HomeMy WebLinkAboutGreenWaste Recovery, Inc. (3)CONSENT AND SECOND AMENDMENT TO FRANCHISE AGREEMENT FOR
COLLECTION AND PROCESSING OF MIXED COMPOSTABLE MATERIALS,
RECYCLABLE MATERIALS AND YARD TRIMMINGS
This Consent and Second Amendment ("Consent and Amendment") dated for reference
November 18, 2021 is entered into by and between the Town of Los Altos Hills, a municipal
corporation organized and existing under the laws of the State of California ("Town") and
GreenWaste Recovery, Inc., a California corporation ("Contractor").
RECITALS
WHEREAS, Town and GreenWaste Recovery, Inc. are parties to that certain Franchise
Agreement Between the Town of Los Altos Hills and GreenWaste Recovery, Inc. for Collection
and Processing of Mixed Compostable Materials, Recyclable Materials and Yard Trimmings,
dated June 28, 2019 and amended on July 16, 2020 (the "Agreement"); and
WHEREAS, on September 8, 2021, Contractor notified Town that Contractor had entered
into an agreement dated as of August 28, 2021 to sell all or substantially all of its outstanding
capital stock to MIP V Waste, LLC, a Delaware limited liability company (the "Company"), which
would result in a change of control of Contractor (the "Transaction"); and
WHEREAS, Sections 18.3 and 18.4 of the Agreement permit assignments and other
transfers only with the prior consent of Town, which consent the Town may withhold at its sole
discretion. Section 18.4 deems a sale or transfer of a controlling percentage of capital stock to be
an assignment, and therefore the Transaction requires the Town's consent; and
WHEREAS, Contractor has requested that Town approve the Transaction's transfer of a
controlling percentage of Contractor's capital stock to Company; and
WHEREAS, Town has considered the Transaction, and is willing to approve it pursuant to
the terms of this Consent and Amendment; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
1. Recitals: Definitions. The foregoing recitals are true and correct, and
incorporated into this Consent and Amendment by this reference. Capitalized terms used in this
Consent and Amendment and not otherwise defined herein shall have the meaning assigned to
them in the Agreement.
2. Amendments to the Agreement. The Agreement is amended as follows:
a. Amendment to Section 13.2. Section 13.2 is amended to read as follows:
"13.2 Annual Adjustments — Franchisee and Town have stipulated to
prescriptive annual rate adjustments to Franchisee's rates in
EXHIBIT B as follows:
Two and forty-five one hundredths percent (2.45%) on
July 1, 2020 (Second Contract Year);
ii. Nine percent (9%) on July 1, 2021 (Third Contract Year);
iii. By one hundred (100%) of the change in the Consumer Price
Index for All Urban Consumers (U) for the San Francisco Bay
Area (the "CPI Index") between January 1, 2021 and December
31, 2021 on July 1, 2022 (Fourth Contract Year);
iv. By seven and fifty-two one hundredths percent (7.52%) plus one
hundred percent (100%) of the CPI Index between January 1,
2022 and December 31, 2022 on July 1, 2023, provided, however
that the total annual rate adjustment shall not exceed nine percent
(9%) (Fifth Contract Year);
V. Unless otherwise agreed upon in writing, beginning July 1,
2024 (Sixth Contract Year) and on each July 1 thereafter for
the remainder of the Term, Franchisee's rates shall increase
(or decrease) annually by one hundred (100%) of the change in
the CPI Index between January 1 and December 31 of the prior
calendar year.
Starting July 1, 2019, Franchisee shall pay its driver employees
providing service in Town at least a minimum wage of forty dollars
($40.00) per hour in addition to all standard benefits provided to
company employees. The minimum driver employee wage shall be
adjusted annually by 100% of the change in the CPI Index."
b. Requiring Reporting of Monthly Source of Revenue. Section 12.4 of the
Agreement is amended to read as follows:
"Payments to Town— Beginning July 1, 2019 and through June 30, 2023,
Franchisee shall not charge nor be required to remit any Franchisee Fee
to Town. Unless otherwise directed by the Town and authorized by the
City Council, beginning on July 1, 2023 and annually thereafter,
Franchisee shall, in partial consideration for granting the exclusive
franchise granted to Franchisee, shall remit to the Town a 7.52 percent
(7.52%) Franchise Fee based on the formula provided in Section 13.2 of
this Agreement. Franchisee shall remit to Town, within ten (10) days of
the end of each month, a Franchise Fee in the amount of 7.52 percent
(7.52%) of all revenues received in the prior month relating to the
performance of this Agreement, including but not limited to Service
Rates and Extra Services fees. Beginning in January 2022, Franchisee
shall on a monthly basis provide sufficient documentation to identify the
source of all revenues. This documentation shall accompany any
payments required by this paragraph or be delivered to the Town within
ten (10) day of the end of each month in which such a payment is not
due. The documentation shall include, at a minimum, specifics for each
account, the amount billed, the amount collected, a listing of accounts
which received Extra Services and the amount of Extra Services
provided, and a listing of accounts which are delinquent.
