CONFIDENTIAL DRAFT 10/3/08

CONFIDENTIAL DRAFT 10/3/08

MUNICIPAL SOLID WASTE DISPOSAL AGREEMENT between TOWN OF ---------------------"

CO~'NECTICUT

and

COYAt'iTA PROJECTS OF WALLINGFORD, L.P.

Dated as of October _ , 2008

MUNICIP AL SOLID WASTE DISPOSAL AGREEMENT THIS MUNICIPAL SOLID WASTE DISPOSAL AGREEMENT (this "Agreement"), is entered into as of October _ _,2008 (the "Effective Date"), by and between COVANTA PROJECTS OF WALLINGFORD, L.P., a Delaware limited partnership, and the TO\VN OF _ _ _ _ _, a municipality and political subdivision of the State of Connecticut (the "Municipalitv"). Covanta and the Municipality are each referred to individually herein as a "Party" and together as the "Parties."

WHEREAS, Covanta operates a solid waste disposal facility located Connecticut (the "Facilitv"); and

In

Wallingford,

WHEREAS, the Municipality and Covanta have agreed to enter into this Agreement pursuant to which, beginning on July 1,2010 (the "Commencement Date"), the Municipality will deliver and pay for the disposal of, and Covanta will accept and dispose of~ Acceptable Solid Waste generated in the Municipality all in accordance with the terms and conditions set forth herein; NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1. General Provisions.

1.1 Definitions. Capitalized terms are used herein with the respective definitions set forth in Section 12.1.

1.2

Waste Deliverv and Acceptance Obligations.

(a) During the Term, the Municipality shall, at its sole cost and expense, deliver or cause to be delivered by its Authorized Haulers to the Delivery Point in accordance with the terms of this Agreement all Acceptable Solid Waste generated within its boundaries and shall take all appropriate actions to ensure that all Acceptable Solid Waste generated within its boundaries will be delivered to the Facility in each Contract Year during the Term, including the continuation of the designation by the Municipality's legislative body, adopted in accordance with Section 22a-220a of the Connecticut General Statutes, that all Acceptable Solid Waste generated within the Municipality's boundaries be delivered to the Facility. During the Term, the rvIunicipality shall not directly or indirectly cause Acceptable Solid Waste within its possession or subject to its control to be delivered to any Person other than Covanta, except to the extent that Covanta rej ects such waste pursuant to Section 1.2(c). (b) For each Contract Year during the Term, the Municipality shall (i) ensure that the Annual Minimum Commitment of Acceptable Solid Waste shall be delivered to the Delivery

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n1

Point and pay the Tip Fees therefor or (ii) pay the Tip Fees required under Section 3.1 (b) in lieu of delivering the Annual Minimum Commitment of Acceptable Solid Waste to the Delivery Point The Municipality shall receive no credit toward meeting its Annual Minimum Commitment of Acceptable Solid Waste for any Acceptable Solid Waste properly rejected by Covanta in accordance with this Agreement or for any waste other than Acceptable Solid Waste. (c) During the Term, Covanta shall use commercially reasonable efforts to accept and dispose of all Acceptable Solid Waste delivered to the Delivery Point by the Municipality and its Authorized Haulers in accordance with the terms of this Agreement; provided, however, that Covanta may reject Acceptable Solid Waste (i) by reason of an Event of Force Majeure or due to a breach of this Agreement by the Municipality, or (ii) that is not delivered to the Delivery Point in accordance with Applicable Law or this Agreement, including the rules and procedures for the Facility provided in Appendix B. Subject to Section 4.2, which provides for the disposal of Non足 Processible Waste by either the Authorized Hauler or Covanta, Covanta shall have the right in its reasonable discretion to reject any waste offered for acceptance by the Municipality or any Authorized Hauler which Covanta determines is not Acceptable Solid Waste. Notwithstanding the foregoing, Covanta may accept waste other than Acceptable Solid Waste for Processing at the Facility and may accept waste from sources other than the Participating Municipalities, so long as such acceptance does not prevent Covanta from accepting Acceptable Solid Waste from the Municipality that Covanta does not have a right to reject hereunder. Covanta shall be responsible for the transportation and disposal of Acceptable Solid Waste accepted by Covanta and not Processed at the Facility. The Municipality shall be responsible for any Losses related to or arising from the transportation and disposal of any Non-Processible Waste delivered to the Facility by on behalf of the Municipality. No title to or ownership of any waste delivered to the Deli very Point shall ever pass to Covanta, regardless of whether such waste is accepted or disposed of by Covanta. Nothing herein shall require Covanta to accept at the Facility Acceptable Solid Waste delivered by residents of the ::Vlunicipality.

1.3

Tenn.

(a) Subject to Subsection (b) below, the initial term of this Agreement shall begin on the Commencement Date and shall expire on the expiration date set forth in Appelldix A hereto (the "Initial Term"), unless sooner terminated in accordance with Section 1.3(b) or Section 8.3.

If no event of default by the Municipality has occurred and is continuing, the Municipality shall have the option to extend the term of this Agreement for a single, additional five-year period (the "Renewal Term"), subject to agreement by the Parties on the terms and conditions applicable to the Renewal Term. The Initial Term and the Renewal Term are referred to herein as the "Term."

The Municipality's option to extend may be exercised by giving written notice to Covanta no later than twelve (12) months prior to the end of the Initial Term. Upon the expiration or termination of the Term, the obligations of the Municipality to deliver Acceptable Solid Waste to the Delivery Point and the obligation of Covanta to accept and dispose of such Acceptable Solid Waste shall terminate; provided, however, that all other rights and obligations of the Parties hereunder shall survive and continue until the same are fully satisfied or waived. (b) This Agreement shall be contingent upon, and subject to, the written waiver by the Connecticut Resources Recovery Authority (the "Authoritv") of any Authority right to

purchase the Facility and the Site, and Covanta's rights to purchase the Facility and the Site, and of any right of first refusal to contract for all or a portion of the capacity of the Facility, and if such waiver is not granted to the sole satisfaction of Covanta and the Municipality on or before the thirtieth (30 th ) day after the Effective Date, this Agreement may be terminated at any time thereafter by either Covanta or the Municipality by written notice to the other party.

1.4

Other Obligations of Covanta.

(a) Covanta shall be responsible for the operation of the scale-house and the scales at the Facility and for billing the Municipality for all amounts payable by the Municipality under this Agreement. (b) Covanta shall be responsible for the transportation and disposal of any Residue generated by the Facility during the Term. (c) Covanta shall be responsible for the repair, maintenance and improvement of the Facility and the Site; provided, however, that the Municipality shall be responsible for the Municipality's Allocable Share of the cost of any such repair, maintenance or improvement to the extent undertaken as a result of an Event of Force Majeure through the monthly surcharge for Facility Change-in-Law Costs or for Facility Force Majeure Costs, as provided in Section 3 Cd) Covama shall not expand the Processing throughput capacity of the Facility without the prior consent of Wallingford. (e) Covanta shall be responsible for the negotiation and payment each Contract Year of the Host Municipality Fee due to Wallingford; provided, however, that any increase in the Host Municipality Fee due for a Contract Year after the Effective Date shall be a Change-in-Law and the responsibility of the Participating Municipalities. The yiunicipality shall be responsible for the ~lunicipality's Allocable Share of any increase in the Host Municipality Fee through the monthly surcharge for Facility Change-in-Law Costs, as provided in Section 3 The Municipality shall receive from Covanta a credit against the Disposal Fees due to Covanta hereunder equal to the Municipality's Electrical Revenue Share for a Contract Year, if any. Covanta shall reflect the Municipality's Electrical Revenue Share, if any, for a Contract Year on the first monthly bill issued by Covanta to the Municipality after Covanta is able to determine its Gross Electricity Revenues of the Facility for such Contract Year or, if this Agreement has expired or otherwise been terminated and no amounts are due from the Municipality hereunder, as part of a separate payment to be made promptly by Covanta to the Municipality after such determination. (f)

(g) During the Term, Covanta will (i) sponsor various community outreach programs in the Municipality reasonably consistent with past practice; (ii) meet weekly with a representative of the Participating Municipalities to discuss and review generally operations at the Facility; and (iii) meet quarterly with the Policy Board.

1.5

The Policv Board. Each Participating Municipality shall have a representative on

the Policy Board, The representative of each Participating Municipality shall be either its chief executive officer or such other person as the chief executive officer shall designate, Covanta shall periodically consult with the Policy Board in those matters relating to citizen complaints, scheduling and routing of deliveries, contract modifications, billing procedures and other matters of concern to the Policy Board, Covanta and the Policy Board will cooperate fully and assist each other so that the Facility will operate smoothly, The Policy Board also shall have such other duties as are expressly agreed upon by the Parties, Unless otherwise agreed upon in writing by Covanta and the Participating .\1unicipalities, actions of the Policy Board shall be determined by a majority of the members of the Policy Board or by such other voting percentage as the bylaws of the Policy Board shall so provide.

ARTICLE 2. Solid Waste Deliverv Procedures and Authorized Haulers.

Delivery Procedures. The delivery of solid waste to the Delivery Point shall be regulated by written procedures adopted by Covanta and applicable generally to customers utilizing the Facility, The delivery procedures shall have reasonable terms and conditions consistent with the operational requirements of the Facility, The delivery procedures for the Facility in effect on the Effective Date are attached hereto as Appendix B. Covanta reserves the right to modify, amend and repeal such procedures from time to time and at any time and will endeavor to provide at least a fitteen (15) days' advance written notice to the Municipality and its Authorized Haulers of any material change in such delivery procedures.

2,1

2.2 Vehicle Identification. Covanta may establish a system for the identification of delivery vehicles (which procedures may include identifying the name of the Municipality and the tare weight of each vehicle used to haul waste to the Delivery Point). Covanta shall be allowed to rely on representations made by operators of vehicles owned by or operated on behalf of the Municipality or any Authorized Hauler with proper identification as to the Person against whose account the solid waste being delivered is to be charged. Covanta may reject Acceptable Solid Waste from any Person or vehicle that does not comply with the identification system or the delivery procedures established by Covanta, Covanta may enforce compliance with identification and delivery procedures by termination or suspension of any Person's disposal privileges and such other means as it may reasonably determine to be necessary or appropriate, 2.3

Authorized Haulers.

(a) The Municipality may designate Authorized Haulers to deliver Acceptable Solid Waste to the Delivery Point pursuant to this Agreement. Notwithstanding such designations, the Municipality will not be relieved of any of its duties or responsibilities under this Agreement, including liability to Covanta and Qualified Covanta Affiliates, for all damages of any nature resulting from the delivery of waste by the Municipality or any Authorized Hauler, other than damages caused by a material violation of this Agreement or any Applicable Law by Covanta or a Qualified Covanta Affiliate. In particular, such designation shall not affect the right of Covanta or a Qualified Covanta Affiliate to rely on the representations of the Person or Persons delivering such waste as to its place of origin. Thirty (30) days prior to the commencement of each Contract Year, Covanta will send to each Participating Municipality a written list of

Authorized Haulers previously designated by the Municipality to deliver Acceptable Solid Waste to the Delivery Point; the Municipality will then verify the list and return a signed copy to Covanta prior to the commencement of such Contract Year. Covanta shall be entitled to rely upon the list of Authorized Haulers provided to the Municipality if the Municipality fails to timely verify and return the signed list. (b) Prior to the use of any Authorized Hauler(s) and upon the addition or termination of an existing Authorized Hauler or the extension of an agreement with an existing Authorized Hauler, the Municipality shall deliver written notice to Covanta of the Authorized Haulers which the Municipality proposes to use. Covanta shall notify the Municipality within seven (7) days of receipt of such notice, whether the proposed Authorized Haulers have disposal privileges at the Facility or are then subject to revocation or suspension of those privileges for cause (as defined in Subsection (c) below). Approval of the Municipality's Authorized Hauler(s) shall not be unreasonably withheld, conditioned or delayed. The Municipality shall not enter an agreement or extension of an agreement with any Authorized Hauler who does not have disposal privileges at the Facility or is then subject to revocation of those privileges. (c) Covanta shall be entitled to terminate or suspend an Authorized Hauler's disposal privileges for cause. For purposes of this Subsection (c) and Subsection (b) above, the term "cause" shall include any act or omission of the Authorized Hauler which involves negligence or a material misrepresentation or constitute a material violation of Applicable Law or constitute a material breach of either the Municipality's or Authorized Hauler's obligations hereunder, including the procedures set forth in Appendix B. (d) Each Authorized Hauler shall be required to maintain comprehensive general and motor vehicle liability insurance covering personal injury and property damage with customary limits for commercial waste haulers as may be reasonably required by Covanta from time to time. Said insurance shall name Covanta as an additional insured and shall provide for thirty (30) days' prior written notice to Covanta in the event of expiration, cancellation, non-renewal or any other material change in coverage. From time to time, as reasonably requested by Covanta and upon each change in the insurance carried by an Authorized Hauler, such Authorized Hauler will provide Covanta with evidence that the insurance required hereunder is in place. Prior to entering into an agreement with an Authorized Hauler to collect Solid Waste, the Municipality may request that Covanta approve the insurance coverage requirements set forth in said agreement, which approval shall not be unreasonably withheld, conditioned or delayed. Any such approval shall be deemed to be effective for the duration of such agreement or one year, whichever period is shorter.

