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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 10, 2002

CLEAN HARBORS, INC.
(Exact name of registrant as specified in charter)

Massachusetts                      0-16379                04-2997780
(State or other jurisdiction            (Commission           (I.R.S. Employer
of incorporation)                 File Number)         Identification No.)

1501 Washington Street
Braintree, Massachusetts                                           02184-7535
(Address of principal                                              (Zip Code)
executive offices)

Registrant's telephone number, including area code: (781) 849-1800 ext. 4454

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Item 2. Acquisition or Disposition of Assets.

Purchase of CSD Assets

On September 10, 2002, Clean Harbors, Inc. and certain of its wholly-owned
subsidiaries (collectively, the "Company") purchased the assets of the Chemical
Services Division (the "CSD") of Safety-Kleen Services, Inc. (the "Seller"). The
sale included the operating assets of 56 of the Seller's subsidiaries in the
United States and the stock of five of the Seller's subsidiaries in Canada (the
"CSD Canadian Subsidiaries"). The sale was made pursuant to a sales order issued
on June 18, 2002 by the Bankruptcy Court for the District of Delaware as part of
the proceedings under Chapter 11 of the Bankruptcy Code in which Safety-Kleen
Corp. ("Safety-Kleen") and 73 of its domestic subsidiaries (including the
Seller) have been operating since June 2000 as debtors in possession. The sales
order authorized the sale of the assets of the CSD to the Company free and clear
of all liens, claims, encumbrances and interests except for certain liabilities
and obligations assumed by the Company as part of the purchase price. Although
the sale closed on September 10, the Company and the Seller have agreed that for
tax and accounting purposes the sale shall be deemed to have occurred at 12:01
a.m. on Saturday, September 7.

The assets of the CSD (including the assets of the CSD Canadian
Subsidiaries) acquired by the Company consist primarily of 50 hazardous waste
treatment and disposal facilities including, among others, 21 service centers,
six wastewater treatment facilities, nine landfills and four incinerators. Such
facilities are located in 30 states, Puerto Rico and six Canadian provinces. The
most significant of such facilities include a landfill in Buttonwillow,
California with approximately 11.3 million cubic yards of remaining capacity, a
landfill in Westmorland, California with approximately 2.8 million cubic yards
of remaining capacity, a landfill in Lambton, Ontario with approximately 1.9
million cubic yards of remaining capacity which is the largest of the total of
three hazardous waste landfills in Canada, three rotary incinerators in Deer
Park, Texas which are collectively the largest capacity hazardous waste
incinerator in the United States, and an incinerator in Lampton, Ontario which
is the largest capacity hazardous waste incinerator in Canada. The acquired
assets do not include Safety-Kleen's Pinewood landfill in South Carolina, which
Safety-Kleen had previously operated as part of the CSD. The addition of the CSD
assets broaden the Company's geographic reach, particularly in the West Coast
and Southwest regions and in Canada and Mexico and make the Company the largest
operator of hazardous waste treatment and disposal facilities in North America.
The combined Company is expected to have annualized revenue of approximately
$750 million, approximately 4,400 employees, and approximately 38,000 customers
including a sizable majority of the Fortune 500.

In accordance with the Acquisition Agreement between the Seller and the
Company dated February 22, 2002, as amended through September 6, 2002, the
Company purchased the assets of the CSD for $34.3 million in cash and the
assumption of certain environmental liabilities valued at approximately $265
million. The cash portion of the purchase price is subject to adjustment based
upon the level of working capital of the CSD as of the closing date, as such
level will be determined subsequent to the closing. In addition to the cash
purchase price paid to the Seller, the Company also paid an aggregate of
$209,000 of cure costs (one-half of the total

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cure cots) to third parties in connection with the Company's assumption of
certain of the CSD's unexpired contracts and leases which the Company had
elected to assume.

Prior to the sale of the CSD assets to the Company, the largest single
customer of the CSD had been Safety-Kleen's Branch Sales and Services Division
(the "BSSD"), which primarily serves as a "front-end" collection agent for
approximately 400,000 clients in the industrial and commercial parts cleaning
and hazardous/non-hazardous waste market, particularly with regard to waste fuel
and solvent recovery and recycling. In connection with the Company's purchase of
the CSD assets, the Company and the Seller entered into a Master Waste Disposal
Agreement which will ensure, during the three-year term of the Agreement, that
the BSSD will continue to be able to rely upon the Company (which now owns the
facilities of the CSD) to provide hazardous waste treatment and disposal
services and that the Company will continue to have the BSSD as a major
customer.

Under Section 5.15 of the Acquisition Agreement as amended, the Company and
the Seller have agreed to certain non-competition and non-solicitation
provisions which are intended to separate the respective businesses of the
Company and the BSSD for a period of three years after the closing. Under such
Section, the Company and the Seller have also agreed during such period not to
recruit or otherwise solicit, with certain exceptions, any of their respective
employees to leave such employment.

Related Financings

In order to finance the cash portion of the purchase price for the CSD
assets, refinance all of the Company's previously outstanding debt, provide cash
collateral for letters of credit to support the financial assurances which the
Company must provide to governmental entities for the Company's licensed
hazardous waste facilities, pay transaction costs and provide for adequate
future working capital, the Company raised $280 million of total financings
(which amount includes $20 million of additional loans under the Ableco
Financing Agreement described below which closed within three days after the
initial closing of such Agreement on September 10, 2002). The $280 million of
total financings consist of a $100 million three-year revolving credit facility
(the "Revolving Credit Facility"), $115 million of three-year non-amortizing
term loans (the "Senior Loans"), $40 million of five-year non-amortizing
subordinated loans (the "Subordinated Loans"), and $25 million of Series C
convertible preferred stock ("Series C Preferred Stock"). In addition to such
financings, the Company has established a letter of credit facility (the "L/C
Facility") under which the Company may obtain up to $100 million of letters of
credit by providing cash collateral equal to 103% of the amount of such
outstanding letter of credit. The Company now has approximately $155 million of
outstanding debt and $50 million of restricted cash pledged or reserved as
collateral for letters of credit. Upon the issuance of additional letters of
credit in March 2003 to support financial assurances, the outstanding debt will
increase to approximately $200 million and the restricted cash will increase to
approximately $100 million.

The principal terms of the Revolving Credit Facility, the Senior Loans, the
Subordinated Loans, the Series C Preferred Stock and the L/C Facility are as
follows:

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Revolving Credit Facility. The Revolving Credit Facility was
established under a Loan and Security Agreement dated September 6, 2002 between
the Company and Congress Financial Corporation (New England) as Lender and as
Agent for the other Lenders thereunder. The Revolving Credit Agreement allows
the Company to borrow up to $100 million in cash and letters of credit, based
upon a formula of eligible accounts receivable. This total is separated into two
lines of credit, namely a line for the CSD Canadian Subsidiaries of $20 million
in Canadian dollars and a line for the Company and its US subsidiaries equal to
$100 million in US dollars less the then conversion value of the Canadian line.
Letters of credit outstanding at any one time under the Revolving Credit
Facility may not exceed $20 million. The Revolving Credit Facility allows for up
to 80% of the outstanding balance of the loans to bear interest at an annual
rate of LIBOR plus 3.0%, with the balance at prime. The Revolving Credit
Agreement requires the Company to pay an unused line fee of 0.25% per annum on
the unused portion of the revolving credit.

The Company's obligations under the Revolving Credit Facility are
secured by a first security interest in the Company's accounts receivable and a
second security interest in substantially all of the Company's other assets
(exclusive of real estate, rolling stock and cash collateral provided by the
Company to the issuer of the letters of credit under the L/C Facility). The
Revolving Credit Facility provides for certain covenants including, among
others, requiring the Company to maintain (i) consolidated annualized or rolling
four quarters earnings before interest, income taxes, depreciation and
amortization ("EBITDA") of not less than $56 million for purposes of calculating
the annualized EBITDA as of the completion of the fiscal quarter ending December
31, 2002 and increasing in approximately equal quarterly increments to not less
than $170 million for purposes of calculating the rolling four quarters EBITDA
as of the completion of the fiscal quarter ending December 31, 2007, and (ii) an
annualized or four quarters rolling fixed charge coverage ratio of not less than
0.65 to 1.0 for the fiscal quarter ending December 31, 2002 and increasing in
approximately equal quarterly increments to not less than 1.5 to 1.0 for each
fiscal quarter ending after December 31, 2004. The covenants generally provide
for annualized, rather than rolling four quarters, calculations for each of the
first four fiscal quarters commencing on and after October 1, 2002 because,
while the closing on September 10, 2002 of the financings related to the CSD
asset acquisition significantly increased the Company's level of total
outstanding debt and interest costs, the anticipated increases in the Company's
EBITDA resulting from the acquisition commenced only with the acquisition and
are not reflected in the Company's results of operations for prior periods of
2002.

Senior Loans and Subordinated Loans. Both the Senior Loans and the
Subordinated Loans were provided under a Financing Agreement dated September 6,
2002 (the "Ableco Financing Agreement") between the Company, the Lenders
thereunder and Ableco Finance LLC as Agent for the Lenders. The Senior Loans
bear interest at an annual rate of LIBOR plus 7.25%, and the Subordinated Loans
bear interest at an annual rate of 22.0% (of which up to one-half may be either
paid in cash or in kind at the Company's option).

The Senior Loans and the Subordinated Loans are secured by a first
security or mortgage interest in substantially all of the Company's assets,
except for second security interests in the Company's accounts receivable in
which the Agent under the Revolving Credit Facility has a first security
interest and the cash collateral provided by the Company to the issuer

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of letters of credit under the L/C Facility in which such issuer has a first
security interest. The Ableco Financing Agreement provides for certain covenants
including, among others, requiring the Company to maintain (i) consolidated
annualized or rolling four quarters EBITDA of not less than $56 million for
purposes of calculating the annualized EBITDA as of the completion of the fiscal
quarter ending December 31, 2002 and increasing in approximately equal quarterly
increments to not less than $170 million for purposes of calculating the rolling
four quarters EBITDA as of the completion of the fiscal quarter ending December
31, 2007, (ii) an annualized or rolling four quarters fixed charge coverage
ratio of not less than 0.65 to 1.0 for the fiscal quarter ending December 31,
2002 and increasing in approximately equal quarterly increments to not less than
1.5 to 1.0 for each fiscal quarter ending after December 31, 2004, and (iii) a
ratio of consolidated funded indebtedness to either consolidated annualized or
rolling four quarters EBITDA of not more than 3.5 to l.0 for the fiscal quarter
ending December 31, 2002 and decreasing in approximately equal quarterly
increments to not more than 1.5 to l.0 for each fiscal quarter ending on or
after December 31, 2004.

Series C Preferred Stock. The Series C Preferred Stock was issued by
the Company on September 10, 2002 to certain affiliates of the Lenders under the
Ableco Financing Agreement pursuant to a Securities Purchase Agreement dated
September 6, 2002 between the Company and such investors.

The Series C Preferred Stock provides for dividends at an annual rate
of 6% (which after the first year will accrue and compound), will be mandatorily
redeemable after seven years, and (together with accrued dividends thereon) will
be convertible at the holder's option into shares of the Company's common stock.
The conversion price will initially be $10.50 per share of common stock, subject
to customary adjustments for antidilution and potential reset to $8.00 per share
if both (i) the Company's Consolidated EBITDA for the year ending December 31,
2003 is less than $115 million and (ii) the average trading price for the
Company's common stock for the month of December 2003 is less than $27.50. In no
event, however, will the Company be obligated to issue more shares of common
stock upon the conversion of the Series C Preferred Stock than is permitted
under the rules and regulations of The Nasdaq Stock Market. Accordingly, unless
the Company's common stockholders shall in the future approve the issuance of a
greater number of common shares upon the conversion of the preferred shares, the
maximum number of common shares which may be issued upon conversion of the
Series C Preferred Stock will be limited to approximately 2,380,953 shares based
upon the $25 million purchase price for the Series C Preferred Stock and the
initial conversion price of $10.50 per share. To the extent (if any) that the
purchase price of the Series C Preferred Shares, plus the amount of any accrued
dividends, would otherwise be convertible into more than the number of shares
permitted under NASDAQ rules, and the Company's common stockholders shall not
have approved the issuance of the excess common shares, the Company will be
obligated to issue only that approximately 2,380,953 common shares and to pay in
cash to the holders of the Series C Preferred Stock the then market value of the
additional common shares which can not be issued because of the foregoing
limitation.

The terms of the Series C Preferred Stock provide for certain
covenants for the benefit of the holders thereof. Among other matters, without
the approval of the holders of a majority of the outstanding shares of Series C
Preferred Stock, the Company shall not be permitted to (i) pay

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cash dividends upon its outstanding common stock, (ii) incur indebtedness in
excess of indebtedness under the Revolving Credit Facility, the Ableco Financing
Agreement, the L/C Facility and certain other forms of permitted indebtedness,
(ii) merge or make material acquisitions or dispositions with certain
exceptions, (iii) create new classes of preferred stock, or (iv) amend its
charter in any manner which would have an adverse effect upon the holders of the
Series C Preferred Stock. Should the Company fail to comply with these covenants
and fail to cure the default within 30 days of notice from the holders of the
Series C Preferred Stock, (i) the dividend rate on the Series C Preferred Stock
would increase to 12% per annum until the later of (A) the six-month anniversary
of the covenant default or (B) the date on which such covenant default is cured
and (ii) the conversion price for the Series C Preferred Stock would decrease
(subject to potential subsequent adjustments to the conversion price as
described above) to an amount equal to either (A) $8.00 per share of common
stock if the conversion price in effect on the date of the covenant default is
greater than $8.00 per share of common stock, or (B) 90% of the conversion price
in effect on the date of the covenant default if the conversion price in effect
on the date of the covenant default is less than or equal to $8.00 per share of
common stock.

L/C Facility. The L/C Facility was established under a Letter of
Credit Facility Agreement dated September 6, 2002 between the Company and Fleet
National Bank ("Fleet"). The L/C Facility Agreement provides that Fleet will
issue up to $100 million of letters of credit at the Company's request provided
that the Company provides cash collateral equal to 103% of the amount of the
outstanding letters of credit (with the Company retaining the interest earned on
such cash collateral). The Company will pay Fleet's customary charges for the
issuance of such letters of credit plus an annual fee equal to 0.3% of the
outstanding amount thereof. The term of the L/C Facility will expire on
September 9, 2005.

Item 7. Financial Statements and Exhibits.

(a) Financial statements of businesses acquired.

Attached are audited balance sheets of the CSD, together with notes thereto
and a report thereon of Arthur Andersen LLP, as at the completion of each of
Safety-Kleen's three most recently completed fiscal years ended August 31, 2001,
2000, and 1999. For reasons discussed in Note 2 to such audited balance sheets
of the CSD, Safety-Kleen (which has been operating under Chapter 11 of the
Bankruptcy Code since June 2000) has not been able to deliver to the Company any
audited statements of income or cash flows of the CSD or related footnotes.
Accordingly, the Company is able to file with this Report the audited balance
sheets of the CSD and will be able to file, within 60 days hereafter by
amendment to this Report, an unaudited pro forma combined balance sheet of the
Company and the CSD as at the completion of the Company's most recent fiscal
year on December 31, 2001, but the Company will not be able to file any audited
statements of income or cash flows of the CSD or an unaudited pro forma combined
statement of operations for the Company and the CSD based thereon. By letter
dated February 22, 2002, the Commission's staff has provided, subject to the
terms described therein, "no-action" relief to the Company with respect to the
Company's inability to file audited statements of income or cash flows of the
CSD or an unaudited pro forma combined statement of operations of the Company
and the CSD based thereon.

(b) Pro forma financial information.

See Item 7(a) above.

(c) Exhibits.

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INDEX OF EXHIBITS

2.1   Acquisition Agreement by and between Safety-Kleen Services, Inc. as
Seller, and Clean Harbors, Inc., as Purchaser, dated as of February 22,
2002 [Incorporated by reference to Exhibit 2.1 to the Company's Report on
Form 8-K dated February 22, 2002]

2.2   First Amendment to Acquisition Agreement by and between Safety-Kleen
Services, Inc. as Seller, and Clean Harbors, Inc. as Purchaser, dated as
of March 8, 2002 [Incorporated by reference to Exhibit 2.2 to the
Company's Form 10-K Annual Report for the Year 2002]

2.3   Second Amendment to Acquisition Agreement by and between Safety-Kleen
Services, Inc. as Seller, and Clean Harbors, Inc. as Purchaser, dated as
of April 30, 2002 [Incorporated by reference to Exhibit 2.3 to the
Company's Form 10-Q Quarterly Report for the Quarterly Period ended March
31, 2002]

2.4   Third Amendment to Acquisition Agreement by and between Safety-Kleen
Services, Inc., as Seller, and Clean Harbors, Inc., as Purchaser, dated as
of September 6, 2002

3.3   Certificate of Vote of Directors Establishing a Class or Series of Stock
(Series C Convertible Preferred Stock) filed on September 9, 2002

4.24  Loan and Security Agreement dated September 6, 2002 by and among Congress
Financial Corporation (New England) as Agent, Congress Financial
Corporation (New England), and the other financial institutions party
thereto from time to time as Lenders, and Clean Harbors, Inc. and its
Subsidiaries as Borrowers

4.25  Financing Agreement dated as of September 6, 2002 by and among Clean
Harbors, Inc., certain of its Subsidiaries signatory thereto, as
Borrowers, certain of its Subsidiaries signatory thereto, as Guarantors,
the Financial Institutions from time to time party thereto, as Lenders,
and Ableco Finance LLC, as Agent

4.26  Letter of Credit Facility, Reimbursement and Security Agreement dated as
of September 6, 2002 by and between Clean Harbors, Inc. and Fleet National
Bank

4.27  Deposit Account Control and Intercreditor Agreement dated as of September
6, 2002 by and among Clean Harbors, Inc., Fleet National Bank, in its
capacity as issuer of letters of credit under the Fleet Facility Agreement
and as depositary bank, and Ableco Finance LLC, in its capacity as agent
for lenders under the Ableco Financing Agreement

10.44 Master Waste Disposal Agreement dated as of September 10, 2002 by and
between Safety-Kleen Services, Inc., and Clean Harbors Environmental
Services, Inc.

10.45 Bill of Sale and Assignment dated as of September 10, 2002 by Safety-Kleen
Services, Inc. and its Subsidiaries named therein, as Sellers, and Clean
Harbors, Inc., as Purchaser, and its Subsidiaries named therein, as
Purchasing Subs

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10.46 Assumption Agreement made as of September 10, 2002 by Clean Harbors, Inc.
in favor of Safety-Kleen Services, Inc. and its Subsidiaries named therein

10.47 Securities Purchase Agreement dated September 6, 2002 among Clean Harbors,
Inc. and the Buyers listed on Schedule A thereto

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Clean Harbors, Inc.
(Registrant)

/s/ Alan S. McKim
September 25, 2002                     ----------------------------------------
Chairman of the Board of Directors,
President and Chief Executive Officer

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Chemical Services Division of Safety-Kleen Corp.
(Debtors-in-Possession As of June 9, 2000)

Combined Balance Sheets
At August 31, 2001, 2000 and 1999
Together with Report of Independent Public Accountants

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Safety-Kleen Corp.:

We have audited the accompanying combined balance sheets of the Chemical
Services Division of Safety-Kleen Corp., (the "Company" - see Note 1), at August
31, 2001, 2000, and 1999. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the balance sheets are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the balance sheets. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the combined balance sheets referred to above present fairly, in
all material respects, the financial position of the Chemical Services Division
of Safety-Kleen Corp, at August 31, 2001, 2000, and 1999, in conformity with
accounting principles generally accepted in the United States.

As discussed in Note 2, the Company was unable to prepare and present combined
statement of operations and cash flow data for the three years ended August 31,
2001, in accordance with accounting principles generally accepted in the United
States. Therefore, we are unable to express, and we do not express, an opinion
on the Company's statements of operations, cash flows or changes in net parent
company investment for the three years ended August 31, 2001.

The accompanying combined balance sheets have been prepared assuming that the
Company will continue as a going concern. As discussed in Notes 1 and 2 to the
combined balance sheets, on June 9, 2000, Safety-Kleen Corp. and certain of its
subsidiaries (including all of the Company's domestic operations), collectively
referred to as the "Debtors", each filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code and continue to operate their
respective businesses as debtors-in-possession. The Debtors' plans in regard to
these matters, including their intent to file a plan of reorganization
acceptable to the Bankruptcy Court and the creditors, are also described in
Notes 1 and 2. These matters, among others, raise substantial doubt about the
Company's ability to continue as a going concern. In the event a plan of
reorganization is accepted, continuation of the business thereafter is dependent
on the Company's ability to achieve successful future operations. The
accompanying combined balance sheets do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.

ARTHUR ANDERSEN LLP

Charlotte, North Carolina
April 11, 2002

2

CHEMICAL SERVICES DIVISION OF SAFETY-KLEEN CORP.
(DEBTORS-IN-POSSESSION AS OF JUNE 9, 2000 - NOTE 1)
COMBINED BALANCE SHEETS
($ in thousands)

August 31,
--------------------------------------
2001       2000           1999
----       ----           ----

ASSETS:
Current assets:
Cash and cash equivalents                                 $       477  $      321    $     1,194
Accounts receivable, net                                       99,375     144,754        133,840
Inventories and supplies                                        7,143       7,988          9,808
Deferred income taxes                                           4,153       1,775         11,594
Other current assets                                           10,769      12,276         25,267
-----------  ----------    -----------
Total current assets                                       121,917     167,114        181,703
-----------  ----------    -----------
Property, plant and equipment, net                              240,160     262,181        565,784
Intangible assets, net                                          333,358     347,192        447,056
Other assets                                                     23,451      33,667         49,566
===========  ==========    ===========
Total assets                                           $   718,886  $  810,154    $ 1,244,109
===========  ==========    ===========
LIABILITIES AND PARENT COMPANY INVESTMENT, NET:
Current liabilities:
Accounts payable                                          $    19,128  $   31,050    $    69,664
Current portion of environmental liabilities                   32,114      27,385         28,568
Income taxes payable                                            9,058       3,584          6,145
Unearned revenue                                               11,730      20,637         20,895
Accrued other liabilities                                      32,575      18,296         33,584
Current portion of long-term debt                              21,778      22,897        812,368
-----------  ----------    -----------
Total current liabilities                                  126,383     123,849        971,224
-----------  ----------    -----------
Environmental liabilities                                       276,841     232,317        190,512
Deferred income taxes                                            47,711      44,552         45,625
Other long-term liabilities                                       4,257       1,729          1,403
Long-term debt and other financing                                   --          --         16,050
Liabilities subject to compromise                               959,079     963,354             --
Commitments and contingencies (Note 10)
Parent company investment, net                                 (695,385)   (555,647)        19,295
===========  ==========    ===========
Total liabilities and parent company investment,net    $   718,886  $  810,154    $ 1,244,109
===========  ==========    ===========

See accompanying Notes to Combined Balance Sheets.

3

CHEMICAL SERVICES DIVISION OF SAFETY-KLEEN CORP.
NOTES TO COMBINED BALANCE SHEETS

1. BUSINESS, ORGANIZATION AND BANKRUPTCY

Organization and Safety-Kleen

Safety-Kleen Corp. was incorporated in Delaware in 1978 as Rollins Environmental
Services, Inc. ("Rollins"), later changed its name to Laidlaw Environmental
Services, Inc. ("LESI") and subsequently changed its name to Safety-Kleen Corp.

On May 15, 1997, pursuant to a stock purchase agreement among Rollins, Laidlaw
Inc., a Canadian corporation ("Laidlaw"), and its subsidiary, Laidlaw
Transportation Inc. ("LTI"), Rollins acquired the hazardous and industrial waste
operations of Laidlaw (the "Rollins Acquisition"). As a result of the Rollins
Acquisition, Laidlaw owned 67% of the issued and outstanding common shares of
LESI. Accordingly, the business combination was accounted for as a reverse
acquisition using the purchase method of accounting, with Rollins being treated
as the acquired company. Coincident with the closing of the Rollins Acquisition,
the continuing legal entity changed its name from Rollins Environmental
Services, Inc. to Laidlaw Environmental Services, Inc.

On May 26, 1998, LESI completed the acquisition of the former Safety-Kleen Corp.
("Old Safety-Kleen"). Effective July 1, 1998, LESI began doing business as
Safety-Kleen Corp. and its stock began trading on the New York Stock Exchange
("NYSE") under the name Safety-Kleen Corp. and the ticker symbol SK. The stock
was suspended from trading on the NYSE and the Pacific Exchange, Inc. ("PCX") on
June 12, 2000 and removed from listing and registration on the NYSE on July 20,
2000, and the PCX on September 29, 2000. The stock now trades over the counter
as SKLNQ.

Safety-Kleen Corp. through its subsidiaries (collectively, "Safety-Kleen"),
provides a range of services designed to collect, transport, process, recycle or
dispose of hazardous and non-hazardous industrial and commercial waste streams.
Safety-Kleen provides these services through its two primary operating divisions
- the Chemical Services Division and the Branch Sales and Service Division
("BSSD").

Support services consisting primarily of legal, accounting, finance and
information technology are provided to the operating divisions through Safety
Kleen's corporate division ("Corporate"). As further discussed in Note 2,
certain assets and liabilities in the Combined Balance Sheets include
allocations, primarily from Corporate.

Chemical Services Division

The accompanying Combined Balance Sheets of the Chemical Services Division (the
"Company") at August 31, 2001, 2000 and 1999, have been presented on a carve-out
basis. The Company operates approximately 100 primary and satellite locations
from which it provides waste management services in North America. The services
offered consist primarily of the collection, treatment and disposal of a wide
variety of hazardous or non-hazardous liquid and solid wastes, in drum, tanker
or roll-off containers from customer locations. The Company provides final
treatment and disposal services for hazardous and non-hazardous wastes, through
the Company's network of thermal destruction incinerators, landfills and
wastewater treatment facilities, in certain instances after accumulating and
treating waste at service centers.

The Company is comprised of specific internal business units of Safety-Kleen,
included within certain domestic, Canadian and Mexican subsidiaries.

On February 22, 2002, Safety-Kleen entered into a definitive agreement with
Clean Harbors, Inc. ("Clean Harbors") to sell certain net assets of Safety-Kleen
including certain net assets of the Company. Pursuant to the terms of the
agreement, Clean Harbors would purchase the defined net assets, excluding
Safety-Kleen (Pinewood), Inc. (the "Pinewood Facility") and certain allocated
assets and liabilities of the Company, from Safety-Kleen for $46.3 million in
cash, subject to defined working capital adjustments, and the assumption of
certain liabilities, including environmental liabilities. The book value of the
net assets to be sold, net of the liabilities to be assumed, at August 31, 2001
was in excess of $300 million. On March 8, 2002, the Bankruptcy Court approved
the bidding and auction procedures for the sale. Pursuant to the bidding
procedures, all qualified bidders interested in purchasing some of all of the
aforementioned net assets must submit an alternative qualified bid on or before
May 20, 2002. There can be no assurance that the Bankruptcy Court and/or the
various regulatory agencies will approve the sale to Clean Harbors or an
alternative purchaser, or that Safety-Kleen will be able to complete the sale.

Safety-Kleen Bankruptcy

On June 9, 2000, Safety-Kleen Corp. and 73 of its domestic subsidiaries
(collectively, the "Debtors"), including all of the Company's domestic
operations, filed voluntary petitions for relief (the "Chapter 11 Cases") under
Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. (SS) 101-1330, as
amended (the "Bankruptcy Code") in the United States Bankruptcy Court for the
District of Delaware (the "Bankruptcy Court"). The Chapter 11 Cases are being
jointly administered for procedural purposes only before the Bankruptcy Court
under case No. 00-2303 (PJW). Excluded from the filing were certain of
Safety-Kleen Corp.'s non wholly-owned domestic subsidiaries and all Safety-Kleen
Corp.'s indirect foreign subsidiaries, including all of the Company's Canadian
operations. See Note 15 for Condensed Combined Balance Sheets of entities in
bankruptcy.

4

The Debtors remain in possession of their properties and assets, and the
management of the Debtors continues to operate their respective businesses as
debtors-in-possession under Sections 1107 and 1108 of the Bankruptcy Code. As
debtors-in-possession, the Debtors are authorized to manage their properties and
operate their businesses, but may not engage in transactions outside the
ordinary course of business without the approval of the Bankruptcy Court.

Under Section 365 of the Bankruptcy Code, subject to the approval of the
Bankruptcy Court, the Debtors may assume or reject executory contracts and
unexpired leases. Parties affected by these rejections may file proofs of claim
with the Bankruptcy Court in accordance with the reorganization process. Claims
for damages resulting from the rejection of executory contracts or unexpired
leases will be subject to separate bar dates, generally thirty days after entry
of the order approving the rejection. At various times since the commencement of
the Chapter 11 Cases, the Bankruptcy Court has approved the Debtors' requests to
reject certain contracts or leases that were deemed burdensome or of no further
value to the Company. As of April 11, 2002, the Debtors had not yet completed
their review of all contracts and leases for assumption or rejection, but
ultimately will assume or reject all such contracts and leases. The Debtors have
until the confirmation of a plan or plans of reorganization to assume or reject
executory contracts, nonresidential real property leases, and certain other
leases. The Debtors cannot presently determine or reasonably predict the
ultimate liability that may result from rejecting such contracts or leases or
from the filings of rejection damage claims, but such rejections could result in
additional liabilities subject to compromise (see Note 8).

Consummation of a plan or plans of reorganization is the principal objective of
the Chapter 11 Cases. A plan of reorganization sets forth the means for
satisfying claims against and interests in the Debtors, including the
liabilities subject to compromise. Generally, pre-petition liabilities are
subject to settlement under such a plan or plans of reorganization, which must
be voted upon by creditors and equity holders and approved by the Bankruptcy
Court. The Debtors have retained Lazard Freres & Co. LLC, an investment bank, as
corporate restructuring advisor to assist them in formulating and negotiating a
plan or plans of reorganization for the Debtors. Although the Debtors expect to
file a reorganization plan or plans as soon as reasonably possible, there can be
no assurance that a reorganization plan or plans will be proposed by the Debtors
or confirmed by the Bankruptcy Court, or that any such plan or plans will be
consummated.

As provided by the Bankruptcy Code, the Debtors initially had the exclusive
right to submit a plan or plans of reorganization for 120 days from the date the
petitions were filed. On October 17, 2000, the Debtors received Bankruptcy Court
approval to extend the exclusive period to file a plan or plans of
reorganization in the Chapter 11 Cases from October 7, 2000, to April 30, 2001,
and extended the Debtors' exclusive right to solicit acceptances of such plan or
plans from December 6, 2000, to June 29, 2001. On May 16, 2001, the Debtors
received Bankruptcy Court approval to further extend the exclusive period to
file a plan or plans of reorganization in the Chapter 11 Cases to September 19,
2001, and extended the Debtors' exclusive right to solicit acceptances of such
plan or plans to November 19, 2001. On February 11, 2002, the Debtors received
Bankruptcy Court approval to further extend the exclusive period to file a plan
or plans of reorganization in the Chapter 11 Cases to April 30, 2002 and
extended the Debtors' exclusive right to solicit acceptances of the plan or
plans to June 30, 2002.

Currently, it is not possible to predict the length of time the Debtors will
operate under the protection of Chapter 11, the outcome of the Chapter 11
proceedings in general, or the effect of the proceedings on the business of
Safety-Kleen or on the interests of the various creditors and security holders.
Under the Bankruptcy Code, post-petition liabilities and pre-petition
liabilities subject to compromise must be satisfied before shareholders can
receive any distribution. The ultimate recovery to Safety-Kleen Corp.
shareholders, if any, will not be determined until the end of the case when the
fair value of the Debtors' assets is compared to the liabilities and claims
against the Debtors. There can be no assurance as to what value, if any, will be
ascribed to the Safety-Kleen Corp. common stock in the bankruptcy proceedings.
Safety-Kleen Corp. does not believe that their common shareholders will receive
any distribution upon consummation of a plan or plans of reorganization.

Certain of Safety-Kleen Corp.'s domestic subsidiaries which filed the Chapter 11
Cases are included in the accompanying Combined Balance Sheets.

2. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the basis of presentation and the significant accounting policies
followed in the preparation of these Combined Balance Sheets is as follows:

Basis of Presentation

The accompanying Combined Balance Sheets of the Company have been prepared on a
going concern basis, which contemplates continuity of operations, realization of
assets, and payment of liabilities in the ordinary course of business, and do
not reflect adjustments that might result if the Company is unable to continue
as a going concern. The Debtors' history of significant losses, stockholders'
deficit and their Chapter 11 filings, as well as issues related to compliance
with debt covenants and financial assurance requirements discussed in Notes 7
and 10, raise substantial doubt about the Company's ability to continue as a
going concern. The Debtors intend to file a plan or plans of reorganization with
the Bankruptcy Court. Continuing as a going concern is dependent upon, among
other things, the Debtors' formulation of a plan or plans of reorganization, the
success of future business operations, and the generation of sufficient cash
from operations and financing sources to meet Debtors' obligations. The
accompanying Combined Balance Sheets do not reflect: (i) the realizable value of
assets on a liquidation basis or their availability to satisfy liabilities; (ii)
aggregate pre-petition liability amounts that may be allowed for unrecorded
claims or contingencies, or their status or priority; (iii) the effect of any
changes to the Company's capital structure or in the Company's business
operations as the result of an approved plan or plans of reorganization; or (iv)
adjustments to the carrying value of assets (including goodwill and other
intangibles) or liability amounts that may be necessary as a result of actions
by the Bankruptcy Court.

5

The Company's Combined Balance Sheets at August 31, 2001 and 2000 have been
presented in conformity with the AICPA's Statement of Position 90-7, "Financial
Reporting By Entities in Reorganization Under the Bankruptcy Code", ("SOP
90-7"). This statement requires, among other things, a segregation of
liabilities subject to compromise by the Bankruptcy Court as of the bankruptcy
filing date and identification of all transactions and events that are directly
associated with the reorganization of the Debtors. In recording liabilities
subject to compromise, the Company must make certain estimates relating to the
amounts it expects to be allowed in the bankruptcy proceeding. The actual
amounts required to settle these claims could significantly differ from the
amounts currently recorded.

The accompanying Combined Balance Sheets of the Company at August 31, 2001, 2000
and 1999 have been presented on a carve-out basis. As further discussed below,
certain assets and liabilities in the Combined Balance Sheets include
allocations, primarily from Corporate. Management believes that the allocations
are made on a reasonable basis; however, the Combined Balance Sheets may not
necessarily reflect the financial position of the Company if the Company had
been a separate, stand-alone entity during the periods presented.

Accounting principles generally accepted in the United States and the
regulations of the Securities and Exchange Commission ("SEC") require the
inclusion of a statement of operations, cash flows and changes in stockholders'
equity. As reported in Safety-Kleen's Form 10-K/A filed with the SEC,
Safety-Kleen Corp. and the Company have identified material deficiencies in many
of the financial systems, processes and related internal controls. As a result,
the Company is unable to prepare, for audit, a combined statement of operations,
combined statement of cash flows, combined statement of changes in parent
company investment, net or an abbreviated statement of operations such as a
statement of revenues and direct expenses. The parent company investment, net in
the accompanying Combined Balance Sheets includes the net intercompany balances,
including those subject to compromise (see Note 8).

Combination

The accompanying Combined Balance Sheets include the accounts of the Company.
All significant intracompany balances have been eliminated as part of the
combination. All intercompany balances are included as a component of parent
company investment, net in the accompanying Combined Balance Sheets.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on deposit and term deposits in
investments with initial maturities of three months or less. These investments
are stated at cost, which approximates market value.

Restricted Funds Held By Trustees

Restricted funds held by trustees are included in other assets and consist
principally of financial assurance funds deposited in connection with landfill
final closure and post-closure obligations, amounts held for landfill and other
construction arising from industrial revenue financings, and amounts held to
establish a GSX Contribution Fund for the Pinewood Facility (see Note 10). These
amounts are principally invested in fixed income securities of federal, state
and local governmental entities and financial institutions.

The Company considers its landfill closure, post-closure, construction and
escrow investments totaling $2.0 million, $12.4 million and $13.0 million at
August 31, 2001, 2000 and 1999, respectively, to be held to maturity. The
Company has the ability, and management has the intent, to hold investment
securities to maturity. Reductions in market value considered by management to
be other than temporary are reported as a realized loss and reduction in the
cost basis of the security. At August 31, 2001, 2000 and 1999 the aggregate fair
value of these investments approximate their net book value and substantially
all of these investments mature within one year. The GSX Contribution Fund for
the Pinewood Facility totaling $20.2 million, $19.1 million and $18.3 million at
August 31, 2001, 2000 and 1999, respectively, has been treated as if it were
available for sale (see Note 10). Accordingly, unrealized gains and losses
resulting from changes between the cost basis and fair value of the securities
in this fund are recorded as adjustments to parent company investment, net.

Inventories and Supplies

Inventories consist primarily of supplies and repair parts, which are valued at
the lower of cost or market as determined on a first-in, first-out basis. The
Company periodically reviews its inventories for obsolete or unsaleable items
and adjusts its carrying value to reflect estimated realizable values.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost. Expenditures for major
renewals and improvements, which extend the life or usefulness of the asset, are
capitalized. Items of an ordinary repair or maintenance nature, as well as major
maintenance activities, are charged directly to operating expense as incurred.
The Company capitalizes expenditures which extend the life of the related
property or mitigate or prevent future environmental contamination.

During the construction and development period of an asset, the costs incurred,
including applicable interest costs, are classified as construction-in-process.
Once an asset has been completed and placed in service, it is transferred to the
appropriate category and depreciation

6

commences. In addition, the Company capitalizes applicable interest costs
associated with partially developed landfill sites, which are included in land,
landfill sites and improvements (see Note 4).

Depreciation and amortization of certain property, plant and equipment is
provided on a straight-line basis over their estimated useful lives, with the
exception of landfill assets, for which depreciation and amortization are
provided on a units of production or capacity basis. Leasehold improvements are
capitalized and amortized over the shorter of the improvement life or the
remaining term of the lease plus renewal period.

Intangible Assets

The Company evaluates the excess of the purchase price over the amounts assigned
to tangible assets and liabilities (excess purchase price) associated with each
of its acquisitions to value the identifiable intangible assets. Any portion of
the excess purchase price that cannot be separately identified represents
goodwill. The Company evaluates the estimated economic lives of each asset,
including goodwill, and has amortized the asset over that life.

Permits -- The Company has reflected the excess of the fair value of
non-landfill facilities over the tangible assets acquired as permits. The
Company has determined the value of acquired permits based on either a
discounted cash flow or other appraisal method. The Company has evaluated and
determined that the non-landfill permits have estimated economic lives in excess
of 40 years, but believes 40 years is appropriate for amortization of these
assets. Accordingly, the Company is amortizing the value of permits over a
period of 40 years.

Goodwill -- The remaining excess purchase price of acquired companies, following
the allocation to permits and the identified intangible assets discussed above,
has been classified as goodwill. The Company considers legal, contractual,
regulatory, obsolescence and competitive factors in determining the useful life
and amortization period of this intangible asset. The Company believes the
goodwill associated with the acquired companies has estimated lives ranging from
40 years to an undeterminable life. As such, the Company has amortized the
goodwill over 40 years.

Goodwill is reviewed for impairment when events or circumstances indicate it may
not be recoverable. If it is determined that goodwill may be impaired and the
estimated undiscounted future cash flows, excluding interest, of the underlying
business are less than the carrying amount of the goodwill, then an impairment
loss is recognized. The impairment loss is based on the difference between the
fair value of the underlying business and the carrying amount. The method of
determining fair value differs based on the nature of the underlying business.

Impairment of Long-Lived Assets

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to Be
Disposed Of", the Company periodically evaluates whether events and
circumstances have occurred that indicate that the remaining useful life of any
of its tangible and intangible assets may warrant revision or that the carrying
amounts might not be recoverable. When factors indicate that the tangible and
intangible assets should be evaluated for possible impairment, the Company uses
an estimate of the future undiscounted cash flows generated by the underlying
assets to determine if a write-down is required. If a write-down is required,
the Company adjusts the book value of the underlying goodwill and then the book
value of the impaired long-lived assets to their estimated fair values (see Note
4).

Deferred Financing Costs

Deferred financing costs of $0.4 million at August 31, 1999 have been recorded
for borrowings directly related to the Company. Additional deferred financing
costs have been allocated to the Company to the extent and in the same manner as
the underlying allocated debt instruments. See allocation methodology summary
and debt instrument allocation below. Deferred financing costs are amortized
over the life of the related debt instrument and are included in other assets in
the accompanying Combined Balance Sheets at August 31, 2001, 2000 and 1999. As a
result of the Chapter 11 Cases discussed in Note 1, deferred financing costs at
the date of the filing of $14.8 million related to pre-petition debt instruments
were written off.

Landfill Accounting and Environmental Liabilities

Environmental liabilities include accruals for the estimates of the Company's
obligations associated with:

.    Regulatory mandated landfill cell closure, final closure and post-closure
activities. The Company accrues cell closure costs over the life of the
cell, and accrues final closure and post-closure costs over the life of the
landfill, as capacity is consumed.

.    Regulatory mandated closure and post-closure activities for facilities
other than landfills, such as incinerators. The Company accrues these costs
when management commits to a definitive plan of closure with respect to the
facility.

.    Costs associated with remedial environmental matters at the Company's
facilities. The Company accrues for these costs on a site-by-site basis,
when management deems such obligations to be probable and reasonably
estimable.

7

.    Sites named on the United States Environmental Protection Agency's National
Priorities List ("Superfund") with which the Company is allegedly
connected. The Company typically accrues its estimate of its obligations
related to these sites no later than the completion of a remedial
investigation and/or feasibility study.

Accruals are adjusted if, and as, further information relative to the underlying
obligations develop or circumstances change. Changes in estimated landfill cell
closure, final closure and post-closure liabilities are recognized
prospectively. Changes in the Company's estimates of its obligations relative to
non-landfill closure and post-closure activities, remedial situations and
Superfund sites are recorded in the period in which the estimates change.

In conjunction with the acquisitions of certain facilities, the Company has
obtained varying amounts and types of indemnification from potential
environmental liabilities existing at the time of acquisition. Such indemnities
typically cover all or a portion of the costs associated with the remediation of
such pre-existing environmental liabilities, and may be for a limited period of
time. No liabilities are recorded at the acquisition date if it is probable that
the indemnifying party has the intent and financial ability to perform under
those indemnities. Indemnifications contractually required of Laidlaw have not
been considered in the determination of the Company's environmental liabilities
(see Note 14).

Site costs -- Site costs include the costs of landfill site acquisition,
permitting, preparation and improvement. These amounts are recorded at cost,
which includes capitalized interest, as applicable. Site costs, net of
amortization, are combined with management's estimate of the costs required to
complete construction of the landfill to determine the amount to be amortized
over the remaining estimated useful economic life of a site. Amortization of
site costs is recorded on a units-of-consumption basis, such that the site costs
should be completely amortized at the date the landfill ceases accepting waste.

Final closure and post-closure obligations for landfills -- Final closure costs
include the costs required to cap the final cell of the landfill and the costs
required to dismantle certain structures for landfills and other landfill
improvements. In addition, final closure costs include regulatory mandated
groundwater monitoring, leachate management, financial assurance and other costs
incurred in the closure process. Post-closure costs include substantially all
costs that are required to be incurred subsequent to the closure of the
landfill, including, among others, groundwater monitoring, leachate management,
and financial assurance. Regulatory post-closure periods are generally 30 years
after landfill closure, but may be as long as 100 years after landfill closure.
Final closure and post-closure obligations are discounted. Final closure and
post-closure obligations are accrued on a units-of-consumption basis, such that
the present value of the final closure and post-closure obligations is accrued
at the date the landfill discontinues accepting waste.

Landfill capacity -- Landfill capacity, which is the basis for the amortization
of site costs and for the accrual of final closure and post-closure obligations,
represents total permitted airspace, plus unpermitted airspace that management
believes is probable of ultimately being permitted based on established
criteria. The Company applies a comprehensive set of criteria for evaluating the
probability of obtaining a permit for future expansion airspace at existing
sites, which provides management a sufficient basis to evaluate the likelihood
of success of unpermitted expansions. Those criteria are as follows:

.    Personnel are actively working to obtain the permit or permit modifications
(land use, state and federal) necessary for expansion of an existing
landfill, and progress is being made on the project;

.    At the time the expansion is included in the Company's estimate of the
landfill's useful economic life, it is probable that the required approvals
will be received within the normal application and processing time periods
for approvals in the jurisdiction in which the landfill is located. The
Company expects to submit the application within the next year and expects
to receive all necessary approvals to accept waste within the next five
years;

.    The owner of the landfill or the Company has a legal right to use or obtain
land associated with the expansion plan;

.    There are no significant known political, technical, legal, or business
restrictions or issues that could impair the success of such expansion;

.    A financial feasibility analysis has been completed, and the results
demonstrate that the expansion has a positive financial and operational
impact such that management is committed to pursuing the expansion; and

.    Additional airspace and related additional costs, including permitting,
final closure and post-closure costs, have been estimated based on the
conceptual design of the proposed expansion.

Exceptions to the criteria set forth above may be approved through a
landfill-specific approval process that includes prompt approval from
Safety-Kleen's Chief Financial Officer and review by the Audit Committee of the
Board of Directors of Safety-Kleen. At August 31, 2001, 2000 and 1999, there
were two unpermitted expansions included in the Company's landfill accounting
model, which together represented approximately 1% of the Company's remaining
airspace at these dates. Neither of these expansions represented exceptions to
the Company's established criteria.

8

At August 31, 2001, the Company has 10 active landfill sites (including the
Company's non-commercial landfill), which have estimated remaining lives (based
on anticipated waste volumes) and property, plant and equipment, net as follows
($ in thousands):

Remaining        Number of     Property, plant
lives (years)        sites      and equipment, net
-------------      ---------    ------------------
0-5                   3    $           18,910
6-10                 --                    --
11-20                  4                40,803
21-40                 --                    --
40 +                  3                16,862
---------    ------------------
10    $           76,575
---------    ------------------

Amortization of cell construction costs and accrual of cell closure obligations
-- Landfills are typically comprised of a number of cells, which are constructed
within a defined acreage (or footprint). The cells are typically discrete units,
which require both separate construction and separate capping and closure
procedures. Cell construction costs are the costs required to excavate and
construct the landfill cell. These costs are typically amortized on a
units-of-consumption basis, such that they are completely amortized when that
specific cell ceases accepting waste. Cell closure costs, which are the costs
required to construct the cell cap, are accrued over the life of the cell. These
costs are typically accrued on a units-of-consumption basis, such that the total
amount required to cap the cell is accrued when the specific cell ceases
accepting waste. In some instances, the Company has landfills that are
engineered and constructed as "progressive trenches." In progressive trench
landfills, a number of contiguous cells form a progressive trench. In those
instances, the Company amortizes cell construction costs, and accrues cell
closure obligations, over the airspace within the entire trench, such that the
cell construction costs will be fully amortized, and the cell closure costs will
be fully accrued, when that specific progressive trench ceases accepting waste.

Final closure and post-closure obligations for facilities other than landfills
-- Final closure costs include costs required to dismantle and decontaminate
certain structures, financial assurance and other costs incurred during the
closure process. Post-closure costs, if required, include associated maintenance
and monitoring costs and financial assurance costs as required by the closure
permit. Post-closure periods are performance based and are not generally
specified in terms of years in the closure permit, but may generally range from
10 to 30 years or more. These obligations generally are not discounted.

Remedial liabilities, including Superfund liabilities -- Remedial liabilities
include the costs of removal or containment of contaminated material, the
treatment of potentially contaminated groundwater and maintenance and monitoring
costs necessary to comply with regulatory requirements.

Discounting of long-term environmental related liabilities -- Costs of future
expenditures for landfill final closure and post-closure are discounted based on
management's expectations of when it will incur the expenditure. Generally,
remediation obligations are not discounted. However, in limited instances,
certain remediation obligations are discounted if they are closely connected to
the regulatory post-closure obligations and/or the amount and timing of the cash
payments are fixed and reliably determinable.

Credit Concentration

Concentration of credit risks in accounts receivable is limited due to the large
number of customers comprising the Company's customer base throughout North
America. The Company performs periodic credit evaluations of its customers. The
Company establishes an allowance for uncollectible accounts based on the credit
risk applicable to particular customers, historical trends and other relevant
information.

Revenue Recognition

The Company recognizes revenue in accordance with SEC Staff Accounting Bulletin
("SAB") No. 101, "Revenue Recognition in Consolidated Financial Statements." SAB
No. 101 requires that four basic criteria must be met before revenue can be
recognized: (i) persuasive evidence of an arrangement exists; (ii) delivery has
occurred or services have been rendered; (iii) the fee is fixed and
determinable; and (iv) collectibility is reasonably assured.

In accordance with SAB No. 101, the Company recognizes revenue upon disposal for
its waste collection and disposal activities. Unearned revenue has been recorded
for services billed but not earned in the accompanying Combined Balance Sheets.
Direct costs associated with the handling and transportation of waste prior to
disposal are capitalized as a component of other current assets in the
accompanying Combined Balance Sheets. Deferral periods related to unearned
revenue and the related direct costs typically range from one to six months.

Income Taxes

The Company's domestic operating results are included in Safety-Kleen's
consolidated income tax returns. Certain of the Company's Canadian operations
file separately for tax purposes. Income taxes have been presented in the
accompanying Combined Balance Sheets as if the Company's domestic operations
filed its returns on a consolidated basis. Current tax liabilities are presented
as if such obligations are due

9

to taxing authorities. Deferred income taxes reflect the tax consequences on
future years of differences between the tax bases of assets and liabilities and
their financial reporting amounts. Future tax benefits, such as net operating
loss carryforwards, are recognized to the extent that realization of such
benefits is more likely than not.

Foreign Currency

Foreign operations' balances are translated according to the provisions of SFAS
No. 52, "Foreign Currency Translation". The functional currency of each foreign
operation is in its respective local currency. Assets and liabilities are
translated to U.S. Dollars at the exchange rate in effect at the balance sheet
date. Cumulative translation adjustments are included in parent company
investment, net in the accompanying Combined Balance Sheets. Recorded balances
that are denominated in a currency other than the functional currency are
adjusted to the functional currency using the exchange rate at the balance sheet
date.

Allocation Methodology

The accompanying Combined Balance Sheets of the Company at August 31, 2001, 2000
and 1999, have been presented on a carve-out basis. For all periods presented,
certain assets and liabilities in the Combined Balance Sheets include
allocations, primarily from Corporate. To the extent that an asset or liability
is identifiable and directly related to the Company, it is reflected in the
accompanying Combined Balance Sheets. For assets and liabilities that are
indirectly related to the Company, management has developed reasonable methods
to allocate these assets and liabilities. Assets or liabilities that exclusively
relate to corporate level activities are not allocated to the Company. All of
the allocations and estimates in the Combined Balance Sheets are based on
assumptions that management believes are reasonable under the circumstances.
However, the financial information included herein may not reflect the financial
position of the Company in the future or what it would have been had the Company
been a separate, stand-alone entity during the years presented.

The following specific allocation methodologies of selected assets or
liabilities were used by management to prepare the accompanying Combined Balance
Sheets:

Other current assets - Safety-Kleen has certain insurance policies which provide
coverage for all its divisions and for which any related prepaid asset has
historically been included in other current assets of Corporate. As these
policies provide coverage to all divisions, the prepaid assets applicable to the
Company were allocated using the following methods:

.    Prepaid automobile insurance - At August 31, 2000, the allocation was based
on the number of vehicles per division, resulting in $0.3 million of
prepaid automobile insurance allocation to the Company. No allocations were
required at August 31, 2001 or 1999.

.    Prepaid worker's compensation and general liability insurance - At August
31, 2000, the allocation was based on claims history, resulting in $0.2
million of prepaid worker's compensation and general liability insurance
allocation to the Company. No allocations were required at August 31, 2001
or 1999.

.    Prepaid environmental impairment liability ("EIL") insurance - Allocations
were based on covered items obtained from facility listings, non-owned
facility listings and transporter listings. Based on this methodology, $0.1
million, $0.2 million and $0.3 million of prepaid EIL insurance was
allocated to the Company at August 31, 2001, 2000 and 1999, respectively.

.    Prepaid financial assurance - Allocations for all years presented
considered the amount of financial assurance coverage required at
individual Company facilities in relation to the total premiums for those
specific Company facilities, based on the August 31, 2001 policies. Based
on this methodology, $1.1 million, $1.6 million, and $1.4 million of
prepaid financial assurance insurance was allocated to the Company at
August 31, 2001, 2000 and 1999, respectively.

Property, plant and equipment, net - Computer equipment, office equipment and
other equipment recorded on Corporate were allocated based on headcount.
Leasehold improvements were allocated based on the facility to which they
relate. Based on this methodology, $4.3 million, $3.7 million and $0.8 million
of equipment and leasehold improvements, net, were allocated to the Company at
August 31, 2001, 2000 and 1999, respectively.

Other assets - Deferred financing costs of $0.4 million, $1.4 million and $16.8
million were allocated to the Company in a manner consistent with the associated
debt instruments at August 31, 2001, 2000 and 1999, respectively. See discussion
of long-term debt and other financing allocations below.

Accounts payable - Accounts payable recorded on Corporate that could not
specifically be identified as relating to the Company, BSSD or Corporate were
allocated on the basis of total Corporate costs charged to the Company during
the fiscal year, resulting in $0.6 million, $0.9 million and $2.6 million of
allocations to the Company at August 31, 2001, 2000 and 1999, respectively.

10

Accrued other liabilities - The significant allocations related to accrued other
liabilities are as follows:

.    At August 31, 2001, 2000 and 1999, $3.4 million, $1.0 million and $8.0
million, respectively, of accrued interest payable was allocated to the
Company in a manner consistent with the associated debt instruments. See
discussion of long-term debt and other financing allocations below.

.    Accrued professional fees related to attorneys and consultants used by
Safety-Kleen specifically for environmental issues were allocated based on
financial assurance coverage requirements. Professional fees related to the
bankruptcy, restructuring, the restatement and other external reporting
requirements of Safety-Kleen are considered costs of corporate activities
and have not been allocated to the Company. Based on this methodology, $2.0
million and $0.1 million of accrued professional fees were allocated to the
Company at August 31, 2001 and 1999, respectively. No allocations were
required at August 31, 2000.

.    Accruals for fully self-insured employee-related health care benefits were
allocated based on relevant headcount. At August 31, 2001, 2000 and 1999,
$1.9 million, $1.9 million and $1.4 million, respectively, of health care
accruals were allocated to the Company.

.    Safety-Kleen estimates accruals for self-insured worker's compensation,
general liability (including product liability), property, and vehicle
liability, based on actuarially determined estimates of the incurred but
not reported claims plus any reported but not paid claims and premiums.
Accruals for premiums not paid at August 31, 2001, 2000 and 1999, were
allocated based on revenue by division. Accruals for incurred but not
reported claims and reported but not paid claims were allocated based upon
actuarial claims data. At August 31, 2001, 2000 and 1999, $2.2 million,
$0.2 million and $1.7 million, respectively, of related insurance accruals
were allocated to the Company.

.    Accruals for penalties assessed by the United States Environmental
Protection Agency ("EPA") and various states for alleged violations of
federal and state financial assurance requirements under the Toxic
Substance Control Act ("TSCA"), and the Resource Conservation and Recovery
Act ("RCRA") and state hazardous waste programs are also included in
accrued other liabilities at August 31, 2001 and 2000. Approximately $3.1
million and $0.6 million of these accruals were allocated to the Company at
August 31, 2001 and 2000, respectively, based on financial assurance
coverage requirements by facility. No allocations were required at August
31, 1999.

