint and several. Both BFIC, Inc. and Acme Fill Corporation are jointly and individually responsible for fulfilling each and every Operator responsibility, duty and obligation set forth in this Agreement. Further, all insurance policies and surety and guaranty instruments required herein shall cover, secure and guarantee the performance and obligations of both BFIC, Inc. and Acme Fill Corporation. IN WITNESS WHEREOF, this Agreement is effective on the date first provided on page one hereof. OPERATOR BFIC, Inc. , a California corporation By: r' resident By: `.......�' vice-President OPERATOR ACME FILL CORPORATION, a California Corporation By. Pre si ent V ce-Pre dent Transfer Station Franchise 36 September, 1994 a ' C � W Weis By:.. hair, Board of Supervisors ATTEST: By: 00JA&.0LCL C e o t e ard, Deputy APPROVED AS TO FORM: By: County CounselCOU14TY COUNiisb, UA COSTA COUNTY, CALN> _ iCts 12.pts934t - . Transfer station Franchise 37 September, 1994 EXHIBIT C GUARANTY This Guaranty is made and entered into this day of r 19943, by and between the County of Contra Costa (hereinafter "County") and U�us ro ' " ( , ,� corporation ("Guarantor"). RECITALS WHEREAS, BFIC, Inc. , a California Corporation , ("Operator"), an [indirect wholly owned subsidiary] of Guarantor desires to enter into a certain Franchise Agreement with the County (the "Agreement") for the Acme Waste Recovery and Transfer Station; WHEREAS, pursuant to Section 11.1 of the Agreement, the County has demanded that Operator obtain certain assurances from Guarantor, as to all conditions and obligations of the Agreement to be fulfilled by Operator; and WHEREAS, in order to induce the County to enter into the Agreement with Operator, Guarantor desires to provide the County with said assurances as to all conditions and obligations of the Agreement to be fulfilled by Operator, NOW, THEREFORE, the County and Guarantor hereby agree as follows: 1. Guarantor hereby guarantees to the County the full performance by Operator of all conditions and obligations in the Agreement which are to be fulfilled by Operator, provided that the County has fulfilled all of its obligations under the Agreement, and in particular, without limiting the foregoing, that the County has provided Operator with the requisite notice(s), opportunities to cure and any option to arbitrate notice(s), opportunities to cure and any option to arbitrate as provided for in the Agreement. .................................................................... .... ................................................................................................... ......... .................................. ....................... .. ................................................. _ _ __ r . < l 2. The County agrees tove Gu arantor notice by certified mail, return receipt requested, at % J. , / l,�t i� (Attention. General Counsel) each time that the County becomes aware of any fact or circumstance =which may give rise to an obligation of Guarantor to perform pursuant to this Guaranty. 3. The County shalt not sell, assign or otherwise transfer this Guaranty, or its rights or obligations thereunder, without the written consent of Guarantor, which consent shall not be unreasonably withheld if the assignment is to a municipal corporation. IN WITNESS WHEREOF, this Guaranty has been executed on the date first above written. COU TYC By. GUARANTOR By Its: S4.. Q. By: Its: G EXHIBIT Al COUNTY OF CONTRA COSTA, STATE OF CALIFORNIA AMENDMENT NO. 1 TO FRANCHISE AGREEMENT FOR THE ACME FILL WASTE RECOVERY AND TRANSFER STATION THIS AMENDMENT NO. 1 TO FRANCHISE AGREEMENT FOR THE ACME WASTE RECOVERY AND TRANSFER STATION (the "Agreement" ) is made and entered into this November 1, 1994, by and between the COUNTY OF CONTRA COSTA (hereinafter "County") and BFIC, Inc. , a California Corporation, a California Corporation (hereinafter referred to as "Operator" ) . RECITALS WHEREAS, on September 13, 1994, the Board of Supervisors of County took action concerning a franchise agreement with Operator, and WHEREAS, the parties have reached agreement on substantive issues concerning the September 13, 1994 action and are prepared to compromise their differences by agreeing that, without either parties waiving any rights as to said September 13, 1994 Franchise Agreement, that said Franchise Agreement may be amended as set forth herein, NOW THEREFORE, the County and Operator, for and in consideration of the covenants and agreements as hereinafter set forth and for other good and valuable consideration, the receipt , and sufficiency of which is hereby acknowledged, do mutually agree as follows : SECTION I . AMENDMENTS. The following sections of the Franchise Agreement are hereby amended as shown in this section (by adding the shaded language and deleting the rR language) : Amendment to section 4.20, Commitment of transfer station waste: "Section 4 .20 COMMITMENT OF TRANSFER STATION WASTE. To the extent allowed by law, and so leaqas the KelleE L ad€il --yrs dispesalw" Operator agrees that Solid Wastes received at and processed through the Transfer Station shall not be delivered to the Acme Landfill for disposal. " Amendment to section 6 .2 , Surcharge: "Section 6 .2 SURCHARGE. The County may determine and establish at least once every two years, effective on the date determined by the Board of Supervisors, (but initially no sooner than twq years, eighteen months from the effective date of this Agreement except for the purpose of decreasing the Surcharge in accordance with Section 6 .4 .d) , the Surcharge, which shall be added to the then applicable Transfer Station Proprietary Rate, and collected as part of the Gate Rate. Operator will be provided at least ninety (90) days written notice of any newly established Surcharge. In the absence of the County establishing a Amendment No. 1 - Transfer Station Franchise, October 31, 1994 Page 2 _.._. . . ................................................................................................................................................................ _..._.. particular Surcharge amount, the Surcharge to be collected by the Operator for the County shall be thirty percent (30%) of the then applicable Transfer Station Proprietary Rate. " Amendment to subsection b of section 6 .4, Initial Surcharge: "b. Funding of Programs from Surcharge. During the period covered by the above initial Surcharge, costs of all current County programs except for LEA and AB 939 fees (required or authorized by the Use Permit or this Agreement) shall be funded from said combined 25% Transfer Station and Keller Landfill Surcharge. In addition, any household hazardous waste fee imposed by the Board pursuant to Public Resources Code section 43213 shall be collected (deducted) from said combined Surcharge amount. Notwithstanding any other provision of this subsection or agreement, any Board .of Supervisors ` directed mandated fees (including among others any state fixed and required fee, local enforcement agency established fee and AB 939 fee) may at the Board's direction be collectedfor the County in addition to any established surcharge percentage. " Amendment to Section 6 .5, Contracts: "Section 6 .5 CONTRACTS. For all contracts entered for the delivery to and receipt of Solid Waste at the Transfer Station, the Surcharge percentage applicable at the time of the contract Amendment No. 1 - Transfer Station Franchise, October 31, 1994 Page 3 shall apply for the term of said contract. The parties agree that any later established surcharge amounts shall not apply to waste received pursuant to such Solid Waste contract for the term of said contract. Operator shall advise County of any contract subject to the privileges of this section immediately upon execution. Operator shall provide County with any and all information requested by County concerning any such Contract, including providing County with copies of such contracts upon request. Operator shall also provide to County upon request, copies of all contracts for the transportation (hauling) and/or disposal of Solid Waste transferred at or processed through the Transfer Station. " SECTION II . EFFECT. Neither party, by its agreement and execution of this Amendment No. 1 to the Franchise Agreement, waives any of its rights existing prior to the execution hereof, and nothing herein shall be construed as a waiver by either party of its -rights or assertions, including, but not limited to, those set forth in the above recitals. Should any subsequent dispute arise between the County and the Operator concerning the action of September 13, 1994 on the franchise agreement, both parties agree that this Amendment, any action taken by the Board of Supervisors on October 31, 1994 and/or November 1, 1994 , and any related action by Operator shall not be admissible in any administrative, equitable or legal proceeding to determine intent Amendment No. 1 - Transfer Station Franchise, October 31, 1994 Page 4 ............................................................................................................................................................................................................................................................................................................................. ..................................................................... ......._...........-__... .............. ..._..... ... ................. ... .......... ......_...... ......_ or effect of the action of September 13, 1994 . IN WITNESS WHEREOF, this Agreement is effective on the date first provided on page one hereof. OPERATOR BFIC, Inc. , a California corporation President By: Vice-President CO TTY OF ONT COSTA By: hair, Board of Supervisors ATTEST: By: 0VVM 0't I A,-, Cle k of the' Board i APPROVED AS TO FORM: By: County Counse if^:`ptzamd.1 ,amendment No. 1 - Transfer Station Franchise, October 31, 1994 Page 5 EXHIBIT B TO CONSENT TO FRANCHISE ASSIGNMENT BFIC has undertaken certain activities and made certain commitments with regard to its operations as required by the Franchise Agreement. The following is intended to set forth several of said operations, current activities and/or ongoing commitments of BFIC which Allied agrees to continue, undertake and/or assume as required by the Franchise Agreement. Those activities or obligations include but are not necessarily limited to: Allied shall proceed in a timely manner with the land use permit reviews by the County of the Transfer Station and further agrees to correct any deficiencies discovered in the review. 2. Allied shall make such payments to County as required to pay for staff/contractors time in the implementation of the associated land use permit. Allied agrees to assume existing and future liabilities of BFIC for such review and enforcement of land use permit conditions of approval and related costs. DD14'TSAS8GN.D0C EXHIBIT C .A 410ALLIED WASTE INDUSTRIES , INC. December 29, 1998 Ms. Janet Schneider Executives Director Central Contra Costa.Solid Waste Authority q 1280 Civic Drive, Suite 314 Walnut Creek,CA 94596 r'r C4 r r RE: Response to Request for Information - Assignment of Solid Wastetilect Transfer and Disposal Franchise Agreement , cn C) Dear Ms. Schneider: On behalf of Browning-Terris Industries (BFI), Allied Waste Industries, Inc. (Allot) is responding to your December 9, 1998 correspondence regarding assignment of the Solid Waste Collection, "Transfer and Disposal Franchise Agreement. With the majority of questions being centered around Al ied's organizational structure, experience and plans for the Centra.Costa/Solano service area.,a direct response from Allied appeared to be the most appropriate. Responses are presented in a manner commensurate with the format of your December 9, 1998 transmittal and represent the most complete information available at this time. Several Franchisors are in various stages of implementing diversion rograms to assist them in attaining AB 939 goals. Therefore,some responses are contingent Pon further development and evaluation of these programs with the various Franchisors. While BFI has initiated numerous discussions with these entities, the specifics of the program's .and their i lec eratation, has not been finalized and most likely will not be determined until the early part of 1999. As such,it would be difficult for Allied or BFT to provide as spec a response as anticipated without the benefit of continued discussions with these Franchisors. In these instwom,our response is intended to illustrate our commitment to assisting the Franchisors with achieving their diversion goals in a timely and efficient manner. A. Description of Acquiring Entity 1. The name of the'acquiring entity will be Allied Waste Industries, Inc. , a Delaware corporation. The address noted in your transmittal is correct and notices for contractual natters should be forwarded to the Pleasant Hill Bayshore Disposal collection operation address which is,as follows: 1 5880 N. Greenway-Hayden Loop, Ste. 100 /Scottsdale, AZ 85260 /602A23.2946 /602,4Z3.94 Z4 tnx 441 N. Buchanan Circle Pacheco, CA 94553 2 -4. Response to Item A(1) eliminates the need for a responses to these items. 5. Allied Waste Industries is organized in a decentralized fashion placing the decision making power with the District Manager in the field. While a District Manager may have several people on a management team such as public sector and community involvement/education representatives, operations personnel and customer service managers, they are ultimately empowered to make the decisions which will impact the service provided to the Franchisors. The Contra Costa/Solano division will be part of Allied's Northern California District. The other operating entities within this district include (1) an operations contract with the South Napa Valley Waste Management Authority for transfer and disposal of waste (located in Napa, CA) and (2) a hauling company, composting facility and landfill in Stockton, CA. The Northern California District is one of six districts in Allied's Western Region located in Scottsdale, AZ. Allied has a total of five regions across the United States which are typically staffed by relatively few individuals. Typical position titles include a Regional Controller,Regional Landfill Engineer and Regional Safety Manager all of whom report to the Regional Vice President. District Managers report directly to the Regional Vice President for a specific Region. The Regional Vice Presidents report to the Vice President of Operations who in turn reports to the Chief Operating Officer(COO). The COO reports to Allied's President/Chairman of the Board. It is important to once again point out that the company's management philosophy is centered upon local managers being held responsible for decisions made in a given service area. While regional and corporate staff are contacted on various matters, their role is one of support and guidance versus policy making and taking the lead on issues that affect customers such as the Franchisors. B. Management 1. The names, occupations and addresses of key individuals within Allied's management structure are as follows: Michael Caprio District Manager (upon closure of the transaction District Manager's Northern California office will be located at Pleasant Bill Bayshore Hauling 1145 W. Charter Way company): Stockton, CA 95206 209-466-5192 Page 2 Mon Swierenga West Region Vice President Allied West Region Office 7201 E. Carnelback Road, Suite 375 Scottsdale, AZ 85251 602-596-9596 Don Slager Vice President of Operations Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 Larry Henke Chief Operating Officer Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 Tom Van Weldon President/Chairman of the Board Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602423-2946 A complete listing of all officers for Allied Waste Industries, Inc. is included in Allid's 1997 Annual Report which was supplied to all of the Franchisors during the past month. 2. Allied is currently in the process of evaluating staffing levels and various personnel for the Contra Costa[Solano service area. It is our intent to proceed with the transition in an orderly and non-disruptive manner and part of this entails utilizing as many of the existing personnel as is practical and efficient. However, it has been the practice of the company to not make decisions on personnel and staffing levels hastily. This can lead to unnecessary disruptions and customer service issues which could otherwise be avoided. Our intent is to assume control of the operations on February 1, 1999 and manage them for a period of 45-60 days, or longer, prior to making ultimate staffing decisions. By proceeding in this manner, Allied is better able to make informed, educated decisions in terms of staffing and operations. The end result is a smoother transition and a work force that was selected through evaluation of employees first hand and not through second hand information or faulty assumptions. Page 3 In terms of employees that may become employed by Allied from outside of BFI's Contra Costa/Solano service area,it would be premature and inappropriate to discuss the names and backgrounds of these individuals at this point in time. The names and experience levels of these individuals will most likely not be made public until after the transaction closes in late January due to the potentially awkward situation which could occur if the names of these individuals become public. A copy of the currently anticipated organizational chart for the Contra CostaJSolano service area is attached. Allied reserves the right to make adjustments to the structure based upon our evaluations over the next month during due diligence and our findings during the initial period of managing the operations. While we do not anticipate any material deviation from this structure, we trust that the Franchisors can respect our need for flexibility with the ultimate goal of providing timely and efficient service to our customers. 3. While Allied has made some decisions relative to former management employees of BFI, we believe that it would be inappropriate for these decisions to be discussed in the context of this transmittal. Although unlikely, it is also important for discretion to be utilized in in the event that the transaction does not close and BFI remains the operator in the service area. Our goal during the transition, and afterwards, is to disrupt as little of the operations as possible and to simply improve upon the services currently being provided. At this point in time we do not envision engaging any former BFI employees through employment or consulting agreements. Any existing management employees that Allied wishes to retain will be hired as full-time personnel. To the best of our knowledge, the cost of these agreements are typically not allowable in the rates. Notwithstanding this, Allied has no plans to request an increase in rates should our position on engaging current BFI employees in this manner change. C. Management Experience 1. The following is a listing of publicly franchised solid waste collection operations presently operated by Allied. In the majority of these cases, Allied has become the operator through an acquisition or asset swap and has been required to transition into an existing contractual arrangement. The list includes information pertaining to the size of the city being served, the type of service, equipment utilized, dates when Allied began servicing the entity, an estimated number of households and commercial customers as well as contact information for the franchise representative. Page 4 ................................ ....... ......... ......... . ....... ...................... .............................................................._...... ... ......... ............._ ......_._. .... ......... _............._..............................................._.. ..............................................................................___. .......................................................................... City of Chula'Vista Mr. David Rollins City Manager 276 46`Avenue Chula Vista, CA 91910 619-691-5031 * Residential refuse, greenjwaste and curbside recyclables (approx. 30,000 households utilizing side load and rear load collection vehicles) * Commercial refuse and recycling(approx. 1500 customers utilizing front end load type collection vehicles-includes multi-family residences) * Population of approximately 150,000 * Allied began service through Laidlaw Waste Systems acquisition in Fall 1996 City of Stockton Mr. Gary Ingraham Assistant City.Manager City Hall 425 N. El Dorado Street Stockton, CA 95202 209-937-8212 * Residential refuse and curbside recyclables(27,500 household utilizing rear loaders for refuse and semi-automated compartmentalized recycling vehicles) * Commercial refuse is collected competitively(multi-family is competitive as well) * Population of approximately 250,000 * Allied began service through an acquisition in June 1998 (Sunrise Sanitation is the name of entity which services the City) San Joaquin County Mr. Tom Horton Director of Solid Waste 1.810 E. Hazelton Street Stockton, CA 95201 209-468-3068 * Residential refuse and curbside recycling(19,000 households utilizing similar collection methodology as City of Stockton) * Subscription greenwaste program for 2000 homes utilizing My automated side loaders * Commercial is competitive and includes multi-family residences * Population of approximately 50,000 for the district served. * Allied began service through acquisition noted under City of Stockton reference. Page 5 City of North Richland Hills (Dallas-Ft. Worth metropolitan area) Mr. Larry Cunningham City Manager 7301 N.E. Loop 820 North Richland Hills, TX 76180 817-581-5500 * Twice per week residential service for approximately 13,000 customers utilizing rear loaders and once per week collection utilizing semi-automated compartmentalized vehicles. * Commercial service to approximately 500 customers utilizing front end load and roll-off collection vehicles(includes multi-family). * Population of approximately 53,150 * Allied began service through Laidlaw Waste Systems acquisition in 1996 City of Bedford (Dallas-Ft. Worth metropolitan area) Chuck Barnett Assistant City Manager 2000 Forest Ridge Drive Bedford, TX 76021 817-952-2106 * Twice per week residential collection utilizing front load collection vehicles for 11,200 homes * Once per week residentiall collection for curbside recyclables utilizing semi-automated compartmentalized vehicles. * Commercial service to approx. 450 customers utilizing front load and roll-off collection trucks(includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 51,000 City of Euless (Dallas-Ft. Worth metropolitan area) Tom Hart City Manager 201 N. Ector Euless, TX 76039 817-685-1400 * Twice per week residential collection utilizing front load vehicles for 9500 customers * Commercial service to approx. 470 accounts utilizing front load and roll-off collection trucks('includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 40,850 Page 6 2. For the references listed above, Allied serves multiple jurisdictions within the Stockton division of the Northern California District (City of Stockton& San Joaquin County). Within this division, Allied also serves the City of Lathrop (approx. population 10,000) with a fully automated program for refuse,green waste and commingled recyclables. The Chula Vista hauling division also services the City of Imperial Beach(approx. population 15,000)with fully automated refuse, green waste and recyclables collection. All of the contracts in the Dallas-Ft. Worth metropolitan area are serviced from Allied's Dallas district and involve extensive interaction with multiple entities. The District also services additional cities from this location which do not have a population of 50,000 people or more. 3-4. As noted previously,Allied is still in the process of identifying various individuals to fill management positions in the Contra Costa/Solano service area. Due to the fact that key individuals will most likely be hired externally and their employment will be contingent upon successful close of the transaction, it would be inappropriate for their identities to be provided. Additionally, providing a summary of their experience levels and backgrounds would also be inappropriate. While Allied understands the desire for the Franchisors to gain a comfort level with individuals placed in these key management positions, it would be irresponsible for our firm to jeopardize an individual's current employment situation by discussing any aspects of their background at this point in time. Due to their employment most likely being contingent upon successful closure of the asset swap, their identities may also not be divulged until the transaction has been consummated. Allied has every intent of employing competent experienced personnel to manage the operations and business base within the Contra Costa/Solano service area. We recognize the importance of retaining quality individuals not only to successfully manage our investment but also to build and maintain relationships with our employees and customers. As soon as practical and appropriate, Allied will notify the Franchisors who the key management personnel will be and what their background and experience levels are. Any input from the Franchisors,will be welcomed at that point in time. 5. Same response as Items 3 &4. It is worth noting that as Northern California District Manager, I have responsibility for all collection, transfer, processing and disposal operations. Prior to becoming employed with Allied Waste Industries, Inc., I was employed by Browning-Ferris Industries primarily in the management of landfills and transfer operations. Of most interest to the Franchise cities is my experience as District Manager for N. California landfills at BE where I worked at the Keller Canyon Landfill for a period of 2.5 years. As such,I am very familiar with the challenges presented by the facility from an engineering, environmental,political and operational standpoint. The role Page 7 of District Manager at BFI also included supervision of transfer operations which complemented the landfill. During my final year of employment with the company, I served as manager of BFI's public sector business in the Bay Area and became very familiar with the Contra Costa/Solano franchise contracts as well as the type of service provider that is envisioned by the Franchisors. This exposure provided me with not only a good working knowledge of the area but also of the expectations placed upon a solid waste service provider in terms of customer service,community involvement, labor relations and overall approach to managing a business in the area that provides a vital public service. Prior to my employment with BFI, I served as Regional Environmental Manager for Norcal Waste Systems Central Valley and Bay Area disposal facilities (five years). My primary responsibilities included permitting, compliance, construction management and interaction with municipal entities on contract issues. While the bulk of my experience has been in the transfer and disposal side of the industry, I have gained extensive experience with collection operations and have a strong working knowledge of the key elements required to run a successful hauling division. The primary areas of focus for Allied at the Pleasant Hill Bayshore Disposal hauling company will be customer service, assisting the Franchisors in attaining their AB939 goals, labor relations,expenditure of capital necessary to provide all the service required contractually, maintenance of equipment, safety and risk management, efficient utilization of personnel and employee morale. Allied also believes that significant opportunities exist to work cooperatively with other local haulers in order to provide an improved service package to the Franchisors. A Transition of Operations I. Allied anticipates a smooth and seamless transition of the operations. This is the case because of our intent to predominantly utilize existing employees and largely the same routing structure at the hauling division. As such, personnel in the field will be very familiar with the various nuances of a particular area. Within the past three to four gears Allied Waste has grown substantially. The primary driving force of this growth has been through acquisitions and as such, the company has obtained a great deal of experience in integrating acquired entities into our system. It is important to note that the decentralized organizational structure of the company allows for a large degree of flexibility in the integration of acquisitions. While some components of the company's approach to managing a business, such as information systems, are constant, a large degree of flexibility exists in terms of how a division is staffed, customer service protocol, approach to community involvement and operational guidelines. Allied Page 8 ........................... ............................... _..................................................................................................................... ...... ......... ......... ............ ..... ............... ........ .......... ....... ... ......... .. ......... . . _ .... . ......... understands that each service area is different from the next and that a one size fits all approach has proven to be ineffective in the solid waste industry. It has been Allied's practice to take a cautious approach to integrating acquisitions. Ding the due diligence stage of acquiring a company, a great deal is learned about hover the operation functions and how well it is serving the customer base. However, it is often very difficult to truly gain a solid understanding of how a particular division functions without managing the operations for a period of time. By alloying for an adequate evaluation period, new management can be confident that the decisions being made in terms of staffing and organizational dynamics are appropriate and not based upon faulty assumptions. Our approach to integrating operations in the Contra Costa/Solano service area will be similar to that outlined above. While we have made some decisions on retention of management personnel, we anticipate that the majority of the workforce in place at the operating companies will remain constant. During the first 45-60 days under Allied management, our personnel will evaluate the existing set of procedures and practices as well as personnel to determine whether there is a need for change in any key positions. Our assessment may conclude that the existing group of personnel is adequate and very little if any change is required. It may also lead us to conclude that some changes in terms of personnel and operational practices are necessary and these changes will be instituted so that the least amount of disruption occurs. It is worth noting that transition from one information system and billing/payables system can be an area where customer service is impacted the most. BFI and Allied have agreed to work closely and cooperatively in this area to ensure a smooth transition. Our experience with integrating multiple systems (including SAP)into our financial systems is extensive and preliminary assessments by our MIS team indicate that the Contra Costa/Solano service area can be transitioned to Allied information systems with minimal difficulty. In order to assist in this process, Allied has retained as a full-time employee BFI's Bay Area Controller. Her knowledge of the Contra Costa/Solano accounting;procedures and requirements is extensive and will be a great asset in ensuring that Allied's systems are formatted to satisfy all the reporting and customer service requirements of the Franchisors. She has been involved with the Contra Costa hauling operation prior to BFI's acquisition in the early 199Ys and was intimately associated with it's integration into BFI's financial systems utilized at that point in time as well as their recent transition to SAI'. Allied anticipates retaining BFI's billing system for a short period of time after the transition to ensure that proper Milling is maintained. Allied has also received positive feedback from several key operations employees at all of the operating locations in relation to their desire to remain employed at the facilities. Page 9 All of these employees have been with the respective facilities for an extended period of time and have an extensive base of knowledge that will serve Allied well in maintaining a suitable level of service during the transition stage. I have been involved in the latter stages of integrating the Stockton division into Allied from an operational standpoint. My primary focus has been to evaluate operational practices and determine whether they can be made more efficient or customer friendly through the use of different technology or whether re-capitalization of a truck fleet/heavy equipment or site improvements will be more beneficial from an operating efficiency or customer service standpoint. As a case in point, these decisions were made only after careful assessment and review and were not the result of preliminary assessment. It is very likely that the vast majority of field employees servicing various Franchisors will remain in the same roles as those that were held while the company was managed by BFI. Their experience with various routes and needs of individual customers (ie. senior citizens) is invaluable and Allied would be remiss in upsetting this component of the operation. Our initial review of the administrative side of the operations leads us to believe that while some adjustments are necessary, the basics of the day to day functions of the company are relatively sound. As noted previously, these assumptions will be reviewed once Allied assumes management control of the entities. . In short, the overall approach of transition through evaluation and assessment during a change in management has allowed Allied to integrate numerous companies with minimal or no disruption to the customers being serviced. As noted in section C(l), many of the municipal contracts that are listed were obtained through acquisitions and it would be instructive for the Franchisors to inquire into how the transition phase of the acquisition proceeded. As with our response to several of the items in Sections B and C, it would be inappropriate to divulge the experience of potential employees in transitioning acquisitions. Allied's intent is to minimize the amount of disruption in all facets of the operation. Our knowledge of the expectations of the Franchisors in terms of customer service,operations, community involvement and interaction with city officials as well as the familiarity with the current accounting systems should allow for a trouble free and timely transfer of operations. 2. I will be the primary liaison between Allied and the Franchisors during the transition of operations. As noted previously,I have extensive experience through my tenure with BFI and Norcal in dealing with the public sector. In the past month I have taken the time to meet all of the City Managers and JPA directors in order to gain an understanding of their individual needs as well as provide them the opportunity to get to know myself and Allied. As noted during these meetings, should there be a need for further discussion or to have Page 10 ..................................................................................... _...... _. _. myself or other Allied representatives meet with individual council and Board members, we would be pleased to make ourselves available. 3. Allied Waste provided documentation to Teamsters Local 315 and Operating Engineers Local 3 of our intent to honor the existing obligations of BFI throughout the remaining term of the collective bargaining agreements. A copy of this letter was sent to all of the Franchisors. During my tenure with BFI, I was involved in the successful resolution of several labor relations issues and contract negotiations. More specifically, I was BFI's primary contact during the beginning of their negotiations with Local 3 at the Keller Canyon Landfill. An agreement was reached between the two parties with no disruption in service at the facility. The individuals who are being contemplated for some of the key management positions also have extensive experience in managing labor relations issues including negotiations from both sides of the bargaining table. 4. The response to Item D(l)should provide the Franchisors,with an understanding of how Allied intends to approach the staffing of the Contra Costa/Solano operations. It is our intent to approach this area of the transition methodically and to evaluate our needs once we assume control of the operations. laking decisions on these issues prior to having the opportunity to evaluate the operations first hand would be inappropriate and could impact service levels to the Franchise cities. E. Litigation A transmittal from Allieds corporate legal department is attached and should provide a suitable response to this request. F. Contingent Environmental Liability 1. Based upon Alhed!s review of the environmental condition of the properties associated with the Contra Costa service area, we have not identified any contingent environmental liabilities. Typically these type of liabilities are associated with older disposal facilities. The Keller Canyon facility began operations in 1992 and has been constructed in accordance with state-of-the-art design criteria. To date,these environmental controls show no signs of malfunction and Allied anticipates continued positive performance in this area. Provisions for funding of closure/post-closure maintenance costs and compensation for any associated accrued future liabilities will be considered as part of the Definitive Agreement between the two companies. Page 11 G. Insurance and Indemnity 1. Allied's Legal & Corporate Secretary has prepared a letter which outlines the corporation's capabilities in terms of securing performance bonds and letters of credit. Upon assignment of the franchise agreements to Allied, performance bonds in the amounts specified in the agreements or if necessary, the individual Franchisor(Antioch and Clayton), will be forwarded to each of the Franchisors. With an extensive base of business in California, Allied has relationships with bonding companies within the state who would provide these assurances. 2-4. Copies of certificates of insurance are attached and indicate the various coverages available to the corporation. As with the performance bonds, upon assignment of the agreements Allied will provide individual certificates to the Franchisors which name them as additional insured. These coverages will not only apply to the hauling division but also to the STAR Transfer Station and the Keller Canyon Landfill. 5. Allied and BFI have both agreed to assume the liabilities of the other party as part of the Definitive Agreement currently being prepared. As a result both parties will assume the contractual obligations of the other in terms of indemnity obligations including CBRCLA, hazardous waste and other environmental liability claims. Assumption of any liability will also include actions or events which may have occurred prior to the assignment of the franchise agreements to Allied. BFI will not retain responsibility for any indemnity obligations to Franchisors after the transaction has closed. A copy of the Definitive Agreement for the transaction will be provided to the Franchisors upon it's completion which is anticipated to be two weeks. H. Acquisition Financing 1. As noted above, a Definitive Agreement is currently being finalized and should be available within two weeks. The responses to items (a) through (i) should provide the Franchisors with a general outline of how the transaction will be structured. (a) Purchase of company stock has been agreed upon for the Contra Costa/Solano component of the asset swap. (b) The total purchase price for the overall transaction is$142MM. The amount ascribed to the Contra Costa/Solano service area has yet to be determined. (c) A full monetary payment will be made to BFI from Allied at the close of the transaction. See attached letter from Alliedts Corporate Secretary regarding financing sources for the corporation. (d) Cash at the close of the transaction. (e) There will be no consulting agreements offered to current BFI employees. (f) Terms to be contained in final Definitive Agreement associated with the transaction. Page 12 Terms to be contained in final Definitive Agreement associated with the transaction. (h) Due diligence ends January 10, 1999. (i) At this point in time neither party envisions potential conflicts with the existing franchise agreements. Allied has indicated to the Franchisors that they are willing to assume the terms and conditions of each individual agreement. 2. As noted in the preceding set of responses, a letter from Allied!s Corporate Secretary regarding corporate financing and bonding capabilities is attached. Working capital required during the transition will be financed through the line of credit referenced in this document. L Capital RMuirements 1. The vast majority of the capital expenditures in the service area over the next five years will be at the Keller Canyon facility. Our current projections indicate that approximately $18-20 million will be expended to develop additional airspace to accommodate refuse flow from the Franchisors. The bulk of these expenditures will be for earthmoving, installation of composite fining systems and leachate management and is expected to occur in the first two years of Allied's operation of the landfill. These estimates will be refined as designs for individual cells are developed. As of this point in time, we do not anticipate any other major construction activities to occur at the landfill facilities with the exception of fitter fence installation and drainage improvements necessary for normal site operations(approx. $75,000 annually). Worth noting is that we anticipate on January 5, 1999,waste currently being diverted to the Potrero Hills Landfill will return to Keller Canyon. Current airspace that has been developed should provide approximately one year of capacity for waste from all of the Franchisors. Construction during the spring and summer of 1999 should provide suitable amounts of airspace for continued acceptance of these wastes. In terms of the transfer station and hauling operations there may be minor improvements made to the facility that would be necessary during the normal course of operations over the next five years. However, at the present time we do not anticipate any major construction activities at either of the facilities. Some all weather surfacing of adjacent property may be necessary to accommodate bin and container storage. This is anticipated to cost approximately $75,000 (to occur in 1999). In addition, all weather areas for transfer and processing of greenwaste and recyclables may be constructed during 1999 to accomodate additional diversion programs established with the Franchisors or arrangements with other local haulers(approx. $100,000). The capital expenditures outlined above were identified and reviewed during the evaluation process prior to the announcement of the transaction and are ones that Allied views to be necessary in the normal course of doing business. As suck we do not Page 13 anticipate adjustments to rates as a result of these projects outside of what is allowed under the franchise agreements (ie. CPI's, pass-through of costs for compliance with new regulations, new regulatory surcharges, etc.). The source of funding for these projects will be the line of credit that discussed in Section H. 2. During the course of operating solid waste collection, transfer and landfill operations equipment will need to be replaced on a regular schedule. The costs associated with these replacements is viewed by Allied as those that are necessary to provide service to our customers and have already been considered in the existing rate base. Costs associated with the implementation of new programs may require capital expenditures and services outside of those covered under the existing agreements and as such, may require adjustments to the rate structure(ie. green waste collection programs, etc.). Allied's FY'99 budget for capital expenditures in the Contra CostalSolano service area, outside of landfill cell development is as follows: General site improvements(transfer station&collection co.) $ 220,000 Collection vehicles $2,195,000 Landfill equipment(new purchases&rebuilds) $1,375,000 Shop equipment, service trucks, maintenance upgrades $ 300,000 Containers, debris boxes, carts, compactors $ 605,000 Total $4,695,000 While we do not anticipate this level of capital expenditure on an annual basis, we do envision replacement of a certain number of collection vehicles, landfill heavy equipment, support vehicles and containers on a regular basis. We have not developed detailed budgets for years 2-5 but based on past experience and knowledge of the age of the fleet in all three locations, the capital expenditures on an annual basis would generally run 50-60% of those anticipated for F'Y99. The types of vehicles which will require replacement in FY99 are recycling collection equipment and rear loaders. All of the vehicles being replaced are nearing the end of their depreciation cycle (te. 10 years). In addition,we anticipate that additional roll-off trucks may need to be purchased to satisfy demand and improve response times throughout the service area. It is important to note that all of the purchases outlined above are replacements. As such, Allied views these expenditures as those necessary to provide service under the framework of the existing contractual arrangements. As additional equipment reaches the end of it's anticipated life a decision will be made to either replace it with a new vehicle or perform a complete rebuild of the chassis and body of the truck. It is important to note that a large portion of the fleet(approx. 401%) consists of relatively new fully automated and front load vehicles purchased to service the CCCSWA Page 14 service area and the City of Antioch's and Clayton's automated collection programs. As such, we do not anticipate that many of these vehicles will be replaced within the next five years. Only one vehicle associated with a new program(green waste in Clayton)is included in the preceding list. It is our understanding that a contract amendment has been negotiated and signed between BFI and Clayton to provide for this service and Allied has indicated to the City of Clayton that we plan to honer the terms of the contract amendment and initiate the service which is scheduled to begin on March 1, 1999. As noted previously, Allied is aware that a number of the Franchisors are interested in establishing green waste collection programs and we are very interested in providing these services to these areas. The framework and terms of these collection programs will be discussed and agreed to with each Franchisor prior to the implementation of the programs. Any new services that are provided or negotiated that are outside the current terms of the collection agreements will be discussed with the individual Franchisors on a case by case basis. In terms of transfer station and landfill equipment, we do anticipate that some of the transfer trailers will be replaced in the next five years as well as some of the existing landfill equipment. We envision two transfer assemblies being replaced on an annual basis and at least one piece of heavy equipment being replaced annually after 1999. Once again, these are expenditures that Allied views to be necessary in the normal course of doing business and would not result in an additional request for funding or cast recovery from the Franchisors. 1. Financing of Existing Operations Prior to entering into a Letter of Intent for acquisition of operating entities, Allied performed a thorough analysis of whether the operations will satisfy our financial benchmarks. Additional analysis and review is also performed during the due diligence stage of the acquisition process. used upon our assessments of the Contra Costa/Solano service area, Allied believes tl .t projected revenues over the next five years under the sting Franchise agreements are sufficient for compliance with the obligations of each of the Franchisors' agreements. As noted previously, any new programs envisioned by the Franchisors may result in added costs but this will ultimately be determined through discussion with each individual entity. At this point in time we believe that it is premature to discuss any planned operating efficiencies that may occur as a result of a change in ownership. As stated above, it has and will be Allied's practice when assimilating acquisitions to proceed in a methodical and orderly manner so that decisions of this nature are based upon first hand experience versus assumptions arrived at through review of financial statements and cursory reviews, Page 15 Conversely, we do not anticipate any significant increases in costs as a result of the change in ownership. My knowledge of how the operating entities are currently staffed and managed as well as our review of year over year financial reports, do not indicate that significant increases in expenses will occur. At this point in time,Allied envisions rates being affected only through CPI's, new programs (ie.greenwaste collection)and other cast recovery items that are currently allowed under the existing franchise agreements. With the exception of CPI's, which in most agreements are specifically called out in terms of timing, it is difficult to provide a schedule for potential increases in rates due to the fact that so much of this schedule depends upon the individual Franchisors and the specifics of the programs they request. K, Other Considerations 1. As noted in the preceding section, Allied intends to provide service to the Franchisors within the framework of the existing franchise agreements. We do not consider a change of ownership to be an opportunity to approach the Franchisors and request additional funding. As part of the due diligence process and our existing knowledge of the franchise agreements, Allied has a thorough understanding of the nature of the revenue base and the types of costs that are allowable under the terms and conditions of the agreements. Any future requests for increases will be handled in a manner commensurate with the terms of the individual franchise agreements(ie. CPI requests by certain dates). Any additional costs associated with the implementation of new programs (ie. greenwaste collection) will be determined through evaluation of the type of program desired by a Franchisor as well as the existing service offered. Statements regarding specific adjustments outside of the standard CPI increases would be inappropriate at this time as much of this will be decided by the needs of the individual Franchisors. Allied's intent is to provide as stable a rate base as possible to our customers while providing a high level of quality in terms of service. We believe the existing revenue base is sufficient to provide a reasonable profit on the services required in the franchise agreements. Costs associated with any new or expanded service will need to be determined through assessment of costs associated with the new programs and any synergies with the existing service package. 2. During our discussions with the various Franchisors concerning the asset swap, several issues related to customer service have been brought forth. Many of these issues center around the inability of customers to receive service in a timely fashion(ie. maximum 24 hour turnaround)as well as not being able to receive carts or containers when requested. These type of concerns can be addressed by investment of the capital discussed in Section I and servicing all back orders on container and cart requests_ Based upon our Page 16 preliminary evaluation, it is our sense that a large portion of the customer service complaints have stertu ed from service representatives having to tell customers that their requests cannot be accommodated due to a lack of operational follow through. Allied believes this issue can be resolved relatively quickly and the capitalbudget for FY99 envisions expenditures necessary to address the issue. As with other facets of the operation, Allied intends to evaluate the existing personnel and customer service procedures during the initial stages of the transition. We believe it is important to review existing procedures and practices first hand and to not make assumptions based upon cursory review. Changes in customer.service procedures may occur only after a thorough review of procedures has occurred. These changes may be as simple as providing training to individuals on proper procedures for responding to issues in a fashion that is commensurate with the expectations of the Franchisors. Allied may also determine that the existing personnel staffing the customer service group are better suited to other roles. Our goal is to staff`the customer service group with individuals who understand the importance of placing the customer's needs first and that when a negative response is appropriate, it is delivered in a polite and courteous manner. To a large degree, the approach to customer service is dictated by the example set by management and the performance benchmarks that are established. Customer service does not always entail saying"yes" but it does involve making every attempt to resolve a given issue in a timely and responsive manner. As noted previously,BFI and Allied have agreed to work cooperatively to ensure that the existing level of customer service is maintained. This may entail the use of BFrs current customer management system for a brief period of time to allow for an orderly transition to Allied's customer management systems. Allied has also held discussions with existing customer service employees and the majority have indicated a willingness to remain with the company following the management transition. These employees will be evaluated during the initial 45-60 period and a determination will be made by both parties as to their ultimate disposition. 