ARTICLE 3. Disposal Fees.

3.1

Tip Fees and the Municipalitv's Annual Minimum Commitment.

(a) As provided in Section 5.1, the Municipality shall pay the Tip Fee to Covanta (i) for each Ton of Acceptable Solid Waste delivered by or on behalf of the Municipality to the Delivery Point and accepted by Covanta; and (ii) for each Ton of Non-Processible Waste

delivered by or on behalf of the Municipality to the Delivery Point and disposed of by Covanta as provided in Section 4.2 (such Tip Fee to be in addition to the payment of all other Disposal Fees payable by the Municipality hereunder). (b) In the event that in any Contract Year during the Term the amount of Acceptable Solid Waste delivered by the Municipality or its Authorized Haulers and accepted by Covanta is less than the Municipality's Annual Minimum Commitment, and the Municipality is not otherwise excused pursuant to this Agreement, the Municipality's payment of Tip Fees for the disposal of Acceptable Solid Waste for the last month of such Contract Year shall be an amount which, together with the Tip Fees paid by the Municipality for the disposal of Acceptable Solid Waste for the first eleven (11) months of such Contract Year, is equal to the Tip Fee multiplied by the Municipality's Annual Minimum Commitment, even if fewer Tons of Acceptable Solid Waste than the Annual Minimum Commitment were delivered to the Delivery Point and accepted by Covanta during such Contract Year.

3.2 Surcharge for Facilitv Change-in-Law Costs and Facilitv Force Majeure Costs.

The Disposal Fee shall be subject to provisional adjustment from time to time as provided below for actual and projected Facility Change-in-Law Costs and Facility Force Majeure Costs; provided, however, no adjustment may be made if the aggregate amount of such Facility Change-in-Law Costs and Facility Force Majeure Costs is less than twenty-five thousand dollars ($25,000.00), in which case any unrecovered Facility Change-in-Law Costs and Facility Force Majeure Costs shall be canied forward and added to any Facility Change-in-Law Costs and Facility Force Majeure Costs for any subsequent Change-in-Law or Event of Force Majeure.

Such adjustment shall be in the form of a surcharge to the monthly bill payable by the Ylunicipality calculated in accordance with the formula set forth below. For each Change-in足 Law or Event of Force Majeure, written notice of the surcharge shall be given by Covanta to the Municipality after the Change-in-Law or Event of Force Majeure, as the case may be, first occurs. If an act or event qualifies both as a Change-in-Law and an Event of Force Majeure, such act or event will be classified by Covanta as either a Change-in-Law or an Event of Force Majeure for the plU1Joses of calculating the surcharge, but not as both. Covanta will use reasonable etTolis to notify the Municipality of Facility Change-in-Law Costs and Facility Force Majeure Costs as soon as possible; provided, however, that any delay or failure by Covanta in delivering said notice shall not affect the .vlunicipality's obligations to pay such Facility Change足 in-Law Costs or Facility Force Majeure Costs. Such notice shall describe the amount of the surcharge, the term of the surcharge and the Facility Change-in-Law Costs or Facility Force Majeure Costs for which the surcharge is being made (including identification of each applicable Change-in-Law or Event of Force ylajeure, as the case may be). The surcharge shall be calculated using the following formula: I = MAS x CO / 12 where: "I" is the dollar amount ofthe surcharge; "MAS" is the Municipality's Allocable Share; and

"CO" is the Facility Change-in-Law Costs or Facility Force Majeure Costs, as the case may be, determined to be incurred in accordance with the provisions of this Agreement.

The surcharge for Facility Change-in-Law Costs and Facility Force Majeure Costs, if any, shall be determined by Covanta once each year, effective on July 1. On or after February 1 of each year, the Municipality may request that Covanta provide the Municipality with notice of any surcharge for Facility Change-in-Law and Facility Force Majeure Costs for the following Contract Year. Covanta shall have thirty (30) days after receipt of such request in which to provide the Municipality with notice of any surcharge that will be effective for the immediately following July 1. If the Municipality does not request advance notice of a surcharge, Covanta will provide the Municipality with written notice of any surcharge prior to the beginning of the Contract Year for which such surcharge is to become effective. Failure of Covanta to provide the Municipality with written notice of a surcharge for Facility Change-in-Law Costs and Facility Force Majeure Costs within the required period of time shall result in a deferral of such surcharge until the beginning of the next Contract Year. Notwithstanding anything herein to the contrary, Facility Change-in-Law Costs or Facility Force Majeure Costs which relate to or arise out of the delivery or acceptance of the Municipality's waste hereunder shall be borne solely by the Municipality. In no case, however, shall any such surcharge be retroactive in effect

ARTICLE 4. Quality of Solid Waste.

4.1 Acceptable Solid Waste. The Municipality shall ensure that all waste delivered hereunder shall constitute Acceptable Solid Waste. Covanta shall retain, at its expense, waste enforcers to examine solid waste delivered by or on behalf of the Municipality to the tipping floor of the Facility; provided, however, the retention of such waste enforcers, or any act or omission on their part, shall not relieve the Municipality of its obligation to deliver only Acceptable Solid Waste to the Facility and to provide or pay for the disposal of waste that is other than Acceptable Solid Waste delivered to the Facility.

4.2

Non-Processible Waste.

(a) The Municipality agrees that neither it nor any Authorized Hauler shall deliver Non-Processible Waste to the Delivery Point. If a delivery of vvaste is made which contains both Acceptable Solid Waste and Non-Processible Waste, the entire delivery shall constitute Non足 Processible Waste if the ~on-Processible Waste cannot be separated from the Acceptable Solid Waste without unreasonable efforts by or expense to Covanta. If the Municipality or any of its Authorized Haulers delivers Non-Processible Waste to the Delivery Point, Covanta at its sole option may (i) reject such waste and require the Authorized Hauler to reload and dispose of such waste at the Authorized Hauler's sale cost and expense, or Oi) if Covanta does not discover such Non-Processible Waste in time to reject and reload such Non-Processible Waste, Covanta may, without prior notice to the Municipality, dispose of such Non-Processible Waste at a location or facility that is authorized to accept such waste in accordance with all Applicable Law and charge the Municipality all direct and indirect costs incurred by Covanta (in addition to the Tip Fees) due to the delivery of such Non-Processible Waste to the Delivery Point, including the costs arising 贈i'om or related to the collection, handling, storage, transportation, processing and disposal of such Non-Processible Waste. Covanta shall perform the waste screening procedures contained in the rules and regulations attached hereto as Appendix B; however, the Municipality shall remain liable for all Losses of any nature resulting from the delivery by the Municipality of Non-Processible Waste.

If Covanta disposes of Non-Processible Waste pursuant to Section 4.2(a) or the (b) Municipality or an Authorized Hauler delivers or attempts to deliver Non-Processible Waste, the Municipality shall, to the extent permitted by law, indemnify, defend and hold the Covanta Indemnified Parties harmless from and against any and all Losses arising out of or related to the collection, handling, storage, transportation, processing or disposal by such Person of Non足 Processible Waste or waste not constituting Acceptable Solid Waste delivered by the Municipality or an Authorized Hauler and all incidental and consequential damages incurred by such Person, including reasonable legal fees and expenses incurred in connection with the enforcement of this indemnity. Such disposal by Covanta shall not constitute acceptance by Covanta, transfer of ownership to Covanta, consent by Covanta to a pattern of repeated deliveries by the Municipality of Non-Processible Waste, or waiver by Covanta of any remedies it may have against the Municipality or the Authorized Hauler because of the delivery of Non足 Processible Waste. All activities of Covanta pursuant to the terms of this Agreement with respect to deliveries of Non-Processible Waste delivered to or abandoned at the Delivery Point shall be as agent for the Municipality and at the Municipality's sole cost and risk.

4.3 Presegregation and Recvcling. The Parties agree that (i) no provision of this Agreement is intended to discourage or prohibit either voluntary or mandatory waste segregation programs or the sale of such segregated materials to private persons and (ii) acknowledge that the Municipality may be subject to one or more Recycling Acts from time to time. The obligation of the Municipality to deliver or cause to be delivered Acceptable Solid Waste to the Delivery Point does not include any Recyclable Materials; provided, however, that neither this Section 4.3 nor any Recycling Act, now or hereafter in effect, shall relieve the Municipality from its obligations to pay the Disposal Fees, nor relieve the Municipality from its obligation to meet its Annual Minimum Commitment and its payment obligations in connection therewith.

Notwithstanding the foregoing, Covanta shall: (i) review any request by the Municipality to reduce its Annual Minimum Commitment for a Contract Year if Covanta receives from the Municipality a notice, at least ninety (90) days prior to the commencement of such Contract Year, setting forth the amount of the proposed reduction and reasonably detailed evidence of the impact of Recycling Acts and/or waste segregation programs on the amount of Acceptable Solid Waste generated within the boundaries of the Municipality; and (ii) review with the Municipality the potential development and operation on the Site of a collection center for residential Recyclable Materials and/or the participation of Covanta in waste segregation programs.

ARTICLE 5. Billing and Payments.

5.1 Monthlv Payments. After the end of each calendar month, Covanta will render a bill to the Municipality for the total Disposal Fees due for such period, including Tip and the costs for the disposal ofNon-Processible Solid Waste. The amount billed with respect to any calendar month for the disposal of Acceptable Solid Waste shall be equal to the Tip multiplied by the number of Tons of Acceptable Solid Waste delivered by the Municipality and its Authorized Haulers to the Delivery Point and accepted by Covanta during such month, provided that the Tip Fees for Acceptable Solid Waste for the last month of any Contract Year together with the aggregate Tip Fees for Acceptable Solid Waste for the previous eleven (11) months of any Contract Year shall not be less than the Tip Fee multiplied by the Annual Minimum Commitment, even if fewer Tons of Acceptable Solid Waste than the Annual Minimum Commitment were delivered to the Delivery Point and accepted by Covanta during such Contract Year. To the extent that Covanta does not accept the Municipality's Acceptable Solid Waste because of Covanta's rights to reject such waste hereunder, the Disposal Fees shall be due in accordance with this Agreement. To the extent that Covanta does not accept the Municipality's Acceptable Solid Waste in default of Covanta's obligations hereunder, then Section 8.1 shall apply. To the extent that Covanta is not accepting the Municipality's Acceptable Solid Waste by reason of the occurrence of an Event of Force Majeure, Section 7.3 shall apply.

5.2 Overdue Charges. If payment in full is not made by the Municipality on or before the close of the thirtieth (30th) day following the rendering of the bill to the Municipality, any amount remaining unpaid shall bear interest at the rate of one and one half percent (1-112%) per month or the highest rate that may then be lawfully charged and paid, whichever is less, from such thirtieth (30th) day to the actual date of payment. The Municipality agrees to pay on

demand all costs and expenses incurred by Covanta in connection with the enforcement of the terms of this Agreement and the collection of all amounts due hereunder, including the fees and out-of-pocket expenses of Covanta' s legal counsel.