Income taxes - All income tax related assets and liabilities are computed based
on the separate return method. Current tax liabilities are presented as if such
obligations are due to taxing authorities. See Note 13 for further discussion.

Derivative instruments - During fiscal 2000 and 1999, Safety-Kleen participated
in significant derivative transactions both to hedge its interest rate exposure
and for trading purposes. Qualifying hedges, which were not required to be
reported on the balance sheet under accounting principles generally accepted in
the United States in effect at these dates, do not impact the accompanying
Combined Balance Sheets. Derivative trading transactions are considered
corporate activities that are not allocated to the Company.

Other long-term liabilities - The long-term portion of self-insured worker's
compensation and general liability (including product liability) accruals are
included in other long-term liabilities and were allocated as discussed above.
At August 31, 2001, 2000 and 1999, $2.8 million, $1.1 million and $1.1 million,
respectively, of long-term self-insured worker's compensation and general
liability insurance accruals were allocated to the Company.

Long-term debt and other financing - All debt instruments directly related to
the operations of the Company are included in the accompanying Combined Balance
Sheets. Debt instruments not specifically attributable to the operations of the
Company or BSSD have been allocated to the respective operating divisions
considering the purchase price of Old Safety-Kleen and the market capitalization
of LESI at the time of that acquisition and the associated refinancing. See Note
7 for further discussion.

Liabilities subject to compromise - As discussed in Note 8, certain liabilities
have been classified as subject to compromise under bankruptcy reorganization
proceedings. The liabilities subject to compromise recorded at Corporate which
required allocations at August 31, 2001 and 2000, consist of certain trade
accounts payable, accrued insurance liabilities, accrued interest and long-term
debt. These liabilities were allocated as described above. Other liabilities
subject to compromise that are reflected in the accompanying Combined Balance
Sheets relate specifically to the Company.

Use of Estimates

The preparation of the Combined Balance Sheets in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the Combined Balance Sheets. Certain estimates require management's judgement,
and when applied, materially affect the Company's Combined Balance Sheets. The
Company considers the "Basis of Presentation" (see above), environmental
liabilities, income taxes, asset impairments, litigation contingencies,
Safety-Kleen (Pinewood), Inc. and recent accounting developments to include
estimates and assumptions that required or will require management's judgement.
These estimates involve matters that are inherently uncertain in nature and have
a material effect on the accompanying Combined Balance Sheets. Actual results
could differ materially from those estimates.

11

Recent Accounting Developments

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which establishes accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in a derivative's fair value be recognized currently in
earnings unless specific hedge accounting criteria are met. Special accounting
for qualifying hedges allows a derivative's gains and losses to offset related
results on the hedged item in the income statement, and requires that a company
must formally document, designate and assess the effectiveness of transactions
that receive hedge accounting. In June 1999, the FASB issued SFAS No. 137,
"Accounting for Derivative Instruments and Hedging Activities - Deferral of the
Effective Date of FASB Statement No. 133", which delayed the original effective
date of SFAS No. 133 until fiscal years beginning after June 15, 2000. In June
2000, the FASB issued SFAS No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities", which amends SFAS No. 133. SFAS No.
138 addresses a limited number of issues related to the implementation of SFAS
No. 133. On September 1, 2001, the Company adopted the provisions of SFAS No.
133, as amended. The Company is not a party to any significant derivative
contracts. Therefore, the adoption of SFAS 133 had no impact on the Company's
financial position.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated or
completed after June 30, 2001. SFAS No. 141 also specifies criteria for
intangible assets acquired in a business combination to be recognized and
reported apart from goodwill. SFAS No. 142 requires that goodwill and intangible
assets with indefinite useful lives no longer be amortized, but instead be
tested for impairment at least annually in accordance with the provisions of
SFAS No. 142. SFAS No. 142 also requires that intangible assets with definite
useful lives be amortized over their respective estimated useful lives to their
estimated residual values, and reviewed for impairment in accordance with SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." The Company is required to adopt the provisions of
SFAS No. 141 immediately for new transactions and SFAS No. 142 at the earlier of
its emergence from bankruptcy or September 1, 2002. Early adoption of SFAS No.
142 is permitted.

The Company's existing goodwill and intangible assets will continue to be
amortized prior to the adoption of SFAS No. 142. Upon adoption of SFAS No. 142,
the Company must evaluate its existing intangible assets and goodwill. Upon
adoption of SFAS No. 142, the Company will be required to reassess the useful
lives and residual values of all recorded intangible assets, and make any
necessary amortization period adjustments by the end of the second fiscal
quarter following adoption. Additionally, to the extent an intangible asset is
identified as having an indefinite useful life, the Company will be required to
test the intangible asset for impairment in accordance with the provisions of
SFAS No. 142 by the end of the second fiscal quarter following adoption. Any
impairment loss will be measured as of the date of adoption and recognized as
the cumulative effect of a change in accounting principle.

As of September 1, 2002, the Company expects to have unamortized goodwill of
approximately $96 million, which will be subject to the transition provisions of
SFAS No. 142. The Company believes it will likely incur a write-down in the
value of its intangible assets at the earlier of its emergence from bankruptcy,
as provided by SOP 90-7, or the adoption of SFAS No. 142.

In June 2001, the FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations." SFAS No. 143 will require, upon adoption, that the Company
recognize as a component of asset cost, the fair value of a liability for an
asset retirement obligation in the period in which it is incurred if a
reasonable estimate of fair value can be made. Under this statement, the
liability is discounted and accretion expense is recognized using the
credit-adjusted risk-free interest rate in effect when the liability was
initially recognized. SFAS No. 143 is effective for financial statements issued
for fiscal years beginning after June 15, 2002. The Company will be required to
adopt SFAS No. 143 at the earlier of its emergence from bankruptcy or September
1, 2002. The Company is currently in the process of evaluating the impact of
SFAS No. 143; however, the adoption of this standard is expected to result in
the recognition of additional assets and liabilities.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived Assets." This statement supersedes FASB statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" and the accounting and reporting provisions of APB
Opinion No. 30, "Reporting the Results of Operations - Reporting the Effects of
Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently
Occurring Events and Transactions" for the disposal of a segment of a business
(as previously defined in that opinion). SFAS No. 144 is effective for financial
statements issued for fiscal years beginning after December 15, 2001. The
Company will be required to adopt SFAS No. 144 at the earlier of its emergence
from bankruptcy or September 1, 2002. The new rules change the criteria for
classifying an asset as held-for-sale. The standard also broadens the scope of
businesses to be disposed of that qualify for reporting as discontinued
operations, and changes the timing of recognizing losses on such operations. The
Company is currently in the process of evaluating the potential impact that the
adoption of SFAS No. 144 will have on its combined financial position.

12

3. ACCOUNTS RECEIVABLE

Net accounts receivable at August 31, 2001, 2000 and 1999 consist of the
following ($ in thousands):

2001       2000         1999
--------   ---------    ---------
Trade accounts receivable                     $ 94,211   $ 140,663    $ 105,771
Accrued revenue                                 16,131      16,891       17,635
Other receivables                                1,572       2,466       15,278
Allowance for uncollectible accounts           (12,539)    (15,266)      (4,844)
--------   ---------    ---------
Accounts receivable, net                      $ 99,375   $ 144,754    $ 133,840
========   =========    =========
4. LONG-LIVED ASSETS

Property, Plant and Equipment

Net property, plant and equipment at August 31, 2001, 2000, and 1999 consist of
the following ($ in thousands):

Range of Estimated
2001          2000         1999         Useful Lives
---------     ---------    ---------   ------------------

Land                                              $  22,586     $  25,260    $  42,500   N/A
Landfill sites and improvements                     173,278       170,746      428,423   0-126 years
Buildings                                            80,349        81,152      150,560   20-40 years
Machinery and equipment                             165,730       176,266      263,160   3-40 years
Lesser of useful life
Leasehold improvements                                1,600         1,692        2,355   or lease term
Construction in process                               6,669         6,611       10,098   N/A
---------     ---------    ---------
Total property, plant and equipment              450,212       461,727      897,096
Less: Accumulated depreciation and amortization    (210,052)     (199,546)    (331,312)
---------     ---------    ---------
Property, plant and equipment, net                $ 240,160     $ 262,181    $ 565,784
=========     =========    =========

During fiscal 2001, the Company had no capitalized interest costs, as
contractually required interest payments have been stayed by the Chapter 11
Cases. During fiscal 2000 and 1999, the Company capitalized total interest costs
of $1.2 million and $2.4 million, respectively.

Intangible Assets

Net intangible assets at August 31, 2001, 2000 and 1999 consist of the following
($ in thousands):

2001           2000          1999
---------      ---------     ---------
Permits, non-landfill                    $ 308,648      $ 308,774     $ 324,809
Goodwill                                   109,585        112,029       192,742
---------      ---------     ---------
Total intangible assets                 418,233        420,803       517,551
Less: accumulated amortization             (84,875)       (73,611)      (70,495)
---------      ---------     ---------
Intangible assets, net                   $ 333,358      $ 347,192     $ 447,056
=========      =========     =========

Impairment and Other Charges

SFAS No. 121 requires the assessment of long-lived assets for impairment
whenever events ("Triggering Events") occur which may indicate that those assets
have become impaired. Triggering Events may be events, which directly cause
impairment (e.g., decisions to close facilities or the effects of new government
regulations) or may be indicators of the existence of other direct causes of
impairment (e.g., continuing or increasing losses, declining customer demand,
etc.).

The Company believes that the Chapter 11 Cases and the events that led up to it
constitute triggering events. In connection with its comprehensive review of its
operations, the Company evaluated the recoverability of long-lived assets at
August 31, 2001 and 2000 by reference to estimated future cash flows. As a
result, the Company identified certain impairments that have been recorded in
fiscal 2001, 2000 and 1999 (see table below).

13

Fair values for impaired assets were determined for landfills, incinerators,
wastewater treatment and other facilities, primarily based on future cash flow
projections discounted using rates appropriate for the risks involved with the
identified assets. For those facilities that were to be sold, management based
fair value on their best estimate of sales value less cost to sell.

Fiscal 2001

The components of fiscal 2001 impairments consisted of the following ($ in
thousands):

Provision for early facility closures and post-closures:
Bridgeport incinerator                                      $  34,123
Coffeyville incinerator                                         9,017
Hilliard wastewater treatment facility                          1,174
Burton transportation facility                                    459
---------
Total                                                          44,773
Asset impairment and other charges                                 5,395
---------
Total                                                       $  50,168
=========

During fiscal 2001, the Company ceased operations at two incinerators, a
wastewater treatment facility and a transportation facility. As a result of
these closures, the Company recorded a provision for early facility closures and
post-closures of approximately $44.8 million. Certain post-closure costs are
expected to be incurred over a period approximating 30 years. The Company also
recorded approximately $5.4 million of impairment charges primarily related to a
wastewater treatment facility.

Fiscal 2000

The components of fiscal 2000 impairments consisted of the following ($ in
thousands):

Service centers and landfills related to western operations    $ 118,336
Other landfills and incinerators                                 118,622
Harbor facility -- closed                                         17,691
Pinewood facility                                                 15,724
Other facilities                                                  73,823
---------
Total                                                       $ 344,196
=========

The amounts shown as related to western operations relate to facilities which
are located in the western region of the United States. Their markets have been
adversely affected by competitive conditions, including over supply of available
services, which have limited the Company's ability to increase prices to recover
increased costs, including those related to new environmental regulations.

Included in other landfills and incinerators is an incinerator constructed to
burn contaminated soils. Although significant revenue resulted from unusual
events in fiscal 1999 and 2000, the general level of demand for these services
has and is expected to continue to decline. In addition, new environmental
regulations are projected to significantly increase capital expenditures and
operating costs in the future. Also included in this amount is a landfill which
has been the primary disposal site for the soil burned at this Company owned
incinerator. The projected declines in volumes generated at the incinerator are
projected to have a continuing adverse effect on volumes at the landfill.

As discussed in Note 10, the Pinewood Facility has been the subject of lengthy,
complex and protracted legal proceedings. The results of the proceedings have
been adverse to the Company; accordingly, the Company has concluded that it
would be imprudent to assume that this facility will generate any significant
future revenue. An additional charge was recorded for the impairment of the
remaining net book value of fixed assets at the Pinewood Facility. Appropriate
reserves for closure and post-closure costs at the Pinewood Facility have been
fully provided.

Fiscal 1999

The components of fiscal 1999 impairments consisted of the following ($ in
thousands):

Write-down of permits                                          $   9,195
Property, plant & equipment                                        2,092
---------
Total                                                       $  11,287
=========

Impairments in 1999 were primarily due to factors relating to decisions made by
management as a result of changes in business conditions or legal issues. These
amounts represent the write-down of property, plant and equipment and
intangibles.

14

5. ACCRUED OTHER LIABILITIES

Accrued other liabilities at August 31, 2001, 2000 and 1999 consist of the
following ($ in thousands):

2001         2000             1999
-----------   -----------     ------------

Accrued interest payable                                     $    3,365   $       969     $      9,926
Accrued employee salaries and benefits                           14,261         8,033            7,670
Accrued professional fees                                         2,028           609            1,365
Accrued insurance                                                 4,102         2,143            3,158
Accrued taxes                                                     5,039         3,471            6,347
Accrued other                                                     3,780         3,071            5,118
-----------   -----------     ------------
$    32,575   $    18,296     $     33,584
-----------   -----------     ------------

6. CLOSURE, POST-CLOSURE AND ENVIRONMENTAL REMEDIATION LIABILITIES

The Company records environmentally related accruals for both its landfill and
non-landfill operations. See Note 2 for further discussion of the Company's
methodology for estimating and recording these accruals.

Final closure and post-closure liabilities -- The Company has material financial
commitments for the costs associated with requirements of the EPA, and the
comparable regulatory agency in Canada for the final closure and post-closure
activities at the majority of its facilities. In the United States, the final
closure and post-closure requirements are established under the standards of the
EPA, and are implemented and applied on a state-by-state basis. Estimates for
the cost of these activities are developed by the Company's engineers,
accountants and external consultants, based on an evaluation of site-specific
facts and circumstances, including the Company's interpretation of current
regulatory requirements and proposed regulatory changes. Such estimates may
change in the future due to various circumstances including, but not limited to,
permit modifications, changes in legislation or regulations, technological
changes and results of environmental studies. Final closure and post-closure
plans are established in accordance with the individual site permit
requirements. Landfill post-closure periods are generally expected to be for a
period of 30 years after closure, but may extend to a period of 100 years. See
Note 10 for a discussion of the Pinewood Facility.

For purchased landfills, the Company assesses and records the present value of
the estimated closure and post-closure liability based upon the estimated final
closure and post-closure costs and the percentage of airspace consumed as of the
purchase date. Thereafter, the difference between the liability recorded at the
time of acquisition and the present value of total estimated final closure and
post-closure costs to be incurred is accrued prospectively on a units of
consumption basis over the estimated useful economic life of the landfill.

Remedial liabilities, including Superfund liabilities -- The Company
periodically evaluates potential remedial liabilities at sites that it owns or
operates and at sites to which it has transported or disposed of waste,
including 28 Superfund sites as of March 31, 2002. The majority of the issues at
Superfund sites relate to allegations that the Company, or its predecessors,
transported waste to the facilities in question, often prior to the acquisition
of the alleged potentially responsible party ("PRP") by the Company. The Company
periodically reviews and evaluates sites requiring remediation, including
Superfund sites, giving consideration to the nature (i.e., owner, operator,
transporter or generator) and the extent (i.e., amount and nature of waste
hauled to the location, number of years of site operations or other relevant
factors) of the Company's alleged connection with the site, the regulatory
context surrounding the site, the accuracy and strength of evidence connecting
the Company to the location, the number, connection and financial ability of
other named and unnamed PRPs and the nature and estimated cost of the likely
remedy. Where the Company concludes that it is probable that a liability has
been incurred, provision is made in the Combined Balance Sheets, based upon
management's judgment and prior experience, for the Company's best estimate of
the liability. Such estimates, which are inherently subject to change, are
subsequently revised if and when additional information becomes available.

The Company believes that its extensive experience in the environmental services
business, as well as its involvement with a large number of sites, provides a
reasonable basis for estimating its aggregate liability. It is reasonably
possible that technological, regulatory or enforcement developments, the results
of environmental studies or other factors could necessitate the recording of
additional liabilities and/or the revision of currently recorded liabilities
that could be material. The impact of such future events cannot be estimated at
the current time.

Discounted environmental liabilities -- When the Company believes that both the
amount of a particular environmental liability and the timing of the payments
are fixed or reliably determinable, its cost in current dollars is inflated
using estimates of future inflation rates (2.9% at each of August 31, 2001 and
2000, and 3.6% at August 31, 1999) until the expected time of payment, then
discounted to its present value using a risk-free discount rate (5.8% at each of
August 31, 2001 and 2000, and 8.5% at August 31, 1999). The portion of the
Company's recorded environmental liabilities (including closure, post-closure
and remedial obligations) that is not inflated or discounted was approximately
$203.4 million, $163.5 million and $150.8 million at August 31, 2001, 2000 and
1999, respectively. Had the Company not discounted any portion of its liability,
the amount recorded would have been increased by approximately $122.9 million,
$132.1 million and $145.0 million at August 31, 2001, 2000 and 1999,
respectively. The Company estimates it will provide $213.9 million in additional
environmental reserves (including the inflation and discount factors referred to
above) over the remaining site lives of its facilities based on current
estimated costs.

15

The Company has recorded liabilities for closure, post-closure and remediation
obligations at August 31, 2001, 2000 and 1999 as follows ($ in thousands):

2001          2000         1999
----------    ----------    ---------

Current portion of environmental liabilities                            $  32,114     $  27,385    $  28,568
Non-current portion of environmental liabilities                          276,841       232,317      190,512
Balances included in liabilities subject to compromise (see Note 8)        10,099         8,562           --
--------      ---------    ---------
Total                                                                $ 319,054     $ 268,264    $ 219,080
=========     =========    =========

In the following table, reserves for environmental matters are classified at
each balance sheet date based on their classification at August 31, 2001.
Reserves for closure, post-closure and remediation at August 31, 2001, 2000 and
1999, respectively, consist of the following ($ in thousands):

2001         2000        1999
----------   ----------  ----------

Landfill facilities:
Cell closure                                               $  24,926    $  25,174   $  26,863
Final closure                                                 22,222       17,732      12,635
Post-closure                                                  67,356       61,799      30,494
Remediation                                                   23,490       21,562      15,863
---------    ---------   ---------
137,994      126,267      85,855
---------    ---------   ---------
Non-landfill facilities:
Remediation, closure and post-closure for closed sites       156,203      115,979     114,519
Remediation (including Superfund) for open sites              24,857       26,018      18,706
---------    ---------   ---------
181,060      141,997     133,225
---------    ---------   ---------
Total                                                    $ 319,054    $ 268,264   $ 219,080
=========    =========   =========

All of the landfill facilities included in the table above are active at August
31, 2001, except the Pinewood Facility. Total closure and post-closure reserves
related to the Pinewood Facility were $51.0 million, $47.2 million and $11.8
million at August 31, 2001, 2000 and 1999, respectively. Total environmental
remediation reserves related to the Pinewood Facility were $2.9 million and $0.4
million at August 31, 2001 and 2000, respectively. There were no environmental
remediation reserves related to the Pinewood Facility at August 31, 1999. The
South Carolina Department of Health and Environmental Control has required that
an Environmental Impairment Fund ("EIF") be established for any potential
environmental cleanup and restoration of environmental impairment at the
Pinewood Facility. The obligation to contribute to the EIF has been treated as a
commitment to restrict assets and no liability related to the obligation has
been recorded at August 31, 2001, 2000 or 1999 (see Notes 2 and 10).

Anticipated payments (based on current estimated costs) and anticipated timing
of necessary regulatory approvals to commence work on closure, post-closure and
remediation activities for each of the next five years and thereafter are as
follows ($ in thousands):

Year ending August 31,
2002                                                $  32,114
2003                                                   41,972
2004                                                   37,437
2005                                                   17,535
2006                                                   16,001
Thereafter                                            387,866
---------
Subtotal                                           532,925
Less:
Reserves to be provided (including discount
of $122.9 million) over remaining site lives      (213,871)
---------
Total                                            $ 319,054
=========

16

7. LONG-TERM DEBT AND OTHER FINANCING

Long-term debt and other financing presented in the accompanying Combined
Balance Sheets includes debt instruments of Safety-Kleen that were specifically
related to the operations of the Company, as well as an allocation of debt
instruments not specifically attributable to the operations of the Company or
BSSD. Those debt instruments not specifically identifiable to the Company or
BSSD have been allocated to the respective operating divisions considering the
purchase price of Old Safety-Kleen and the market capitalization of LESI at the
time of that acquisition and the associated refinancing. Management believes
that the basis for allocating long-term debt and other financing to the Company
is reasonable based on the capital structure of Safety-Kleen.

Long-term debt and other financing of both Safety-Kleen and the amounts
allocated to the Company at August 31, 2001 consist of the following ($ in
thousands):

2001
--------------------------

Safety-Kleen      Company
------------     ---------

First DIP Facility                                   $        --      $      --
-----------      ---------
Other Domestic Borrowings:
Senior Credit Facility:
Term Loans                                        1,137,750        398,213
Revolver                                            340,000        119,000
Senior Subordinated Notes, due June 1, 2008           325,000        113,750
Senior Notes, due May 15, 2009                        225,000         78,750
Promissory note, due May 15, 2003                      60,000         60,000
Industrial revenue bonds, due 2003-2027                80,603         80,603
Other                                                   3,237          1,129
-----------      ---------
2,171,590        851,445
-----------      ---------
Canadian Borrowings:
Senior Credit Facility                                 45,910         16,068
Operating Facility                                     16,313          5,710
-----------      ---------
62,223         21,778
-----------      ---------
Total debt                                             2,233,813        873,223
Less: Current portion not subject to compromise          (62,223)       (21,778)
Less: Liabilities subject to compromise (see Note 8)  (2,171,590)      (851,445)
-----------      ---------
Long-term debt and other financing           $        --      $      --
===========      =========

Long-term debt and other financing of both Safety-Kleen and the amounts
allocated to the Company at August 31, 2000 consist of the following ($ in
thousands):

2000
--------------------------

Safety-Kleen      Company
------------     ---------

First DIP Facility                                   $        --      $      --
-----------      ---------
Other Domestic Borrowings:
Senior Credit Facility:
Term Loans                                        1,137,750        398,213
Revolver                                            340,000        119,000
Senior Subordinated Notes, due June 1, 2008           325,000        113,750
Senior Notes, due May 15, 2009                        225,000         78,750
Promissory note, due May 15, 2003                      60,000         60,000
Industrial revenue bonds, due 2003-2027                90,900         90,900
Other                                                  11,425          1,166
-----------      ---------
2,190,075        861,779
-----------      ---------
Canadian Borrowings:
Senior Credit Facility                                 48,269         16,894
Operating Facility                                     17,152          6,003
-----------      ---------
65,421         22,897
-----------      ---------
Total debt                                             2,255,496        884,676
Less: Current portion not subject to compromise          (65,421)       (22,897)
Less: Liabilities subject to compromise (see Note 8)  (2,190,075)      (861,779)
-----------      ---------
Long-term debt and other financing           $        --      $      --
===========      =========

17

Long-term debt and other financing of both Safety-Kleen and the amounts
allocated to the Company at August 31, 1999 consist of the following ($ in
thousands):

1999
----------------------------

Safety-Kleen      Company
--------------   -----------
Domestic Borrowings:
Senior Credit Facility:
Term Loans                                   $  1,171,250    $  409,938
Revolver                                          113,000        39,550
Senior Subordinated Notes, due June 1, 2008         325,000       113,750
Senior Notes, due May 15, 2009                      225,000        78,750
Promissory note, due May 15, 2003                    60,000        60,000
Industrial revenue bonds, due 2003-2027              90,900        90,900
Short-term borrowings                                24,739         8,659
Other                                                11,367         1,055
------------    ----------
2,021,256       802,602
------------    ----------
Canadian Borrowings:
Senior Credit Facility                               53,245        18,636
Operating Facility                                   20,515         7,180
------------    ----------
73,760        25,816
------------    ----------
Total debt                                           2,095,016       828,418
Less: Current portion                               (2,070,224)     (812,368)
------------    ----------
Long-term debt and other financing        $     24,792    $   16,050
============    ==========
Safety-Kleen DIP Facility

On July 19, 2000, the Bankruptcy Court granted final approval of Safety-Kleen's
one-year $100 million Revolving Credit Agreement underwritten by Toronto
Dominion (Texas), Inc. as general administrative agent and CIT Group/Business
Credit, Inc. as collateral agent (the "First DIP Facility") with an aggregate
sublimit for letters of credit of $35 million. The actual amount available under
the First DIP Facility was subject to a borrowing base computation. The First
DIP Facility was amended on eleven occasions which, among other things, extended
the maturity date, increased the aggregate limit for letters of credit to $95
million, increased the sublimits for letters of credit for certain uses and
waived the Debtors' non-compliance with certain affirmative covenants under the
First DIP Facility. The Debtors were jointly and severally liable under the
First DIP Facility. As of August 31, 2001, no amounts have been drawn by
Safety-Kleen on the First DIP Facility and approximately $48 million of letters
of credit have been issued.

On March 20, 2002, the Bankruptcy Court approved Safety-Kleen's $200 million
Second Amended and Restated Debtor-in-Possession Credit Facility (the "Second
DIP Facility"). The Second DIP Facility extends the maturity date of the First
DIP Facility until the earlier of March 22, 2003, or the effective date of a
plan or plans of reorganization. In addition, it reduces the aggregate amount of
borrowings available from $100 million to $75 million, which continues to be
subject to borrowing base limitations ("Tranche A"). The Second DIP Facility
also creates a new tranche under the credit facility in the amount of $125
million ("Tranche B"). Tranche B is available for cash borrowings and letters of
credit, and has the same maturity date as Tranche A.

Proceeds from Tranche A or Tranche B may be used for general corporate purposes.
Tranche A is available for letters of credit or cash borrowings, with a
sub-limit of $45 million available for environmental letters of credit. The
letter of credit sub-limit under Tranche B is $50 million, and there is a
further sub-limit of $40 million available for environmental letters of credit,
including the replacement of certain existing cash collateral pledged to support
financial assurance with respect to certain facilities.

Tranche A letters of credit are priced at 3% per annum (plus a fronting fee of
0.25% to the Agent) on the outstanding face amount of each letter of credit. In
addition, the Debtors pay a commitment fee of 0.50% per annum on the unused
amount of Tranche A, payable monthly in arrears. Tranche B letters of credit are
priced at 12% per annum (plus a fronting fee of 0.25% to the Agent) on the
outstanding face amount of each letter of credit, payable monthly in arrears. In
addition, the Debtors pay a commitment fee of 2.5% on the unused amount of
Tranche B letters of credit.

Interest charged for cash borrowings under Tranche A is the greater of Prime
Rate plus 1% per annum and the Fed Funds Rate plus 0.5% per annum, or LIBOR plus
3% per annum, depending on the nature of the borrowings. Interest charged for
cash borrowings under Tranche B is the greater of Prime Rate plus an applicable
margin of 7.25%, or 12% per annum. Beginning September 1, 2002, the applicable
margin on Tranche B cash borrowings increases monthly by 0.5% per annum. The
Debtors are also required to pay as additional interest, paid in kind, a fee
equal to 3% of the average daily outstanding Tranche B cash borrowings,
compounded and accrued monthly, and fully payable upon the termination of the
Second DIP Facility, provided that, if the termination does not occur prior to
September 1, 2002, the amount of such fee

18

increases each month by 1% per annum. The commitment fee on Tranche B is
calculated at a rate equal to 4% per annum on the average daily unused cash
portion of Tranche B, payable monthly in arrears. In addition, the Debtors are
required to pay an extension fee on the Tranche B commitments, payable as
follows, if the Second DIP Facility remains outstanding at such dates: 1.2% on
September 1, 2002; 1.2% on December 1, 2002 and 1.2% on March 22, 2003.

Under the provisions of the Second DIP Facility, the Debtors are required to
establish a $5 million interest escrow account. Tranche A and Tranche B fees and
interest will be paid from this account. On the earlier of depletion of the
escrowed funds or six months after the closing date of the Second DIP Facility,
additional funds must be deposited in the escrow account in order to assure that
$5 million will be escrowed for this same purpose.

In the event of the sale of those certain net assets of Safety-Kleen as
described in Note 1, the net proceeds, after reserves for certain selling
expenses, interest and fees on the Second DIP facility, shall be applied to
prepay the Tranche B loans and the availability under Tranche B will be reduced
by $17 million. Net proceeds of certain other asset sales, after reserves for
certain selling expenses, interest and fees on the Second DIP facility, are to
be used to prepay Tranche A and then Tranche B.

The Second DIP Facility benefits from superpriority claim status as provided for
under the Bankruptcy Code. Under the Bankruptcy Code, a superpriority claim is
senior to unsecured pre-petition claims and all other administrative expenses
incurred in a Chapter 11 case. As security, the Second DIP Facility lenders were
granted certain priority, perfected liens on certain of the Debtors' assets.
Pursuant to the final order approving the Second DIP Facility, such liens are
not subordinate to or pari passu with any other lien or security interest (other
than (a) liens for certain administrative expenses and (b) liens in favor of
Safety-Kleen Corp.'s Chief Executive Officer). As of April 11, 2002, no cash
borrowings have been made under the Tranche B facility and approximately $1.4
million has been issued for letters of credit. The Debtors are jointly and
severally liable under the Second DIP Facility.

Other Domestic Borrowings of Safety-Kleen

Senior Credit Facility -- In April 1998, Safety-Kleen repaid its then existing
bank credit facility and established a $2.2 billion Senior Credit Facility (the
"Senior Credit Facility") pursuant to a credit agreement between Safety-Kleen
and a syndicate of banks and other financial institutions. In June 1998, the
availability of the Senior Credit Facility was permanently reduced by $325
million to $1.875 billion by the subsequent issuance of the Senior Subordinated
Notes described below. The Senior Credit Facility consists of five parts: (i) a
$550 million six-year Senior Secured Revolving Credit Facility with a $200
million letter of credit sublimit and $400 million sublimit for loans (the
"Revolver"); (ii) a $455 million six-year senior secured amortizing term loan;
(iii) a $70 million six-year senior secured amortizing term loan; (iv) a $400
million minimally amortizing seven-year senior secured term loan and (v) a $400
million minimally amortizing eight-year senior secured term loan. The term loans
referred to in clauses (ii), (iii), (iv) and (v) are collectively referred to
herein as the "Term Loans."

Interest costs on the Senior Credit Facility are reset periodically, at least
annually, and vary depending on the particular facility and whether Safety-Kleen
chooses to borrow under Eurodollar or non-Eurodollar loans. Interest rates
applicable to the Senior Credit Facility ranged from 7.56% to 12.88%, including
a 2% default premium, effective June 1, 2000.

At August 31, 2001, the Term Loans have been drawn in full and borrowings
outstanding under the Revolver totaled $340 million. In addition, there were
approximately $83.0 million of letters of credit issued under the terms of the
Revolver. As a result of the Debtors' Chapter 11 Cases, all additional
availability under the Revolver has been terminated, although the letters of
credit remain outstanding.

Domestic borrowings of Safety-Kleen Services, Inc. (formerly known as LES, Inc.)
(the "Domestic Borrower") under the Senior Credit Facility are collateralized by
substantially all of the non-hazardous tangible and intangible assets of the
domestic subsidiaries of the Domestic Borrower (including subsidiaries of the
Company), plus 65% of the capital stock of Safety-Kleen Corp.'s foreign
wholly-owned subsidiaries, including but not limited to, Safety-Kleen Corp.'s
primary Canadian subsidiaries (collectively, the "Canadian Borrower"). In
addition, substantially all of the capital stock of the Domestic Borrower and
its wholly-owned or majority-owned domestic subsidiaries is pledged to the
Domestic Senior Credit Facility lenders (the "Domestic Lenders") and such
domestic subsidiaries guarantee the obligations of the Domestic Borrower to the
Domestic Lenders.

Senior Subordinated Notes -- On May 29, 1998, the Domestic Borrower, a
wholly-owned subsidiary of Safety-Kleen Corp., issued $325 million 9.25% Senior
Subordinated Notes due 2008 in a Rule 144A offering. In accordance with an
Exchange and Registration Rights Agreement entered at the time of the issuance
of the aforementioned notes, Safety-Kleen filed a registration statement with
the SEC on June 24, 1998, pursuant to which Safety-Kleen exchanged the 9.25%
Senior Subordinated Notes due 2008 for substantially identical notes of
Safety-Kleen (the "1998 Notes"). Net proceeds from the sale of the 1998 Notes,
after the underwriting fees and other expenses, were approximately $316.8
million. The proceeds were used to repay a portion of the borrowings outstanding
under the Senior Credit Facility.

The 1998 Notes mature on June 1, 2008. Interest is payable semiannually, on
December 1 and June 1. The 1998 Notes will be redeemable, in whole or in part,
at the option of Safety-Kleen, at any time and from time to time at a redemption
price as defined in the indenture. Upon a change in control of Safety-Kleen,
each holder of the 1998 Notes may require Safety-Kleen to repurchase all or a
portion of the holder's 1998 Notes at 101% of the principal amount, plus accrued
interest.

19

The 1998 Notes are general unsecured obligations of the Domestic Borrower,
subordinated in right of payment to all existing and future senior indebtedness,
as defined, of the Domestic Borrower. The 1998 Notes will rank senior in right
of payment to all existing and future subordinated indebtedness of the Domestic
Borrower, if any. The payment of the 1998 Notes are guaranteed on a senior
subordinated basis by Safety-Kleen and are jointly and severally guaranteed on a
senior subordinated basis by the Domestic Borrower's wholly-owned domestic
subsidiaries (including subsidiaries of the Company). No foreign direct or
indirect subsidiary or non wholly-owned domestic subsidiary is an obligor or
guarantor on the financing.

Senior Notes -- On May 17, 1999, Safety-Kleen Corp. issued $225 million 9.25%
Senior Notes due 2009 in a Rule 144A offering which were subsequently exchanged
for substantially identical notes of Safety-Kleen Corp. in an offering
registered with the SEC in September 1999 (the "1999 Notes"). Net proceeds,
after the underwriting fees and other expenses, were approximately $219 million
and were used to finance the cash portion of the purchase price for the
repurchase of the pay-in-kind debenture ("PIK Debenture"), for expenses relating
to the repurchase and for general corporate purposes.

The 1999 Notes mature on May 15, 2009, with interest payable semi-annually on
May 15 and November 15. The 1999 Notes will be redeemable, in whole or in part,
at the option of Safety-Kleen, at any time and from time to time at a redemption
price as defined in the indenture. Upon a change in control of Safety-Kleen,
each holder of the 1999 Notes may require Safety-Kleen Corp. to repurchase all
or a portion of such holder's 1999 Notes at 101% of the principal amount
thereof, plus accrued interest.

The 1999 Notes are unsecured and rank equally with all existing and future
senior indebtedness and are senior to all existing and future subordinated
indebtedness. The 1999 Notes are not guaranteed by Safety-Kleen Corp.'s
subsidiaries.

The Senior Credit Facility, the 1998 Notes and the 1999 Notes contain negative,
affirmative and financial covenants including covenants restricting debt,
guarantees, liens, mergers and consolidations, sales of assets, transactions
with affiliates, the issuance of stock to third parties and payment of dividends
and establishing a total leverage ratio test, a fixed charge coverage test, an
interest coverage ratio test and a maximum contingent obligation to operating
cash flow ratio test. As a result of the Chapter 11 Cases, Safety-Kleen, which
was not in compliance with the covenants at the time of the Chapter 11 Cases,
classified the entire portion of domestic borrowings as liabilities subject to
compromise.

Promissory Note

On May 15, 1997, Safety-Kleen Corp. issued a promissory note in the amount of
$60 million to Westinghouse Electric Corporation, subsequently assigned to
Toronto Dominion (Texas), Inc. This note, which is specifically identifiable to
the Company, bears interest at the variable rate of the six-month London
Interbank Offered Rates (6-month LIBOR). Interest on the outstanding principal
balance of this note is payable semi-annually on May 30 and November 30 of each
year.

All outstanding amounts under this note are due in full on May 15, 2003, with
mandatory payments of $10 million due on May 15, 2001 and May 15, 2002, which
have been stayed as a result of the Chapter 11 Cases. This note is guaranteed by
Laidlaw (see Notes 10 and 14).

Industrial Revenue Bonds

The following industrial revenue bond obligations relate specifically to
facilities of the Company:

On July 1, 1997, Safety-Kleen Corp. agreed to repay the obligations related to
Industrial Revenue Bonds ("IRB") issued by the California Pollution Control
Financing Authority in the amount of $19.5 million. Proceeds from these bonds
were used to repay prior Pollution Control Revenue Bonds, which were used to
finance the acquisition, construction and installation of stabilization
treatment units of the Company's hazardous waste landfills in Kern County and
Imperial County, California. These bonds mature on July 1, 2007 and bear
interest at a rate of 6.70% per annum. Interest payments are due semi-annually
beginning on January 1, 1998.

On July 1, 1997, Safety-Kleen Corp. guaranteed repayment of all obligations
related to the IRB issued by Tooele County Utah in the amount of $45.7 million.
Proceeds from these bonds were used to repay prior Tooele County Bonds, which
were used to construct and make improvements to the Company's hazardous waste
incineration facility located slightly west of Salt Lake City, Utah. These bonds
mature on July 1, 2027 and bear interest at a rate of 7.55% per annum. Interest
payments are due semi-annually beginning on January 1, 1998.

The Company has pledged certain revenues to repay the obligations related to the
IRB issued by Tooele County Utah on August 1, 1995, in the amount of $10.0
million. Proceeds from these bonds were used to finance in part, the
acquisition, construction and equipping of the Company's hazardous waste
disposal and treatment facility. These bonds mature on August 1, 2010 and bear
interest at a rate of 6.75% per annum. Interest payments are due semi-annually
beginning on February 1, 1996. Repayment of all obligations related to the IRB
issued by Tooele County Utah was also guaranteed by Laidlaw (see Notes 10 and
14).

Certain assets of the Company secure the obligations related to the IRB issued
by The Industrial Development Board of The Metropolitan Government of Nashville
and Davidson County on May 1, 1993, in the amount of $15.7 million. Proceeds
from these bonds were used to finance in part, the construction, acquisition and
installation of modifications and improvements of the Company's hazardous waste
facility in Nashville, Tennessee. During fiscal 2001, the bond trustee
distributed approximately $10.3 million from the Company's restricted funds (see

20

Note 2) to repay a portion of the outstanding principal. These bonds mature on
May 1, 2003 and bear interest at a rate of 6.0% per annum. Interest payments are
due semi-annually beginning on November 1, 1993. Repayment of all obligations
related to the IRB issued by The Industrial Development Board of The
Metropolitan Government of Nashville and Davidson County was also guaranteed by
Laidlaw (see Notes 10 and 14).

Canadian Borrowings of Safety-Kleen

Senior Credit Facility - The Canadian Borrower and Safety-Kleen Corp.'s Canadian
subsidiaries participated in the Senior Credit Facility under which it
established and initially borrowed $70.0 million (USD) from a syndicate of five
banks. The term loan has a floating interest rate based on Canadian prime plus
1.375% or Canadian Bankers Acceptance, ("CB/A") plus 2.375%, at Safety-Kleen's
discretion. As a result of the Debtors' Chapter 11 Cases, its Canadian
subsidiaries are in default of the loan conditions and a notice of default has
been issued by the banks making the loan payable on demand. In accordance with
the provisions of default under the Senior Credit Facility, the floating
interest rate will increase an additional 2% if all or a portion of any
principal of any loan, any interest payable thereon, any commitment fee or any
Reimbursement Obligation or Acceptance Reimbursement Obligation, as defined in
the Senior Credit Facility, or other amount payable hereunder shall not be paid
when due. Accordingly, the outstanding loan balance is classified as a current
liability at August 31, 2001 and 2000, and interest continues to accrue at the
Canadian Prime Rate plus 3.375%.

Operating Facility -- On April 3, 1998, the Canadian Borrower entered into a
letter agreement with the Toronto Dominion Bank providing an operating line of
credit of up to $35.0 million (CDN). The letter agreement has a floating
interest rate based on Canadian prime plus 1.375% or CB/A plus 2.375% for
Canadian borrowings and prime plus 1.375% or LIBOR plus 2.375% for U.S.
borrowings, at Safety-Kleen's discretion. On March 4, 2000, Toronto Dominion
Bank cancelled this letter agreement at which time the Canadian Borrower had
borrowings of $17.2 million and letters of credit totaling $3.6 million. The
full amount borrowed was in default at August 31, 2001 and 2000, due to breaches
of loan covenants by the local subsidiary. Accordingly, the outstanding loan
balance is classified as a current liability at August 31, 2001 and 2000.

Borrowings by the Canadian Borrower under the Senior Credit Facility and the
Operating Facility are collateralized by substantially all of the tangible
personal property of Safety-Kleen Corp.'s Canadian subsidiaries and by the
guarantees of the Domestic Borrower's domestic, wholly-owned and majority-owned
subsidiaries. Additionally, 35% of the common stock of the Canadian Borrower is
pledged in favor of the Canadian Senior Credit Facility Lenders and the Canadian
Operating Facility Lenders.

8. LIABILITIES SUBJECT TO COMPROMISE

The principal categories of claims classified as liabilities subject to
compromise under bankruptcy reorganization proceedings are identified below. All
amounts below may be subject to future adjustment depending on Bankruptcy Court
action, further developments with respect to disputed claims, or other events,
including the reconciliation of claims filed with the Bankruptcy Court to
amounts included in the Company's records (see Note 1). Additional pre-petition
claims may arise from rejection of additional executory contracts or unexpired
leases by the Debtors. Under a confirmed plan or plans of reorganization, all
pre-petition claims may be paid and discharged at amounts substantially less
than their allowed amounts.

Recorded liabilities -- On a combined basis, recorded liabilities subject to
compromise under Chapter 11 Cases at August 31, 2001 and 2000 consist of the
following ($ in thousands):

2001         2000
----------   ----------
Accrued litigation                         $  18,387    $  20,598
Trade accounts payable                        46,912       46,238
Accrued insurance liabilities                  1,130        1,109
Environmental liabilities                     10,099        8,562
Accrued interest, primarily allocated         26,317       26,307
Allocated Safety-Kleen debt, net             704,511      704,247
Promissory note                               60,000       60,000
Industrial revenue bonds                      80,603       90,900
Other                                         11,120        5,393
---------    ---------
$ 959,079    $ 963,354
=========    =========

Safety-Kleen made certain adequate protection payments to pre-petition lenders
of the Senior Credit Facility. Allocated Safety-Kleen debt is presented net of
allocated adequate protection payments of $6.3 million and $6.6 million at
August 31, 2001 and 2000, respectively.

As a result of the Chapter 11 Cases, principal and interest payments may not be
made on pre-petition debt without Bankruptcy Court approval or until a plan or
plans of reorganization defining the repayment terms has been confirmed. The
total interest on pre-petition debt of Safety-Kleen that was not paid or accrued
for the period from June 9, 2000 to August 31, 2001 was $306.2 million.
Approximately $111.3 million of the interest not paid or accrued relates to the
pre-petition debt of Safety-Kleen allocated or directly related to the Company
as described in Note 2. Such interest is not being accrued since it is not
probable that it will be treated as an allowed claim. The Bankruptcy Code
generally disallows the payment of interest that accrues post-petition with
respect to unsecured or undersecured pre-petition liabilities.

21

As discussed in Note 2, all net intercompany balances of the Company, including
those as of the Chapter 11 filing date, are included in parent company
investment, net, in the accompanying Combined Balance Sheets.

Contingent liabilities -- Contingent liabilities as of the Chapter 11 filing
date are also subject to compromise. At August 31, 2001, the Company was
contingently liable to banks, financial institutions and others for
approximately $57.3 million for outstanding letters of credit, which included
$0.4 million of performance bonds securing performance of sales contracts and
other guarantees in the ordinary course of business.

The Company is a party to litigation matters and claims that are normal in the
course of its operations. Generally, litigation related to "claims", as defined
by the Bankruptcy Code, is stayed. Also, as a normal part of their operations,
the Company undertakes certain contractual obligations, warranties and
guarantees in connection with the sale of products or services. The outcome of
the bankruptcy process on these matters cannot be predicted with certainty.

9.  ACQUISITIONS

The Company completed four acquisitions of stock and assets during fiscal 1999.
These acquisitions have been accounted for under the purchase method of
accounting. The total purchase price paid for these acquisitions was $10.7
million and the respective net liabilities acquired was $1.1 million, resulting
in goodwill recorded of $11.8 million.

The Company made no acquisitions during fiscal 2001 or 2000.

10. COMMITMENTS AND CONTINGENCIES

Lease Commitments

Safety-Kleen enters into operating leases primarily for real property and
vehicles used by the Company under various terms and conditions. As discussed in
Note 8, commitments related to operating leases are subject to compromise and
additional claims may arise from the rejection of unexpired leases.

The contractually stated minimum future lease payments for property and
equipment used by the Company consist of the following ($ in thousands):

Year ending August 31,
2002                               $  9,419
2003                                  6,847
2004                                  4,794
2005                                  3,885
2006                                  3,427
Thereafter                            5,312
--------
Total minimum payments           $ 33,684
--------

Purchase Commitments

Effective July 2001, Safety-Kleen entered into an agreement with Unisys
Corporation and certain of its affiliates to provide outsourced information
technology support functions related to personal computer and related network
needs. The agreement provides for a monthly fee estimated at approximately $0.5
million based on, among other things, the actual number of workstations, laptops
and servers used. The term of the agreement is for five years. Management has
estimated that approximately $0.2 million of the monthly fee relates to
providing outsourced information technology functions of the Company.

Liability Insurance

Safety-Kleen, through premiums paid to Laidlaw (see Note 14), carried general
liability, vehicle liability, employment practices liability, pollution
liability, directors and officers liability, worker's compensation and
employer's liability coverage, as well as umbrella liability policies to provide
excess coverage over the underlying limits contained in these primary policies.
Effective September 1, 2000, Safety-Kleen obtained its insurance requirements
from a third-party insurance company.

Safety-Kleen's insurance programs for certain worker's compensation, general
liability (including product liability) and vehicle liability are self-insured
up to certain limits. Claims in excess of these self-insurance limits are fully
insured. For self-insured worker's compensation, general liability (including
product liability), property, and vehicle liability, management estimates these
liabilities based on actuarially determined estimates of the incurred but not
reported claims plus any portion of incurred but not paid claims and premiums.
These estimates are generally within a range of potential ultimate outcomes. All
employee-related health care benefits are fully self-insured and liabilities

22

include both an accrual for an estimate of the incurred but not reported claims
that is calculated using historical claims data and an accrual for the incurred
but not paid claims and premiums.

The Company's liabilities for unpaid and incurred but not reported claims at
August 31, 2001, 2000 and 1999 were $8.0 million, $4.3 million and $4.3 million,
respectively, under the current risk management program. Certain product and
worker's compensation liabilities have been classified as long-term liabilities
based upon actuarial projections of future claims payments. These liabilities at
August 31, 2001, 2000 and 1999 were $2.8 million, $1.1 million and $1.1 million,
respectively. In addition, $1.1 million of the self-insured liabilities at
August 31, 2001 and 2000, respectively, are subject to compromise. While the
ultimate amount of claims incurred are dependent on future developments, in
management's opinion, recorded reserves are adequate to cover the future payment
of claims. However, it is reasonably possible that recorded reserves may not be
adequate to cover the future payment of claims and there is no guarantee that
the Company or Safety-Kleen will have the cash or funds available to pay any or
all claims. Adjustments, if any, to estimates recorded resulting from ultimate
claim payments will be recorded in the periods in which such adjustments are
known.

Employment Agreements

Safety-Kleen is party to employment agreements with certain executives of the
Company, which provide for compensation and certain other benefits. The
agreements also provide for severance payments under certain circumstances.

Financial Assurance Matters

Under RCRA, TSCA, and analogous state statutes, owners and operators of certain
waste management facilities are subject to financial assurance requirements to
ensure performance of their closure, post-closure and corrective action
obligations. Safety-Kleen Corp. and certain of its subsidiaries as owners and
operators of RCRA and TSCA waste management facilities are subject to these
financial assurance requirements. Applicable regulations allow owners and
operators to provide financial assurance through a surety bond from an approved
surety. Under federal regulations and in virtually all states, to qualify as an
approved surety for the purposes of providing this type of financial assurance,
a surety company must be listed on Circular 570, which is maintained and
distributed publicly by the United States Department of the Treasury.

In compliance with the law, starting in 1997, Safety-Kleen procured surety bonds
issued by Frontier Insurance Company ("Frontier") as financial assurance at
numerous locations. Of the total amount of financial assurance required for the
Company's locations under the environmental statutes, which approximated $420.0
million as of May 31, 2000, slightly more than 50% of such requirements were
satisfied through assurances provided by Frontier in the form of surety bonds.

On June 6, 2000, the U.S. Treasury issued notification that Frontier no longer
qualified as an acceptable surety on Federal bonds and had been removed from
Circular 570 on May 31, 2000. Accordingly, effective May 31, 2000, Safety-Kleen
no longer had compliant financial assurance for many of its facilities. Under
applicable regulations, Safety-Kleen Corp.'s affected subsidiaries were required
to obtain compliant financial assurance within sixty days, and in some states,
more quickly (although the surety bonds issued by Frontier no longer qualify as
acceptable federal bonds, they remain in place and effective until replaced).
Immediately following this U.S. Treasury announcement, Safety-Kleen notified the
EPA of its lack of audited consolidated financial statements for fiscal 1999,
1998 and 1997 and the difficulties that certain alleged accounting
irregularities would cause Safety-Kleen in attempting to obtain compliant
financial assurance for its facilities covered by the Frontier bonds.
Safety-Kleen and the EPA also contacted states in which the non-compliant
facilities were located and apprised such states of these facts.

Safety-Kleen and the EPA, acting on behalf of many, but not all, affected
states, then engaged in negotiations resulting in the entry of a Consent
Agreement and Final Order ("CAFO"), which the Bankruptcy Court approved on
October 17, 2000. Some states referred their enforcement authority to the EPA
for purposes of this CAFO and thus are, in effect, parties to the CAFO. Other
states entered separate, but similar, consent agreements with Safety-Kleen. Some
states have never entered separate written agreements, but have allowed
Safety-Kleen to continue operating while it obtains coverage to replace the
Frontier bonds.

The main component of the EPA CAFO (and of the consent agreements in various
states) is a compliance schedule for Safety-Kleen Corp. and its affected
subsidiaries to obtain compliant financial assurance for the facilities covered
by the Frontier bonds. That schedule has been modified on several occasions
since the CAFO was entered and as Safety-Kleen has replaced Frontier at various
facilities.

Safety-Kleen believes that most, but not all, states that have retained primary
jurisdiction on this issue and which have facilities where Frontier has not yet
been replaced will accept the July 31, 2002 deadline under the CAFO, discussed
below. However, Safety-Kleen has not concluded agreements with all such states.
South Carolina has not followed the EPA schedule, as discussed below.

Safety-Kleen may seek further extensions from the EPA and the states, but the
CAFO does not obligate the EPA and the states to grant such further extensions.
Under the CAFO, the EPA reserves the right, in consultation with an affected
state, to determine in its discretion and in accordance with applicable law, to
modify these requirements. There can be no assurance that Safety-Kleen will be
able to complete its replacement of Frontier on a schedule acceptable to the EPA
and the states. If it does not, Safety-Kleen could be assessed penalties in
addition to those discussed in the next paragraph.

23

The CAFO imposed a penalty on Safety-Kleen Services, Inc. The penalty has grown
to approximately $1.6 million as delays have ensued in the replacement of
Frontier, and additional states have joined the CAFO (see discussion below).
Some states have imposed financial assurance penalties in addition to this
amount. Safety-Kleen believes such penalties, if asserted, would total
approximately $1.0 million through January 31, 2002. The total asserted and
unasserted penalties related to the Company through January 31, 2002, are
approximately $1.3 million.

The State of South Carolina has not entered any consent agreement with
Safety-Kleen that would extend any financial assurance regulatory deadline with
respect to the Pinewood Facility. Moreover, South Carolina has not agreed to the
July 31, 2002 deadline for the replacement of Frontier at inactive facilities
and has notified Safety-Kleen that it is assessing daily penalties that escalate
to a maximum of $6,000 per day at an inactive facility in that state that does
not yet have coverage to replace Frontier. In the EPA CAFO and in some state
consent agreements, Safety-Kleen agreed to a schedule by which the EPA and
certain states may monitor Safety-Kleen's efforts to obtain compliant financial
assurance. Among other things, the schedule required Safety-Kleen to provide
audited restated consolidated financial statements for fiscal years 1997-1999
and the audited consolidated financial statements for fiscal 2000 by certain
deadlines. Safety-Kleen did not meet the deadlines by the original due dates but
subsequently provided the required information to the EPA and participating
states. Accordingly, the EPA and certain states may impose additional penalties
on Safety-Kleen, a portion of which may be allocable to the Company.

Under the CAFO, until such time as the affected facilities have obtained
compliant financial assurance, Safety-Kleen Corp. and its affected facilities
must not seek to withdraw an existing irrevocable letter of credit from Toronto
Dominion Bank, which is subject to compromise, in the amount of $28.5 million
for the benefit of Frontier and shall take all steps necessary to keep current
the existing Frontier surety bonds.

In the CAFO, Safety-Kleen waived certain arguments they otherwise could have
asserted under the Bankruptcy Code with respect to their financial assurance and
certain other obligations under environmental laws. Safety-Kleen's lenders and
the unsecured creditors committee have reserved their right to assert certain of
such arguments.

Safety-Kleen understands that, on August 27, 2001, Frontier entered a
rehabilitation proceeding that the New York Superintendent of Insurance will
administer pursuant to New York law. Safety-Kleen further understands that in
such a proceeding, the Superintendent takes possession of the property of
Frontier and conducts its business. Safety-Kleen has been informed that these
rehabilitation proceedings are unlikely to affect the validity of the remaining
Frontier bonds at its facilities; however, there can be no guarantee that the
remaining Frontier bonds at Safety-Kleen facilities will continue to be valid.

As of January 1, 2002, Safety-Kleen was in a position to replace Frontier at all
its active facilities (actual replacement occurs as regulators review and accept
the replacement policies Safety-Kleen has little or no control over the timing
of this process). The current EPA deadline for replacement of Frontier at
inactive facilities of the Company is July 31, 2002.

As of August 31, 2001, Safety-Kleen had provided financial assurances for the
Company's facilities in the form of insurance policies and performance bonds to
the applicable regulatory authorities totaling approximately $440.0 million, in
connection with closure, post-closure and corrective action requirements of
certain facility operating permits. Letters of credit of approximately $52.9
million are held to meet various financial assurance requirements for the
Company. Restricted assets of $22.2 million are held in trust for the Company's
landfill closure, post-closure and environmental impairment (see Note 2).
Insurance policies with limits of approximately $92.0 million are held to cover
any bodily injury or property damage to third parties caused by accidental
occurrences at certain of the Company's facilities.