3. A number of the Franchisors have indicated a desire to implement green waste and mixed paper or commercial recycling programs within their jurisdictions. Allied has indicated their willingness to provide the service necessary to the Franchisors in working towards their AB939 goals. The timing for implementation of these programs is largely dependent upon the needs and goals of the individual Franchisors. Allied believes that any new diversion programs desired by the Franchisors can be implemented during 1999. As noted previously,costs associated with the implementation of these programs will be discussed on a case by case basis and will largely be dependent upon the type and level of service requested and how it ties into the existing service package. Page 17 4. Based upon our initial review of the Pleasant Hill Bayshore hauling division, there appears to be a deficiency in the turnaround times for debris box service and commercial containers. 'Without having first hand experience running the operation on a daily basis, it is difficult to determine whether this issue is related to a shortage of containers or bins or whether additional routes need to be added to service the existing customer base. The deficient turn around times may also be a product of routing or a combination of all three of these issues. Allied has indicated to all of the Franchisors that they intend to honor the terms of the existing franchise agreements and provide service in a timely manner to the customer base. Once the management transition has occurred and Allied has had the opportunity to evaluate the cause of this issue, appropriate changes will be instituted to ensure that . customers receive service generally within [24 hours of their request). 5. Some of the franchise agreements require the service provider to offer commercial recycling services. In these instances, Allied plans to continue these programs and make every effort to increase diversion in the commercial sector. A review of the existing programs will occur once the management transition takes place and determinations will be made as to the relative success of the programs. Possible means of enhancing the programs could include greater efforts towards advertising the service and educating the community, increased service flexibility (ie. different commodities) and possible efficiencies gained through integration with other recycling programs. BFI currently provides street sweeping service to the City of Benicia and has had preliminary discussions with the City of Clayton regarding their desire to implement a similar program. Allied has indicated to both of these entities that we are willing to continue or initiate street sweeping services and would also be interested in discussing the program with other Franchisors. Allied's intent is to work cooperatively with all of the Franchisors and provide them with high quality service at a reasonable cost and to assist them in achieving their AB939 diversion goals. We are hopeful that this transmittal will respond to all of the issues put forward by the Franchisors. However, in the event that ether areas exist which require fixrther clarification, we would be pleased to provide additional responses. Sincerely, VL� { 4-Ukt� Michael Caprio District Manager Northern California Page 18 MAC.mc enclosures cc: Richard Mill, City of Clayton Joseph Tanner, City of Pleasant Mill Michael Ramsey, City of Antioch Marcia Haines, City of Martinez Otto Giuliani, City of Benicia Dennis M. Barry, Contra.Costa County Community Development Thomas Bruen,Esq. Kent Alm, Esq. Paul Nelson,Browning-Ferris Industries` Page 19 cn o c "40; 'i-j lot a E a7 iy cd tau.�, •�.``�,�' • ., Cj Cl cl us Cd 4 " . p , max, �, o ro �ro Cd 7.3 a .................. ............................................................. ..................................................................................................................... _...... ......... ........... ................... . ......... ......... ........ ....... ......... ........................... ......... ......... ............ ... .. .................................................................... DEC-30-1999 10=03 ALLIED WASTE NORTH AMERIC P.01z01 JAAP&LIED WASTE IN D U S T R I ES, I N C. Memorandum To: Mike Caprin Ric Wojahn Froem Jo Lynn White CQ Daft 17/3=8 Re: Contra Carte—Response to Regulatory Agency Below is the suggested response for question E.1.: In the past five years,Aliied Waste lnduusbies, Inc. ("AlGed'), its affiliates and sutsid aries, have not had any ligation (civil, criminal of adminisbVive) related to solid waste acv es that has resulted in an adverse resolution or liability in an amount in excess of$100,000, nor does Allied, lts motes or subsUmdes have any pending fitigation related to solid waw acUties that request rerief In excess of$100,000. Page 1 TOTAL P.01 FLIED WASTE INDUSTRIES , INC . December 21, 1998 To Whom It May Concern: Allied Waste North America (AWNA), a wholly owned subsidiary of Allied Waste Industries, Inc. (AWIN), maintain a $1.1 billion Credit Facility with Citibank, N.A., Citicorp USA, Inc.,.Credit Suisse First Boston, and Goldman Sachs Credit Partners, L.P. Part of this Credit Facility is a $800 million revolving Credit Facility that AWNA may draw upon to fund the acquisition, capital expenditures and working capital needs of the Company and its operating subsidiaries. Furthermore, AWNA and AWIN have the capability to provide performance bonds up to $100 million through third party bonding agents and brokers. In addition, AWNA and AWIN may provide letters of credit up to $150 million. Allied Waste Industries, Inc., headquartered in Scottsdale, Arizona, is a vertically integrated solid waste management company providing non-hazardous waste collection, transfer, recycling and disposal services to approximately 2.4 million residential, municipal and commercial customers located in 28 states. The company currently conducts its operations through 114 collection companies, 72 transfer stations, and 26 recycling facilities and 72 landfills. Respe y, Steven M. Helm Vice President, Legal & Corporate Secretary GTR/ab Agtrab 122198.1 15880 N. Greenway-Hayden Loop, Ste. 100 Scottsdale, AZ 85260 1602.423.2946 1602.423.9424 FAx ,:, w a"M/ ?'v. '*'Fi+rl+�"" ,+, .,^ x..- �.R.„� wX'ixx'w y' Y' WIN Y� �*i4P,Ili 3;'{"n.t,..•,i,,y'^^r,ux.`^*�.nh.,D,"`; ,Mr:�'';�"w.�v�,s..nn4 s iX "S''"`✓ "y ,�...,", ', _s,'li s�ixa-x�� .N� * ♦•M 143377 Mmrroon Contoration of Arizona # North 16th StreetR: #. w ,ham^'-i•, .i s.. R ."$ # �R R Suite 300 Phoenix AZ 85020-5299 (6 02) Backy_S #s +} st a+ Milled Waste industries.Inc. 1513Si •� • Loop.Suite 4# Scottsdale AZ $52-60 • '.s`` 'ue' ?' Y .ashvsK r,�virxar*%+4„ x > ax^,.y€�r^2rx+%» < a .^x"zs'•m+, w„tl##3�;:•'��R:s7,,,�+ £„+�{�'+r^f. �rt"i;S� `' '`€€`'f 'v'r'�,^k�'b�� �t ^v7A w"�^"[+t �*�\�"y`.<.; �rkri�'` r yz'<`k'yq '°�3�' Rmck^`+�`"� .x �x -------------- A A „�. tJ.r ...�C.,?cx„ro;x{.�^rc-x..x_.. .r.,.x.��=,!..,,_AF ,:,M..c.�.".,.M'�,a";'n�"^.rr ��.'s'x`a€` R^w.`r.::.�"':".'�..s•R':� �.^.z.*;�.,;�;Ms>.��'��.3"s.�>.h ��; .,.';"t t`^%"er�.r� �x+.x. - ^,,^r�+�`. _ F.. �” 1.'b 3t •” ..�. R"iia S --r • ,. �. # b^... ! ..�,. • f �i • a +aw ! 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Suite 300 15880 N.+Qreenway4iayden Phoenix AZ 85020-5299 Loop,Su"rte 180 (502)870-7004 Scottsdale AZ 85260 Becky Still,C1C THIS IS TO CERTIFY THAT THE PO=ES OF INSURANCE USTED BEUJW HAVE SEEN ISSUED 7X7 THE INSURED XMIED ABOVE FOR THE POLICY PEA101 its OMTEO. NOT1fV`MiSTANDING ANY ReOUIFiEMENL TERM OR CONDITION OF AW CONiTRACr OR OTHER DOC�IIME`W Wn-d RESpWT To VVNCH TNI: CERTIFICATE MAY BE rAUED OR IAAY PERTAIN„ THE WWRANICE AFFORDED BY THE P aUCIES DESCRIBED 1 1S 8t3E eC' TO ALL THE TEP4MS 80=MWONS AAIB CONDITIONS OF SUCH POUCnEs. LWrrs MAY HAVE SEEN REDMED BY PAID CLAIMS. TYPE OF INSURANCE POL=NLTI R P � 3MMAMN�= GATE t31ttT5 DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/SPECIAL ITEMS Property Coverage: Insures against Risks of Direct Physical Loss subject to policy forms. conditions and exclusions_ Valuation: Actual Cash Value - Equipment Replacement Cost - Other Property Limits: Blanket Real , Personal Property & Equipment $352.150,347 Blanket Business Interruption $ 23,944,000 Additional Coverages: Boiler & Machinery $150,000,000 Flood (other than Zone A) $ 25,000,000 Flood Zone A $ 2, 500.000 Earthquake other than California, Utah. Alaska Hawaii and Puerto Rico $ 25,000,000 Equipment limit per occurrence $ 7. 500,000 Equipment maximum limit per item$ 2., 500,000 Deductibles : All Other Insured Losses $10.000 Flood $50.000 Earthquake $50. 000 Windstorm in "Tier One" Counties 2% subject to minimum of $100,000 A . SHOULD ANY M THE ABOVZ DESCRILaB!POUCWS BE rCANM a*tis BEFORE TETE EXPIRAMON DATE THEREOF, INE MGM COMPANY WILL. EMOCAVOR TO NAIL U.S.Bank Trust National Association 30 DAYS WRMEN HO=E TO 1H EE C8nW-ATE W"ER MUFF TO THE LE", First Trust Cont" BITS FA9JJRE TO MAX.SUCH NO110E SHAM REPOSE go OBLJ"noN OR 11ABILITY 180 East Filth Avenue OF ANY SONO UPON THE COMP FIS AGENTS OR REPRESENrATME5. St.Paul MN 55101 tLTH R ESENfAV4 .H'fwwvwv�y' tMfMv.�v �'CYC"`''''!N'�"r°hVr�%SrWL{�GiC ..:Na'' .Wd Y4 9Y.VN .Nn.: 1NiI3stS;St]tC2(71i tt` ` st1lGf?i1� i?_ x" Y Ctft#4'f94 a a rsri r� Idu 12:30 FA.I" 6028706102 WILLIS CORROON COKUL LNS {x004 ' rAM DATE WK=4r t 37-t1 -t998 IS T�3 ED ASG [E D AMM flt. �t�`.t)�A $J �BY� C1l.tSi� t'I 143377 PREaOOCER VMRW Uvngs Ceerroon corporation of AAwna 7310 North 16th Street Rifted Wasta industries.Inc. S¢atte 3010 16880 N.Greenway4inyden Phoenix AZ 851320.5289 Loop.Sca$Le 100 L 602)870-7000 Scottsdale AZ 85260 Becky Stili.CIC Ttl is To IFY Tmr TH1E POLICIES OF #MPANCE 13 Bpi H&VE BEEN I=EU To THE VW RED IV ABOVE FOR TtiE POLICY PERIO INCJlCATEI). NOTWn-H 3°C7kt�OM JU�I`1' > f t '. TERM OR CONDITION OF AW CCJfi RACT OR tT HEA � Mf TH RESPECT TO WPICH rm� INOICATED'IE ht04Y "JE£t Ott t+1Y Pen AIN. THE #43URRA4NCE 1 RDW BY THE POLICES" DEED-HE" IS WWECT TO ALL THE TERMS I„Lf31CJN5 At#C1 C �tI"IONBaacr. �► GAtE Carrier. Travelers Indemnity Co. of IL Policy #: KTiCMN1220454 Term: 8/1.4/98-1/1/99 POLLUTION Coverage: $5.000,000 Per Jccurrence $5.000,000 Aggregate Limit $1.000,000 Uedttible Coverage applies o Third Party Claims for on and off site Bodily Injury and property damage "ability and off-site clean up of new conditions. Coverage is Cla .:s Bade Carrier: Ameri .n International Specialty Lines Ins. Co. `°t Policy # PLS 8 8100 Term: 1/1/3 '_1/1/01 ii I it f. °,....�: x� StfDtle.Le A"of TW AWYE maw POLK=&BE c"ce im ImMaE`fHE EXP iASX7Dt 3SNIE Sii Ol;Tha COWA", WALL ENneAVON To HAIL. U4.Bank Trust Nildonai Assoc i sdon 30 �. tBAY a W�MOTS€YC!F�t��ItH�1TE etCaa Fa lWaEO 7A TF4E!Ew3, First 7--t Ater` W"FAXIM'M MAJL 3UCH)P*Tf=StUAL W03C NO t7EStJtl MU OR a UbYLtIy haat E";( y Avowo OF Atter MD UP" IM COMPAWNTIM AtrSM OR AEPAE5E9TATr4M St Paul M( 5510Ph 1 Uwe. ........ 6g. � .. A,..:.:.... A ;2,:! �Y . ATTACHMENT 3 AGREEMENT REGARDING CONDITIONAL,CONSENT TO FRANCHISE ASSIGNMENT 1. Parties, Effective Date. Effective on February 2 -1 1999, the County of Contra Costa, a political subdivision of the State of California ("County"), Keller Canyon Landfill Company, a California corporation ("Keller") and Allied Waste Industries, Inc., a Delaware corporation ("Allied"), promise and agree as follows: 2. Background. a. County and Keller are parties to a franchise agreement entitled "First Amended Landfill Franchise Agreement", as amended by Amendment No. 1 and Amendment No. 2, attached hereto as Exhibit A, Exhibit Al and Exhibit A2 and incorporated herein by this reference ("Franchise"). b. Keller desires to assign its interest in the Franchise to Allied in connection with Browning-Ferris Industries, Inc.'s ("BFI") sale and transfer of certain assets to Allied, and Keller is a subsidiary of BFI. C. Allied desires and agrees to assume, perform and discharge all obligations of Keller under the Franchise. d. The consent of County is required for Keller's assignment of its interest in the Franchise to Allied, and County is willing to provide such consent based on the promises and representations of Allied and Keller herein and subject to the conditions set forth below. e. The Central Contra Costa Solid Waste Authority sent a Request For Information (on behalf of the County and other local jurisdictions) to Dennis Fenton of BFI, dated December 9, 1998, and Allied provided a substantive response to the Request For Information, dated December 29, 1998. f. County has relied, in part, on the responses provided in the December 29, 1998 response from Allied in the County's consideration of whether to consent to the assignment, particularly on the stated commitments of Allied with regard to high levels of customer service, adequacy of internal financing of operational and capital needs, and the assumption of ail liabilities and responsibilities under the Franchise. 9- Allied has demonstrated knowledge of the level of services being provided by Keller and has voiced a strong commitment to provide the levels of service being provided by Keller, as more fully set forth in the Franchise and Exhibit B hereto. Page 9 3. Assignment. Keller assigns and transfers to Allied, pnd Allied accepts such transfer and assignment from Keller of all of Keller's rights and obligations under the Franchise. 4. Representations of Keller. Keller represents and warrants to County as follows. a. Keller is not in default in any respect for any requirement of the Franchise, and no event has occurred in which with the passage of time would constitute a default under the Franchise, and b. Keller has agreed to assign its interest in the Franchise to Allied, and c. This assignment is part of a multi-asset/sale transaction expected to close in February 1999 (`'closing") wherein BFI is selling all of its Contra Costa and Solano County operations, including the collection franchises, the leased operations of the Contra Costa Transfer & Recovery Station and the Keller Canyon Landfill; and d. Keller's assignment of this Franchise is subject to the successful closing of the purchase/sale agreement. Keller's assignment of this Franchise is not effective until the requirements set forth in paragraph 7 below have been met. 5. Representations of Allied. Allied represents and warrants to County as follows: a. Allied promises and agrees to assume, perform and discharge all obligations of Keller under the Franchise from and after the effective date of the assignment (paragraph 7); and b. Allied has the professional competence, experience, resources and commitment to and shall carry out the obligations of Keller in a manner which will meet or exceed the existing service and quality levels performed by Keller, including those responsibilities set forth in Exhibit B, attached hereto and incorporated herein by this reference; and C, The information provided in that letter from Michael Caprio dated December 29, 1998 is true and correct, including, but not limited to, the ability of Allied to provide for the short and long term operating and capital needs of the Contra Costa/Solano Division and the Northern California District of Allied's operations. A copy of said letter is attached hereto as Exhibit C and is incorporated herein by this reference; and d. Allied agrees to assume existing and future liabilities of Keller, including all indemnity obligations provided for in the Franchise, for actions or events Page 2 which may have occurred prior to and after the assignment of the franchises to Allied; and .t . e. Allied agrees to make such payments to County as may exist or be required d- tai date--of the closing, including required payments based on revenue or'ramount of waste accepted at the Keller Canyon Landfill. :. y c r e t `cif.County. '�. vl�je-t to and in reliance on the representations set forth above, County hereby consents to the assignment of Keller's interest in the Franchise Agreement to Allied and releases feller from any further obligations thereunder from and after the effective date set forth in paragraph 7 below. T Effective Gate of Assignment. The assignment shall be effective upon the closing having occurred and upon Allied providing to the County, evidence acceptable to the County, of all insurance required by Sections 12.1, 12.2 and 1.2.3 of the Franchise, and the Faithful Performance Surety required by Section 12.4 of the Franchise (Exhibit A). Said evidence must be provided to the County by April 5, 1999, unless such deadline is extended by the written agreement of the parties hereto. If evidence acceptable to the County of Allied's satisfaction with all of the requirements hereof is not provided by April 5, 1999 or such time as the parties may agree, this assignment shall be of no force or effect. l B 1 I 1 1 l i Page 3 IN WITNESS WHEREOF, the parties have executed this Agreement regarding Conditional Consent to Franchise Assignment as of the day and year first written above. COUNTY OF CONTRA COSTA ATTESTED: By: By: � 3oe anciamilla PHIL BATCHELO# , CLERK OF HE Tit C air, Board of Supervisors BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR APPROVED AS TO FORM: V ictor J. Westman, County Counsel By: DEPUTY COUNTY COUNSEL KELLER CANYON LANDFILL COMPANY, A California corporation By. By. Title: Title: ALLIED WASTE INDUSTRIES, INC., A Delaware corporation By: By: Title: Title: TO: Keller Canyon Landfill Company and Allied Waste Industries, Inc. This Agreement must be signed by two officers. One signature mast be that of the Chairman of the Board, President or any Vice President. The other signature must be that of Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Treasurer(Civil Code Section 1190 and Corporations Code Section 313). All signatures must be acknowledged pursuant to Civil Code Section 1189). DD14:KCLASSGN.D0C Page 4 EXHIBIT A T A s COUNTY OF CONTRA COSTA STATE OF CALIFORNIA FIRST AMENDED LANDFILL FRANCHISE AGREEMENT YEAR CANYON LANDFILL RECEIVED OCT 1 0 1994 CLERK BOARD O) SUPERVISORS CON'T'RA COSTA CQ. September, 1994 9 � R TABLE OF CONTENTS FIRST AMENDED LANDFILL FRANCHISE AGREEMENT RECITALS 1 ARTICLE 1. INTRODUCTORY PROVISIONS 3 Section 1.1 RECITALS INCORPORATION. . . . . . . . . . . 3 Section 1.2 EFFECTIVE DATE, EFFECT. . . . . . Section 1.3 CONDITIONS OF APPROVAL. . . . r . r 3 Suction 1.4 OPERATOR ACKNOWLEDGMENT. . . . . . . . . . 4 Section 1.5 COUNTY DISCRETION AND INTEREST. 4 Suction 1.6 USE PERMIT.OPERATIVE. . . . . . 5 Section 1.7 NO PREFERENTIAL TREATMENT. . . . . . . . 5 ARTICLE 2. DEFINITIONS 5 Suction 2. 1 AGREEMENT. . . . . . . . . . . . . . . . . 5 Suction 2.2 ACTIVITIES REPORT. . . . . . . . . . . . . 5 Suction 2.3 ANALYSIS PERIOD. . i . . . 6 Suction 2.4 BASE RATE. , . . 6 Section 2.5 COMMENCEMENT DATE. . . . . . . . . . . . . 6 Suction 2.6 COUNTY. . . . . . . . . . . . . . . . . . . 6 Suction 2.7 DIRECTOR. . . . . . . . . . . . . . . . . . 6 Suction 2.8 EMERGENCY. . . . . . . . . . . . . . . . 6 Section 2.9 GATE FEE COLLECTION SYSTEM. . . . . . . . . 7 Section 2. 10 GATE RATE. . . . . . . . . . . . . . . . . 7 Section 2. 11 HOURS OF OPERATION. a . . . . . . . . . . 7 Section 2. 12 HOURS OF ACCESS. . . . . . . . . . . . . . 7 Section 2. 13 LANDFILL. . . . . . . . . . . . . . . . . 7 Section 2.14 MANDATED FEES. . . . . . . . . . . . . . . 7 Section 2. 15 OPERATOR. . . . . . . . . . . . . . . 8 Section 2. 16 PERMITS. . . . . . . . . . . . . . . . . . 8 Section 2.17 POST--CLOSURE MAINTENANCE. . . . . . . . . 8 Section 2. 18 REGULATORY AGENCIES. . . . . . . . . . . . 8 Section 2.19 SCHEDULE OF DISPOSAL CHARGES. . . . . . . 9 Section 2.20 SITE CLOSURE. . . . . . . . . . . 9 Section 2.21 SOLID WASTE. . . . . a . . . . 9 Section 2.22 SOLID WASTE PROGRAMS. . . . . . . . . . . 10 Section 2.23 SPECIAL HANDLING WASTE. . . . . . . . . . 10 Section 2.24 SURCHARGE. . . . . . . . . . . . a . . . . 11 Section 2.25 SURCHARGE PAYMENTS. . . . . . . . . . . . 11 Section 2.26 USE PERMIT. . . . . . . . . . . . . . . . 11 .ARTICLE 3. 'TERM OF AGREEMENT 11 ARTICLE 4. PERFORMANCE OF OPERATOR 12 Section 4. 1 OPERATION OF LANDFILL. . . . . . . . . . . 12 Section 4 .2 WASTE STREAM. . . . . . . . . . . . . . . . 12 Section 4.3 WASTE TYPES. . . . . • . . . . . . 12 Section 4.4 UNACCEPTABLE WASTE. . . . . . . . . . . . . 12 Section 4 .5 INSPECTION, INVESTIGATION, AND EVALUATION OF SITE.-- . . . . . . . . . . . . . . . . . . . . . 13 Amended Landfill Franchise i September, 1994 Section 4 .6 PERMITS. . . . . . . . . . . . . . . . . . 14 =Section 4 .7 STATUS OF TITLE. . . . . . . . . . . . . . 14 Section 4 .8 GATE FACILITIES. . . . . . . . . . . . . . 14 Section 4 .9 OPERATION OF GATE FEE COLLECTION SYSTEM. . 15 Section 4 . 10 FEE COLLECTION. . . . . . . . . . . . . . 15 Section 4. 11 PAYMENT TO COUNTY. . . . . . . . . . . . . 16 Section 4 . 12 HOURS OF ACCESS. . . . . . . . . . . . . . 16 Section 4 . 13 NONDISCRIMINATORY SERVICE. . . . . . . . . 17 Section 4 . 14 ACCESS ROADS, HAUL ROADS_ AND SERVICE ROADS. . . . . . . . . . . . . . . . . . . . . . 17 Section 4 .15 LITTER MANAGEMENT. . . . . . . . . . . . . 17 Section 4.16 ENVIRONMENTAL MITIGATION. . . . . . . . . 17 Section 4.17 RECYCLING/RESOURCE RECOVERY PROGRAMS. . . 18 Section 4.18 ACTIVITIES REPORT. . . . . . . . . . . 18 Section 4. 19 PENALTY SCHEDULE FOR NONCOMPLIANCE. . . . 18 Section 4 .20 RECORDS. . . . . . . . . . . . . . . . . . 19 Section 4 .21 HOST COMMUNITY. . . . . . . . . 19 ARTICLE 5. PERFORMANCE OF COUNTY 20 Section 5. 1 GATE FEE COLLECTION SYSTEM. . . . . . . . . 20 Section 5.2 INSPECTION OF SCALES. . . . . . . . . . . . 20 ARTICLE 6. RATES 20 Section 6 . 1 BASE RATE. . . . . . . . . . . . . . . . . 20 Section 6.2 SURCHARGE. . . . . . . . . . . . . . . 20 Section 6 .3 GATE RATE. . . . . . . . . . . . . . . . . 21 Section 6.4 INITIAL SURCHARGE. . . . . . . . . . . . . 21 Section 6.5 DISPOSAL CONTRACTS. . . . . . . . . . . . . 22 Section 6 .6 SCHEDULE OF RATES. . . . . . . . . . . . . 23 ARTICLE 7 . PERSONNEL 24 ARTICLE 8. LANDFILL GAS 25 ARTICLE 9 . CLOSURE AND POST CLOSURE 25 Section 9. 1 CLOSURE RESPONSIBILITIES. . . . . . . . . . 25 Section 9 .2 FINANCIAL ASSURANCES. . . . . . . . . . . . 25 Section 9.3 PERFORMANCE. . . . . . . . . . . . . . . . 26 Section 9.4 SIGNING OF INSTRUMENTS AND DOCUMENTS. . . . 27 Section 9.5 FAILURE TO MEET CLOSURE AND POST-CLOSURE OBLIGATIONS. . . . . . . . . . . . . . . . . . . . 27 ARTICLE 10. UNINTERRUPTED OPERATION 27 Section 10. 1 ASSURANCE OF UNINTERRUPTED OPERATION. . . 27 Section 10.2 LABOR DISPUTES. . . . . . . . . . . . . . 28 ARTICLE 11. DEFAULT, REMEDIES 28 Section 11. 1 FAILURE TO PROSECUTE WORK. . . . . . . . 28 Section 11 .2 CONVICTION OF CERTAIN CRIMES. . . . . . . 30 Section 11 .3 CONDEMNATION. . . . . . . . . . . . . . . 30 Section 11 .4 RIGHT TO TAKE/RIGHT TO POSSESSION. . . . . 30 Amended Landfill Franchise ii September, 1994 .. f Section .11.5 FORCE MAJEURE. . . . . . . . . . . . . . . 31 :Section 11.6 SPECIFIC PERFORMANCE. . . . . . . . . . . 31 Section 11.7 NONEXCLUSIVE REMEDIES. . . . . . . . . . . 31 ARTICLE 12. INSURANCE AND BONDS 31 Section 12. 1 WORKERS' COMPENSATION. . . . . . . . . . . 31 Section 12.2 PUBLIC LIABILITY. . . . . . . . . . . . . 32 Section 12.3 OTHER INSURANCE PROVISIONS. . , . . . . . 33 Section 12.4 FAITHFUL PERFORMANCE SURETY. . . . . . . . 33 ARTICLE 13. GENERAL PROVISIONS 34 Section 13.1 GUARANTY BY PARENT OR AFFILIATE. . . . . . 34 Section 13.2 ATTORNEY'S FEES. . . . . . . . . . . . . 34 Section 13.3 INDEMNITY AND HOLD HARMLESS AGREEMENT: . . 34 Section 13.4 ASSIGNMENT. . . . . . . . . . . . . 36 Section 13.5 COMPLETE AGREEMENT. . . . . . . . . . . . 37 Section 13.6 NO THIRD PARTY BENEFICIARY ENFORCEMENT. 37 Section 13.7" SURVIVAL OF OBLIGATIONS. . . . . . . . . . 38 Section 13.8 ARBITRATION. . . . . . . . . . . . . . . . 38 Section 13.9 CONFLICT. . . . . .. . . . . . . . . . . . 38 Section 13.10 CAPTIONS. . . . . . . . . . . . . . . . . 39 Section 13. 11 DELEGATION BY BOARD, . . . . . . . . f 39 Section 13. 12 SEVERABILITY. . . . . . . . . . . . . 40 Section 13. 13 MASCULINE GENDER USED. . . . . . . . . . 40 Section 13. 14 GOVERNING LAW. . . . . . . . . . . . . . 40 Section 13. 15 NOTICES. r . . . . . . . . . . . . . . . 40 Amended Landfill Franchise iii September, 1994 f COUNTY OF CONTRA COSTA STATE OF .CALIFORNIA FIRST AMENDED LANDFILL FRANCHISE AGREEMENT THIS FIRST AMENDED LANDFILL FRANCHISE AGREEMENT (the "Agreement" ) is made and entered into this , by and between the COUNTY OF CONTRA COSTA (hereinafter "County") and KELLER CANYON LANDFILL COMPANY (hereinafter "Operator") . RECITALS WHEREAS, the legislature of the State of California has adopted the Nejedly-Z `berg-Dills Solid Waste Management and Resource Recovery Act of 1972 and now has adopted the California Integrated Waste Management Act of 1989, both of which assign certain responsibilities for the County's solid waste planning, management, implementation, and regulation to the Contra Costa County Board of Supervisors; and WHEREAS, on July 24, 1990, the Board of Supervisors of Contra Costa County approved the Keller Canyon Sanitary Landfill Use Permit No. 2020-89 subject to the Conditions of Approval, the Special Land Use Conditions of Approval and the Findings Relative to the Landfill Site Land Use Permit pursuant to the California Environmental Quality Act ("CEQA") and Adoption of a Mitigation Monitoring Program, each of the same date; and WHEREAS, the County adopted Ordinance No. 88-81, which provides that a solid waste disposal facility may be operated within the County only upon the approval of a franchise agreement, Amended Landfill Franchise 1 September, 1994 by the County or upon the operator of a landfill entering into a contract with the Contra Costa County Board of Supervisors to prepare the site and operate such facility; and WHEREAS, on 4 December 1990 County and Operator entered a LANDFILL FRANCHISE AGREEMENT ("Landfill ,Franchise Agreement") in accordance with the requirements of County Ordinance No. 88-81, and to implement the requirements of Land Use Permit No. 2020--89, which Landfill Franchise Agreement has been amended by Amendments Nos. 1 through 10, inclusive, thereto, and WHEREAS, recent United States Supreme Court cases decided under the Commerce Clause of the United States Constitution generally prohibiting states and their political subdivisions from erecting barriers to the free flow of solid waste (and thereby discriminating against interstate commerce) significantly affects the solid waste industry, and affects the parties hereto in that some of the provisions of the Landfill Franchise Agreement, particularly the provisions regarding the County's regulation of rates, may no longer be appropriate or necessary given the current competitive nature of the solid waste industry as a result of said recent Supreme Court decisions, and WHEREAS, the parties now desire to amend certain provisions of the Landfill Franchise Agreement; NOW, THEREFORE, the County and Operator, for and in consideration of the covenants and agreements as hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, do mutually Amended Landfill Franchise 2 September,, 1994 w� My ASSIGNMENT OF COUNTY/BFI FRANCHISE AGREEMENTS February 2, 1999 Page 2 FISCAL IMPACT No impact to the County general Fund. BA CIKGRO'UNDIREASONS FOR ECOMMENDATIONS Contra Costa County entered into the following three franchise agreements with BFI subsidiaries for solid waste collection, processing, transfer and disposal and recycling services. 