5.3 Disputes. In the event of a dispute other than a dispute concerning a Change-inLaw or an Event of Force Majeure as to any monthly payment, (i) the Municipality shall pay when due the amount of the bill which is not in dispute or ninety percent (90%) of the amount of the bill, whichever is greater, and (ii) the Municipality shall give Covanta, at the time such payment is made, written notice of the dispute. Such notice shall identify said dispute with reasonable particularity, state the amount in dispute and set forth a full statement of the grounds which form the basis of such dispute. No adjustment shall be considered or made for disputed charges until notice is gi ven as aforesaid. Acceptance of payment of the amount not in dispute as provided hereLmder shall not constitute accord and satisfaction of the amount in dispute. Upon settlement by the Parties of the dispute, Covanta shall refund promptly the amount of any paid overcharge or the Municipality promptly shall pay the outstanding portion of the bill, whichever is applicable.

5.4 Obligation of the Municipalitv to Make Payments. The Municipality hereby pledges its full faith and credit for the payment all amounts to be paid pursuant to this Agreement by the Municipality. This Agreement shall be binding on the Municipality, and the Municipality shall be obligated to annually appropriate funds or levy taxes to pay its obligations under this Agreement. Except as provided in Section 5.3 with respect to matters in dispute, the Municipality agrees that its obligation to make any such payments in the amounts and at the times herein specified shall be absolute and unconditional, shall not be subject to any setoff: abatement, counterclaim, recoupment, defense (other than payment itselt) or other right which the Municipality may have against Covanta or any other person for any reason whatsoever or any reason, known or unknown, foreseeable or unforeseeable, which might otherwise constitute a legal or equitable defense or discharge of the liabilities of the Municipality hereunder or limit recourse against the Municipality. Payment made pursuant to this provision shall not prejudice the right of the Municipality to claim abatements, refunds or adjustments to which it is entitled under this Agreement or pursuant to law. Moreover, the Municipality's obligation to make such payments shall not be affected by any damage to the Facility, or any interruption or cessation in the possession, use or operation of the Facility by Covanta or any other Person, so long as the Facility is capable of accepting Acceptable Solid Waste delivered by or on behalf of the Municipality pursuant to this Agreement. All indemnity and payment obligations of the Municipality under this Agreement shall survive the expiration or termination of this Agreement.

ARTICLE 6. Governmental Regulation.

6.1 Jurisdiction. Covanta and the ~lunicipality acknowledge that the collection, transpOliation and disposal of solid waste is subject to the jurisdiction of various governmental agencies, including agencies of the United States of America, the State of Connecticut and the municipality in which the Facility is located.

6.2

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Compliance. Covanta and the

~lunicipality

agree, at their own expense, (subject

to the provisions herein relating to a Change-in-Law and Events of Force Majeure), to comply with all Applicable Law applicable to them in connection with this Agreement and the transactions contemplated hereby. Such Applicable Law shal1 include actions taken by the municipality in which the Facility is located to regulate vehicular traffic associated with the Facility. The Municipality agrees to take all necessary action to the extent allowed by law to cause Persons delivering waste on its behalf to the Delivery Point to comply with all Applicable Law.

ARTICLE 7. Events of Force Majeure and Change-in-Law. 7.1

Suspension of Obligations.

(a) A delay or failure of performance hereunder by either Party shall not constitute an event of default or result in any liability under this Agreement to the extent caused by an Event of Force Majeure; provided, however, an Event of Force Majeure shall not excuse the Municipality's obligation to pay all amounts due hereunder. Such delay or failure shall be excused at any time performance is adversely affected by an Event of Forcc Majeure and during such period thereafter as may be reasonably necessary for the Party so affected, using its reasonable efforts, to correct the adverse etrects of such Event of Force Majeure. If an Event of Force Majeure causes a reduction, but not a complete suspension in the ability of Covanta in connection with the operation of the Facility to accept, Process or dispose of Acceptable Solid Waste or dispose of Residue, then subject to (i) the requirements of all applicable permits, consents and approvals of the State of Connecticut and other governmental entities and (ii) the efficient operation of the Facility, Covanta shall use its commercially reasonable eirorts (without violating any contract then in existence) to allocate a portion of such reduced capacity of the Facility to the Municipality pro rata based upon the Municipality'S share of the total tonnage then under contract for disposal at the Facility. An Event of Force Majeure shall not terminate or suspend the Municipality's obligation to make payments pursuant to this Agreement for waste which has been delivered to the Facility prior to a suspension for an Event of Force Majeure. (b) The Party relying on an Event of Force Majeure as an excuse for a delay or failure of performance hereunder shall give the other Party prompt written notice of such Event of Force Majeure; provided however, that the failure of Covanta to provide written notice of an Event of Force Majeure shall not affect Covanta's right to impose a surcharge for Facility Force Majeure Costs pursuant to Section 3.2. In no case, however, shall any such surcharge be retroactive in effect.

7.2 EtIorts to Remove Condition. The provisions of this Article allowing a Party to claim excuse due to an Event of Force Majeure shall not relieve such Party from using its commercially reasonable efforts to overcome or remove such Event of Force Majeure. After the completion of a suspension due to an Event of Force Majeure and to the extent Covanta has the capacity to accept, Process and dispose of excess waste, Covanta shall use its commercially reasonable efforts to accept Acceptable Solid Waste collected by the Municipality which the Municipality was unable to deliver to Covanta during the Event of Force Majeure period.

Covanta shall not be obligated to accept Acceptable Solid Waste to the extent that the

acceptance, Processing or disposal of such Acceptable Solid Waste is contrary to or in violation of or would cause Covanta to be in violation of any permits and approvals necessary for or applicable to the Facility or a Landfill.

7.3 Suspension of the Municipalitv's Obligation to Pav Disposal Fees. If an Event of Force Majeure causes a complete or partial suspension in the ability of Covanta to accept Acceptable Solid Waste, the Municipality's obligation to pay Disposal Fees other than for solid waste actually accepted by Covanta shall be suspended during the continuance of such Event of Force Majeure.

ARTICLE 8. Default and Remedies.

8.1

Each of the following shall be an event of default

by Covanta under this Agreement: (a) Covanta fails to perform its obligation to accept delivery of Acceptable Solid Waste in accordance with this Agreement and the continuance of such failure for a period of thirty (30) days after written notice to Covanta; (b) Covanta fails to observe and perform any other material term, covenant or agreement contained in this Agreement on its part to be performed and the continuance of such failure for a period of thirty (30) days after written notice to Covanta specifying the nature of such failure and requesting that it be remedied: or (c) Covanta makes a general assignment for the benefit of creditors, files a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any custodian, receiver or trustee for it or any substantial part of its property, commences any proceeding relating to it under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect, or if there shall have been filed any such proceeding, in which an order for relief is entered or which remains undismissed for a period of one hundred twenty (120) days or more or ifby any act indicates its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of any custodian, receiver of or any trustee for it or any substantial part of its property or suffers any such custodianship, receivership or trusteeship to continue undismissed for a period of one hundred twenty (120) days or more.

8.2 Events of Default bv the Municipalitv. Each of the following shall be an event of default by the Municipality under this Agreement: (a) The Municipality fails to pay any Disposal Fees, including the Tip Fees or any other amounts payable pursuant to Section 1.4(e), 3.1, 3.2, 4.2, 5.1 or 5.2, which is due from the Municipality hereunder, or any other amounts to be paid or reimbursed by the Municipality hereunder, within thirty (30) days after notice of delinquency from

Covanta; (b) The Municipality or any Authorized Hauler fails to observe and perform any other material term, covenant or agreement contained in this Agreement, Covanta's delivery procedures or other agreements or policies to which either the Municipality or the Authorized Haulers(s) are subject in accordance with this Agreement and such failure continues for, or is not remedied within, a period of thirty (30) days after written notice to the Ylunicipality specifying the nature of such failure and requesting that it be remedied; or (c) The Municipality makes a general assignment for the benefit of creditors, files a petition in bankruptcy or a request to the Governor of the State of Connecticut to file such a petition in bankruptcy, is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any custodian, receiver or trustee for it or any substantial part of its property, commences any proceeding relating to it under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction whether now or hereafter in effect, or if there shall have been filed any such proceeding, in which an order for relief is entered or which remains undismissed for a period of one hundred twenty (120) days or more or if by any act indicates its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of any custodian, receiver of or any trustee for it or any substantial part of its property or suffers any such custodianship, receivership or trusteeship to continue undismissed for a period of one hundred twenty (120) days or more.

8.3 Remedies on Default. Whenever any event of default shall have occurred and be continuing, the non-defaulting Party shall have the following rights and remedies: (a) Upon sixty (60) days written notice to Covanta, if Covanta is then in default, the Municipality shall have the option to terminate this Agreement unless the event of default is fully cured prior to the expiration of such sixty (60) day period or unless during such period Covanta has taken remedial steps the effect of which would be to enable Covanta to cure such event of default within a reasonable period of time (which, if the event of default is a default in the payment of monies and results from restraint by a court or regulatory agency, shall mean the undertaking and prosecution of prompt, diligent, good faith efforts to remove such restraint); (b) Upon sixty (60) days written notice to the Municipality, if the Municipality is then in default, Covanta shall have the option to terminate this Agreement unless the event of default is fully cured prior to the expiration of such sixty (60) day period or unless during such period the Municipality has taken remedial steps the effect of which would be to enable the Municipality to cure such event of default within a reasonable period of time (which, if the event of default is a default in the payment of monies and results from restraint by a court or regulatory agency, shall mean the undertaking and prosecution of prompt, diligent, good faith efforts to remove such restraint);

(c) Upon written notice to the Municipality, if the Municipality has defaulted, Covanta shall have the option, without terminating this Agreement, to stop accepting Acceptable Solid Waste delivered or tendered for delivery by the Municipality or its Authorized Haulers, until such default is cured or this Agreement is terminated; and (d) In no event shall either Party be liable to the other for monetary damages on account of a breach of the terms of this Agreement caused by a declaration of an Event of Force Majeure or Change-in-Law made in good faith; provided, however, that nothing in this Section shall be deemed to limit the liability of the Municipality to m,tke the payments described in Article 3 as a result of an Event of Force Majeure or Change足 in-Law. 8.4 Remedies Cumulative. All rights and remedies under this Agreement are cumulative to, and not exclusive of, any rights or remedies otherwise available.

ARTICLE 9. Representations and Warranties. Insurance and Indemnification.

9.1 Representations and Warranties of the Municipalitv. The Municipality hereby represents and warrants to Covanta that: (a) this Agreement has been executed by officers of the Municipality acting under the authority of the legislative body of the Municipality, and the Municipality has heretofore delivered to Covanta evidence of such authority;

(b) the Municipality is authorized (i) to enter into a long-term contract for resource recovery and waste disposal processing, (ii) to pay the fees and charges established by this Agreement, and (iii) to pledge the full faith and credit of the Municipality for the payment of such fees and charges; (c) the Municipality has the full power and authority to execute and deliver this Agreement to Covanta and carry out the Municipality's obligations hereunder, all of which have been duly authorized in accordance with Applicable Law, and this Agreement shall be in full force and effect and be legally binding upon, and enforceable against, the Municipality in accordance with its terms upon its due execution and delivery by the Municipality and Covanta; (d) the Municipality, through its legislative body, has properly designated, and shall continue to properly maintain during the Term the designation of, the Facility as the only area where Acceptable Solid Waste originated within its boundaries shall be disposed pursuant to Conn. Gen. Stat. § 22a-220a, and such actions are consistent with the Municipality's and the State of Connecticut's solid waste management plans under Conn. Gen. Stat. §§22a-227 and 22a-228; (e) to the extent required by applicable law, the Municipality has obtained the approval of this Agreement by the Connecticut Commissioner of Environmental Protection, as set forth in Conn. Gen. Stat. § 22a-213, and any other governmental approval required by applicable law relating to the Municipality's execution, delivery and performance of its obligations under this Agreement and the Municipality has heretofore delivered to Covanta evidence of such approvals; and (t) there is no action, suit, investigation or other proceeding pending or, to the knowledge of the :v1unicipality, threatened, which questions the enforceability of this Agreement or which affects or affect the performance of the Municipality's obligations hereunder.