Chapter 11 Proceedings

As described in Note 1, the Debtors filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code on June 9, 2000. Management continues to
operate the business of the Debtors as debtors-in-possession under Sections 1107
and 1108 of the Bankruptcy Code. In this proceeding, the Debtors intend to
propose and seek confirmation of a plan or plans of reorganization. Pursuant to
the automatic stay provision of Section 362 of the Bankruptcy Code, virtually
all pending pre-petition litigation against the Debtors is currently stayed.

As of August 31, 2001, proofs of claim in the approximate amount of $174.0
billion have been filed against the Debtors by, among others, secured creditors,
unsecured creditors and security holders. Safety-Kleen is in the process of
reviewing the proofs of claim and once this process is complete, will file
appropriate objections to the claims in the Bankruptcy Court, including
objections on behalf of the Company. As of August 31, 2001, Safety-Kleen
believes it has identified approximately $170.8 billion of such claims that are
duplicative or without merit. The Company believes that the amount of these
claims related to the Company that are in excess of the $959.1 million recorded
as liabilities subject to compromise in the accompanying Combined Balance Sheet
at August 31, 2001 are: (i) duplicative or without merit; (ii) do not meet the
criteria to be recorded as a liability under accounting principles generally
accepted in the United States; and (iii) will not have a material effect on the
accompanying Combined Balance Sheets, but there can be no assurance that
management is correct and these claims may have a material effect on the
accompanying Combined Balance Sheets.

As a result of the Chapter 11 Cases, Safety-Kleen has not paid certain real
estate taxes and certain taxing authorities have asserted liens against certain
real estate of the Company.

Currently, it is not possible to predict the length of time the Debtors will
operate under the protection of Chapter 11, the outcome of the Chapter 11
proceedings in general, or the effect of the proceedings on the business of
Safety-Kleen or on the interests of the various creditors and security holders.
Under the Bankruptcy Code, post-petition liabilities and pre-petition
liabilities subject to compromise must be satisfied

24

before shareholders can receive any distribution. The ultimate recovery to
Safety-Kleen Corp.'s shareholders, if any, will not be determined until the end
of the case when the fair value of the Debtors' assets is compared to the
liabilities and claims against the Debtors. There can be no assurance as to what
value, if any, will be ascribed to the Safety-Kleen Corp. common stock in the
bankruptcy proceedings. Safety-Kleen Corp. does not believe that its
shareholders will receive any distribution upon consummation of a plan or plans
of reorganization.

Actions Involving Laidlaw Inc.

Laidlaw owns 43.6% of the outstanding common stock of Safety-Kleen and has
various other arrangements and relationships with Safety-Kleen. On November 7,
2000, Laidlaw, on behalf of itself and its direct and indirect subsidiaries
(collectively referred to as the "Laidlaw Group"), filed a proof of claim in the
unliquidated amount of not less than $6.5 billion against the Debtors in the
Chapter 11 Cases. The Laidlaw Group claims against the Debtors fall into the
following general categories: 1) claims for indemnification; 2) contribution and
reimbursement in connection with certain litigation matters; 3) claims against
the Debtors for fraudulent misrepresentation, fraud, securities law violations,
and related causes of action; 4) insurance claims; 5) guaranty claims; 6)
environmental contribution claims; 7) tax reimbursement claims; and 8)
additional miscellaneous claims. On April 19, 2001, Safety-Kleen Corp. on behalf
of itself and its direct and indirect subsidiaries, including those within the
Company, filed with the Bankruptcy Court an objection to the proof of claim
filed by Laidlaw Group.

On April 19, 2001, Safety-Kleen filed an action against Laidlaw and its
affiliates, LTI and Laidlaw International Finance Corporation ("LIFC")
(collectively the "Laidlaw Defendants") in the Debtors' Chapter 11 Cases, Adv.
Pro. No. 01-01086 (PJW). This action seeks to recover a transfer of over $200
million in August 1999 (the "Transfer") made to or for the benefit of the
Laidlaw Defendants, holders of 43.6% of Safety-Kleen Corp's common stock.
Safety-Kleen asserts that the transfer is recoverable either as a preference
payment to the extent the Transfer retired pre-existing debt or as a fraudulent
transfer to the extent the Transfer redeemed equity or was made with intent to
hinder, delay or defraud creditors. In the action, Safety-Kleen seeks to recover
the Transfer, plus interest and costs occurring from the first date of demand
from the Laidlaw Defendants.

On June 28, 2001, Laidlaw and five of its subsidiary holding companies, Laidlaw
Investments Ltd., LIFC, Laidlaw One, Inc., LTI and Laidlaw USA, Inc.
(collectively, "Laidlaw Debtors") filed voluntary petitions for reorganization
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court
for the Western District of New York Case Nos. 01-14099K through 01-1404K. On
the same day, Laidlaw and Laidlaw Investments Ltd. filed cases under the Canada
Companies' Creditors Arrangement Act (CCAA) in the Ontario Superior Court of
Justice in Toronto, Ontario. On October 16, 2001, Safety-Kleen and the Official
Committee of Unsecured Creditors filed a proof of claim in the unliquidated
amount of not less than $4.6 billion, subject to statutory trebling, plus
punitive damages, interest, and costs, against Laidlaw Debtors in the
above-referenced Chapter 11 cases. The claims against Laidlaw Debtors fall into
the following general categories: 1) claims for fraud, racketeering, breach of
fiduciary duty, and other related misconduct; 2) preference and fraudulent
transfer claims; 3) breach of contract, misrepresentation, and other related
misconduct; 4) guaranty claims; and 5) indemnification, contribution, and
reimbursement claims. Laidlaw Debtors have not yet filed an objection to the
proof of claim filed by Safety-Kleen. Safety-Kleen intends to vigorously pursue
this claim. Similarly, certain directors of Safety-Kleen Corp. filed a proof of
claim against Laidlaw Debtors. To the extent these directors are successful in
obtaining payments that otherwise would have gone to Safety-Kleen, their
interests could be deemed materially adverse to the interests of Safety-Kleen.
As a result of Laidlaw Debtors' filings, the claims and causes of action
Safety-Kleen may have against Laidlaw Debtors may be subject to compromise in
the Laidlaw Debtors' Chapter 11 or CCAA proceedings.

In December 2001, pursuant to the Safety-Kleen/Laidlaw Mediation Discovery
Protocol, the Debtors, the Debtors' secured lenders, the Debtors' Official
Committee of Unsecured Creditors, certain of the Debtors' directors, Laidlaw
Debtors and the Laidlaw Debtors creditors' committee and subcommittees agreed to
undertake, on an expedited and consolidated basis, limited preliminary discovery
to obtain information to assist in presenting submissions to a mediator in an
effort to resolve certain outstanding claims between and among the parties in
the Debtors' and Laidlaw Debtors bankruptcy cases. A mediation proceeding began
in early April 2002. The parties continue discussions. The resolution of these
matters could have a material adverse effect on financial condition of
Safety-Kleen and the Company.

Legal Proceedings

Legal proceedings covering a wide range of matters are pending or threatened in
the United States and foreign jurisdictions against Safety-Kleen and/or former
and/or current officers, directors and employees. Many of these claims directly
or indirectly impact the Company. Various types of claims are raised in these
proceedings, including shareholder class action and derivative lawsuits, product
liability, environmental, antitrust, tax, and breach of contract. Management
consults with legal counsel in estimating reserves and developing estimates of
ranges of potential loss.

Safety-Kleen has claims related to the Company where Safety-Kleen has assessed
that an unfavorable outcome is probable. At August 31, 2001, the aggregate
estimated potential loss on these claims range from approximately $14.4 million
to approximately $62.7 million and the Company has recorded reserves of
approximately $20.0 million, comprised of $18.4 million of accrued litigation
subject to compromise and $1.6 million of environmental liabilities subject to
compromise, representing its best estimate of losses to be incurred.

Additionally, Safety-Kleen also has substantial claims related to the Company
where Safety-Kleen has assessed that an unfavorable outcome is probable or, at
least, reasonably possible and which, if incurred, may have a material adverse
effect on Safety-Kleen's and the Company's

25

financial condition. The Company, however, has not recorded reserves related to
these claims as management believes the potential loss is not currently
estimable.

The actual outcomes from these claims, the most significant of which are
discussed below, could differ from these estimates.

Matters Related to Investigation of Safety-Kleen's Financial Results

On March 6, 2000, Safety-Kleen announced that it had initiated an internal
investigation (the "Safety-Kleen Investigation") of its previously reported
financial results and certain if its accounting policies and practices. This
investigation followed receipt by Safety-Kleen Corp.'s Board of Directors of
information alleging possible accounting irregularities that may have affected
the previously reported financial results of Safety-Kleen. Following this
announcement PricewaterhouseCoopers LLP, Safety-Kleen's independent accountants
at that time, notified Safety-Kleen that it was withdrawing its previously
issued reports of independent public accountants on the fiscal years 1999, 1998
and 1997 consolidated financial statements. The internal investigation included
fiscal year 1997 and subsequent periods. The Board appointed a special
committee, consisting of four directors who were then independent outside
directors of Safety-Kleen Corp., to conduct the internal investigation (the
"Special Committee (Investigation)"). The Special Committee (Investigation) was
later expanded to five directors, with the addition of one additional
independent outside director. The Special Committee (Investigation) engaged the
law firm Shaw Pittman, and Shaw Pittman engaged the accounting firm Arthur
Andersen LLP, to assist with the comprehensive investigation of these matters.
The Board placed Kenneth W. Winger, Safety-Kleen Corp.'s President and Chief
Executive Officer and a director, Michael J. Bragagnolo, Executive Vice
President and Chief Operating Officer, and Paul R. Humphreys, Senior Vice
President of Finance and Chief Financial Officer, on administrative leave on
March 5, 2000. Safety-Kleen accepted the resignations of Messrs. Winger,
Bragagnolo, and Humphreys, as officers, in mid-May 2000 and of Mr. Winger, as a
director, on June 9, 2000, and subsequently terminated the employment of these
individuals in July 2000.

On September 14, 2000, the Bankruptcy Court approved Safety-Kleen's motion to
engage Arthur Andersen LLP (i) to act as its independent public accountants,
(ii) to conduct an audit of Safety-Kleen's consolidated financial statements
with respect to fiscal years 2000, 1999, 1998 and 1997, (iii) to continue
assisting with the Safety-Kleen Investigation and (iv) to provide other
services. Safety-Kleen restated its previously reported consolidated financial
statements for each of the three years ended August 31, 1999, 1998 and 1997 in
Safety-Kleen's Form 10-K/A for the year ended August 31, 2000 filed with the SEC
on July 9, 2001.

On September 13, 2001, the Board of Directors dissolved the Special Committee
(Investigation) and established the Special Committee (Conflicts of Interest in
Litigation). The Special Committee (Conflicts of Interest in Litigation) is
authorized to manage all litigation involving Safety-Kleen and any member of the
Board of Directors. The new committee is comprised of Ronald A. Rittenmeyer,
Kenneth K. Chalmers, Peter E. Lengyel and David W. Wallace, each of whom was
appointed to the Board subsequent to March 6, 2000 and is not personally
involved in such litigation.

Beginning in March 2000, a number of lawsuits were filed, on behalf of various
classes of investors, including bondholders and shareholders, against
Safety-Kleen, certain officers, former directors, and others. The complaints
that did name Safety-Kleen were subsequently amended eliminating Safety-Kleen as
a defendant and adding certain other defendants, including certain Directors of
Safety-Kleen Corp. The complaints allege, among other things, that the
defendants made false and misleading statements and violated certain federal
securities laws. Generally, the actions seek to recover damages in unspecified
amounts that the plaintiffs allegedly sustained by acquiring shares of
Safety-Kleen Corp.'s common stock or purchasing debt of Safety-Kleen. Although
Safety-Kleen is not a party to these actions, certain of the individual
defendants who are present or former officers or directors of Safety-Kleen Corp.
have made demands to be indemnified by Safety-Kleen in connection with the
action.

Shortly after Safety-Kleen's March 6, 2000, announcement, Safety-Kleen
representatives met with officials of the SEC and advised the SEC of the alleged
accounting irregularities and Safety-Kleen's internal investigation with respect
to the allegations. On March 10, 2000, Safety-Kleen was advised that the SEC had
initiated a formal investigation of Safety-Kleen. On or about March 22, 2000,
Safety-Kleen Corp. was served with a subpoena issued by a Grand Jury sitting in
the United States District Court for the Southern District of New York seeking
production of documents sought by the SEC in its investigation. Safety-Kleen has
responded to the subpoena. Safety-Kleen is cooperating with each of the
investigations.

On October 4, 2001, Safety-Kleen, along with Robert W. Luba, the Estate of John
W. Rollins, Sr., John W. Rollins, Jr., David E. Thomas, Jr., Henry B. Tippie,
James L. Wareham, and Grover C. Wrenn filed an action in the Circuit Court of
South Carolina, Richland County, against PricewaterhouseCoopers LLP and
PricewaterhouseCoopers LLP (Canada), Civil No. 3:01-4247-17 (the "PWC Action").
The PWC Action alleges, among other things, that the defendants were negligent
and reckless in failing to comply with applicable industry and professional
standards in their review and audit of Safety-Kleen's consolidated financial
statements and in the negligent and reckless failure to detect and/or report
material misstatements in those consolidated financial statements. The Complaint
alleges causes of action for breach of contract, breach of contract accompanied
by a fraudulent act, professional negligence, negligent misrepresentation,
violations of the South Carolina Unfair Trade Practices Act and a declaratory
judgment for indemnification on behalf of the plaintiff directors. The Complaint
seeks in excess of $1.0 billion from the defendants. Safety-Kleen intends to
pursue this claim vigorously.

On November 13, 2001, Safety-Kleen, along with Robert W. Luba, the Estate of
John W. Rollins, Sr., John W. Rollins, Jr., David E. Thomas, Jr., Henry B.
Tippie, James L. Wareham, and Grover C. Wrenn filed an action in the Circuit
Court of South Carolina, Richland County,

26

against National Union Fire Insurance Company of Pittsburgh, PA and American
Home Assurance Company, Civil No. 01CP404813 (the "Insurance Action"). The
Insurance Action alleges that the defendants wrongfully denied insurance
coverage under certain directors and officers insurance policies for the various
securities actions detailed above. The Complaint alleges causes of action for
declaratory judgment and breach of contract. The Complaint also seeks insurance
coverage for plaintiffs' for costs associated with defending the securities
actions and for any liability plaintiffs may ultimately incur. Safety-Kleen
intends to pursue this claim vigorously.

On December 13, 2000, thirteen lenders to Safety-Kleen Services, Inc., sued
PricewaterhouseCoopers LLP, in the State Court of Fulton County Georgia,
alleging negligent misrepresentation by PricewaterhouseCoopers LLP, in
connection with the consolidated financial statements of Safety-Kleen for fiscal
years 1997, 1998 and 1999. The case is captioned Toronto Dominion (Texas), Inc.,
et al. v. PricewaterhouseCoopers LLP, Civil Action No. 00 VS 02679 F. The
complaint has been amended twice, and the plaintiffs now number over 90 lenders
to Safety-Kleen Services, Inc. On October 23, 2001, PricewaterhouseCoopers LLP,
filed a motion for leave to file a third-party complaint naming Safety-Kleen and
former Safety-Kleen Corp. officers Kenneth W. Winger, Michael J. Bragagnolo, and
Paul B. Humphreys as third party defendants in a third party claim for indemnity
or contribution. The Georgia state court granted leave and
PricewaterhouseCoopers LLP, has now served a third party complaint against
Safety-Kleen. Safety-Kleen is moving to enjoin the third party complaint and
argues that it contravenes the automatic stay provisions of federal bankruptcy
law.

General Environmental

The Company's hazardous and industrial waste services are continuously regulated
by federal, state, provincial and local laws enacted to regulate the discharge
of materials into the environment or primarily for the purpose of protecting the
environment. This inherent regulation of the Company necessarily results in its
frequently becoming a party to judicial or administrative proceedings involving
all levels of governmental authorities and other interested parties. The issues
that are involved generally relate to applications for permits and licenses by
the Company and their conformity with legal requirements and alleged violations
of existing permits and licenses. At April 11, 2002, the Company was involved in
four proceedings in which a governmental authority is a party relating primarily
to activities at waste treatment, storage and disposal facilities where
management believes sanctions involved in each instance may exceed $100,000.

The most significant environmental and regulatory proceedings are discussed
below:

(i) Safety-Kleen (Pinewood), Inc.

Safety-Kleen (Pinewood), Inc. ("Pinewood"), an entity included in the
accompanying Combined Balance Sheets, owns and operated a hazardous waste
landfill, the Pinewood Facility, near the Town of Pinewood in Sumter County,
South Carolina. By an order dated May 19, 1994 ("Order"), the South Carolina
Board of Health and Environmental Control ("Board") approved the issuance by the
Department of Health and Environmental Control ("DHEC") of a RCRA Part B permit
(the "Permit") for operation of the Pinewood Facility. The Permit included
provisions governing financial assurance and capacity for the facility.

The Order established Pinewood's total permitted capacity of hazardous and
non-hazardous waste to be 2,250 acre feet, including the amount of hazardous
waste disposed prior to the date of the Order. South Carolina law requires that
hazardous waste facilities provide evidence of financial assurance for potential
environmental cleanup and restoration in form and amount to be determined by
DHEC. The Order required Pinewood to establish and maintain the EIF in the
amount of $133 million in 1994 dollars ($151 million in 2001 dollars) by July 1,
2004 as financial assurance for potential environmental cleanup and restoration
of environmental impairment at the Pinewood Facility. The total fund requirement
amount is to be adjusted annually by the Implicit Price Deflator for the Gross
National Product as published by the U.S. Department of Commerce. The EIF has
two components: (i) the GSX Contribution Fund, which was to be funded by
Pinewood in annual cash payments over a ten year period; and (ii) the State
Permitted Sites Fund, a legislatively created fund derived from fees on waste
disposal at the Pinewood Facility. Under the Order, at the end of the 100-year
post-closure care period, funding of the GSX Contribution Fund will be subject
to evaluation by an independent arbitrator, who will determine what level of
funding, if any, is still required. Safety-Kleen is entitled to seek recovery of
any excess amount so determined. Upon termination of the GSX Contribution Fund,
any remaining trust assets would revert to Pinewood. In 1993 and 1994, Pinewood
paid approximately $15.5 million cash into the GSX Contribution Fund, which has
grown to approximately $20.2 million as of August 31, 2001.

In June 1995, the South Carolina legislature approved regulations (the
"Regulations") governing financial assurance for environmental cleanup and
restoration. The Regulations gave owner/operators of hazardous waste facilities
the right to choose from among six options for providing financial assurance.
The options included insurance, a bond, a letter of credit, a cash trust fund
and a corporate guaranty, subject to a financial soundness test.

From June 1995, under authority of the Regulations, Pinewood submitted financial
assurance for potential environmental cleanup and restoration by way of a
corporate guaranty by Laidlaw or insurance. Pinewood also left in place the GSX
Contribution Fund. On September 15, 1995, DHEC issued a declaratory ruling
finding that the Regulations were applicable to the financial assurance
requirements for Pinewood.

Pinewood appealed the May 19, 1994, DHEC order and the opposing parties appealed
the May 19, 1994, DHEC Order and the September 15, 1995, DHEC declaratory ruling
and the appeals were consolidated in the South Carolina Circuit Court in the
case captioned Laidlaw Environmental Services of South Carolina, Inc. et al.,
Petitioners vs. South Carolina Department of Health and Environmental Control
and South Carolina Board of Health and Environmental Control, Respondents -
Energy Research Foundation, et al., Intervenors, Docket Numbers

27

C/A 94-CP-43-175, 94-CP-43-178, 94-CP-40-1412 and 94-CP-40-1859. The opposing
parties included Citizens Asking for a Safe Environment, Energy Research
Foundation, County of Sumter, Sierra Club, County of Clarendon, Senator Phil
Leventy, the South Carolina Department of Natural Resources and the South
Carolina Public Service Authority.

The South Carolina Court of Appeals issued a decision on April 4, 2000
(substituting for a January 17, 2000 ruling) ruling that (i) the Regulations
were invalid due to insufficient public notice during the promulgation procedure
and ordering Pinewood to immediately comply with the cash financial assurance
requirements of the May 19, 1994 Order; and (ii) both non-hazardous and
hazardous waste count against Pinewood's capacity from the beginning of waste
disposal, thereby reducing the remaining permitted capacity.

On June 13, 2000, the South Carolina Supreme Court denied Pinewood's petition
for a writ of certiorari. On June 14, 2000, DHEC sent notice by letter to the
Pinewood Facility directing that Pinewood cease accepting waste for disposal in
30 days and submit a closure plan. DHEC based this directive on the decision of
the Court of Appeals that all non-hazardous waste disposed at Pinewood should be
counted against Pinewood's hazardous waste capacity limit and DHEC's resulting
conclusion that there is no remaining permitted capacity at Pinewood.

On June 22, 2000, DHEC notified Pinewood that the Court of Appeals' decision
vacated the Regulations and, therefore, Pinewood has the sole responsibility to
provide cash funding into the EIF in accordance with the May 19, 1994 Order. The
DHEC notice also directed Pinewood to provide information to DHEC within 15 days
on how Pinewood would comply with the Order including payment into the GSX
Contribution Fund. As of August 31, 2001, there was approximately $20.2 million
in the GSX Contribution Fund and approximately $14.7 million in the State
Permitted Sites Fund. In 2001 dollars, the total EIF funding requirement is
approximately $151.3 million. To comply with the financial assurance provisions
of the Order, Pinewood would have to contribute the following payments (in 2001
dollars) as follows, subject to the automatic stay provisions discussed below ($
in thousands):

Amount due during fiscal year:
2002                                 $ 109,811
2003                                     6,625
---------
Total                              $ 116,436
=========

Additionally, on June 9, 2000 (on the same day, but after, Pinewood filed its
petition for bankruptcy protection in the Bankruptcy Court), DHEC issued an
Emergency Order finding that Frontier (the issuer of the bonds used by Pinewood
to provide for financial assurance for the costs of closure and post-closure,
and third party liability) no longer met regulatory standards for bond issuers.
Based on this finding, DHEC ordered Pinewood to cease accepting waste for
disposal by August 28, 2000, unless it could provide acceptable alternative
financial assurance by June 27, 2000.

On July 7, 2000, in the legal action captioned: In re: Safety-Kleen Corp., et
al. Debtor, Chapter 11 Cases, Delaware Bankruptcy Court, Case Nos. 00-203 (PJW),
Adversary Proceeding No. 00-698-Safety-Kleen (Pinewood), Inc. v. State of South
Carolina, et al., District of South Carolina (MJP) Case No. 3:00-2243-10,
Pinewood commenced legal proceedings in the United States District Court for the
District of Delaware challenging DHEC's June 9, 2000, Emergency Order and DHEC's
June 14 and June 22, 2000 notice letters. Pinewood sought to stay and/or enjoin
DHEC and the State of South Carolina from enforcement of these directives on the
grounds that the actions of DHEC were invalid under various provisions of the
United States Constitution, violated the automatic stay provision of the
Bankruptcy Code and/or should be enjoined under the equitable powers of the
Bankruptcy Court. As an alternative cause of action, Pinewood demanded that it
be compensated for the taking of its property without just compensation under
provisions of the Constitutions of the United States and the State of South
Carolina.

On July 12, 2000, the Delaware U.S. District Court issued an Order transferring
the case to the United States District Court for the District of South Carolina.

On August 25, 2000, the U.S. District Court for the District of South Carolina
issued rulings that (i) denied South Carolina's motion to dismiss Pinewood's
claims upon jurisdictional grounds and certified the issue for an immediate
appeal to the United States Court of Appeals for the Fourth Circuit; (ii) held
that the June 9, 2000 Emergency Order was subject to the automatic stay
provisions of Section 362 of the Bankruptcy Code; and (iii) denied Pinewood's
motion for a preliminary injunction with respect to the June 14, 2000 DHEC
letter. The State of South Carolina and Pinewood appealed the District Court's
ruling to the United States Court of Appeals for the Fourth Circuit.

On December 19, 2001, the United States Court of Appeals for the Fourth Circuit
issued its decision on the appeals from Pinewood and DHEC. The Fourth Circuit
(i) affirmed the District Court's ruling that Pinewood's action was not barred
for failing to state a claim, or on other jurisdictional grounds, (ii) reversed
the District's Court's ruling as to the automatic stay, holding that the
automatic stay does not apply to DHEC's efforts to enforce the financial
assurance requirements, and (iii) affirmed the District Court's denial of
Pinewood's motion for a preliminary injunction. On January 22, 2002, DHEC issued
a letter to Pinewood directing that various investigative and other actions be
taken with respect to the landfill and current Pinewood operating procedures. On
January 29, 2002, DHEC issued a letter to Pinewood requiring that it submit a
closure plan within 30 days. Pinewood has appealed both the January 22 and
January 29 directives while at the same time continuing discussions with DHEC to
resolve all open issues. On March 11, 2002, DHEC advised Pinewood that it had
submitted a conceptual closure plan that met the intent of DHEC's January 29,
2002 letter. There can be no assurance that these matters will be resolved in
favor of the Company and there can be no assurance as to whether the outcome may
have a material adverse effect on the Company's financial position.

28

(ii)  Ville Mercier Facility

On January 12, 1993, Safety-Kleen Services (Mercier) Ltd. ("the Subsidiary"), an
entity included in the accompanying Combined Balance Sheets, filed a declaratory
judgement action (Safety-Kleen Services (Mercier) Ltd. v. Attorney General of
Quebec; Pierre Paradis, in his capacity as Minister of the Environment of
Quebec; Ville Mercier; and LaSalle Oil Carriers, Inc.) in the Superior Court for
the Province of Quebec, District of Montreal. The legal proceeding seeks a court
determination of the liability associated with the contamination of former
lagoons that were located on the Company's Ville Mercier property. The
Subsidiary asserts that it has no responsibility for the contamination on the
site. The Minister filed a Defense and Counterclaim in which it asserts that the
Subsidiary is responsible for the contamination, should reimburse the Province
of Quebec for past costs incurred in the amount of $17.4 million (CDN), and
should be responsible for future remediation costs. The legal proceedings are in
the discovery stage.

The contamination on the Ville Mercier facility dates back to 1968, when an
unrelated company owned the property. In 1968, the Quebec government issued two
permits to the unrelated company to dump organic liquids into lagoons on the
Ville Mercier property. By 1972, groundwater contamination had been identified
and the Quebec government provided an alternate water supply to the municipality
of Ville Mercier. Also in 1972, the permit authorizing the dumping of liquids
was terminated and a permit to operate an organic liquids incinerator on the
property was issued. (The entity to which this permit was issued was indirectly
acquired by Safety-Kleen Corp. in 1989.) In 1973, the Quebec government
contracted with the incinerator operator to incinerate the pumpable liquids in
the lagoons. In 1980, the incinerator operator removed, solidified and disposed
of the non-pumpable material from the lagoons in a secure cell and completed the
closure of the lagoons at its own expense. In 1983, the Quebec government
constructed and continues to operate a groundwater pumping and treatment
facility near the lagoons.

Safety-Kleen believes that the Subsidiary is not the party responsible for the
lagoon and groundwater contamination and the Subsidiary has denied any
responsibility for the decontamination and restoration of the site. In November
1992, the Minister of the Environment ordered the Subsidiary to take all the
necessary measures to excavate, eliminate or treat all of the contaminated soils
and residues and to recover and treat all of the contaminated waters resulting
from the aforementioned measures. The Subsidiary responded by letter,
reiterating its position that it had no responsibility for the contamination
associated with the discharges of wastes into the former Mercier lagoons between
1968 and 1972 and proposing to submit the question of responsibility to the
Courts for determination as expeditiously as possible through the cooperation of
the parties' respective attorneys, resulting in the filing of the pending
action.

On or about February 9 and March 12, 1999, Ville Mercier and three neighboring
municipalities filed separate legal proceedings against the Subsidiary and
certain related companies together with certain former officers and directors,
as well as against the Government of Quebec (Ville Mercier v. Safety-Kleen
Services (Mercier) Ltd., et. al.; Ville de Chateauguay v. Safety-Kleen Services
(Mercier) Ltd., et. al.; Municipality of Ste-Martine v. Safety-Kleen Services
(Mercier) Ltd., et. al.; and St.Paul de Chateauguay v. Safety-Kleen Services
(Mercier) Ltd., et. al.). The lawsuits assert that the defendants are jointly
and severally responsible for the contamination of groundwater in the region,
which Plaintiffs claim was caused by contamination from the former Ville Mercier
lagoons, and which they claim caused each municipality to incur additional costs
to supply drinking water for their citizens since the 1970's and early 1980's.
The four municipalities claim a total of $1.6 million (CDN) as damages for
additional costs to obtain drinking water supplies and seek an injunctive order
to obligate the defendants to remediate the groundwater in the region. The
Subsidiary will continue to assert that it has no responsibility for the ground
water contamination in the region. The legal proceedings are in the discovery
stage.

(iii) Marine Shale Processors

Beginning in the mid-1980's and continuing until July 1996, Marine Shale
Processors, Inc., located in Amelia, Louisiana ("Marine Shale"), operated a kiln
which incinerated waste producing a vitrified aggregate as a by-product. Marine
Shale contended that its operation recycled waste into a useful product, i.e.
vitrified aggregate, and therefore, was exempt from RCRA regulation and
permitting requirements as a Hazardous Waste Incinerator. The EPA contended that
Marine Shale was a "sham-recycler" subject to the regulation and permitting
requirements as a Hazardous Waste Incinerator under RCRA, that its vitrified
aggregate by-product is a hazardous waste, and that Marine Shale's continued
operation without required permits was illegal. Litigation between the EPA and
Marine Shale with respect to this issue began in 1990 and continued until July
1996 when Marine Shale was ordered to shut down its operations by U.S. Fifth
Circuit Court of Appeals.

During the course of its operation, Marine Shale produced thousands of tons of
aggregate, some of which was sold as fill material at various locations in the
vicinity of Amelia, Louisiana, but most of which is stockpiled on the premises
of the Marine Shale facility. Moreover, as a result of past operations, soil and
groundwater contamination may exist on the Marine Shale site.

In November 1996, an option to buy Marine Shale was obtained by Earthlock
Technologies, Inc. ("Earthlock") formerly known as GTX, Inc. with the intent to
operate the facility as a permitted Hazardous Waste Incinerator. Subsequently,
Marine Shale, Earthlock and the EPA reached a settlement, including a required
cleanup of the aggregate and the facility, and the Louisiana Department of
Environmental Quality issued a draft permit to Earthlock for operation of the
Marine Shale facility as a RCRA-permitted Hazardous Waste Incinerator.
Opposition parties filed appeals and in October 1999, a Louisiana State Court
Judge ruled that the draft permit was improperly issued. Earthlock appealed this
decision and in October 2000, the Appeals Court reversed the lower court and
affirmed the permit issuance. The opposition parties filed applications for
Supervisory Writs with the Louisiana Supreme Court, and these applications were
denied in April 2001. There may be further

29

legal challenges to the permit and it is uncertain whether or when Earthlock
will exercise its purchase option and begin operation of the Marine Shale
facility.

The Company was one of the largest customers of Marine Shale. In the event
Marine Shale does not operate, the potential exists for an EPA action requiring
cleanup of the Marine Shale site and the stockpiled aggregate under CERCLA. In
this event, the Company would be exposed to potential financial liability for
remediation costs as a PRP under CERCLA.

(iv) RayGar Environmental Systems International Litigation

On August 7, 2000, RayGar Environmental Systems International, Inc. filed its
First Amended Complaint in the United States District for the Southern District
of Mississippi, Hattiesburg Division, Civil Action No. 2:9CV376PG, against
Laidlaw, Laidlaw Investments, Ltd., LTI, LESI, LES, Inc. (a wholly-owned
subsidiary of Safety-Kleen Corp. now known as Safety-Kleen Services, Inc.),
Laidlaw Environmental Services (U.S.), Inc. (an indirect wholly-owned subsidiary
of Safety-Kleen Corp. and predecessor to Safety-Kleen Services, Inc.), Laidlaw
OSCO Holdings, Inc. (a wholly-owned subsidiary of Safety-Kleen Corp. now known
as Safety-Kleen OSCO Holdings, Inc., a company included in the accompanying
Combined Balance Sheets), Laidlaw International, and Safety-Kleen Corp. alleging
a variety of Federal antitrust violations and state law business torts. RayGar
seeks damages it has allegedly sustained as a result of the defendants' actions
in an amount of not less than $450 million in actual compensatory damages and
not less than $950 million for punitive damages.

The dispute arises from an unsuccessful effort pursuant to an agreement between
RayGar and Safety-Kleen, to obtain RCRA and related permits for the operation of
a wastewater treatment facility in Pascagoula, Mississippi. The action has not
proceeded against Safety-Kleen due to the Chapter 11 Cases.

(v) Federated Holdings, Inc. Litigation

On November 6, 2000, Federated Holdings, Inc. (FHI) filed a lawsuit against
Laidlaw, Laidlaw Investments, Ltd., LTI, LESI (now Safety-Kleen Corp.), LES,
Inc., Laidlaw OSCO Holdings, Inc. (a wholly-owned subsidiary of Safety-Kleen now
known as Safety-Kleen OSCO Holdings, Inc., and a company included in the
accompanying Combined Balance Sheets), Laidlaw International, and Safety-Kleen
Corp. in the United States District Court for the Southern District of
Mississippi, Hattiesburg Division, Civil Action No. 2:00CV286 alleging a variety
of Federal antitrust violations and state law business torts. FHI seeks damages
it has allegedly sustained as a result of the defendants' actions in an amount
of not less than $200 million in actual compensatory damages and not less than
$250 million for punitive damages.

The dispute arises from an unsuccessful effort pursuant to an agreement between
FHI and a Safety-Kleen Corp. subsidiary to obtain RCRA and related permits for
the operation of a hazardous waste landfill in Noxubee County, Mississippi. The
action has not proceeded against Safety-Kleen due to the Chapter 11 Cases.

(vi) Hudson County Improvement Authority Litigation

In July 1999, Hudson County Improvement Authority ("HCIA") filed suit in the
Superior Court, Hudson County, New Jersey against SK Services (East), L.C. ("SK
Services East") (a company included in the accompanying Combined Balance
Sheets), Safety-Kleen, American Home Assurance Company, and Hackensack
Meadowlands Development Commission. An Amended Complaint was filed on August 18,
1999, in which HCIA sought damages and injunctive relief evicting SK Services
East from a 175-acre site in Kearny, New Jersey owned by HCIA. SK Services East
had been using the site pursuant to an Agreement and Lease dated as of February
2, 1997 (the "Agreement and Lease") for the processing and disposal of processed
dredge material. HCIA alleged that certain conditions precedent to SK Services
East's right to continue operations at the site had not occurred, that as a
result the Agreement and Lease had automatically terminated, that SK Services
East owed HCIA approximately $11 million in back rent, and that SK Services East
was obligated to finish the remediation of the site and its preparation for
development as a commercial property. In January 2000, the Court granted HCIA
summary judgment on its motion to declare the Agreement and Lease null and void
as a result of the failure of the conditions precedent. This ruling effectively
terminated the relationship between SK Services East and HCIA leaving only the
issue of the determination of the rights and responsibilities of the parties in
the unwinding of the relationship. In May 2000, HCIA filed for summary judgment
seeking an order declaring that SK Services East is obligated to complete all
measures required under the Remedial Action Work Plan for the site. SK Services
East filed a brief opposing the motion. In June 2000, HCIA withdrew its pending
motion, with the Court's understanding that the motion could be re-filed if the
automatic stay in connection with Debtor's Chapter 11 bankruptcy protection is
lifted. On July 11, 2001 the Bankruptcy Court entered an Order authorizing
Debtor's rejection of the executory contracts and the unexpired lease to which
SK Services East and HCIA were parties. The Order does not limit, abridge, or
otherwise effect HCIA's right to assert and seek remedies regarding its pre-
and/or post-petition claims against Safety-Kleen for damages and other relief.
Also on July 11, 2001 the Bankruptcy Court granted HCIA's motion to modify the
Bankruptcy Code's automatic stay, and entered an Order permitting the Superior
Court of New Jersey, Hudson County, to make its final determination regarding SK
Services East contractual obligations under the Agreement and Lease. The
Superior Court held oral argument on this matter in September 2001 and advised
the parties that the Court wanted the parties to make good faith efforts to
reach an agreement as to the remaining obligations before the Court issues a
decision. Representatives of all the parties involved in the remediation
development activities at the Kearny, NJ site met on December 5, 2001 for
preliminary discussions of a final resolution of all open issues. The Company
has recorded its expected remaining liability related to the rejected lease as a
component of liabilities subject to compromise in the accompanying Combined
Balance Sheets at August 31, 2001.

30

(vii) ECDC Environmental, L.C. Claim

The Company entered into a long-term contract (the "4070 Contract") with General
Motors Corporation ("GM") to manage certain GM waste products. One requirement
of the 4070 Contract was to provide a dedicated cell for GM waste products at a
landfill facility owned by ECDC Environmental, L.C. ("ECDC"), which was then a
Safety-Kleen Corp. subsidiary. In November 1997, Safety-Kleen Corp. sold its
interest in ECDC to an affiliate of Allied Waste Industries, Inc. Pursuant to
the sale, ECDC, the Company entered the GM Waste Disposal Agreement (the "WDA")
governing the obligations of the parties with respect to the continued
management of GM waste in the dedicated cell at the ECDC landfill.

By letter dated May 15, 2000, Safety-Kleen was notified of GM's intent to
terminate the 4070 Contract for default, effective December 31, 2000. Under the
WDA, default by the Company under the 4070 Contract would have obligated the
Company to pay certain costs, rebates and damages to ECDC in accordance with the
terms of the WDA.

The Debtors, including the Company, which were parties to the 4070 Contract and
the WDA, filed for protection under Chapter 11 of the Bankruptcy Code. In
anticipation of the Company's rejection of the 4070 Contract pursuant to 11
U.S.C. (s)365, on October 30, 2000, ECDC filed a claim for not less than
approximately $11 million plus other additional, and unspecified damages for the
Company's breach of the 4070 Contract and WDA. Subsequently, the Bankruptcy
Court granted the motion by Safety-Kleen and certain of its subsidiaries, which
were parties to the 4070 Contract and the WDA, to reject both the 4070 Contract
and the WDA, effective December 1, 2000.

(viii) Bryson Adams Litigation

In 1996, a lawsuit was filed in the federal court in Baton Rouge, Louisiana,
under the caption Carleton Gene Rineheart et al. v. CIBA-GEIGY Corporation, et
al., U.S. District Court for the Middle District of Louisiana, CA #96-517,
Section B(2). In October 1999, a substantially similar lawsuit was filed in
state court in Lafayette Parish, Louisiana, under the caption of Bryson Adams,
et al. v. Environmental Purification Advancement Corporation, et al., Civil
Action No. 994879, Fifteenth Judicial District Court, Parish of Lafayette, State
of Louisiana. In December 2000, these two cases were consolidated with Adams
designated as the lead case. In this consolidated litigation, plaintiffs are
suing for alleged personal injury and/or property damage arising out of the
operation of certain waste disposal facilities near Bayou Sorrel, Louisiana. The
initial Bryson Adams lawsuit was filed on behalf of 320 plaintiffs against 191
defendants.

The Company owns and operates a hazardous waste deep injection well in Bayou
Sorrel, Louisiana and is named as a defendant. The Company is also named as a
defendant for its alleged role as a generator and arranger for disposal or
treatment of hazardous waste at certain of the disposal facilities, which are
named in the litigation. It is alleged that the Company was the operator of the
injection well in question from 1974 through the present. In addition to the
claims asserted by the plaintiffs, there is the potential that the customers of
the injection well, who are also defendants, may assert claims for
indemnification against the Company. The action has not proceeded against the
Company due to the filing of their Chapter 11 Cases on June 9, 2000.

(ix) FUSRAP Waste Disposal at Safety-Kleen (Buttonwillow), Inc.

Safety-Kleen (Buttonwillow), Inc., a company included in the accompanying
Combined Balance Sheets, owns and operates a hazardous waste landfill in Kern
County, California. The facility accepted and disposed of construction debris
that originated at a site in New York, which was part of the federal Formerly
Utilized Sites Remediation Program (FUSRAP). The construction debris was
low-activity radioactive waste and was shipped to the site by the U.S. Army
Corps of Engineers (USACE). FUSRAP was created in the mid-1970s in an attempt to
manage various sites around the country contaminated with residual radioactivity
from activities conducted by the Atomic Energy Commission and United States
military during World War II. The California Department of Health Services (DHS)
has claimed that the facility did not lawfully accept the waste. Both DHS and
the Department of Toxic Substances Control (DTSC) have filed claims in the
Debtor's Chapter 11 Cases preserving the right of the agencies to seek penalties
and possibly compel removal of the material should an ongoing investigation
reveal the subsidiary acted improperly. DHS claimed penalties in the amount of
$0.6 million and potential removal costs of $15.5 million should DHS have to
oversee and/or conduct the removal. The proof of claim filed by the DTSC was in
the amount of $15.0 million for potential penalties plus an unspecified amount
for any costs the DTSC may incur should the subsidiary be forced to remove the
waste. Safety-Kleen (Buttonwillow), Inc. and the USACE contend the material was
properly disposed of and will vigorously resist the imposition of any penalties
or any efforts to require that waste be removed.

11. DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying amounts reported in the accompanying Combined Balance Sheets for cash
and cash equivalents, accounts receivable, accounts payable and accrued other
liabilities approximate fair value due to the short-term nature of these
instruments.

Long-term investments - The fair value of the restricted funds held by trustees
approximates carrying value (see Note 2).

Long-term debt - Due to the uncertainty resulting from the Chapter 11 Cases
discussed in Note 1, the fair value of the Safety-Kleen's long-term debt at
August 31, 2001 and 2000 is not determinable. The fair value of Safety-Kleen's
long-term debt at August 31, 1999 also cannot be determined. Therefore, fair
value of the amounts allocated to the Company at August 31, 2001, 2000 and 1999
are not determinable.

31

Fair value estimates are made at a specific point in time based on relevant
market information about the financial instruments. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore, cannot be determined with precision. Changes in
assumptions could significantly affect these estimates.

12. EMPLOYEE BENEFIT PLANS

Defined benefit plans

As of August 31, 2001, Safety-Kleen did not sponsor any significant active
defined benefit pension plans for employees of the Company. For plans terminated
during fiscal 2000, all accumulated benefits have been distributed to plan
participants.

Upon completion of the Rollins Acquisition, the plan sponsor requested
permission from all interested parties to terminate the Rollins pension plan.
The labor union organizations representing the Rollins employees declined to
grant their permission. Safety-Kleen formed a "mirror image" plan, a plan
identical in all respects, to the then existing Rollins pension plan. The mirror
image plan was named the LES Union Pension Plan, and the union-represented
participants and their related accumulated benefit obligations were transferred
to the new plan. Accumulated plan benefits were not affected by the transfer.
Participants without union affiliations remained in the Rollins pension plan
which was formally terminated in July 1997 and the final settlement was paid in
September 1998.

In January 1998, certain union organizations granted their permission to
terminate the LES Union Pension Plan and, during July 1998, the application for
determination upon termination was filed with the Internal Revenue Service. The
final settlement payout for the LES Union Pension Plan was made in May 1999. All
remaining participants represented by union organizations not granting
termination permission were transferred to another "mirror image" plan, the Deer
Park Union Pension Plan, effective February 1, 1998. In March 1999, management
obtained the remaining union organizations' permission to terminate the Deer
Park Union Pension Plan. Plan assets were distributed to participants in March
2000.

Changes in the projected benefit obligations and pension plan assets relating to
the Company's defined benefit pension plans at August 31, 2001, 2000 and 1999,
are set forth in the following table ($ in thousands):

2001               2000             1999
------------       ------------      -----------

Change in benefit obligation
----------------------------
Net benefit obligation at beginning of year               $         --       $      3,312      $    22,395
Service cost                                                                                            58
Interest cost                                                       --                 --              102
Curtailment gain                                                    --                 --             (775)
Settlement loss                                                     --              1,851            8,322
Benefits paid                                                       --             (5,163)         (26,790)
------------       ------------      -----------
Net benefit obligation at end of year                               --                 --            3,312
------------       ------------      -----------
Change in plan assets
---------------------
Fair value of plan assets at beginning of year                     387              3,742           21,994
Net plan assets acquired                                            --                 --               --
Actual return on plan assets                                        26              1,808            3,329
Contributions                                                       17                 --            5,209
Benefits paid                                                      (44)            (5,163)         (26,790)
Commissions, fees and expenses                                     (44)                --               --
------------       ------------      -----------
Fair value of plan assets at end of year                           342                387            3,742
------------       ------------      -----------

Accrued benefit surplus                                   $        342        $       387      $       430
============        ===========      ===========

Effective as of October 14, 1997, Safety-Kleen adopted a Supplemental Executive
Retirement Plan (SERP) for certain eligible employees. The SERP is an unfunded
plan that provides for benefit payments in addition to those payable under a
qualified retirement plan. At August 31, 2001, 2000 and 1999, a liability of
approximately $1.3 million, $0.5 million and $0.1 million, respectively, related
to the employees of the Company included in the SERP plan, is recorded in other
long-term liabilities.

Defined contribution plan

The Company offers to all eligible employees the opportunity to participate in
Safety-Kleen's defined contribution employee benefit plan (the "Safety-Kleen
401(k) Plan"). Employees are allowed to contribute up to 15% of their annual
salary to the Safety-Kleen 401(k) Plan, and during fiscal 2001, the Company made
matching contributions limited to 75% of the first 6% of an employee's eligible
compensation. In fiscal 2002, the Board of Directors of Safety-Kleen Corp. has
determined to suspend matching contributions indefinitely.

Stock-based compensation

32

Certain of the Company's employees participate in stock option plans that are
sponsored by and associated with the stock of Safety-Kleen Corp. At August 31,
2001, the Company's employees held 318,425 options with exercise prices ranging
from $11.50 to $23.00.

13. INCOME TAXES

The Company is comprised of specific internal business units of Safety-Kleen,
included within certain domestic, Canadian and Mexican subsidiaries and
therefore does not report on a consolidated basis for tax purposes. Accordingly,
for purposes of the accompanying Combined Balance Sheets, the current income tax
liability and the deferred tax assets and liabilities have been presented using
the separate return method as allowed by SFAS 109, "Accounting for Income
Taxes". Differences, if any, between the amounts included in the accompanying
Combined Balance Sheets and the amounts recorded by the Company entities
participating in Safety-Kleen's tax sharing arrangement have been included in
parent company investment, net in the accompanying Combined Balance Sheets.

Deferred tax assets and liabilities at August 31, 2001, 2000 and 1999 consisted
of the following ($ in thousands):

2001            2000            1999
-----------      ----------      ----------

Deferred tax assets:
Allowance for uncollectible invoices                $    6,993       $   4,579       $   1,789
Deferred revenue                                         2,375          11,871          16,213
Accrued liabilities                                    127,004         101,368          74,657
Tax attribute carryovers                               242,281         179,221         115,258
Deferred financing costs                                 4,226           5,313              --
Excess of tax basis over book basis                     11,174          18,179              --
Other                                                    1,066             635              --
===========      =========       ==========
Total gross deferred tax assets                   395,119         321,166         207,917
Less -Valuation allowance                        (339,535)       (297,530)       (128,485)
-----------      ---------       ----------
Net deferred tax assets                                    55,584          23,636          79,432
-----------      ---------       ----------
Deferred tax liabilities:
Excess of book basis over tax basis                  (32,481)        (34,556)        (94,856)
Interest                                             (43,421)         (8,629)             --
Other                                                (23,240)        (23,228)        (18,607)
-----------      ----------      ----------
Total gross deferred tax liabilities              (99,142)        (66,413)       (113,463)
-----------      ----------      ----------
Net deferred tax liabilities                           $  (43,558)      $ (42,777)      $ (34,031)
===========      ==========      ----------

The reported deferred tax attributes differ from the Company's actual tax
attributes as they have been adjusted to consider the allocations used to
prepare the accompanying Combined Balance Sheets.

As of August 31, 2001, the Company's allocable share of Safety-Kleen's net
operating loss ("NOL") carryforwards for U.S. federal income taxes was
approximately $487 million expiring in the years 2006 through 2021. Such NOLs
are subject to limitations of both Treasury Regulation 1.1502-21 and Internal
Revenue Code "IRC" Section 382. At August 31, 2001, the Company's allocable
share of Safety-Kleen's interest carryovers of approximately $8.9 million
limited by IRC Section 163(j) are available against U.S. federal tax without
expiration. The NOL carryforwards are based on tax returns as currently filed
and are subject to change based on Safety-Kleen's detailed review and analysis
of all restatement adjustments for tax purposes, as it is not practicable to
determine the impact or related interest and penalties, if any, of the
restatement adjustments on amended returns at this time. Safety-Kleen's tax
returns are subject to periodic audit by the various jurisdictions in which it
operates. These audits, including those currently underway, can result in
adjustments of taxes due or adjustments of the NOLs, which are available to
offset future taxable income. Implementation of a plan or plans of
reorganization will likely reduce the availability of some or all of these NOL
carryforwards.

Valuation allowances have been established for uncertainties in realizing the
benefit of certain tax loss carryforwards and other deferred tax assets. In
assessing the realizability of carryforwards and other deferred tax assets,
management considers whether it is more likely than not that some portion or all
of the deferred tax assets will be realized. The valuation allowance is adjusted
in the period management determines it is more likely than not that deferred tax
assets will or will not be realized.

Until May 1997, Safety-Kleen was included in the consolidated U.S. tax returns
filed by Laidlaw. As such, Safety-Kleen is jointly and severally liable for any
taxes due with respect to those returns. Accordingly, Safety-Kleen and the
Company could be responsible for taxes relating to adjustments to the 1997 and
prior consolidated tax returns of Laidlaw.

33

14. RELATED PARTY TRANSACTIONS

Corporate

The Company receives certain support services consisting primarily of legal,
accounting, finance and information technology through Corporate. Costs incurred
by Corporate that can reasonably be associated with the Company are allocated
using methods which management believes reflect the cost of services performed.
The allocations were based on a specific identification of Corporate costs
attributable to the Company and, to the extent that such identification was not
practicable, based on the Company's estimate of how Corporate resources were
consumed. Safety-Kleen believes these allocations have been effected on a
systematic and rational basis. These allocations are included in intercompany
account balances between the Company, BSSD and Corporate. Accordingly these
balances are included in parent company investment, net in the accompanying
Combined Balance Sheets.

Branch Sales and Service Division

The Company provides a variety of services to BSSD, including the collection,
treatment and disposal of hazardous and non-hazardous wastes. The Company
believes that charges to BSSD for these services approximate market prices. In
addition, the Company charges the BSSD for services provided to the BSSD,
including engineering and environmental accounting services.

The Company sends certain waste streams to the BSSD recycle centers and kilns
and is charged amounts the Company believes approximate market prices.

Net amounts due to or due from the BSSD are included in parent company
investment, net in the accompanying Combined Balance Sheets.

Laidlaw Inc.

Insurance premiums owed by the Company to Laidlaw, including those related to
workers' compensation, general and auto liability, as described in Note 10,
totaled $0.4 million, $0.4 million and $1.5 million at August 31, 2001, 2000 and
1999, respectively. Rates paid under insurance contracts were determined on a
similar basis as those charged under similar contracts with third-party
insurers.

Pursuant to the Rollins Acquisition, Laidlaw and LTI, and indirect wholly-owned
subsidiaries of Laidlaw, agreed to jointly and severally indemnify Safety-Kleen
for certain obligations and liabilities. Also pursuant to the acquisition,
Safety-Kleen agreed to jointly and severally indemnify Laidlaw and LTI for
certain obligations and liabilities. Additionally, certain other guaranties have
been entered into by Laidlaw on behalf of Safety-Kleen (see Notes 7 and 10).

Certain former directors or officers of Safety-Kleen Corp. also served as
directors or officers of Laidlaw during fiscal 2000 and 1999. As of August 31,
2001, no directors or officers of Safety-Kleen Corp. served as directors or
officers of Laidlaw.

Currently, there are substantial claims and counterclaims between Safety-Kleen,
Laidlaw and its affiliates (see Note 10).

Rollins Truck Leasing Corp.

Until February 26, 2001, Mr. Tippie, a director of Safety-Kleen Corp., was
Chairman of the Board, Chairman of the Executive Committee, President and CEO of
Rollins Truck Leasing Corp. At August 31, 2001, 2000 and 1999, the Company owed
Rollins Truck Leasing Corp. approximately $0.7 million, $0.9 million and $0.9
million, respectively, for truck rentals. Rollins Truck Leasing Corp. also
purchased certain supplies from the Company. At August 31, 2001, 2000 and 1999,
no amounts were owed to the Company.

Matlack Systems, Inc.

Mr. Tippie is a director and shareholder of Matlack Systems, Inc. Mr. Rollins,
Jr., who is a member of Safety-Kleen Corp.'s Board of Directors, is Chairman of
the Board and a shareholder of Matlack Systems, Inc. At August 31, 2001, 2000
and 1999, the Company owed Matlack Systems, Inc. approximately $0.2 million,
$0.2 million and $0.4 million, respectively, for transportation services. At
August 31, 2001, 2000 and 1999, Matlack Systems, Inc. owed the Company
approximately less than $0.1 million, for the purchases of supplies and
services.

The above related party transactions which involve certain current or former
directors or officers of the Company and Safety-Kleen were conducted on terms
similar to those of third parties.

34

15. CONDENSED COMBINED BALANCE SHEETS OF ENTITIES IN BANKRUPTCY

The following condensed Combined Balance Sheets are presented in accordance with
SOP 90-7:

Condensed Combining Balance Sheet
At August 31, 2001

Entities In        Entities Not In
Reorganization       Reorganization     Combined
In thousands                                              Proceedings          Proceedings        Totals
---------------------------------------                  --------------      ---------------    -----------

ASSETS:
Current assets                                           $       95,659      $        26,258    $   121,917
Property, plant & equipment, net                                182,113               58,047        240,160
Intangibles assets, net                                         260,755               72,603        333,358
Other assets                                                     23,065                  386         23,451
--------------      ---------------    -----------
$      561,592      $       157,294    $   718,886
==============      ===============    ===========
LIABILITIES:
Current liabilities                                      $       82,473      $        43,910    $   126,383
Non-current liabilities                                         275,019               53,790        328,809
Liabilities subject to compromise                               959,079                   --        959,079

PARENT COMPANY INVESTMENT, NET                                 (754,979)              59,594       (695,385)
--------------      ---------------    -----------
$      561,592      $       157,294    $   718,886
==============      ===============    ===========

Condensed Combining Balance Sheet
At August 31, 2000

Entities in        Entities not in
Reorganization       Reorganization     Combined
In thousands                                              Proceedings          Proceedings        Totals
---------------------------------------                  --------------      ---------------    -----------

ASSETS:
Current assets                                           $      142,882      $        24,232    $   167,114
Property, plant and equipment, net                              196,761               65,420        262,181
Intangible assets, net                                          274,400               72,792        347,192
Other assets                                                     32,935                  732         33,667
--------------      ---------------    -----------
$      646,978      $       163,176    $   810,154
==============      ===============    ===========

LIABILITIES:
Current liabilities                                      $       86,338      $        37,511    $   123,849
Non-current liabilities                                         223,179               55,419        278,598
Liabilities subject to compromise                               963,354                   --        963,354

PARENT COMPANY INVESTMENT, NET                                 (625,893)              70,246       (555,647)
--------------      ---------------    -----------
$      646,978      $       163,176    $   810,154
==============      ===============    ===========

35

Exhibit 2.4

THIRD AMENDMENT TO ACQUISITION AGREEMENT

WHEREAS, Safety-Kleen Services, Inc. (the "Seller") and Clean Harbors, Inc.
(the "Purchaser"), are parties to an Acquisition Agreement dated as of February
22, 2002, as amended by the First Amendment to Acquisition Agreement dated as of
March 8, 2002, and the Second Amendment to Acquisition Agreement dated as of
April 30, 2002 (as so amended, the "Acquisition Agreement");

WHEREAS, the Seller and the Purchaser wish to amend certain provisions of
the Acquisition Agreement as set forth in this Third Amendment to Acquisition
Agreement (this "Amendment");

NOW, THEREFORE, the parties hereto agree as follows:

1.   Section 1.1(a) of the Acquisition Agreement is hereby amended to read
as follows: "(a) all of the outstanding equity interests (the "Interests") of
the subsidiaries of the Seller set forth on Schedule 1.1(a) (each a "Transferred
Sub" and collectively the "Transferred Subs"), provided that in the case of
Laidlaw Environmental Services de Mexico, S.A. de C.V. ("LES Mexico"), the
Interest of LES Mexico will be transferred post-Closing in the manner specified
in Section 1.9."