1 , "Franchise Agreemement with Pleasant Hill Bayshore Disposal, Inc." entered into in August 1995 for the collection of solid waste and recycling in various unincorporated areas. This Agreement has not been amended, (Exhibit A to Attachment 1) 2, "Permanent Transfer Station Franchise Agreement" entered into in September 1994 for the Permanent Transfer Station (located at 951 Waterbird Way in the Martinez area). This Agreement was amended once, Amendment No. 1 was rade and entered into on November 1 , 1994. (Exhibit A to Attachment 2) 3. "Fist Amended Landfill Franchise Agreement" entered into in September 1994 for the Keller Canyon Landfill (located at 901 Bailey Road in the Pittsburg area). This Agreement was amended twice; Amendment No. 1 was made and entered into on November 1, 1994 and Amendment No. 2 was made and entered into on February 27, 1996. (Exhibit A to Attachment 3) Hereinafter, the above three franchise agreements are collectively referred to as "Franchise Agreements". All three of these Franchise Agreements include a section regarding assignment or assignability. These sections indicate that the operator may not assign the agreements to another entity without written consent of the County. Additionally, the assignability section of the Pleasant Hill Baysore Disposal, Inc. Franchise Agreement states that consent to the assignment may not be unreasonably withheld. On December 15, 1998 the Board referred to the Community Development Director, County Counsel and the County Administrator, a letter from Thomas M, Bruen, dated December 2, 1998, requesting that Contra Costa County approve and consent to the assignment by BFI to Allied Waste Industries, Inc, of all BFI assets in Contra Costa County to Allied Waste Industries, Inc., including all BFI subsidiary franchises. In December the Central Contra Costa Solid Waste Authority (CCCWA) arranged a meeting of representatives from all franchising agencies in the County being served by IFI and Benicia. The purpose of this meeting was to coordinate efforts. County staff participated in the meeting and has continued to communicate with staff of other local jurisdictions to share information„ On December 9, 1998, a "Request for Information" letter was sent by the CCCSWA (on behalf of various local jurisdictions, including Contra Costa County) to BFI and Allied Waste Industries, Inc. A detailed response dated December 29, 1998 was submitted by Allied Waste Industries, Inc. The subject of the requests and responses included in these letters fall within the following general categories- Description of Acquiring Entity, Management, Management Experience, Transition of Operations, Litigation, Contingent Environmental Liability, Insurance and Indemnification, Acquisition Financing, Capital Requirements, Financing of Existing Operations, and Other Service Considerations. A copy of these letters were previously transmitted to ASSIGNMENT OF COUNTY/BFI FRANCHISE AGREEMENTS February 2, 1999 Page 3 Members of the Board accompanied by a memorandum from the Community Development Department dated January 25, 1999. Staff reviewed these letters and additional information provided by the CCCSWA staff regarding Allied Waste Industries, Inc (some of which was also included with the January 25, 1999 memorandum to Board Members). A magazine article states that Allied Waste Industries, Inc. is the fourth largest non-hazardous solid waste management company in the nation. As of August 1998, Allied owned 58 landfills. Allied is traded on the New York Mock Exchange (ticker symbol 'AW') with revenues of $875 million in 1997. Allied operates with a decentralized management philosophy that maintains a strong local presence in its operations. It also operates vertically integrated operations which include collection, recycling, transfer and disposal services in each of its markets. Based on the information reviewed by staff, Allied Waste Industries, Inc. has sufficient resources and is capable of assuming the duties of the franchisees, Staff has reviewed the Franchise Agreements and has determined that there are several documents that Allied Waste Industries, Inc. must submit to the County to replace existing documents filed by BFI (e.g. evidence of insurance and performance bonds/surety). Submittal of these documents is required as conditions to the County's consent to the assignments and these conditions are included in the "Agreements regarding Conditional Consent to Franchise Assignment" (Attachments 1 , 2 and 3). Presently, Allied is not yet the franchisee or owner of the assets and has requested that we allow them to submit insurance and bonds after acquiring the assets from BFI subsidiaries. Also, certain sections of these Franchise Agreements could be amended to reflect the change of owner/operator. Therefore, we have recommended that the Board direct staff to develop amendments, if necessary and schedule the issue for Board consideration and possible approval. The Franchise Agreements all include a section requiring that the Contractor submit a Guaranty. A Guaranty is a legal agreement where the guarantor guarantees all the conditions and obligations of another entity. The Pleasant Hill Bayshore Disposal, Inc. agreement requires proof of guaranty by Browning-Ferris Industries of California, Inc. ,Section 47). The Keller Canyon landfill and Permanent Transfer Station agreements require proof of guaranties by the parent companies or affiliate companies (Section 13.1 and 11 .1). If approved this assignment names Allied Waste Industries, Inc., the parent company, as the Contractor. Therefore staff recommends that the Board determines that a guaranty by the parent or an affiliate company is not necessary in this ase. Unlike BFI, Allied Waste Industries, Inc., as mentioned above, is structured as one large company and is organized in a decentralized fashion, placing day to day decision making authority with individual districts. Local operations would become a part of the Northern California District. Currently, Allied plans on maintaining the existing company names for the local entities (e.g. Allied Waste Industries, Inc. doing business as Keller Canyon Landfill Company). The Agreements regarding Conditional Consent to Franchise Assignment are attached as Attachments 1, 2 and 3. Exhibit B to the Agreements regarding Conditional Consent to Franchise Assignment is intended to acknowledge several of the contemplated operations, current activities and/or ongoing commitments of BFI which Allied agrees to continue, undertake and/or assume, as required by the Franchise ASSIGNMENT OF COUNTY/BF1 FRANCHISE AGREEMENTS February 2, 1999 Page 4 Agreements. A representative of Allied Waste Industries, Inc. has indicated that they expect that the transaction will be finalized by BFI and Allied around the middle of February, 1999. This corresponds to the expected timeframe for all of the local jurisdictions' decision making bodies to consider the assignment requests. Staff acknowledges the assistance of the Central Contra Costa Solid Waste Authority in assembling many documents relied upon by staff in making the recommendations in this report. ��rR�:�rtass�tv.�o A-ITTACHMENT ! AGREEMENT REGARDING CONDITIONAL CONSENT TO FRANCHISE ASSIGNMENT Parties, Effective Date. Effective on February 2 , '1999, the County of Contra Costa, a political subdivision of the State of California ("County'), Pleasant Hili Bayshore Disposal, Inc., a California corporation ("PHBD"), and Allied Waste Industries, Inc., a Delaware corporation ("Allied"), promise and agree as follows. 2. Background. a. County and PHBD are parties to a franchise agreement entitled "Franchise Agreement with Pleasant Hill Bayshore Disposal, Inc." attached hereto as Exhibit A and incorporated herein by reference ("Franchise"). b. Pleasant Hill Bayshore Disposal, Inc. desires to assign its interest in the Franchise to Allied in connection with Browning-Ferris Industries, Inc.'s ("BFI") sale and transfer of certain assets to Allied, and PHBD is a subsidiary of BFI. C. Allied desires and agrees to assume, perform and discharge all obligations of PHBD under the Franchise. d. The consent of County is required for PHBD's assignment of its interest in the Franchise to Allied, and County is willing to provide such consent based on the promises and representations of Allied and PHBD herein and subject to the conditions set forth below. e. The Central Contra Costa Solid Waste Authority sent a Request For Information (on behalf of the County and other local jurisdictions) to Dennis Fenton of BFI, dated December 9, 1998, and Allied provided a substantive response to the Request For Information, dated December 29, 1998. f. County has relied, in part, on the responses provided in the December 29, 1998 response from Allied in the County's consideration of whether to consent to the assignment, particularly on the stated commitments of Allied with regard to high levels of customer service, adequacy of internal financing of operational and capital needs, and the assumption of all liabilities and responsibilities under the Franchise. g. Allied has demonstrated knowledge of the level of services being provided by PHBD and has voiced a strong commitment to provide each of the types and levels of service being provided by PHBD, as more fully set forth in the Franchise and Exhibit B to this Agreement. Page I 3. Assignment. PHBD assigns and transfers to Allied, and Allied accepts such transfer and assignment from PHBD of all of PHBD's rights and obligations in the Franchise. 4. Representations of PHBD. PHBD represents and warrants to County as follows: a. PHBD is not in default in any respect of any requirements of the Franchise, and no event has occurred in which with the passage of time would constitute a default under the Franchise; and b. PHBD has agreed to assign its interest in the Franchise to Allied; and C. This assignment is part of a multi-asset/sale transaction expected to close in February 1999 ("closing"), wherein Browning-Ferris Industries is selling all of its Contra Costa and Solano County operations, including the collection franchises, the leased operations of the Contra Costa Transfer & Recovery Station and the Keller Canyon Landfill; and d. PHBD's assignment of this Franchise is subject to the successful closing of the purchase/sale agreement. PHBD's assignment of this Franchise is not effective until the requirements set forth in paragraph 7 below have been met. 5. Representations of Allied. Allied represents and warrants to County as follows: a. Allied promises and agrees to assume, perform and discharge all obligations of PHBD under the Franchise from and after the effective date of the assignment (paragraph 7). b. Allied has the professional competence, experience, resources and commitment to and shall carry out the obligations of PHBD in a manner which will meet or exceed the existing service and quality levels performed by PHBD, including those responsibilities set forth in Exhibit B, attached hereto and incorporated herein by this reference; and C. The information provided in that letter from Michael Caprio dated December 29, 1998 is true and correct, including, but not limited to, the ability of Allied to provide for the short and long term operating and capital needs of the Contra Costa/Solano Division and the Northern California District of Allied's operations. A copy of said letter is attached hereto as Exhibit C and is incorporated herein by this reference; and d. Allied agrees to assume existing and future liabilities of PHBD, including all indemnity obligations provided for in the Franchise, for actions or events Page 2 ............................... ......................................................................__.... ......... ......... ......... .............. .... ........................................ ...... ......... ......... ......... ............ ........ ... ................ _ ........................................... which may have occurred prior to and after the assignment of the franchises to Allied; and e. Allied agrees to make such payments to County as may exist or be required qs of the.date of the closing, including required payments based on revenue. 6. Consent of County. Subject to and in reliance on the representations set forth above.., County hereby consents to the assignment of PHBUs interest in the Franchise to Allied and'releases PHBD from any further obligations thereunder from and after the effective date set forth in paragraph 7 below. 7. Effective Date of Assignment. The assignment shall be effective upon the closing having occurred and upon Allied providing to the County, evidence acceptable to the County, of the Faithful Performance Bond required by Section 26 and all insurance required by Section 27 of the Franchise (Exhibit A). Said evidence must be provided to the County by April 5, 1999, unless such deadline is extended by the written agreement of the parties hereto. if evidence acceptable to the.County of Allied°s satisfaction with all of the requirements hereof is not provided by April 5, 1999 or such time as the parties may agree, this assignment shall be of no force or effect. ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Page 3 IN WITNESS WHEREOF, the parties have executed this Agreement regarding Conditional Consent to Franchise Assignment as of the day and year first written above. COUNTY OF CONTRA COSTA ATTESTED; 1 By: By: oe anciamilla 'HIL BATCHELOR, CLERKOF THE Ti C ir, Board of Supervisors BOARD OF SUPERVISORS AND COUNTY ADMINISTRATOR APPROVED AS TO FORM: V ictor J. Westman, County Counsel By: DEPUTY COUNTY COUNSEL PLEASANT HILL BAYSHORE DISPOSAL, INC., a California corporation By: By: Title: Title: ALLIED WASTE INDUSTRIES, INC., a Delaware corporation By: By: Title: Title: TO: Pleasant Hill Bayshore Disposal, Inc. and Allied Waste Industries, Inc. This Agreement must be signed by two officers. One signature must be that of the Chairman of the Board, President or any Vice President. The other signature must be that of Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Treasurer(Civil Code Section 1190 and Corporations Code Section 313). All signatures must be acknowledged pursuant to Civil Code Section 1189). DD14:HF1ASSGV.00C Page 4 ..................................................................................... ................................................................................................................................................................................................... ..... ......... ......... .......... ........ ......... ........................................ ._ ........ ......... ......... ................................... ... .. EXHIBIT A FRANCHISE AGREEMENT WITH PLEASANT HILL. BAYSHORE DISPOSAL, INC. CONTRA COSTA COUNTY TABLE OF CONTENTS 1. EFFECTIVE DATE, PARTIES. . . . . . . . . . . . . . . . . 1 2. - DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1 a* Agreement. . . . . . . . . . . . . . . . . . . 1 b. Act. . . . . . . . . . . . . . . . . . . . . . . 1 C. Beard. . . . . . . . . . . . . . . . . . . . 3 d. Commercial Solid Waste. . . . . . . . . . . e. Contractor. . . . . . . . . . . . . . . . . . . f. County. . . . . . . . . . . . . . . . . . . . . . . 1 g. Customers. . . . . . . . . . . . . . . . . . . . 1 h. Designated Waste. . . . . . . . . . . . . . . . . . 1 i. Franchise Area. . . . . . . . . . . . . . . . . . . 2 J . Hazardous Waste. . . . . . . . . . . . . . . . . . 2 k. Industrial Waste. . . . . . . . . . . . . . . . . . 2 1. Infectious Waste. . . . . . . . . . . . . . . . . 2 . M. Recycle or Recycling. . . . . . . . . . . . . . . 2 n. Residential Solid Waste. . . . . . . . . . . . 3 o. Septage. . . . . . . . . . . . . . . . . . . . . . 3 p. Solid Waste. . . . . . . . . . . . . . . . . . . 3 q. Waste Stream. . . . . . . . . . . . . . . . . . . 3 3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 . INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL AND SOLID WASTE COLLECTION, REMOVAL AND/OR DISPOSAL. . . . . 3 S. EXCLUSIVE PRIVILEGE AND DUTY. . . . . . . . . . . . . . 3 6. EXCEPTIONS TO EXCLUSIVE PRIVILEGE. . . . . . . . . . . . 4 7. CONTRACTOR'S DUTY TO MAINTAIN RECORDS; COUNTY'S RIGHT TO EXAMINE RECORDS. . . . . . . . . . . . . . . . 4 6. RATES. . . . . . . . . . . . . . . . . . . . 5 9. RATE APPLICATIONS. . . . . • . . . . . • . . . . . . . . 6 10. OPERATION BY CONTRACTOR. . . . . . . . . . . . . . . . 7 11. LIMITATION ON TIME AND MANNER OF COLLECTION. . . . . . . 7 12. CUSTOMER SATISFACTION, AB 939 AND EFFICIENCIES IN OPERATION. . . . . . . . . . . . . . . . . . . . . . . . S 13. CUSTOMER SERVICE STANDARDS. . . . . . . . . . . . . . . 9 May 3, 1995 i _....................................................................................._. ..........................................................................................................................................................._..................._ ......... .... ......... . ......... ...................................................... ......... ....... ......... ................................................................ ._..._.. . ..................................................11 14 . LOCAL ADVISORY BOARD. . . . . . . . . . . . . . . . . . 10 15. CUSTOME '�R COMPLAINTS. . . . . . . . . . . . . . . . . . 10 16. BILLING. . . . . . . . . . . . . . . . . . . . . . . . . 10 17. RECYCLING. . . . . . . . a a . . . . . a . . . a . . . 10 18. FREE SERVICE FOR COUNTY. . . . . . . . . . . . . . . . . 11 19. FRANCHISE AREA—WIDE COLLECTION. . . . . . . . . . . . 11 20. PARTICIPATION IN COMMUNITY CLEAN—UP PROJECTS. . . . . . 11 21. DISPOSAL AND WASTE S'T'REAM CONTROL. . . . . . . . . . . . 11 22. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. . . . . . . . . 12 23. ADMINISTRATIVE SERVICES AND FRANCHISE FEES. . . . . . . 12 24 . HAZARDOUS WASTE. . . . . . . . . . . . . . . . . . . . . 12 25. PRELIMINARY DISPUTE RESOLUTION. . . . . . . . . . . . . 13 26. FAITHFUL PERFORMANCE BOND. . . . . . . . . . . . . . . . 13 27. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 13 28. INDEM.NI FICATION. . . . . . . . . . . . . . . . . . . . . 14 29. ATTORNEY`S FEES. . . . . . . . . . . . . . . . . . . . 15 30. ASSIGNABILITY. . . . . . . . . . . . . . . . . . . . . . 15 31. INVOLUNTARY ASSIGNMENT. . . . . . . . . . . . . . . . . 16 32. NOTICE PROVISIONS. . . . . . . . . . . . . . . . . . . 17 33. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. . . 17 34. AFFILIATED ENTITIES. . . . . . . . . . . . . . . . . 17 35. BREACH AND TERMINATION. . . . . . . . . . . . . . . . . 18 36. EMERGENCY. . . . . . . . . . . . . . . . . . . . . . 19 37. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS. . . . . . 20 38. AMENDMENT OR MODIFICATION. . . . . . . . . . . . . . . . 20 39 . POLICE POWERS. . . . . . . . . . . . . . . . . . . . . . 20 May 3, 1995 ii 40. CONTEST OF AGREEMENT'S TERMS. . . . . . . . . . . . . . 20 41. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . 20 42. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . 21 43. SURVIVAL OF OBLIGATIONS. . . . . . 21 44. NEW AGREEMENT. . . . . . . . . . . . . . . . . . . . . 21 45. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . 21 46. OPERATIVE DATE. . . . . . . . . . . . . . . . . . . . . 21 47. GUARANTY. . . . . . . . . . . 21 May 3, 1995 .............. ................................................................................................................................................................. ...._ ......... ......... ................................................ ................. .. ..... ............................................... .... ....... ......... .................................................................. ....... ......... ....................... . ........ FRANCHISE AGREEMENT WITH PLEASANT HILL BAYSHORE DISPOSAL, INC. 1. EFFECTIVE DATE, PARTIES. This Agreement is binding between the County and the below named Contractor and is effective on the date last signed by the parties hereto. 2. DEFINITIONS. As used herein, the following terms shall have the meanings set forth below: a. Agreement. Agreement means this Agreement by and between the County and Contractor for the collection, removal, and disposal of solid waste and the recycling of material. b. Act. Act means the California Integrated Waste Management Act of 1989 (Public Res. Code, S 400300 et seq. ) and all rules and regulations adopted under any of those sections, as such sections, rules and regulations may be amended from time to time in the future. C. Board. Board means the Board of Supervisors for the County of Contra Costa. d. Commercial Solid Waste. Commercial Solid Waste means Solid Waste routinely originating from stores, business offices and other commercial and light industrial sources, excluding residences and wastes from heavy industry (i.e. , industry that manufactures or processes petroleum, lumber, steel, chemicals, explosives, fertilizers, gas, rubber, cement,• -sugar and other products [see section 84-60.402 of the Contra Costa County Ordinance Code. ] ) . e. Contractor. Cohtractor means Pleasant Hill Bayshore Disposal, Inc. a wholly owned subsidiary of Browning Ferris Industries of California, Inc. , a California Corporation, and is the entity which has been granted an exclusive franchise pursuant to the terms and conditions set forth herein. f. County. County means the County of Contra Costa. g. Customers. Customers means those who have contracted with the Contractor for the collection of materials for recycling and/or for the collection, removal, or disposal of Solid Waste, pursuant to this Agreement and applicable ordinances of County, including mandatory subscription ordinances. h. Designated Waste. Designated Waste as used herein has the meaning set forth in section 2522 of Title 23 of the California Code of Regulations, as amended from time to time. May 3, 1995 1 f , i. Franchise Area. Franchise Area means the geographic area generally described in Exhibit A to this Agreement, which Exhibit is attached hereto and incorporated herein by reference, and illustrated in the six hundred (600)- scale maps to be maintained and available for inspection at the Community Development Department. Exhibit A and said six hundred (1500)- scale maps shall be amended from time to time to reflect changes of boundaries of the Franchise Area in such a manner as to identify each alteration to the Franchise Area and the effective date thereof. J . Hazardous Waste. Hazardous Wastes include any waste material. or mixture of wastes which is toxic, corrosive, flammable, an irritant, a strong sensitizer, which generates pressure through decomposition, heat or other means, if such a waste or mixture of wastes may cause substantial personal injury, serious illness or harm to humans, domestic animals, or wildlife, during or as an approximate result of any disposal of such wastes as defined in Article 2, Chapter 6,5, Section 26117 of the Health and Safety Code. The terms "toxic,," "corrosive," "flammable," "irritant," and "strong sensitizer" shall be given the same meaning as in the California Hazardous Substances Act (Chapter 13 commencing with Section 28740 of Division 21 of the Health and Safety Code) . (14 Cal.Code Regs. , 5 17225.32. ) k. Industrial Waste.. Industrial Waste includes all types of Solid Waste which result from industrial processes and manufacturing operations and/or which originates from such facilities. 1. Infectious Waste. Infectious Wastes include: (1) Equipment, instruments, utensils and other fomites of a disposable nature from the rooms of patients who are suspected to have or have been diagnosed as having a communicable disease and must, therefore, be isolated as required by public health agencies; (2) Laboratory wastes, including pathological specimens (i.e. , all tissues, specimens of blood elements, excreta and secretions obtained from patients or laboratory animals) and- disposable fomites (any substances that may harbor or transmit pathogenic organisms) attendant thereto; (3) surgical operating room pathologic specimens - including recognizable anatomical parts, human tissue, anatomical human remains and disposable materials from hospital, clinics, outpatient areas and emergency rooms, as is also defined in Section 314(d) of the California Administrative Code, Title 17 . (14 Cal.Code Regs. , 5 17225.36. ) M. Recycle or Recycling. Recycle or Recycling means May 3, 2995 2 the process of collecting, sorting, cleaning, treating and reconstituting materials and recovering them so that they may be used in the form of raw material for new, reused, or reconstituted products. n. Residential Solid Waste. Residential Solid Waste means Solid Waste routinely originating from single-family or multiple family dwellings. Residential Solid Waste includes household hazardous waste, but does not include septage. +�. Septage. Septage means non--sewered liquid or semi--liquid waste which may be trucked to treatment facilities for disposal, to include, but not be limited to, waste from residential septic tanks, commercial grease clean-outs, and industrial waste holding facilities. p. Solid Waste. Solid Waste has the meaning set forth in Section 40191 of the California Public Resources Code as of the date of execution of this Agreement. Solid Waste includes, but is not limited to, all putrescible and nonputresc.ible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semisolid wastes and other discarded solid and semisolid wastes. "Solid Waste" does not include infectious, designated, and hazardous waste, except household hazardous waste. q. Waste Stream. Waste Stream means the Solid Waste to be collected under this Agreement from the time of its collection by the Contractor to its disposal at a landfill or, at County's discretion, delivery to a transfer facility or other facility by Contractor. 3. TERM. Subject to Section 33 (Annexation and Change of Franchise Area Boundaries) and Section 35 (Breach and Termination) , the term of this Agreement and the exclusive franchise granted hereunder .shall be 20 years, commencing on the effective date first mentioned in section 1 of this Agreement. 