9.2 Representations and Warranties of Covanta. wanants to the Municipality that:

Co vanta hereby represents and

(a) Covanta has the full power and authority to execute and deliver this Agreement to the Municipality and to carry out Covanta's obligations hereunder, and this Agreement shall be in full force and effect and be legally binding upon, and enforceable against, Covanta in accordance with its terms upon its due execution and delivery by Covanta and the Municipality; (b) there is no action, suit, investigation or other proceeding pending or, to the knowledge of Covanta, threatened, which questions the enforceability of this Agreement or which affects or may affect the performance of Covanta's obligations hereunder; and the Facility is duly licensed, permitted or otherwise authorized to Process (c) solid waste, and that Covanta shall operate the Facility in material compliance with

Applicable Law. 9.3 Insurance. The Municipality, if delivering waste to Covanta in municipal vehicles, shall obtain and maintain such insurance coverage as Covanta may reasonably require in conformity with the insurance coverages required by Covanta for Authorized Haulers under Section 2.3( d) and Appenciix B, and the Municipality shall name Covanta as an additional insured under such policies and provide for thirty (30) days' prior written notice to Covanta in the event of expiration, cancellation, non-renewal or any other material change in coverage. For those insurance policies which name Covanta as an additional insured, Covanta waives any and every claim for recovery from the Municipality for any and all loss or damage to Covanta resulting from the performance of this Agreement, but only to the extent that such loss or damage is recovered by Covanta under said insurance policies.

9.4 In<iemnification. The Municipality agrees, to the extent permitted by law, to indemnify, defend and hold harmless the Covanta Indemnified Parties from and against any and all Losses arising out of or related to (i) the breach of any term, covenant, agreement or undertaking of the Municipality to Covanta, (ii) the negligence or willful misconduct of the Municipality, or (iii) any action taken to enforce this indemnity; provided, however, that the Municipality shall not be obligated to indemnify a Covanta IndemniÂąied Party to the extent that any such Loss is caused by the negligence or willful misconduct of such Covanta Indemnitied Party.

ARTICLE 10. Goveming Law and Disputes.

10.1 Governin!1 Law. The interpretation and performance of this Agreement shall be governed by the laws of the State of Connecticut without regard to its contlict of law principles.

(a) All disputes, claims, controversies and differences arising out of or relating to this Agreement, or the termination, invalidity or breach hereof, shall be determined by arbitration in the City of Hartford, Connecticut, in accordance with the Commercial Arbitration Rules of the American Arbitration Association (except as otherwise specified in this Section 10.2) and each Party submits to the jurisdiction of such arbitration. A Party may, upon written notice to the other Party, submit a dispute for arbitration. The dispute shall be determined by one (1) arbitrator acceptable to both Parties who shall be selected within fourteen (14) days of receipt of notice of intention to arbitrate by the party receiving that notice. If the receiving Party fails to respond to said notice in writing within said fourteen (14) days, then the Party providing said notice shall select the arbitrator and the arbitrator selected by the Party providing said notice shall be deemed to have been selected by the receiving Party. If, by the end of said fourteen (14) day period the Parties have not agreed upon one (1) arbitrator as acceptable, then the dispute shall be determined by a panel of three (3) arbitrators selected as follows: Within an additional seven (7) days, each Party will appoint one (1) arbitrator. These two (2) arbitrators will then, within an additional seven (7) days, name a third arbitrator. If the

two (2) arbitrators are unable to agree upon the choice of a third arbitrator within seven (7) days, either Party may request the person or entity administering the arbitration, or, if none, the American Arbitration Association or any other arbitration administering person or entity, to appoint the necessary arbitrator pursuant to the Commercial Arbitration Rules. (b) As soon as the arbitrator has been chosen or if three are utilized, the panel has been convened, a hearing date shall be set within thirty (30) days thereafter. Such hearing date shall be subject to the mutual agreement of the Parties and the arbitrator(s), but if such agreement cannot be reached, the arbitrator(s) shall have authority to establish such times for hearings as he, she or they deem appropriate. Written submissions shall be presented and exchanged by both Parties fifteen (IS) days before the hearing date, including reports prepared by any expert upon whom either Party intends to rely. At such time the Parties shall also exchange copies of all documentary evidence upon which they will rely at the arbitration hearing and a list of the witnesses whom they intend to call to testify at the hearing. Each Party shall also make its respective experts available for deposition by the other Party prior to the hearing date. The arbitrator( s) shall make his or her award as promptly as practicable after conclusion of the hearing. Arbitrators shall be compensated for their services at the standard hourly rate charged in their private professional activities. (c) The Parties acknowledge that the United States District Court for the District of Connecticut has jurisdiction over the Parties for the purpose of enforcing this Section 10.2. Connecticut rules of civil procedure and evidence shall apply with respect to any arbitration hereunder, including all rules pertaining to discovery and inspection.

The award may be made solely on the default of a Party. The arbitrator(s) shall follow substantive rules of law. The arbitrator(s) shall make the award in strict conformity with this Agreement and shall have no power to depart from or change any of the provisions hereof Tfthree arbitrators are used, a decision of any two of them shall be binding. At the request of either Party at the start of the arbitration, the award of the arbitrator(s) shall be accompanied by findings of fact and a written statement of reasons for the decision.

The arbitrator(s) shall have the discretion to award the costs of arbitration, arbitrators' fees and the respective attorneys' fees of each Party between the Parties as they see fit.

All Parties agree to be bound by the results of this arbitration; judgment upon the award so rendered may be entered and enforced in any court of competent jurisdiction, including the power to require specific performance. To the extent reasonably practicable, both Parties agree to continue performing their respective obligations under this Agreement while the dispute is being resolved. All matters relating to any arbitration hereunder shall be maintained in confidence. (d) Nothing contained in this Section 10.2 shall prohibit either Party from seeking equitable relief without tirst resorting to arbitration under such circumstances as that Party's interests hereunder and in its property will be otherwise compromised.

Effect of Disputes on the Obligations of the Parties. Except as provided in Section 5.3, the pendency of an arbitration proceeding or litigation shall not affect the obligations 10.3

of the Parties to make any payment or render any service required by this Agreement nor the rights of the Parties under this Agreement.

ARTICLE 11. Yfiscellaneous.

11.1 Assignment. Except for the designation of Authorized Haulers as provided in Section 2.3, the Municipality may not assign or transfer, directly or indirectly, its rights or duties under this Agreement. Co vanta may, upon prior written notice to the Municipality, assign all or any portion of its rights and obligations under this Agreement or delegate any of its obligations under this Agreement at any time; provided, however, that any such assignee or dele gee shall be obligated to comply with the provisions of this Agreement and no such assignment or delegation shall, in and of itself, result in any greater cost to the Municipality; and provided, further, that unless such assignment or delegation is to a Qualified Covanta Affiliate, such assignment or delegation shall not relieve Covanta of any obligation hereunder without the consent of the Municipality. Any assignment in violation of this Section 11.1 shall be null and void and of no effect.

11 .2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties in respect of the subject matter hereof. This Agreement supersedes all prior negotiations, representations and agreements between the Parties with respect to the subject matter hereof.

11.3 Waiver. :No delay in exercising or failure to exercise any right or remedy accruing to or in favor of any Party shall impair any such right, remedy, or constitute a waiver thereof. Every right and remedy given hereunder or by law may be exercised from time to time and as often as may be deemed expedient by the Parties. Any extension of time for payment hereunder or other indulgences shall not alter, affect or waive rights or obligations hereunder.

Acceptance of any payment, whether partial or otherwise, after it shall have become due, shall not be deemed to alter, affect or waive the obligations of either Party.

11.4 Modifications. Except as otherwise provided herein regarding Appendix B hereto, this Agreement may not be modified or amended except in writing signed by or on behalf of both Parties by their duly authorized officers.

11.5 Successors and Assigns. This Agreement shall inure to the benefit of and bind the respecti ve successors and permitted assigns of the Parties.

11.6 Notices. All written notices, reports and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered personally or deposited in the mails, postage prepaid, registered or certified mail, return receipt requested, or by commercial overnight courier addressed to the Party to whom notice is being given at its address set forth below. Either Party may change its address by notice similarly given.

If to the Municipality:

If to Covanta: Covanta Projects of Wallingford, L.P.

530 South Cherry Street

Wallingford, CT 06492-4431

Attention:

With a copy to: Covanta Energy Group, Inc. 40 Lane Road, CK 2615 Fairfield, NJ 07007-2615 Attention: General Counsel 11.7 Further Actions. Each Party agrees that it will, at its own expense, to the extent not reimbursable by the other Party under this Agreement, execute any and all certificates, documents and other instruments, and take such other further actions as may be reasonably necessary to give effect to the terms of this Agreement.

11.8 Counterparts. This Agreement may be executed in several counterparts, anyone of which shall be considered an original hereof for all purposes.

11.9 Severabilitv. In the event that any of the provisions, portions or applications of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the remaining provisions, portions and applications thereof shall not be affected thereby. In such event, the Parties agree that the court making such determination shall have the power to alter or amend such provision so that it shall be enforceable.

11.10 No Third Party Beneficiaries. Nothing in this Agreement is intended to confer any right on any Person other than the Parties and their respective successors and permitted assigns; nor is anything in this Agreement intended to modify or discharge the obligation or liability of any third party to any Party or give any third party any right of subrogation or action

over or against any Party.

11.11 Headings for Convenience. The headings in this Agreement are for convenience and reference only and in no way define or limit the scope or content of this Agreement or in any way affect its provisions.

11.12 Confidentiality. (a) The Municipality shall: (i) treat as confidential all Confidential Information which may be made available to the :v1unicipality or any agent or representative of Municipality; (ii) maintain in a secure place all Confidential Information made available to it and limit access to the Confidential Information to those agents or representatives of the Municipality to whom it is necessary to disclose the Confidential Information in furtherance of the Municipality's obligations under this Agreement; (iii) prevent disclosure of any Confidential Information by any agent or representative of the Municipality to unauthorized parties and assumes liability for any breach of this Agreement, or for any unauthorized disclosure or use of Confidential Information by it or any of its agents or representatives; and (iv) not use any Confidential Intormation other than in furtherance of its obligations under this Agreement.

If the Municipality receives a request for disclosure of any Confidential (b) Intormation under Connecticut's Freedom of Information Act ("FOIA"), the Municipality shall, before complying with such request, provide written notice of the request, and the opportunity to review and discuss it, to Covanta. If Covanta asserts that all or part of the requested information is exempt from disclosure under FOIA or other applicable provisions of la\v, the Municipality shall withhold the information so designated (the "Exempt Information") from disclosure and shall assert the exemptions claimed by Covanta. If a complaint is thereafter tIled with the Connecticut Freedom of Intormation Commission, the Municipality agrees to give Co vanta prompt notice of such complaint to allow Covanta to seek to intervene in any proceeding to adjudicate its claim of exemption. The Municipality agrees not to disclose Exempt Information unless ordered to do so in a final judgment issued by a court of competent jurisdiction after any appeals are concluded.

If the Municipality receives any other request or demand for disclosure of (c) any Confidential Information (whether in the form of a subpoena, an investigative inquiry by a governmental agency, discovery demands in litigation, or otherwise), the Municipality agrees to give prompt notice to Covanta of such request or demand and to allow Covanta an opportunity to seek judicial protection for the Confidential Information, unless the Municipality is expressly prohibited by court order from so disclosing the demand.

ARTICLE 12. Definitions and Interpretation.

1 1

Definitions. The following words and phrases shall have the following meanings

when used in this Agreement: "Acceptable Solid Waste" means mixed household solid waste and commercial solid waste generated within the boundaries of the Municipality and collected by or on behalf of the Municipality (including trash, refuse and garbage), other than Recyclable Materials, which has the characteristics of Solid Waste and which is (i) normally collected or disposed of by householders or other residents and by churches, schools and other municipal buildings (which for purposes of this Agreement shall be deemed to be household waste), and (ii) permitted under then Applicable Law to be accepted at the Delivery Point, Processed at the Facility and disposed of at a Landfill, and which is not otherwise Unacceptable Waste.

"Annual Minimum Commitment" means (i) with respect to the Municipality, the number of Tons of Acceptable Solid Waste set forth on Appendix A hereto, and (ii) with respect to any other Participating Municipality, the number of Tons of Acceptable Solid Waste constituting its annual minimum commitment under its municipal solid waste disposal agreement with Covanta, to be delivered to the Delivery Point during any full Contract Year, and a pro rata amount of Acceptable Solid Waste for any Contract Year having less than 365 days.

"Applicable Law" means each and every applicable Federal, state or local law, statute, charter, ordinance, rule, regulation, order, permit, license or approval of any governmental, regulatory or administrative agency or authority or court or other tribunal having jurisdiction.