2.   Section 1.1(b) of the Acquisition Agreement and, to the extent
required, any other Sections of the Acquisition Agreement are hereby amended to
provide that (i) the transfer of the Owned Real Property in Clarence, NY, and
the insurance proceeds to be received as a result of the fire which recently
occurred on such Owned Real Property will be dealt with in such manner as shall
be mutually agreed by the Purchaser and the Seller in the Transition Services
Agreement and (ii) the property in Millington, Tennessee is to be removed from
the schedule of Owned Real Property that is to be transferred.

3.   Section 1.1(b)(i) of the Acquisition Agreement is hereby amended to
read as follows: "(i) all accounts receivable (which are not excluded pursuant
to Section 1.2 (b)) arising out of the operation of the Business existing on the
date hereof including, without limitation, those listed or described on Schedule
1.1(b)(i), or arising in the ordinary course of the Business after the date
hereof (the "Accounts Receivable");"

4.   Section 1.2(s) [which is currently incorrectly numbered as a second
Section 1.2(i)] of the Acquisition Agreement is hereby amended to read as
follows: "(s) that certain promissory note from Cameron-Cole LLC dated June 15,
2001 and that certain promissory note from Kenneth C. Crouch, Carrie M. Crouch
and Dizzy Bridge Realty Trust executed in 1994 and extended in October, 1997;
and"

5.   Section 1.6(a) of the Acquisition Agreement is hereby amended to read
as follows:

1

(a)  In consideration for the Acquired Assets, the Purchaser shall, in
addition to the assumption of the Assumed Liabilities, pay in cash at
Closing (inclusive of the delivery to the Seller of the Purchaser's Deposit
as described in Section 5.2(k)): (i) to the Seller the difference between
(A) Thirty-Four Million Three Hundred and Thirty Thousand Dollars
($34,330,000) (the "Unadjusted Cash Purchase Price") and (B) the
adjustments to the Unadjusted Cash Purchase Price set forth on the Closing
Statement attached to this Third Amendment, which include adjustments made
in accordance with Sections 1.4 and 1.6(b), and (ii) to the applicable
parties set forth on the Closing Statement attached to this Third
Amendment, which payments shall be made by wire transfer of immediately
available funds to an account or accounts designated by the Seller and the
applicable parties, as the case may be. The Unadjusted Cash Purchase Price,
as it may be adjusted pursuant to Section 1.7 , shall be referred to as the
"Cash Purchase Price" under this Agreement.

6.   Section 1.7(a) of the Acquisition Agreement is hereby amended by (i)
amending the second from the last sentence thereof so that such sentence shall
read: "The Seller shall return to the Purchaser the amount of any Working
Capital Deficiency"; and (ii) deleting the next to the last sentence thereof
(which currently reads: "If and to the extent the Escrow Agent shall not be
holding enough funds in the Escrow Account, the Seller shall return to the
Purchaser the amount of any Working Capital Deficiency").

7.   Section 1.8 of the Acquisition Agreement is hereby deleted in its
entirety and replaced with the following: "The Seller and the Purchaser agree
that Seventy-Four Million U.S. Dollars ($74,000,000) shall be allocated as
purchase price to the stock of Safety-Kleen Ltd. and that the balance of the
purchase price shall be allocated to the other Acquired Assets."

8.   Section 1.9 is hereby added to the Acquisition Agreement and reads as
follows: "As soon as practicable following Closing, Purchaser and Seller shall
take the actions described in those certain letters dated August 20 and 28, 2002
from L. Roberto Fernandez R. to Ms. Shawn DeJames and such further actions
needed to convey the Interests of LES Mexico to Purchaser."

9.   Section 2.2(a)(i) of the Acquisition Agreement is hereby amended to
read: "(i) duly executed instruments or other evidence sufficient to transfer to
the Purchaser and the Purchasing Subs the Interests of Safety-Kleen Ltd."

10.  Subsection 2.2(a)(iii) of the Acquisition Agreement is hereby amended
to read as follows: "(iii) all other conveyance documents reasonably necessary
to transfer to the Purchaser and the Purchasing Subs the Acquired Assets,
including special warranty deeds regarding the Owned Real Property purchased by
the Purchaser and the Purchasing Subs provided that, in the case of the Owned
Real Property in Westmoreland, CA, the delivery of any such special warranty
deed will dealt with in such manner as shall be mutually agreed by the Purchaser
and the Seller in the Transition Services Agreement;"

2

11.  Sections 2.2(a)(vi) of the Acquisition Agreement are hereby amended to
change the words "by May 24, 2002" to "prior to the Closing."

12.  Sections 2.2(a)(viii) and 2.2(b)(v) of the Acquisition Agreement are
hereby amended to delete the provisions set forth in such Sections and replace
such deleted provisions with the following: "Intentionally omitted." Any
reference to the defined term "Sales Agency Agreement" is herby accordingly
deleted in the Acquisition Agreement due to the amendments to such Sections.

13.  Subsections 2.2(a)(ix) and 2.2(b)(vi) of the Acquisition Agreement
(which now provide for the delivery at the Closing of the Escrow Agreement) are
hereby deleted and subsections 2.2(a)(x) through 2.2(a)(xv) (and the cross
reference thereto in subsection 6.3(m)) and subsection 2.2(b)(vii) are hereby
accordingly renumbered to reflect such deletions.

14.  Section 2.2(a)(xii) of the Acquisition Agreement is hereby amended to
read as follows: "certificates of tax and legal good standing and releases from
secured lenders evidencing that each of Safety-Kleen Ltd. and its direct and
indirect subsidiaries (Safety-Kleen Ltd. and such direct or indirect
subsidiaries being collectively the "CSD Canadian Subsidiaries") is in good
standing and that the secured lenders of the CSD Canadian Subsidiaries have
released all of their claims against the CSD Canadian Subsidiaries and security
interests on the assets of the CSD Canadian Subsidiaries and on the issued and
outstanding equity interests of the CSD Canadian Subsidiaries, together with a
copy of a Section 116 Certificate issued to the Seller in form satisfactory to
the Purchaser with respect to the Seller's sale to the Purchaser of the
Interests in Safety-Kleen Ltd.;

15.  Section 5.12 of the Acquisition Agreement is hereby amended by
replacing the fourth sentence of such Section with the following four sentences:
"After the Closing, the Seller shall not reject any executory contracts or
unexpired leases with respect to the Business until the earlier of (i) the
Confirmation Date and (ii) the date the Purchaser notifies the Seller that it no
longer will assume executory contracts or unexpired leases (the earlier of such
dates being referred to as the "Contract Expiration Date"), provided that,
Purchaser agrees, pursuant to any executory contract and unexpired leases, to
provide waste management services to Seller's former customers of the Business
until the date of the court hearing to consider the rejection of the executory
contracts or unexpired leases following the Contract Expiration Date (the
"Contract Hearing Date"), and provided further, Purchaser agrees, pursuant to
any executory contracts and unexpired leases, to pay the vendors of the Business
for their services until the Contract Hearing Date. The obligations of the
Purchaser in the preceding sentence, including any breach or damages caused by
the Purchaser's continued use of the contracts, leases or services, shall be
considered Assumed Liabilities for purposes of the indemnification provisions of
Article VIII of the Acquisition Agreement. During the period between the Closing
and the Contract Expiration Date, the Purchaser and the Seller shall each pay
one-half of any Cure Costs of any executory contracts and unexpired leases that
Purchaser wishes to assume until the sum of (a) the Cure Costs paid as of the
Closing and (b) the Cure Costs paid post-Closing equal the Cure Costs Cap.

3

Thereafter, Purchaser shall pay all of the Cure Costs of any executory contracts
and unexpired leases that Purchaser wishes to assume."

16.  Section 5.15(h) is added to the Acquisition Agreement and shall read
as follows: "(h) Nothing in this Section 5.15 shall prohibit the Seller in any
manner from continuing to operate and grow its fuels and tolling businesses."

17.  Section 6.3(d) of the Acquisition Agreement is hereby amended to
delete the provisions set forth in such Section and replace such deleted
provisions with the following: "Intentionally omitted."

18.  Sections 3.11 and 8.15 of the Acquisition Agreement are hereby amended
by: (i) deleting the second sentence of Section 3.11 and revising and inserting
such sentence immediately after the first sentence of Section 8.15 so that such
sentence shall read as follows: "The Seller shall be responsible for the payment
of all Taxes (including, without limitation, the Taxes of the Transferred Subs)
arising out of or pertaining to any period or partial period ending prior to or
on the Closing Date, except to the extent that such Taxes are otherwise resolved
by the Section 363/365 Order or, if applicable, the Confirmation Order" and (ii)
changing the cross references to "Section 3.11(a)" which now appear in Section
8.15 so that such references read "this Section 8.15."

19.  Section 5.3(a) of the Acquisition Agreement is hereby amended to read
as follows:

(a)  the Seller shall, and shall cause the Business Subs to, use
commercially reasonable efforts to conduct the Business only in the
ordinary course consistent with past practice provided that, in order to
ensure the orderly transfer as of the Closing of all of the Accounts
Receivable of the Business to the Purchaser and the Purchasing Subs, the
Seller, the Selling Subs, the Purchaser and the Purchasing Subs shall (both
prior to and after the Closing) take all of the actions with respect
thereto described in the separate memo which has been signed by both the
Purchaser and the Seller entitled "Methodology to Segregate CSD Payments."

20.  Sections 6.1(a) and 6.2(c) of the Acquisition Agreement are hereby
amended to change the dates therein from "June 27, 2002" and "June 20, 2002,"
respectively, to "June 30, 2002."

21.  Section 8.14 of the Acquisition Agreement is hereby amended to read as
follows: "The Purchaser and the Seller agree that no election under Section 338
of the Internal Revenue Code of 1986, as amended, shall be made in connection
with any transaction contemplated in this Agreement, except for any such
election which may properly be made by either the Purchaser or the Seller
without the consent of the other party and which will not have an adverse effect
upon such other party."

22.  Section 8.16 of the Acquisition Agreement is hereby amended by adding
the words "or Section 8.15" to the second sentence thereof and adding the
following as the third sentence thereof: "All costs incurred by the Purchaser or
the Seller as a result of

4

the exercise by the Seller of its right under this Section 8.16 shall be for the
account of the Seller and not the Purchaser."

Article IX of the Acquisition Agreement is hereby amended to (i) add a
definition of the term "Section 116 Certificate," (ii) delete the definitions of
"Escrow Agent" and "Escrow Agreement" and (iii) reduce the amount of the "Target
Working Capital" by $10,000,000.00, so that such definitions shall read as
follows:

"Section 116 Certificate" means a Certificate (as amended by any subsequent
amendments thereto) with Respect to the Proposed Disposition of Property by a
Non-Resident of Canada issued by the Canadian Minsister of National Revenue
pursuant to Section 116(4) of the Canadian Income Tax Act, with a Certificate
Limit fixed by the Minister of National Revenue in such Certificate.

"Target Working Capital" means Fifty-four Million, Two Hundred and Seventy
Thousand Dollars ($54,270,000).

23.  Except as described in the preceding sections of this Amendment, the
Acquisition Agreement shall remain in full force and effect.

Remainder of page intentionally left blank.

5

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
September 6, 2002.

SAFETY-KLEEN SERVICES, INC.

By: /s/ James K. Lehman
---------------------------
Name:  James K. Lehman
Title: Sole Director

CLEAN HARBORS, INC.

By: /s/ Stephen Moynihan
----------------------------
Name:  Stephen Moynihan
Title: Senior Vice President

6

EXHIBIT 3.3

FEDERAL IDENTIFICATION
NO.04-2997780

The Commonwealth of Massachusetts
Examiner                      William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512

CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A CLASS OR SERIES OF STOCK
(General Laws, Chapter 156B, Section 26)

We  Stephen H. Moynihan                                     Vice President
--------------------------------------------------------

and C. Michael Malm                                         *Clerk
-------------------------------------------------------

of  Clean Harbors, Inc.                                          ,
--------------------------------------------------------------------
(Exact name of corporation)

located at: 1501 Washington Street, Braintree, MA 02185
------------------------------------------------------------

(Street Address of corporation in Massachusetts)

do hereby certify that it a meeting of the directors of the corporation
held on August 27, 2002 the following vote establishing and designating a
class or series of stock and determining the relative rights and
preferences thereof was duly adopted:

See continuation pages 1-34 attached hereto.

*Delete the inapplicable words.
Note, Votes for which the space provided above is not sufficient should be
provided on one side of separate 8 1/2 x 11 sheets of white paper,
P.C.  numbered 2A, 2B, etc., with 4 left margin of at least 1 inch.

CLEAN HARBORS, INC.

CERTIFICATE OF VOTE OF DIRECTORS ESTABLISHING
A SERIES OF A CLASS OF STOCK

VOTED:   That the Corporation issue a series of convertible preferred stock
having the voting powers, designations, preferences and special or
relative participating, optional and other rights and privileges as
set forth in the "Description of Series C Convertible Preferred Stock"
presented to this meeting with such changes therein as shall be deemed
appropriate by the President (such approval to be conclusively
evidenced by the filing of the Certificate of Vote described below)
that such series of preferred stock shall be designated: "Series C
Convertible Preferred Stock"; that said Series C Convertible Preferred
Stock shall consist of twenty-five thousand (25,000) shares of
Preferred Stock of this Corporation; and that the Clerk of the
Corporation file a Certificate of Vote of Directors Establishing a
Series of a Class of Stock incorporating the Description of Series C
Convertible Preferred Stock with the Massachusetts Secretary of State.

DESCRIPTION OF SERIES C CONVERTIBLE PREFERRED STOCK

1.   Designation and Amount. Through the filing with the Massachusetts
Secretary of State of this Certificate of Vote of Directors Establishing a
Series of a Class of Stock (the "Certificate of Vote"), a total of twenty-five
thousand (25,000) shares of Preferred Stock, $0.01 par value per share, of Clean
Harbors, Inc., a Massachusetts corporation (the "Corporation") is hereby
designated as the Series C Convertible Preferred Stock (the "Preferred Stock" or
the "Preferred Shares") and the initial stated value per share shall equal
$1,000 (the "Initial Stated Value").

2.   Definitions. For purposes of this Certificate of Vote, the
following terms shall have the following meanings:

(a) "2004 Consolidated EBITDA Certificate" has the meaning
specified in Section 8(e)(iii) hereof.

(b) "Account Receivable" means, with respect to any Person, any
and all rights of such Person to payment for goods sold and/or services
rendered, including accounts, general intangibles and any and all such rights
evidenced by chattel paper, instruments or documents, whether due or to become
due and whether or not earned by performance, and whether now or hereafter
acquired or arising in the future, and any proceeds arising therefrom or
relating thereto.

(c) "Accrued Dividend Payment" has the meaning specified in
Section 4 hereof.

(d) "Acquiring Entity" has the meaning specified in Section 7(b)
hereof.

(e) "Additional Amount" means, on a per Preferred Share basis,
the product of (i) the result of the following formula: (Dividend Rate)(N/360)
and (ii) the then-applicable Stated Value.

(f) "Adjustment Measuring Period" means the period commencing on
and including December 1, 2003 and ending on and including December 31, 2003.

(g) "Adjustment Price" means, with respect to a share of Common
Stock on the Adjustment Date, $8.00 (as adjusted in accordance with Section 8(e)
in respect of any events occurring on or after the Issuance Date but on or prior
to the Adjustment Date which would result in an adjustment to the Conversion
Price thereunder).

(h) "Adjustment Date" means January 1, 2004.

(i) "Affiliate" means, with respect to any Person, any other
Person that directly or indirectly through one or more intermediaries, controls,
is controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
any holder of Preferred Shares be considered an "Affiliate" of the Corporation
or any of its Subsidiaries under this Certificate of Vote.

(j) "Applicable Price" has the meaning specified in Section
8(e)(i) hereof.

(k) "Approved Stock Plan" means any employee benefit or stock
purchase plan which has been approved by the Board of Directors of the
Corporation, pursuant to which the Corporation's securities may be issued to any
employee, officer or director for services provided to the Corporation.

(l) "Bloomberg" means Bloomberg Financial Markets.

(m) "Business Day" means any day other than Saturday, Sunday or
other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

(n) "Calendar Quarter" means each of the following periods: the
period beginning on and including January 1 and ending on and including March
31; the period beginning on and including April 1 and ending on and including
June 30; the period beginning on and including July 1 and ending on and
including September 30; and the period beginning on and including October 1 and
ending on and including December 31.

(o) "Cap Allocation Amount" has the meaning specified in Section
11 hereof.

2

(p) "Capital Expenditures" means, with respect to any Person for
any period, the sum of (i) the aggregate of all expenditures by such Person and
its Subsidiaries during such period that in accordance with GAAP are or should
be included in "property, plant and equipment" or in a similar fixed asset
account on its balance sheet, whether such expenditures are paid in cash or
financed and including all Capitalized Lease Obligations paid or payable during
such period, and (ii) to the extent not covered by clause (i) above, the
aggregate of all expenditures by such Person and its Subsidiaries during such
period to acquire by purchase or otherwise the business or fixed assets of, or
the Capital Stock of, any other Person.

(q) "Capitalized Lease" means, with respect to any Person, any
lease of real or personal property by such Person as lessee which is (i)
required under GAAP to be capitalized on the balance sheet of such Person or
(ii) a transaction (other than an operating lease of Rolling Stock) of a type
commonly known as a "synthetic lease" (i.e. a lease transaction that is treated
as an operating lease for accounting purposes but with respect to which payments
of rent are intended to be treated as payments of principal and interest on a
loan for Federal income tax purposes).

(r) "Capitalized Lease Obligations" means, with respect to any
Person, obligations of such Person and its Subsidiaries under Capitalized
Leases, and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.

(s) "Capital Stock" means (i) with respect to any Person that is
a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate stock,
and (ii) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.

(t) "Cash Dividend Payment" has the meaning specified in Section
4(a) hereof.

(u) "Certificate of Vote" has the meaning specified in Section 1
hereof.

(v) "Change of Control" means each occurrence of any of the
following:

(i)  the acquisition, directly or indirectly, by any person
or group (within the meaning of Section 13(d)(3) of the Exchange Act) other than
a Permitted Holder, of beneficial ownership of more than 33% of the aggregate
outstanding voting power of the Capital Stock of the Corporation; or

(ii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors of the
Corporation (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Corporation was approved by a vote of at least a majority the directors of the
Corporation then still in office who were either directors at the beginning of
such period, or whose election or nomination for election was previously
approved) cease for

3

any reason other than death or incompetence to constitute a majority of the
Board of Directors of the Corporation.

(w)  "Change of Control Redemption Price" has the meaning
specified in Section 7(a) hereof.

(x)  "Closing Sale Price" means, for any security as of any date,
the last closing trade price for such security on the Principal Market as
reported by Bloomberg, or if the Principal Market begins to operate on an
extended hours basis, and does not designate the closing trade price, then the
last trade price at 4:00 p.m., New York City Time, as reported by Bloomberg, or
if the foregoing do not apply, the last closing trade price of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no last closing trade price is reported for
such security by Bloomberg, the last closing ask price of such security as
reported by Bloomberg, or, if no last closing ask price is reported for such
security by Bloomberg, the average of the highest bid price and the lowest ask
price of any market makers for such security as reported in the "pink sheets" by
the National Quotation Bureau, Inc. If the Closing Sale Price cannot be
calculated for such security on such date on any of the foregoing bases, the
Closing Sale Price of such security on such date shall be the fair market value
as mutually determined by the Corporation and the holders of no less than 51% of
the Preferred Shares then outstanding. If the Corporation and the holders of
Preferred Shares are unable to agree upon the fair market value of the Common
Stock, then such dispute shall be resolved pursuant to Section 8(c)(iii) below.
All such determinations shall be appropriately adjusted for any stock dividend,
stock split or other similar transaction during such period.

(y)  "Common Stock" has the meaning specified in Section 3
hereof.

(z)  "Common Stock Deemed Outstanding" means, at any given time,
the number of shares of Common Stock actually outstanding at such time, plus the
number of shares of Common Stock deemed to be outstanding pursuant to Sections
8(e)(i)(A) and 8(e)(i)(B) hereof that are "in the money" at the time of
determination, but in all events excluding any shares of Common Stock (i) owned
or held by or for the account of the Corporation, (ii) issuable upon conversion
of the Preferred Shares or (iii) issuable upon potential future exercise of
Options issued under any Approved Plan which are not vested at the time of
determination.

(aa) "Contingent Obligation" means, with respect to any Person,
any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (iii) any obligation of such
Person, whether or not contingent, (A) to purchase any such primary obligation
or any property constituting direct or indirect security therefor, (B) to
advance or supply funds (1) for the purchase or payment of any such primary
obligation or (2) to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net

4

worth or solvency of the primary obligor, (3) to purchase property, assets,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (4) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term "Contingent Obligation" shall not include any product or service
warranties extended in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

(bb) "Conversion Amount" means, in respect of each Preferred
Share as of any date, the sum of (i) the Additional Amount and (ii) the Stated
Value.

(cc) "Conversion Date" has the meaning specified in Section
8(c)(i) hereof.

(dd) "Conversion Notice" has the meaning specified in Section
8(c)(i) hereof.

(ee) "Conversion Price" means, as of any Conversion Date or other
date of determination, $10.50, subject to adjustment as provided in Section
8(e).

(ff) "Conversion Rate" has the meaning specified in Section 8(b)
hereof.

(gg) "Convertible Securities" means any stock or securities
(other than Options) directly or indirectly convertible into or exchangeable or
exercisable for Common Stock.

(hh) "Corporation" has the meaning specified in Section 1 hereof.

(ii) "Covenant Default" has the meaning specified in Section 10
hereof.

(jj) "Current Market Price" shall mean, on any date of
determination, the arithmetic average of the Closing Sale Prices during the ten
(10) consecutive trading days immediately preceding such date, except that, if
on any such date the shares of Common Stock are not listed or admitted for
trading on any national securities exchange or quoted in the over-the-counter
market, the Current Market Price shall be the Closing Sale Price on such date.

(kk) "Dividend Date" has the meaning specified in Section 4(a)
hereof.

(ll) "Dividend Rate" has the meaning specified in Section 4(a)
hereof.

(mm) "Dividends" has the meaning specified in Section 4(a)
hereof.

5

(nn) "DTC" has the meaning specified in Section 8(c)(ii) hereof.

(oo) "Effective Date" has the meaning specified in the Financing
Agreement.

(pp) "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.

(qq) "ERISA Affiliate" means, with respect to any Person, any
trade or business (whether or not incorporated) which is a member of a group of
which such Person is a member and which would be deemed to be a "controlled
group" within the meaning of Sections 414(b), (c), (m) and (o) of the Internal
Revenue Code.

(rr) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

(ss) "Facility" means each parcel of real property listed on
Schedule 1.01(B) to the Financing Agreement, including, without limitation, the
land on which such facility is located, all buildings and other improvements
thereon, all fixtures located at or used in connection with such facility, all
whether now or hereafter existing.

(tt) "Financing Agreement" shall mean the Financing Agreement,
dated as of September 6, 2002 among the Corporation and certain of its
Subsidiaries, as borrowers, certain of the Corporation's Subsidiaries, as
guarantors, the lenders from time to time party thereto, as lenders, and Ableco
Finance, LLC, as agent for the lenders, as in effect on the Issuance Date,
whether or not the Financing Agreement is in effect on the date of any
determination hereunder.

(uu) "Fiscal Year" means the fiscal year of the Corporation and
its Subsidiaries ending on December 31 of each year.

(vv) "GAAP" means generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis.

(ww) "Hedging Agreement" means any interest rate, foreign
currency, commodity or equity swap, collar, cap, floor or forward rate
agreement, or other agreement or arrangement designed to protect against
fluctuations in interest rates or currency, commodity or equity values
(including, without limitation, any option with respect to any of the foregoing
and any combination of the foregoing agreements or arrangements), and any
confirmation executed in connection with any such agreement or arrangement.

(xx) "Initial Stated Value" has the meaning set forth in Section
1 hereof.

(yy) "Indebtedness" means, with respect to any Person, without
duplication, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other

6

accounts payable incurred in the ordinary course of such Person's business and
not outstanding for more than 90 days after the date such payable was created);
(iii) all obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments or upon which interest payments are customarily made;
(iv) all reimbursement, payment or other obligations and liabilities of such
Person created or arising under any conditional sales or other title retention
agreement with respect to property used and/or acquired by such Person, even
though the rights and remedies of the lessor, seller and/or lender thereunder
may be limited to repossession or sale of such property; (v) all Capitalized
Lease Obligations of such Person; (vi) all obligations and liabilities,
contingent or otherwise, of such Person, in respect of letters of credit,
acceptances and similar facilities; (vii) all obligations and liabilities of
such Person under Hedging Agreements; (viii) all Contingent Obligations; (ix)
liabilities incurred under Title IV of ERISA with respect to any plan (other
than a Multiemployer Plan) covered by Title IV of ERISA and maintained for
employees of such Person or any of its ERISA Affiliates; (x) withdrawal
liability incurred under ERISA by such Person or any of its ERISA Affiliates
with respect to any Multiemployer Plan; and (xi) all obligations referred to in
clauses (i) through (x) of this definition of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien upon property owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness. The Indebtedness of any Person shall include the Indebtedness of
any partnership of or joint venture in which such Person is a general partner or
a joint venturer.

(zz)  "Inventory" means, with respect to any Person, all goods
and merchandise of such Person, including, without limitation, all raw
materials, work-in-process, packaging, supplies, materials and finished goods of
every nature used or usable in connection with the shipping, storing,
advertising or sale of such goods and merchandise, whether now owned or
hereafter acquired, and all such other property the sale or other disposition of
which would give rise to an Account Receivable or cash.

(aaa) "Investors Rights Agreement" means that certain investor
rights agreement between the Corporation and the initial holders of the
Preferred Shares relating to the filing of a registration statement covering the
resale of the shares of Common Stock issuable upon conversion of the Preferred
Shares and certain other matters, as such agreement may be amended from time to
time as provided in such agreement.

(bbb) "Issuance Date" means, with respect to each Preferred
Share, the date of issuance of the applicable Preferred Share.

(ccc) "Junior Securities" has the meaning specified in Section 3
hereof.

(ddd) "Lien" means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any Capitalized
Lease and any assignment, deposit arrangement or financing lease intended as, or
having the effect of, security.

(eee) "Liquidation Event" has the meaning specified in Section
5(a) hereof.

7

(fff) "Liquidation Preference Payment" has the meaning specified
in Section 5(a) hereof.

(ggg) "Mandatory Redemption Date" has the meaning specified in
Section 6(a) hereof.

(hhh) "Multiemployer Plan" means a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to which any of the Corporation or any of
its ERISA Affiliates has contributed to, or has been obligated to contribute, at
any time during the preceding six (6) years.

(iii) "N" means the actual number of days from, but excluding,
the last Dividend Date with respect to which Dividends have been paid or
accrued, as the case may be, on the applicable Preferred Share, or the Issuance
Date if no Dividend Date has occurred, through and including the Conversion Date
or other date of determination for such Preferred Share, as the case may be, for
which such determination is being made.

(jjj) "Non-Redemption Event" has the meaning specified in Section
6(c) hereof.

(kkk) "Non-Tendering Holder" has the meaning specified in Section
7(b) hereof.

(lll) "Options" means any rights, warrants or options to
subscribe for or purchase Common Stock or Convertible Securities.

(mmm) "Organic Change" shall mean any recapitalization,
reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Corporation's assets to another Person or other
transaction which is effected in such a way that holders of Common Stock are
entitled to receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock.

(nnn) "Permitted Holder" means each of (i) Alan S. McKim and his
heirs, legal representatives and legatees, (ii) the trustees of a trust for the
benefit of Mr. McKim, which trust is revocable solely by Mr. McKim, (iii) Mr.
McKim's spouse or children, (iv) a trust created for the exclusive benefit of
Mr. McKim's spouse or children or for the exclusive benefit of Mr. McKim and
such persons and (v) any charitable trust or foundation qualified under Section
501(c)(3) of the Internal Revenue Code established by Mr. McKim and for which he
serves as a trustee or director.

(ooo) "Permitted Indebtedness" means:

(i)  any Indebtedness owing under the Financing Agreement
and any other agreement or instrument entered into in connection therewith;

(ii) any other Indebtedness permitted by Section 7.02(b) of
the Financing Agreement, and the extension of maturity, refinancing or
modification of the terms thereof; provided, however, that (a) such extension,
refinancing or modification is pursuant to terms that are not less favorable to
the Corporation and its Subsidiaries and the lenders under the

8

Financing Agreement than the terms of the Indebtedness being extended,
refinanced or modified and (b) after giving effect to such extension,
refinancing or modification, the amount of such Indebtedness is not greater than
the amount of Indebtedness outstanding immediately prior to such extension,
refinancing or modification;

(iii)  Indebtedness evidenced by Capitalized Lease
Obligations entered into in order to finance Capital Expenditures made by the
Corporation or any of its Subsidiaries that is permitted in accordance with the
provisions of Section 7.02(g) of the Financing Agreement, which Indebtedness,
when aggregated with the principal amount of Indebtedness incurred under this
clause (iii) and clause (iv) of this definition, does not exceed $10,000,000 in
the aggregate for all such Indebtedness incurred after the Effective Date;

(iv)   Indebtedness permitted by clause (v) of the
definition of "Permitted Lien";

(v)    Indebtedness permitted under Section 7.02(e) of the
Financing Agreement;

(vi)   Subordinated Indebtedness;

(vii)  Revolving Credit Indebtedness to the extent it
constitutes "Revolving Credit Indebtedness" under paragraph (g) of the
definition of Permitted Indebtedness under the Financing Agreement;

(viii) Indebtedness of the Corporation or any of its
Subsidiaries incurred in connection with the issuance of litigation,
environmental, ERISA-related, surety, reclamation, or other performance bonds in
an aggregate principal amount at any one time outstanding for the Corporation
and all its Subsidiaries not to exceed $50,000,000; and

(ix)   Indebtedness of the Corporation or any of its
Subsidiaries incurred in connection with the issuance of letters of credit on
behalf of the Corporation or any of its Subsidiaries in the ordinary course of
business (other than letters of credit issued under the Revolving Credit
Agreement the obligations for which constitute Revolving Credit Indebtedness
permitted under paragraph (vii) above), provided that the obligations of the
Corporation or any of its Subsidiaries in respect of each letter of credit are
fully secured in accordance with section (i) of the definition of Permitted
Indebtedness under the Financing Agreement, and provided further that (A) the
aggregate amount of such letters of credit shall not exceed at any time the
amount permitted by section (i) of the definition Permitted Indebtedness under
the Financing Agreement and (B) the obligations of the Corporation or any of its
Subsidiaries in respect of each letter of credit are fully secured in the manner
described in such section (i).

(ppp) "Permitted Investments" means (i) marketable direct
obligations issued or unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case, maturing within six months from the date of
acquisition thereof; (ii) commercial paper, maturing not more than 270 days
after the date of issue rated P-1 by Moody's or A-1 by Standard & Poor's; (iii)
certificates of deposit maturing not more than 270 days after the date of issue,
issued by commercial banking institutions and money market or demand deposit
accounts maintained at

9

commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the United States Government or any agency thereof, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000, (vi) tax exempt securities rated A or better by Moody's or A+ or
better by Standard & Poor's and having a stated maturity of not more than 270
days from issuance, and (vii) other investments in an aggregate amount at any
time outstanding not exceeding $2,000,000.

(qqq) "Permitted Liens" means:

(i)   Liens securing all obligations under the Financing
Agreement and the agreements and instruments entered into in connection
therewith;

(ii)  Liens for taxes, assessments and governmental charges
the payment of which is not required under Section 7.01(c) of the Financing
Agreement;

(iii) Liens imposed by law, such as carriers',
warehousemen's, mechanics', materialmen's and other similar Liens arising in the
ordinary course of business and securing obligations (other than Indebtedness
for borrowed money) that are not overdue by more than 30 days or are being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor;

(iv)  Liens described on Schedule 7.02(a) to the Financing
Agreement, but not the extension of coverage thereof to other property or the
extension of maturity, refinancing or other modification of the terms thereof or
the increase of the Indebtedness secured thereby;

(v)   (A) purchase money Liens on equipment acquired or
held by the Corporation or any of its Subsidiaries in the ordinary course of its
business to secure the purchase price of such equipment or Indebtedness incurred
solely for the purpose of financing the acquisition of such equipment or (B)
Liens existing on such equipment at the time of its acquisition; provided,
however, that (1) no such Lien shall extend to or cover any other property of
any of the Corporation or any of its Subsidiaries, (2) the principal amount of
the Indebtedness secured by any such Lien shall not exceed the lesser of 80% of
the fair market value or the cost of the property so held or acquired and (3)
the aggregate principal amount of Indebtedness secured by any or all such Liens
shall not exceed at any one time outstanding $10,000,000;

(vi)  deposits and pledges of cash securing (A) obligations
incurred in respect of workers' compensation, unemployment insurance or other
forms of governmental insurance or benefits, (B) the performance of bids,
tenders, leases, contracts (other than for the payment of money) and statutory
obligations or (C) obligations on surety or appeal bonds, but only to the extent
such deposits or pledges are incurred or otherwise arise in the ordinary course
of business and secure obligations not past due;

10

(vii) easements, zoning restrictions and similar
encumbrances on real property and minor irregularities in the title thereto that
do not (A) secure obligations for the payment of money or (B) materially impair
the value of such property or its use by the Corporation or any of its
Subsidiaries in the normal conduct of such Person's business;

(viii) Liens securing Indebtedness permitted by clause
(iii) of the definition of "Permitted Indebtedness";

(ix) Liens granted under the Revolving Credit Documents
(as in effect on the Issuance Date) to secure the Revolving Credit Indebtedness
permitted pursuant to clause (vii) of the definition of "Permitted
Indebtedness"; and

(x) Liens in favor of the issuers of the letters of credit
permitted by subsection (ix) of the definition of "Permitted Indebtedness".

(rrr)  "Person" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

(sss)  "Preferred Stock" or "Preferred Shares" has the meaning
specified in Section 1 hereof.

(ttt)  "Preferred Stock Certificates" has the meaning specified
in Section 8(c)(i) hereof.

(uuu)  "Preferred Stock Delivery Date" has the meaning specified
in Section 8(c)(ii) hereof.

(vvv)  "Principal Market" means The NASDAQ National Market, or if
the Common Stock is not listed on traded on The NASDAQ National Market, then the
principal securities exchange or trading market for the Common Stock.

(www)  "Purchase Agreement" means that certain securities
purchase agreement between the Corporation and the initial holders of the
Preferred Shares, as such agreement may be amended from time to time as provided
in such agreement.

(xxx)  "Purchasers" has the meaning specified in Section 11
hereof.

(yyy)  "Redemption Date" has the meaning specified in Section 6
(a) hereof.

(zzz)  "Redemption Notice" has the meaning specified in Section
6(c) hereof.

(aaaa) "Redemption Price" has the meaning specified in Section
6(c) hereof.

11

(bbbb) "Revolving Credit Agent" means Congress Financial
Corporation (New England).

(cccc) "Revolving Credit Agreement" means the Loan and Security
Agreement, dated as of September 6, 2002, by and among the Corporation and
certain of its Subsidiaries, the Revolving Loan Lenders and the Revolving Credit
Agent, as in effect on the Issuance Date.

(dddd) "Revolving Credit Documents" means, collectively, (i) the
Revolving Credit Agreement, and (ii) all other agreements, instruments, and
other documents executed and delivered pursuant to the foregoing.

(eeee) "Revolving Credit Indebtedness" means the Indebtedness of
the Corporation and certain of its Subsidiaries owing to the Revolving Credit
Agent and the Revolving Loan Lenders under the Revolving Credit Agreement.

(ffff) "Revolving Loan Lenders" means the lenders party to the
Revolving Credit Agreement.

(gggg) "Rolling Stock" means all trucks, trailers, tractors,
service vehicles, automobiles and other mobile equipment.

(hhhh) "Series C Board Designee" has the meaning specified in
Section 6(d) hereof.

(iiii) "Share Delivery Date" has the meaning specified in Section
8(c)(ii) hereof.

(jjjj) "Stated Value" means, as of any date, $1,000 plus the
aggregate amount of all Accrued Dividend Payments.

(kkkk) "Subordinated Indebtedness" means Indebtedness of the
Corporation or any of its Subsidiaries which would constitute "Subordinated
Indebtedness" under such definition in the Financing Agreement.

(llll) "Subsidiary" means, with respect to any Person at any
date, any corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity (i)
the accounts of which would be consolidated with those of such Person in such
Person's consolidated financial statements if such financial statements were
prepared in accordance with GAAP or (ii) of which more than 50% of (A) the
outstanding Capital Stock having (in the absence of contingencies) ordinary
voting power to elect a majority of the board of directors or other managing
body of such Person, (B) in the case of a partnership or limited liability
company, the interest in the capital or profits of such partnership or limited
liability company or (C) in the case of a trust, estate, association, joint
venture or other entity, the beneficial interest in such trust, estate,
association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such
Person.

12

(mmmm) "Term Loan A" has the meaning specified in the Financing
Agreement.

(nnnn) "Transfer Agent" has the meaning specified in Section
8(c)(i) hereof.

(oooo) "Valuation Event" has the meaning specified in Section
8(e)(i)(D) hereof.

3.   Ranking. The Preferred Shares shall rank, with respect to
dividend distributions and distributions upon a Liquidation Event (as defined in
Section 5(a) herein), senior to all classes of common stock of the Corporation
(including the common stock, $0.01 par value per share, of the Corporation (the
"Common Stock"), senior to any other class of Capital Stock or series of
preferred stock established by the Board after the Issuance Date and junior to
the Series B Convertible Preferred Stock, par value $0.01 per share, of the
Corporation issued and outstanding prior to the Issuance Date. All classes of
Common Stock of the Corporation and any other class of Capital Stock or series
of preferred stock established after the Issuance Date to which the Preferred
Shares is senior, are collectively referred to herein as "Junior Securities".

4.   Dividend Provisions. The holders of the Preferred Shares shall be
entitled to receive, when and if declared, dividends ("Dividends"), prior and in
preference to the holders of Junior Securities, payable on the Stated Value of
such Preferred Share at a rate of 6.0% per annum (the "Dividend Rate"), which
shall be cumulative, accrue daily from the Issuance Date and calculated on the
basis of a 360-day year for actual days elapsed, whether or not such dividends
have been declared and whether or not there are profits, surplus or other funds
of the Corporation legally available for the payment of dividends, and be due
and payable quarterly on the first day of each Calendar Quarter (each, a
"Dividend Date"). If a Dividend Date is not a Business Day, then the Dividend
shall be due and payable on the Business Day immediately following such Dividend
Date. Each Dividend shall accrue and be payable by adding the Additional Amount
determined as of the applicable Dividend Date to the Stated Value (each such
addition to the Stated Value being referred to herein as an "Accrued Dividend
Payment") and subject to the following proviso, such addition shall be deemed to
be made as of each Dividend Date, without any further action on the part of the
Corporation; provided, that Dividends that accrue and are payable on or prior to
the first anniversary of the Issuance Date may be paid, at the option of the
Corporation, in cash (each such cash dividend being referred to herein as a
"Cash Dividend Payment"), if, and only, if the Corporation provides written
notice of such Cash Dividend Payment to each holder of Preferred Shares at least
ten (10) Business Days prior to the relevant Dividend Date. A notice of a Cash
Dividend Payment shall be irrevocable unless holders of at least 51% of the
outstanding Preferred Shares shall agree otherwise in writing.

5.   Liquidation Preference.

(a)    In the event of any liquidation, dissolution or winding up
of the Corporation (a "Liquidation Event"), whether voluntary or involuntary (in
bankruptcy or otherwise), the holders of Preferred Shares shall be entitled to
receive, prior and in preference to any payment or distribution of any of the
assets of the Corporation to the holders of any Junior

13

Securities, by reason of their ownership thereof, an amount per share equal to
the Conversion Amount, computed to the date payment thereof is made (together,
the "Liquidation Preference Payment"). If upon the occurrence of any Liquidation
Event, the assets and funds to be distributed among the holders of Preferred
Shares shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then the entire assets and funds of the
Corporation available for distribution shall be distributed pro rata among the
holders of Preferred Shares in proportion to the number of shares of such stock
owned by each such holder.

(b)  For purposes of this Certificate of Vote, no Change of
Control or Organic Change shall be deemed a Liquidation Event.

6.  Redemption.

(a)  Mandatory Redemption. The Corporation shall redeem all
Preferred Shares on the seventh (7th) anniversary (the "Mandatory Redemption
Date") of the Issuance Date by paying for each share, in cash, an amount equal
to the Conversion Amount as of such Mandatory Redemption Date (the "Redemption
Price"). Such payment shall be made in full on the Redemption Date to the
holders entitled thereto.

(b)  Optional Redemption. The Preferred Shares shall not be
subject to redemption at any time at the option of the Corporation or any of its
Subsidiaries or Affiliates.

(c)  Mechanics of Redemption. At least 30 but not more than 60
days prior to the Mandatory Redemption Date (hereinafter, the "Redemption
Date"), written notice (the "Redemption Notice") shall be given by the
Corporation by mail, postage prepaid, or by facsimile transmission, to each
holder of record (at the close of business on the Business Day next preceding
the day on which the Redemption Notice is given) of Preferred Shares notifying
such holder of the redemption and specifying the Redemption Price, the Mandatory
Redemption Date and the place where said Redemption Price shall be payable. The
Redemption Notice shall be addressed to each holder at his address as shown by
the records of the Corporation in the preferred share register established
pursuant to Section 21. From and after the close of business on the Redemption
Date, unless there shall have been a default in the payment of the Redemption
Price, all rights of holders of such Preferred Shares subject to redemption
(except the right to receive the Redemption Price) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose whatsoever. Any
Preferred Shares redeemed pursuant to this Section 6 or otherwise acquired by
the Corporation in any manner whatsoever shall be canceled and shall not under
any circumstances be reissued; and the Corporation may from time to time take
such appropriate corporate action as may be necessary to reduce accordingly the
number of authorized Preferred Shares.

(d)  Failure to Redeem. If the Corporation fails for any reason
to redeem the total number of outstanding Preferred Shares to be redeemed on
such Redemption Date (each, a "Non-Redemption Event"), then, immediately upon
the occurrence of such Non-Redemption Event, (i) the Dividend Rate in effect on
the date of the Non-Redemption Event shall, until the date such Non-Redemption
Event is cured as to all Preferred Shares, automatically increase by six percent
(6%) for the period commencing on the date such Non-

14

Redemption Event occurs and ending on the ninetieth day thereafter, and shall
increase by an additional one percent (1%) per annum on the first day of each
consecutive ninety (90) day period (or portion thereof) thereafter until such
Non-Redemption Event is cured as to all Preferred Shares, (ii) the Conversion
Price shall automatically be adjusted (subject to further adjustment pursuant to
this Certificate of Vote subsequent to such adjustment) to equal 80% of the
Conversion Price in effect on the date of the initial occurrence of such
Non-Redemption Event and (iii) the holders of a majority of the then outstanding
Preferred Shares shall have the right by giving written notice to the Company to
designate a member of the Board of Directors of the Corporation (the "Series C
Board Designee") until such time as the Non-Redemption Event has been cured as
to all Preferred Shares. Upon the occurrence of a Non-Redemption Event, the
Corporation's Board of Directors shall immediately call a special meeting of all
holders of Preferred Shares for the purpose of electing the Series C Board
Designee and the holders of Preferred Shares shall have the right to vote, as a
single class, to elect by a vote of the holders of a majority of the Preferred
Shares represented at such meeting, the Series C Board Designee, although less
than a quorum. Upon the cure of the Non-Redemption Event as to all Preferred
Shares, the term of office of the Series C Board Designee elected by the holders
of Preferred Shares pursuant to such special voting right shall forthwith
terminate. So long as the Non-Redemption Event shall continue, any vacancy in
the office of the Series C Board Designee may be filled, and the Series C Board
Designee may be removed with or without cause, by written consent of the holders
of a majority of the then outstanding Preferred Shares. As long as the
Non-Redemption Event shall continue, holders of any of the outstanding capital
stock (other than the Preferred Shares) of the Corporation entitled to vote on
the election of directors shall not be entitled to vote on the election or
removal of the Series C Board Designee. The Corporation shall take such actions
(corporate or otherwise) as are necessary to effectuate this Section 6(d)(iii).

7.  Change of Control/Organic Change.

(a)   Offer to Purchase.

(i)  No sooner than 60 days nor later than 30 days prior to
the consummation of any Organic Change and no later than 10 days after any
Change of Control, the Corporation shall deliver (or cause to be delivered) a
binding irrevocable written offer containing the information required by Section
7(c) hereof to purchase for cash each outstanding Preferred Share pursuant to
the terms described in Section 7(c) (the "Offer") at a purchase price per share
equal to 101% of the Conversion Amount calculated through and including the
Payment Date (the "Change of Control Redemption Price"), and shall purchase (or
cause the purchase of) any Preferred Shares tendered in the Offer pursuant to
the terms hereof.

(ii) Prior to the mailing of the Offer referred to in
Section 7(a), the Corporation shall (i) promptly determine if the purchase of
the Preferred Shares would violate or constitute a default under the
Indebtedness of the Corporation or the terms of any other series of the
Corporation's outstanding preferred stock and (ii) either shall repay or redeem
to the extent necessary all such indebtedness or preferred stock of the
Corporation that would prohibit the repurchase of the Preferred Shares pursuant
to a Offer prior to or concurrent with the consummation of the Change of Control
or obtain any requisite consents or approvals under instruments governing any
indebtedness or preferred stock of the Corporation to permit the

15

repurchase of the Preferred Shares for cash. The Corporation shall first comply
with this Section 7(a) before it shall repurchase any Preferred Shares pursuant
to this Section 7.

(iii) The Offer shall be delivered by the Corporation to
each holder of Preferred Shares, by first-class mail, postage prepaid, and shall
state:

(A) all instructions and materials necessary to enable
such holders to tender Preferred Shares pursuant to the Offer;

(B) that a Change of Control has occurred or an
Organic Change is scheduled to occur, as applicable, that an Offer is being made
pursuant to this Section 7 and that all Preferred Shares validly tendered and
not withdrawn will be accepted for payment;

(C) the Change of Control Redemption Price and the
purchase date (which shall be concurrent with, and subject to the consummation
of, the Organic Change, and not later than (20) days following consummation of a
Change of Control) (the "Payment Date");

(D) that any Preferred Shares not tendered will
continue to accrue Dividends;

(E) that, unless the Corporation defaults in making
payment therefor, any Preferred Shares accepted for payment pursuant to the
Offer shall cease to accrue Dividends after the Payment Date;

(F) that holders electing to have any Preferred Shares
purchased pursuant to the Offer will be required to surrender stock certificates
representing such Preferred Shares, properly endorsed for transfer, together
with such other customary documents as the Corporation may reasonably request at
the address specified in the Offer prior to the close of business on the
Business Day prior to the Payment Date;

(G) that holders will be entitled to withdraw their
election if the Corporation receives, not later than three (3) Business Days
prior to the Payment Date, a facsimile transmission or letter setting forth the
name of the holder, the number of Preferred Shares the holder delivered for
purchase and a statement that such holder is withdrawing its election to have
such Preferred Shares purchased;

(H) that holders who tender only a portion of the
Preferred Shares represented by a certificate delivered will, upon purchase of
the shares tendered, be issued a new certificate representing the unpurchased
Preferred Shares; and

(I) the circumstances and relevant facts regarding
such Change of Control or Organic Change (including information with respect to
pro forma historical income, cash flow and capitalization after giving effect to
such Change of Control or Organic Change).

(iv)  The Corporation will comply with any tender offer
rules under the Exchange Act which then may be applicable in connection with any
offer made by the

16

Corporation to repurchase the Preferred Shares as a result of a Change of
Control or Organic Change. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Certificate of Vote, the
Corporation shall comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligation under this Certificate of
Vote by virtue thereof.

(v)  On the Payment Date, the Corporation shall (A) accept
for payment the Preferred Shares validly tendered pursuant to the Offer, (B) pay
to the holders of shares so accepted the purchase price therefor in immediately
available funds and (C) cancel each surrendered certificate and retire the
shares represented thereby and issue replacement certificates representing
Preferred Shares not tendered. Unless the Corporation defaults in the payment
for the Preferred Shares tendered pursuant to the Offer, Dividends will cease to
accrue with respect to the Preferred Shares tendered and all rights of holders
of such tendered shares will terminate, except for the right to receive payment
therefor on the Payment Date.

(vi) To accept the Offer, the holder of a Preferred Share
shall deliver, prior to the close of business on the Business Day prior to the
Payment Date, written notice to the Corporation (or an agent designated by the
Corporation for such purpose) of such holder's acceptance and the number of
Preferred Shares tendered for repurchase, together with certificates evidencing
the Preferred Shares with respect to which the Offer is being accepted, duly
endorsed for transfer.

(b)  Other Rights of Holders on an Organic Change. Prior to the
consummation of any (i) sale of all or substantially all of the Corporation's
assets to an acquiring Person or (ii) other Organic Change following which the
Corporation is not a surviving entity, in which any holder of Preferred Shares
does not tender all of its Preferred Shares to the Corporation for repurchase
pursuant to Section 7(a) (each, a "Non-Tendering Holder") the Corporation will
secure from the Person purchasing such assets or the successor, or, if
applicable, the parent of the successor, resulting from such Organic Change (in
each case, the "Acquiring Entity") a written agreement (in form and substance
reasonably satisfactory to the Non-Tendering Holders holding at least 51% of the
then outstanding Preferred Shares held by all Non-Tendering Holders) to deliver
to each holder of Preferred Shares in exchange for such shares, a security of
the Acquiring Entity evidenced by a written instrument substantially similar in
form and substance to the Preferred Shares, including, without limitation,
having a stated value and liquidation preference equal to the Stated Value and
the Liquidation Preference Payment of the Preferred Shares held by such holder
and having a rank senior to all Capital Stock of such Acquiring Entity (other
than the Series B Preferred Stock of the Corporation which may be senior to the
Preferred Shares to the same extent as they are senior to the Preferred Shares
as of the Issuance Date), and reasonably satisfactory to the holders of at least
51% of the then outstanding Preferred Shares held by all Non-Tendering Holders.

(c)  Prior to the consummation of any Organic Change, the
Corporation shall make appropriate provision (in form and substance reasonably
satisfactory to the holders of at least 51% of the then outstanding Preferred
Shares held by all Non-Tendering Holders) to insure that each of the holders of
the Preferred Shares will thereafter have the right to acquire and receive in
lieu of or in addition to (as the case may be) the shares of Common Stock
immediately theretofore acquirable and receivable upon the conversion of such
holder's Preferred

17

Shares such shares of stock, securities or assets that would have been issued or
payable in such Organic Change with respect to or in exchange for the number of
shares of Common Stock which would have been acquirable and receivable upon the
conversion of such holder's Preferred Shares as of the date of such Organic
Change (without taking into account any limitations or restrictions on the
convertibility of the Preferred Shares).

8.   Conversion.

(a)  Holder's Conversion Right. Subject to the provisions of
Section 11, at any time or times on or after the Issuance Date, any holder of
Preferred Shares shall be entitled to convert any whole or fractional number of
Preferred Shares into fully paid and nonassessable shares of Common Stock in
accordance with Section 8(c) at the Conversion Rate. The Corporation shall not
issue any fraction of a share of Common Stock upon any conversion. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more than
one Preferred Share by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of a fraction of
a share of Common Stock. If, after the aforementioned aggregation, the issuance
would result in the issuance of a fraction of a share of Common Stock, the
Corporation shall round such fraction of a share of Common Stock up or down to
the nearest whole share with one half shares being rounded up.

(b)  Conversion Rate. The number of shares of Common Stock
issuable upon conversion of each Preferred Share pursuant to Section 8(a) shall
be determined according to the following formula (the "Conversion Rate"):

Conversion Amount
Conversion Price

(c)  Mechanics of Conversion. The conversion of Preferred Shares
shall be conducted in the following manner:

(i)  Holder's Delivery Requirements. To convert Preferred
Shares into shares of Common Stock on any date (the "Conversion Date"), the
holder thereof shall (A) transmit by facsimile (or otherwise deliver) a copy of
a properly completed notice of conversion executed by the registered holder of
the Preferred Shares subject to such conversion in the form attached hereto as
Exhibit I (the "Conversion Notice") to the Corporation and the Corporation's
designated transfer agent for the Common Stock (the "Transfer Agent") and (B) if
required by Section 8(c)(vii), surrender to a common carrier for delivery to the
Corporation as soon as practicable following such date the original certificates
representing the Preferred Shares being converted (or compliance with the
procedures set forth in Section 12) (the "Preferred Stock Certificates").

(ii) Corporation's Response. Upon receipt by the
Corporation of copy of a Conversion Notice, the Corporation shall (A) as soon as
practicable, but in any event within two (2) Business Days, send, via facsimile,
a confirmation of receipt of such Conversion Notice to such holder and the
Transfer Agent, which confirmation shall constitute an instruction to the
Transfer Agent to process such Conversion Notice in accordance with the terms
herein and (B) on or before the second (2/nd/) Business Day following the date
of receipt by the

18

Corporation of such Conversion Notice (the "Share Delivery Date"), (1) issue and
deliver to the address as specified in the Conversion Notice, a certificate,
registered in the name of the holder or its designee, for the number of shares
of Common Stock to which the holder shall be entitled, or (2) provided the
Transfer Agent is participating in The Depository Trust Corporation ("DTC") Fast
Automated Securities Transfer Program, upon the request of the holder, credit
such aggregate number of shares of Common Stock to which the holder shall be
entitled to the holder's or its designee's balance account with DTC through its
Deposit Withdrawal Agent Commission system. If the number of Preferred Shares
represented by the Preferred Stock Certificate(s) submitted for conversion is
greater than the number of Preferred Shares being converted, then the
Corporation shall, as soon as practicable and in no event later than five
Business Days after receipt of the Preferred Stock Certificate(s) (the
"Preferred Stock Delivery Date") and at its own expense, issue and deliver to
the holder a new Preferred Stock Certificate representing the number of
Preferred Shares not converted.