4. INTENT TO REGULATE ALL RECYCLING AND RESIDENTIAL. AND SOLID WASTE COLLECTION, REMOVAL ANDIOR DISPOSAL. The parties hereto agree that County currently has jurisdiction to regulate the collection, removal and disposal of all Solid Waste, and the recycling of all material, in the Franchise Area. The intent of this Agreement is to regulate Solid Waste handling service and recycling of material in the Franchise Area. 5. EXCLUSIVE PRIVILEGE AND DUTY. To the extent allowed by law, County hereby grants to Contractor the exclusive privilege May 3, 1995 3 and duty to collect and remove for disposal and recycling, all residential and commercial Solid Waste, including recyclable materials, within the Franchise Area and to charge and receive charges therefor, pursuant to and subject-to the terms of this Agreement. Contractor promises and agrees to perform the responsibilities and duties set forth herein. The Franchise Area may be expanded or reduced in size by mutual agreement of the parties, or as provided in Section 33 (Annexation and Change of Franchise Area Boundaries) of this Agreement. 6. EXCEPTIONS TO EXCLUSIVE PRIVILEGE. The exclusive privilege granted by this Agreement shall not apply if: (a) A person or entity generates Solid Waste, including recyclable materials, and personally collects, removes and disposes or recycles such in a clean and sanitary manner in conformance with all applicable laws and regulations, including mandatory subscription ordinances. This exception shall not apply to a person who incurs a net cost of collection to a third person in the above described activities; or (b) A person or entity contracts with a third person for the removal and disposal or recycling of inorganic refuse or garden waste (a "Non-Franchised Contractor") and such removal and disposal or recycling is solely incidental to work such as remodeling or gardening occasionally performed by or for the customer. This exception shall not apply if the Non-Franchised Contractor incurs a net cost of collection to any third person in connection with its collection and/or disposal of said Solid Waste. 7. CONTRACTOR'S DUTY TO MAINTAIN RECORDS; COUNTY'S RIGHT TO EXAMINE RECORDS. Contractor shall maintain a ,proper set of books and records in accordance with generally accepted accounting principles, accurately reflecting the business done by it under this Agreement. Contractor shall further maintain and make available to County, upon its request, records as to number of Customers, total and by type, route maps, service records and other materials and operating statistics in such manner and with such detail as County may require. County shall treat the information required by thins paragraph that affects the competitive position of the company as confidential information to the extent permitted by law. County may at any time during the term of this Agreement, have the books and records of the Contractor examined by a County Agent or Agents appointed for that purpose by the County. County shall give thirty (30) days' written notice to the Contractor of May 3, 1995 4 ................................................................................... ................._.................................................................................................................................................................................................. ......... ......... ......... ......... ... ...... .......... . ............................................ ... ......... .............................................................. ......... _ ___ _ _ __ q. such examination date. County expenses incurred under this section shall be paid by Contractor subject to their recovery through the rates allowed by the County hereunder. The information required by this section shall pertain to Contractor's operations covered and regulated by this Agreement, and nothing contained herein shall require the Contractor to provide the County with information pertaining to the Contractor's operations which are not regulated by the County, except in conformance with this section. County's Agents may examine Contractor's books, records and financial statements pertaining to operations not regulated by the County as may be reasonably required for the sole purpose of gathering information necessary to allow the Agents to ascertain whether income, expenses, assets and liabilities are reasonably and consistently allocated among operations regulated by County and those not regulated by the County. Contractor shall obtain County's written approval of its method of segregating its financial records between county-regulated and non-County regulated operations. County shall not unreasonably withhold such approval. To the extent allowed by lana, information gained from examination of records pertaining to operations not regulated by the County shall be treated by County and its agents as confidential information. For the review of books and other financial records necessary to verify the Contractor's income, expenses, assets and liabilities, "County Agent" shall mean County employees .or an independent Certified Public Accountant or public accountancy firm. For all other information or records, including the results of financial verification, "County Agent" shall mean any consultant designated by the County or County employees . Nothing in this section will prevent County from allowing public access to County records as provided for under the California Government Code, and in the event any dispute arises as to the public access to information provided by Contractor under the terms of this Agreement, the County shall in its discretion provide public access to said information according to law or tender the defense of any claims made against the County concerning said information to Contractor. Prior to releasing any information pursuant to this paragraph, County.shall make a good faith effort to notify Contractor of the intended release. S. RATES. Rates shall be fixed by the County from time to time. In determining the rates, the County shall consider fairness to both Contractor and the Customers. Reasonable costs incurred by Contractor pursuant to this Agreement shall be designated as "pass-through" or "subject to reasonable profit" as May 3, 1995 5 determined by the County during the rate review process. Rates fixed by County shall be maximum rates which Contractor may charge the Customers . The maximum rates fixed by the County at this time shall be the highest commercial rate and the highest residential rate being charged by Contractor within the Franchise Area immediately before the effective date of this Agreement as set forth in Exhibit C Nothing in this Agreement precludes Contractor from charging rates less than the maximum rates fixed by the County. Pending a rate review by the County, the maximum rates chargeable shall be those rates charged on the effective date of this Agreement. Following consultation with the Contractor and examination of industry norms and trends, the County, in its sole discretion, shall determine the method of determining Contractor profitability. All costs associated with County review and processing of rate applications shall be paid by Contractor and shall be allowed as a pass-through cost in the rate application process. Contractor will offer a mini-can program at reduced rates as directed by the County following consultation with Contractor. 9. RATE APPLICATIONS. Rate applications shall be prepared in accordance with such forms and in such detail as required by the County. The application shall include one reproducible hard copy, 15 hard copies bound in an appropriate manner and one copy on disk formatted pursuant to County specifications. Contractor shall submit its first rate application as directed by the County. All rate applications shall include information from the previous rate change to the present, or such other period of time as is selected by the County. Every three years, a rate application shall be accompanied by an audited financial statement covering the entire period since the last audited rate application together with supporting documentation as required to segregate its County regulated activities from other business activities. The County Administrator may, in writing, allow the rate application to be submitted without an audited financial statement provided the County Administrator is satisfied that the level of verifiable detail allows for adequate assessment of the Contractor's income, expenses, assets and liabilities. Rate changes may be initiated by County at any time or by Contractor under the conditions allowed in this section. In either case, Contractor shall prepare a rate application in accordance with the requirements of this section. May 3, 1995 6 ............................. ......................................................................................................................................................................................... _. ......... ......... ......... . .......... ......... ... .................................... .............................. ....... ............................................................ ...._._._. ... ........._......................................................... .._.. a If the rate change is initiated by County, the Contractor shall, submit its rate application to County within 60 days of County's notice to Contractor. If the rate change is initiated by Contractor, it shall be submitted no more than once a year under normal operating conditions. The date of Contractor initiated applications shall be standard, year by year; such date to be determined upon mutual agreement of the parties and .reasonably related to the fiscal year of Contractor. In the event that the rate change that would be requested by Contractor is no more than the change in the Consumer Price Index for All. Urban Consumers for the San Francisco Bay Area for that fiscal year of Contractor, Contractor may increase its rate up to such amount and not request a rate change from the County. Contractor may defer a rate application pursuant to this paragraph for a maximum of two consecutive years. In the event that Contractor must make significant changes in its operations or experiences significant changes in, costs of revenue not under its control, Contractor may submit a rate application. Contractor shall provide documentation for the need for such rate application relative to those changes. The application will thereafter be considered by the Board. 10. OPERATION BY CONTRACTOR. Contractor shall furnish all necessary equipment (excluding containers for single-family residential wastes) for services provided pursuant to this Agreement in the Franchise Area and shall maintain such equipment in a sanitary condition at all times. Contractor shall furnish all necessary labor in connection with the operation of a Solid Waste collection system in the Franchise Area. The Contractor, in performance hereof, shall use trucks with covered, water-tight truck bodies constructed of sufficient strength to withstand a fire within, without endangering adjacent property. Trucks, drop boxes, bins, or similar types of equipment shall be kept clean and in good repair. Contractor shall have its name and telephone number on the side of each truck and on each drop box, bin or similar type equipment provided by Contractor. 11. LIMITATION ON TIME AND MANNER OF COLLECTION. Contractor shall systematically collect Solid Waste, and to the extent permitted by this Agreement, materials for recycling from its Customers. Frequency, place of pickup (e.g. , curbside, backyard, etc. ) or any other manner of collection shall be subject to the review and approval of the Director of Community Development. Upon commencement of service and upon changes in collections day schedules, Contractor shall provide each customer with notice of the scheduled collection day. Contractor shall May 3, 1995 7 s not collect Solid Waste from an inhabited dwelling or dwelling unit between the hours of 7:00 p.m. and 4:00 a.m. , except that if a dwelling unit is part of a collection route that predominately serves commercial accounts, collection may begin as early as 3:00 a.m. 12. CUSTOMER SATISFACTION, Ala 939 AND EFFICIENCIES IN OPERATION. (a) From time to time,, at its discretion, County may examine Contractor's operation in order to evaluate whether the Contractor is operating at a satisfactory level of efficiency and customer satisfaction. Contractor agrees to cooperate in any such examination and shall permit County representatives to inspect, at Contractor's principal place of business, such information pertaining to Contractor's obligations hereunder as County may require, including, but not limited to, such things as customer inquiry records, collection routes and {equipment records. Access to Contractor's records shah, be subject to Paragraph 8 (Contractor's Duty to Maintain Records; County's Right to Examine Records) . (b) Notwithstanding any contrary provision in this Agreement, the County shall have the right to direct Contractor to compile information, develop plans for and/or conduct programs on alternative methods of Solid Waste and recyclable material collection and management, or to take any other action requested by the County for the purpose of meeting the source reduction, recycling and composting requirements of the Act, and any other applicable federal,, state or local laws regarding Solid Waste collection, recycling and disposal, including, without limitation, the County's Materials Diversion ordinance. Contractor agrees to indemnify and hold the County harmless from and against any and all liability to the State of California for the County's noncompliance with the requirements of the California Integrated Waste Management Act due in whole or material part to the material failure of Contractor to properly carry out the reasonable directives of the County to Contractor regarding collection and disposition of Solid Waste and recyclable material; provided, however, that Contractor shall not be obligated to carry out any such directive (and shall not indemnify nor hold the County harmless from any resulting liability) if the County fails to agree to allow Contractor its reasonable costs (including a reasonable profit) associated with carrying out such directives. (c) County may require Contractor to develop plans for and conduct programs on alternative methods of .Solid Waste collection, including pilot programs of limited scope, or may require additional programs, for the purpose of improving service, increasing customer satisfaction, and meeting diversion requirements. County may also require Contractor to implement efficiencies in its operation upon written notice from County. May 3, 1995 g The notice shall allow Contractor a reasonable period of time to implement the specified service (efficiency) . Should County require commencement of such a program as outlined in this paragraph, Contractor agrees not only to do those things specified herein, but also to act at the direction of the County on other matters that may be necessary for the success and efficiency of the project, such as public information and notification. In the event that County elects to direct Contractor to discontinue any service theretofore performed by Contractor at the direction of County hereunder, County shall allow Contractor to recover its reasonable capital equipment costs and other reasonable costs arising upon termination of the service. Rate adjustments applicable solely to programs _ instituted pursuant to this subsection (c) initially shall be established at the time the County authorizes implementation of the program or efficiency. 13. CUSTOMER SERVICE STANDARDS. Contractor shall provide prompt, efficient, continuous and professional service to its Customers. Contractor shall have a phone system with sufficient capacity to promptly respond to telephone calls for at least 8 hours a day during weekdays, excluding those holidays observed by Contractor. Telephone numbers for customer service shall be located in the local telephone directory. All telephone lines for customer service shall be toll free to Customers. Not less than once every three years and not less than six months prior to an application for contract renewal, assignment or extension of term, Contractor shall conduct a representative survey or surveys of Customers within the Franchise Area to determine satisfaction with service, including, without . . limitation, response to customer complaints. The survey methodology, format and content shall be subject to the prior review and approval of the Director of Community Development. A copy of the survey results shall be sent to the County within sixty (60) days of completion of the survey. Nothing in this paragraph shall limit the right of the County to conduct additional surveys. The Contractor shall cooperate with the County in such cases. Upon initiation of service, and at least once a year, Contractor shall send or deliver to Customers information concerning the conditions of service, including, but not limited to, rates, fees, charges, service options, payment options, discounts (if any) , days of collections, the amount and manner of refuse to be collected, service level and inquiry/complaint procedures, including the name, address and local telephone number of Contractor and the name, address and telephone number of the County Community Development Department. The form and content shall be subject to the review and approval of the Director of Community Development. May 3, 1995 9 14. LOCAL ADVISORY BOARD. The Board of Supervisors may designate an existing committee to represent the Franchise Area, or form an advisory body to advise the Board on the performance of the Contractor in the community, local service interests and needs, and rate applications. in all cases, the Committee shall hold its meetings at a time and place convenient to the public. The Committee shall keep a record of all public comments and submit such comments when reporting to the Board. 15. CUSTOMER COMPLAINTS. Contractor shall develop and implement policy and procedure for responding to and recording customer complaints, including dispute resolution. The policy and procedure shall be subject to the approval of the Director of Community Development. 16. BILLING. The form and content of customer bills shall be subject to the review and approval of the Director of Community Development.. Bills for services may be monthly, bimonthly or quarterly as determined by County. Contractor may bill its customer in advance or in arrears. The County may establish billing period options for Customers upon a finding that such options are cost- effective and meet a community need. Full payment for drop boxes may be required by Contractor prior to delivery of the drop box to the customer. The County shall have the right to direct the Contractor to change or alter its billing system in which event the marginal additional expenses incurred by the Contractor in the implementation of the change, with regard to the accounting, printing, mailing, loss of use of funds, or otherwise, shall be recoverable by the Contractor through the rates allowed by the County provided such expenses are reasonable. Contractor shall inform customers of all rate changes at least 30 days prior to their effective date. A copy or facsimile of such notice shall be provided to`County at the time of customer notification. 17. RECYCLING. County grants to Contractor the right and obligation to operate recycling programs, including curbside pickup of recyclable materials, as determined and designated by County, subject to County's right to terminate this grant to Contractor pursuant to the provisions of this section. Contractor has instituted and is implementing a recycling program including regular curbside pickup at all single family residences of at least aluminum, tin, newsprint, glass bottles, non-colored HDPE and PET. This program is currently operating to the satisfaction of County; however, County has the right at anytime to modify said program or require new programs as May 3, 1995 10 _......................................................................... .................................................................................................................................................................................................................................................................. r provided at Section 12 (b) hereof. Contractor shall maintain and provide to the County records relating to its recycling programs as directed by the Director of Community Development. Contractor's provision of recycling service shall be reviewed .within three (3) years of the effective date of this Agreement and, at County's discretion, every five years thereafter. If County determines that continuation of such service by Contractor is not consistent with the County's ratepayers best interest, but not as a result of Contractor's failure to satisfactorily provide recycling services, Contractor shall be ;allowed to recoup its unamortized capital expenditures as follows. Contractor shall make a good faith effort to sell all disposable assets acquired in furtherance of the program for their fair market value. If income derived from the sale is insufficient to cover the unamortized costs of such assets, Contractor may transfer those losses together with net operations profits or losses to its general account and submit a rate application to cover such losses. If County determines that Contractor has failed to satisfactorily provide and perform recycling services, County may terminate this grant to Contractor of the right and obligation to provide and operate recycling programs, at no cost or further obligation on the part of County or County's ratepayers. 1$. FREE SERVICE FOR COUNTY. Contractor shall provide Solid Waste collection and disposal services at those County buildings designated by the Director of Community Development from time to time, at no charge to the County. 19 . FRANCHISE AREA-WIDE COLLECTION. In addition to its regular collections, Contractor shall provide two annual collectioins for each region in the Franchise Area as determined by the Community Development Director. Said collections shall be wade each year throughout the term of this Agreement in accordance with practices and procedures .established by Contractor and subject to the approval of the Community Development Director. 20. PARTICIPATION IN COMMUNITY CLEAN-UP PROJECTS. Contractor shall provide, upon direction of the Community Development Director, Solid Waste drop boxes or equivalent containers for community or other cleanup projects within the Franchise Area. The Contractor's obligation shall be limited to the equivalent of ten (10) 20-cubic yard drop boxes per year, per region in the Franchise Area. 21. DISPOSAL AND WASTE STREAM CONTROL. Contractor shall be solely responsible for the disposal of the Solid Waste collected May 3, 1995 11 pursuant to this Agreement. County has complete authority and control over the Franchise Area waste stream. County may, at its sole discretion upon providing 60 days' notice to Contractor, direct the Solid Waste collected under this Agreement to be delivered to any site or facility of its choosing. This shall include the right of the County to direct the Solid Waste to be delivered to any County designated transfer station, disposal site, transformation facility and/or resource recovery facility. It is understood that County may contract with any party, public or private, to commit the waste stream from the Franchise area, and that Contractor's contracts may not bind County, nor need County consider such other contracts for any purpose. Notwithstanding the above, Contractor may propose, and County may but need not consider, waste management and/or disposition alternatives which are cost effective. In determining or comparing costs, County shall consider all relevant factors, including but not limited to, transportation costs, closure and postclosure ,requirements, costs and liabilities, disposal fees, fees levied by governmental entities, including benefits to Contractor's customers from paying such fees, costs of compliance with ordinances and other local requirements, and long-term costs, including degree of control over future •costs. 22. MISCELLANEOUS OBLIGATIONS OF CONTRACTOR. Contractor shall assist County in its enforcement of its mandatory subscription ordinance by providing County with the addresses of properties not subscribing to collection service within the Franchise Area and by providing collection service to such properties upon written request by the County. 23. ADMINISTRATIVE SERVICES ANIS FRANCHISE FEES. Contractor shall pay to the County for (a) the services provided by the County in administering this Agreement, (b) for services and programs pertaining to Solid Waste provided by the County, and (c) additionally as directed by the County, a percentage of its gross annual revenues generated from the performance of such waste collection services under this Agreement. Such percentage, time and frequency of payment shall be established by County from time to time. Said sums shall be payable from the Contractor to the County upon the inclusion of the administrative service charge in the allowed rate and upon the collection of said rate by the Contractor. Such administrative and program services and any franchise fees shall be considered a reasonable cost and subject to •'pass--through" as described in Section 8 on Rates. 24 . HAZARDOUS WASTE. The parties hereto recognize that federal, state and local agencies with responsibility for defining hazardous waste and for regulating the collection, handling or disposing of such substances are continually May 3, 1995 12 .........._......................................... _ ........_ ......... ......... ......... ......... __ ... .......................... .......... ................................ .... ... .... ..... . ............................... ........ .................... ....._..... _ __ _ _ _ _ __ providing new definitions, tests and regulations concerning these substances. Under this Agreement, it is Contractor's responsibility to Deep current with the regulations and tests on such substances and to identify such substances and to comply with all federal, state and local regulations concerning such substances. Contractor agrees to provide to County upon its request, Contractor's program for identifying hazardous waste and complying with all federal, state and local statutes and regulations dealing with hazardous waste. Contractor shall make every reasonable effort to prohibit the collection and the disposal of hazardous waste in any manner inconsistent with applicable law. 25. PRELIMINARY DISPUTE RESOLUTION. If Contractor has a question as to the interpretation of this Agreement, it shall submit a written request to the Director of Community Development for a determination of the issue. The Contractor shall provide and submit such information as the Director of Community Development may request or require to make the requested determination. The written determination of the Director of Community Development may be appealed to the Board of Supervisors pursuant to Ordinance Code Chapter 14-4. 