Franchise Fees will be due on any revenues received from the
performance of this Agreement following the termination of this
Agreement."
C. Increase in Number of Town -Requested Data Requests. Section 11.3 is
amended to read as follows:
"11.3 Transfer of Data - The customer billing database shall be
considered to be jointly owned by both Town and the Franchisee, and
shall be made available to Town on request. Six (6) months prior to the
termination date -of this Agreement, and within ten (10) working days of
a request by Town (the Town may make up to five (5) such requests after
November 18, 2021), the Franchisee shall provide Town a complete
listing of all billing accounts, level of service information and route
maps. The listing of billing accounts and level of service information
shall be provided digitally in a format and file type that is mutually
agreed upon by both Town and the Franchisee."
d. Addition of Streets to Street Sweeping list (Exhibit G). Exhibit G to the
Agreement is hereby replaced with Exhibit A hereto, a Revised Exhibit
G. The revised Exhibit G reflects the addition of six street segments,
items 17, 28, 34, 40, 43, and 55, corrections of segment lengths, and
updated total segment lengths.
3. Negotiations to Explore Reverting to Prior Collection Program. Franchisee and
Town agree to enter into good faith negotiations in calendar year 2022 to explore reverting to the
collection program that was in place as -of June 30, 2019, wherein Residential Service Recipients
were permitted to participate in a three -stream collection system generally placing Carts at a
location of their choosing, whether On -Premise, On -Street and/or Curbside or some combination
thereof.
Beginning in January 2022, Franchisee and Town shall begin discussing options to revise
the scope of services provided to Residential and Non -Residential Service Recipients. Within 60 -
days of being provided a finalized scope(s) of work from the Town. Franchisee shall provide the
Town with a corresponding cost proposal(s) that shall first utilize existing labor and capital
according to Franchisee's current route labor requirements and depreciation schedule, then shall
identify additional labor requirements, inclusive of changes to off -route demands resulting from
the new and/or modified services, and /or additional capital required to perform the new and/or
modified services that shall be depreciated over the remaining Term of the Agreement, and shall
also incorporate adjustments to processing costs resulting from the new and/or modified collection
programs, as applicable. Once the scope(s) of service and cost-proposal(s) have been sufficiently
refined, Franchisee and Town shall work collaboratively to develop corresponding rate structure(s)
for the City Council's consideration that will generate the revenue required to cover Franchisee's
revenue requirement.
Franchisee and Town are committed to finalize negotiations in calendar year 2022 with the
goal of rolling out new and/or modified collection programs and rates on July 1, 2023.
4. Approval of Change of Control. The City Council of the Town of Los Altos Hills
approves and consents to the change of control of Contractor to Company pursuant to Sections
18.3 and 18.4 of the Agreement ("COC Approval") and shall in no event be deemed an "event of
default" or cause or result in any default or violation under, termination of, or any other effect on
the Agreement. The COC Approval shall become effective immediately upon execution by Town
of this Consent and Amendment ("Approval Date") unless Contractor furnishes written notice to
Town that it will not consummate the Transaction, at which time the COC Approval shall be
deemed null and void.
5. Due Execution. The person(s) executing this Consent and Amendment on behalf
of a party hereto warrant(s) that (i) such party is duly organized and existing; (ii)_ such person(s)_
are duly authorized to execute and deliver this Consent and Amendment on behalf of said party;
(iii) by so executing this Consent and Amendment, such party is formally bound to the provisions
of this Consent and Amendment; and (iv) entering into this Consent and Amendment does not
violate any provision of any other agreement to which said party is bound.
6. Entire Amendment. This Consent and Amendment contains the entire agreement
and understanding between the parties with respect to the subject matter of this Consent and
Amendment and supersedes any and all prior or contemporaneous oral and written representations,
warranties, agreements, and understandings between the parties concerning the subject matter of
this Consent and Amendment.
7. Full Force and Effect. Other than as set forth in this Consent and Amendment,
the terms of the Agreement shall remain unchanged and in fiill force and effect. In the event of any
conflict between the Agreement and this Consent and Amendment, this Consent and Amendment
shall apply.
8. Counterparts. This Consent and Amendment may be executed in counterparts,
each of which shall be considered an original.