(iii) Dispute Resolution. In the case of a dispute as to
the determination of the Conversion Price or the arithmetic calculation of the
Conversion Rate, the Corporation shall instruct the Transfer Agent to issue to
the holder the number of shares of Common Stock that is not disputed and shall
transmit an explanation of the disputed determinations or arithmetic
calculations to the holder via facsimile within five (5) Business Days of
receipt of such holder's Conversion Notice or other date of determination. If
such holder and the Corporation are unable to agree upon the determination of
the Conversion Price or arithmetic calculation of the Conversion Rate within
five (5) Business Days of such disputed determination or arithmetic calculation
being transmitted to the holder, then the Corporation shall within three (3)
Business Days submit via facsimile (a) the disputed determination of the
Conversion Price to an independent, reputable investment bank selected by the
Corporation and approved by the holders of at least 51% of the Preferred Shares
then outstanding or (b) the disputed arithmetic calculation of the Conversion
Rate to an independent, outside accountant approved by the holders of at least
51% of the Preferred Shares then outstanding. The Corporation shall cause the
investment bank or the accountant, as the case may be, to perform the
determinations or calculations and notify the Corporation and the holders of the
results no later than five (5) Business Days from the time it receives the
disputed determinations or calculations. Such investment bank's or accountant's
determination or calculation, as the case may be, shall be binding upon all
parties absent manifest error.

(iv)  Record Holder. The Person or Persons entitled to
receive the shares of Common Stock issuable upon a conversion of Preferred
Shares shall be treated for all purposes as the record holder or holders of such
shares of Common Stock on the Conversion Date.

(v)   Pro Rata Conversion. In the event the Corporation
receives a Conversion Notice from more than one holder of Preferred Shares for
the same Conversion Date and the Corporation can convert some, but not all, of
such Preferred Shares by virtue of the limitations expressly set forth in
Section 11 hereof, the Corporation shall convert from each holder of Preferred
Shares electing to have Preferred Shares converted at such time a pro rata
amount of such holder's Preferred Shares submitted for conversion based on the
number of Preferred Shares submitted for conversion on such date by such holder
relative to the number of Preferred Shares submitted for conversion on such
date.

19

(vi) Book-Entry. Notwithstanding anything to the contrary
set forth herein, upon conversion of Preferred Shares in accordance with the
terms hereof, the holder thereof shall not be required to physically surrender
the certificate representing the Preferred Shares to the Corporation unless the
full or remaining number of Preferred Shares represented by the certificate are
being converted. The holder and the Corporation shall maintain records showing
the number of Preferred Shares so converted and the dates of such conversions or
shall use such other method, reasonably satisfactory to the holder and the
Corporation, so as not to require physical surrender of the certificate
representing the Preferred Shares upon each such conversion. In the event of any
dispute or discrepancy, such records of the Corporation establishing the number
of Preferred Shares to which the record holder is entitled shall be controlling
and determinative in the absence of manifest error. Notwithstanding the
foregoing, if Preferred Shares represented by a certificate are converted as
aforesaid, the holder may not transfer the certificate representing the
Preferred Shares unless the holder first physically surrenders the certificate
representing the Preferred Shares to the Corporation, whereupon the Corporation
will forthwith issue and deliver upon the order of the holder a new certificate
of like tenor, registered as the holder may request, representing in the
aggregate the remaining number of Preferred Shares represented by such
certificate. The holder and any assignee, by acceptance of a certificate,
acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of any Preferred Shares, the number of Preferred Shares
represented by such certificate may be less than the number of Preferred Shares
stated on the face thereof. Each certificate for Preferred Shares shall bear the
following legend:

ANY TRANSFEREE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE
TERMS OF THE COMPANY'S CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK RELATING TO THE
PREFERRED SHARES REPRESENTED BY THIS CERTIFICATE, INCLUDING
SECTION 8(c)(vi) THEREOF. THE NUMBER OF PREFERRED SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF
PREFERRED SHARES STATED ON THE FACE HEREOF PURSUANT TO SECTION
8(c)(vi) OF THE CERTIFICATE OF VOTE RELATING TO THE PREFERRED
SHARES REPRESENTED BY THIS CERTIFICATE.

(d)  Taxes. The Corporation shall pay any and all documentary,
stamp, transfer (but only in respect of the registered holder thereof) and other
similar taxes that may be payable with respect to the issuance and delivery of
Common Stock upon the conversion of Preferred Shares.

(e)  Adjustments to Conversion Price. The Conversion Price shall
be subject to adjustment from time to time as provided in this Section 8(e).

(i)   Adjustment of Conversion Price upon Issuance of Common
Stock. If and whenever on or after the Issuance Date, the Corporation issues or
sells, or in accordance with this Section 8(e) is deemed to have issued or sold,
any shares of Common Stock (including the issuance or sale of shares of Common
Stock owned or held by or for the account

20

of the Corporation, but excluding shares of Common Stock: (a) issued or deemed
to have been issued by the Corporation in connection with an Approved Stock Plan
(not to exceed 2,500,000 shares of Common Stock as constituted on the date
hereof and provided in each case that the exercise or purchase price for any
such share shall not be less than 85% of the fair market value (determined in
good faith by the Corporation's Board of Directors) of the Common Stock on the
date of the grant); (b) deemed to have been issued upon issuance of the
Preferred Shares or issued upon conversion of the Preferred Shares and (c)
issued upon exercise of Options or Convertible Securities which are outstanding
on the date immediately preceding the Issuance Date, provided that such issuance
of shares of Common Stock upon exercise of such Options or Convertible
Securities is made pursuant to the terms of such Options or Convertible
Securities in effect on the date immediately preceding the Issuance Date and
such Options or Convertible Securities are not amended after the date
immediately preceding the Issuance Date), for a consideration per share less
than a price (the "Applicable Price") equal to the higher of the Current Market
Price and the Conversion Price, each as in effect immediately prior to such
issuance, then immediately after such issue or sale, the Conversion Price then
in effect shall be reduced to an amount equal to the product of (1) the
Conversion Price in effect immediately prior to such issue or sale and (2) the
quotient of (A) the sum of (x) the product of the Applicable Price and the
number of shares of Common Stock Deemed Outstanding immediately prior to such
issue or sale and (y) the consideration, if any, received by the Corporation
upon such issue or sale, divided by (B) the product of (x) the Applicable Price
multiplied by (y) the number of shares of Common Stock Deemed Outstanding
immediately after such issue or sale. For purposes of determining the adjusted
Conversion Price under this Section 8(e)(i), the following provisions shall be
applicable:

(A) Issuance of Options. If the Corporation in any
manner grants or sells any Options and the lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or upon
conversion, exchange or exercise of any Convertible Securities issuable upon
exercise of such Option is less than the Applicable Price, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Corporation at the time of the granting or sale of such Option for such
price per share. For purposes of this Section 8(e)(i)(A), the "lowest price per
share for which one share of Common Stock is issuable upon the exercise of any
such Option or upon conversion, exchange or exercise of any Convertible
Securities issuable upon exercise of such Option" shall be equal to the sum of
the lowest amounts of consideration (if any) received or receivable by the
Corporation with respect to any one share of Common Stock (disregarding, prior
to its occurrence, any potential adjustment thereto described in Section
8(e)(i)(C) unless and until the same shall occur) upon granting or sale of the
Option, upon exercise of the Option and upon conversion, exchange or exercise of
any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Conversion Price shall be made upon the actual issuance of
such Common Stock or of such Convertible Securities upon the exercise of such
Options or upon the actual issuance of such Common Stock upon conversion,
exchange or exercise of such Convertible Securities.

(B) Issuance of Convertible Securities. If the
Corporation in any manner issues or sells any Convertible Securities and the
lowest price per share for which one share of Common Stock is issuable upon such
conversion, exchange or exercise thereof is less than the Applicable Price, then
such share of Common Stock shall be

21

deemed to be outstanding and to have been issued and sold by the Corporation at
the time of the issuance of sale of such Convertible Securities for such price
per share. For the purposes of this Section 8(e)(i)(B), the "lowest price per
share for which one share of Common Stock is issuable upon such conversion,
exchange or exercise" shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Corporation with respect to
any one share of Common Stock (disregarding, prior to its occurrence, any
potential adjustment thereto described in Section 8(e)(i)(C) unless and until
the same shall occur) upon the issuance or sale of the Convertible Security and
upon the conversion, exchange or exercise of such Convertible Security. No
further adjustment of the Conversion Price shall be made upon the actual
issuance of such Common Stock upon conversion, exchange or exercise of such
Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the
Conversion Price had been or are to be made pursuant to other provisions of this
Section 8(e)(i), no further adjustment of the Conversion Price shall be made by
reason of such issue or sale.

(C) Change in Option Price or Rate of Conversion. If the purchase
or exercise price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exchange or exercise of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exchangeable or exercisable for Common Stock changes at any time, the
Conversion Price in effect at the time of such change shall be adjusted to the
Conversion Price which would have been in effect at such time had such Options
or Convertible Securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this Section 8(e)(i)(C), if
the terms of any Option or Convertible Security that was outstanding as of the
date of issuance of the Preferred Shares are changed in the manner described in
the immediately preceding sentence, then such Option or Convertible Security and
the Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such change.
Notwithstanding the foregoing, no adjustment shall be made if such adjustment
would result in an increase of the Conversion Price then in effect.

(D) Calculation of Consideration Received. In case any Option is
issued in connection with the issue or sale of other securities of the
Corporation, together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a per Option or per unit, as applicable,
consideration of $0.01. If any Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor will be deemed to be the gross amount received
by the Corporation therefor. If any Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
the consideration other than cash received by the Corporation will be the fair
value of such consideration, except where such consideration consists of
marketable securities, in which case the amount of consideration received by the
Corporation will be the arithmetic average of the Closing Sale Prices of such
securities during the ten (10) consecutive trading days ending on the date of
receipt of such securities. The fair value of any consideration other than cash
or securities will be determined jointly by the Corporation and the holders of
at least 51% of the Preferred Shares then outstanding. If such parties are
unable to reach agreement within ten (10) days after the occurrence of an event

22

requiring valuation (the "Valuation Event"), the fair value of such
consideration will be determined within five Business Days after the tenth
(10th) day following the Valuation Event by an independent, nationally
recognized investment banking firm selected by the Corporation and the holders
of at least 51% of the Preferred Shares then outstanding. The determination of
such appraiser shall be deemed binding upon all parties absent manifest error
and the fees and expenses of such appraiser shall be borne by the Corporation.

(E) Record Date. If the Corporation takes a record of the
holders of Common Stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in Common Stock, Options or Convertible
Securities or (2) to subscribe for or purchase Common Stock, Options or
Convertible Securities, then such record date will be deemed to be the date of
the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

(ii)  Adjustment of Conversion Price upon Subdivision or
Combination of Common Stock. If the Corporation at any time subdivides (by any
stock split, stock dividend, recapitalization or otherwise) its outstanding
shares of Common Stock into a greater number of shares, the Conversion Price in
effect immediately prior to such subdivision will be proportionately reduced. If
the Corporation at any time combines (by combination, reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller number of
shares and the Conversion Price in effect immediately prior to such combination
will be proportionately increased.

(iii) Adjustment of Conversion Price on Adjustment Date. In
addition to any other adjustment to the Conversion Price provided for in this
Certificate of Vote, if (A) the Consolidated EBITDA of the Corporation (as such
term is defined in the Financing Agreement), for the Fiscal Year ending December
31, 2003 is not greater than $115 million, as certified in writing by the chief
financial officer of the Corporation to each holder of Preferred Shares as soon
as is available, but not later than March 30, 2004 (the "2004 Consolidated
EBITDA Certificate") and (B) the arithmetic average of the Closing Sale Prices
of the Common Stock during the Adjustment Measuring Period is less than $27.50
(appropriately adjusted to reflect any stock dividend, stock split, stock
combination or other similar transaction occurring from and after the Issuance
Date), then the Conversion Price for the Preferred Shares shall be reduced
effective as of the Adjustment Date to an amount equal to the Adjustment Price,
subject to further adjustment as provided in this Certificate of Vote. If any
holder of Preferred Shares disputes any calculation by the Corporation required
by this Section 8(e)(iii), (including, without limitation, the Corporation's
calculation of Consolidated EBITDA contained in the 2004 Consolidated EBITDA
Certificate), such holder shall deliver to the Corporation (and the Corporation
shall immediately thereafter deliver such notice to each other holder of
Preferred Shares) within ten (10) Business Days of such holder's receipt of the
2004 Consolidated EBITDA Certificate a written notice of such dispute describing
the basis for such dispute. If the Corporation and the disputing holder(s) of
Preferred Shares cannot arrive at a compromise to such dispute within five (5)
Business Days of the Corporation's receipt of written notice thereof from the
disputing holder(s), then such dispute shall be resolved in accordance with the
procedures set forth in Section 8(c)(iii) hereof.

23

(iv) If the Corporation, at any time while Preferred Shares are
outstanding, shall distribute to all holders of Common Stock (and not to the
holders of Preferred Shares) evidences of its indebtedness or assets or rights
or warrants to subscribe for or purchase any security, then in each such case
the Conversion Price at which each share of Preferred Stock shall thereafter be
convertible shall be determined by multiplying the Conversion Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the Closing Sale Price of a share of Common Stock determined as of the
record date mentioned above, and of which the numerator shall be such Closing
Sale Price on such record date less the then fair market value at such record
date of the portion of such assets or evidence of indebtedness so distributed
applicable to one outstanding share of Common Stock as determined by the Board
in good faith. If any holder of Preferred Shares shall dispute the findings of
the Corporation's Board, then such fair market value shall be determined in
accordance by a nationally recognized investment banking firm selected by the
Corporation and approved by the holders of not less than 51% of the then
outstanding Preferred Shares in accordance with Section 8(c)(iii). In either
case the adjustments shall be described in a statement provided to each holder
of Preferred Shares of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.

(v)  Other Events. If any event occurs of the type contemplated
by the provisions of this Section 8(e) but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Corporation's Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of the Preferred
Shares; provided that no such adjustment will increase the Conversion Price as
otherwise determined pursuant to this Section 8(e).

(vi) Notices.

(A) Whenever the Conversion Price is required to be adjusted
as provided herein, the Corporation (1) shall immediately compute the Conversion
Price, (2) shall prepare a certificate signed by the Corporation's Treasurer
setting forth such Conversion Price and showing in detail the facts upon which
such adjustment is based, which certificate shall be certified by the
independent public accountants regularly employed by the Corporation (and
corrected, if such accountants determine that the Corporation's certification is
incorrect), and (3) shall mail a copy of such certificates to each holder of
record of then outstanding Preferred Shares. A copy of such certificate shall
also forthwith be filed with the Corporation's Transfer Agent. Until further
adjusted, the Conversion Price shall be as set forth in such certificate. In the
case of a dispute as to the determination of such adjustment between the
Corporation and any holder of Preferred Shares, then such dispute shall be
resolved in accordance with the procedures set forth in Section 8(c)(iii).

(B) The Corporation will give written notice to each holder
of Preferred Shares at least ten (10) Business Days prior to the date on which
the Corporation closes its books or takes a record (1) with respect to any
dividend or distribution

24

upon the Common Stock, (2) with respect to any pro rata subscription offer to
holders of Common Stock or (3) for determining rights to vote with respect to
any Organic Change.

(C) The Corporation will also give written notice to
each holder of Preferred Shares at least ten (10) Business Days prior to the
date on which any Organic Change, dissolution or liquidation will take place.

9. Voting Rights; Board Observation Rights.

(a) Voting Rights. Except as may be otherwise provided in this
Certificate of Vote or required by law, the Preferred Shares shall vote together
with all other classes and series of stock of the Corporation as a single class
on all actions to be taken by the stockholders of the Corporation. Each
Preferred Share shall have a number of votes, subject to reduction pursuant to
Section 11 hereof, equal to the quotient determined by dividing (a) the number
of shares of Common Stock into which all of the outstanding Preferred Shares are
then convertible in accordance with Section 8 (but subject to the limitation in
Section 11) divided by (b) the number of Preferred Shares then outstanding. Each
holder of Preferred Shares shall be entitled to notice of any stockholders'
meeting in accordance with the By-Laws of the Corporation.

(b) Board Observation Rights. For so long as Oak Hill Advisors,
Inc. ("Oak Hill") and its Affiliates and funds and accounts that Oak Hill and
its Affiliates control or advise own in the aggregate not less than 2,500
Preferred Shares (subject to adjustment for any stock split, subdivision,
combination or other similar transaction), Oak Hill shall be entitled to appoint
one (1) designee who shall be entitled to observe the meetings of the Board of
Director of the Corporation in a non-voting capacity. Such observer shall have
full rights to attend all meetings of the Board of Directors of the Corporation
and all meetings (whether such meetings are formal or informal, are convened in
person, telephonically, or via any other telecommunication means) of any
committee or subcommittee of the Board of Directors of the Corporation,
including, without limitation, any executive, compensation, governance,
nominating and audit committee. In connection with the rights set forth in this
Section 9(b), the Corporation shall (i) provide all materials distributed to the
members of the Board of Directors of the Company (and any committee or
subcommittee thereof) to each Person designated by Oak Hill hereunder at the
same time such materials are distributed to other Board, committee or
subcommittee members and (ii) pay all reasonable expenses of such Person to
attend the meetings of the Board of Directors (and any committee or subcommittee
thereof).

10. Protective Provisions. The Corporation shall not, directly or
indirectly, without the affirmative vote or written consent of the holders of
not less than 51% of the then outstanding Preferred Shares, voting or consenting
as a separate class:

(a) enter into, renew, extend or be a party to, or permit any of
its Subsidiaries to enter into, renew, extend or be a party to, any transaction
or series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any Affiliate, except (1) in the
ordinary course of business in a manner and to an extent consistent with past
practice and necessary or desirable for the prudent operation of its business,
for fair consideration and on

25

terms no less favorable to it or its Subsidiaries than would be obtainable in a
comparable arm's length transaction with a Person that is not an Affiliate
thereof, (2) transactions with another wholly-owned Subsidiary of the
Corporation or the Corporation and (3) transactions permitted by Section 10(f)
hereof;

(b) (1) declare or pay any dividend or other distribution, direct
or indirect, on account of any Capital Stock of the Corporation or any of its
Subsidiaries, now or hereafter outstanding, (2) make any repurchase, redemption,
retirement, defeasance, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Capital Stock of any of the
Corporation or any of its Subsidiaries, now or hereafter outstanding, (3) make
any payment to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights for the purchase or acquisition of shares of any class
of Capital Stock of any of the Corporation or any of its Subsidiaries, now or
hereafter outstanding, (4) return any Capital Stock to any shareholders or other
equity holders of any of the Corporation or any of its Subsidiaries, or make any
other distribution of property, assets, shares of Capital Stock, warrants,
rights, options, obligations or securities thereto as such or (5) pay any
management fees or any other fees or expenses (including the reimbursement
thereof by any of the Corporation or any of its Subsidiaries) pursuant to any
management, consulting or other services agreement to any of the shareholders or
other equity holders of any of the Corporation or any of its Subsidiaries or
other Affiliates, or to any other Subsidiaries or Affiliates of the Corporation;
provided, however, (A) any Subsidiary of the Corporation may pay dividends to
the Corporation or another Subsidiary of the Corporation (B) the Corporation may
pay dividends on its outstanding common Capital Stock in the form of common
Capital Stock, provided that an adjustment for such payment is provided for in
Section 8(e) hereof, (C) the Corporation may pay cash dividends in the annual
amount of $4.00 per share per twelve-month period upon each of the 112,000
shares of the Corporation's Series B Preferred Stock which are currently
outstanding, and (D) the Corporation may accrue Dividends and make Cash Dividend
Payments to the holders of Preferred Shares in the manner provided in Section 4
hereof provided that, in each case of clauses (A) through (D) above, no payment
shall be made if Section 7.02(h) of the Financing Agreement would prohibit such
payment;

(c) create, incur, assume, guarantee or suffer to exist, or
otherwise become or remain liable with respect to, or permit any of its
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness other than Permitted
Indebtedness;

(d) create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien upon or with
respect to any of its properties, whether now owned or hereafter acquired; file
or suffer to exist under the Uniform Commercial Code or any similar law or
statute of any jurisdiction, a financing statement (or the equivalent thereof)
that names it or any of its Subsidiaries as debtor; sign or suffer to exist any
security agreement authorizing any secured party thereunder to file such
financing statement (or the equivalent thereof); sell any of its property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable) with
recourse to it or any of its Subsidiaries or assign or otherwise transfer, or
permit any of its Subsidiaries to assign or otherwise transfer, any account or
other right to receive income; other than, as to all of the above, Permitted
Liens;

26

(e) Wind-up, liquidate or dissolve, or merge, consolidate or
amalgamate with any Person, or convey, sell, lease or sublease, transfer or
otherwise dispose of, whether in one transaction or a series of related
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired (or agree to do any of the foregoing), or purchase
or otherwise acquire, whether in one transaction or a series of related
transactions, all or substantially all of the assets of any Person (or any
division thereof) (or agree to do any of the foregoing), or permit any of its
Subsidiaries to do any of the foregoing; provided, however, that

(i)  any direct or indirect wholly-owned Subsidiary of the
Corporation may be merged into any other direct or indirect wholly-owned
Subsidiary of the Corporation, or may consolidate with another direct or
indirect wholly-owned Subsidiary of the Corporation, so long as no other
provision of this Certificate of Vote would be violated thereby; and

(ii) any of the Corporation and its Subsidiaries may (A)
sell Inventory in the ordinary course of business, (B) dispose of obsolete or
worn-out equipment in the ordinary course of business, (C) sell or otherwise
dispose of other property or assets (other than any Capital Stock, Rolling Stock
or any Facility of any of the Corporation or any of its Subsidiaries) for cash
in an aggregate amount not less than the fair market value of such property or
assets, and (D) sell or otherwise dispose of Rolling Stock for cash in an amount
not less than the fair market value of such Rolling Stock, provided that the net
cash proceeds of such dispositions in the case of clauses (B), (C) and (D)
above, do not exceed $500,000 in the aggregate in any twelve-month period and
the conditions of Section 7.02(c)(ii) of the Financing Agreement are satisfied.

(f) Make or commit or agree to make any loan, advance,
guarantee of obligations, other extension of credit or capital contributions to,
or hold or invest in or commit or agree to hold or invest in, or purchase or
otherwise acquire or commit or agree to purchase or otherwise acquire any shares
of the Capital Stock, bonds, notes, debentures or other securities of, or make
or commit or agree to make any other investment in, any other Person, or
purchase or own any futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or permit any of its Subsidiaries to do any of the foregoing,
except for: (i) investments existing on the Issuance Date, as set forth on
Schedule 7.02(e) to the Financing Agreement, but not any increase in the amount
thereof as set forth in such Schedule or any other modification of the terms
thereof, (ii) investments made by the Company or any Subsidiary of the Company
that is a Loan Party (as defined in the Financing Agreement) in or to its
respective wholly-owned Subsidiaries and by such Subsidiaries to it, made in the
ordinary course of business, provided that the aggregate principal amount of
such investments made in or to the Loan Parties' Subsidiaries organized outside
of the United States (exclusive of (A) investments in the Capital Stock of such
Subsidiaries resulting from the allocation of the consideration paid by the Loan
Parties for the CSD Acquisition Assets (as defined in the Financing Agreement)
and (B) Indebtedness incurred by a Loan Party on behalf of one or more of its
Subsidiaries which is permitted under clause (i) of the definition of "Permitted
Indebtedness") shall not exceed, in the case of such Subsidiaries organized
under the laws of a Canadian province, $5,000,000 or, in the case of any other
Subsidiary organized outside the

27

United States, $500,000, in each case at any one time outstanding, and (iii)
Permitted Investments;

(g) Make or commit or agree to make, or permit any of its
Subsidiaries to make or commit or agree to make, any Capital Expenditure (by
purchase or Capitalized Lease) that would cause the aggregate amount of all
Capital Expenditures made by the Corporation and their Subsidiaries to exceed
the amount permitted in any Fiscal Year under Section 7.02(g) of the Financing
Agreement;

(h) Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any direct or indirect Subsidiary of the Corporation
(i) to pay dividends or to make any other distribution on any shares of Capital
Stock of such Subsidiary owned by directly or indirectly by the Corporation,
(ii) to pay or prepay or to subordinate any Indebtedness owed to any of the
Corporation or any of its Subsidiaries, (iii) to make loans or advances to any
of the Corporation or any of its Subsidiaries or (iv) to transfer any of its
property or assets to any of the Corporation or any of its Subsidiaries, or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that nothing in any of clauses (i) through (iv) of this Section 10(h) shall
prohibit or restrict compliance with:

(A) the Financing Agreement, the Revolving Credit
Agreement, or any other agreement or instrument entered into in connection
therewith;

(B) any agreements in effect on the Issuance Date and
described on Schedule 7.02(k) to the Financing Agreement;

(C) any applicable law, rule or regulation (including,
without limitation, applicable currency control laws and applicable state
corporate statutes restricting the payment of dividends in certain
circumstances);

(D) in the case of clause (iv) any agreement setting
forth customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of similar
property or assets; or

(E) in the case of clause (iv) any agreement,
instrument or other document evidencing a Permitted Lien from restricting on
customary terms the transfer of any property or assets subject thereto.

(i) assume, or accept any assignment of, directly or
indirectly, after the Issuance Date any contract, agreement or obligation of
Safety-Kleen Corp. or its Affiliates or Subsidiaries containing or otherwise
imposing on the Corporation or any of its Affiliates or Subsidiaries any
material indemnification or guarantee obligation, other than those contracts and
agreements listed in a schedule delivered prior to the Effective Date to each
holder of Preferred Shares as of the Effective Date;

(j) amend, alter, change, repeal or waive any provision of
its Articles of Organization (whether by way of a Certificate of Vote or
otherwise) or this Certificate of Vote

28

or its By-laws in any manner (whether by merger, consolidation or otherwise),
that would adversely affect the rights, preferences or privileges of the
Preferred Shares;

(k) create or authorize the creation of or issue (including,
without limitation, by way of recapitalization), or obligate itself or any
Subsidiary to authorize or issue any shares of any series of preferred stock of
the Corporation or any such Subsidiary, or any other security exercisable for or
convertible into any shares of any series of preferred stock of the Corporation
or any Subsidiary, whether any such creation or authorization shall be by means
of amendment of the Articles of Organization (whether by way of a Certificate of
Vote or otherwise) or of this Certificate of Vote or by merger, consolidation or
otherwise;

(l) issue or authorize the issuance of any Preferred Shares
after the Issuance Date;

(m) issue or authorize the issuance of any shares of Series
B Preferred Stock of the Corporation after the Issuance Date;

(n) modify or amend the terms of the Series B Preferred
Stock in a manner that could reasonably be expected to adversely affect the
rights of the holders of Preferred Shares; or

(o) enter into any contract, agreement, commitment or
understanding with respect to any of the foregoing.

If the Company shall have breached or defaulted with respect to
any of the covenants set forth in this Section 10, and such breach has not been
cured, if curable, within 30 days of written notice to the Company thereof
(each, a "Covenant Default"), then, immediately upon the occurrence of such
Covenant Default, (i) the Dividend Rate in effect on the date of the Covenant
Default shall increase by six percent (6%) until the later of (A) the six-month
anniversary of the date of the occurrence of the Covenant Default and (B) the
date on which such Covenant Default is cured and (ii) the Conversion Price shall
automatically be adjusted (subject to further adjustment pursuant to this
Certificate of Vote subsequent to such adjustment) to an amount equal to (A) the
Adjustment Price, in the event the Conversion Price in effect on the date of the
Covenant Default is greater than the Adjustment Price and (B) the product of (I)
0.9 and (II) the Conversion Price in effect on the date of the Covenant Default,
in the event the Conversion Price in effect on the date of the Covenant Default
is less than or equal to the Adjustment Price.

11. Limitation on Number of Conversion Shares. Notwithstanding
anything to the contrary contained herein, (a) the Corporation shall not be
obligated to issue any shares of Common Stock upon conversion of the Preferred
Shares if the issuance of such shares of Common Stock would exceed that number
of shares of Common Stock which the Corporation may issue upon conversion of the
Preferred Shares without breaching the Corporation's obligations under the rules
or regulations of the Principal Market, or the market or exchange where the
Common Stock is then traded (the "Exchange Cap") and (b) the holders of
Preferred Shares may not exercise voting power with respect to any Preferred
Shares in accordance with Section 9 hereof on any matter brought before all
holders of Capital Stock of the Corporation to

29

the extent that voting such Preferred Shares shall cause the Corporation to
breach its obligations under the Exchange Cap, except that such limitations
shall not apply in the event that the Corporation (i) obtains the approval of
its stockholders as required by the applicable rules of the Principal Market (or
any successor rule or regulation) for issuances of Common Stock in excess of
such amount, or (ii) obtains a written opinion from outside counsel to the
Corporation that such approval is not required, which opinion shall be
reasonably satisfactory to the holders of at least 51% of the Preferred Shares
then outstanding. Until such approval or written opinion is obtained, (A) no
purchaser of Preferred Shares pursuant to the Purchase Agreement (the
"Purchasers") shall be issued, upon conversion of Preferred Shares, shares of
Common Stock and (B) no Purchaser shall have the right to exercise voting rights
on matters brought before all holders of Capital Stock in accordance with
Section 9 hereof in respect of Preferred Shares in an amount greater than the
product of (1) the Exchange Cap amount multiplied by (2) a fraction, the
numerator of which is the number of Preferred Shares issued to such Purchaser
pursuant to the Purchase Agreement and the denominator of which is the aggregate
amount of all the Preferred Shares issued to the Purchasers pursuant to the
Purchase Agreement (the "Cap Allocation Amount"). In the event that any
Purchaser shall sell or otherwise transfer any of such Purchaser's Preferred
Shares, the transferee shall be allocated a pro rata portion of such Purchaser's
Cap Allocation Amount. In the event that any holder of Preferred Shares shall
convert all of such holder's Preferred Shares into a number of shares of Common
Stock which, in the aggregate, is less than such holder's Cap Allocation Amount,
then the difference between such holder's Cap Allocation Amount and the number
of shares of Common Stock actually issued to such holder shall be allocated to
the respective Cap Allocation Amounts of the remaining holders of Preferred
Shares on a pro rata basis in proportion to the number of Preferred Shares then
held by each such holder. If at any time when a holder of Preferred Shares shall
deliver a Conversion Notice pursuant to Section 8(c) hereof the Corporation
shall be prohibited pursuant to the provisions of this Section 11 from issuing
all or any portion of the Conversion Shares issuable pursuant to such Conversion
Notice, then the Corporation shall pay in immediately available funds to the
holder within two (2) Business Days of the date of delivery of such Conversion
Notice, an amount in cash equal to the product of (x) the number of shares of
Common Stock which could not be issued by virtue of the limitations contained in
this Section 11 multiplied by (y) the average of the Closing Sale Prices of the
Common Stock on each of the five (5) trading days immediately preceding the date
of delivery of such Conversion Notice, and concurrent with, and subject to such
payment by the Corporation, the number of Preferred Shares held by such holder
shall be reduced on the books and records of the Corporation in accordance with
Section 8(c)(vi) by the number of Preferred Shares that were subject to the
Conversion Notice and could not be converted by virtue of the limitations of
this Section 11.

12. Lost or Stolen Certificates. Upon receipt by the Corporation
of evidence reasonably satisfactory to the Corporation of the loss, theft,
destruction or mutilation of any Preferred Stock Certificates representing the
Preferred Shares, and, in the case of loss, theft or destruction, of an
indemnification undertaking by the holder to the Corporation in customary form
and, in the case of mutilation, upon surrender and cancellation of the Preferred
Stock Certificate(s), the Corporation shall execute and deliver to the holder
new preferred stock certificate(s) of like tenor and date.

13. Reservation of Shares. The Corporation shall, so long as any
of the Preferred Shares are outstanding, take all action necessary to reserve
and keep available out of its

30

authorized and unissued Common Stock, solely for the purpose of effecting the
conversions of the Preferred Shares, such number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Preferred Shares then outstanding (without regard to any limitations on
conversions) under the terms of this Certificate of Vote as then in effect. The
initial number of shares of Common Stock reserved for conversions of the
Preferred Shares and each increase in the number of shares so reserved shall be
allocated pro rata among the holders of the Preferred Shares based on the number
of Preferred Shares held by each holder at the time of issuance of the Preferred
Shares or increase in the number of reserved shares, as the case may be. In the
event a holder shall sell or otherwise transfer any of such holder's Preferred
Shares, each transferee shall be allocated a pro rata portion of the number of
reserved shares of Common Stock reserved for such transferor. Any shares of
Common Stock reserved and allocated to any Person which ceases to hold any
Preferred Shares shall be allocated to the remaining holders of Preferred
Shares, pro rata based on the number of Preferred Shares then held by such
holders.

14. No Impairment. The Corporation shall not, by amendment of its
Articles of Organization or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of the Preferred Shares set forth herein, but will at all times in
good faith assist in the carrying out of all terms and in the taking of all
action that may be necessary or appropriate in order to protect the rights of
the holders of then outstanding Preferred Shares against dilution or other
impairment. Without limiting the generality of the foregoing, the Corporation
(a) shall not increase the par value of any shares of stock receivable on the
conversion of Preferred Shares above the amount payable therefor on such
conversion and (b) shall take all action that may be necessary or appropriate in
order that the Corporation may validly and legally issue fully paid and
nonassessable shares of stock on the conversion of all Preferred Shares from
time to time outstanding.

15. Severability of Provisions. Whenever possible, each provision
of this Certificate of Vote shall be interpreted in a manner as to be effective
and valid under applicable law, but if any provision hereof is held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating or otherwise adversely affecting the remaining provisions hereof.
If a court of competent jurisdiction should determine that a provision hereof
would be valid or enforceable if a period of time were extended or shortened or
a particular percentage were increased or decreased, then such court may make
such change as shall be necessary to render the provision in question effective
and valid under applicable law.

16. Amendment, Waiver or Discharge. Except as otherwise expressly
provided herein, neither this Certificate of Vote nor any term hereof may be
amended, waived, modified, discharged or terminated without the written consent
or affirmative vote of the holders of not less than 51% of the Preferred Shares
then outstanding; provided, however, that no amendment, waiver or consent shall
(a) change or extend the Mandatory Redemption Date, the Redemption Price or the
Conversion Price applicable to any Preferred Shares, in each case without the
written consent of the holder of such Preferred Shares (b) amend, modify or
waive the conversion or redemption rights of any holder of Preferred Shares
without the written consent

31

of such holder or (c) amend, modify or waive this Section 16 without the written
consent of each holder of Preferred shares.

17. Remedies, Characterizations, Other Obligations, Breaches and
Injunctive Relief. The remedies provided in this Certificate of Votes shall be
cumulative and in addition to all other remedies available under this
Certificate of Vote, at law or in equity (including a decree of specific
performance and/or other injunctive relief). No remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy.
Nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Corporation to comply with the terms of this Certificate of Vote.
The Corporation covenants to each holder of Preferred Shares that there shall be
no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the holder thereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Corporation (or the
performance thereof). The Corporation acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the holders of the
Preferred Shares and that the remedy at law for any such breach may be
inadequate. The Corporation therefore agrees that, in the event of any such
breach or threatened breach, the holders of the Preferred Shares shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

18. Failure or Indulgence Not Waiver. No failure or delay on the
part of a holder of Preferred Shares in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.

19. Notice. Whenever notice is required to be given under this
Certificate of Vote, unless otherwise provided herein, such notice shall be
given in accordance with Section 8 of the Purchase Agreement (provided that if
the Preferred Shares are not held by a Buyer (as defined in the Purchase
Agreement) then such notice shall be given to the holder of Preferred Shares at
the address set forth on the books and records of the Corporation.

20. Transfer of Preferred Shares. A holder of Preferred Shares
may assign some or all of the Preferred Shares and the accompanying rights
hereunder held by such holder without the consent of the Corporation; provided
that such assignment is in compliance with applicable securities laws and notice
of such assignment is delivered to the Corporation promptly thereafter.

21. Preferred Share Register. The Corporation shall maintain at
its principal executive offices (or such other office or agency of the
Corporation as it may designate by notice to the holders of the Preferred
Shares), a register for the Preferred Shares, in which the Corporation shall
record the name and address of the persons in whose name the Preferred Shares
have been issued, as well as the name and address of each transferee. The
Corporation may treat the person in whose name any Preferred Share is registered
on the register as the owner and holder thereof for all purposes,
notwithstanding any notice to the contrary, but in all events recognizing any
properly made transfers.

32

EXHIBIT I

CLEAN HARBORS, INC. CONVERSION NOTICE

Reference is made to the Certificate of Vote of Directors Establishing
a Series of a Class of Stock describing the Preference and Rights of Series C
Convertible Preferred Stock of Clean Harbors, Inc. (the "Certificate of Vote").
In accordance with and pursuant to the Certificate of Vote, the undersigned
hereby elects to convert the number of shares of Series C Convertible Preferred
Stock, par value $0.01 per share (the "Preferred Shares"), of Clean Harbors,
Inc., a Massachusetts corporation (the "Corporation"), indicated below into
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of the
Corporation, as of the date specified below.

Date of Conversion:___________________________________________________

Number of Preferred Shares to be converted:___________________________

Stock certificate no(s). of Preferred Shares to be converted:__________

Tax ID Number (If applicable):________________________________________

Please confirm the following information:_______________________________________

Conversion Price:_____________________________________________________

Number of shares of Common Stock to be issued:________________________

Please issue the Common Stock into which the Preferred Shares are
being converted and, if applicable, any check drawn on an account of the
Corporation in the following name and to the following address:

Issue to:_____________________________________________________________

_____________________________________________________________

Address:______________________________________________________________

Telephone Number:_____________________________________________________

Facsimile Number:_____________________________________________________

Authorization:________________________________________________________

By:____________________________

Title:_________________________

Dated:

Account Number (if electronic book entry transfer):___________________

Transaction Code Number (if electronic book entry transfer):__________

33

[NOTE TO HOLDER -- THIS FORM MUST BE SENT CONCURRENTLY TO TRANSFER AGENT]

34

SIGNED UNDER THE PENALTIES OF PERJURY this  9th day of September, 2002

/s/ Stephen H. Moynihan                    /*Vice President,
---------------------------------------------------------------

/s/ C. Michael Malm                     / **Clerk /
------------------------------------------------------------

THE COMMONWEALTH OF MASSACHUSETFS

CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK
(General Laws, Chapter 156B, Section 26)

I hereby approve the within Certificate of
Vote of Directors and, the filing fee in the
amount of $100.00 having been paid, said
certificate is deemed to have been filed
with me this 9th day of September, 2002

Effective date:_____________________________

WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth

TO BE FILLED IN BY CORPORATION
Photocopy of document to be sent to:

C. Michael Malm, Esq.
------------------------------
Davis Malm & D'Agostine, P.C.
------------------------------
One Boston Place, 37th Floor
------------------------------
Boston, MA 02108
------------------------------

Telephone: 617-367-2500
-------------------

Exhibit 4.24

LOAN AND SECURITY AGREEMENT

by and among

CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND) as Agent,

CONGRESS FINANCIAL CORPORATION (NEW ENGLAND),
And the other financial institutions party hereto
from time to time as Lenders,

and

CLEAN HARBORS, INC. AND ITS SUBSIDIARIES
as Borrowers

Dated: September 6, 2002

TABLE OF CONTENTS

Page

SECTION 1.  DEFINITIONS. ...................................................   1

SECTION 2.  CREDIT FACILITIES. .............................................  25

SECTION 3.  INTEREST AND FEES. .............................................  32

SECTION 4.  CONDITIONS PRECEDENT. ..........................................  35

SECTION 5.  GRANT AND PERFECTION OF SECURITY INTEREST.......................  38

SECTION 6.  COLLECTION AND ADMINISTRATION. .................................  44

SECTION 7.  COLLATERAL REPORTING AND COLLATERAL COVENANTS. .................  50

SECTION 8.  REPRESENTATIONS AND WARRANTIES. ................................  53

SECTION 9.  AFFIRMATIVE AND NEGATIVE COVENANTS .............................  60

SECTION 10. EVENTS OF DEFAULT AND REMEDIES .................................  75

SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS;
GOVERNING LAW. .............................................................  82

SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS ...............................  86

SECTION 13. THE AGENT. .....................................................  93

SECTION 14. JOINT AND SEVERAL LIABILITY; GUARANTEES. .......................  99

INDEX TO EXHIBITS AND SCHEDULES

Exhibit A   Information Certificate

Exhibit B   Compliance Certificate

Exhibit C   Permitted Holders

Exhibit D   Form of Assignment and Acceptance

Schedule 1  Lenders' Pro Rata Shares and Revolving Loan Limits

Schedule 2  Inactive Subsidiaries

i

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement dated September 6, 2002 is entered into by
and among Congress Financial Corporation (New England), a Massachusetts
corporation ("Congress") as agent for itself and the other Lenders ("Agent"),
Congress Financial Corporation (New England) and the other financial
institutions from time to time party hereto (each, a "Lender" and, collectively,
"Lenders") and Clean Harbors, Inc., a Massachusetts corporation ("Parent"),
Clean Harbors Canada, Inc. (currently, Safety-Kleen Ltd.), a New Brunswick
corporation, Clean Harbors Mercier, Inc. (currently, Safety-Kleen Services
(Mercier) Ltd.), a Quebec corporation, Clean Harbors Quebec, Inc. (currently,
Safety-Kleen Services (Quebec) Ltd.), a Quebec corporation and 510127 N.B. Inc.,
a New Brunswick corporation (collectively, "Canadian Borrowers" as hereinafter
further defined) and each of the other Subsidiaries of Parent from time to time
a party hereto (each together with Parent and Canadian Borrowers, a "Borrower"
and, collectively, "Borrowers").

W I T N E S S E T H:

WHEREAS, Parent has entered into an Acquisition Agreement dated as of
February 22, 2002, as amended as of March 8, April 30 and September 6, 2002 with
Safety-Kleen Services, Inc. (the "Purchase Agreement") to acquire certain assets
and businesses of the Chemical Services Division (the "Division") of
Safety-Kleen Services, Inc. and certain of its subsidiaries ("Sellers") in a
transaction pursuant to Sections 363/365 of the United States Bankruptcy Code;

WHEREAS, Borrowers have requested that Agent and Lenders enter into
financing arrangements with Borrowers pursuant to which Agent and Lenders may
make loans and provide other financial accommodations to Borrowers;

WHEREAS, Agent and Lenders are willing to make such loans and provide such
financial accommodations on the terms and conditions set forth herein; and

WHEREAS, immediately after the consummation of the transactions
contemplated by the Purchase Agreements the name of Safety-Kleen Services
(Mercier) Ltd. will be changed to Clean Harbors Mercier, Inc., the name of
Safety-Kleen Services (Quebec) Ltd. will be changed to Clean Harbors Quebec,
Inc. and the name of Safety-Kleen Ltd. will be changed to Clean Harbors Canada,
Inc;

NOW,  THEREFORE,  in consideration of the mutual  conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency  of  which is  hereby  acknowledged,  the  parties  hereto  agree as
follows:

SECTION 1. DEFINITIONS.

For purposes of this Agreement, the following terms shall have the
respective meanings given to them below:

1.1 "Accounts" shall mean all present and future rights of each Borrower to
payment of a monetary obligation, whether or not earned by performance, which is
not evidenced by chattel paper or an instrument, (a) for Inventory that has been
or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for
services rendered or to be rendered, (c) for a

1

secondary obligation incurred or to be incurred, or (d) arising out of the use
of a credit or charge card or information contained on or for use with the card.

1.2 "Acquisition" means the acquisition of the Division in accordance with
the Purchase Agreements.

1.3 "Adjusted Eurodollar Rate" shall mean, with respect to each Interest
Period for any Eurodollar Rate Loan, the rate per annum (rounded upwards, if
necessary, to the next one-sixteenth (1/16) of one (1%) percent) determined by
dividing (a) the Eurodollar Rate for such Interest Period by (b) a percentage
equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof,
"Reserve Percentage" shall mean the reserve percentage, expressed as a decimal,
prescribed by any United States or foreign banking authority for determining the
reserve requirement which is or would be applicable to deposits of United States
dollars in a non-United States or an international banking office of Reference
Bank used to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with
the proceeds of such deposit, whether or not the Reference Bank actually holds
or has made any such deposits or loans. The Adjusted Eurodollar Rate shall be
adjusted on and as of the effective day of any change in the Reserve Percentage.

1.4 "Adjusted Net Worth" shall mean as to any Person, at any time, in
accordance with GAAP (except as otherwise specifically set forth below), on a
consolidated basis for such Person and its Subsidiaries (if any), the amount
equal to the difference between: (a) the aggregate net book value of all assets
of such Person and its Subsidiaries after deducting from such book values all
appropriate reserves in accordance with GAAP (including all reserves for
doubtful receivables, obsolescence, depreciation and amortization) and (b) the
aggregate amount of the Indebtedness and other liabilities of such Person and
its Subsidiaries (including tax and other proper accruals).

1.5 "Affiliate" shall mean, with respect to a specified Person, any other
Person (a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such specified
person; (b) which beneficially owns or holds five (5%) percent or more of any
class of the Voting Stock or other equity interest of such specified person; or
(c) of which five (5%) percent or more of the Voting Stock or other equity
interest is beneficially owned or held by such specified person or a Subsidiary
of such specified person. For purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with") when used with respect to any specified person shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of Voting Stock, by agreement or otherwise.

1.6 "Agent" shall mean Congress Financial Corporation (New England) and its
successors and assigns, as administrative and collateral agent for the Lenders
hereunder.

1.7 "Agent Payment  Account" shall mean account no. ______________ of Agent
at Wachovia Bank,  National  Association or such other account as Agent may from
time to time designate to Borrowers as the Agent Payment Account for purposes of
this Agreement.

2

1.8  "Assignment and Acceptance" means an Assignment and Acceptance between
a Lender and an Eligible Assignee (with the consent and approval of the Agent)
in the form of Exhibit D hereto.

1.9  "Bankruptcy Court" shall have the meaning set forth in Section 4.1(k)
hereof.

1.10 "Blocked Accounts" shall have the meaning set forth in Section 6.3
hereof.

1.11 "Borrowers" shall mean, collectively, US Borrowers and Canadian
Borrowers; each sometimes being referred to herein individually as a "Borrower".

1.12 "Borrowing Base" shall mean, as to US Borrowers, the US Borrowing Base
and as to Canadian Borrowers, the Canadian Borrowing Base.

1.13 "Borrower Representative" shall have the meaning set forth in Section
2.5 hereof.

1.14 "Business Day" shall mean (a) in connection with any Loans or Letter
of Credit Accommodations made or provided to a Canadian Borrower, or other
matters related exclusively to a Canadian Borrower, any day (i) other than a
Saturday or Sunday or other day on which commercial banks are authorized or
required to close under the laws of the State of New York, the State of North
Carolina, or The Commonwealth of Massachusetts or the Province of Ontario, and
(ii) on which Agent's Canadian Affiliate's offices and the Bank of Montreal are
open for the transaction of business and (b) in connection with any Loans or
Letter of Credit Accommodations made or provided to any other Borrower, any day
other than a Saturday, Sunday, or other day on which commercial banks are
authorized or required to close under the laws of the State of New York, the
State of North Carolina, or The Commonwealth of Massachusetts and a day on which
the Reference Bank and Agent are open for the transaction of business, except
that if a determination of a Business Day shall relate to any Eurodollar Rate
Loans, the term Business Day shall also exclude any day on which banks are
closed for dealings in dollar deposits in the London interbank market or other
applicable Eurodollar Rate market.

1.15 "Canadian Borrowing Base" shall mean, at any time, the amount for each
Canadian Borrower equal to: (a) eighty (80%) percent of the Net Amount of
Eligible Accounts of each such Canadian Borrower (including all Municipal
Government Accounts that are Eligible Accounts), plus (b) sixty-five (65%)
percent of the Net Amount of Federal Government Accounts of each such Canadian
Borrower that are Eligible Accounts, less (c) any Reserves attributable to each
such Canadian Borrower.

1.16 "Canadian Borrowers" shall mean, collectively, the following (together
with their respective successors and assigns): Clean Harbors Canada, Inc.
(currently, Safety-Kleen Ltd.), a New Brunswick corporation, Clean Harbors
Mercier, Inc. (currently, Safety-Kleen Services (Mercier) Ltd.), a Quebec
corporation, Clean Harbors Quebec, Inc. (currently, Safety-Kleen Services
(Quebec) Ltd.), a Quebec corporation, and 510127 N.B. Inc., a New Brunswick
corporation; each being referred to sometimes herein as a "Canadian Borrower".

1.17 "Canadian Credit Facility" shall mean the Loans and Letter of Credit
Accommodations provided to or for the benefit of a Canadian Borrower pursuant to
Section 2 hereof.

2

1.18 "Canadian Dollar Equivalent" shall mean at any time (a) as to any
amount denominated in Canadian Dollars, the amount thereof and (b) as to any
amount denominated in US Dollars or any other currency, the equivalent amount in
Canadian Dollars calculated by Agent at such time using the then applicable
Exchange Rate in effect on the Business Day of determination.

1.19 "Canadian Dollar Loans" shall mean any Loans or portion thereof which
are denominated in Canadian Dollars.

1.20 "Canadian Dollars" and "C$" shall each mean the lawful currency of
Canada.

1.21 "Canadian Lender" shall mean Congress Financial Corporation (Canada),
an Ontario corporation, and its successors and assigns.

1.22 "Canadian Letter of Credit Accommodations" shall mean Letter of Credit
Accommodations made by Canadian Lender under the Canadian Credit Facility.

1.23 "Canadian Payment Account" shall mean US Dollar account no.
00002-4635-886 of Canadian Lender at Bank of Montreal for US Dollars and
Canadian Dollar account no. 00002-1258-246 of Canadian Lender at Bank of
Montreal for Canadian Dollars or such other account of Canadian Lender as Agent
may from time to time designate to Parent as the Canadian Payment Account for
purposes of this Agreement and the other Financing Agreements.

1.24 "Canadian Maximum Credit" shall mean C$20,000,000.

1.25 "Canadian Overadvances" shall have the meaning set forth in Section
2.1(e).

1.26 "Canadian Pension Plan" shall mean any plan, program or arrangement
(other than the Canada/Quebec Pension Plan) that is a pension plan for the
purposes of any applicable pension benefits legislation or any tax laws of
Canada or a Province thereof, whether or not registered under any such laws,
which is maintained or contributed to by, or to which there is or may be an
obligation to contribute by, any Borrower in respect of any Person's employment
in Canada with such Borrower.

1.27 "Canadian Prime Rate" shall mean, at any time, the greater of (i) the
rate from time to time publicly announced by Bank of Montreal as its prime rate
in effect for determining interest rates on Canadian Dollar denominated
commercial loans in Canada, whether or not such announced rate is the best rate
available at such bank and (ii) the CDOR Rate at such time plus one (1%) percent
per annum.

1.28 "Canadian Prime Rate Loans" shall mean any Canadian Dollar Loans or
portion thereof on which interest is payable based on the Canadian Prime Rate in
accordance with the terms hereof.

1.29 "Canadian Revolving Loans" shall mean Revolving Loans made by Canadian
Lender under the Canadian Credit Facility.

1.30 "Capital Expenditures" shall mean with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such

4

period that in accordance with GAAP are or should be included in "property,
plant and equipment" or in a similar fixed asset account on its balance sheet,
whether such expenditures are paid in cash or financed and including all Capital
Leases paid or payable during such period, and (ii) to the extent not covered by
clause (i) above, the aggregate of all expenditures by such Person and its
Subsidiaries during such period to acquire by purchase or otherwise the business
or fixed assets of, or the Capital Stock of, any other Person.

1.31 "Capital Leases" shall mean, as applied to any Person, any lease of
(or any agreement conveying the right to use) any property (whether real,
personal or mixed) by such Person as lessee which in accordance with GAAP, is
required to be reflected as a liability on the balance sheet of such Person.

1.32 "Capital Stock" shall mean, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
such Person's capital stock, partnership interests or limited liability company
interests at any time outstanding, and any and all rights, warrants or options
exchangeable for or convertible into such capital stock or other interests (but
excluding any debt security that is exchangeable for or convertible into such
capital stock).

1.33 "Cash Equivalents" shall mean, at any time, (a) any evidence of
Indebtedness with a maturity date of ninety (90) days or less issued or directly
and fully guaranteed or insured by the United States of America, Canada or any
agency or instrumentality thereof; provided, that, the full faith and credit of
the United States of America or Canada, as applicable, is pledged in support
thereof; (b) certificates of deposit or bankers' acceptances with a maturity of
ninety (90) days or less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and undivided profits
of not less than $250,000,000; (c) commercial paper (including variable rate
demand notes) with a maturity of ninety (90) days or less issued by a
corporation (except any Borrower or an Affiliate of any Borrower) organized
under the laws of any State of the United States of America or the District of
Columbia or organized under the laws of any Province of Canada, or the federal
laws applicable therein and rated at least A-1 by Standard & Poor's Ratings
Service, a division of The McGraw-Hill Companies, Inc. or at least P-1 by
Moody's Investors Service, Inc.; (d) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the types described in
clause (a) above entered into with any financial institution having combined
capital and surplus and undivided profits of not less than $250,000,000; (e)
repurchase agreements and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the United States of
America, Canada or issued by any governmental agency thereof and backed by the
full faith and credit to the United States of America or Canada, as applicable,
in each case maturing within ninety (90) days or less from the date of
acquisition; provided, that, the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions with Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985; and (f) investments in money market funds
and mutual funds which invest substantially all of their assets in securities of
the types described in clauses (a) through (e) above.

1.34 "CDOR Rate" shall mean, on any day, the annual rate of interest which
is the rate based on an average 30 day rate applicable to Canadian Dollar
bankers' acceptances appearing on the "Reuters Screen CDOR Page" (as defined in
the International Swap Dealer Association,

5

Inc. definitions, as modified and amended from time to time) as of 10:00 a.m.
Toronto, Ontario time on such day; provided that if such rate does not appear on
the Reuters Screen CDOR Page as contemplated, then the CDOR Rate on any day
shall be the 30 day rate applicable in Canadian Dollar bankers' acceptances
quoted by the Bank of Montreal as of 10:00 a.m. Toronto, Ontario time on such
day.

1.35 "Change of Control" shall mean (a) except as may be expressly
permitted under Section 9.7 hereof, the transfer (in one transaction or a series
of transactions) of all or substantially all of the assets of any Borrower to
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act); (b) except as may be expressly permitted under Section 9.7 hereof, the
liquidation or dissolution of any Borrower or the adoption of a plan by the
stockholders of any Borrower relating to the dissolution or liquidation of any
Borrower; (c) the acquisition by any Person or group (as such term is used in
Section 13(d)(3) of the Exchange Act), except for one or more Permitted Holders,
of beneficial ownership, directly or indirectly, of fifty (50%) percent or more
of the voting power of the total outstanding Voting Stock of Parent, or the
Board of Directors of Parent; (d) during any period of two (2) consecutive
years, individuals who at the beginning of such period constituted the Board of
Directors of Parent (together with any new directors who have been appointed by
any Permitted Holder, or whose nomination for election by the stockholders of
Parent, as the case may be, was approved by a vote of at least sixty-six and
two-thirds (66 2/3%) percent of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason (other than death
or cessation of legal capacity) to constitute a majority of the Board of
Directors of Parent then still in office; (e) in the case of any Borrower other
than Parent, Parent or Borrowers that own beneficially and of record, Voting
Stock of other Borrowers on the date of this Agreement shall cease to own
beneficially and of record, one hundred (100%) percent of the voting power of
the total outstanding Voting Stock of each such other Borrower or shall cease to
control the appointment of the Board of Directors of each such Borrower; or (f)
the failure of the Permitted Holders to own more than twenty-five (25%) percent
of the voting power of the total outstanding Voting Stock of Parent.