25. FAITHFUL PERFORMANCE BOND. Contractor shall submit to County simultaneously with the execution of this Agreement a corporate surety bond in the amount of $10,000.00, provided however, that the Board may increase this amount not more often than every three years to reflect changes in the Consumer Price Index for All Urban Consumers for the San Francisco Bay Area. The bond shall be executed by a surety company licensed to do business in the State of California and acceptable to County. The bond shall be approved by county and shall be payable to County. The condition of the bond shall be that Contractor will faithfully perform the duties imposed by ordinance, this Agreement ,and the rules and regulations of County. Any action by County to 'proceed against the Bond shall ,not limit or affect the right of County to use other remedies available to County under the Agreement, or in courts of law or equity. Notwithstanding . the foregoing, in lieu of the corporate surety bond, Contractor may provide to County a letter of credit, cash bond or other security. acceptable to the County Administrator's Office in a form satisfactory to the County. 37. 'INSURANCE. Contractor shall procure and maintain in full force and effect at all times during the entire term of this Agreement the following insurance coverage: (a) Public liability and property damage insurance including completed operations, products, contractual, broad form May 3. 1995 13 property damage, personal injury and owned and non-owned automobile liability with such coverages and limits as may be reasonably requested by County from time to time, but in no event with limits not less than the sum of $1 million combined single limit for each occurrence arising from the services as stated in the Agreement herein. County shall be named as an additional insured under such liability insurance policy or policies, if commercially available. (b) Contractor shall carry workers' compensation insurance for all its employees. Evidence of liability and workers` compensation insurance shall be provided by Contractor by filing with County a certificate of insurance indicating that County is endorsed as an additional named insured under the liability policy. All policies shall include a provision that written notice of cancellation or any material change in coverage shall be delivered to County thirty (30) days in advance of the effective date thereof. No cancellation, alteration or change of beneficiary shall be made without written notice to County. County reserves the right to examine all policies from time to time to ensure appropriate conformity to prevailing practices and standards of the insurance industry. Such insurance shall be obtained from a company or companies licensed to do business in the State of California and acceptable to County. Failure of Contractor to maintain insurance in the manner and amount stated herein and as directed by County Administrator, subject to the approval of the Board, will constitute a material breach of this Agreement. 28. INDEMNIFICATION. a. Complete Indemnification of County. All work and performance covered by this Agreement shall be at the risk of Contractor. Contractor agrees to save, indemnify and keep harmless the County, its officers, employees, agents and assigns against any and all liability, claims, judgments, or' demands, including demands arising from injuries or deaths of persons and damage to property, including environmental damage, arising directly or indirectly out of the obligations herein undertaken or out of the operations conducted by Contractor, save and except claims or litigation arising through the sole negligence or willful misconduct of County, and will make good to and reimburse County for any expenditures, including reasonable attorney's fees, that County may snake by reason of such matters and, if .requested by County shall defend any such suit at the sole cost and expense of Contractor. The above premise by Contractor to indemnify, hold harmless May 3. 1995 14 -- ............................................................................................................................................................................................................................................................................................................................ and defend the County expressly includes, but is not limited to, all claims, damages (including by not limited to special and consequential damages) , natural resources damages, punitive damages, injuries, costs, response, remediation and removal costs, losses, demands, debts, liens, liabilities, causes of action, suits, legal administrative proceedings, interest, fines, charges, penalties and expenses (including but not limited to attorneys and expert witness fees and costs incurred in connection with defending against any of the foregoing or in enforcing this indemnity) of any kind whatsoever paid, incurred or suffered by, or asserted against, County, its officers, employees or agents arising from or attributable to any repair, cleanup or detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless or whether undertaken due to governmental action) concerning any hazardous substances 'or hazardous waste at any place where municipal solid waste is or has been transported, transferred, processed, stored, disposed of or otherwise come to be located by Contractor under Agreement, or the activities of Contractor pursuant to this Agreement resulting in a release of hazardous substances or waste into the environment. The foregoing is intended to operate, in part, as an agreement pursuant to Section 107(e) of the Comprehensive Environmental Response, Compensation and Liability Act, "CERCLA", 42 U.S.C. Section 9607(e) , and California Health and Safety Code section 26364, to defend, protect, hold harmless and indemnify County. The intent of the section is to provide County with the highest level of protection possible under existing and future laws. b. Defense of Agreement. Should any party successfully challenge the validity of this Agreement, the procedure by which this Agreement was entered into or the validity of any County ordinance which authorizes the County to enter into this Agreement, then in such case the Contractor shall have no cause of action for damages or any other relief against County as a result of such successful challenge. Contractor has the right to defend this Agreement and County. County has no duty to Contractor to defend the validity of this Agreement or any provision hereof. 29. ATTC}MEY'S FEES. In the event of litigation between the parties arising hereunder, each party shall be responsible for and pay its own litigation expenses, including attorney's fees. 30. ' ASSIGNABILITY. Contractor shall not sell, assign, subcontract or transfer this Agreement or any part hereof, or any obligation hereunder, without the written consent of County. The term assignment shall include any dissolution, merger, consolidation or other reorganization of Contractor, which May 3, 19958 results - in change of control of Contractor. It is understood and agreed by the parties that any corporation wholly owned by Browning Ferris Industries of California, Inc. may presently and in the future perform the obligations and responsibilities of the Contractor in the regions of the Franchise Area. Performance of the obligations and responsibilities of the Contractor by such companies shall not require an assignment under this section. In the event Contractor herein attempts to assign or subcontract this Agreement or any part hereof or any obligation hereunder, County shall have the right to elect to terminate this Agreement forthwith, without suit or other proceeding. Consent to assignment may not be unreasonably withheld. However, it is understood that County's grant of this franchise to Contractor is partly persuaded by the Contractor's financial strength and background in the field of waste management; therefore, assuming Contractor maintains it ability to faithfully carry out its duties hereunder,. it is in the County's ratepayers ' best interest for Contractor to continue under this Agreement. Following a public hearing, County may assign or transfer any or all of its rights under this Agreement without the consent of Contractor to any legally authorized public entity. 31. INVOLUNTARY ASSIGNMENT. No interest of Contractor in this Agreement shall be assignable by operation of law. Each or any of the following acts shall be considered an involuntary assignment providing County with the right to elect to terminate the Agreement forthwith, without suit or other proceeding: (1) If Contractor is or becomes insolvent, or makes an assignment for the benefit of creditors; (2) If Writ of Attachment or Execution is levied on this Agreement or other property of Contractor such that would affect Contractor's ability to perform its duties and obligations under this Agreement. (3) If in any proceeding to which Contractor is a party, a Receiver is appointed with authority to take possession of Contractor's property such that would affect Contractor's ability to perform its duties and obligations under this Agreement. (4) Except as otherwise provided in Section 31 (Assignability) , in the event of a probate proceeding where the rights of Contractor under the Agreement would pass to another individual or other individuals. May 3, 1995 16 32. NOTICE PROVISIONS. Any notice required or permitted under this Agreement shall be in writing and shall be deemed to have been given if delivered personally or ten (10) days after posted by certified mail, return receipt requested, addressed as appropriate either to Contractor: Pleasant Hill Bayshore, Inc. Attn: Ren Etherington 441 North Buchanan Circle Pacheco, CA 94553 Or to County: Attention: Director of Community Development 651 Pine Street, 4th Floor North Wing Martinez, California 94553 33. ANNEXATION AND CHANGE OF FRANCHISE AREA BOUNDARIES. Contractor shall give notice to County by January 30 of the next calendar year of any geographic area in the Franchise Area or immediately contiguous to the Franchise Area, in which Contractor has commenced service within the preceding year, notwithstanding whether Contractor deems that area to be regulated or unregulated. Contractor realizes that the public agency boundaries may be altered by virtue of actions taken by the Contra Costa County Local Agency Formation Commission (LAFCO) . Contractor agrees that should a municipal corporation lawfully annex territory which is within the Franchise Area, County may make such alterations to the Franchise Area as the annexation necessitates. Should the Franchise Area boundaries be amended, Contractor agrees that it will abide by any change resulting from the Franchise Area change. Contractor agrees that the Board of Supervisors may make such alterations to the Franchise Area as are necessitated by such Local Agency Formation Commission actions and shall have no right or claim to damages or other relief against the County for such alterations to the Franchise Area. However, nothing herein is intended to abrogate Contractor's rights under Public Resources Code Section 49520 or any successor or similar statute. 34. AFFILIATED ENTITIES. Contractor shall provide information necessary to reasonably satisfy County that the charges made by any Affiliated Entity are reasonable in accordance with the provisions of Section 0 (Contractor's Duty to Maintain Records; County's Right to Examine Records) . Information gained from examination of books and records pertaining to operations not regulated by the County shall be treated by the County and its agents as confidential information. May 3, 1995 17 "Affiliated Entity" shall be defined, for purposes of this section, as any entity which provides products or services to Contractor and in which either Contractor or the affiliated entity owns a ten percent (10%) or greater interest in the other, or where one person or entity owns ten percent (10%) or greater interest in berth. For purposes of this section, the term "Contractor" shall include Contractor, and if Contractor is an individual or a group of individuals (partnership) , all immediate family members, or if a corporation, major shareholders, and if any major shareholder is an individual, said individuals' immediate family members. For the purpose of this paragraph, "immediate family" includes spouses and relatives of the first degree of sanguinity, and their spouses. . 35. BREACH AND TERMINATION. The Director of Community Development shall have authority, subject to review by the Board of Supervisors upon appeal, to- determine whether a breach of any provision of this Agreement by Contractor has occurred. Any waiver of a breach shall not be deemed to be a waiver of any subsequent breach or to be construed as approval of a course of conduct. In the event that the Director determines that a breach has occurred, County shall give Contractor written notice of the breach setting forth the breach or default. Contractor shall have a reasonable period to cure the noticed breach, said breach not to exceed 60 days. In the event the breach or default is cured to the satisfaction of the Director of Community Development within the period of time allotted, the breach shall not be deemed a material breach. In the event that the Director of Community Development determines that Contractor has failed to satisfactorily cure the breach or default within the period of time allotted, the Director of Community Development may determine such breach or default to be material. Multiple or repeated breaches, or a pattern of breaches and subsequent attempts to cure said breaches by Contractor shall provide an adequate basis for the Director of Community Development, in his discretion, to declare any subsequent breach to be material, notwithstanding whether that breach is ultimately cured by Contractor. If such a determination of material breach is made, the Director of Community Development's determination shall be automatically appealed to the Board of Supervisors for final action. A material breach shall be cause for termination of this Agreement by the Board of Supervisors. In the event of a termination pursuant to this section, County shall have the right to temporarily assume the obligations of Contractor and shall have the right to forthwith take May 3, 1995 18 _....._.................................................................................__....................................................... _. ....... ......................................... .................................................................................. ......... possession of all trucks and other equipment of Contractor and exercise Contractor's right to enter and use any disposal facilities for the purpose of performing the services agreed to be performed by Contractor herein until such time as County can make other arrangements for the performance of said services. However, such temporary assumption of Contractor's obligations under the Agreement shall not be continued by County for a period exceeding twelve (12) months from the date such operations are undertaken by County. During any period in which County has temporarily assumed the obligations of Contractor under this Agreement, County shall be entitled to the gross revenue attributable to operations during such period and shall pay therefrom only those costs and expenses applicable or allocable to said period, including the reasonable rental value of the trucks and equipment to be paid to Contractor. County shall be entitled to the excess, if any, of revenue over applicable or allocable costs and expenses during such period. The loss, if any, during such period shall be a charge against Contractor, and shall be paid to County by Contractor on demand. Final adjustment and allocation of gross revenue, costs, and expenses to the period during which County temporarily assumed the obligations of Contractor shall be determinedby an audit by a Certified Public Accountant and prepared in report form with his unqualified opinion annexed thereto. Nothing in this Agreement shall prevent County during any period in which County temporarily assumes the obligations of Contractor under this Agreement, from employing persons who were employed by the Contractor for the collection of Solid Waste under this Agreement. Upon the occurrence of a material breach and the declaration of such and termination of this' Agreement by the Hoard of Supervisors, this Agreement and the franchise granted thereunder shall be of no further force and effect, expecting these provisions concerning County's right to temporarily assume Contractor's obligations and to use Contractor's facilities, and Section 28 (Indemnification) . County then shall be free to enter into whatever other arrangements are deemed justified and necessary for the collection, removal and disposal of Solid Waste within the Franchise Area. 35. EMERGENCY. Notwithstanding Contractor*s exclusive franchise rights set forth in Paragraph 5 (Exclusive Privilege and Duty) , in the event of an emergency due to natural disaster or labor strike which interrupts the collection of Solid Waste by Contractor, the Board of Supervisors shall have the right to declare a temporary suspension of this Agreement for the reasonable duration of the emergency and until such time as County determines that Contractor is able to reassume all May 3* 1995 19 obligations under this Agreement. Should Contractor fail to demonstrate to the satisfaction of the Board of Supervisors that required services can be resumed by Contractor prior to the expiration of a six (5) month period, this Agreement may be terminated at the direction of the Board. 37. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAtwTs. Contractor shall be responsible for and shall comply with all applicable laws, rules and regulations that are now in effect or may be promulgated or amended from time to time by the Government of the United States, the State of California, the County and any other agency now authorized or which may be authorized in the future to regulate the services to be performed herein regarding the collection, .removal and disposal of Solid Waste and recycling of material. This includes County Ordinance Code Chapter 418-6 Lon mandatory subscription to Solid Waste collection service) , and the County's Materials Diversion Ordinance. 38. AMENDMENT OR MODIFICATION. This Agreement may be amended or modified upon written agreement of the parties hereto. The parties agree to meet and confer in good faith if amendments or modifications are proposed. 39. POLICE POWERS. Nothing in this Agreement is intended to or may limit County authority pursuant to its police power. 40. CONTEST OF AGREEMENT'S TERMS. In the event either party to this Agreement attempts to challenge the validity of any portion of this Agreement, such action in attempting to challenge the Agreement shall constitute a material breach of this Agreement and the non-breaching party shall have the right to elect to terminate this Agreement forthwith without suit or other proceeding. This section shall not be construed .to prevent either party from seeking redress from the courts for the purpose of legal review of administrative proceedings regarding rate setting or County actions taken pursuant to this Agreement, or for the purpose of interpreting or enforcing the provisions contained in this Agreement. 41. SEVERABILITY. In the event legal action is brought by a person or entity, other than the parties to this Agreement, to challenge, invalidate, contest or set aside any of the provisions of this Agreement, each and every term and condition, and each and every section and paragraph is severable from the remaining terms, conditions, sections, and paragraphs. The invalidation of May 3._ 1995 20 any term, condition, section or paragraph as a result of a legal action, brought by a person or entity not a party to this Agreement shall not affect the validity or enforceability of the remaining provisions. However, if material provisions hereof are affected, the parties agree to negotiate in good faith to reach agreement- on revisions which preserve the substance hereof to the greatest extent allowed by law. 42. WAIVER. The waiver by either party of any breach or violation of any provisions of this Agreement shall not be deemed to be waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. The acceptance of any monies which become due hereunder shall not be deemed to be a waiver of any pre-existing or concurrent breach or violation by the other party of any provision of this Agreement. 41 . SURVIVAL OF OBLIGATIONS. Obligations of this Agreement which embody continuing obligations, including but not limited to Section 28 (Indemnification) shall survive the termination or expiration of this Agreement. 44. NEW AGREEMENT. Upon the effective date of this Agreement, all other Agreements between the parties for the provision of solid waste and/or recycling services within the Franchise Area are superseded except that all continuing obligations under said superseded agreements shall continue in full force and effect for the periods covered by said superseded agreements. 45 . ENTIRE AGREEMENT. This Agreement represents the full and entire agreement between the parties hereto with respect to the matters covered herein. 46. OPERATIVE DATE. This Agreement becomes operative on the Effective date as to areas within the Franchise Area subject to other agreements between the parties (e.g. , portions of the Bay Point area) • As to all other areas within the Franchise Area, this Agreement becomes operative on August 5, 1996, or on such earlier date as the parties may agree. 47. GUARANTY. Prior to the the operative date, Contractor shall provide to the Director of Community Development, proof of guaranty by Browning Ferris Industries of California, Inc. , of the performance by Contrator of each and every provision of this Agreement to be performed by Contractor. Proof of Guaranty shall May 9, 1995 21 any term, condition, section or paragraph as a result of a legal action, brought by a person or entity not a party to this Agreement shall not affect the validity or enforceability of the remaining provisions. However, if material provisions hereof are affected, the parties agree to negotiate in good faith to reach agreement on revisions which preserve the substance hereof to the greatest extent allowed by law. 42. WAIVER. The waiver by either party of any breach or violation of any provisions of this Agreement shall not be deemed to be waiver of any breach or violation of any other provision nor of any subsequent breach or violation of the same or any other provision. The acceptance of any monies which become due hereunder shall not be deemed to be a waiver of any pre-existing or concurrent breach or violation by the other party of any provision of this Agreement. 43. SURVIVAL OF OBLIGATIONS. obligations of this Agreement which embody continuing obligations, including but not limited to Section 28 (Indemnification) shall survive the termination or expiration of this Agreement. 44. NEW AGREEMENT. Upon the effective state of this Agreement, all other Agreements between the parties for the provision of solid waste and/or recycling services within the Franchise Area are superseded except that all continuing obligations under said superseded agreements shall continue in full force and effect for the periods covered by said superseded agreements . 45. ENTIRE AGREEMENT. This Agreement represents the full and entire agreement between the parties hereto with respect to the scatters covered herein. 46. OPERATIVE DATE. This Agreement becomes operative on the Effective date as to areas within the Franchise Area subject to other agreements between the parties (e.g. , portions of the Say Point area) . As to all other areas within the Franchise Area, this Agreement becomes operative on August 5, 1996, or on such earlier date as the parties. 47. GUARANTY. Prior to the the operative date, Contractor shall provide to the Director of Community Development, proof of guaranty by Browning Ferris Industries of California, Inc. , of the performance by Contrator of each and every provision of this Agreement to be performed by Contractor. Proof of Guaranty shall May 3, 1995 21 _._........................................................................... ............................................................................................................................................................................................................................................................................................................................ ..................................................................................... ......._.... ....................................... _............................. .................... ......... ................. . ... . . ......... . ..............._ _ __ _ _ _ __ be in the form set forth in Exhibit B. 1 COUNTY OF CONTRA COSTA CHAIR, JKOARD OF SUP RV"ISORS D e ATTEST, Phil Batchelor, Clerk of the Board FORM APPRCV D and County Administrator VICTOR 1.w AN,Cgjtn,y C�sa'Ise, 1 :+rDutr - By: ILn' o T} Ufi Y CONTRACTOR PLEASANT HILL BAYSHORE DISPOSAL, INC. , a alifornia Corpo ation , t Title Date Taxpayer I.D. No. LTF 17a:\frnbf15.395 May 3, 1995 22 tet. �n of 1'•"e ��. t• e• .... a i �! L T tv f«. `t� . •... '_try•. '�`+`'+ :.. i Yl �"( •' r •t r t• (' ff ' rr � t.-+"f ?[ .i r' �.�t�'� l• ■lra l 't' ..—...`_..,....r.y..n'._, .w- to > , 1 . f l' t t a b EXHIBIT B GUARANTY This Guaranty is made and entered into this 1st day of _ June 1995 , by and between the County of Contra Costa (hereinafter "County") and BroynM erris 19dustrie 0 a i t�rnla, nc. a California corporation ("Guarantor"). RECITALS WHEREAS, Pleasant Hill Bayshore Disposal, Inc.- ("Contractor"), an indirect wholly owned subsidiary of Guarantor desires to enter into a certain Franchise Agreement with the County (the "Agreement") for the provision of solid waste handling service within specified areas in the unincorporated area of the County; WHEREAS, pursuant to Section 47 of the Agreement, the County has demanded that Contractor obtain certain assurances from Guarantor, as to all conditions and obligations of the Agreement to be fulfilled by Contractor; and WHEREAS, in order to induce the County to enter into the Agreement with Contractor, Guarantor desires to provide the County with said assurances as to all conditions and obligations of the Agreement to be fulfilled by Contractor; NOW, THEREFORE, the County and Guarantor hereby agree as follows: 1. Guarantor hereby guarantees to the County the full performance by Contractor of all conditions and obligations in the Agreement which are to be 11 fulfilled by Contractor, provided that the County has fulfilled all of Its obligations under the Agreement, and in particular, without limiting the foregoing, that the County has provided Contractor with the requisite notice(s) , and opportunities to cure as provided for in the Agreement. - a e 2. The County agrees to give Guarantor notice by certified mail, return receipt requested, at P-0- Box 7325, Fremont, CA 94537 (Attention: General Counsel) each time that the County becomes aware of any fact or circumstance which may give rise to an obligation of Guarantor to perform pursuant to this Guaranty. 