"Authoritv" is defined in Section 1.3(b).

"Authorized Haulers" means those Persons who are engaging generally in the business of collecting, transporting and delivering solid waste which have been designated by the Municipality in accordance with Section 22a-220a of the Connecticut General Statutes and approved by Covanta to deliver Acceptable Solid Waste to the Delivery Point and who are doing so on behalf of the Municipality at the times relevant to this Agreement.

"A verage Price Per Megawatt" means, for a Contract Year, the average price per megawatt of electricity paid to Covanta by third parties for electricity generated by the Facility during the Contract Year and sold by Covanta to such third parties, calculated by dividing the Electricity Revenues of the Facility for the Contract Year by the number of megawatts of electricity generated by the Facility during the Contract Year and sold to third pm1ies.

"Change-in-Law" means any of the following events or conditions which have or will have, an adverse effect on (i) the ability of Covanta to perform its obligations under this Agreement or its ability to accept, Process or dispose of the Acceptable Solid Waste delivered hereunder, (ii) the Facility, a Landfill, or any other facility or landfill utilized in Processing or disposing of Acceptable Solid Waste delivered by the Municipality or disposing of Residue derived therefrom, or (iii) the ability of Covanta, or any operator of the Facility or a Landfill, to equip, to test, to operate, to maintain, to own or to possess the Facility or a Landfill, to the extent that such is not the result of any willful or negligent act or omission of the Party relying thereon as justification for not performing any obligation or complying with any condition required of such Party under this Agreement and shall include the following: (A) the enactment, adoption,

promulgation, implementation (if new or materially different from existing implementation), repeal, modification, interpretation (if materially different from existing interpretation) or enforcement (if materially different from existing enforcement) of any Federal, state, or local law, statute, act, ordinance, code, rule, regulation, policy, or requirement not adopted or enforced on or before the Effective Date or a decree, judgment, order of a court or governmental authority or agency or other action by a governmental authority or agency after the Effective Date; (B) the imposition of any condition on the issuance, re-issuance or continued effectiveness of any official permit, license or approval after the Effective Date, which establishes requirements more burdensome than those that would have been imposed as of the Effective Date; (C) the termination, suspension, rescission, modification, failure to renew or denial of any such permit, license or approval; (D) the imposition or increase of any Tax of any nature or the imposition or amendment of any requirement obligating Covanta, or any owner or operator of the Facility or a Landfill or any of their respective affiliates, to establish, maintain or increase reserves or financial assurances of any nature whatsoever by a Federal, state or local governmental authority or entity on the operation, ownership, possession or use of the Facility, a Landfill or any equipment used to construct, maintain, operate or test the Facility or a Landfill or to satisfy its obligation hereunder or the collection or disposal of Solid Waste at the Facility or a Landfill; or (E) an increase in the Host Municipality Fee on or after the Effective Date.

"Contract Year" means each twelve-month period beginning on July 1 and ending on the following June 30, with the first Contract Year beginning on the Commencement Date.

"Conn. Gen. Stat." means the Connecticut General Statutes.

"Commencement Date" is defined in the recitals.

"Confidential Information" means all data and information heretofore or hereafter disclosed, directly or indirectly, by or on behalf of Covanta, any limited or general partner of Co vanta, any affiliate or predecessor of any of the foregoing Persons, any licensor of technology to be used in connection with the Facility or any subcontractor engaged by any of the foregoing Persons (the "Disclosing Party") and (i) identified in writing as confidential by the Disclosing Party or Covanta, any limited or general partner of Covanta or any affiliate of any of the foregoing Persons, including patented and unpatented inventions, trade secrets, know-how, techniques, data, specifications, as-built drawings, blueprints, flow sheets, designs, engineering information, construction information, economic information, operation criteria, and other information related to solid waste disposal and resource recovery, or (ii) bearing the name "Enercon" or otherwise identified in writing as originating, directly or indirectly, from Enercon Systems, Inc. or Ogden Martin Systems, Inc. "Covanta" means Covanta Projects of Wallingford, L.P. and its permitted assignees and successors.

"Covanta Indemnified Parties" means Co vanta, any owner or operator of the Facility or a Landfill, or any of their respective affiliates, stockholders, officers, directors, members, employees, agents or contractors.

"Delivery Point" means the disposal location at the Facility designated by Covanta.

"Disposal Fees" means all amounts payable by the Municipality hereunder, including the Tip Fees payable pursuant to Section 3.1 (a), any additional Tip Fees payable by the Municipality pursuant to Section 3.1(b) for any Contract Year in which the Municipality fails to deliver and have accepted by Covanta the Municipality's iillnual Minimum Commitment, the monthly surcharge set forth in Section 3.2 to recover Facility Force Majeure Costs and Facility Charge-in足 Law Costs, the Municipality's Allocable Share of any increase in the Host Municipality Fee pursuant to Section 1.4( e), any fees, costs and indemnity amounts for which the Municipality becomes responsible pursuant to Section 4.2, and any other fees, costs, expenses and indemnity amounts payable by the Municipality to Covanta hereunder.

"Electricity Revenues of the Facilitv" means, for a Contract Year, the gross monetary revenues actually received by Covanta from the sale by Covanta to third parties of electricity generated by the Facility during such Contract Year.

"Effective Date" is defined in the preamble.

"Event of Force Majeure" means (A) an occurrence beyond the reasonable control of the Party affected which adversely affects the Facility, a Landfill or the operation or the ability of any Party to perform its obligations hereunder (including the ability of Covanta to accept, Process or dispose of any Acceptable Solid Waste delivered hereunder) or the ability of Covanta, or any Person acting on behalf of Covanta, to comply with the requirements of any governmental order, permit or other approval; (B) acts of God, landslides, lightning, earthquakes, hurricanes, tornadoes, blizzards, fires, explosions, floods, acts of a public enemy, wars, blockades, insurrections, riots or civil disturbances; (C) labor disputes, strikes, work slowdowns or work stoppages; (D) an order or judgment of any Federal, state or local court, administrative agency or governmental body, or other entity, if not the result of willful or negligent action of the Party relying thereon or failure to act in accordance with this Agreement; provided, however, that the contesting in good faith by such Party of any such order and/or judgment shall not constitute or be construed to constitute a willful or negligent action or inaction of such Party; (E) blockage of access to the Facility, or a Landfill if not the result of willful or negligent action of the Party relying thereon; (F) any surface or subsurface condition (including the presence of hazardous materials) at the Facility, or a Landfill not created solely by Covanta or an affiliate which causes a complete or partial suspension of services at the Facility or a Landfill or adversely affects operations at the Facility or a Landfill; (G) the condemnation, taking, seizure, involuntary conversion or requisition of title to or use of the Facility or a Landfill or any portion thereof by action of any Federal, state or local governmental agency or authority; (H) a Change-in-Law; andior (1) the repair, maintenance and/or improvement of the Facility or Site requested by a Participating Municipality.

"Exempt Information" is defined in Section 11.7(b).

"Facility" is defined in the recitals and includes all appurtenant structures and related facilities and equipment.

"Facilitv Change-in-Law Costs" means, without duplication, for any period and for any Change-in-Law the amount, if any, of the increased annual operating and capital costs, but shall not include decreases in revenues, of the Facility or a Landfill or any other costs and expenses incurred by Covanta or its affiliates or, any other operator or owner of the Facility or a Landfill, including costs and expenses to establish adequate reserves to meet anticipated obligations due from any and all Change-in-Law events and fees and expenses of legal counsel and consultants retained in connection with a proposed or a pending Change-in-Law resulting from such Change足 in-Law during such period. For purposes of this definition, the annual amount of increased capital costs shall include the principal and interest payments which would fall due in such period if Covanta permanently financed such cost (including interest to the date of the imputed permanent financing) by a loan incurred on the date of satisfactory completion of any related alteration or improvement payable in equal monthly installments of principal and interest over an amortization period equal to (i) the recovery period of such alteration or improvement as permitted for Federal income tax purposes by the pertinent provisions of the Internal Revenue Code or any regulations, rulings, procedures or bulletins promulgated thereunder or (ii) the remainder of the then current Term, whichever peri ad is longer. The annual rate of interest used for the imputed tInancing shall be the prime rate of interest as published in The Wall Street Journal, at the time of the imputed financing. A Facility Change-in-Law Cost shall not include general taxes on net income generally applicable to all corporations, partnerships or individuals.

"Facjlitv Force Majeure Costs" means, without duplication and subject to the application of Facility insurance proceeds relating to such Event of Force Majeure, for any period and for any Event of Force Majeure the amount if any, of the increased annual operating and capital costs, but shall not include decreases in revenues, of the Facility or a Landfill or any other costs and expenses incurred by Covanta, or any other operator or owner of the Facility or a Landfill, or any of their respective affiliates, including costs and expenses to establish adequate reserves to meet obligations due from any and all Events of Force Majeure and fees and expenses of legal counsel and consultants retained in connection or resulting from such Event of Force Majeure during such period. For purposes of this definition, the annual amount of increased capital costs shall include the principal and interest payments which would fall due in such period if Covanta permanently financed such costs (including interest to the date of the imputed permanent financing) by a loan incurred on the date of satisfactory completion of the related alteration or improvement payable in equal monthly installments of principal and interest over an amortization period equal to (i) the recovery period of such alteration or improvement as permitted for Federal income tax purposes by the pertinent provisions of the Internal Revenue Code or any regulations, rulings, procedures or bulletins promulgated thereunder or (ii) the remainder of the then current Term, whichever period is longer. The annual rate of interest used for the imputed financing shall be the prime rate of interest as published in The Wall Street Journal, at the time of the imputed financing.

"FOIA" is defined in Section 11.7(b).

"Host Municipality Fee" means the aggregate amount paid or payable, including Taxes, during a Contract Year directly or indirectly by Covanta to Wallingford, whether pursuant to Applicable Law and/or by agreement, relating to or arising out of the ownership, use or operation of the Facility and the Site, and/or any improvements and property located thereon.

is detined in Section 1.3(a).

"Landfill" means the landfill or landfills designated from time to time by Covanta for receipt of Residue from the Facility. or "Losses" means liabilities, losses, damages, tines, penalties, Ta'Ces, interest, suits, administrative proceedings, costs, expenses (including the fees and costs of investigators, accountants and attorneys) and disbursements.

"Municipalitv" is defined in the preamble.

"Municipality's Allocable Share" means a percentage equal to the Allliual Minimum Commitment of the Municipality divided by the aggregate annual minimum commitment of all Participating Municipalities multiplied by 100%.

"Municipality's Electrical Benchmark Price" means, for the first Contract Year of the Term, $90.00 per megawatt of electricity, and for each subsequent Contract Year during the Term shall be determined by adjusting the Municipality's Electrical Benchmark Price for the immediately preceding Contract Year by an amount equal one hundred percent (100%) of the percentage increase, if any, during such immediately preceding Contract Year in the Consumer Price Index (Whereas Base Year = June 30, 2010) for All Urban Consumers; not seasonally adjusted for the New York-Northern New Jersey-Long Island, NY-NJ-CT-PA (series id #CUURi\lOlSAO), as determined and reported by the U.S. Department of Labor, Bureau of Labor Statistics (the "CPI").

"Municipalitv's Electrical Revenue Share" means, for a Contract Year, the amount calculated using the formula: MERS == (APM MEBP) x .10 x TMS x PMAM x MAS where: "MERS" is the Municipality's Electrical Revenue Share for the Contract Year; "APM" is Average Price Per Megawatt of electricity paid to Covanta by third parties for the Contract Year; "MEPB" is the Municipality's Electrical Benchmark Price per megawatt of electricity for the Contract Year; "TMS" is the total megawatts of electricity produced at the Facility during the Contract Year and sold to third parties; "PMAyl" is the percentage of the total tonnage of 'vvaste Processed at the Facility during the Contract Year that was delivered by or on behalf of the Participating Municipalities; and "MAS" is the Municipality's Allocable Share for the Contract Year; provided, however, that if the APM for a Contract Year is equal to or less than the MEPB for such Contract Year, the Municipality's Electrical Revenue Share for such Contract Year is zero.

"Non-Processible Waste" means Recyclable Materials and Unacceptable Waste.

"Participating Municipalities" means, at the time of reference thereto, the Municipality and those other municipalities which, as of such time, are delivering or having delivered to the Facility Solid Waste pursuant to a municipal solid waste disposal agreement with Covanta for disposal at the Facility.