1.36 "Code" shall mean the Internal Revenue Code of 1986, as the same now
exists or may from time to time hereafter be amended, modified, recodified or
supplemented, together with all rules, regulations and interpretations
thereunder or related thereto.

1.37 "Collateral" shall have the meaning set forth in Section 5.1 hereof.

1.38 "Collateral Access Agreement" shall mean an agreement in writing, in
form and substance satisfactory to Agent, from any lessor of premises to any
Borrower, or any other person to whom any Collateral (including Inventory,
Equipment, bills of lading or other documents of title) is consigned or who has
custody, control or possession of any such Collateral or is otherwise the owner
or operator of any premises on which any of such Collateral is located, pursuant
to which such lessor, consignee or other person, inter alia, acknowledges the
first priority security interest of Agent in such Collateral, agrees to waive
any and all claims such lessor, consignee or other person may, at any time, has
against such Collateral, whether for processing, storage or otherwise, and
agrees to permit Agent access to, and the right to remain on, the premises of
such lessor, consignee or other person so as to exercise Agent's rights and
remedies and otherwise deal with such Collateral and, in the case of any
consignee or other person who at any time has custody, control or possession of
any Collateral, acknowledges that it

6

holds and will hold possession of the Collateral for the benefit of Agent and
agrees to follow all instructions of Agent with respect thereto.

1.39 "Congress" shall mean Congress Financial Corporation (New England) , a
Massachusetts corporation, and its successors and assigns.

1.40 "Consolidated Annualized EBITDA" means, as of any date of
determination, the product of (i) the aggregate amount of Consolidated EBITDA
for those fiscal quarters commencing on or after October and ending on or prior
to such date of determination , multiplied by (ii) a fraction, the numerator of
which shall be the number 12 and the denominator of which shall equal the total
number of calendar months that have elapsed since October 1, 2002.

1.41 "Consolidated EBITDA" shall mean with respect to any Person for any
period, the Consolidated Net Income of such Person and its Subsidiaries for such
period, plus (i) without duplication, the sum of the following amounts of such
Person and its Subsidiaries for such period, in each case and to the extent
deducted in determining Consolidated Net Income of such Person for such period:
(A) Consolidated Net Interest Expense, (B) income tax expense determined on a
consolidated basis in accordance with GAAP, (C) depreciation expense determined
on a consolidated basis in accordance with GAAP, and (D) amortization expense
determined on a consolidated basis in accordance with GAAP.

1.42 "Consolidated Net Income" shall mean with respect to any Person for
any period, the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP, but
excluding from the determination of Consolidated Net Income (without
duplication): (a) any extraordinary or non recurring gains or losses or gains or
losses from dispositions of assets of such Person and Subsidiaries (other than
Inventory in the ordinary course of business on ordinary business terms), (b)
restructuring charges, (c) effects of discontinued operations, (d) interest
income, and (e) extraordinary or non recurring costs otherwise included in the
calculation of Consolidated Net Income that were incurred during 2002 in
connection with the Acquisition and the related financing transactions.

1.43 "Consolidated Net Interest Expense" shall mean with respect to any
Person for any period, gross interest expense of such Person and its
Subsidiaries for such period determined on a consolidated basis and in
accordance with GAAP (including, without limitation, interest expense paid to
Affiliates of such Person), less (i) the sum of (A) interest income for such
period, (B) gains for such period on Hedging Agreements (to the extent not
included in interest income above and to the extent not deducted in the
calculation of gross interest expense), and (C) amortization of extraordinary or
non recurring costs otherwise included in gross interest expense that were
incurred during 2002 in connection with the Acquisition and the related
financing transactions (but only to the extent such costs would be deducted in
the determination of Consolidated Net Income without regard to the exclusion set
forth in clause (e) of the definition of "Consolidated Net Income") plus (ii)
the sum of (A) losses for such period on Hedging Agreements (to the extent not
included in gross interest expense) and (B) the upfront costs or fees for such
period associated with Hedging Agreements (to the extent not included in gross
interest expense), in each case, determined on a consolidated basis and in
accordance with GAAP.

7

1.44 "Credit Facility" shall mean, collectively, the US Credit Facility and
the Canadian Credit Facility.

1.45 "Currency Due" shall have the meaning set forth in Section 11.6
hereof.

1.46 "Deed of Hypothec" means, collectively, (a) Deed of Hypothec executed
or to be executed by Clean Harbors Mercier, Inc. (currently, Safety-Kleen
Services (Mercier) Ltd.), a Quebec corporation, pursuant to which it
hypothecates its Collateral in favour of the Agent pursuant to the provisions of
Article 2692 of the Civil Code of Quebec, and (b) the Deed of Hypothec executed
or to be executed by Clean Harbors Quebec, Inc. (currently, Safety-Kleen
Services (Quebec) Ltd.), a Quebec corporation, pursuant to which it hypothecates
its Collateral in favour of the Agent pursuant to the provisions of Article 2692
of the Civil Code of Quebec.

1.47 "Default" shall mean an act, condition or event which with notice or
passage of time or both would constitute an Event of Default.

1.48 "Default Rate" shall mean the Interest Rate specified in the proviso
to Section 1.83 hereto.

1.49 "Delinquent Lender" shall have the meaning set forth in Section
13.5(c) hereof.

1.50 "Deposit Account Control Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Agent, by and among Agent, a
Borrower, and any bank at which any deposit account of any Borrower is at any
time maintained and such Borrower which provides that such bank will comply with
instructions originated by Agent directing disposition of the funds in the
deposit account without further consent by such Borrower and such other terms
and conditions as Agent may require, including as to any such agreement with
respect to any Blocked Account, providing that all items received or deposited
in the Blocked Accounts are the property of Agent, that the bank has no lien
upon, or right to setoff against, the Blocked Accounts, the items received for
deposit therein, or the funds from time to time on deposit therein and that the
bank will wire, or otherwise transfer, in immediately available funds, on a
daily basis to the Agent Payment Account (in the case of the US Borrowers) and
to the Canadian Payment Account (in the case of the Canadian Borrowers) all
available funds received or deposited into the Blocked Accounts.

1.51 "Division" shall have the meaning set forth in the recitals.

1.52 "Eligible Accounts" shall mean Accounts created by Borrowers which are
and continue to be acceptable to Agent based on the criteria set forth below. In
general, Accounts shall be Eligible Accounts if:

(a)  such Accounts arise from the actual and bona fide sale and delivery of
Inventory by a Borrower or rendition of services by a Borrower in the
ordinary course of its business which transactions are completed in
accordance with the terms and provisions contained in any documents
related thereto;

(b)  such Accounts are not unpaid more than the ninety (90) days after the
date of the original invoice for them;

8

(c)  such Accounts comply with the terms and conditions contained in
Section 7.2(b) of this Agreement;

(d)  such Accounts do not arise from sales on consignment, guaranteed sale,
sale and return, sale on approval, or other terms under which payment
by the account debtor may be conditional or contingent;

(e)  the chief executive office of the account debtor with respect to such
Accounts is located in the United States of America, Puerto Rico or
Canada (provided, that, at any time promptly upon Agent's request,
Borrowers shall execute and deliver, or cause to be executed and
delivered, such other agreements, documents and instruments as may be
required by Agent to perfect the security interests of Agent in those
Accounts of an account debtor with its chief executive office or
principal place of business in Puerto Rico or Canada in accordance
with the applicable laws of the Commonwealth of Puerto Rico or the
Province of Canada in which such chief executive office or principal
place of business is located and take or cause to be taken such other
and further actions as Agent may request to enable Agent as secured
party with respect thereto to collect such Accounts under the
applicable laws of Puerto Rico or Federal or Provincial laws of
Canada) or, at Agent's option, if the chief executive office and
principal place of business of the account debtor with respect to such
Accounts is located other than in the United States of America, Puerto
Rico or Canada, then if: (i) the account debtor has delivered to
Borrowers an irrevocable letter of credit issued or confirmed by a
bank satisfactory to Agent and payable only in the United States of
America and in US dollars, sufficient to cover such Account, in form
and substance satisfactory to Agent and if required by Agent, the
original of such letter of credit has been delivered to Agent or
Agent's agent and Borrowers have complied with the terms of Section
5.2(f) hereof with respect to the assignment of the proceeds of such
letter of credit to Agent or naming Agent as transferee beneficiary
thereunder, as Agent may specify, (ii) such Account is subject to
credit insurance payable to Agent issued by an insurer and on terms
and in an amount acceptable to Agent, or (iii) such Account is
otherwise acceptable in all respects to Agent (subject to such lending
formula with respect thereto as Agent may determine);

(f)  such Accounts do not consist of progress billings (such that the
obligation of the account debtors with respect to such Accounts is
conditioned upon a Borrower's satisfactory completion of any further
performance under the agreement giving rise thereto), bill and hold
invoices or retainage invoices, except as to bill and hold invoices,
if Agent shall have received an agreement in writing from the account
debtor, in form and substance satisfactory to Agent, confirming the
unconditional obligation of the account debtor to take the goods
related thereto and pay such invoice;

(g)  the account debtor with respect to such Accounts has not asserted a
counterclaim, defense or dispute and does not have, and does not
engage in transactions which may give rise to any right of setoff or
recoupment against such Accounts (but the portion of the Accounts of
such account debtor in excess of the amount at any

9

time and from time to time owed by any Borrower to such account debtor
or claimed owed by such account debtor may be deemed Eligible
Accounts);

(h)  there are no facts, events or occurrences which would impair the
validity, enforceability or collectability of such Accounts or reduce
the amount payable or delay payment thereunder;

(i)  such Accounts are subject to the first priority, valid and perfected
security interest of Agent as to Accounts of US Borrower and first
priority, valid and perfected security interest, lien and first
ranking hypothec of Agent and, to the extent applicable, in the case
of the Hypothec, the Canadian Lender, as to Accounts of Canadian
Borrowers and any goods giving rise thereto are not, and were not at
the time of the sale thereof, subject to any claims, liens, security
interest or hypothecs except those permitted in this Agreement;

(j)  neither the account debtor nor any officer or employee of the account
debtor with respect to such Accounts is an officer, employee, agent or
other Affiliate of any Borrower;

(k)  the account debtors with respect to such Accounts are not any foreign
government, the United States of America, any State, Canada, any
Province, political subdivision, department, agency or instrumentality
thereof, unless, upon Agent's request, if (i) the account debtor is
the United States of America, any State, political subdivision,
department, agency or instrumentality thereof, such Borrower has
assigned its rights to payment of such Account to Agent pursuant to
and in accordance with the Federal Assignment of Claims Act of 1940,
as amended, or pursuant to any similar State or local law, regulation
or requirement or (ii) the account debtor is Her Majesty in right of
Canada or any Canadian provincial or local governmental entity, or any
ministry, such Borrower has assigned its rights to payment of such
Account to Agent pursuant to and in accordance with the Financial
Administration Act, R.S.C. 185, c.F-11, as amended, or any similar
applicable provincial or local law, regulation or requirement;

(l)  there are no proceedings or actions which are threatened or pending
against the account debtors with respect to such Accounts which might
result in any material adverse change in any such account debtor's
financial condition;

(m)  such Accounts are not evidenced by or arising under any instrument or
chattel paper;

(n)  such Accounts of a single account debtor or its affiliates do not
constitute more than twenty (20%) percent of all otherwise Eligible
Accounts (but the portion of the Accounts not in excess of such
percentage may be deemed Eligible Accounts);

(o)  such Accounts are not owed by an account debtor who has Accounts
unpaid more than ninety (90) days after the original invoice date for
them which constitute more than fifty (50%) percent of the total
Accounts of such account debtor;

10

(p)  the account debtor is not located in a state requiring the filing of a
Notice of Business Activities Report or similar report in order to
permit Borrowers to seek judicial enforcement in such State of payment
of such Account, unless the Borrower doing business with such account
debtor has qualified to do business in such state or has filed a
Notice of Business Activities Report or equivalent report for the then
current year or such failure to file and inability to seek judicial
enforcement is capable of being remedied without any material delay or
material cost;

(q)  such Accounts are owed by account debtors whose total indebtedness to
Borrowers does not exceed the credit limit with respect to such
account debtors as determined by Borrowers from time to time and as is
reasonably acceptable to Agent (but the portion of the Accounts not in
excess of such credit limit may be deemed Eligible Accounts); and

(r)  such Accounts are owed by account debtors deemed creditworthy at all
times by Agent in good faith.

The criteria for Eligible Accounts set forth above may only be changed and any
new criteria for Eligible Accounts may only be established by Agent in good
faith based on either: (i) an event, condition or other circumstance arising
after the date hereof, or (ii) an event, condition or other circumstance
existing on the date hereof to the extent Agent has no written notice thereof
from Borrowers prior to the date hereof, in either case under clause (i) or (ii)
which adversely affects or could reasonably be expected to adversely affect the
Accounts in the good faith determination of Agent. Any Accounts which are not
Eligible Accounts shall nevertheless be part of the Collateral.

1.53 "Eligible Assignee" shall mean any of the following: (i) a commercial
bank, insurance company, or finance company or a subsidiary thereof organized
under the laws of the United States, or any State thereof or the District of
Columbia, and having total assets in excess of $1,000,000,000 or, in the case of
the Canadian Credit Facility, any Affiliate thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with GAAP or, in the case of the
Canadian Credit Facility, any Affiliate thereof; (iii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (iv) the central bank of any country which is a member of
the OECD; and (v) if, but only if, an Event of Default has occurred and is
continuing, any other bank, insurance company, finance company or other
financial institution or Affiliate thereof approved by the Agent, in good faith.

1.54 "Environmental Laws" shall mean all foreign, Federal, State,
Provincial and local laws (including common law), legislation, rules, codes,
licenses, permits (including any conditions imposed therein), authorizations,
judicial or administrative decisions, injunctions or agreements between any
Borrower and any Governmental Authority, (a) relating to pollution and the
protection, preservation or restoration of the environment (including air, water
vapor, surface

11

water, ground water, drinking water, drinking water supply, surface land,
subsurface land, plant and animal life or any other natural resource), or to
human health or safety, (b) relating to the exposure to, or the use, storage,
recycling, treatment, generation, manufacture, processing, distribution,
transportation, handling, labeling, production, release or disposal, or
threatened release, of Hazardous Materials, or (c) relating to all laws with
regard to recordkeeping, notification, disclosure and reporting requirements
respecting Hazardous Materials. The term "Environmental Laws" includes (i) the
Federal Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Federal Superfund Amendments and Reauthorization Act, the Federal
Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal
Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976
(including the Hazardous and Solid Waste Amendments thereto), the Federal Solid
Waste Disposal and the Federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water
Act of 1974, the Canadian Environmental Assessment Act, the Canadian
Environmental Protection Act, the Environmental Assessment Act (Ontario), and
the Environmental Protection Act (Ontario) and any equivalent act or statute in
Quebec or New Brunswick; (ii) applicable state or provincial counterparts to
such laws, and (iii) any common law or equitable doctrine that may impose
liability or obligations for injuries or damages due to, or threatened as a
result of, the presence of or exposure to any Hazardous Materials.

1.55 "Equipment" shall mean all of Borrowers' now owned and hereafter
acquired equipment, wherever located, including machinery, data processing and
computer equipment and computer hardware and software, whether owned or
licensed, and including embedded software, vehicles, tools, furniture, fixtures,
all attachments, accessions and property now or hereafter affixed thereto or
used in connection therewith, and substitutions and replacements thereof,
wherever located.

1.56 "ERISA" shall mean the United States Employee Retirement Income
Security Act of 1974, together with all rules, regulations and interpretations
thereunder or related thereto.

1.57 "ERISA Affiliate" shall mean any person required to be aggregated with
any Borrower or any of its Subsidiaries under Sections 414(b), 414(c), 414(m) or
414(o) of the Code.

1.58 "ERISA Event" shall mean (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder, with respect to a
Plan; (b) the adoption of any amendment to a Plan that would require the
provision of security pursuant to Section 401(a)(29) of the Code or Section 307
of ERISA; (c) the existence with respect to any Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived; (d) the filing pursuant to Section 412 of the Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding
standard with respect to any Plan; (e) the occurrence of a "prohibited
transaction" with respect to which any Borrower or any of its Subsidiaries is a
"disqualified person" (within the meaning of Section 4975 of the Code) or with
respect to which any Borrower or any of its Subsidiaries could otherwise be
liable; (f) a complete or partial withdrawal by any Borrower or any ERISA
Affiliate from a Multiemployer Plan or a cessation of operations which is
treated as a withdrawal or notification that a Multiemployer Plan is in
reorganization; (g) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or
the commencement of proceedings by the Pension Benefit Guaranty Corporation to
terminate a Plan;

12

(h) an event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; (i) the imposition of any liability under
Title IV of ERISA, other than the Pension Benefit Guaranty Corporation premiums
due but not delinquent under Section 4007 of ERISA, upon any Borrower or any
ERISA Affiliate; and (j) any other event or condition with respect to a Plan
including any Plan subject to Title IV of ERISA maintained, or contributed to,
by any ERISA Affiliate that could reasonably be expected to result in liability
of any Borrower in excess of $250,000.00.

1.59 "Eurodollar Rate" shall mean with respect to the Interest Period for a
Eurodollar Rate Loan, the interest rate per annum equal to the arithmetic
average of the rates of interest per annum (rounded upwards, if necessary, to
the next one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is
offered deposits of United States dollars in the London interbank market (or
other Eurodollar Rate market selected by Borrowers and approved by Agent) on or
about 9:00 a.m. (New York time) two (2) Business Days prior to the commencement
of such Interest Period in amounts substantially equal to the principal amount
of the Eurodollar Rate Loans requested by and available to Borrowers in
accordance with this Agreement, with a maturity of comparable duration to the
Interest Period selected by Borrower.

1.60 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on
which interest is payable based on the Adjusted Eurodollar Rate in accordance
with the terms hereof.

1.61 "Event of Default" shall mean the occurrence or existence of any event
or condition described in Section 10.1 hereof.

1.62 "Excess Availability" shall mean:

(a) as to US Borrowers, the amount, as determined by Agent, calculated
at any time, equal to: (a) the lesser of: (i) the US Borrowing Base and (ii) the
US Maximum Credit, minus (b) the sum of: (i) the amount of all then outstanding
and unpaid Obligations of US Borrowers, plus (ii) the aggregate amount of all
then outstanding and unpaid trade payables and other obligations of US Borrowers
which are more than sixty (60) days past due as of such time, plus (iii) the
aggregate amount of checks issued by US Borrowers to pay trade payables and
other obligations which are more than sixty (60) days past due as of such time,
but not yet sent (but without duplication of clause (b)(ii)) and the aggregate
book overdraft of US Borrowers; and

(b) as to Canadian Borrowers, the amount, as determined by Agent,
calculated at any time, equal to: (a) the lesser of: (i) the Canadian Borrowing
Base and (ii) the Canadian Maximum Credit, minus (b) the sum of: (i) the amount
of all then outstanding and unpaid Obligations of Canadian Borrowers, plus (ii)
the aggregate amount of all then outstanding and unpaid trade payables and other
obligations of Canadian Borrowers which are more than sixty (60) days past due
as of such time, plus (iii) the aggregate amount of checks issued by Canadian
Borrowers to pay trade payables and other obligations which are more than sixty
(60) days past due as of such time, but not yet sent (but without duplication of
clause (b)(ii)) and the aggregate book overdraft of Canadian Borrowers.

1.63 "Exchange Act" shall mean the Securities Exchange Act of 1934,
together with all rules, regulations and interpretations thereunder or related
thereto.

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1.64 "Exchange Rate" shall mean the prevailing spot rate of exchange of
Reference Bank or, in the case of the Canadian Credit Facility, Bank of Montreal
or if such rate is not available from Reference Bank or Bank of Montreal, as
applicable, such other bank as Agent may reasonably select for the purpose of
conversion of one currency to another, at or around 11:00 a.m. Boston time, on
the date on which any such conversion of currency is to be made under this
Agreement.

1.65 "Excluded Taxes" shall have the meaning set forth in Section 6.8
hereof.

1.66 "Federal Funds Rate" shall mean, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such a rate is not so
published for any day that is a Business Day, the average (rounded upward, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by Agent from three federal funds brokers of recognized
standing selected by Agent.

1.67 "Federal Government Account" shall mean an Account in which the
account debtor with respect to such Account is the United States of America or
Canada or a department, agency or instrumentality thereof.

1.68 "Final Order" shall have the meaning set forth in Section 4.1(k)
hereof.

1.69 "Financing Agreements" shall mean, collectively, this Agreement and
all notes, guarantees, security agreements, hypothecs, mortgages, deeds of
trust, deeds to secure debts, deposit account control agreements, intercreditor
agreements and all other agreements, documents and instruments now or at any
time hereafter executed and/or delivered by any Borrower or any Obligor in
connection with this Agreement.

1.70 "First Rate" shall have the meaning set forth in Section 3.1(e)
hereof.

1.71 "Fixed Charge Coverage Ratio" shall mean with respect to any Person
for any period, the ratio of (i) Consolidated EBITDA of such Person and its
Subsidiaries for such period, to (ii) the sum of (A) all principal of
Indebtedness of such Person and its Subsidiaries scheduled to be paid or prepaid
(excluding any prepayment of the Term Debt) during such period (and in the case
of this Agreement, to the extent there is an equivalent permanent reduction in
the Maximum Credit and Revolving Loan Limits hereunder), plus (B) Consolidated
Net Interest Expense of such Person and its Subsidiaries for such period, plus
(C) income taxes paid or payable by such Person and its Subsidiaries during such
period, plus (D) cash dividends or distributions paid by such Person and its
Subsidiaries (other than, in the case of any Borrower, dividends or
distributions paid by such Borrower to any other Borrower) during such period,
plus (E) Capital Expenditures made by such Person and its Subsidiaries during
such period. In determining the Fixed Charge Coverage Ratio for a particular
period (w) pro forma effect will be given to: (1) the incurrence, repayment or
retirement of any Indebtedness by such Person and its Subsidiaries since the
first day of such period as if such Indebtedness was incurred, repaid or retired
on the first day of such period and (2) the acquisition (whether by purchase,
merger or otherwise) or disposition (whether by sale, merger or otherwise) of
any property or assets acquired or disposed of by such Person and its
Subsidiaries since the first day of such period, as if such acquisition or
disposition occurred on the first day of such period; (x) interest on

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Indebtedness bearing a floating interest rate will be computed as if the rate at
the time of computation had been the applicable rate for the entire period; (y)
if such Indebtedness bears, at the option of such Person and its Subsidiaries, a
fixed or floating rate of interest, interest thereon will be computed by
applying, at the option of such Person, either the fixed or floating rate; and
(z) the amount of Indebtedness under a revolving credit facility will be
computed based upon the average daily balance of such Indebtedness during such
period.

1.72 "FRBP" shall have the meaning set forth in Section 4.1(k) hereof.

1.73 "GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time as set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board which are applicable to the
circumstances as of the date of determination consistently applied, except that,
for purposes of Sections 9.17 and 9.18 hereof, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial statements
delivered to Lender prior to the date hereof.

1.74 "Governmental Authority" shall mean any nation or government, any
state, province, or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.

1.75 "Hazardous Materials" shall mean any hazardous, toxic or dangerous
substances, materials and wastes, including hydrocarbons (including naturally
occurring or man-made petroleum and hydrocarbons), flammable explosives,
asbestos, urea formaldehyde insulation, radioactive materials, biological
substances, polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including materials which include
hazardous constituents), sewage, sludge, industrial slag, solvents and/or any
other similar substances, materials, or wastes and including any other
substances, materials or wastes that are or become regulated under any
Environmental Law (including any that are or become classified as hazardous or
toxic under any Environmental Law).

1.76 "Hedging Agreements" shall mean any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.

1.77 "Inactive Subsidiaries" shall mean the Subsidiaries of the Borrowers
listed on Schedule 2.

1.78 "Indebtedness" shall mean, with respect to any Person, any liability,
whether or not contingent, (a) in respect of borrowed money (whether or not the
recourse of the lender is to the whole of the assets of such Person or only to a
portion thereof) or evidenced by bonds, notes, debentures or similar
instruments; (b) representing the balance deferred and unpaid of the purchase
price of any property or services (except any such balance that constitutes an
account

15

payable to a trade creditor (whether or not an Affiliate) created, incurred,
assumed or guaranteed by such Person in the ordinary course of business of such
Person in connection with obtaining goods, materials or services that is not
overdue by more than ninety (90) days, unless the trade payable is being
contested in good faith); (c) all obligations as lessee under leases which have
been, or should be, in accordance with GAAP recorded as Capital Leases; (d) any
contractual obligation, contingent or otherwise, of such Person to pay or be
liable for the payment of any indebtedness described in this definition of
another Person, including, without limitation, any such indebtedness, directly
or indirectly guaranteed, or any agreement to purchase, repurchase, or otherwise
acquire such indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof, or to maintain solvency,
assets, level of income, or other financial condition; (e) all obligations with
respect to redeemable stock and redemption or repurchase obligations under any
Capital Stock or other equity securities issued by such Person; (f) all
reimbursement obligations and other liabilities of such Person with respect to
surety bonds (whether bid, performance or otherwise), letters of credit,
banker's acceptances or similar documents or instruments issued for such
Person's account; and (g) all indebtedness of such Person in respect of
indebtedness of another Person for borrowed money or indebtedness of another
Person otherwise described in this definition which is secured by any consensual
lien, security interest, collateral assignment, conditional sale, mortgage, deed
of trust, or other encumbrance on any asset of such Person, whether or not such
obligations, liabilities or indebtedness are assumed by or are a personal
liability of such Person, all as of such time.

1.79 "Information Certificate" shall mean, collectively, the Information
Certificates of Borrowers constituting Exhibit A hereto containing material
information with respect to Borrowers, their business and assets provided by or
on behalf of Borrowers to Agent in connection with the preparation of this
Agreement and the other Financing Agreements and the financing arrangements
provided for herein.

1.80 "Intellectual Property" shall mean Borrowers' now owned and hereafter
arising or acquired: patents, patent rights, patent applications, copyrights,
works which are the subject matter of copyrights, copyright registrations,
trademarks, trade names, trade styles, trademark and service mark applications,
and licenses and rights to use any of the foregoing; all extensions, renewals,
reissues, divisions, continuations, and continuations-in-part of any of the
foregoing; all rights to sue for past, present and future infringement of any of
the foregoing; inventions, trade secrets, formulae, processes, compounds,
drawings, designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill (including any goodwill associated with any trademark or the
license of any trademark); customer and other lists in whatever form maintained;
and trade secret rights, copyright rights, rights in works of authorship, domain
names and domain name registrations; software and contract rights relating to
software, in whatever form created or maintained.

1.81 "Intercreditor Agreement" shall mean the Intercreditor Agreement among
Agent, Term Loan Agent, and Borrowers as such may be amended, modified,
supplemented, extended, renewed, restated or replaced.

1.82 "Interest Period" shall mean for any Eurodollar Rate Loan, a period of
approximately one (1), two (2), or three (3) months duration as Borrowers may
elect, the exact duration to be determined in accordance with the customary
practice in the applicable Eurodollar

16

Rate market; provided, that, Borrowers may not elect an Interest Period which
will end after the last day of the then-current term of this Agreement.

1.83 "Interest Rate" shall mean, as to US Prime Rate Loans, a rate equal to
the US Prime Rate, as to Canadian Prime Rate Loans, a rate equal to the Canadian
Prime Rate and as to Eurodollar Rate Loans, a rate of three (3.00%) percent per
annum in excess of the Adjusted Eurodollar Rate (based on the Eurodollar Rate
applicable for the Interest Period selected by Borrower as in effect three (3)
Business Days after the date of receipt by Agent of the request of Borrower for
such Eurodollar Rate Loans in accordance with the terms hereof, whether such
rate is higher or lower than any rate previously quoted to Borrower); provided,
that, notwithstanding anything to the contrary contained herein, the Interest
Rate shall mean the rate of two and one half (2.50%) percent per annum in excess
of the rate then applicable as to Prime Rate Loans and the rate of five and one
half (5.50%) percent per annum in excess of the rate then applicable as to
Eurodollar Rate Loans, at Agent's option (or as directed by the Majority
Lenders), without notice, (a) either (i) for the period on and after the date of
termination or non-renewal hereof until such time as all Obligations are
indefeasibly paid and satisfied in full in immediately available funds, or (ii)
for the period from and after the date of the occurrence of any Event of
Default, and for so long as such Event of Default is continuing as determined by
Agent and (b) on the Revolving Loans at any time outstanding in excess of the
amounts available to Borrower under Section 2 (whether or not such excess(es)
arise or are made with or without Agent's knowledge or consent and whether made
before or after an Event of Default).

1.84 "Inventory" shall mean all of Borrowers' now owned and hereafter
existing or acquired goods, wherever located, which (a) are leased by any
Borrower as lessor; (b) are held by any Borrower for sale or lease or to be
furnished under a contract of service; (c) are furnished by any Borrower under a
contract of service; or (d) consist of raw materials, work in process, finished
goods or materials used or consumed in their business.

1.85 "Investment Property Control Agreement" shall mean an agreement in
writing, in form and substance satisfactory to Agent, by and among Agent, a
Borrower and any securities intermediary, commodity intermediary or other person
who has custody, control or possession of any investment property of such
Borrower acknowledging that such securities intermediary, commodity intermediary
or other person has custody, control or possession of such investment property
on behalf of Agent, that it will comply with entitlement orders originated by
Agent with respect to such investment property, or other instructions of Agent,
or (as the case may be) apply any value distributed on account of any commodity
contract as directed by Agent, in each case, without the further consent of such
Borrower and including such other terms and conditions as Agent may require.

1.86 "Judgment Currency" shall have the meaning set forth in Section 11.6
hereof.

1.87 "LC Participant" shall have the meaning set forth in Section 2.4(j)
hereof.

1.88 "Lender" shall have the meaning set forth in the preamble hereto and,
with respect to Letter of Credit Accommodations, any issuer of a Letter of
Credit Accommodation including, without limitation, the Reference Bank in the
case of the US Credit Facility and Bank of Montreal in the case of the Canadian
Credit Facility.

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1.89 "Letter of Credit Accommodations" shall mean, collectively, the
letters of credit, merchandise purchase or other guaranties which are from time
to time either: (a) issued or opened by Agent or any Lender for the account of
any Borrower or any Obligor, or (b) with respect to which Agent or Lenders have
agreed to indemnify the issuer or guaranteed to the issuer including, without
limitation, the Reference Bank or Bank of Montreal, as applicable, the
performance by any Borrower of its obligations to such issuer: sometimes being
referred to herein individually as a "Letter of Credit Accommodation".

1.90 "License Agreements" shall have the meaning set forth in Section 8.11
hereof.

1.91 "Loans" shall mean the Revolving Loans, Overadvances and the SwingLine
Loans.

1.92 "Majority Lenders" shall mean, as of any date, Lenders whose Pro Rata
Shares aggregate 51% or more of the Credit Facilities; provided that if any
Lender breaches its obligation to fund any Loan, for so long as such breach
exists, its Pro Rata Share for the purpose of determining voting rights
hereunder shall be reduced to zero.

1.93 "Material Contract" shall mean (a) any contract or other agreement
(other than the Financing Agreements), written or oral, of any Borrower
involving monetary liability of or to any Person in an amount in excess of
$1,000,000.00 in any fiscal year and (b) any other contract or other agreement
(other than the Financing Agreements), whether written or oral, to which any
Borrower is a party as to which the breach, non-performance, cancellation or
failure to renew by any party thereto would have a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations or prospects of any Borrower or the validity or enforceability of
this Agreement, any of the other Financing Agreements, or any of the rights and
remedies of Agent or Lenders hereunder or thereunder.

1.94 "Maximum Credit" shall mean the amount of $100,000,000.

1.95 "Movable Hypothec" means, collectively, (a) the Movable Hypothec
executed or to be executed by Clean Harbors Mercier, Inc. (currently,
Safety-Kleen Services (Mercier), Ltd.), a Quebec corporation, pursuant to which
it pledges the bond issued or to be issued under the Deed of Hypothec executed
or to be executed by it in favour of the Agent, and (b) the Movable Hypothec
executed or to be executed by Clean Harbors Quebec, Inc. (currently,
Safety-Kleen Services (Quebec), Ltd.), a Quebec corporation, pursuant to which
it pledges the bond issued or to be issued under the Deed of Hypothec executed
or to be executed by it in favour of the Agent.

1.96 "Multiemployer Plan" shall mean a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA which is or was at any time during the current year
or the immediately preceding six (6) years contributed to by any Borrower or any
ERISA Affiliate.

1.97 "Municipal Government Account" shall mean an Account in which the
account debtor with respect to such Account is a state, province or a political
subdivision, department, agency or instrumentality thereof.

1.98 "Net Amount of Eligible Accounts" shall mean the gross amount of
Eligible Accounts less (a) sales, excise or similar taxes included in the amount
thereof, and (b) returns,

18

discounts, claims, credits and allowances of any nature at any time issued,
owing, granted, outstanding, available or claimed with respect thereto.

1.99 "Net Amount of Federal Government Accounts" shall mean the gross
amount of Federal Government Accounts less (a) sales, excise or similar taxes
included in the amount thereof, and (b) returns, discounts, claims, credits and
allowances of any nature at any time issued, owing, granted, outstanding,
available or claimed with respect thereto.

1.100 "New Lending Office" shall have the meaning set forth in Section
6.8(e) hereof.

1.101 "Non-U.S. Person" shall have the meaning set forth in Section 6.8(e)
hereof.

1.102 "Obligations" shall mean any and all Revolving Loans, Overadvances,
SwingLine Loans, Loans made by Agent pursuant to Section 6.6 hereof, Letter of
Credit Accommodations and all other obligations, liabilities and indebtedness of
every kind, nature and description owing by any Borrower to Agent and/or Lenders
and/or their respective affiliates, including principal, interest, charges,
fees, costs and expenses, however evidenced, whether as principal, surety,
endorser, guarantor or otherwise, arising under this Agreement or under the
other Financing Agreements, including, without limitation, with respect to any
Hedging Agreements, whether now existing or hereafter arising, whether arising
before, during or after the initial or any renewal term of this Agreement or
after the commencement of any case with respect to any Borrower under the United
States Bankruptcy Code, the Bankruptcy and Insolvency Act (Canada), the
Companies' Creditors Arrangement Act (Canada) or any similar statute (including
the payment of interest and other amounts which would accrue and become due but
for the commencement of such case, whether or not such amounts are allowed or
allowable in whole or in part in such case), whether direct or indirect,
absolute or contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, secured or unsecured, and however acquired by Agent
or any Lender.

1.103 "Obligor" shall mean any guarantor, endorser, acceptor, surety or
other person liable on or with respect to the Obligations or who is the owner of
any property which is security for the Obligations, other than a Borrower.

1.104 "Other Taxes" shall mean any present or future stamp or documentary
taxes or any other exercise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any of the
other Financing Agreements.

1.105 "Overadvances" shall have the meaning set forth in Section 2.1(e).

1.106 "Parent" shall mean Clean Harbors, Inc., a Massachusetts corporation,
and its successors and assigns.

1.107 "Permitted Holders" shall mean the persons listed on Exhibit C hereto
and their respective successors and assigns.

1.108 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including any corporation which elects subchapter S
status under the Code), limited liability company, limited liability
partnership, business trust, unincorporated association, joint

19

stock corporation, trust, joint venture or other entity or any government or any
agency or instrumentality or political subdivision thereof.

1.109 "Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower sponsors, maintains, or to which it makes, is making,
or is obligated to make contributions, or in the case of a Multiemployer Plan
has made contributions at any time during the immediately preceding six (6) plan
years.

1.110 "PPSA" shall mean the Personal Property Security Act as in effect in
the Province of Ontario, the Civil Code of Quebec as in effect in the Province
of Quebec, the Personal Property Security Act as in effect in the Province of
New Brunswick or any other Canadian Federal or Provincial statute pertaining to
the granting, perfecting, priority or ranking of security interests, liens,
hypothecs on personal property, and any successor statutes, together with any
regulations thereunder, in each case as in effect from time to time. References
to sections of the PPSA shall be construed to also refer to any successor
sections.

1.111 "Prime Rate Loans" shall mean US Prime Rate Loans and Canadian Dollar
Prime Rate Loans.

1.112 "Priority Payables" shall mean, as to any Canadian Borrower at any
time, (a) the full amount of the liabilities of such Borrower at such time which
(i) have a trust imposed to provide for payment or a security interest, pledge,
lien or charge ranking or capable of ranking senior to or pari passu with
security interests, liens or charges securing the Obligations on any of the
Eligible Accounts of such Borrower under Federal, Provincial, State, county,
district, municipal, or local law, or (ii) have a right imposed to provide for
payment ranking or capable of ranking senior to or pari passu with the
Obligations under local or national law, regulation or directive, including, but
not limited to, claims for unremitted and/or accelerated rents, taxes, wages,
withholding taxes, VAT and other amounts payable to an insolvency administrator,
employee withholdings or deductions and vacation pay, workers' compensation
obligations, government royalties or pension fund obligations in each case to
the extent such trust, or security interest, lien or charge has been or may be
imposed.

1.113 "Pro Rata Share" shall mean, with respect to a Lender at any time,
such Lender's percentage of the US Credit Facility or Canadian Credit Facility,
as applicable, as set forth on Schedule 1 thereto.

1.114 "Proportionate Share" shall have the meaning set forth in Section
14.3 hereof.

1.115 "Purchase Agreements" shall mean, individually and collectively, the
Acquisition Agreement, dated February 22, 2002, as amended as of March 8, April
30 and September 6, 2002 between Parent and Safety-Kleen Services, Inc.,
together with bills of sale, quitclaim deeds, assignment and assumption
agreements and such other instruments of transfer as are referred to therein and
all side letters with respect thereto, and all agreements, documents and
instruments executed and/or delivered in connection therewith, as all of the
foregoing now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced; provided, that, the term "Purchase
Agreements" as used herein shall not include any of the "Financing Agreements"
as such term is defined herein.

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1.116 "Purchased Assets" shall mean all of the assets and properties
acquired by Borrowers from Sellers pursuant to the Purchase Agreements.

1.117 "Real Property" shall mean all now owned and hereafter acquired real
property of Borrowers, including leasehold interests, together with all
buildings, structures, and other improvements located thereon and all licenses,
easements and appurtenances relating thereto, wherever located.

1.118 "Receivables" shall mean all of the following now owned or hereafter
arising or acquired property of each Borrower: (a) all Accounts; (b) all amounts
at any time payable to any Borrower in respect of the sale or other disposition
by such Borrower of any Account or other obligation for the payment of money;
(c) all interest, fees, late charges, penalties, collection fees and other
amounts due or to become due or otherwise payable in connection with any
Account; (d) all payment intangibles of each Borrower and other contract rights,
chattel paper, instruments, notes, and other forms of obligations owing to any
Borrower, whether from the sale and lease of goods or other property, licensing
of any property (including Intellectual Property or other general intangibles),
rendition of services or from loans or advances by any Borrower or to or for the
benefit of any third person (including loans or advances to any Affiliates or
Subsidiaries of Borrowers) or otherwise associated with any Accounts, Inventory
or general intangibles of Borrowers (including, without limitation, choses in
action, causes of action, tax refunds, tax refund claims, any funds which may
become payable to any Borrower in connection with the termination of any Plan or
other employee benefit plan and any other amounts payable to any Borrower from
any Plan or other employee benefit plan, rights and claims against carriers and
shippers, rights to indemnification, business interruption insurance and
proceeds thereof, casualty or any similar types of insurance relating to or
arising out of Collateral and any proceeds thereof and proceeds of insurance
covering the lives of employees on which Borrower is beneficiary).

1.119 "Receiver" shall have the meaning set forth in Section 10.2(j)
hereof.

1.120 "Records" shall mean all of Borrowers' present and future books of
account of every kind or nature, purchase and sale agreements, invoices, ledger
cards, bills of lading and other shipping evidence, statements, correspondence,
memoranda, credit files and other data relating to the Collateral or any account
debtor, together with the tapes, disks, diskettes and other data and software
storage media and devices, file cabinets or containers in or on which the
foregoing are stored (including any rights of Borrowers with respect to the
foregoing maintained with or by any other person).

1.121 "Reference Bank" shall mean Wachovia Bank, National Association, and
its successors and assigns, or such other bank as Agent may from time to time
designate.

1.122 "Register" shall have the meaning set forth in Section 12.8 hereof.

1.123 "Report" shall have the meaning set forth in Section 13.13 hereof.

1.124 "Reserves" shall mean as of any date of determination, such amounts
as Agent may from time to time establish and revise in good faith reducing the
amount of Revolving Loans and Letter of Credit Accommodations which would
otherwise be available to Borrowers under the lending formula(s) provided for
herein: (a) to reflect events, conditions, contingencies

21

or risks which, as determined by Agent in good faith, adversely affect, or would
have a reasonable likelihood of adversely affecting, either (i) the Collateral
or any other property which is security for the Obligations or its value, (ii)
the assets, business or prospects of any Borrower or any Obligor or (iii) the
security interests and other rights of Agent in the Collateral (including the
enforceability, perfection and priority thereof); or (b) to reflect Agent's good
faith belief that any collateral report or financial information furnished by or
on behalf of any Borrower or any Obligor to Agent is or may have been
incomplete, inaccurate or misleading in any material respect; or (c) to reflect
outstanding Letter of Credit Accommodations as provided in Section 2.4 hereof;
or (d) in respect of any state of facts which Agent determines in good faith
constitutes a Default or an Event of Default; or (e) to reflect the amounts of
the Priority Payables; or (f) to reflect Agent's good faith estimate of the
amount necessary to reflect changes in applicable currency exchange rates or
currency exchange markets; or (g) to reflect rent and other amounts as Agent may
determine in good faith payable to owners, lessor or licensors of Real Property
leased or used by any Borrower, which do not enter into Collateral Access
Agreements acceptable to Agent. To the extent Agent may revise the lending
formulas used to determine the Borrowing Base or establish new criteria or
revise existing criteria for Eligible Accounts so as to address any
circumstances, condition, event or contingency in a manner satisfactory to
Agent, Agent shall not establish a Reserve for the same purpose. The amount of
any Reserve established by Agent shall have a reasonable relationship to the
event, condition or other matter which is the basis for such reserve as
determined by Agent in good faith.

1.125 "Revolving Loan Limit" shall mean, with respect to each Lender at any
time, the amount set forth on Schedule 1 hereto representing the aggregate
amount such Lender has agreed to make in Revolving Loans and to participate in
Letter of Credit Accommodations under the US Credit Facility or Canadian Credit
Facility, as applicable, hereunder.

1.126 "Revolving Loan Priority Collateral" shall have the meaning given
such term in the Intercreditor Agreement.

1.127 "Revolving Loans" shall mean the loans now or hereafter made by
Lenders to or for the benefit of Borrowers on a revolving basis (involving
advances, repayments and readvances) as set forth in Section 2.1 hereof.

1.128 "Sale Order" shall have the meaning set forth in Section 4.1(k)
hereof.

1.129 "Sellers" shall mean Safety-Kleen Services, Inc., a Delaware
corporation, and its subsidiaries that are sellers under the Purchase
Agreements, and their successors and assigns.

1.130 "Solvent" shall mean, at any time with respect to any Person, that at
such time such Person (a) is able to pay its debts as they mature and has (and
has a reasonable basis to believe it will continue to have) sufficient capital
(and not unreasonably small capital) to carry on its business consistent with
its practices as of the date hereof, and (b) the assets and properties of such
Person at a fair valuation (and including as assets for this purpose at a fair
valuation all rights of subrogation, contribution or indemnification arising
pursuant to any guarantees given by such Person) are greater than the
Indebtedness of such Person, and including subordinated and contingent
liabilities computed at the amount which, such person has a reasonable basis to
believe, represents an amount which can reasonably be expected to become an
actual or matured liability (and including as to contingent liabilities arising
pursuant to any guarantee the face amount of such liability as reduced to
reflect the probability of it becoming a matured liability).

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1.131 "Subsidiary" or "subsidiary" shall mean, with respect to any Person,
any corporation, limited liability company, limited liability partnership or
other limited or general partnership, trust, association or other business
entity of which an aggregate of at least a majority of the outstanding Capital
Stock or other interests entitled to vote in the election of the board of
directors of such corporation (irrespective of whether, at the time, Capital
Stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency), managers, trustees
or other controlling persons, or an equivalent controlling interest therein, of
such Person is, at the time, directly or indirectly, owned by such Person and/or
one or more subsidiaries of such Person.

1.132 "SwingLine Loans" shall have the meaning set forth in Section 2.3
hereof.

1.133 "Taxes" shall mean any and all future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.

1.134 "Termination Date" shall the meaning set forth in Section 12.1
hereof.

1.135 "Term Debt" shall mean the term loans made by the Term Loan Lenders
under the Term Loan Agreement and all indebtedness, liabilities and obligations
of every kind, nature and description owing by any Borrower to Term Loan Lenders
under the Term Loan Agreement, whether now existing or hereafter arising.

1.136 "Term Loan Agreement" shall mean the Financing Agreement dated as of
the date hereof among the Term Loan Agent, Term Lenders, and Borrowers and all
promissory notes, instruments, documents and agreements now or hereafter
executed and delivered by any Borrower or any Obligor in connection therewith,
as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.

1.137 "Term Loan Agent" shall mean Ableco Finance, LLC in its capacity as
agent for the Term Loan Lenders under the Term Loan Agreement.

1.138 "Term Loan Lenders" shall mean the lenders identified in the Term
Loan Agreement to be making the Term Debt available to Borrowers and their
respective successors and assigns.

1.139 "Transferee" shall have the meaning set forth in Section 6.8 hereof.

1.140 "UCC" shall mean the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts, and any successor statute, as in effect from time
to time (except that terms used herein which are defined in the Uniform
Commercial Code as in effect in The Commonwealth of Massachusetts on the date
hereof shall continue to have the same meaning notwithstanding any replacement
or amendment of such statute except as Lender may otherwise determine).

1.141 "US Borrowers" shall mean Parent, each of its Subsidiaries (other
than Canadian Borrowers and Inactive Subsidiaries) and each of their successors
and assigns.

1.142 "US Borrowing Base" shall mean, at any time, as to US Borrowers, the
amount equal to: (a) eighty (80%) of the Net Amount of Eligible Accounts of US
Borrowers (including

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all Municipal Government Accounts of US Borrowers that are Eligible Accounts),
plus (b) sixty-five (65%) percent of the Net Amount of Federal Government
Accounts of US Borrowers that are Eligible Accounts, less (c) any Reserves
attributable to US Borrowers.

1.143 "US Credit Facility" shall mean the Loans and Letter of Credit
Accommodations provided to or for the benefit of US Borrowers pursuant to
Section 2 hereof.

1.144 "US Dollar Equivalent" shall mean at any time (a) as to any amount
denominated in US Dollars, the amount thereof at such time, and (b) as to any
amount denominated in any other currency, the equivalent amount in US Dollars
calculated by Agent in good faith at such time using the Exchange Rate in effect
on the Business Day of determination.

1.145 "US Dollar Loans" shall mean any Loans or portion thereof which are
denominated in US Dollars.

1.146 "US Dollars", "US$" and "$" shall each mean lawful currency of the
United States of America.

1.147 "US Lenders" shall mean, collectively, all Lenders other than
Canadian Lender; sometimes being referred to herein individually as a "US
Lender".

1.148 "US Letter of Credit Accommodations" shall mean Letter of Credit
Accommodations made by US Lenders under the US Credit Facility.

1.149 "US Maximum Credit" shall mean $100,000,000 less the US Dollar
Equivalent of C$20,000,000.

1.150 "US Overadvances" shall have the meaning set forth in Section 2.1(d).

1.151 "US Prime Rate" shall mean the rate from time to time publicly
announced by Reference Bank, or its successors, as its prime rate, whether or
not such announced rate is the best rate available at such bank.

1.152 "US Prime Rate Loans" shall mean any US Dollar Loans or portion
thereof on which interest is payable based on the US Prime Rate in accordance
with the terms thereof.

1.153 "US Revolving Loans" shall mean Revolving Loans made by US Lenders
under the US Credit Facility.

1.154 "Voting Stock" shall mean with respect to any Person, (a) one (1) or
more classes of Capital Stock of such Person having general voting powers to
elect at
least a majority of the board of directors, managers or trustees of such Person,
irrespective of whether at the time Capital Stock of any other class or classes
have or might have voting power by reason of the happening of any contingency,
and (b) any Capital Stock of such Person convertible or exchangeable without
restriction at the option of the holder thereof into Capital Stock of such
Person described in clause (a) of this definition.

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SECTION 2. CREDIT FACILITIES.

2.1 Revolving Loans.

(a) Subject to and upon the terms and conditions contained herein,
each of the US Lenders severally, but not jointly, agrees to make Revolving
Loans to US Borrowers from time to time in amounts requested by US Borrowers up
to the amount equal to the lesser of such Lender's (i) Pro Rata Share of the US
Borrowing Base or (ii) such US Lender's Revolving Loan Limit.

(b) Subject to and upon the terms and conditions contained herein,
Canadian Lender agrees to make Revolving Loans to each Canadian Borrower from
time to time in amounts requested by each such Canadian Borrower up to the
aggregate amount for all Canadian Borrowers equal to the lesser of (i) Canadian
Lender's Pro Rata Share of the Canadian Borrowing Base or (ii) Canadian Lender's
Revolving Loan Limit; provided that each Canadian Borrower shall only be
permitted to borrow hereunder with respect to the amount of its specific
Canadian Borrowing Base.

(c) Agent may, in its discretion (and shall, upon the direction of
the Majority Lenders), from time to time, upon not less than five (5) days prior
notice to Borrowers with respect to the US Credit Facility or Canadian Credit
Facility, as applicable, (i) reduce the lending formula with respect to Eligible
Accounts to the extent that Agent determines in good faith that: (A) the
dilution with respect to the Accounts for any period (based on the ratio of (1)
the aggregate amount of reductions in Accounts other than as a result of
payments in cash to (2) the aggregate amount of total sales) has increased or
may be reasonably anticipated to increase in any material respect above
historical levels, or (B) the general creditworthiness of account debtors has
declined in any material respect. The amount of any decrease in the lending
formulas shall have a reasonable relationship to the event, condition or
circumstance which is the basis for such decrease as determined by Agent in good
faith. In determining whether to reduce the lending formula(s), Agent and
Majority Lenders may consider events, conditions, contingencies or risks which
are also considered in determining Eligible Accounts or in establishing
Reserves.

(d) Insofar as US Borrowers may request and Agent or Majority
Lenders (as provided below) may be willing, in their sole and absolute
discretion, to make Revolving Loans to US Borrowers at a time when the unpaid
balance of the Revolving Loans and SwingLine Loans plus the amount of Letter of
Credit Accommodations, exceeds, or would exceed with the making of any such
Revolving Loan, the US Borrowing Base (and such Loan or Loans being herein
referred to individually as an "US Overadvance" and collectively, as "US
Overadvances"), Agent (unless otherwise directed by the Majority Lenders) shall
make such US Overadvances to the US Borrowers or Agent may, at its option,
charge any loan account(s) of US Borrowers for the ratable account of the US
Lenders in an aggregate outstanding principal amount not to exceed the lesser of
$10,000,000 or ten (10%) percent of the US Borrowing Base; provided that the US
Overadvances plus the US Dollar Equivalent of the Canadian Overadvances shall
not at any time exceed the lesser of $10,000,000 or ten (10%) percent of the
Borrowing Base. All US Overadvances shall be repaid on demand, shall be secured
by the Collateral and shall bear interest as provided for US Prime Rate Loans in
clause (b) of the proviso to Section 1.83, the definition of "Interest Rate";
provided, however, that US

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Overadvances to be made after the occurrence and during the continuation of an
Event of Default shall require the consent of Majority Lenders. Any US
Overadvance made pursuant to the terms hereof shall be made by all US Lenders
ratably in accordance with their respective Pro Rata Shares. The foregoing
notwithstanding, in no event, unless otherwise consented to by all US Lenders,
(i) shall any such US Overadvances be outstanding for more than sixty (60)
consecutive days, (ii) after all outstanding US Overadvances have been repaid,
shall Agent or Majority Lenders authorize the making of any additional US
Overadvances unless sixty (60) days or more have expired since the last date on
which any US Overadvances were outstanding, (iii) shall US Overadvances be
outstanding on more than ninety (90) days within any one hundred eighty day
(180) period or (iv) shall Agent make Revolving Loans on behalf of US Lenders
under this Section 2.1(d) to the extent such Revolving Loans would cause a US
Lender's share of the Revolving Loans to exceed such US Lender's Revolving Loan
Limit.

(e) Insofar as Canadian Borrowers may request and Agent or Majority
Lenders (as provided below) may be willing, in their sole and absolute
discretion, to make Revolving Loans to Canadian Borrowers at a time when the
unpaid balance of the Revolving Loans and SwingLine Loans plus the amount of
Letter of Credit Accommodations, exceeds, or would exceed with the making of any
such Revolving Loan, the Canadian Borrowing Base (and such Loan or Loans being
herein referred to individually as an "Canadian Overadvance" and collectively,
as "Canadian Overadvances", and together with US Overadvances, as
"Overadvances"), Agent (unless otherwise directed by the Majority Lenders) shall
make such Canadian Overadvances to the Borrowers or Agent may, at its option,
charge any loan account(s) of Canadian Borrowers for the ratable account of the
Lenders in an aggregate outstanding principal amount not to exceed the lesser of
C$2,000,000 or ten (10%) percent of the Canadian Borrowing Base; provided that
the US Dollar Equivalent of Canadian Overadvances plus the US Overadvances shall
not at any time exceed the lesser of $10,000,000 or ten (10%) of the Borrowing
Base. All Canadian Overadvances shall be repaid on demand, shall be secured by
the Collateral and shall bear interest as provided for Canadian Prime Rate Loans
in clause (b) of the proviso to Section 1.83, the definition of "Interest Rate";
provided, however, that Canadian Overadvances to be made after the occurrence
and during the continuation of an Event of Default shall require the consent of
Majority Lenders. Any Canadian Overadvance made pursuant to the terms hereof
shall be made by all Canadian Lenders ratably in accordance with their
respective Pro Rata Shares. The foregoing notwithstanding, in no event, unless
otherwise consented to by all Canadian Lenders, (i) shall any such Canadian
Overadvances be outstanding for more than sixty (60) consecutive days, (ii)
after all outstanding Canadian Overadvances have been repaid, shall Agent or
Majority Lenders authorize the making of any additional Canadian Overadvances
unless sixty (60) days or more have expired since the last date on which any
Canadian Overadvances were outstanding, (iii) shall Canadian Overadvances be
outstanding on more than ninety (90) days within any one hundred eighty day
(180) period or (iv) shall Agent make Revolving Loans on behalf of Canadian
Lenders under this Section 2.1(e) to the extent such Revolving Loans would cause
a Lender's share of the Revolving Loans to exceed such as Lender's Revolving
Loan Limit.