TO EFFECTUATE THIS CONSENT AND AMENDMENT, each of the parties has
caused this Consent and Amendment to be executed by its authorized representative as of the
date set forth below the authorized signature.
[signatures begin on next page]
TOWN:
TOWN OF LOS ALTOS HILLS,
a municipal corporation
By: rc ,
Its: Mayor
Date: I l �a G
ATTEST:
By:
Its: City Clerk
Date:
APPROVED AS TO FORM:
B3 '1"4'
Its: City Attorney
Date: 11/22/2021
CONTRACTOR:
GreenWaste Recovery, Inc., a California
corporation
Its: Chief Executive Officer
Date: --J! I I Z / —_v____
[REVISED] EXHIBIT G: STREET SWEEPING
The following street segments shall he swept once each month:
Road/section
Estimated
Linear Feet
1
Altamont Road, from Moody Road to Page Mill Road
11,506
2
Anacapa Drive, from Visciano Road to Ascension Drive
1,300
3
Arastradero Road, from Page Mill Road north to Town Boundary
1,430
4
Arastradero Road, from Horseshoe Lane to Stirrup Way
1,900
5
Black Mountain Road, from Natoma Road to Altamont Road
2,816
6
Blandor Way, from Magdelena Avenue to Olive Tree Lane
850
7
Briones Way, from Altamont Road to Via Ventana
1,600
8
Canario Way, from Visciano Road north to end
950
9
Conception Road, from Fremont Road to Purissima Road
4,604
10
Corte Madera Lane, from Conception Road west to end
580
11
Dawson Drive, from Magdelena Avenue west to end
2,555
12
Dianne Drive, from O'Keefe Lane north to end
1,200
13
Duval Way, from Robleda Road southwest to end
1,200
14
Edith Road from Fremont Road to end of bridge
500
15
EI Monte Avenue, from Summerhill Avenue to Elena Road
14,066
16
Elena Road from Purissima Road to EI Monte Road
14,230
17
Aric Lane, from Fremont to end.
940
18
Esperanza Drive
2,674
19
Fawn Creek Court, from Page Mill Road east to end
695
20
Foothill Lane, from Elena Road north to end
1,014
21
Fremont Pines Lane, from Fremont Road south to end
600
22
Fremont Road, from Arastradero Road to end
11,843
23
Horseshoe Court, from Arastradero Road south to end
465
24
Horseshoe Lane, Horseshoe Court west to end
828
25
La Barranca Road, from Purissima Road to Elena Road
2,080
26
La Cresta Court, from La Cresta Drive to end
870
27
La Cresta Drive, from south end to Arastradero Road
7,020
28
La Paloma Road from Fremont Road to Purissima Road
5,465
29
Liddicoat Drive & Circle
3,451
30
Lupine Road, from Page Mill Road west to end
1,179
31
Magdelena Avenue, from Eastbrook Avenue to Camino Hermoso
8,210
32
Manuella Road, from Fremont Road to Rancho Manuella Road
3,415
33
Moody Road, from Elena Road to Tanglewood Lane
7,130
34
Mora Drive, from Town Boundary to Town Boundary
1,491
35
Murietta Lane, from Moody Road south to end
870
36
Natoma Road, from Elena Road to Altamont Road
6,159
37
Newbridge Drive, from La Paloma east to end
780
38
Nina Place, from La Cresta Drive west to end
785
39
O'Keefe Lane, from EI Monte Road west to end
4,444
40
Page Mill Road, from Berry Hill Court to 935' north of Altamont Road
11,317
41
Paseo del Roble, from Page Mill Road to Page Mill Road
3,745
42
Purissima Road, from Robleda Road to Arastradero Road
9,558
43
Ravensbury Ave, from Magdalena Road to West Loyola
4,514
44
RobLe laedera
1,840
45
Roble Veneno Lane, from Conception Road west to end
330
46
Robleda Road, from Fremont Road to Elena Road
7,685
47
Stonebrook Drive, from EI Monte Road to Teresa Drive
3,740
48
Story Hill Lane, from Page Mill Road southwest to end
1,603
49
Summerhill Avenue, from EI Monte Road to Nicole Lane
900
50
Taaffe Road, from Elena Road to Altamont Road
4,692
51
Via Ventana, from Page Mill Road east to end
2,062
52
Viscaino Court
1,110
53
Viscaino Road, from Conception Road to Purissima Road
3,456
54
Via Serena, from O'Keefe Lane north to end
750
55
West Loyola Drive, from Eastbook Ave to Ravensbury Ave
4,762
56
Westwind Way, from Conception Road to La Paloma Road
1,070
---Totals
---- -- - - -
- --
196,829