"Partv" and "Parties" are defined in the Preamble.

"Person" means a municipality, corporation, partnership, limited partnership, limited liability company, limited liability partnership, business trust, trust, joint venture, company, firm, entity or individual.

"Policv Board" means the board, if any, constituted by two or more of the Participating Municipalities to consider matters relating to the Facility as provided in Section 1.5.

"Process" means the combustion of Acceptable Solid Waste using the Facility.

"Qualified Covanta Affiliate" means an entity which is owned or controlled, directly or indirectly, by Covanta Energy Group, Inc., a Delaware corporation, or any successor thereto, which is at least as creditworthy as Covanta.

"Recyclable Materials" shall mean and include any item of solid waste (other than Unacceptable Waste) which cannot under any provision of any Recycling Act be accepted for disposal, at the time in question, at the Facility.

"Recycling Act" shall mean any law or regulation requiring the separation of any item (other than Unacceptable Waste) from solid waste prior to acceptance at a solid waste disposal site (including landfills and resource recovery facilities) including Connecticut Public Act 87~ 544, Sections 22a-241 through 22a-24li of the Connecticut General Statutes or any successor laws and the regulations promulgated under any of the foregoing, except for purposes of the definition of a Change-in-Law only, the term "Recycling Act" refers only to a Recycling Act as in effect on the Effective Date.

"Renewal Term" is defined in Section 1.3(a).

"Residue" means (i) the material remaining after the combustion of Acceptable Solid Waste at the Facility, including bottom ash and f1y ash, and (ii) any Acceptable Solid Waste, other than Non-Processible Waste, accepted at the Facility but not burned there prior to disposal.

"Site" shall mean the real property on which the Facility is located.

"Solid Waste" means unwanted or discarded solid materials, consistent with the meaning of that term pursuant to Subsection 22a-260(7) ofthe Connecticut General Statutes. Semi-solid, liquid and gaseous materials of the type which are customarily collected and treated in municipal sewage facilities, water supply treatment systems, water pollution abatement facilities or air pollution control facilities are not Solid Waste.

"Tax" or "Taxel''' means all net income, capital gains, gross income, gross receipts, sales, use, transfer, ad valorem, Connecticut escheats, franchise, profits, license, capital, withholding, payroll, employment, excise, goods and services, severance, stamp, occupation, premium, property, assessments or other governmental charges, levies or surcharges or any kind whatsoever, including a solid waste assessment, such as that provided in Conn. Gen. Stat. §22a­ 232, and a payment due to the municipality in which a solid waste disposal facility is located, such as that provided in Conn. Gen. Stat. §22a-220b, together with any interest, fines and any penalties, additions to tax or additional amounts incurred or accrued under applicable federal, state, local or foreign tax law or assessed, charged or imposed by any authority, domestic or foreign.

"Term" is defined in Section 1.3(a).

"Tip Fee" for the first Contract Year of the Term shall be $71.00 per Ton, and for each subsequent Contract Year during the Term shall be determined by adjusting the Tip Fee for the immediately preceding Contract Year by an amount equal one hundred percent (100%) of the percentage increase, if any, during such immediately preceding Contract Year in the Consumer Price Index (Whereas Base Year = June 30, 2010) for All Urban Consumers; not seasonally adjusted for the New York-Northern New Jersey-Long Island, NY-NJ-CT-PA (series id

<;'I1I1kl ,,()1

#CUURAI01SAO), as determined and reported by the U.S. Department of Labor, Bureau of Labor Statistics (the "CPI"); provided, however, that the annual increase shall not be less than two percent (2%) nor more than four percent (4%) for any Contract Year (subject to a carryforward to succeeding Contract Year(s) of the dollar amount of any difference between the actual increase in the CPI for the Contract Year and the dollar amount of the permissible increase hereunder for such Contract Y ear), By way of illustration, without limiting the generality of the foregoing, if the increase in the cpr from July 2010 to June 2011 is five percent (5%), the Tip Fee for the second Contract Year shall be $73.84 (104% of $71.00) and the amount of the additional CPI percentage increase, j,e. $0.71, will be carried over until the third and succeeding Contact Year(s) during the Term until it is fully recovered or offset by any amounts below the minimum annual increase of two percent (2%). Likewise, should the increase in the CPI from July 2010 to June 2011 be one percent (1%), the Tip Fee for the second Contract Year shall be $72.42 (102% of $71 ,00) and the amount of the additional cpr percentage increase, i,e., $0,71, will be carried over until the third and succeeding Contract Year(s) during the Term until it is fully recovered or offset by any amounts above the maximum annual increase of four percent (4%), Notwithstanding the foregoing, any carryover ofa cpr percentage increase will expire at the end of the Term without liability on the part of either Party, The adjusted Tip Fee shall be applied retroactively in the event that the cpr for the month of June is not available until after the invoice for the month of July is prepared, In the event that the CPI ceases to be available, the Parties shall mutually agree upon the use of a closely comparable index then available, "ToJ1" means 2,000 pounds, "Unacceptable Waste" means (except for trace amounts normally found in household waste) (A) any material which, by reason of its composition, characteristics or quantity, is hazardous waste as defined in the Resource Conservation and Recovery Act of 1976,42 U,S.c. ยง690 1 et seq" and the regulations thereunder or any material which, by reason of its composition or characteristics, is hazardous waste, a hazardous substance or hazardous material as defined in any other Federal, state or local law and the applicable regulations thereunder (including the following laws and the regulations, if any, promulgated thereunder: Chapters 441, 445, 446a, 446b 446k and 446m of the Connecticut General Statutes; the Toxic Substance Control Act, 15 U.S,c. ยง2601 et seq.; the Federal Insecticide, Fungicide and Rodentcide Control Act, 7 U,S.c. ยง136 et seq.; the Federal Water Pollution Control Act, 33 U.S.c. ยง1251 et seq.; and the Comprehensive Environmental Response, Compensation, and Liability Act of1980, 42 U.S.c. ยง9601 et seq., as amended by the Superfund Amendments and Reauthorization Act, the Safe Drinking Water Act, and the Hazardous Materials Transportation Act, and any similar or substituted legislation or regulations and amendments to the foregoing), and any other material which any governmental agency or political subdivision having or claiming appropriate jurisdiction shall determine from time to time to be harmful, toxic or dangerous, or otherwise ineligible for disposal through the Facility or a Landfill, including any materials the disposal of which at the Facility or a Landfill is prohibited or restricted pursuant to Section 22a-209-7(0) of the Regulations of Connecticut State Agencies, such as yard waste and grass clippings, metal containers, and glass containers (other than de minimis quantities as permitted under such Regulations), and lead acid batteries and white goods; (B) any material which would result in process residue being materials described in (A) above; (C) commercial solid waste which does not originate within the boundaries of the Municipality and waste which is not Solid Waste; and

'i?14fil v.Ol

(D) agricultural waste, explosive materials, corrosive materials, pathological waste, biological waste, human or animal remains, radioactive materials, ashes, foundry sand, mining waste, sewage sludge, cesspool and other human waste, motor vehicles, major motor vehicle parts (including transmissions, rear ends, springs, mattresses, fenders, batteries, battery cables, exhaust systems and gasoline tanks), agricultural and farm machinery and equipment and major parts thereof, marine vessels and major parts thereof, any other large machinery or equipment (including thick walled or solid metallic objects such as castings, forgings, gas cylinders, steel drums, asbestos insulation, closed metal containers, barrels and buckets), large motors, solid blocks of rubber or plastic, rolls of carpet or fencing over twelve (12) inches in diameter, steel or nylon rope, chains, cables or slings, logs larger than those acceptable under Covanta's normal operating procedures, street sweepings, tree stumps, tires, white goods such as refrigerators, stoves and washing machines, liquid waste (including liquid chemical wastes, sewage and other highly diluted water-carried materials or substances) and those in gaseous form, construction materials and demolition debris (including masonry; stone, structural steel, re-bar and structural shapes), special nuclear or by-product materials within the meaning of the Atomic Energy Act of 1954, as amended, any item of waste that is either smoldering or on fire, wastes in quantities and concentrations which require special handling in their collection or processing or any other material which (i) may present a danger to public health or safety, (ii) would cause applicable air quality, water effluent or process residue or ash standards to be violated by the normal operation of the Facility or a Landfill, (iii) because of its size, durability or composition would not normally be processed or disposed in a mass burn facility or a sanitary landfill, may materially impair its structures or equipment or has a reasonable possibility of otherwise adversely affecting the operation or useful life of the Facility or a Landfill outside of the normal usage expected for the Facility or a Landfill, or (iv) would be prohibited by any judicial decision or the order or action of any federal, state or local governmental agency or other regulatory authority or by any applicable law or regulation or Facility or Site permit or approval.

"Wallingford" means the Town of Wallingford, Connecticut.

12.2

Interpretation. In this Agreement, unless the context otherwise requires:

(a) The terms "hereby", "hereof", "herein", "hereunder" and any similar terms refer to this Agreement, and the term "heretofore" shall mean before, and the term "hereafter" shall mean after the Effective Date; (b) Words of masculine gender shall mean and include correlative words of feminine and neuter genders and words importing the similar number shall mean and include the plural number and vice versa; (c) The use of the word "including" in this Agreement shall be by way of example rather than by limitation; (d) Reference to any agreement, document or instrument, including this Agreement or any appendix hereto, means such agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof;

(e)

The use of the words "or", "either" and "any" shall not be exclusive;

(f) All references to statutory provisions and current or proposed rules and regulations shall be deemed to include any amendment or other revision to those laws and regulations and shall also be construed to refer to the corresponding provisions of any laws and regulations enacted to replace the laws and regulations referenced in this Agreement;

(g) All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles which are generally accepted at the date or time of such computation; (i) Words which have well-known technical or trade meanings are used herein in accordance with such recognized meanings unless otherwise specifically provided; and (j) Reference to a particular Party shall include that Party's employees and the authorized agents of that Party.

Both Parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

rSlGNA TURE PAGE FOLLOWSl

L

"

IN WITNESS WHEREOF, the Patties have caused this Municipal Solid Waste Disposal Agreement to be executed by their duly authorized representatives as of the day and year first above written.

COY ANTA WALLINGFORD PROJECTS, L.P. By:

COY ANT A OPW ASSOCIATES, INC., its General Partner

By: Name: Title:

TOWN OF _~ _____ ~_~_, CON1\JECTICUT

By: ___________________ Name: Its Chief Executive Officer

(SEAL)

______

By: ________________________ Name: Its Town Clerk

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~

APPENDIX A

Annual Minimum Commitment: _ _ _ _ _ _ Tons of Acceptable Solid Waste (pro-rated for any Contract Year ofless than 365 days) Expiration date of the Initial Term: June 30, ___ [The Municipality may elect an initial term of five, ten or fifteen years. J Annual Minimum Tonnage Commitments All Participating Municipalities Cheshire Hamden Meriden North Haven Wallingford Total

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9,955 17,107 17,174 11,537 21,162 76,935

13% 22% 22% 15% 28% 100%

APPENDIX B

HAULER'S RULES AND REGULATIONS

COVANTA PROJECTS OF WALLINGFORD, L,P.

JULY 1, 2010

HAULER'S RULES AND REGULATIONS COVANTA PROJECTS OF WALLINGFORD, L.P.

I.

General

A B. C. D. E. F. G. H. I. II.

Safety

A B. C. III.

Definition at the Facility General Fines and Penalties

Prohibited Waste

A B. C. D. VI.

General Fines and Penalties

Hazardous Waste

A B. C. V.

General Emergencies and Damages Fines and Penalties

Maintenance

A B. IV.

Receiving Hours Hauler Identification Notice of Hauler Changes Tare Weights Weight Tickets Insurance Liability Bypass Procedure Amendment Unattended Containers

Definition by Type Definition by Source General Fines and Penalties

Ad ministration

A B. C. D.

Notification Fines Damages Suspension

VII.

Appeals Procedures A. Timing B. Appeal Committee C. Clearance

I.

General

A.

Receiving Hours 7:00 a.m. to 4:00 p.m. - Monday through Friday 7:00 a.m. to 12:00 a.m. - Saturday

Closed Sunday

On or before June 1 of each year, notice to haulers of closures and/or reduced Receiving Hours on Legal Holidays will be provided by Covanta Projects of Wallingford, L.P. ("Covanta").