2.2    Maximum Loans. Unless consented to by all the Lenders, in Lenders'
discretion, (a) the aggregate amount of the US Revolving Loans and the US Letter
of Credit Accommodations outstanding at any time shall not exceed the US Maximum
Credit; (b) the aggregate amount of the Canadian Revolving Loans and the
Canadian Letter of Credit Accommodations shall not exceed the Canadian Maximum
Credit and (c) the aggregate US

26

Dollar Amount of the Revolving Loans and Letter of Credit Accommodations shall
not exceed the Maximum Credit. In the event that, except as provided in Section
2.1(d) or (e), the outstanding amount of any component of the US or Canadian
Loans, as applicable, or the aggregate amount of the outstanding US or Canadian
Loans, as applicable, and US or Canadian Letter of Credit Accommodations, as
applicable, exceed the amounts available pursuant to the applicable Borrowing
Base, the sublimits for US Letter of Credit Accommodations or Canadian Letter of
Credit Accommodations as applicable set forth in Section 2.4(f) or the Maximum
Credit, as applicable, such event shall not limit, waive or otherwise affect any
rights of Agent and Lenders in that circumstance or on any future occasions and
Borrower shall, upon demand by Agent, which may be made at any time or from time
to time, immediately repay to Agent for the benefit of the relevant Lenders the
entire amount of any such excess(es) for which payment is demanded.

2.3 SwingLine Loans. In order to reduce the frequency of transfers of funds
from US Lenders to Agent for making US Revolving Loans and subject to the terms
and conditions of this Agreement, Agent shall be permitted (but not required) to
make loans to US Borrowers (such loans to be designated as "SwingLine Loans");
provided, that the aggregate principal amount of SwingLine Loans outstanding at
any time will not (i) exceed $10,000,000; (ii) when added to the principal
amount of Agent's other US Revolving Loans then outstanding plus Agent's
participation in the US Letter of Credit Accommodations, exceed Agent's
Revolving Loan Limit; or (iii) when added to the principal amount of all US
Revolving Loans then outstanding plus the US Letter of Credit Accommodations,
exceed the US Borrowing Base. Within the foregoing limits, US Borrowers may
borrow, repay and reborrow SwingLine Loans. SwingLine Loans may only be borrowed
as US Prime Rate Loans. Notwithstanding the foregoing, not more than two (2)
Business Days after (a) Lenders receive notice from Agent that a SwingLine Loan
has been advanced in respect of a drawing under a US Letter of Credit
Accommodation or (b) in any other circumstance, demand is made by Agent during
the continuance of an Event of Default, each US Lender shall irrevocably and
unconditionally purchase and receive from the Agent without recourse or warranty
from Agent an undivided interest and participation in each SwingLine Loan to the
extent of such US Lender's Pro Rata Share thereof, by paying to the Agent in
immediately available funds, an amount equal to such US Lender's Pro Rata Share.

2.4 Letter of Credit Accommodations.

(a) Subject to and upon the terms and conditions contained herein, at
the request of US Borrowers, Agent agrees to provide or arrange for Letter of
Credit Accommodations for the account of US Borrowers containing terms and
conditions acceptable to Agent and the issuer thereof. Any payments made by
Agent to any issuer thereof and/or related parties in connection with the US
Letter of Credit Accommodations shall constitute additional US Revolving Loans
by Lenders to Borrowers pursuant to this Section 2.

(b) Subject to and upon the terms and conditions contained herein, at
the request of Canadian Borrowers (or Parent on behalf of Canadian Borrowers),
Agent agrees to cause the Canadian Lender to arrange for Letter of Credit
Accommodations for the account of Canadian Borrowers containing terms and
conditions acceptable to Agent and the issuer thereof. Any payments made by
Agent or Canadian Lender to any issuer thereof and/or related parties in
connection with the Canadian Letter of Credit Accommodations shall constitute
additional Canadian Revolving Loans by Lenders to Canadian Borrowers pursuant to
this Section 2.

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(c) In addition to any charges, fees or expenses charged by any bank or
issuer in connection with the Letter of Credit Accommodations, the applicable
Borrowers shall pay to Agent for the ratable benefit of the applicable Lenders a
letter of credit fee at a rate equal to three (3%) percent per annum on the
daily outstanding balance of the Letter of Credit Accommodations for the
immediately preceding month (or part thereof), payable in arrears as of the
first day of each succeeding month, except that Borrowers shall pay to Agent for
the ratable benefit of Lenders such letter of credit fee, at Agent's option (or
at the direction of Majority Lenders), without notice, at a rate equal to five
and one-half (5.50%) percent per annum on such daily outstanding balance for:
(i) the period from and after the date of termination or non-renewal hereof
until Agent and Lenders have received full and final payment of all Obligations
(notwithstanding entry of a judgment against any Borrower) and (ii) the period
from and after the date of the occurrence of an Event of Default for so long as
such Event of Default is continuing as determined by Agent. Such letter of
credit fee shall be calculated on the basis of a three hundred sixty (360) day
year and actual days elapsed and the obligation of Borrowers to pay such fee
shall survive the termination or non-renewal of this Agreement.

(d) Borrowers shall give Agent two (2) Business Days' prior written
notice of Borrowers' request for the issuance of a Letter of Credit
Accommodation. Such notice shall be irrevocable and shall specify the original
face amount of the Letter of Credit Accommodation requested, the effective date
(which date shall be a Business Day) of issuance of such requested Letter of
Credit Accommodation, whether such Letter of Credit Accommodation may be drawn
in a single or in partial draws, the date on which such requested Letter of
Credit Accommodation is to expire (which date shall be a Business Day), the
purpose for which such Letter of Credit Accommodation is to be issued, and the
beneficiary of the requested Letter of Credit Accommodation. Borrowers shall
attach to such notice the proposed form of the Letter of Credit Accommodation.

(e) In addition to being subject to the satisfaction of the applicable
conditions precedent contained in Section 4 hereof and the other terms and
conditions contained herein, no Letter of Credit Accommodations shall be
available unless each of the following conditions precedent have been satisfied
in a manner satisfactory to Agent: (i) Borrowers shall have delivered to the
proposed issuer of such Letter of Credit Accommodation at such times and in such
manner as such proposed issuer may require, an application in form and substance
satisfactory to such proposed issuer and Lender for the issuance of the Letter
of Credit Accommodation and such other documents as may be required pursuant to
the terms thereof, and the form and terms of the proposed Letter of Credit
Accommodation shall be satisfactory to Agent and such proposed issuer, (ii) as
of the date of issuance, no order of any court, arbitrator or other Governmental
Authority shall purport by its terms to enjoin or restrain money center banks
generally from issuing letters of credit of the type and in the amount of the
proposed Letter of Credit Accommodation, and no law, rule or regulation
applicable to money center banks generally and no request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over money center banks generally shall prohibit, or request that
the proposed issuer of such Letter of Credit Accommodation refrain from, the
issuance of letters of credit generally or the issuance of such Letters of
Credit Accommodation; and (iii) the applicable Excess Availability, prior to
giving effect to any Reserves with respect to such Letter of Credit
Accommodations, on the date of the proposed issuance of any Letter of Credit
Accommodations, shall be equal to or greater than an amount equal to one hundred
(100%) percent of the face amount thereof and all other commitments and
obligations made or

28

incurred by Agent or Canadian Lender, as applicable, with respect thereto.
Effective on the issuance of each Letter of Credit Accommodation, a Reserve
shall be established in the amount set forth in this Section 2.4(e).

(f) Except in Agent's and Majority Lenders' discretion, the US Dollar
Equivalent of all outstanding Letter of Credit Accommodations and all other
commitments and obligations made or incurred by Agent in connection therewith
shall not at any time exceed $20,000,000.

(g) Each Borrower shall indemnify and hold Agent and each Lender
harmless from and against any and all losses, claims, damages, liabilities,
costs and expenses which Agent or any Lender may suffer or incur in connection
with any Letter of Credit Accommodations and any documents, drafts or
acceptances relating thereto, including any losses, claims, damages,
liabilities, costs and expenses due to any action taken by any issuer or
correspondent with respect to any Letter of Credit Accommodation. Each Borrower
assumes all risks with respect to the acts or omissions of the drawer under or
beneficiary of any Letter of Credit Accommodation and for such purposes the
drawer or beneficiary shall be deemed such Borrower's agent. Each Borrower
assumes all risks for, and agrees to pay, all foreign, Federal, State,
Provincial and local taxes, duties and levies relating to any goods subject to
any Letter of Credit Accommodations or any documents, drafts or acceptances
thereunder. Each Borrower hereby releases and holds Agent and each Lender
harmless from and against any acts, waivers, errors, delays or omissions,
whether caused by any Borrower, by any issuer or correspondent or otherwise with
respect to or relating to any Letter of Credit Accommodation, except for the
gross negligence or willful misconduct of Agent or Canadian Lender, as
applicable, as determined pursuant to a final, non-appealable order of a court
of competent jurisdiction. The provisions of this Section 2.4 shall survive the
payment of Obligations and the termination or non-renewal of this Agreement.

(h) Each Borrower hereby irrevocably authorizes and directs any issuer
of a Letter of Credit Accommodation to name Borrowers as the account party
therein and to deliver to Agent or Canadian Lender, as applicable, all
instruments, documents and other writings and property received by issuer
pursuant to the Letter of Credit Accommodations and to accept and rely upon
Agent's or Canadian Lender, as applicable, instructions and agreements with
respect to all matters arising in connection with the Letter of Credit
Accommodations or the applications therefor. Nothing contained herein shall be
deemed or construed to grant any Borrower any right or authority to pledge the
credit of Agent or any Lender in any manner. Neither Agent or Canadian Lender,
as applicable, shall have any liability of any kind with respect to any Letter
of Credit Accommodation provided by an issuer other than Agent or Canadian
Lender unless Agent or Canadian Lender, as applicable, has duly executed and
delivered to such issuer the application or a guarantee or indemnification in
writing with respect to such Letter of Credit Accommodation. Borrowers shall be
bound by any interpretation made in good faith by Agent or Canadian Lender, as
applicable, or any other issuer or correspondent under or in connection with any
Letter of Credit Accommodation or any documents, drafts or acceptances
thereunder, notwithstanding that such interpretation may be inconsistent with
any instructions of Borrowers. Agent and Canadian Lender shall have the sole and
exclusive right and authority to, and Borrowers shall not: (i) at any time an
Event of Default exists or has occurred and is continuing, (A) approve or
resolve any questions of non-compliance of documents, (B) give any instructions
as to acceptance or rejection of any documents or goods, or (C) execute any and
all applications for steamship or airway guaranties, indemnities or delivery
orders; and (ii) at all times, (A) grant

29

any extensions of the maturity of, time of payment for, or time of presentation
of, any drafts, acceptances, or documents, and (B) agree to any amendments,
renewals, extensions, modifications, changes or cancellations of any of the
terms or conditions of any of the applications, Letter of Credit Accommodations,
or documents, drafts or acceptances thereunder or any letters of credit included
in the Collateral. Agent or Canadian Lender, as applicable, may take such
actions either in its own name or in any Borrower's name.

(i) Any rights, remedies, duties or obligations granted or undertaken
by Borrowers to any issuer or correspondent in any application for any Letter of
Credit Accommodation, or any other agreement in favor of any issuer or
correspondent relating to any Letter of Credit Accommodation, shall be deemed to
have been granted or undertaken by Borrowers to Agent or Canadian Lender, as
applicable. Any duties or obligations undertaken by Agent or Canadian Lender to
any issuer or correspondent in any application for any Letter of Credit
Accommodation, or any other agreement by Agent or Canadian Lender in favor of
any issuer or correspondent relating to any Letter of Credit Accommodation,
shall be deemed to have been undertaken by Borrowers to Agent or Canadian
Lender, as applicable, and to apply in all respects to Borrowers.

(j) To induce Agent to issue or cause to be issued Letter of Credit
Accommodations, each Lender (an "LC Participant") under the Canadian Credit
Facility or US Credit Facility, as applicable, irrevocably agrees to accept and
purchase and hereby accepts and purchases, on the terms and conditions
hereinafter stated, for such LC Participant's own account and risk, an undivided
interest and participation equal to such LC Participant's Pro Rata Share in the
Agent's or Canadian Lender's obligations and rights under each Letter of Credit
Accommodation. Each LC Participant unconditionally and irrevocably agrees with
the Agent or Canadian Lender, that it shall be directly and unconditionally
obligated to the Agent or Canadian Lender to reimburse the Agent or Canadian
Lender upon demand and without setoff or deduction of any kind or nature, for
making any payment under any Letter of Credit Accommodation, in an amount equal
to such LC Participant's Pro Rata Share multiplied by the amount of such payment
made by the Agent or Canadian Lender, as applicable, under such Letter of Credit
Accommodation. If any amount required to be paid by any LC Participant to the
Agent pursuant hereto in respect of any payment made by the Agent or Canadian
Lender under any Letter of Credit Accommodation is not paid to Agent or Canadian
Lender on the date such payment is due from such LC Participant, such LC
Participant shall pay to the Agent or Canadian Lender, as applicable, on demand
an amount equal to the product of (i) such amount, times (ii) (A) the Federal
Funds Rate during the period from and including the date such payment is
required to and including the third day after such payment is required and (B)
thereafter, the Interest Rate applicable to Prime Rate Loans to the date on
which such payment is immediately available to the Agent or Canadian Lender, as
applicable, times (iii) a fraction the numerator of which is the number of days
that elapse during such period and the denominator of which is 360 in the case
of US Letters of Credit and the denominator of which is 365 in the case of
Canadian Letters of Credit. A certificate of the Agent or Canadian Lender, as
applicable, submitted to any LC Participant with respect to any amounts owing
under this subsection shall be conclusive in the absence of manifest error.
Whenever, at any time after the Agent or Canadian Lender, as applicable, has
made payment under any Letter of Credit Accommodation and has received from any
LC Participant its pro rata share of such payment in accordance herewith, and
the Agent or Canadian Lender, as applicable, receives any payment from the
Borrowers on account of such payment under such Letter of Credit Accommodation
(whether directly from the Borrowers or

30

otherwise, including by way of set-off or proceeds of collateral applied thereto
by the Agent or Canadian Lender, as applicable), or any payment of interest on
account thereof, the Agent shall distribute to such LC Participant its pro rata
share thereof; provided, however, that in the event that any such payment
received by the Agent or Canadian Lender shall be required to be returned by the
Agent or Canadian Lender, such LC Participant shall return to the Agent the
portion thereof previously distributed by the Agent to it. The obligations of
each LC Participant to make payments to the Agent with respect to its
participation in any Letter of Credit Accommodation shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which any Lender or any Borrower may have or
have had against the Agent, the issuing bank or any beneficiary of a Letter of
Credit Accommodation.

2.5 Borrower Representative. Each Borrower hereby irrevocably
designates the Parent as its representative and agent on its behalf (the
"Borrower Representative") for the purpose of requesting on such Borrower's
behalf borrowings of US Revolving Loans or Canadian Revolving Loans, as
applicable, and the continuation and/or conversion of US Revolving Loans or
Canadian Revolving Loans, as applicable, giving instructions with respect to the
disbursement of the proceeds of US Revolving Loans or Canadian Revolving Loans,
as applicable, to be made to US Borrowers or Canadian Borrowers, as applicable,
selecting interest rate options for US Borrowers or Canadian Borrowers, as
applicable, requesting US Letter of Credit or Canadian Letter of Credit
Accommodations, as applicable, for the account of US Borrowers or Canadian
Borrowers, as applicable, giving and receiving on Borrowers' behalf all other
notices and consents hereunder or under any of the other Financing Agreements
and taking all other actions (including in respect of compliance with covenants)
on behalf of Borrowers under the Financing Agreements. The Borrower
Representative hereby accepts such appointment. The Agent and each Lender may
regard any notice or other communication pursuant to any Financing Agreement
from the Borrower Representative as a notice or communication from the US
Borrowers or Canadian Borrowers, as applicable, and may give any notice or
communication required or permitted to be given to any Borrower or Borrowers
hereunder to the Borrower Representative on behalf of such Borrower or
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by the Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower. This
appointment of Parent as Borrower Representative may not be terminated,
rescinded or changed without the prior written consent of Agent, provided that
upon Agent's request, the Borrowers shall designate an alternative Borrower
Representative satisfactory to Agent.

2.6 Syndication. Borrowers agree to actively assist Agent in completing
the syndication of the Obligations in a manner satisfactory to Agent. In
connection with such syndication, Borrowers shall: (a) promptly prepare
financial information and projections including balance sheets and income, cash
flow and availability projections for dissemination to prospective Lenders as
Agent may request and in form and substance satisfactory to Agent, (b) make
available senior management and advisors of the Borrowers to meet with
prospective Lenders as Agent may request, and (c) assist Agent and its
representatives in the preparation of other information and materials to be used
in connection with the syndication. Borrowers agree that Agent will exclusively
manage all aspects of the syndication including decisions as to the selection
and timing of financial institutions to be approached, which financing
institutions will be selected to be Lenders and the allocation of Pro Rata
Shares and compensation to Lenders.

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Borrowers further agree, upon Agent's request, to enter into such amendments and
modifications to this Agreement and to the other Financing Agreement as Agent
may request in connection with such syndication and to respond to requests made
by prospective Lenders.

SECTION 3. INTEREST AND FEES.

3.1    Interest.

(a) US Borrowers shall pay to Agent for the ratable benefit of US
Lenders and Canadian Borrowers shall pay to Agent for the benefit of Canadian
Lender interest on the outstanding principal amount of the Loans at the
applicable Interest Rate. All interest accruing hereunder on and after the date
of any Event of Default or termination hereof shall be payable on demand.

(b) Borrower Representative may from time to time request Eurodollar
Rate Loans or may request that Prime Rate Loans be converted to Eurodollar Rate
Loans or that any existing Eurodollar Rate Loans continue for an additional
Interest Period. Such request from Borrower Representative shall be in writing
on such form or forms as Agent may require and shall specify, without
limitation, the amount of the Eurodollar Rate Loans or the amount of the Prime
Rate Loans to be converted to Eurodollar Rate Loans or the amount of the
Eurodollar Rate Loans to be continued (subject to the limits set forth below)
and the Interest Period to be applicable to such Eurodollar Rate Loans. Subject
to the terms and conditions contained herein, three (3) Business Days after
receipt by Agent of such a request from Borrower Representative, such Prime Rate
Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans
shall continue, as the case may be, provided, that, (i) no Default or Event of
Default shall exist or have occurred and be continuing, (ii) no party hereto
shall have sent any notice of termination or non-renewal of this Agreement,
(iii) Borrowers shall have complied with such customary procedures as are
established by Agent and specified by Agent to Borrowers from time to time for
requests by Borrowers for Eurodollar Rate Loans, (iv) no more than four (4)
Interest Periods may be in effect at any one time, (v) the aggregate amount of
the Eurodollar Rate Loans must be in an amount not less than $5,000,000 or an
integral multiple of $1,000,000 in excess thereof, (vi) the maximum amount of
the Eurodollar Rate Loans at any time requested by Borrowers shall not exceed
the amount equal to eighty (80%) percent of the lowest principal amount of the
Revolving Loans which it is anticipated will be outstanding during the
applicable Interest Period, in each case as determined by Agent (but with no
obligation of Lenders to make such Loans), and (vii) Agent shall have determined
that the Interest Period or Adjusted Eurodollar Rate is available to Lenders and
Reference Bank and can be readily determined as of the date of the request for
such Eurodollar Rate Loan by Borrowers. Any request by Borrower Representative
for Eurodollar Rate Loans or to convert Prime Rate Loans to Eurodollar Rate
Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable.
Notwithstanding anything to the contrary contained herein, Lenders and Reference
Bank shall not be required to purchase United States Dollar deposits in the
London interbank market or other applicable Eurodollar Rate market to fund any
Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as if
Lenders and Reference Bank had purchased such deposits to fund the Eurodollar
Rate Loans.

(c) Any Eurodollar Rate Loans shall automatically convert to US
Prime Rate Loans upon the last day of the applicable Interest Period, unless
Agent has received and

32

approved a request to continue such Eurodollar Rate Loans at least three (3)
Business Days prior to such last day in accordance with the terms hereof. Any
Eurodollar Rate Loans shall, at Agent's option, upon notice by Agent to
Borrowers, convert to US Prime Rate Loans in the case of US Dollar Loans in the
event that this Agreement shall terminate or not be renewed. US Borrowers shall
pay to Agent for the benefit of US Lenders, and Canadian Borrowers shall pay to
Agent for the benefit of Canadian Lender, in each case upon demand by any Lender
(or Agent or any such Lender may, at its option, charge any loan account of
Borrower) any amounts required to compensate such Lender, the Reference Bank or
any participant with any such Lender for any loss (including loss of anticipated
profits), cost or expense incurred by such person, as a result of the conversion
of Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing.

(d) Interest shall be payable by US Borrowers to Agent for the
account of US Lenders and by Canadian Borrowers to Agent for the account of
Canadian Lender, monthly in arrears not later than the first day of each
calendar month and shall be calculated on the basis of (i) a three hundred
sixty-five (365) day year in the case of Canadian Dollar Loans and (ii) a three
hundred sixty (360) day year in the case of US Dollar Loans and in each case
based on actual days elapsed. The interest rate on non-contingent Obligations
(other than Eurodollar Rate Loans) shall increase or decrease by an amount equal
to each increase or decrease in the Prime Rate effective on the first day of the
month after any change in such Prime Rate is announced based on the Prime Rate
in effect on the last day of the month in which any such change occurs. In no
event shall charges constituting interest payable by Borrowers to Agent or to
Lenders exceed the maximum amount or the rate permitted under any applicable law
or regulation, and if any such part or provision of this Agreement is in
contravention of any such law or regulation, such part or provision shall be
deemed amended to conform thereto.

(e) For purposes of disclosure under the Interest Act (Canada),
where interest is calculated pursuant thereto at a rate based upon a three
hundred sixty (360) day year or three hundred sixty-five (365) day year (the
"First Rate"), the rate or percentage of interest on a yearly basis is
equivalent to such First Rate multiplied by the actual number of days in the
year divided by three hundred sixty (360) or three hundred sixty-five (365), as
applicable.

(f) Notwithstanding the provisions of this Section 3 or any other
provision of this Agreement, in no event shall the aggregate "interest" (as that
term is defined in Section 347 of the Criminal Code (Canada)) with respect to
any Loans by or on behalf of Canadian Lender exceed the effective annual rate of
interest on the "credit advanced" (as defined therein) lawfully permitted under
Section 347 of the Criminal Code (Canada). The effective annual rate of interest
for such purpose shall be determined in accordance with generally accepted
actuarial practices and principles over the term of the applicable Loan by or on
behalf of Canadian Lender, and in the event of a dispute, a certificate of a
Fellow of the Canadian Institute of Actuaries appointed by Agent will be
conclusive for the purposes of such determination.

(g) A certificate of an authorized signing officer of Agent as to
each rate of interest payable hereunder from time to time absent manifest error
shall be conclusive evidence of such rate.

(h) For greater certainty, unless otherwise specified in this
Agreement or any of the other Financing Agreements, as applicable, whenever any
amount is payable under this

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Agreement or any of the other Financing Agreements by Borrowers as interest or
as a fee which requires the calculation of an amount using a percentage per
annum, each party to this Agreement acknowledges and agrees that such amount
shall be calculated as of the date payment is due without application of the
"deemed reinvestment principle" or the "effective yield method." As an example,
when interest is calculated and payable monthly, the rate of interest payable
per month is one twelfth (1/12) of the stated rate of interest per annum.

3.2 Agent Fees. Borrowers shall pay to Agent the fees set forth in the
Agent fee letter dated as of the date hereof between Agent and Borrowers.

3.3 Lender Fees. Borrowers shall pay to Agent for the benefit of Lenders
the fees set forth in the Lender fee letter dated as of the date hereof between
Agent and Borrowers.

3.4 Unused Line Fee. Borrowers shall pay to Agent for the ratable benefit
of Lenders monthly an unused line fee at a rate equal to one quarter of one
(.25%) percent per annum calculated upon the amount by which the Revolving Loan
Limit exceeds the average daily principal balance of the outstanding Revolving
Loans and Letter of Credit Accommodations during the immediately preceding month
(or part thereof) while this Agreement is in effect and for so long thereafter
as any of the Obligations are outstanding, which fee shall be payable on the
first day of each month in arrears.

3.5 Changes in Laws and Increased Costs of Loans.

(a) Notwithstanding anything to the contrary contained herein, the
Eurodollar Rate Loans made by a Lender shall, upon notice by such Lender to
Borrowers, convert to Prime Rate Loans in the event that (i) any change in
applicable law or regulation (or the interpretation or administration thereof)
shall (A) make it unlawful for such Lender, or any participant with such Lender
or Reference Bank to make or maintain Eurodollar Rate Loans or to comply with
the terms hereof in connection with the Eurodollar Rate Loans, or (B) shall
result in the increase in the costs to such Lender or any participant with such
Lender or Reference Bank of making or maintaining any Eurodollar Rate Loans by
an amount deemed by such Lender to be material, or (C) reduce the amounts
received or receivable by such Lender in respect thereof, by an amount deemed by
such Lender to be material; or (ii) the cost to such Lender, or any participant
with such Lender or Reference Bank of making or maintaining any Eurodollar Rate
Loans shall otherwise increase by an amount deemed by such Lender to be
material. Borrowers shall pay to such Lender, upon demand by such Lender (or
such Lender may, at its option, charge any loan account of Borrowers) any
amounts required to compensate such Lender or any participant with such Lender
or Reference Bank for any loss (including loss of anticipated profits), cost or
expense incurred by such person as a result of the foregoing, including, without
limitation, any such loss, cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such person to make or
maintain the Eurodollar Rate Loans or any portion thereof. A certificate of such
Lender setting forth the basis for the determination of such amount necessary to
compensate such Lender as aforesaid shall be delivered to Borrowers and shall be
conclusive, absent manifest error.

(b) If any payments or prepayments in respect of the Eurodollar Rate
Loans are received by Lenders other than on the last day of the applicable
Interest Period (whether pursuant to acceleration, upon maturity or otherwise),
including any payments pursuant to the application of collections under Section
6.3 or any other payments made with the proceeds of

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Collateral, Borrowers shall pay to Lenders upon demand by Agent (or Agent or any
Lender may, at their option, charge any loan account of Borrowers) any amounts
required to compensate Lenders, the Reference Bank or any participant with any
Lender for any additional loss (including loss of anticipated profits), cost or
expense incurred by such person as a result of such prepayment or payment,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
person to make or maintain such Eurodollar Rate Loans or any portion thereof.

SECTION 4. CONDITIONS PRECEDENT.

4.1 Conditions Precedent to Initial Loans and Letter of Credit
Accommodations. Each of the following is a condition precedent to Agent and each
Lender making the initial Loans and providing the initial Letter of Credit
Accommodations hereunder:

(a) Agent shall have received, in form and substance satisfactory to
Agent, all releases, terminations and such other documents as Agent may request
to evidence and effectuate the termination by the existing lenders to Borrowers
of their respective financing arrangements (other than Indebtedness permitted by
Section 9.9) with Borrowers and the termination and release by it or them, as
the case may be, of any interest in and to the Purchased Assets and any assets
and properties of Borrowers and each Obligor, and such releases, terminations
and other documents shall be duly authorized, executed and delivered by it or
each of them, including, but not limited to, (i) UCC termination statements for
all UCC financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or any Obligor, as debtor, (ii)
PPSA terminations or hypothec discharges or acknowledgments for all PPSA
financing statements or hypothecs previously filed or registered by it or any of
them or their predecessors, or secured party and any Borrower or any Obligor, as
debtor, and (iii) satisfactions and discharges of any mortgages, deeds of trust
or deeds to secure debt by any Borrower or any Obligor in favor of such existing
lender or lenders, in form acceptable for recording with the appropriate
Governmental Authority;

(b) all requisite corporate action and proceedings in connection with
this Agreement and the other Financing Agreements shall be satisfactory in form
and substance to Agent, and Agent shall have received all information and copies
of all documents, including records of requisite corporate action and
proceedings which Agent may have requested in connection therewith, such
documents where requested by Agent or its counsel to be certified by appropriate
corporate officers or Governmental Authority (and including a copy of the
certificate of incorporation or formation of each Borrower certified by the
Secretary of State (or equivalent Governmental Authority) which shall set forth
the same complete corporate or limited liability company name of each Borrower
as is set forth herein and such document as shall set forth the organizational
identification number of each Borrower, if one is issued in its jurisdiction of
incorporation or formation);

(c) no material adverse change shall have occurred in the assets,
business or prospects of any Borrower or the Purchased Assets since the date of
Agent's latest field examination and no change or event shall have occurred
which would impair the ability of any Borrower or any Obligor to perform its
obligations hereunder or under any of the other Financing Agreements to which it
is a party or of Agent or Lenders to enforce the Obligations or realize upon the
Collateral;

35

(d) Agent shall have completed a field review of the Records and such
other information with respect to the Collateral as Agent may require to
determine the amount of Revolving Loans available to Borrowers (including,
without limitation, current perpetual inventory records and/or roll-forwards of
Accounts and Inventory through the date of closing and test counts of the
Inventory in a manner satisfactory to Agent, together with such supporting
documentation as may be necessary or appropriate, and other documents and
information that will enable Agent to accurately identify and verify the
Collateral), the results of which each case shall be satisfactory to Agent, not
more than three (3) Business Days prior to the date hereof;

(e) Agent shall have received, in form and substance satisfactory to
Agent, all consents, waivers, acknowledgments and other agreements from third
persons which Agent may deem necessary or desirable in order to permit, protect
and perfect its security interests in and liens upon the Collateral or to
effectuate the provisions or purposes of this Agreement and the other Financing
Agreements, including, without limitation, Collateral Access Agreements by
owners and lessors of leased premises of Borrowers and by warehouses at which
Collateral is located, and the hypothecs, the security interests and liens of
Agent upon the Collateral of the Canadian Borrowers.

(f) the combined Excess Availability of US Borrowers and Canadian
Borrowers as determined by Agent, as of the date hereof, shall be not less than
the US Dollar Equivalent of $25,000,000 after giving effect to the initial Loans
made or to be made and Letter of Credit Accommodations issued or to be issued in
connection with the initial transactions hereunder;

(g) Agent shall have received, in form and substance satisfactory to
Agent, Deposit Account Control Agreements by and among Agent, Borrowers and each
bank where any Borrower has a deposit account, in each case, duly authorized,
executed and delivered by such bank and such Borrower (or shall be the bank's
customer with respect to such deposit account as Agent may specify);

(h) Agent shall have received evidence, in form and substance
satisfactory to Agent, that Agent for the benefit of itself and the Lenders and
Canadian Lender, where applicable, has a valid perfected first priority security
interest in, and first ranking hypothec on, all of the Revolving Loan Priority
Collateral and a valid perfected second priority security interest in and second
ranking hypothec on all other Collateral;

(i) Agent shall have received and reviewed lien and judgment search
results for the jurisdiction of incorporation or organization of each Borrower,
the jurisdiction of the chief executive office of each Borrower and all
jurisdictions in which assets of Borrowers are located, which search results
shall be in form and substance satisfactory to Agent;

(j) Agent shall have received evidence of insurance and loss payee
endorsements required hereunder and under the other Financing Agreements, in
form and substance satisfactory to Agent, and certificates of insurance policies
and/or endorsements naming Lender as loss payee;

(k) The order dated June 18, 2002 of the United States Bankruptcy Court
for the District of Delaware ("Bankruptcy Court") approving the sale of the
Division of the Sellers to Parent pursuant to Sections 363/365 of the United
States Bankruptcy Code (the "Sale Order")

36

shall be in form and substance satisfactory to the Agent and shall be a Final
Order. The Sale Order shall have been signed and entered by the Bankruptcy Court
and a certified copy thereof shall have been delivered to Agent. The Sale Order
shall be in full force and effect and shall not have been reversed, stayed,
modified or amended. For purposes hereof, "Final Order" means an order of the
Bankruptcy Court with respect to which (x) no appeal has been filed within the
time period specified by Rule 8002(a) of the Federal Rules of Bankruptcy
Procedure ("FRBP"), (y) in the event a timely appeal has been filed, the
effectiveness of such order has not been stayed in accordance with Rule 8005 of
the FRBP, or (z) in the event such order was stayed pending appeal, such stay
has been terminated by a subsequent court order.

(l) Agent shall have received, in form and substance satisfactory to
Agent, evidence that the Purchase Agreements have been duly executed and
delivered by and to the appropriate parties thereto and the transactions
contemplated under the terms of the Purchase Agreements and Sales Order have
been consummated prior to or contemporaneously with the execution of this
Agreement and that, pursuant thereto, Borrowers have acquired good and
marketable title to the Purchased Assets, free and clear of all claims, liens,
pledges and encumbrances of any kind, except as permitted hereunder;

(m) Agent shall have received, in form and substance satisfactory to
Agent, a pro-forma balance sheet of Borrowers reflecting the initial
transactions contemplated hereunder, including, but not limited to, (i) the
consummation of the acquisition of the Purchased Assets by Borrowers from
Sellers and the other transactions contemplated by the Sale Order and Purchase
Agreements, and (ii) the Loans and Letter of Credit Accommodations provided by
Lenders, Term Lenders to Borrowers on the date hereof and the use of the
proceeds of the initial Loans as provided herein and the initial advances of
Term Debt, accompanied by a certificate, dated of even date herewith, of the
chief financial officer of Borrowers stating that such pro-forma balance sheet
represents the reasonable, good faith opinion of such officer as to the subject
matter thereof as of the date of such certificate;

(n) The Term Loan Agreement shall be in form and substance satisfactory
to Agent, all conditions precedent to the making of the term loans thereunder
shall have been satisfied and Borrowers shall have received not less than (i)
$100,000,000 in cash proceeds from term loans A made by the Term Loan Lenders
and (ii) $35,000,000 in cash proceeds from term loans B made by the Term Loan
Lenders under the Term Loan Agreement;

(o) Parent shall have received not less than $25,000,000 in cash
proceeds from the issuance of its Series C convertible preferred stock pursuant
to documentation in form and substance satisfactory to Agent and to investors
acceptable to Agent;

(p) Agent shall have received, in form and substance satisfactory to
Agent, such opinion letters of counsel to Borrowers with respect to the
Financing Agreements and such other matters as Agent may request; and

(q) the other Financing Agreements and all instruments and documents
hereunder and thereunder shall have been duly executed and delivered to Agent,
in form and substance satisfactory to Agent.

4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations.
Each of the following is an additional condition precedent to Agent and Lenders
making Loans and/or

37

providing Letter of Credit Accommodations to Borrowers, including the initial
Loans and Letter of Credit Accommodations and any future Loans and Letter of
Credit Accommodations:

(a) all representations and warranties contained herein and in the
other Financing Agreements shall be true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date of the making of each such Loan or providing each such
Letter of Credit Accommodation and after giving effect thereto, except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and accurate on and as of such earlier date);

(b) no law, regulation, order, judgment or decree of any Governmental
Authority shall exist, and no action, suit, investigation, litigation or
proceeding shall be pending or threatened in any court or before any arbitrator
or Governmental Authority, which (i) purports to enjoin, prohibit, restrain or
otherwise affect (A) the making of the Loans or providing the Letter of Credit
Accommodations, or (B) the consummation of the transactions contemplated
pursuant to the terms hereof or the other Financing Agreements; or (ii) has or
could reasonably be expected to have a material adverse effect on the assets,
business or prospects of any Borrower or would impair the ability of any
Borrower to perform its obligations hereunder or under any of the other
Financing Agreements or of Agent and Lenders to enforce any Obligations or
realize upon any of the Collateral;

(c) no Default or Event of Default shall exist or have occurred and be
continuing on and as of the date of the making of such Loan or providing each
such Letter of Credit Accommodation and after giving effect thereto; and

(d) In addition to the other conditions precedent to Agent and Lenders
making Loans and/or providing Letter of Credit Accommodations to Borrowers, the
conditions to Loans and Letter of Credit Accommodations by or on behalf of
Canadian Lender in favor of Canadian Borrowers shall also include that no
requirement of the Minister of National Revenue for payment pursuant to Section
224, or any successor section, of the Income Tax Act (Canada) or Section 317, or
any successor section of the Excise Act (Canada) or any comparable provision of
similar legislation shall have been received by Agent, Canadian Lender or any
other Person in respect of a Canadian Borrower or otherwise issued in respect of
a Canadian Borrower.

SECTION 5. GRANT AND PERFECTION OF SECURITY INTEREST.

5.1    Grant of Security Interest.

(a) To secure payment and performance of all Obligations, each
Borrower hereby grants to Agent for the benefit of itself and each Lender a
continuing security interest in, a lien upon, and a right of set off against,
and hereby assigns to Agent for the benefit of itself and each Lender as
security, and each Canadian Borrower hereby grants to Agent a continuing
security interest in, a lien upon, and a right of set off against, and hereby
assigns to Agent for the benefit of itself and each Lender as security, all
personal and real property and fixtures and interests in property and fixtures
of each Borrower, whether now owned or hereafter acquired or existing, and
wherever located (together with all other collateral security for the
Obligations at any time granted to or held or acquired by Agent for the benefit
of itself and each Lender or by any Lender, collectively, the "Collateral"),
including:

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(i)     all Accounts;

(ii)    all general intangibles, including, without limitation, all
Intellectual Property;

(iii)   all goods, including, without limitation, Inventory and
Equipment;

(iv)    all Real Property and fixtures;

(v)     all chattel paper (including all tangible and electronic
chattel paper);

(vi)    all instruments (including all promissory notes);

(vii)   all documents;

(viii)  all deposit accounts;

(ix)    all letters of credit, banker's acceptances and similar
instruments and including all letter-of-credit rights;

(x)     all supporting obligations and all present and future liens,
security interests, rights, remedies, title and interest in, to
and in respect of Receivables and other Collateral, including
(i) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit and credit and other
insurance related to the Collateral, (ii) rights of stoppage in
transit, replevin, repossession, reclamation and other rights
and remedies of an unpaid vendor, lien or secured party, (iii)
goods described in invoices, documents, contracts or
instruments with respect to, or otherwise representing or
evidencing, Receivables or other Collateral, including
returned, repossessed and reclaimed goods, and (iv) deposits by
and property of account debtors or other persons securing the
obligations of account debtors;

(xi)    all investment property (including securities, whether
certificated or uncertificated, securities accounts, security
entitlements, commodity contracts or commodity accounts) and
all monies, credit balances, deposits and other property of any
Borrower now or hereafter held or received by or in transit to
Agent, any Lender or any of their Affiliates or at any other
depository or other institution from or for the account of any
Borrower, whether for safekeeping, pledge, custody,
transmission, collection or otherwise;

(xii)   all commercial tort claims, including, without limitation,
those identified in the Information Certificates;

(xiii)  to the extent not otherwise described above, all Receivables;

(xiv)   all Records;

39

(xv)    all products and proceeds of the foregoing, in any form,
including insurance proceeds and all claims against third
parties for loss or damage to or destruction of or other
involuntary conversion of any kind or nature of any or all of
the other Collateral; and

(xvi)   as to Canadian Borrowers only, a hypothec to and in favor of
each of Agent and Canadian Lender to the extent of the sum of
C$200,000,000 in lawful money of Canada with interest thereon
at the rate of twenty-five (25%) percent, with respect to all
of its rights and interests to the Collateral.

(b)     Notwithstanding anything to the contrary set forth in 5.1(a)
above, the types of collateral described in such Section shall not include the
last day of the term of any lease or agreement to which any Canadian Borrower is
a party therefor but upon enforcement of the security interest the applicable
Canadian Borrower shall stand possessed of such last day in trust to assign the
same to any person acquiring the term of the lease or agreement therefor.

5.2   Perfection of Security Interests.

(a) Each Borrower irrevocably and unconditionally authorizes Agent (or
its agent) to file at any time and from time to time such financing statements
with respect to the Collateral naming Agent or its designee as the secured party
and each such Borrower as debtor, as Agent may require, and including any other
information with respect to each such Borrower or otherwise required by part 5
of Article 9 of the Uniform Commercial Code of such jurisdiction or under the
PPSA as Agent may determine, together with any amendment and continuations with
respect thereto, which authorization shall apply to all financing statements
filed on, prior to or after the date hereof. Each Borrower hereby ratifies and
approves all financing statements naming Agent or its designee as secured party
and each such Borrower as debtor with respect to the Collateral (and any
amendments with respect to such financing statements) filed by or on behalf of
Agent prior to the date hereof and ratifies and confirms the authorization of
Agent to file such financing statements (and amendments, if any). Each Borrower
hereby authorizes Agent to adopt on behalf of each such Borrower any symbol
required for authenticating any electronic filing. In no event shall any
Borrower at any time file, or permit or cause to be filed, any correction
statement or termination statement with respect to any financing statement (or
amendment or continuation with respect thereto) naming Agent or its designee as
secured party and any Borrower as debtor.

(b) Borrowers do not have any chattel paper (whether tangible or
electronic) or instruments as of the date hereof, except as set forth in the
Information Certificates. In the event that any Borrower shall be entitled to or
shall receive any chattel paper or instrument after the date hereof, Borrowers
shall promptly notify Agent thereof in writing. Promptly upon the receipt
thereof by or on behalf of any Borrower (including by any agent or
representative), Borrowers shall deliver, or cause to be delivered to Agent, all
tangible chattel paper and instruments that any Borrower may at any time
acquire, accompanied by such instruments of transfer or assignment duly executed
in blank as Agent may from time to time specify, in each case, except as Agent
may otherwise agree. At Agent's option, Borrowers shall, or Agent may at any
time on behalf of Borrowers, cause the original of any such instrument or
chattel paper to be conspicuously marked in a form and manner acceptable to
Agent with the following legend

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referring to chattel paper or instruments as applicable: "This [chattel
paper][instrument] is subject to the security interest of Congress Financial
Corporation (New England), as agent for itself and certain other lending
institutions, and any sale, transfer, assignment or encumbrance of this [chattel
paper][instrument] violates the rights of such secured party."

(c) In the event that any Borrower shall at any time hold or acquire an
interest in any electronic chattel paper or any "transferable record" (as such
term is defined in Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction), Borrowers shall
promptly notify Agent thereof in writing. Promptly upon Agent's request,
Borrowers shall take, or cause to be taken, such actions as Agent may reasonably
request to give Agent control of such electronic chattel paper under Section
9-105 of the UCC and control of such transferable record under Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act or, as the
case may be, Section 16 of the Uniform Electronic Transactions Act, as in effect
in such jurisdiction.

(d) Borrowers do not have any deposit accounts as of the date hereof,
except as set forth in the Information Certificates. Borrowers shall not,
directly or indirectly, after the date hereof open, establish or maintain any
deposit account unless each of the following conditions is satisfied: (i) Agent
shall have received not less than five (5) Business Days prior written notice of
the intention of any Borrower to open or establish such account which notice
shall specify in reasonable detail and specificity acceptable to Agent the name
of the account, the owner of the account, the name and address of the bank or
other financial institution at which such account is to be opened or
established, the individual at such bank or other financial institution with
whom such Borrower is dealing and the purpose of the account, (ii) the bank or
other financial institution where such account is opened or maintained shall be
acceptable to Agent, and (iii) on or before the opening of such deposit account,
such Borrower shall, as Agent may specify, either (A) deliver to Agent a Deposit
Account Control Agreement with respect to such deposit account duly authorized,
executed and delivered by such Borrower and the bank at which such deposit
account is opened and maintained, or (B) arrange for Agent to become the
customer of the bank with respect to the deposit account on terms and conditions
acceptable to Agent. The terms of this subsection (d) shall not apply to deposit
accounts specifically and exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrowers' salaried
employees.

(e) Borrowers do not own or hold, directly or indirectly, beneficially
or as record owner or both, any investment property, as of the date hereof, or
have any investment account, securities account, commodity account or other
similar account with any bank or other financial institution or other securities
intermediary or commodity intermediary as of the date hereof, in each case
except as set forth in the Information Certificates.

(i) In the event that any Borrower shall be entitled to or shall at any
time after the date hereof hold or acquire any certificated
securities, such Borrower shall promptly endorse, assign and
deliver the same to Agent, accompanied by such instruments of
transfer or assignment duly executed in blank as Agent may from
time to time specify. If any securities, now or hereafter acquired
by Borrower are uncertificated and are issued to such Borrower or
its nominee directly by the issuer thereof, such Borrower

41

shall immediately notify Agent thereof and shall, as Agent may
specify, either (A) cause the issuer to agree to comply with
instructions from Agent as to such securities, without further
consent of such Borrower or such nominee, or (B) arrange for Agent
to become the registered owner of the securities.

(ii) Borrowers shall not, directly or indirectly, after the date hereof
open, establish or maintain any investment account, securities
account, commodity account or any other similar account (other
than a deposit account) with any securities intermediary or
commodity intermediary unless each of the following conditions is
satisfied: (A) Agent shall have received not less than five (5)
Business Days prior written notice of the intention of a Borrower
to open or establish such account which notice shall specify in
reasonable detail and specificity acceptable to Agent the name of
the account, the owner of the account, the name and address of the
securities intermediary or commodity intermediary at which such
account is to be opened or established, the individual at such
intermediary with whom such Borrower is dealing and the purpose of
the account, (B) the securities intermediary or commodity
intermediary (as the case may be) where such account is opened or
maintained shall be acceptable to Agent, and (C) on or before the
opening of such investment account, securities account or other
similar account with a securities intermediary or commodity
intermediary, such Borrower shall, as Agent may specify, either
(1) execute and deliver, and cause to be executed and delivered to
Agent, an Investment Property Control Agreement with respect
thereto duly authorized, executed and delivered by such Borrower
and such securities intermediary or commodity intermediary, or (2)
arrange for Agent to become the entitlement holder with respect to
such investment property on terms and conditions acceptable to
Agent.

(f)  No Borrower is the beneficiary or otherwise entitled to any right
to payment under any letter of credit, banker's acceptance or similar instrument
as of the date hereof, except as set forth in the Information Certificates. In
the event that any Borrower shall be entitled to or shall receive any right to
payment under any letter of credit, banker's acceptance or any similar
instrument, whether as beneficiary thereof or otherwise after the date hereof,
such Borrower shall promptly notify Agent thereof in writing. Each Borrower
shall immediately, as Agent may specify, either (i) deliver, or cause to be
delivered to Agent, with respect to any such letter of credit, banker's
acceptance or similar instrument, the written agreement of the issuer and any
other nominated person obligated to make any payment in respect thereof
(including any confirming or negotiating bank), in form and substance
satisfactory to Agent, consenting to the assignment of the proceeds of the
letter of credit to Agent by such Borrower and agreeing to make all payments
thereon directly to Agent or as Agent may otherwise direct, or (ii) cause Agent
to become, at Borrowers' expense, the transferee beneficiary of the letter of
credit, banker's acceptance or similar instrument (as the case may be).

(g)  No Borrower has commercial tort claims as of the date hereof,
except as set forth in the Information Certificates. In the event that any
Borrower shall at any time after the date hereof have any commercial tort
claims, such Borrower shall promptly notify Agent

42

thereof in writing, which notice shall (i) set forth in reasonable detail the
basis for and nature of such commercial tort claim, and (ii) include the express
grant by such Borrower to Agent of a security interest in such commercial tort
claim (and the proceeds thereof). In the event that such notice does not include
such grant of a security interest, the sending thereof by such Borrower to Agent
shall be deemed to constitute such grant to Agent. Upon the sending of such
notice, any commercial tort claim described therein shall constitute part of the
Collateral and shall be deemed included therein. Without limiting the
authorization of Agent provided in Section 5.2(a) hereof or otherwise arising by
the execution by Borrowers of this Agreement, Agent is hereby irrevocably
authorized from time to time and at any time to file such financing statements
naming Agent or its designee as secured party and each Borrower as debtor, or
any amendments to any financing statements, covering any such commercial tort
claim as Collateral. In addition, Borrowers shall promptly upon Agent's request,
execute and deliver, or cause to be executed and delivered, to Agent such other
agreements, documents and instruments as Agent may require in connection with
such commercial tort claim.

(h) Borrowers do not have any goods, documents of title or other
Collateral in the custody, control or possession of a third party as of the date
hereof, except as set forth in the Information Certificates and except for goods
located in the United States or Canada in transit to a location of Borrowers
permitted herein or in the ordinary course of business of Borrowers in the
possession of the carrier transporting such goods. In the event that any goods,
documents of title or other Collateral are at any time after the date hereof in
the custody, control or possession of any other person not referred to in the
Information Certificates or such carriers, Borrowers shall promptly notify Agent
thereof in writing. Promptly upon Agent's request, Borrowers shall deliver to
Agent a Collateral Access Agreement duly authorized, executed and delivered by
such person and Borrower.

(i) If a Default or an Event of Default shall occur and be continuing
or if the aggregate Excess Availability of all Borrowers is less than the US
Dollar Equivalent of $10,000,000 for ten (10) consecutive days or ten (10) days
in any thirty (30) day period, upon the request of Agent, (i) Borrowers shall
cause Agent's name to be noted as secured party on each certificate of title for
titled goods of the Borrowers, if, as determined by Agent, such notation is a
condition to attachment, priority or perfection or ability of Agent to enforce,
the security interest of Agent in such Collateral, (ii) Borrowers shall execute
and deliver to Agent mortgages, charges, hypothecs, deeds of trust or deeds to
secure debt, as Agent may determine, in form and substance satisfactory to Agent
and in forms appropriate for recording in the real estate records of the
jurisdictions in which Borrowers' Real Property is located granting to Agent a
lien and mortgage on and security interest in such Real Property, fixtures or
other property and cause to be delivered to Agent, in form and substance
satisfactory to Agent, valid and effective title insurance policies issued by a
company and agent satisfactory to Agent insuring the priority, amount and
sufficiency of such mortgages, charges, hypothecs, deeds of trust or deeds to
secure debt and containing such legally available endorsements, assurances and
affirmative coverages as Agent may reasonably require, with opinions of counsel
in form and substance satisfactory to Agent as Agent may reasonably require.

(j) Borrowers shall take any other actions reasonably requested by
Agent from time to time to cause the attachment, perfection and first priority
of, and the ability of Agent to enforce, the security interest of Agent in any
and all of the Collateral, including, without limitation, (i) executing,
delivering and, where appropriate, filing financing statements

43

and amendments relating thereto under the UCC, the PPSA or other applicable law,
to the extent, if any, that a Borrower's signature thereon is required therefor,
(ii) complying with any provision of any statute, regulation or treaty of the
United States or Canada as to any Collateral if compliance with such provision
is a condition to attachment, perfection or priority of, or ability of Agent to
enforce, the security interest of Agent in such Collateral, or (iii) obtaining
the consents and approvals of any Governmental Authority or third party,
including, without limitation, any consent of any licensor, lessor or other
person obligated on such Collateral, and taking all actions required by any
earlier versions of the UCC, the PPSA or by other law, as applicable in any
relevant jurisdiction.

5.3   Exclusion from Collateral of Cash Collateral Maintained at L/C Issuer
Under Cash Collateral Control Agreement. Notwithstanding anything to the
contrary contained in Section 5.1 above, the types or items of Collateral
described in such Section shall not include the cash and Cash Equivalents
deposited in the collateral account maintained at the L/C Issuer (as such term
is defined in the Term Loan Agreement) pursuant to the Cash Collateral Control
Agreement among Borrowers, Term Loan Agent and the L/C Issuer entered into under
the Term Loan Agreement that secures the letters of credit issued by the L/C
Issuer from time to time.

SECTION 6. COLLECTION AND ADMINISTRATION.

6.1   Borrowers' Loan Account. Agent shall maintain one or more loan
account(s) on its books in which shall be recorded (a) all Loans, Letter of
Credit Accommodations and other Obligations and the Collateral, (b) all payments
made by or on behalf of Borrowers, and (c) all other appropriate debits and
credits as provided in this Agreement, including fees, charges, costs, expenses
and interest. All entries in the loan account(s) shall be made in accordance
with Agent's customary practices as in effect from time to time.

6.2   Statements. Agent shall render to Borrowers each month a statement
setting forth the balance in the Borrowers' loan account(s) maintained by Agent
for Borrowers pursuant to the provisions of this Agreement, including principal,
interest, fees, costs and expenses. Each such statement shall be subject to
subsequent adjustment by Agent but shall, absent manifest errors or omissions,
be considered correct and deemed accepted by Borrowers and conclusively binding
upon Borrowers as an account stated except to the extent that Agent receives a
written notice from Borrowers of any specific exceptions of Borrower thereto
within thirty (30) days after the date such statement has been mailed by Agent.
Until such time as Agent shall have rendered to Borrowers a written statement as
provided above, the balance in Borrowers' loan account(s) shall be presumptive
evidence of the amounts due and owing to Agent and Lenders by Borrowers.

6.3   Collection of Accounts.

(a) Borrowers shall establish and maintain, at their expense, blocked
accounts or lockboxes and related blocked accounts (in either case, "Blocked
Accounts"), as Agent may specify, with such banks as are acceptable to Agent
into which Borrowers shall promptly deposit and direct their account debtors to
directly remit all payments on Receivables and all payments constituting
proceeds of other Revolving Loan Priority Collateral in the identical form in
which such payments are made, whether by cash, check or other manner. Borrowers
shall deliver, or cause to be delivered to Agent, a Depository Account Control
Agreement duly authorized, executed and delivered by each bank where a Blocked
Account is maintained as provided in Section 5.2 hereof or at any time and from
time to time Agent may become bank's customer with

44

respect to the Blocked Accounts and promptly upon Agent's request, Borrowers
shall execute and deliver such agreements or documents as Agent may require in
connection therewith. Borrowers agree that all payments made to such Blocked
Accounts or other funds received and collected by Agent, whether in respect of
the Receivables or other Revolving Loan Priority Collateral or otherwise shall
be treated as payments to Agent for the benefit of itself and Lenders in respect
of the Obligations and therefore shall constitute the property of Agent and
Lenders to the extent of the then outstanding Obligations.

(b) For purposes of calculating the amount of the Loans available to
Borrowers, such payments will be applied (conditional upon final collection) to
the Obligations on the Business Day of receipt by Agent of immediately available
funds in the Agent Payment Account or the Canadian Payment Account (as the case
may be) provided such payments and notice thereof are received in accordance
with Agent's usual and customary practices as in effect from time to time and
within sufficient time to credit Borrowers' loan account(s) on such day, and if
not, then on the next Business Day. For the purposes of calculating interest on
the Obligations, such payments or other funds received will be applied
(conditional upon final collection) to the Obligations one (1) Business Day
following the date of receipt of immediately available funds by Agent in the
Agent Payment Account or the Canadian Payment Account (as the case may be)
provided such payments or other funds and notice thereof are received in
accordance with Agent's usual and customary practices as in effect from time to
time and within sufficient time to credit Borrowers' loan account on such day,
and if not, then on the next Business Day and such amount shall be retained by
the Agent. In the event that at any time or from time to time there are no Loans
outstanding, Borrowers shall pay an administrative charge to Agent in an amount
equivalent to the interest Borrowers would have paid for such Business Day had
there been Loans outstanding on such day which charge shall be paid to Agent.

