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<br />88 <br />Page 31 <br /> <br />HUDSON BAYLOR - REVISED PROPOSAL <br />After being selected for negotiation, HBC set forth several alternatives and options for <br />consideration by SBWMA. In correspondence dated December 9,2008, HBC offered the final <br />revision of their proposal to include the following features and changes: <br /> <br />. Recommitment to Commodity Sales Revenue Guarantee of $10.1M annually, without <br />caveat. <br /> <br />. Revised MRF system design to eliminate 2- optical sorting units and 1- drum feeder <br />thereby reducing capital cost. <br /> <br />. The new MRF design adds the required dust collection, film plastic collection/baling, and <br />trash transfer conveyor (to TS). <br /> <br />. MRF operating costs have remained constant, though capital equipment has been <br />reduced. All material can be processed in a single-shift using 22 material sorters. <br /> <br />. After considering the use of other Transfer StationlTransportation sub-contractors, HBC <br />has opted to confirm their original selection of Waste Solutions Group (WSG). HBC <br />contends that WSG is well capable and competent to implement their proposed transfer <br />station / transportation management proposal. As a measure of confidence, HBCIWSG <br />will invite SBWMA to participate in the interview process for selection of its site <br />managers. <br /> <br />. By retaining WSG as TS/Transportation subcontractor, only minor changes in operating <br />costs are proposed. <br /> <br />. HBC has submitted a letter from JP Morgan Chase Bank that is not a commitment to <br />lend, yet indicates that the SBWMA project is consistent with the bank's lending <br />practices as they relate to HBC. Based on said letter, it is not clear that the entire 17.5M <br />is available for this project and as a result HBC's currently approved credit facilities may <br />not be sufficient to finance the acquisition of the MRF processing system, although the <br />company is confident of its ability to do so. <br /> <br />SBWMA . EC Report <br /> <br />Page <br />13 <br /> <br />1/15/2009 <br />