3. The County shall not sell, assign or otherwise transfer this Guaranty, or Its rights or obligations thereunder, without the written consent of Guarantor, which consent shall not be unreasonably withheld if the assignment is to a municipal corporation. IN WITNESS WHEREOF, this Guaranty has been executed on the date first above written. COUNTY OF CONTRA COSTA By: GUARANTO By: ' Its: i cr By: Its: t 1tr7:qa&r.ntr.phb _.... _.................._........... ..................................................... ........... . ......................... � +�� f�r �ecyc`e`s pap.--ft s y t ms- 111Rt}WNING-FERRIS INDUSTRIES Came Coca County May 2, 1995 Mr. Val Alexeeff, Director Growth Management and Economic Development Agency County of Contra Costa 651 Rine Street Martinez, CA 94553 Re: Franchise Agreement with Pleasant Bill Bayshore Disposal/BFI Dear Val: This letter confirms that the highest monthly rates for the handling of Commercial Solid Waste (defined in Section 2 (d) of the Franchise Agreement with PHBD/BFI) currently .charged by PHBD/BF'I within the Franchise Area described in Exhibit A to the Agreement are the rates as described in Attachment A--1 to this letter. We understand those rates will be the maximum monthly rates, as described in the Franchise Agreement at Section 8, for the handling of Commercial Solid Waste. We understand that this letter will be included as Exhibit C to the Franchise Agreement with PHBD/BFI to confirm that mutual understanding. This letter also confirms that the highest monthly rates for handling Residential Solid Waste (defined in Section 2(n) of the Agreement) currently being charged by PHBD/BFI within the Franchise Area described in Exhibit A to the Agreement are the rates described in Attachment A-2 to this letter. With the approval of the Franchise Agreement, the Board will establish those gates as a maximum monthly rate, as defined in the Franchise Agreement at Section 8, for the handling of Residential Solid Waste in the PHBD/BFI franchise area. The maximum residential rates in Attachment A-2 reflect reductions in rates a previously made by PHBD/BFI to reflect reduced gate charges at the S.T.A.R. transfer !station and Keller Canyon Landfill. The Franchise Agreement only !sets the maximum rates to be charged. There are no minimum 'rates. It is acknowledged by PHBD/BFI that the County is free to initiate a review and potential reduction of those maximum rates with 60-days notice to the Contractor, consistent with section 9 of the Franchise Agreement. C"HIBIT C- SOLID WASTE COLLECTION BFI TRANSFER KELLER CANYON AND RECYCLING DISTRICT r STATION AT MARTINEZ i SANITARY LANDFILL (510)685-4716 (510) 313-8900 (510)458-9800 441 N. BUCHANAN CIRCLE • PACHECO, CA 94553 + P.O. BOX 29164 + PLEASANT HILL, CA 94523 (510)685-4716 + FAX: (510) 685-4735 Mr. Val Alexeeff, Director May 2, 1995 Page 2 Please also be advised that if PHBD/BFI intends to further decrease the rates it charges to residential customers within the Franchise Area, the County will be notified in advance. Very truly yours, PLEASANT HILL BAYSHORE/DI-SPOSAL Ken Etherin gxt4 .......................................................................................................................... .................................... ................................ ...................................................................... BFI -PLEASANT HILL SAYSHORE DISPOSAL, INC. MONTHLY MAXIMUM COMMERCIAL RATES Comm mitt Can ServiceL S of 32 gallon Extra Cans Serviced 1x 2x 3x 4x 5x Pickups 1- $15.15 $30.30 $45.45 $60.60 $75.75 $10.00 2 $30.30 $50.50 $90.90 $121.20 $151.50 per can 3 WAS $90.90 $136.35 $181.80 $22745 4 $60.60 $121.20 $181.80 $242.40 $301.00 5 $75.75 $151.50 $227.25 $303.00 $37815 Porn emiat Cart Services: M`0164 gallon Extra Carts Serviced 1x 2x 3x 4x 5x Pickups 1 $24.15 $55.65 $87.15 $118.65 $460.20 $15.00 2 $48.30 $111.30 $174.30 $237.30 $300.40 per cart 3 $72.45 $166.95 $261x45 $355.95 $450.60 4 $96.60 $222.60 $348.60 $474.60 $600.80 5 $120.75 $278.25 $435.75 $593.25 $751.00 8 of 95 gallon Extra Carta Serviced ix 2x 3x 4x 5x Pickups 1 $35.75 $78.20 $120.70 $163.20 $205.70 $20.00 2 $71.50 $156.40 $241.40 $326.40 $411.40 per cart 3 $107.25 $234.60 $362.10 $489.60 $617.10 4 $143.00 $312..80 $482.80 $652.80 $822.80 5 $178.75 $891.00 $603.50 $816.00 $1,028.30 2 Yard Bin Senrieerr: O � and Sins Serviced Ix 3X 4x x Pickups 1 11132.65 $265.30 $397.95 $530.60 $663.25 $40.00 2 J265.,330 $530.60 $795.90 $1,061.10 $1,326.50 per bin 3 $397.95 $795.90 $1,193.85 $1,591.80 $1,985.75 4 $530.60 $1,061.20 $1,591.80 $2,122.40 $2,653.00 5 $663.25 $1,326.50 $1,989.75 $2,653.00 $3,316.25 Ober Feea One Thne Lock Charge $65.00 !Lock Replacement $15.00 Steam Clean Bin $65.00 Attachment A-1 to Exhibitd-of BFI Franchise Agreement r � i BFI •PLEASANT HILL BAYSHORE DISPOSAL., INC. MONTHLY MAXIMUM RESIDENTIAL.RATES ildontM Quarterly Service Description Fee Fee 20 gallon Mini-Can Service+2 dipping cans at curb $16.00 $48.00 1 32 gallon Can Service+2 dipping cans at curb $18.00 $54.00 2-32 gallon Can Service+2 dipping cans at curb $31.50 $84.50 3-32 gallon Can Service+2 clipping cans at curb $45.00 $135.00 95 Galion Cart Service(no additional dipping cans) 321.00 $63.00 Recycling fee Included In all residential service Was Attachment A-2 to Exhibit G of BFl Franchise Agreement ..................................._ - ............................................................................................................................................................................................................................................................................................................................ EXHIBIT B TO CONDITIONAL CONSENT TO FRANCHISE ASSIGNMENT AGREEMENT PHBD has undertaken certain activities and made certain commitments with regard to its operations as required by the Franchise Agreement. The following is intended to set forth several of said operations, current activities and/or ongoing commitments of PHBD which Allied agrees to continue, undertake and/or assume as required by the Franchise Agreement. Those activities or obligations include but are not necessarily limited to: 1. Allied shall proceed in a timely manner with the provision of required recycling, source reduction and composting programs required by the County SRRE and the Franchise Agreements. 2. Allied shall cooperate with the County in implementing the programs and Goals as outlined in the June 23, 1998 Beard of Supervisor's Board Order, implementing expanded recycling and greenwaste programs and redesigning the rate structure and instituting variable can rates. 3. Allied shall continue programs instituted by PHBD to facilitate service to some hard to serve unincorporated areas (including but not limited to the recycling bias serviced at the Canyon Elementary School). DD14:BF1AsscN.D00 EXHIBIT C ALLIED WASTE INDUSTRI ES , INC . December 29, 1998 Ms. Janet Schneider Executive Director Central Contra Costa Solid Waste Authority D 1280 Civic Drive, Suite 314 � r� Walnut Creek, CA 94596 RE: Response to Request for Information - Assignment of Solid Waste - 8-'ct4M1' Transfer and.Disposal.Franchise Agreement -�=�f :3C t/� Zn Dear Ms. Schneider: Can behalf of Browning-Ferris Industries (13M), Allied Waste Industries, Inc. (Allied) is responding to your December 9, 1998 correspondence regarding assignment of the Solid Waste Collection, 'Transfer and Disposal. Franchise Agreement. With the majority of questions being centered around Allie d's organizational structure, experience and plans for the Contra CostalSolLano sere area.,a direct response from Allied appeared to be the most appropriate. Responses are presented in a manner commensurate with the format of your December 9, 1998 transmittal and represent the most complete information available at this time. Several Franchisors are in various stages of implementing diversion krograms to assist them in attaining All 939 goals. Therefore,some responses are contingent pon further development and evaluation of these programs with the various Frazmchisors. Whsle BFI has initiated numerous discussions with these entities, the specifics of the programs .and their implementation, has not been finalized and most likely will not be determined until the early part of 1999. As such,it would be difficult for Allied or BFI to provide as specific a response as anticipated without the benefit of continued discussions with these Franchisors. In these instances,our response is intended to illustrate our commitment to assisting the Franchisors with achieving their diversion goals in a timely and efficient manner. A. I3esc6ption of Acruirin Entity 1. The name of the acquiring entity will be Allied Waste Industries, Inc. , a Delaware corporation. The address noted in your transmittal is correct and notices for contractual matters should be forwarded to the Pleasant MI Bayshore Disposal collection operation address which is as follows: 15880 N. Greenway-Hayden Loop. Ste. 100 /Scottsdale, AZ 85260 1602.423.2941, / 602.423.9424 rnx 441 N. Buchanan Circle Pacheco, CA 94553 2-4. Response to Item A(1) eliminates the need for a responses to these items. 5. Allied Waste Industries is organized in a decentralized fashion placing the decision making power with the District Manager in the field. While a District Manager may have several people on a management team such as public sector and community involvement/education representatives, operations personnel and customer service managers, they are ultimately empowered to make the decisions which will impact the service provided to the Franchisors. The Contra Costa/Solano division will be part of Allied's Northern California District. The other operating entities within this district include (1) an operations contract with the South Napa Valley Waste Management Authority for transfer and disposal of waste (located in Napa, CA) and (2) a hauling company, composting facility and landfill in Stockton, CA. The Northern California District is one of six districts in Allied's Western Region located in Scottsdale, AZ. Allred has a total of five regions across the United States which are typically staffed by relatively few individuals. Typical position titles include a Regional Controller,Regional Landfill Engineer and Regional Safety Manager all of whom report to the Regional Vice President. District Managers report directly to the Regional Vice President for a specific Region. The Regional Vice Presidents report to the Vice President of Operations who in turn reports to the Chief Operating Officer(COO). The COO reports to Allied's President/Chairman of the Board. It is important to once again point out that the company's management philosophy is centered upon local managers being held responsible for decisions made in a given service area. While regional and corporate staff are contacted on various matters, their role is one of support and guidance versus policy making and taking the lead on issues that affect customers such as the Franchisors. B. Manazement 1. The names, occupations and addresses of key individuals within Allied's management structure are as follows: Michael Cap►rio District Manager (upon closure of the transaction District Manager's Northern California office will be located at Pleasant Hill Bayshore Hauling 1145 W. Charter Way company). Stockton, CA 95206 209-466-5192 Page 2 Don Swierenga West Region Vice President Allied West Region Office 7201 E. Camelback Road, Shite 375 Scottsdale, AZ 55251 602-596-9596 Don Stager Vice President of Operations Allied Corporate 15880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 Larry Henke Chief Operating Officer Allied Corporate 15880 North Greenway-Hayden Loop, Suite 1.00 Scottsdale, AZ 85260 602-423-2946 Tom Van Weldon President/chairman of the Board .Allied Corporate 1.5880 North Greenway-Hayden Loop, Suite 100 Scottsdale, AZ 85260 602-423-2946 A complete listing of all officers for Allied Waste Industries, Inc. is included in Allied's 1997 Annual:Report which was supplied to all of the Franchisers during the past month. 2. Allied is currently in the process of evaluating staffing levels and various personnel for the Contra Costa/Solano service area. It is our intent to proceed with the transition in an orderly and non-disruptive manner and pat of this entails utilizing as many of the wasting personnel as is practical and efficient. However, it has been the practice of the company to not make decisions on personnel and staffing levels hastily. This can lead to unnecessary disruptions and customer service issues which could otherwise be avoided. Our intent is to assume control of the operations on February 1, 1999 and manage them for a period of 45-60 days, or longer, prior to malting ultimate staffing decisions. By proceeding in this manner, Allied is better able to make informed, educated decisions in terms of staffing and operations. The end result is a smoother transition and a work force that was selected through evaluation of employees first hand and not through second hand information or faulty assumptions. .page 3 In terms of employees that may become employed by Allied from outside of BFI's Contra Costa/Solano service area,it would be premature and inappropriate to discuss the names and backgrounds of these individuals at this point in time. The names and experience levels of these individuals will most likely not be made public until after the transaction closes in late January due to the potentially awkward situation which could occur if the names of these individuals become public. A copy of the currently anticipated organizational chart for the Contra Costa/Solano service area is attached. Allied reserves the right to make adjustments to the structure based upon our evaluations over the next month during due diligence and our findings during the initial period of managing the operations. While we do not anticipate any material deviation from this structure, we trust that the Franchisors can respect our need for flexibility with the ultimate goal of providing timely and efficient service to our customers. 3. While Allied has made some decisions relative to former management employees of BFI, we believe that it would be inappropriate for these decisions to be discussed in the context of this transmittal. Although unlikely, it is also important for discretion to be utilized in in the event that the transaction does not close and BFI remains the operator in the service area. Our goal during the transition, and afterwards, is to disrupt as little of the operations as possible and to simply improve upon the services currently being provided. At this point in time we do not envision engaging any former BFI employees through employment or consulting agreements. Any existing management employees that Allied wishes to retain will be hired as full-time personnel. To the best of our knowledge, the cost of these agreements are typically not allowable in the rates. Notwithstanding this, Allied has no plans to request an increase in rates should our position on engaging current BFI employees in this manner change. C. Management Experience I. The following is a listing of publicly franchised solid waste collection operations presently operated by Allied. In the majority of these cases, Allied has become the operator through an acquisition or asset swap and has been required to transition into an existing contractual arrangement. The list includes information pertaining to the size of the city being served, the type of service, equipment utilized, dates when Allied began servicing the entity, an estimated number of households and commercial customers as well as contact information for the franchise representative. Page 4 City of Chula Vista Mr. David Rollins City Manager 276 e Avenue Chula.Vista, CA 91910 619-691-5031 * Residential refuse, greenwaste and curbside recyclables (approx. 30,000 households utilizing side load and rear lead collection vehicles) * Commercial refuse and recycling(approx. 1500 customers utilizing front end load type collection vehicles-includes multi-family residences) * Population of approximately 150,000 * .Allied began service through Laidlaw Waste Systems acquisition in Pall 1996 City of Stockton Mr. Cary Ingraham Assistant City Manager City Hall 425 N. El Dorado Street Stockton, CA 952032 209--937-821.2 * Residential refuse and curbside recyclables(27,5003 household utilizing rear loaders for refuse and semi-automated compartmentalized recycling vehicles) * Commercial refuse is collected competitively(multi-family is competitive as well) * Population of approximately 250,00303 * .died began service through an acquisition in June 1998 (Sunrise Sanitation is the name of entity which services the City) San Joaquin County Mr. Tom Morton Director of Solid Waste 1810 E. Hazelton Street Stockton, CA 95201 209468-3068 * Residential refuse and curbside recycling(19,000 households utilizing similar collection methodology as City of Stockton) * Subscription greenwaste program for 2000 homes utilizing fully automated side loaders * Commercial is competitive and includes multi-family residences * Population of approximately 50,000 for the district served. * Allied began service through acquisition noted under City of Stockton reference. Page 5 City of North Richland Hills (Dallas-Ft. Worth metropolitan area) Mr. Larry Cunningham City Manager 7301 N.E. Loop 820 North Richland Hills, TX 76180 817-581-5500 * Twice per week residential service for approximately 13,000 customers utilizing rear loaders and once per week collection utilizing semi-automated compartmentalized vehicles. * Commercial service to approximately 500 customers utilizing front end load and roll-off collection vehicles (includes multi-family). * Population of approximately 53,150 * Allied began service through Laidlaw Waste Systems acquisition in 1996 City of Bedford (Dallas-Ft. Worth metropolitan area) Chuck Barnett Assistant City Manager 2000 Forest Ridge Drive Bedford, TX 76021 817-952-2106 * Twice per week residential collection utilizing front load collection vehicles for 11,200 homes * Once per week residential collection for curbside recyclables utilizing semi-automated compartmentalized vehicles. * Commercial service to approx. 450 customers utilizing front load and roll-off collection trucks(includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 51,000 City of Euless (Dallas-Ft. Worth metropolitan area) Tom Hart City Manager 201 N. Ector Euless, TX 76039 817-685-1400 * Twice per week residential collection utilizing front load vehicles for 9500 customers * Commercial service to approx. 470 accounts utilizing front load and roll-off collection trucks('includes multi-family). * Contract acquired through acquisition of Laidlaw Waste Systems in 1996 * Population of 40,850 Page 6 2. For the references listed above, Allied serves multiple jurisdictions within the Stockton division of the Northern California District (City of Stockton c& San Joaquin County). Within this division, Allied also serves the City of Lathrop (approx. population 10,000) with a fully automated program for refuse,green waste and commingled recyclable$. The Chula Vista hauling division also services the City of Imperial Beach(approx. population 1.5,000)with fully automated refuse, green waste and recyclable$collection. All of the contracts in the Dallas-Ft. Worth metropolitan area are serviced from Allied's Dallas district and involve extensive interaction with multiple entities. The District also services additional cities from this location which do not have a population of 50,000 people or more. 3-4. As noted previously,Allied is still in the process of identifying various individuals to fill management positions in the Contra Costa/Solano service area.. Due to the fact that key individuals will most likely be hired externally and their employment will be contingent upon successful close of the transaction, it would be inappropriate for their identities to be provided. Additionally, providing a summary of their experience levels and backgrounds would also be inappropriate. While Allied understands the desire for the Franchisors to gain a comfort level with individuals placed in these key management positions, it would be irresponsible for our firm to jeopardize an individual's current employment situation by discussing any aspects of their background at this point in time. Due to their employment most likely being contingent upon successful closure of the asset swap, their identities may also not be divulged until the transaction has been consummated. Allied has every intent of employing competent experienced personnel to manage the operations and business base within the Contra CostalSolano service area. We recognize the importance of retaining quality individuals not only to successfully manage our investment but also to build and maintain relationships with our employees and customers. As soon as practical and appropriate, Allied will notify the Franchisors who the key management personnel will be and what their background and experience levels are. Any input from the Franchisors will be welcomed at that point in time. 5. Same response as Items 3 c&4. It is worth noting that as Northern California District Manager, I have responsibility for all collection, transfer, processing and disposal operations. Prior to becoming employed with Allied Waste Industries, Inc., I was employed by Browning-Ferris Industries primarily in the management of landfills and transfer operations. Of most interest to the Franchise cities is my experience as District Manager for N. California landfills at BE where I worked at the Keller Canyon Landfill for a period of 2.5 years. As such,I am very familiar with the challenges presented by the facility from an engineering, environmental,political and operational standpoint. The role Page 7 of.District Manager at BFI also included supervision of transfer operations which complemented the landfill. During my final year of employment with the company, I served as manager of BFI's public sector business in the Bay Area and became very familiar with the Contra Costa/Solano franchise contracts as well as the type of service provider that is envisioned by the Franchisors. This exposure provided me with not only a good working knowledge of the area but also of the expectations placed upon a solid waste service provider in terms of customer service,community involvement, labor relations and overall approach to managing a business in the area that provides a vital public service. Prior to my employment with BFI, I served as Regional Environmental Manager for Norcal Waste Systems Central Valley and Bay Area disposal facilities (five years). My primary responsibilities included permitting, compliance, construction management and interaction with municipal entities on contract issues. While the bulk of my experience has been in the transfer and disposal side of the industry, I have gained extensive experience with collection operations and have a strong working knowledge of the key elements required to run a successful hauling division. The primary areas of focus for Allied at the Pleasant Hill Bayshore Disposal hauling company will be customer service, assisting the Franchisors in attaining their AB939 goals, labor relations, expenditure of capital necessary to provide all the service required contractually, maintenance of equipment, safety and risk management, efficient utilization of personnel and employee morale. Allied also believes that significant opportunities exist to work cooperatively with other local haulers in order to provide an improved service package to the Franchisors. D. Transition of Operations 1. Allied anticipates a smooth and seamless transition of the operations. This is the case because of our intent to predominantly utilize existing employees and largely the same routing structure at the hauling division. As such, personnel in the field will be very familiar with the various nuances of a particular area. Within the past three to four years Allied Waste has grown substantially. The primary driving force of this growth has been through acquisitions and as such, the company has obtained a great deal of experience in integrating acquired entities into our system. It is important to note that the decentralized organizational structure of the company allows for a large degree of flexibility in the integration of acquisitions. While some components of the company's approach to managing a business, such as information systems, are constant, a large degree of flexibility exists in terms of how a division is staffed, customer service protocol, approach to community involvement and operational guidelines. Allied Page 8 understands that each service area is different from the next and that a one size fits all approach has proven to be ineffective in the solid waste industry. It has been Allied's practice to tape a cautious approach to integrating acquisitions. During the due diligence stage of acquiring a company, a great deal is learned about how the operation functions and how well it is serving the customer base. However, it is often very difficult to truly gain a solid understanding of how a particular division functions without managing the operations for a period of time. By allowing for an adequate evaluation period, new management can be confident that the decisions being made in terms of staffing and organizational dynamics are appropriate and not based upon faulty assumptions. Our approach to integrating operations in the Contra CostalSolano service area will be similar to that outlined above. While we have made some decisions on retention of management personnel, we anticipate that the majority of the workforce in place at the operating companies will remain constant. During the first 45-60 days under ,Allied management, our personnel will evaluate the existing set of procedures and practices as well as personnel to determine whether there is a need for change in any key positions. Our assessment may conclude that the existing group of personnel is adequate and very little if any change is required. It may also lead us to conclude that some changes in terms of personnel and operational practices are necessary and these changes will be instituted so that the least amount of disruption occurs. It is worth noting that transition from one information system and billing/payables system can be an area where customer service is impacted the most. BFI and Allied have agreed to work closely and cooperatively in this area to ensure a smooth transition. Our experience with integrating multiple systems(including SAP)into our financial systems is extensive and preliminary assessments by our MIS team indicate that the Contra, CostalSolano service area can be transitioned to Allied information systems with minimal difficulty. In order to assist in this process, Allied has retained as a full-time employee BFI's Bay Area Controller. Her knowledge of the Contra Costa/Sola.no accounting procedures and requirements is extensive and will be a great asset in ensuring that Allied's systems are formatted to satisfy all the reporting and customer service requirements of the Franchisors. She has been involved with the Contra Costa hauling operation prior to BFI's acquisition in the early 1990's and was intimately associated with it's integration into BFI's financial systems utilized at that point in time as well as their recent transition to SAP. Allied anticipates retaining BFI's billing system for a short period of time after the transition to ensure that proper billing is maintained. Allied has also received positive feedback from several key operations employees at all of the operating locations in relation to their desire to remain employed at the facilities. Page 9 All of these employees have been with the respective facilities for an extended period of time and have an extensive base of knowledge that will serve Allied well in maintaining a suitable level of service during the transition stage. I have been involved in the latter stages of integrating the Stockton division into Allied from an operational standpoint. My primary focus has been to evaluate operational practices and determine whether they can be made more efficient or customer friendly through the use of different technology or whether re-capitalization of a truck fleet/heavy equipment or site improvements will be more beneficial from an operating efficiency or customer service standpoint. As a case in point, these decisions were made only after careful assessment and review and were not the result of preliminary assessment. It is very likely that the vast majority of field employees servicing various Franchisors will remain in the same roles as those that were held while the company was managed by BFI. Their experience with various routes and needs of individual customers (ie. senior citizens) is invaluable and Allied would be remiss in upsetting this component of the operation. Our initial review of the administrative side of the operations leads us to believe that while some adjustments are necessary, the basics of the day to day functions of the company are relatively sound. As noted previously, these assumptions will be reviewed once Allied assumes management control of the entities. . In short, the overall approach of transition through evaluation and assessment during a change in management has allowed Allied to integrate numerous companies with minimal or no disruption to the customers being serviced. As noted in section C(l), many of the municipal contracts that are fisted were obtained through acquisitions and it would be instructive for the Franchisors to inquire into how the transition phase of the acquisition proceeded. As with our response to several of the items in Sections B and C, it would be inappropriate to divulge the experience of potential employees in transitioning acquisitions. Allied's intent is to minimize the amount of disruption in all facets of the operation. Our knowledge of the expectations of the Franchisors in terms of customer service, operations, community involvement and interaction with city officials as well as the familiarity with the current accounting systems should allow for a trouble free and timely transfer of operations. 