B.

Hauler Identification 1. Each Participating Municipality's Department of Public Works, or equivalent, shall provide to Covanta and the Wallingford Policy Board (WPB) all relevant information pertaining to new haulers or vehicles permitted to dispose of Acceptable Solid Waste at the Facility. Notification must be made at least seven (7) business days in advance of use of the Facility.

2. Each vehicle disposing of Acceptable Solid Waste at the Facility for the first time must be assigned a Covanta Identification Number. Decals will be provided and must be displayed on the driver's door of the vehicle in clear view of the Scale-house Attendant. Haulers failing to comply with this procedure will not be allowed to enter the Facility.

3. Each hauler shall properly display and comply with its respective community rules regarding truck and equipment identification and permitting. Proof of community permitting will be required in order to be issued and maintain Covanta Identification Number.

4. All vehicles with trailers are required to fit completely on Facility scales. Manual unloading or drop weighing will only be allowed with the mutual consent of Covanta.

5. Haulers are responsible to replace worn or missing numbers.

6. Trucks arriving at the scale-house which do not have appropriate hauler and truck identification will be rejected from the Facility.

C.

Notice of Hauler Changes Each hauler shall give the Covanta Facility Administration Office, any Participating Municipalities in which it is permitted and the WPB advance written notification of any changes in such hauler's operation which would have a material effect on delivery schedules or weight records and shall include the effective date or dates of such changes. These include, but are not necessarily limited to, any of the following: 1.

2.

3.

4.

5.

6.

7.

D.

Changes in name or mailing address.

Change in phone number.

Purchase or sale of trucks.

Purchase or sale of containers.

Purchase or sale of packer bodies.

Leased or borrowed trucks or equipment.

Sale, lease, or transfer of a substantial portion of hauler's business.

Tare Weights 1. An initial tare weight shall be obtained for each truck disposing of Acceptable Solid Waste at the Facility for the first time. Such tare weights shall be obtained at the direction and under the procedures set forth by the Facility Scale House Attendant.

Tare weights will be taken upon exiting the Facility.

2. After the initial tare weights have been obtained, Covanta employees may require tare weights on a random basis to verify weight records.

Haulers shall cooperate with Covanta employees to provide such data as required 3. Haulers with trucks that regularly pull containers other than packers shall be required to both weigh in and weigh out. A weight ticket will then be issued.

4. Haulers shall not request spot tare weight checks for their trucks without justification.

5. Haulers failing to comply with the tare weight procedures may be billed for 22 tons for each load (the approximate maximum load which can be delivered).

E.

Weight Tickets 1. The driver of each truck disposing of Acceptable Solid Waste shall be presented a weight ticket from the Scale House Attendant.

The ticket shall indicate date, time, hauler's company name, vehicle and container identification numbers, gross weight, tare weight, net weight, and the communities which are the source of the delivery. Each driver will be responsible for identifying the communities for which he is hauling. In the case of a mixed load, it will also be the driver's responsibility to relay to the Scale-house Attendant the percentages of waste being delivered from each community.

2. If a driver fails to sign for or receive a weight ticket, the Municipality shall be billed for such delivery as if a weight ticket had been signed and received.

F.

Insurance Liability 1 Certificates of Insurance evidencing coverage as outlined in Schedule No. 1 must be on file with Covanta before a hauler can access the Facility.

2. Covanta must be named an additional insured on each hauler's comprehensive general liability and comprehensive automobile liability policies.

3. Each certificate of insurance shall provide that 30 days prior written notice be given to Covanta in the event of expiration, cancellation, non-renewal or any other material change in the hauler'S insurance coverage.

G.

Bypass Procedure 1. Vehicles arriving at Covanta are to arrive during Receiving Hours (Section A) unless previously arranged.

2. All vehicles to be loaded must register a tare weight by weighing in on the in bound scale at the Facility.

3. Bypass waste vehicles are not to enter the tipping floor until advised to do so by loader operator.

4. All vehicles must secure covering of Acceptable Solid Waste before leaving the tip floor.

5. All vehicles must weigh out, ticket will be presented at that time.

H.

Amendment 1. These Hauler's Rules and Regulations may be amended by Covanta upon fifteen (15) days prior notice to the Participating Municipalities, the WPB and the Haulers.

II.

Safety

A.

General 1. Haulers shall form a single file line at the scale to the right of the scale-house. Vehicles should not proceed on or off the scales until instructed to do so by the Scale-house Attendant.

2. The speed limit at the Facility is 15 m.p.h. This speed limit will be enforced. Failure to comply will result in drivers being fined and/or prohibited from using the Facility. Haulers shall follow standard vehicle safety procedures at all times and observe Covanta safety regulations. A full complete stop must be made prior to entry onto the tipping floor. A rolling stop is not adequate.

3. Trucks with mechanical problems shall exit the Facility, or if disabled request towing immediately, so inbound and outbound roads will be clear to other traffic. Under no circumstances are repairs to be made at the Facility.

4. Trucks and/or containers are not to be left unattended while at the Facility. Parking on roadways is prohibited.

5. No hauler/driver shall possess, consume, or be under the influence of any illegal, controlled or intoxicating substance.

6. Lighted cigarettes or other sources of combustion are not allowed on the tipping floor at any time.

'\;14.111 v 01

7. Entry into any building except the tipping floor and ash building is prohibited. A portable toilet is located outside the tipping floor for hauler's use.

8. Any vehicle whose condition is determined to be unsafe by Facility staff will not be allowed to dump.

9. Haulers shall not dump their truck in front of an existing pile (unless directed by a Covanta employee).

10. Absolutely no one is to walk around on the tipping floor, haulers must stay within 5 (five) feet of their vehicle.

11. Completely exit the tipping floor after discharging load. Do not block the exit door of the tipping floor. (Allow enough room for another vehicle to get by in case of an emergency).

12. The tailgate locking levers on roll-off containers and trailers must be secured with a locking pin while the load is being dumped.

13. The tailgate on roll-off containers and trailers must be secured to the side of same by a proper chain.

14.Any hauler leaving the vehicle must wear proper protective equipment as defined by Covanta, which includes hard hat, eye protection, reflective safety vest, hearing protection and boots.

15. Any vehicle leaking fluids or experiencing noticeable safety or mechanical problem will be denied access.

16. Within the boundaries of the Town of Wallingford, all haulers delivering waste to the Facility from Participating Municipalities shall use the routes specified below: a. North Haven and Hamden - 1-91 North to Exit 13; North on South Colony (Route 5 north), to west on John Street and south on South Cherry Street to the facility. b. Meriden - 1-91 South to Exit 13 and the same route as above from that point on. c. Cheshire - First choice, east on Route 68 to 1-91, south to Exit 13. Second choice - east on Cook Hill Road to south on South Turnpike road and then east on Toelles Road to South Colony.

In both cases trucks shall

521461 v.Ol

proceed north on South Colony to west on John Street and south on Cherry Street to the Facility.

B.

Emergencies and Damages 1. No hot loads will be allowed to enter the Facility.

2. In the event of any emergency, haulers shall follow directions and procedures of Covanta employees-as handed out by the Loader Operators or Scale House Attendant.

Haulers on the tipping floor or queue line may be requested to leave.

3. Any damage to a hauler's truck or equipment occurring at the Facility shall be promptly reported to the Covanta Plant Manager for appropriate action.

4. After appropriate notification, haulers will be billed by Covanta and shall promptly pay Covanta for damages to the Facility or equipment caused by the Haulers drivers and/or equipment. See Section VI.C.

C.

Fines and Penalties 1. Effective as of July 1, 2010 any hauler who commits a safety violation shall subject both himself and his company to the following disciplinary action: a. First Violation

$ 500.00 Fine

b. Second Violation

$ 1,000.00 Fine

c. Third Violation

$ 1,500.00 Fine

d. Fourth Violation

$ 2,000.00 Fine and/or up to six months suspension from the Facility.

e. Fifth Violation

'i?14f)1 v.01

Permanent suspension from the Facility.

2. Administration of fines and penalties are described in Section VI. The appeals procedure is described in Section VII.

III.

Maintenance A.

General 1. Open topped Vehicles and Containers:

Section 14-271 of the Connecticut General Statutes requires the contents of containers to be secured with a screen or other material having perforations of a size not greater than two square inches. Any vehicle arriving at the Facility that is not in compliance with this statute or any other applicable law or regulation will be fined. Waste must be secured to prevent leakage or spillage from any vehicle and container.

2. Hauler traffic is in a one way direction between entering and exiting at the scale-house. All trucks must proceed with care and follow directions issued by the appropriate Facility staff, which may include diverting their load elsewhere. Any hauler's truck observed not driving on the paved roadways will be invoiced a $100.00 road cleaning charge.

3. Unloading and clearing out vehicles is only permitted on the tipping floor.

4. Upon exiting the scale, trucks shall proceed to the enclosed tipping floor and wait for an available bay to unload. Do not block access to the company parking lot when in line.

Vehicles will not be uncovered nor will loads be unlatched or turnbuckles loosened until the vehicle is within the tipping floor area. All unloading preparations must be made prior to crossing the yellow warning lines to minimize fall hazards.

Trucks shall stay in marked lanes and back to the curb at the edge of the pit. Drivers should ascertain correct placement of the container before releasing their load. After unloading, the driver shall assist in cleaning the area before exiting the Facility.

5. After unloading on the tipping floor, trucks shall exit through the south door of the tipping floor.

6. Trucks may be directed to a specific area on the tipping floor to unload for examination of waste being delivered. Trucks

shall not leave tipping floor following examination until directed by Facility staff. a. For Prohibited Waste which is not Hazardous Waste, the hauler may be required, at the discretion of Covanta Projects of Wallingford personnel, to reload such materials for disposal at another location. b. If Hazardous Waste, as defined by Federal, State, and Local laws, is discovered, haulers shall remain at the Facility until appropriate public health and law enforcement officials arrive.

7. Haulers shall make every effort to unload in an expedient manner to assure even traffic flow through the FaGility.

8. Foul language and inappropriate behavior are not permitted

on site e.g. spitting, swearing, lewd gestures, littering, etc.

9. Restroom facilities are not available. There will be no defecating or urinating on site. Entry into any facility building except the tipping floor and ash building is prohibited. A portable sanitary toilet has been located to the north of the tipping floor for use by the haulers.

10. Salvaging or scavenging of any items found in Waste is prohibited.

11. Vehicles are not allowed to remove containers outside the tipping floor at any time, and only on the tipping floor in cases of emergency, safety or mechanical failure.

12. Drivers must refrain from using cellular phones within 50 feet

of scale house as it may interfere with scale readings.

B.

Idling Policy

Haulers must comply with Connecticut Air Regulations (RCSA Section 22a-174足 (18)(b)(3)(C)), which does not allow trucks to be left idling for more than three consecutive minutes, except as follows: i. When a mobile source is forced to remain motionless because of traffic conditions or mechanical difficulties over which the operator has no control,

II.

iii.

iv. v. vi.

vii.

C.

When it is necessary to operate defrosting, heating or cooling equipment to ensure the safety or health of the driver or passengers, When it is necessary to operate auxiliary equipment that is located in or on the mobile source to accomplish the intended use of the mobile source, To bring the mobile source to the manufacturer's recommended operating temperature, When the outdoor temperature is below twenty degrees Fahrenheit (20 degrees F), When the mobile source is undergoing maintenance that requires such mobile source be operated for more than three (3) consecutive minutes, or When a mobile source is in queue to be inspected by U.S. military personnel prior to gaining access to a U.S. military installation.

Fines and Penalties 1. Effective as of July 1, 2010, any hauler who commits a maintenance (including idling) violation shall subject himself and his company to the following disciplinary action: a. First Violation

-$100.00 Fine

b. Second Violation

-$250.00 Fine

c. Third Violation

-$750.00 Fine

d. Fourth Violation

-$1250.00 fine and/or up to six months suspension from the Facility.

e. Fifth Violation

-Permanent suspension the Facility.

from

2. Administration of fines and penalties are described in Section VI. The appeals procedure is described in Section VII.

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IV.

Hazardous Waste

A.