2. I will be the primary liaison between Allied and the Franchisors during the transition of operations. As noted previously, I have extensive experience through my tenure with BFI and Norcal in dealing with the public sector. In the past month I have taken the time to meet all of the City Managers and JPA directors in order to gain an understanding of their individual needs as well as provide them the opportunity to get to know myself and Allied. As noted during these meetings, should there be a need for further discussion or to have Page 10 1111...................... .... ......... ......... ......... ......... ............._...._._.......... __... ......... ......... ......... ......... 11.11 ...... ........ ......... ......... ...... ......... ......... ......_.. ...... ......... .................... ................................................................................_____. myself or ether Allied representatives meet with individual council and Board members, we would be pleased to make ourselves available. 3. Allied Waste provided documentation to Teamsters Local 315 and Operating Engineers Local 3 of our intent to honor the existing obligations of BFI throughout the remaining term of the collective bargaining agreements. A copy of this letter was sent to all of the Franchisors. During my tenure with BFI, I was involved in the successful resolution of several labor relations issues and contract negotiations. More specifically, I was BFI's primary contact during the beginning of their negotiations with Local 3 at the Feller Canyon Landfill. An agreement was reached between the two parties with no disruption in service at the facility. The individuals who are being contemplated for some of the key management positions also have extensive experience in managing labor relations issues including negotiations from both sides of the bargaining table. 4. The response to Item D(l)should provide the Franchisors with an understanding of how Allied intends to approach the staffing of the Contra.CostalSolano operations. It is our intent to approach this area of the transition methodically and to evaluate our needs once we assume control of the operations. Making decisions on these issues prior to having the opportunity to evaluate the operations first hand would be inappropriate and could impact service levels to the Franchise cities. E. Lltiatian A transmittal from Allied's corporate legal department is attached and should provide a suitable response to this request. F. Continrrent Environmental Liahiiity 1. Based upon Allied's review of the environmental condition of the properties associated with the Contra.Costa service area, we have not identified any contingent environmental liabilities. Typically these type of liabilities are associated with older disposal facilities. The Keller Canyon facility began operations in 1992 and has been constructed in accordance with state-of-the-art design criteria. To date,these environmental controls show no signs of malfunction and Allied anticipates continued positive performance in this area. Provisions for funding of closurelpost-closure maintenance costs and compensation for any associated accrued f rtnare liabilities will be considered as part of the Definitive Agreement between the two companies. Page 11 G. Insurance and Indemnity 1. Allied`s Legal & Corporate Secretary has prepared a letter which outlines the corporation's capabilities in terms of securing performance bonds and letters of credit. Upon assignment of the franchise agreements to Allied, performance bonds in the amounts specified in the agreements or if necessary, the individual Franchisor(Antioch and Clayton), will be forwarded to each of the Franchisors. With an extensive base of business in California, Allied has relationships with bonding companies within the state who would provide these assurances. 24. Copies of certificates of insurance are attached and indicate the various coverages available to the corporation. As with the performance bonds, upon assignment of the agreements Allied will provide individual certificates to the Franchisors which name them as additional insured. These coverages will not only apply to the hauling division but also to the STAR Transfer Station and the Keller Canyon Landfill. 5. Allied and BFI have both agreed to assume the liabilities of the other party as part of the Definitive Agreement currently being prepared. As a result both parties will assume the contractual obligations of the other in terms of indemnity obligations including CERCLA, hazardous waste and other environmental liability claims. Assumption of any liability will also include actions or events which may have occurred prior to the assignment of the franchise agreements to Allied. BFI will not retain responsibility for any indemnity obligations to Franchisors after the transaction has closed. A copy of the Definitive Agreement for the transaction will be provided to the Franchisors upon it's completion which is anticipated to be two weeks. H. Acquisition Financing 1. As noted above, a Definitive Agreement is currently being finalized and should be available within two weeks. The responses to items (a) through (i) should provide the Franchisors with a general outline of how the transaction will be structured. (a) Purchase of company stock has been agreed upon for the Contra Costa/Solano component of the asset swap. (b) The total purchase price for the overall transaction is$142MM. The amount ascribed to the Contra Costa/Solano service area has yet to be determined. (c) A full monetary payment will be made to BFI from Allied at the close of the transaction. See attached letter from Allie&'s Corporate Secretary regarding financing sources for the corporation. (d) Cash at the close of the transaction. (e) There will be no consulting agreements offered to current BFI employees. (f) Terms to be contained in final Definitive Agreement associated with the transaction. Page 12 (g)'Terms to be contained in final Definitive Agreement associated with the transaction. (h) Due diligence enols January 10, 1999. (i) At this port in time neither party envisions potential conflicts with the existing franchise agreements. Allied has indicated to the Franchisors that they are willing to assume the terms and conditions of each individual agreement. 2. As noted in the preceding set of responses, a letter from Allied's Corporate Secretary regarding corporate firuamang and bonding capabilities is attached. Working capital required during the transition will be financed through the line of credit referenced in this document. L CatitaiLequirements 1. The vast majority of the capital expenditures in the service area over the next five years will be at the Feller Canyon facility. Our current projections indicate that approximately $18-20 million will be expended to develop additional airspace to accommodate refuse flow from the Franchisors. The bulk of these expenditures will be for earthmoving, instillation of composite lining systems and leachate management and is expected to occur in the first two years of Allied's operation of the landfill. These estimates will be refined as designs for individual cells are developed. As of this point in time,we do not anticipate any other major construction activities to occur at the landfill facilities with the exception oflhw fence installation and drainage improvements necessary for normal site operations(approx. $75,000 annually). Worth noting is that we anticipate on January 5, 1999, waste currently being diverted to the Potrero Hills Landfill will return to.Feller Canyon. Current airspace that has been developed should provide approximately one year of capacity for waste from all of the Franchisors. Construction during the spring and summer of 1999 should provide suitable amounts of airspace for continued acceptance of these wastes. In terms of the transfer station and hauling operations there may be minor improvements made to the facility that would be necessary during the normal course of operations over the next five years. However, at the present time we do not anticipate any major construction activities at either of the facilities. Some all weather surfacing of adjacent property may be necessary to accommodate bin and container storage. This is anticipated to cost approximately $75,000 (to occur in 1999). In addition, all weather areas for transfer and processing of greenwaste and recyclabies may be constructed during 1999 to accomodate additional diversion programs established with the Franchisors or arrangements with other local haulers(approx. $100,000). The capital expenditures outlined above were identified and reviewed during the evaluation process prior to the announcement of the transaction and are ones that Allied views to be necessary in the normal course of doing business. As such, we do not Page 13 anticipate adjustments to rates as a result of these projects outside of what is allowed under the franchise agreements (ie. CPI's, pass-through of costs for compliance with new regulations, new regulatory surcharges, etc.). The source of funding for these projects will be the line of credit that discussed in Section H. 2. During the course of operating solid waste collection, transfer and landfill operations equipment will need to be replaced on a regular schedule. The costs associated with these replacements is viewed by Allied as those that are necessary to provide service to our customers and have already been considered in the existing rate base. Costs associated with the implementation of new programs may require capital expenditures and services outside of those covered under the existing agreements and as such, may require adjustments to the rate structure(ie. green waste collection programs, etc.). Allied's FY99 budget for capital expenditures in the Contra Costa/Solano service area, outside of landfill cell development is as follows: General site improvements(transfer station&collection co.) $ 220,000 Collection vehicles $2,195,000 Landfill equipment(new purchases&rebuilds) $1,375,000 Shop equipment, service trucks, maintenance upgrades $ 300,000 Containers, debris boxes, carts, compactors $ 605,000 Total $4,695,000 While we do not anticipate this level of capital expenditure on an annual basis, we do envision replacement of a certain number of collection vehicles, landfill heavy equipment, support vehicles and containers on a regular basis. We have not developed detailed budgets for years 2-5 but based on past experience and knowledge of the age of the fleet in all three locations, the capital expenditures on an annual basis would generally run 50-60% of those anticipated for FY99. The types of vehicles which will require replacement in FY99 are recycling collection equipment and rear loaders. All of the vehicles being replaced are nearing the end of their depreciation cycle ('ie. 10 years). In addition,we anticipate that additional roll-off trucks may need to be purchased to satisfy demand and improve response times throughout the service area. It is important to note that all of the purchases outlined above are replacements. As such, Allied views these expenditures as those necessary to provide service under the framework of the existing contractual arrangements. As additional equipment reaches the end of it's anticipated life a decision will be made to either replace it with a new vehicle or perform a complete rebuild of the chassis and body of the truck. It is important to note that a large portion of the fleet(approx. 40%)consists of relatively new fully automated and front load vehicles purchased to service the CCCSWA Page 14 service area and the City of Antioch's and Clayton's automated collection programs. As such, we do not anticipate that many of these vehicles will be replaced within the next five years. Only one vehicle associated with a new program(green wash;in Clayton)is included in the preceding list. It is our understanding that a contract amendment has been negotiated and signed between BFI and Clayton to provide for this service and Allied has indicated to the City of Clayton that we plan to honor the terms of the contract amendment and initiate the service which is scheduled to begin on March 1, 1999. As noted previously, Allied is aware that a number of the Franchisors are interested in establishing green waste collection programs and we are very interested in providing these services to these areas. The framework and terms of these collection programs will be discussed and agreed to with each Franchisor prior to the implementation of the programs. Any new services that are provided or negotiated that are outside the current terms of the collection agreements will be discussed with the individual Franchisors on a case by case basis. In terms of transfer station and landfill equipment, we des anticipate that some of the transfer trailers, will be replaced in the next five years as well as some of the existing landfill equipment. We envision two transfer assemblies being replaced on an annual basis and at least one piece of heavy equipment being replaced annually after 1999. Once again,these are expenditures that Allied views to be necessary in the normal course of doing business and would not result in an additional request for funding or cost recovery from the Franchisors. J. Financing of Existing Operations Prior to entering into a Letter of Intent for acquisition of operating entities, Allied performed a thorough analysis of whether the operations will satisfy our financial benchmarks. Additional analysis and review is also performed during the due diligence stage of the acquisition process. used upon our assessments of the Contra Costa/Solano service area, Allied believes that projected revenues over the newt five years under the existing Franchise agreements are sufficient for compliance with the obligations of each of the Franchisors' agreements. As noted previously,any new programs envisioned by the Franchisors may result in added costs but this will ultimately be determined through discussion with each individual entity. At this point in time we believe that it is premature to discuss any planned operating efficiencies that may occur as a result of a change in ownership. As stated above, it has and will be Allied's practice when assimilating acquisitions to proceed in a methodical and orderly manner so that decisions of this nature are based upon first hand experience versus assumptions arrived at through review of financial statements and cursory reviews. Page 15 Conversely, we do not anticipate any significant increases in costs as a result of the change in ownership. My knowledge of how the operating entities are currently staffed and managed as well as our review of year over year financial reports, do not indicate that significant increases in expenses will occur. At this point in time,Allied envisions rates being affected only through CPI's, new programs (ie.greenwaste collection)and other cost recovery items that are currently allowed under the existing franchise agreements. With the exception of CPI's, which in most agreements are specifically called out in terms of timing, it is difficult to provide a schedule for potential increases in rates due to the fact that so much of this schedule depends upon the individual Franchisors and the specifics of the programs they request. K Other Considerations 1. As noted in the preceding section, Allied intends to provide service to the Franchisors within the framework of the existing franchise agreements. We do not consider a change of ownership to be an opportunity to approach the Franchisors and request additional funding. As part of the due diligence process and our existing knowledge of the franchise agreements, Allied has a thorough understanding of the nature of the revenue base and the types of costs that are allowable under the terms and conditions of the agreements. Any future requests for increases will be handled in a manner commensurate with the terms of the individual franchise agreements(ie. CPI requests by certain dates). Any additional costs associated with the implementation of new programs (ie. greenwaste collection) will be determined through evaluation of the type of program desired by a Franchisor as well as the existing service offered. Statements regarding specific adjustments outside of the standard CPI increases would be inappropriate at this time as much of this will be decided by the needs of the individual Franchisors. Allied's intent is to provide as stable a rate base as possible to our customers while providing a high level of quality in terms of service. We believe the existing revenue base is sufficient to provide a reasonable profit on the services required in the franchise agreements. Costs associated with any new or expanded service will need to be determined through assessment of costs associated with the new programs and any synergies with the existing service package. 2. During our discussions with the various Franchisors concerning the asset swap, several issues related to customer service have been brought forth. Many of these issues center around the inability of customers to receive service in a timely fashion(ie. maximum 24 hour turnaround)as well as not being able to receive carts or containers when requested. These type of concerns can be addressed by investment of the capital discussed in Section I and servicing all back orders on container and cart requests. Based upon our Page 16 preliminary evaluation, it is our sense that a large portion of the customer service complaints have stemmed from service representatives having to tell customers that their requests cannot be accommodated due to a lack of operational follow through. Allied believes this issue can be resolved relatively quickly and the capital budget for FY99 envisions expenditures necessary to address the issue. As with other facets of the operation, Allied intends to evaluate the existing personnel and customer service procedures during the initial stages of the transition. We believe it is important to review existing procedures and practices first hand and to not make assumptions based upon cursory review. Changes in customer.service procedures may occur only after a thorough review of procedures has occurred. These changes may be as simple as providing training to individuals on proper procedures for responding to issues in a fashion that is commensurate with the expectations.of the Franchisors. Allied may also determine that the existing personnel staffing the customer service group are better suited to other roles. Our goal is to staff the customer service group with individuals who understand the importance of placing the customer's needs first and that when a negative response is appropriate, it is delivered in a polite and courteous manner. To a large degree, the approach to customer service is dictated by the example set by management and the performance benchmarks that are established. Customer service does not always entail saying"yes"but it does involve making every attempt to resolve a given issue in a timely and responsive manner. As noted previously,BE and Allied have agreed to work cooperatively to ensure that the existing level of customer service is maintained. This may entail the use of BFI's current oastomer management system for a brief period of time to allow for an orderly transition to Allied"s customer management systems. Allied has also held discussions with existing customer service employees and the majority have indicated a willingness to remain with the company following the management transition. These employees will be evaluated during the initial 45-60 period and a determination will be made by both parties as to their ultimate disposition. 3. A number of the Franchisors have indicated a desire to implement green waste and mixed paper or commercial recycling programs within their jurisdictions. Allied has indicated their willingness to provide the service necessary to the Franchisors in working towards their AB939 ,goats. The timing for implementation of these programs is largely dependent upon the needs and goals of the individual Franchisors. Allied believes that any new diversion programs desired by the Franchisors can be implemented during 1999. As noted previously,costs associated with the implementation of these programs will be discussed on a case by case basis and will largely be dependent upon the type and level of service requested and how it ties into the existing service package. Page 17 4. Based upon our initial review of the Pleasant Hill Bayshore hauling division, there appears to be a deficiency in the turnaround times for debris box service and commercial containers. Without having first hand experience running the operation on a daily basis, it is difficult to determine whether this issue is related to a shortage of containers or bins or whether additional routes need to be added to service the existing customer base. The deficient turn around times may also be a product of routing or a combination of all three of these issues. Allied has indicated to all of the Franchisors that they intend to honor the terms of the existing franchise agreements and provide service in a timely manner to the customer base. Once the management transition has occurred and Allied has had the opportunity to evaluate the cause of this issue, appropriate changes will be instituted to ensure that customers receive service generally within (24 hours of their request). 5. Some of the franchise agreements require the service provider to offer commercial recycling services. In these instances, Allied plans to continue these programs and make every effort to increase diversion in the commercial sector. A review of the existing programs will occur once the management transition takes place and determinations will be made as to the relative success of the programs. Possible means of enhancing the programs could include greater efforts towards advertising the service and educating the community, increased service flexibility (ie. different commodities) and possible efficiencies gained through integration with other recycling programs. BFI currently provides street sweeping service to the City of Benicia and has had preliminary discussions with the City of Clayton regarding their desire to implement a similar program. Allied has indicated to both of these entities that we are willing to continue or initiate street sweeping services and would also be interested in discussing the program with other Franchisors. Allied's intent is to work cooperatively with all of the Franchisors and.provide them with high quality service at a reasonable cost and to assist them in achieving their AB939 diversion goals. We are hopeful that this transmittal will respond to all of the issues put forward by the Franchisors. However, in the event that other areas exist which require further clarification, we would be pleased to provide additional responses. Sincerely, Michael Caprio District Manager Northern California Page 18 MAC:mc enclosures cc: Richard I-Till, City of Clayton Joseph Tanner, City of pleasant 1 Till Michael Ramsey, City of Antioch Marcia Raines, City of Martinez Otto Giuliani City of Benicia Dennis M. Barry, Contra Costa County Community Development Thomas Bruen, Esq. Kent Alva, Esq. Paul Nelson, Browning-Ferris Industries Page 19