Definition at the Facility "Hazardous Waste" means that portion of solid waste which, by reason of its composition, characteristics or quantity is (a) hazardous waste as defined in the Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq., and the regulations thereunder, or in Section 22a-209-1 of the Regulations of Connecticut State Agencies, or any material which, by reason of its composition or characteristics, is hazardous waste, a hazardous substance or hazardous material as defined in any federal, state or local law and the applicable regulations thereunder, and any succeeding legislation or regulations or amendments to the foregoing; (b) material which a governmental agency or unit having appropriate jurisdiction shall determine from time to time is harmful, toxic or dangerous, or othelWise ineligible for disposal through the Facility; or (c) a material which would result in Process Residue being Hazardous Waste under (a) or (b) above.

B.

General 1. All Hazardous Waste shall be rejected from the Facility if delivery is attempted. Haulers who have received weight tickets for loads which contain a portion of Hazardous Waste shall not receive a credit for any rejected portion.

2, Upon discovery of Hazardous Waste on the Facility or

Alternate Site, the Company shall notify the Hauler, the Participating Municipalities and the WPB. Covanta will work to identify, test, protect, contain, and promptly transport from the Facility site and store such Hazardous Waste. Covanta shall be reimbursed from the hauler for all these costs.

3. Haulers shall dispose of the Hazardous Waste at their cost at a site and in a manner prescribed by law.

C.

Fines and Penalties 1. Effective as of July 1, 2010, any hauler who attempts to deliver or delivers Hazardous Waste shall be subject (together with the hauler's company) to the following disciplinary action:

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a. First Violation

-$500.00 Fine

b. Second Violation

-$1000.00 Fine

c. Third Violation

-$1500.00 Fine

d. Fourth Violation

-$2000.00 Fine and/or up to six months suspension from the Facility

e. Fifth Violation

-Permanent suspension from the Facility

2. Administration of fines and penalties are described In Section VI. The appeals procedure is described in Section VII.

V.

Prohibited Waste A.

Definition by Type Prohibited Waste by Type shall include the materials (A) if present in quantities or concentrations that, in the reasonable judgment of the Covanta Projects of Wallingford, (1) would pose a substantial threat to public health or safety, (2) may cause applicable air quality or water effluent standards to be violated by the normal operation of the Facility, or (3) have a reasonable possibility of adversely affecting the operation of the Facility in any material respect. and (B) if the concentrations or quantities exceed those normally found in solid waste generated in residential, commercial or light industrial areas.

Prohibited Waste by Type includes but is not limited to the following: 1. Explosives Blasting Caps Dynamite Fireworks Hand Grenades Shotgun Shells Any other explosives

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2.

Liquid Waste Acetate Acids Alcohol Caustics Ether Gasoline Waters Hydraulic Oil Inflammable or Volatile Liquids

Leachate Naphtha Paints Petroleum Sewage Sludge Sewage or Process Waste Solvents Turpentine Waste Oil

3. Demolition Debris Sand Aggregate Sheetrock Asbestos Brick Soil Stone Cement Structural Clay Products Gravel Plaster Other Non-Combustible Debris Demolition Roofing Materials Oil tanks, pipes, fixtures Entire Loads of full pallets (must be broken up) 4. Miscellaneous Materials Ashes Asphalt Found ry Sand Offal

Pressurized Containers Sealed Drums Tar

Motor Vehicles Major Motor Vehicle Parts Tires Bumpers Any large machinery 5.

Medical, Pathological or Infectious Waste, needles, body fluid items, blood stained items.

such

as

Medical Waste is generally defined as any solid waste that is generated in the diagnosis, treatment, or immunization of human beings or animals, in research pertaining thereto, or

521461 v.O

in the production or testing of biologicals, including but not limited to: a) b) c) d) e)

soiled or blood-soaked bandages culture dishes and other glassware discarded surgical gloves-after surgery discarded surgical instruments-scalpels needles-used to give shots or draw blood f) cultures, stocks, swabs used to inoculate cultures g) removed body organs-tonsils, appendices, limbs, etc. h) lancets-the little blades the doctor pricks your finger with to get a drop of blood

6. Radioactive Waste (please see Schedule No. 2 for Radioactive Waste Handling Procedure) 7. White Goods 8. Logs or Tree stumps larger than four feet in length and six inches in diameter.

9. Recyclable Materials will be treated in accordance with Public Act 90-220, 90-249 or any successor law.

B.

Definition by Source Prohibited Waste by Source shall include significant waste from a jurisdiction not authorized by Covanta. This includes jurisdictions other than Participating Municipalities and haulers bringing in Waste for a Contracted Community in which they are not permitted to do so.

C.

General 1. Prohibited Waste shall be rejected from the Facility if delivery is attempted. Haulers shall dispose of the Prohibited Waste at a site and in a manner prescribed by law. Haulers who have received weight tickets for loads which contain a portion of Prohibited Waste shall not receive a credit for any rejected portion.

2. Upon discovery of Prohibited Waste on the Facility or alternate site, if the hauler cannot be identified, Covanta shall transport

521461 v.Ol

and dispose of it at a disposal site. The cost and expense of such transportation and disposal will be by the Municipality, or if the source is undetermined, by all Participating Municipalities.

D.

Fines and Penalties Prohibited by Type Violations shall be accumulated separately from Prohibited by Source Violations.

Prohibited by Type 1. Effective as July 1, 2010, any hauler who attempts to deliver or delivers Prohibited Waste by Type shall be subject (together with the hauler's company) to the following disciplinary action: a. First Violation

$250 Fine

b. Second Violation

$500 Fine

c. Third Violation

$1,000 Fine

d. Fourth Violation

$1,500 Fine and/or up to six months suspension from the Facility.

e. Fifth Violation

-Permanent suspension from the Facility

Prohibited by Source 2. Effective as of as July 1 2010 any hauler who attempts to deliver or delivers Prohibited Waste by Source shall subject himself and his company to the same disciplinary action as Prohibited by Type Violations above.

J

3. Administration of fines and penalties are described in Section VI. The appeals procedure is described in Section VII.

521461 v.01

VI.

Administration

A.

Notification A notice of violation will be mailed to the designated hauler, and the Participating Municipalities in which the hauler is permitted for use of the Facility. This notice will be sent within five business days. It will include the amount of fines due or the effective date of suspension.

B.

Fines Fines will be due and payable to Covanta Projects of VVallingford, L.P., 530 South Cherry Street, Wallingford, CT 06492 within 30 days of the notification date. Notification date is defined as the date of notice per Section VI (A) or, if an appeal is made, the date of notice per Section VII (B). They will be subject to the highest finance charge as permitted by law and will be computed from the date of violation. After 30 days, if payment is not received, Covanta will contact the hauler and issue a reminder of the fine. If payment plus interest is not received within 30 days of Covanta notice, hauler will automatically be assessed the next level of violation (and all associated ramification both financial and otherwise) per Sections II (C), III (C), IV (C) or V (D), as appropriate.

C.

Damages Violations resulting in actual costs and expenses to the Facility will be ascertained and billed as soon as reasonably possible, but not later than sixty days from the date of the offense. Amounts will be due and payable to Covanta Projects of Wallingford, 530 South Cherry Street, Wallingford, CT 06492 within thirty days of the billing date. They will be subject to the highest finance charge as permitted by law and will be computed from the date of violation.

These amounts are in addition to any fines or suspension of privileges. The Participating Municipalities and WPB will be notified of any damage and except in the case of emergencies or risk to safety be given the opportunity to observe damage.

D.

Suspension Suspension will commence ten business days from the date of the notice, unless an appeal in writing has been received. If the Appeals Committee rules suspension is in order, suspension will commence ten business days from the Appeals Committee notification.

521461 v.01

VII.

Appeals Procedures A.

Timing An appeal may be made by a hauler within ten business days of the date of violation notification. The appeal should be in writing to the Business Manager, Covanta Projects of Wallingford, 530 South Cherry Street, Wallingford, CT 06492 with copies sent to the WPB at , attention:

B.

Appeal Committees The appeal will be evaluated by the applicable Appeal Committee, comprised of the three individuals noted below.

For All Violations • Covanta Wallingford Business Manager and lor Facility Manager • Covanta Facility Safety Supervisor • Project Coordinator or hislher designee.

• Member of the WPB or their designee The appeal may include a meeting between the Appeal Committee and the hauler's representative. At the discretion of the Appeal rornmittt=>(::l tht=> indi\J',rh I~I \A/itnocsin,., tho all"''''erl infraf"'tif"\n n-ta\l ...., 1111 II ............ : ~11 ...... lIt IV ............ """ • • Vll"l' ...... ...., IIf~ 1,,11'-" Il"""'~ lilll .....,\,IVII III J he> U"-,,

\"..I

called to testify.

The Committee will render its decision within 30 days of receipt of the appeal. Notice will be mailed to the hauler within five business days of the decision rendered. Payment must then be made per Section VI (B).

Decisions by the Appeal Committees are final and binding.

C.

Clearance Unless permanently suspended, a hauler's record will be cleared in a category (safety, maintenance, hazardous waste, prohibited waste by type or prohibited waste by source) if no violation is incurred in that category for a one year period of time from the last offense,

521461 v.OI

SCHEDULE NO.1

Minimum Insurance Requirements

Workers Compensation

As required by law

Comprehensive General Liability

$ 1,000,000.00

Comprehensive Automobile Liability

$

Excess Liability

$ 1,000,000.00

1461 v.Ol

500,000.00

Schedule No.2

,,~~.:£~!~~~~ P~gj ~,~€~~.~f,~.Il,!I!?g!~~~,'f":"

, ",

l3C1dIQg~JIV:~~YV~§t~~f:lanfl fInglRrQ.c;~ti l!J:~

In order to comply with state law and the company policy, the Covanta Wallingford facility has been fitted with two stationary radioactive detector systems, which automatically screen all incoming traffic at the scale house. The facility also has a portable radiation survey meter, which is used to verifY and quantifY the presence of radioactive materials.

For the purposes of implementing this policy, any load is considered to be radioactive when the radiation level, as recorded by the facility radioactive detection equipment, shows a level of emission greater than five times background. The stationary detectors at the scale house are programmed to alarm at this condition.

The following procedures are to be followed in the event the system indicates an alarm condition: I. The Scale Attendant shall confirm the radiation level by having the vehicle repositioned

on the scale and then notifY the Shift Supervisor and Chief Engineer immediately. He shall attempt to identify the location of the suspect material and relay this information to the Chief Engineer 2. The vehicle shall be directed to park on the right side of the entrance road beyond the incoming scale.

3. The Shift Supervisor or Chief Engineer, using the hand-held radiation detector, shall verify the existence of radiation levels exceeding five times (5X) the background level.

If confirmed, contact the Environmental Specialist immediately.

4. If the existence and level of the source is confirmed, the Environmental Specialist will contact the CT DEP at 424-3333, describe the situation and follow their instruction.

5. The instruction issued by the CT DEP will be relayed to the vehicle driver and owner of the vehicle. The CT DEP will arrange to come to the facility and assess the nature of the radioactive material. If the driver chooses to leave the site prior to the CT DEP's arrival, the driver should be informed that the appropriate authorities have been provided with a description and plate numbers of the vehicle.

6. Plant personnel will cooperate and assist the CT DEP in the assessment of the radioactive material. If the CT DEP determines the material does not present an environmental or health/safety issue, the vehicle will be allowed to tip with approval of the Environmental Specialist. If the material is deemed an environmental or health/safety issue, the CT DEP will arrange and/or eSC011 the vehicle from the facility to properly remove and dispose of the radioactive material.

Gate Monitors: 5X Background (~ 10.0)

1461 \'.01

Schedule No.3 HAULER FINE TABLE

nse

Type of violation ,Safety ,MaTnTenance Waste"'" <j5rotiTbltec{{no;':haza(dous} w.3ste , . ___ .___ •

·HaZardous· ~h

._._._~'h'

':;jL1hl ,,OJ

i

Fi rsT·~-·S·econd·-r~-Thjr(r··Fou·rth--·

, $ 500,00 •$1,000,00 : $ 1,500.00' $2,000.00 ' i··$-100',Oif"'$'250.0·o 7-$'··750:'oo·'fl,2"so.-OO"· '-;$56b~o·o-'$·f~606~o6·~··$·'1:56o:o6·$2~6bo.oo·'·:

,·$-256~66·'·····$··'566~6(fi-if·ro6ojjo··$1,'500~O{f'