(c) Each Borrower and its shareholders, directors, employees, agents,
Subsidiaries or other Affiliates shall, acting as trustee for Agent and Lenders,
receive, as the property of Agent and Lenders, any monies, checks, notes, drafts
or any other payment relating to and/or proceeds of Accounts or other Revolving
Loan Priority Collateral which come into their possession or under their control
and immediately upon receipt thereof, shall deposit or cause the same to be
deposited in the Blocked Accounts, or remit the same or cause the same to be
remitted, in kind, to Agent for the benefit of itself and Lenders. In no event
shall the same be commingled with any Borrower's own funds. Each Borrower agrees
to reimburse Agent and Lenders on demand for any amounts owed or paid to any
bank at which a Blocked Account is established or any other bank or person
involved in the transfer of funds to or from the Blocked Accounts arising out of
Agent's or any Lender's payments to or indemnification of such bank or person.
The obligation of Borrowers to reimburse Agent and Lenders for such amounts
pursuant to this Section 6.3 shall survive the termination or non-renewal of
this Agreement.

(d) No Borrower shall permit any payment relating to or constituting
proceeds of Collateral other than Revolving Loan Priority Collateral to be
deposited into any Blocked Account or the Agent Payment Account or the Canadian
Payment Account. All payments relating to or constituting proceeds of Collateral
other than Revolving Loan Priority Collateral shall be made to the account of
the Term Loan Agent set forth in the Term Loan Agreement or as otherwise
provided under the Term Loan Agreement. Borrowers shall immediately notify Agent
if any payment or deposit is made contrary to this provision.

45

6.4   Payments.

(a) All Obligations of US Borrowers shall be payable to the Agent
Payment Account as provided in Section 6.3 and all Obligations of Canadian
Borrowers shall be payable to the Canadian Payment Account or, in each case such
other place as Agent may designate from time to time. Agent shall apply payments
received or collected from Borrowers or for the account of Borrowers (including
the monetary proceeds of collections or of realization upon any Collateral)
under the US Credit Facility or Canadian Credit Facility, as applicable, as
follows: first, to pay any fees, indemnities or expense reimbursements then due
to Agent or Lenders from Borrowers; second, to pay interest due in respect of
any Loans; third, to pay principal due on any SwingLine Loans, Overadvances and
Loans made by Agent pursuant to Section 6.6 thereof; fourth, to pay principal
due in respect of the Revolving Loans; fifth, to pay or prepay any other
Obligations whether or not then due, in such order and manner as Agent
determines. Notwithstanding anything to the contrary contained in this
Agreement, (i) unless so directed by Borrowers, or unless a Default or an Event
of Default shall exist or have occurred and be continuing, Lenders shall not
apply any payments which they receive to any Eurodollar Rate Loans, except (A)
on the expiration date of the Interest Period applicable to any such Eurodollar
Rate Loans, or (B) in the event that there are no outstanding Prime Rate Loans,
and (ii) to the extent Borrowers use any proceeds of the Loans or Letter of
Credit Accommodations to acquire rights in or the use of any Collateral or to
repay any Indebtedness used to acquire rights in or the use of any Collateral,
payments in respect of the obligations shall be deemed applied first to the
Obligations arising from Loans and Letter of Credit Accommodations that were not
used for such purposes and second to the Obligations arising from Loans and
Letter of Credit Accommodations the proceeds of which were used to acquire
rights in or the use of any Collateral in the chronological order in which
Borrowers acquired such rights or use.

(b) At Agent's option, all principal, interest, fees, costs, expenses
and other charges provided for in this Agreement or the other Financing
Agreements may be charged directly to the loan account(s) of Borrowers.
Borrowers shall make all payments to Agent and Lenders on the Obligations free
and clear of, and without deduction or withholding for or on account of, any
setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions,
withholding, restrictions or conditions of any kind. If after receipt of any
payment of, or proceeds of Collateral applied to the payment of, any of the
Obligations, Agent or any Lender is required to surrender or return such payment
or proceeds to any Person for any reason, then the Obligations intended to be
satisfied by such payment or proceeds shall be reinstated and continue and this
Agreement shall continue in full force and effect as if such payment or proceeds
had not been received. Borrowers shall be liable to pay to Agent and each
Lender, and does hereby indemnify and hold Agent and each Lender harmless for
the amount of any payments or proceeds surrendered or returned. This Section 6.4
shall remain effective notwithstanding any contrary action which may be taken by
Lender in reliance upon such payment or proceeds. This Section 6.4 shall survive
the payment of the Obligations and the termination or non-renewal of this
Agreement.

6.5   Authorization to Make Loans.

(a) Agent and Lenders are authorized to make the Loans and provide
the Letter of Credit Accommodations based upon telephonic or other instructions
received from anyone purporting to be an authorized officer of Borrower
Representative (as set forth in the

46

Information Certificate) or other authorized person or, at the discretion of
Agent, if such Loans are necessary to satisfy any Obligations. All requests for
Loans or Letter of Credit Accommodations hereunder shall be made to the Agent
and shall specify the date on which the requested advance is to be made or
Letter of Credit Accommodations established (which day shall be a Business Day)
and the amount of the requested Loan. Requests received after 11:00 a.m. Boston,
Massachusetts time on any day shall be deemed to have been made as of the
opening of business on the immediately following Business Day. All Loans and
Letter of Credit Accommodations under this Agreement shall be conclusively
presumed to have been made to, and at the request of and for the benefit of,
Borrowers when deposited to the credit of Borrowers or otherwise disbursed or
established in accordance with the instructions of Borrowers or in accordance
with the terms and conditions of this Agreement; and

(b) All Loans provided to US Borrowers shall be in or denominated in
US Dollars and shall be disbursed only to bank accounts in the United States of
America and all Loans provided to Canadian Borrowers shall be in or denominated
in either Canadian Dollars or US Dollars as Canadian Borrowers may specify,
except as Canadian Lender may otherwise specifically agree in writing and shall
be disbursed only to bank accounts in Canada. Set forth on Schedule 8.10 to the
Information Certificates are the bank accounts of each Borrower used by such
Borrower for making payments of its Indebtedness and other obligations to which,
as of the date hereof, proceeds of Loans may be disbursed.

6.6   Payment by Lenders and Settlement of Loans. Each Lender shall, not
later than 12:00 p.m. (Boston time) on such requested borrowing date, wire to a
bank designated by Agent the amount of that Lender's Pro Rata Share of the
requested Revolving Loan. The failure of any Lender to make the Revolving Loans
required to be made by it shall not release any other Lender of its obligations
hereunder to make its Revolving Loan. Neither Agent nor any other Lender shall
be responsible for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender. Unless the Agent has received notice from a Lender
that such Lender does not intend to fund a Revolving Loan and the basis for such
action prior to 12:00 noon on the Business Day prior to the date any Revolving
Loan is to be made, Agent shall be entitled to assume that all Lenders will make
Revolving Loans as required hereunder and to make such Revolving Loans to the
Borrowers. The foregoing notwithstanding, Agent, in its sole discretion, may
from time to time make Revolving Loans on behalf of any or all Lenders
including, without limitation, Revolving Loans with respect to Letter of Credit
Accommodations that may be drawn. In such event, the Lenders on behalf of whom
Agent made the Revolving Loans, shall reimburse Agent for the amount of such
Revolving Loan made on its behalf, on a weekly (or more frequent, as determined
by Agent in its sole discretion) basis. Settlements shall continue to occur
during the continuance of a Default or an Event of Default and whether or not
the applicable conditions in Section 4 have been satisfied. On each such
settlement date, each such Lender shall pay to Agent, the net amount owing to
Agent in connection with such settlement, as determined by Agent, including
without limitation, amounts relating to Loans, fees, interest and other amounts
payable hereunder. If a Lender fails to pay the settlement amount due to Agent
on the settlement date specified by Agent, such Lender shall pay to Agent on
demand an amount equal to the product of (i) such amount times (ii)(A) the
Federal Funds Rate during the period from and including the third day after such
payment is required to be made, and (B) thereafter, the Interest Rate applicable
to Prime Rate Loans to the date on which such payment is immediately available
to Agent, times (iii) a fraction, the numerator of which is the number of days
that elapsed from and including such settlement date to the date such settlement
amount is

47

immediately available to Agent and the denominator is 360. In addition to the
foregoing, if the amount of any such Lender's Pro Rata Share of such Revolving
Loans is not made available to Agent on any settlement date, the Agent shall be
entitled to recover such amount from Borrowers upon demand with interest thereon
at the Interest Rate applicable to Prime Rate Loans.

6.7   Use of Proceeds.

Borrowers shall use the initial proceeds of the Loans provided by
Lenders to Borrower hereunder only for: (a) payments to each of the persons
listed in the disbursement direction letter furnished by Borrowers to Lenders on
or about the date hereof including with respect to payments to be made to the
Sellers under the Purchase Agreements, to refinance existing indebtedness of
Borrowers and pay the prepayment and defeasance costs in connection therewith
and for fees, costs and expenses relating thereto and (b) costs, expenses and
fees in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Financing Agreements. All other Loans made or
Letter of Credit Accommodations provided by Agent, Lenders and Reference Bank to
Borrower pursuant to the provisions hereof shall be used by Borrowers only for
general operating, working capital and other proper corporate purposes of
Borrowers not otherwise prohibited by the terms hereof. None of the proceeds
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin security or for the purposes of reducing or retiring any indebtedness
which was originally incurred to purchase or carry any margin security or for
any other purpose which might cause any of the Loans to be considered a "purpose
credit" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System, as amended.

6.8   Taxes.

(a) Any and all payments by or on behalf of a Borrower hereunder and
under any other Financing Agreement shall be made, in accordance with Section
6.4, free and clear of and without deduction for any and all Taxes, excluding
the following (collectively, "Excluded Taxes"): (i) income taxes imposed on the
net income or capital of Agent or any Lender (or any transferee or assignee of
such Lender, including any Participant, any such transferee or assignee being
referred to as a "Transferee") in the jurisdiction of Agent's or such Lender's
applicable lending office or jurisdiction of organization or any political
subdivision thereof, and (ii) franchise or similar taxes imposed on or
determined by reference to the net income of Agent or any Lender (or
Transferee), in each case by the United States of America or by the jurisdiction
under the laws of which such Lender (or Transferee) (A) is organized or any
political subdivision thereof, (B) has its applicable lending office located or
(C) is otherwise doing business. In addition, Borrowers agree to pay to the
relevant Governmental Authority in accordance with applicable law any Other
Taxes.

(b) If a Borrower shall be required by law to deduct or withhold in
respect of any Taxes or Other Taxes (other than Excluded Taxes) from or in
respect of any sum payable hereunder to Agent or any Lender, then:

(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) such
Lender (or Agent on behalf of such Lender or itself, as the case may be)
receives an amount equal to the sum it would have received had no such
deductions or withholdings been made;

48

(ii)   such Borrower shall make such deductions and withholdings;

(iii)  such Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law; and

(iv)   to the extent not paid to Agent and Lenders pursuant to
clause (i) above, Borrowers shall also pay to Agent or any Lender, at the time
interest is paid, all additional amounts which Agent or any Lender specifies as
necessary to preserve the after-tax yield such Lender would have received if
such Taxes or Other Taxes had not been imposed.

(c)  Within thirty (30) days after the date of any payment by a
Borrower of Taxes or Other Taxes, upon Agent's request, such Borrower shall
furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof, or other evidence of payment reasonably satisfactory to Agent.

(d)  Borrowers any will indemnify Agent and each Lender (or
Transferee) for the full amount of Taxes and Other Taxes paid by Agent or such
Lender (or Transferee, as the case may be). If Agent or such Lender (or
Transferee) receives a refund in respect of any Taxes or Other Taxes for which
Agent or such Lender (or Transferee) has received payment from a Borrower
hereunder, so long as no Default or Event of Default shall exist or have
occurred and be continuing and Excess Availability in excess of such refund
exists, Agent or such Lender (as the case may be) shall credit to the loan
account of the applicable Borrower the amount of such refund plus any interest
received (but only to the extent of indemnity payments made, or additional
amounts paid, by or on behalf of such Borrower under this Section 6.8 with
respect to the Taxes or Other Taxes giving rise to such refund). If a Lender (or
any Transferee) claims a tax credit in respect of any Taxes for which it has
been indemnified by a Borrower pursuant to this Section 6.8, such Lender will
apply the amount of the actual dollar benefit received by such Lender as a
result thereof, as reasonably calculated by such Lender and net of all expenses
related thereto, to the Loans made by such Lender. If Taxes or Other Taxes were
not correctly or legally asserted, Agent or such Lender shall, upon Parent's
request and at the expense of Parent, provide such documents to Parent in form
and substance satisfactory to Agent, as Parent may reasonably request, to enable
such Borrower to contest such Taxes or Other Taxes pursuant to appropriate
proceedings then available to such Borrower (so long as providing such documents
shall not, in the good faith determination of Agent or the Lender, have a
reasonable likelihood of resulting in any liability of Agent or such Lender for
which Agent has not established a Reserve). The indemnity provided for herein
shall survive the payment of the Obligations and the termination of this
Agreement. A certificate as to the amount of such payment or liability and
setting forth in reasonable detail the calculation and basis for such payment or
liability delivered to Parent by a Lender or by Agent on its own behalf or on
behalf of a Lender, shall be conclusive, absent manifest error.

(e)  Each Transferee of a US Lender or Agent that is not a United
States person within the meaning of Section 7701(a)(30) of the Code and that is
a US Lender or claims indemnification or additional amounts under this Section
6.8 (a "Non-U.S. Person") shall deliver to Parent two (2) copies of the
applicable United States Internal Revenue Service Form W-8 wherein such
Transferee claims entitlement to a complete exemption from U.S. federal income
withholding tax on all payments by or on behalf of Parent under this Agreement
and the other Financing Agreements. Such forms shall be delivered by any
Non-U.S. Person receiving

49

payments by or on behalf of Parent on or before the date it becomes a party to
this Agreement (or, in the case of a Transferee that is a Participant, on or
before the date such Participant becomes a Transferee hereunder) and on or
before the date, if any, such Non-U.S. Person changes its applicable lending
office by designating a different lending office (a "New Lending Office"). In
addition, a Non-U.S. Person shall upon written notice from Parent promptly
deliver such new forms as are required by the relevant Governmental Authority to
claim exemption from, or reduction in the rate of, U.S. Federal withholding tax
upon the obsolescence or invalidity of any form previously delivered by such
Non-U.S. Person. Each Lender and Agent that is a United States Person (other
than a Lender or Agent that is a corporation or otherwise exempt from United
States backup withholding Tax) shall deliver at the time(s) and in the manner(s)
if and to the extent such delivery is required under applicable law, to Parent
and Agent (as applicable), a properly completed and duly executed United States
Internal Revenue From W-9 or any successor form, certifying that such Person is
exempt from United States backup withholding Tax on payments made by Parent
hereunder. Notwithstanding any other provision of this Section 6.8(e), no
Non-U.S. Person, Agent or any Lender shall be required to deliver any form
pursuant to this Section 6.8(e) that such Non-U.S. Person, Agent or Lender is
not legally able to deliver.

(f)  Borrowers shall not be required to indemnify any Person or to
pay any additional amounts to any Person pursuant to subsections (b) or (d)
above to the extent that (i) the Tax was applicable on the date such Person
became a party to this Agreement (or, in the case of a Transferee that is a
Participant, on the date such Participant became a Transferee hereunder) or,
with respect to payments to a New Lending Office, the date such Person
designated such New Lending Office with respect to a Loan, provided, that, this
subsection (f) shall not apply (A) to any Transferee or New Lending Office that
becomes a Transferee or New Lending Office as a result of an assignment,
participation, transfer or designation made at the request or with the approval
of any Borrower, and (B) to the extent the indemnity payment or additional
amounts any Transferee, acting through a New Lending Office, would be entitled
to receive (without regard to this subsection (f)) do not exceed the indemnity
payment or additional amounts that the person making the assignment,
participation or transfer to such Transferee making the designation of such New
Lending Office, would have been entitled to receive in the absence of such
assignment, participation, transfer or designation; or (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such
Person to comply with the provisions of subsection (e) above or the gross
negligence or wilful misconduct of such Person as determined pursuant to a
final, non-appealable order of a court of competent jurisdiction.

(g)  The provisions of this Section 6.8 shall survive the termination
of this Agreement and the repayment of the Obligations.

SECTION 7. COLLATERAL REPORTING AND COLLATERAL COVENANTS.

7.1   Collateral Reporting.

(a)  Borrowers shall provide Agent (with, upon Agent's request,
sufficient copies for the Lenders) with the following documents in a form
satisfactory to Agent:

(i)  on a regular basis as required by Agent, a schedule of sales
made, credits issued and cash received;

50

(ii)   as soon as possible after the end of each month (but in any
event within ten (10) days after the end thereof), on a monthly
basis or more frequently as Agent may request, (A) agings of
accounts payable (and including information indicating the
status of payments to owners and lessors of the leased premises
of Borrower) and (B) agings of accounts receivable (together
with a reconciliation to the previous month's aging and general
ledger);

(iii)  upon Agent's request, (A) copies of customer statements and
credit memos, remittance advices and reports, and copies of
deposit slips and bank statements, (B) copies of shipping and
delivery documents, (C) copies of purchase orders, invoices
and delivery documents for Inventory and Equipment acquired by
Borrowers, and (D) copies of Material Contracts entered into
after the date hereof; and

(iv)   such other reports as to the Collateral as Agent or Majority
Lenders shall request from time to time.

(b)    If any of Borrowers' records or reports of the Collateral are
prepared or maintained by an accounting service, contractor, shipper or other
agent, each Borrower hereby irrevocably authorizes such service, contractor,
shipper or agent to deliver such records, reports, and related documents to
Agent and to follow Agent's instructions with respect to further services at any
time that an Event of Default exists or has occurred and is continuing.

7.2  Accounts Covenants.

(a)    Each Borrower shall notify Agent promptly of: (i) any material
delay in any Borrower's performance of any of its obligations to any account
debtor or the assertion of any claims, offsets, defenses or counterclaims by any
account debtor, or any disputes with account debtors, or any settlement,
adjustment or compromise thereof, (ii) all material adverse information relating
to the financial condition of any account debtor, and (iii) any event or
circumstance which, to any Borrower's knowledge would cause Agent to consider
any then existing Accounts as no longer constituting Eligible Accounts. No
credit, discount, allowance or extension or agreement for any of the foregoing
shall be granted to any account debtor without Agent's consent, except in the
ordinary course of Borrowers' business in accordance with practices and policies
previously disclosed in writing to Agent and except as set forth in the
schedules delivered to Agent pursuant to Section 7.1(a) above. So long as no
Event of Default exists or has occurred and is continuing, Borrowers shall
settle, adjust or compromise any claim, offset, counterclaim or dispute with any
account debtor. At any time that an Event of Default exists or has occurred and
is continuing, Agent shall, at its option, have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with account
debtors or grant any credits, discounts or allowances.

(b)    With respect to each Account: (i) the amounts shown on any
invoice delivered to Lender or schedule thereof delivered to Agent shall be true
and complete, (ii) no payments shall be made thereon except payments immediately
delivered to Lender pursuant to the terms of this Agreement, (iii) no credit,
discount, allowance or extension or agreement for any of the foregoing shall be
granted to any account debtor except as reported to Agent in accordance with
this Agreement and except for credits, discounts, allowances or extensions made

51

or given in the ordinary course of Borrowers' business in accordance with
practices and policies previously disclosed to Agent, (iv) there shall be no
setoffs, deductions, contras, defenses, counterclaims or disputes existing or
asserted with respect thereto except as reported to Lender in accordance with
the terms of this Agreement, and (v) none of the transactions giving rise
thereto will violate any applicable foreign, Federal, State, Provincial or local
laws or regulations, all documentation relating thereto will be legally
sufficient under such laws and regulations, and all such documentation will be
legally enforceable in accordance with its terms.

(c)  Agent shall have the right at any time or times, in Agent's name
or in the name of a nominee of Agent, to verify the validity, amount or any
other matter relating to any Account or other Collateral, by mail, telephone,
facsimile transmission or otherwise.

7.3  Power of Attorney. Each Borrower hereby irrevocably designates and
appoints Agent (and all persons designated by Agent) as such Borrower's true and
lawful attorney-in-fact, and authorizes Agent, in any Borrower's or Agent's
name, to: (a) at any time an Event of Default exists or has occurred and is
continuing (i) demand payment on Receivables or other Collateral, (ii) enforce
payment of Receivables by legal proceedings or otherwise, (iii) exercise all of
each Borrower's rights and remedies to collect any Receivable or other
Collateral, (iv) sell or assign any Receivable upon such terms, for such amount
and at such time or times as the Lender deems advisable, (v) settle, adjust,
compromise, extend or renew an Account, (vi) discharge and release any
Receivable, (vii) prepare, file and sign any Borrower's name on any proof of
claim in bankruptcy or other similar document against an account debtor or other
obligor in respect of any Receivables or other Collateral, (viii) notify the
post office authorities to change the address for delivery of remittances from
account debtors or other obligors in respect of Receivables or other proceeds of
Collateral to an address designated by Agent, and open and dispose of all mail
addressed to any Borrower and handle and store all mail relating to the
Collateral; and (ix) do all acts and things which are necessary, in Agent's
determination, to fulfill Borrowers' obligations under this Agreement and the
other Financing Agreements, and (b) at any time to (i) take control in any
manner of any item of payment in respect of Receivables or constituting
Collateral or otherwise received in or for deposit in the Blocked Accounts or
otherwise received by Agent, (ii) have access to any lockbox or postal box into
which remittances from account debtors or other obligors in respect of
Receivables or other proceeds of Collateral are sent or received, (iii) endorse
any Borrower's name upon any items of payment in respect of Receivables or
constituting Collateral or otherwise received by Lender and deposit the same in
Lender's account for application to the Obligations, (iv) endorse any Borrower's
name upon any chattel paper, document, instrument, invoice, or similar document
or agreement relating to any Receivable or any goods pertaining thereto or any
other Collateral, including any warehouse or other receipts, or bills of lading
and other negotiable or non-negotiable documents, (v) clear Inventory the
purchase of which was financed with Letter of Credit Accommodations through US
Customs or foreign export control authorities in any Borrower's name, Agent's
name or the name of Agent's designee, and to sign and deliver to customs
officials powers of attorney in any Borrower's name for such purpose, and to
complete in any Borrower's or Agent's name, any order, sale or transaction,
obtain the necessary documents in connection therewith and collect the proceeds
thereof, and (vi) sign any Borrower's name on any verification of Receivables
and notices thereof to account debtors or any secondary obligors or other
obligors in respect thereof. Each Borrower hereby releases Agent and their
respective officers, employees and designees from any liabilities arising from
any act or acts under this power of attorney and in furtherance thereof, whether
of omission or commission, except as a result of Agent's own gross negligence

52

or willful misconduct as determined pursuant to a final non-appealable order of
a court of competent jurisdiction.

7.4   Right to Cure. Agent may, at its option, (a) upon notice to
Borrowers, cure any default by any Borrower under any material agreement with a
third party that affects the Collateral, their value or the ability of Agent to
collect, sell or otherwise dispose of the Collateral or the rights and remedies
of Agent therein or the ability of Borrowers to perform their obligations
hereunder or under the other Financing Agreements, (b) pay or bond on appeal any
judgment entered against any Borrower, (c) discharge taxes, liens, security
interests or other encumbrances at any time levied on or existing with respect
to the Collateral, and (d) pay any amount, incur any expense or perform any act
which, in Agent's judgment, is necessary or appropriate to preserve, protect,
insure or maintain the Collateral and the rights of Agent with respect thereto.
Agent may add any amounts so expended to the Obligations and charge Borrowers'
account(s) therefor, such amounts to be repayable by Borrowers on demand. Agent
shall be under no obligation to effect such cure, payment or bonding and shall
not, by doing so, be deemed to have assumed any obligation or liability of any
Borrower. Any payment made or other action taken by Agent under this Section 7.4
shall be without prejudice to any right to assert an Event of Default hereunder
and to proceed accordingly.

7.5   Access to Premises. From time to time as requested by Agent, at the
cost and expense of Borrowers, (a) Agent, Lenders, or their respective designees
shall have complete access to all of Borrowers' premises during normal business
hours and after notice to Borrowers, or at any time and without notice to any
Borrower if an Event of Default exists or has occurred and is continuing, for
the purposes of inspecting, verifying and auditing the Collateral and all of
Borrowers' books and records, including the Records, and (b) Borrowers shall
promptly furnish to Agent and Lenders such copies of such books and records or
extracts therefrom as Agent or Lenders may request, and (c) Agent or its
designee may use during normal business hours such of Borrowers' personnel,
equipment, supplies and premises as may be reasonably necessary for the
foregoing and if an Event of Default exists or has occurred and is continuing
for the collection of Accounts and realization of other Collateral.

SECTION 8. REPRESENTATIONS AND WARRANTIES.

Each Borrower hereby represents and warrants to Agent and Lenders the
following (which shall survive the execution and delivery of this Agreement),
the truth and accuracy of which are a continuing condition of the making of
Loans and providing Letter of Credit Accommodations by Agent and Lenders to
Borrower:

8.1   Corporate Existence; Power and Authority. Each Borrower is a
corporation, limited liability company, limited partnership or business trust
duly organized and in good standing under the laws of its jurisdiction of
incorporation or organization and is duly qualified as a foreign corporation,
limited liability company, limited partnership or business trust and in good
standing in all states, provinces or other jurisdictions where the nature and
extent of the business transacted by it or the ownership of assets makes such
qualification necessary, except for those jurisdictions in which the failure to
so qualify would not have a material adverse effect on any Borrower's financial
condition, results of operation or business or the rights of Agent and Lenders
in or to any of the Collateral. The execution, delivery and performance of this
Agreement, the other Financing Agreements and the transactions contemplated
hereunder and

53

thereunder (a) are all within each Borrower's corporate, limited liability
company, partnership or trust powers, (b) have been duly authorized, (c) are not
in contravention of law or the terms of Borrower's certificate of incorporation,
certificate of formation or certificate of limited partnership, by-laws,
operating agreement, partnership agreement or declaration of trust, or other
organizational documentation, or any indenture, agreement or undertaking to
which any Borrower is a party or by which any Borrower or its property are
bound, and (d) will not result in the creation or imposition of, or require or
give rise to any obligation to grant, any lien, security interest, charge or
other encumbrance upon any property of any Borrower. This Agreement and the
other Financing Agreements constitute legal, valid and binding obligations of
each Borrower enforceable in accordance with their respective terms.

8.2   Name; State of Organization; Chief Executive Office; Collateral
Locations.

(a)    The exact legal name of each Borrower is as set forth on the
signature page of this Agreement and in the Information Certificates. No
Borrower has, during the past five years, been known by or used by any other
corporate or fictitious name or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired any
of its property or assets out of the ordinary course of business, except as set
forth in the Information Certificates.

(b)    Each Borrower is an organization of the type and organized in
the jurisdiction set forth in the Information Certificate. The Information
Certificates accurately set forth the organizational identification number of
each Borrower or accurately states that a Borrower has none and accurately sets
forth the federal employer identification number of each Borrower.

(c)    The chief executive office and mailing address of each
Borrower and each Borrower's Records concerning Accounts are located only at the
address identified as such in Schedule 8.2 to the appropriate Information
Certificate and its only other places of business and the only other locations
of Collateral, if any, are the addresses set forth in Schedule 8.2 to the
appropriate Information Certificate, subject to the right of Borrowers to
establish new locations in accordance with Section 9.2 below. The Information
Certificates correctly identify any of such locations which are not owned by
Borrowers and sets forth the owners and/or operators thereof.

8.3   Financial Statements; No Material Adverse Change. All financial
statements relating to Borrowers which have been or may hereafter be delivered
by Borrowers to Agent and/or Lenders have been prepared in accordance with GAAP
(except as to any interim financial statements, to the extent such statements
are subject to normal year-end adjustments and do not include any notes) and
fairly present the financial condition and the results of operation of Borrowers
as at the dates and for the periods set forth therein. Except as disclosed in
any interim financial statements furnished by Borrowers to Agent and Lenders
prior to the date of this Agreement, there has been no material adverse change
in the assets, liabilities, properties and condition, financial or otherwise, of
Borrowers, since the date of the most recent audited financial statements
furnished by Borrowers to Agent and Lenders prior to the date of this Agreement.

8.4   Priority of Liens; Title to Properties. The security interests,
hypothecs and liens granted to Agent under this Agreement and the other
Financing Agreements constitute valid and

54

perfected first priority liens and security interests and first ranking
hypothecs in and upon the Revolving Loan Priority Collateral and valid and
perfected second priority liens and security interests and second ranking
hypothecs in and upon the other Collateral subject only to the liens indicated
on Schedule 8.4 to the Information Certificates and the other liens permitted
under Section 9.8 hereof. Each Borrower has good and marketable fee simple title
to or valid leasehold interests in all of its Real Property and good, valid and
merchantable title to all of its other properties and assets subject to no
liens, mortgages, pledges, security interests, encumbrances or charges of any
kind, except those granted to Agent and such others as are specifically listed
on Schedule 8.4 to the Information Certificates or permitted under Section 9.8
hereof.

8.5   Tax Returns. Each Borrower has filed, or caused to be filed, in a
timely manner all tax returns, reports and declarations which are required to be
filed by it. All information in such tax returns, reports and declarations is
complete and accurate in all material respects. Each Borrower has paid or caused
to be paid all taxes due and payable or claimed due and payable in any
assessment received by it, except taxes the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to Borrowers and with respect to which adequate reserves have been set
aside on its books. Adequate provision has been made for the payment of all
accrued and unpaid Federal, State, Provincial, county, local, foreign and other
taxes whether or not yet due and payable and whether or not disputed.

8.6   Litigation. Except as set forth in Schedule 8.6 to the Information
Certificates, there is no present investigation by any Governmental Authority
pending, or to the best of any Borrower's knowledge threatened, against or
affecting any Borrower, its assets or business and there is no action, suit,
proceeding or claim by any Person pending, or to the best of any Borrower's
knowledge threatened, against any Borrower or its assets or goodwill, or against
or affecting any transactions contemplated by this Agreement, which if adversely
determined against any Borrower would result in any material adverse change in
the assets, business or prospects of any Borrower or would impair the ability of
any Borrower to perform its obligations hereunder or under any of the other
Financing Agreements to which it is a party or of Agent or Lenders to enforce
any Obligations or realize upon any Collateral.

8.7   Compliance with Other Agreements and Applicable Laws. No Borrower is
in default in any material respect under, or in violation in any material
respect of any of the terms of, any agreement, contract, instrument, lease or
other commitment to which it is a party or by which it or any of its assets are
bound and each Borrower is in compliance in all material respects with all
applicable provisions of laws, rules, regulations, licenses, permits, approvals
and orders of any foreign, Federal, State, Provincial or local Governmental
Authority.

8.8   Environmental Compliance.

Except as shown or reflected in the financial statements of Borrowers
previously furnished to Agent and Lenders and to be furnished to Agent and
Lenders under Section 9.6 or as set forth on Schedule 8.8 to the Information
Certificates, unless such matters would not have a material adverse effect upon
the business, assets or prospects of the Borrowers on a consolidated basis or on
the Collateral:

(a)  No Borrower or any Subsidiary has generated, used, stored,
treated, transported, manufactured, handled, produced or disposed of any
Hazardous Materials, on or off its premises (whether or not owned by it) in any
manner which at any time violates any

55

applicable Environmental Law or any license, permit, certificate, approval or
similar authorization thereunder and the operations of Borrowers and their
Subsidiaries comply in all material respects with all Environmental Laws and all
orders, licenses, permits, certificates, approvals and similar authorizations
thereunder.

(b)  There has been no investigation, proceeding, complaint, order,
directive, claim, citation or notice by any Governmental Authority or any other
person nor is any pending or to the best of Borrowers' knowledge threatened,
with respect to any non-compliance with or violation of the requirements of any
Environmental Law by Borrowers and their Subsidiaries or the release, spill or
discharge, threatened or actual, of any Hazardous Material at any properties at
which or from which Borrowers or their Subsidiaries has transported, stored or
disposed of any Hazardous Materials, and all transportation, handling,
processing and disposal of Hazardous Materials by Borrowers and their
Subsidiaries has been conducted in compliance with all applicable Environmental
Laws, and all laws relating to health or safety matters.

(c)  Borrowers and their Subsidiaries have no material liability
(contingent or otherwise) in connection with (i) a release, spill or discharge,
threatened or actual, of any Hazardous Materials, (ii) the generation, use,
storage, treatment, transportation, manufacture, handling, production,
processing or disposal of any Hazardous Materials or (iii) any service or
remediation performed by Borrowers or their Subsidiaries at any location.

(d)  Borrowers and their Subsidiaries have all licenses, permits,
certificates, approvals or similar authorizations required to be obtained or
filed in connection with the operations of Borrowers and their Subsidiaries
under any Environmental Law and, to the best knowledge of Borrowers, all of such
licenses, permits, certificates, approvals or similar authorizations are valid
and in full force and effect.

8.9  Employee Benefits.

(a)  Each Plan is in compliance with the applicable provisions of
ERISA, the Code and other federal or state law. Each Plan which is intended to
qualify under Section 401(a) of the Code has received a favorable determination
letter from the Internal Revenue Service and to the best of Borrowers'
knowledge, nothing has occurred which would cause the loss of such
qualification. Each Borrower and its ERISA Affiliates have made all required
contributions to any Plan subject to Section 412 of the Code, and no application
for a funding waiver or an extension of any amortization period pursuant to
Section 412 of the Code has been made with respect to any Plan.

(b)  There are no pending or to the best of Borrowers' knowledge,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan.

(c)  (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) the current value of each Plan's assets (determined in accordance
with the assumptions used for funding such Plan pursuant to Section 412 of the
Code) are not less than such Plan's liabilities under Section 4001(a)(16) of
ERISA; (iii) Borrowers and their ERISA Affiliates have not incurred and do not
reasonably expect to incur, any liability under Title IV of ERISA with respect
to any Plan (other than premiums due and not delinquent under Section 4007 of
ERISA);

56

(iv) Borrowers and their ERISA Affiliates have not incurred and do not
reasonably expect to incur, any liability (and no event has occurred which, with
the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multiemployer
Plan; and (v) Borrowers and their ERISA Affiliates have not engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.

(d)  With respect to any Canadian Pension Plan, if and to the extent
that any such Canadian Pension Plan exists or has not been terminated, (i) the
Canadian Pension Plans are duly registered under all applicable Federal and
Provincial pension benefits legislation, (ii) all obligations of any Borrower
(including fiduciary, funding, investment and administration obligations)
required to be performed in connection with the Canadian Pension Plans or the
funding agreements therefor have been performed in a timely fashion and there
are no outstanding disputes concerning the assets held pursuant to any such
funding agreement, (iii) all contributions or premiums required to be made by
any Borrower to the Canadian Pension Plans have been made in a timely fashion in
accordance with the terms of the Canadian Pension Plans and applicable laws and
regulations, (iv) all employee contributions to the Canadian Pension Plans
required to be made by way of authorized payroll deduction have been properly
withheld by any Borrower and fully paid into the Canadian Pension Plans in a
timely fashion, (v) all reports and disclosures relating to the Canadian Pension
Plans required by any applicable laws or regulations have been filed or
distributed in a timely fashion, (vi) there have been no improper withdrawals,
or applications of, the assets of any of the Pension Plans, (vii) no amount is
owing by any of the Canadian Pension Plans under the Income Tax Act (Canada) or
any provincial taxation statute, (viii) the Canadian Pension Plans are fully
funded both on an ongoing basis and on a solvency basis (using actuarial
assumptions and methods which are consistent with the valuations last filed with
the applicable governmental authorities and which are consistent with generally
accepted actuarial principles), and (ix) to the best of the knowledge of each
Borrower none of the Canadian Pension Plans is the subject of an investigation,
any other proceeding, an action or a claim and there exists no state of facts
which after notice or lapse of time or both could reasonably be expected to give
rise to any such proceeding, action or claim.

8.10 Bank Accounts. All of the deposit accounts, investment accounts or
other accounts in the name of or used by any Borrower maintained at any bank or
other financial institution are set forth in Schedule 8.10 to the Information
Certificates, subject to the right of Borrower to establish new accounts in
accordance with Section 5.2 hereof.

8.11 Intellectual Property. Each Borrower owns or licenses or otherwise has
the right to use all Intellectual Property necessary for the operation of its
business as presently conducted or proposed to be conducted. As of the date
hereof, no Borrower has any Intellectual Property registered, or subject to
pending applications, in the United States Patent and Trademark Office, the
Canadian Intellectual Property Office or any similar office or agency in the
United States, or Canada, any State or Province thereof, any political
subdivision thereof or in any other country, other than those described in
Schedule 8.11 to the Information Certificates hereto and has not granted any
licenses with respect thereto other than as set forth in Schedule 8.11 to the
Information Certificates. No event has occurred which permits or would permit
after notice or passage of time or both, the revocation, suspension or
termination of such rights. To the best of Borrowers' knowledge, no slogan or
other advertising device, product, process, method, substance or other
Intellectual Property or goods bearing or using any Intellectual Property
presently contemplated to be sold by or employed by any Borrower infringes any
patent,

57

trademark, servicemark, tradename, copyright, license or other Intellectual
Property owned by any other Person presently and no claim or litigation is
pending or threatened against or affecting any Borrower contesting its right to
sell or use any such Intellectual Property. Schedule 8.11 to the Information
Certificates sets forth all of the agreements or other arrangements of Borrowers
pursuant to which any Borrower has a license or other right to use any
trademarks, logos, designs, representations or other Intellectual Property owned
by another person as in effect on the date hereof and the dates of the
expiration of such agreements or other arrangements of any Borrower as in effect
on the date hereof (collectively, together with such agreements or other
arrangements as may be entered into by any Borrower after the date hereof,
collectively, the "License Agreements" and individually, a "License Agreement").
No trademark, servicemark or other Intellectual Property at any time used by any
Borrower which is owned by another person, or owned by any Borrower subject to
any security interest, lien, collateral assignment, pledge or other encumbrance
in favor of any person other than Lender, is affixed to any Inventory, except to
the extent permitted under the term of the License Agreements listed on Schedule
8.11 to the Information Certificates.

8.12 Subsidiaries; Affiliates; Capitalization; Solvency.

(a)  No Borrower has any direct or indirect Subsidiaries or Affiliates
and is engaged in any joint venture or partnership except as set forth in
Schedule 8.12 to the Information Certificates, subject to the right of Borrower
to form or acquire Subsidiaries in accordance with Section 9.10 hereof.

(b)  Borrowers are the record and beneficial owners of all of the
issued and outstanding shares of Capital Stock of the each of the Subsidiaries
listed on Schedule 8.12 to the Information Certificates as being owned by
Borrowers and there are no proxies, irrevocable or otherwise, with respect to
such shares and no equity securities of any of the Subsidiaries are or may
become required to be issued by reason of any options, warrants, rights to
subscribe to, calls or commitments of any kind or nature and there are no
contracts, commitments, understandings or arrangements by which any Subsidiary
is or may become bound to issue additional shares of it Capital Stock or
securities convertible into or exchangeable for such shares.

(c)  The issued and outstanding shares of Capital Stock of each
Borrower are directly and beneficially owned and held by the persons indicated
in the Information Certificates, and in each case all of such shares have been
duly authorized and are fully paid and non-assessable, free and clear of all
claims, liens, pledges and encumbrances of any kind, except as disclosed in
writing to Lender.

(d)  After giving effect to the Purchase Agreement, each Borrower is
Solvent and will continue to be Solvent after the creation of the Obligations,
the security interests of Agent and Lenders and the other transactions
contemplated hereunder, and after creation of the Term Debt, the security
interests and liens of Term Loan Agent, and Term Loan Lenders and other
transactions contemplated under the Term Loan Agreement.

8.13 Labor Disputes.

(a)  Set forth on Schedule 8.13 to the Information Certificates is a
list (including dates of termination) of all collective bargaining or similar
agreements between or

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applicable to any Borrower and any union, labor organization or other bargaining
agent in respect of the employees of any Borrower on the date hereof.

(b)    There is (i) no significant unfair labor practice complaint
pending against any Borrower or, to the best of Borrowers' knowledge, threatened
against any Borrower, before the National Labor Relations Board, (ii) no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is pending on the date hereof against
any Borrower or, to best of Borrowers' knowledge, threatened against any
Borrower, and (iii) no significant strike, labor dispute, slowdown or stoppage
is pending against any Borrower or, to the best of Borrowers' knowledge,
threatened against any Borrower.

8.14   Restrictions on Subsidiaries. Except for restrictions contained in
this Agreement or any other agreement with respect to Indebtedness of Borrowers
permitted hereunder as in effect on the date hereof, there are no contractual or
consensual restrictions on any Borrower or any of their Subsidiaries which
prohibit or otherwise restrict (a) the transfer of cash or other assets (i)
between any Borrower and any of their Subsidiaries or (ii) between any
Subsidiaries of Borrowers or (b) the ability of any Borrower or any of their
Subsidiaries to incur Indebtedness or grant security interests to Lender in the
Collateral.

8.15   Material Contracts. Schedule 8.15 to the Information Certificates
sets forth all Material Contracts to which any Borrower is a party or is bound
as of the date hereof. Borrowers have delivered true, correct and complete
copies of such Material Contracts to Agent on or before the date hereof.
Borrowers are not in breach of or in default under any Material Contract and
have not received any notice of the intention of any other party thereto to
terminate any Material Contract.

8.16   Payable Practices. Borrowers have not made any material change in
the historical accounts payable practices from those in effect immediately prior
to the date hereof.

8.17   Acquisition of Purchased Assets.

(a)    The Purchase Agreements and the transactions contemplated
thereunder have been duly executed, delivered and performed in accordance with
their terms by the respective parties thereto in all respects, including the
fulfillment (not merely the waiver, except as may be disclosed to Agent and
consented to in writing by Agent) of all conditions precedent set forth therein
and giving effect to the terms of the Purchase Agreements and Sales Order and
the assignments to be executed and delivered by Sellers (or any of their
affiliates or subsidiaries) thereunder, Borrowers acquired and have good and
marketable title to the Purchased Assets, free and clear of all claims, liens,
pledges and encumbrances of any kind, except as permitted hereunder.

(b)    All actions and proceedings, required by the Purchase
Agreements, applicable law or regulation (including, but not limited to,
compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as
amended) have been taken and the transactions required thereunder have been duly
and validly taken and consummated.

(c)    No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of the
transactions described in the Purchase Agreements and no governmental or other
action or proceeding has been threatened or

59

commenced, seeking any injunction, restraining order or other order which seeks
to void or otherwise modify the transactions described in the Purchase
Agreements.

(d)    The Sales Order is in full force and effect and has not
been reversed, stayed, modified, or amended, no appeal has been filed with
respect to the Sales Order within the time period specified by Rule 8002(a) of
the Federal Rules of Bankruptcy Procedure and Sellers and Borrowers have
performed their respective obligations under the Sales Order in all respects;

(e)    Borrowers have delivered, or caused to be delivered, to
Agent, true, correct and complete copies of the Sales Order, all proceedings
relating thereto, the Purchase Agreements and the Series C convertible preferred
stock.

8.18   Interdependent Businesses and Operations. Each of the operations
and businesses of each Borrower is interdependent with the other Borrowers and
each Borrower substantially relies on the other Borrowers in its operations and
business. Each Borrower will derive substantial direct and indirect benefits
from the Loans and Letter of Credit Accommodations made and to be made by Agent
and Lenders hereunder. Each Borrower's access to the financing provided
hereunder significantly enhances its own financial condition and business
prospects and the Borrowers acknowledge that the financing provided hereunder
would only be available on a joint and several basis among all the US Borrowers.

8.19   Accuracy and Completeness of Information. All information
furnished by or on behalf of Borrowers in writing to Agent and/or Lenders in
connection with this Agreement or any of the other Financing Agreements or any
transaction contemplated hereby or thereby, including all information on the
Information Certificates are true and correct in all material respects on the
date as of which such information is dated or certified and does not omit any
material fact necessary in order to make such information not misleading. No
event or circumstance has occurred which has had or could reasonably be expected
to have a material adverse affect on the business, assets or prospects of any
Borrower, which has not been fully and accurately disclosed to Agent and Lenders
in writing.

8.20   Survival of Warranties; Cumulative. All representations and
warranties contained in this Agreement or any of the other Financing Agreements
shall survive the execution and delivery of this Agreement and shall be deemed
to have been made again to Lender on the date of each additional borrowing or
other credit accommodation hereunder and shall be conclusively presumed to have
been relied on by Agent and Lenders regardless of any investigation made or
information possessed by Agent or Lenders. The representations and warranties
set forth herein shall be cumulative and in addition to any other
representations or warranties which Borrowers shall now or hereafter give, or
cause to be given, to Agent.

Section 9.    AFFIRMATIVE AND NEGATIVE COVENANTS

9.1    Maintenance of Existence.

(a)    Borrowers shall at all times preserve, renew and keep in
full, force and effect their corporate, limited liability company, partnership
or business trust, as the case may be, existence and all rights and franchises
with respect thereto and maintain in full force and effect all permits,
licenses, trademarks, tradenames, approvals, authorizations, leases and
contracts necessary to carry on the businesses as presently or proposed to be
conducted by Borrowers.

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(b)    No Borrower shall change its name unless each of the
following conditions is satisfied: (i) Agent shall have received not less than
thirty (30) days prior written notice from a Borrower of such proposed change in
its name, which notice shall accurately set forth the new name; and (ii) prior
to the filing thereof, Agent shall have received a copy of the proposed
amendment to the Certificate of Incorporation, Certificate of Formation or
Certificate of Limited Partnership, as the case may be, of such Borrower
providing for the name change and once the filing has been made, Agent shall
receive a copy of such amendment to the Certificate of Incorporation,
Certificate of Formation or Certificate of Limited Partnership, as the case may
be, of such Borrower certified by the Secretary of State of the jurisdiction of
incorporation or organization of such Borrower as soon as it is available.

(c)    No Borrower shall change its chief executive office or its
mailing address or organizational identification number (or if it does not have
one, shall not acquire one) unless Agent shall have received not less than
thirty (30) days' prior written notice from Borrowers of such proposed change,
which notice shall set forth such information with respect thereto as Agent may
require and Agent shall have received such agreements as Agent may reasonably
require in connection therewith. No Borrower shall change its type of
organization, jurisdiction of organization or other legal structure.

9.2    New Collateral Locations. Borrowers may only open any new location
within the continental United States or Canada provided Borrowers (a) give Agent
thirty (30) days prior written notice from Borrowers of the intended opening of
any such new location, and (b) execute and deliver, or causes to be executed and
delivered, to Agent such agreements, documents, and instruments as Agent may
deem necessary or desirable to protect its interests in the Collateral at such
location.

9.3    Compliance with Laws, Regulations, Etc.

(a)    Borrowers shall, and shall cause any Subsidiary to, at all
times, comply in all material respects with all laws, rules, regulations,
licenses, permits, approvals and orders applicable to it and duly observe all
requirements of any foreign, Federal, State, Provincial or local Governmental
Authority, including ERISA, the Code, the Occupational Safety and Health Act of
1970, as amended, the Fair Labor Standards Act of 1938, as amended, and all
statutes, rules, regulations, orders, permits and stipulations relating to
environmental pollution and employee health and safety, including all of the
Environmental Laws if the failure to so comply could result in the imposition of
material fines or penalties or result in the revocation or termination of any
material license, permit, order or approval of any Governmental Authority or
could otherwise materially and adversely affect the business, assets or
prospects of Borrowers on a consolidated basis.

(b)    Borrowers shall give written notice to Agent immediately
upon any Borrower's receipt of any notice of, or any Borrower's otherwise
obtaining knowledge of, any of the following which could result in the
imposition of material fines or penalties or the revocation or termination of
any material license, permit, order or approval of any Governmental Authority or
could otherwise materially and adversely affect the business, assets or
prospects of Borrowers on a consolidated basis, (i) the occurrence of any event
involving the release, spill or discharge, threatened or actual, of any
Hazardous Material or (ii) any investigation, proceeding, complaint, order,
directive, claims, citation or notice with respect to: (A) any non-compliance
with or

61

violation of any applicable Environmental Law by any Borrower or (B) the
release, spill or discharge, threatened or actual, of any Hazardous Material
other than in the ordinary course of business and other than as permitted under
any applicable Environmental Law. Copies of all environmental surveys, audits,
assessments, feasibility studies and results of remedial investigations shall be
promptly furnished, or caused to be furnished, by Borrowers to Agent. Borrowers
shall take prompt and appropriate action to respond to any non-compliance with
any of the Environmental Laws and shall regularly report to Agent on such
response.

(c)    Without limiting the generality of the foregoing, whenever
Agent reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of Borrowers in order to avoid any material
non-compliance, with any Environmental Law, Borrowers shall, at Agent's request
and Borrowers' expense: (i) cause an independent environmental engineer
acceptable to Agent to conduct such tests of the site where Borrowers'
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to Agent a report as
to such non-compliance setting forth the results of such tests, a proposed plan
for responding to any environmental problems described therein, and an estimate
of the costs thereof, and (ii) provide to Agent a supplemental report of such
engineer whenever the scope of such non-compliance, or Borrowers' response
thereto or the estimated costs thereof, shall change in any material respect.

(d)    Borrowers shall indemnify and hold harmless Agent, each
Lender, and each of their respective directors, officers, employees, agents,
invitees, representatives, successors and assigns, from and against any and all
losses, claims, damages, liabilities, costs, and expenses (including attorneys'
fees and legal expenses) directly or indirectly arising out of or attributable
to the use, generation, manufacture, reproduction, storage, release, threatened
release, spill, discharge, disposal or presence of a Hazardous Material,
including the costs of any required or necessary repair, cleanup or other
remedial work with respect to any property of Borrowers and the preparation and
implementation of any closure, remedial or other required plans. All
representations, warranties, covenants and indemnifications in this Section 9.3
shall survive the payment of the Obligations and the termination or non-renewal
of this Agreement.

9.4    Payment of Taxes and Claims. Borrowers shall, and shall cause any
Subsidiary to, duly pay and discharge all taxes, assessments, contributions and
governmental charges upon or against it or its properties or assets, except for
taxes the validity of which are being contested in good faith by appropriate
proceedings diligently pursued and available to Borrowers or such Subsidiary, as
the case may be, and with respect to which adequate reserves have been set aside
on its books. Borrowers shall be liable for any tax or penalties withheld from
or imposed on Agent or any Lender as a result of the financing arrangements
provided for herein and Borrowers agree to indemnify and hold Agent and each
Lender harmless with respect to the foregoing, and to repay to Agent and each
Lender on demand the amount thereof, and until paid by Borrowers such amount
shall be added and deemed part of the Loans. The foregoing indemnity shall
survive the payment of the Obligations and the termination or non-renewal of
this Agreement.

9.5    Insurance. Borrowers shall, and shall cause any Subsidiary to, at
all times, maintain with financially sound and reputable insurers insurance with
respect to the Collateral against loss or damage and all other insurance of the
kinds and in the amounts customarily insured against or carried by corporations
of established reputation engaged in the same or similar businesses and
similarly situated. Said policies of insurance shall be satisfactory to

62

Agent as to form, amount and insurer. Borrowers shall furnish certificates,
policies or endorsements to Agent as Agent shall require as proof of such
insurance, and, if Borrowers fail to do so, Agent is authorized, but not
required, to obtain such insurance at the expense of Borrowers. All policies
shall provide for at least thirty (30) days prior written notice to Agent of any
cancellation or reduction of coverage and that Agent may act as attorney for
Borrowers in obtaining, and at any time a Default or an Event of Default exists
or has occurred and is continuing, adjusting, settling, amending and canceling
such insurance. Borrowers shall cause Agent to be named as a loss payee and an
additional insured (but without any liability for any premiums) under such
insurance policies and Borrowers shall obtain non-contributory lender's loss
payable endorsements to all insurance policies in form and substance
satisfactory to Agent. Such lender's loss payable endorsements shall specify
that the proceeds of such insurance shall be payable to Agent as its interests
may appear and further specify that Agent shall be paid regardless of any act or
omission by Borrower or any of its Affiliates. At its option, Agent may apply
any insurance proceeds received by Agent at any time to the cost of repairs or
replacement of Collateral and/or to payment of the Obligations, whether or not
then due, in any order and in such manner as Agent may determine or hold such
proceeds as cash collateral for the Obligations.

9.6    Financial Statements and Other Information.

(a)    Borrowers shall, and shall cause any Subsidiary to, keep
proper books and records in which true and complete entries shall be made of all
dealings or transactions of or in relation to the Collateral and the business of
Borrowers and their Subsidiaries in accordance with GAAP. Borrowers shall
promptly furnish to Agent and Lenders all such financial and other information
as Agent shall reasonably request relating to the Collateral and the assets,
business and operations of Borrowers, and to notify the auditors and accountants
of Borrower that Agent is authorized to obtain such information directly from
them. Without limiting the foregoing, Borrowers shall furnish or cause to be
furnished to Agent and each Lender, the following: (i) within thirty (30) days
after the end of each fiscal month, monthly unaudited consolidated financial
statements (including in each case balance sheets, statements of income and
loss, statements of cash flow, and statements of shareholders' equity), all in
reasonable detail, fairly presenting the financial position and the results of
the operations of Parent and its Subsidiaries as of the end of and through such
fiscal month, certified to be correct by the chief financial officer of Parent,
subject to normal year-end adjustments and accompanied by a compliance
certificate substantially in the form of Exhibit B hereto, along with a schedule
in form reasonably satisfactory to Agent of the calculations used in
determining, as of the end of such month, whether Parent was in compliance with
the covenants set forth in Sections 9.17, and 9.18 of this Agreement for such
month, (ii) within forty-five (45) days after the end of each fiscal quarter,
quarterly unaudited consolidated financial statements (including in each case
balance sheets, statements of income and loss, statements of cash flow, and
statements of shareholders' equity), all in reasonable detail, fairly presenting
the financial position and the results of operations of Parent and its
Subsidiaries as of the end of and through such fiscal quarter, certified to be
correct by the chief financial officer of Parent, subject to normal year-end
adjustments; and (iii) within ninety (90) days after the end of each fiscal
year, audited consolidated financial statements of Parent and its Subsidiaries
(including in each case balance sheets, statements of income and loss,
statements of cash flow and statements of shareholders' equity), and the
accompanying notes thereto, all in reasonable detail, fairly presenting the
financial position and the results of the operations of Parent and its
Subsidiaries as of the end of and for such fiscal year, together with

63

the unqualified opinion of independent certified public accountants, which
accountants shall be an independent accounting firm selected by Parent and
reasonably acceptable to Agent, that such financial statements have been
prepared in accordance with GAAP, and present fairly the results of operations
and financial condition of Parent, and its Subsidiaries as of the end of and for
the fiscal year then ended.

(b)    Borrowers shall promptly notify Agent in writing of the
details of (i) any loss, damage, investigation, action, suit, proceeding or
claim relating to the Collateral or any other property which is security for the
Obligations or which would result in any material adverse change in any
Borrower's business, properties, assets, goodwill or condition, financial or
otherwise, (ii) any Material Contract of any Borrower being terminated or
amended or any new Material Contract entered into (in which event Borrowers
shall provide Agent with a copy of such Material Contract), (iii) any order,
judgment or decree in excess of $500,000 in any one case or in the aggregate
shall have been entered against any Borrower or any of its properties or assets,
(iv) any notification of violation of laws or regulations received by any
Borrower, (v) any ERISA Event, and (vi) the occurrence of any Default or Event
of Default.

(c)    Borrowers shall promptly after the sending or filing
thereof furnish or cause to be furnished to Lender copies of all reports which
Parent sends to its stockholders generally and copies of all reports and
registration statements which Parent files with the Securities and Exchange
Commission, any national securities exchange or the National Association of
Securities Dealers, Inc.

(d)    Borrowers shall furnish or cause to be furnished to Agent
and Lenders such budgets, forecasts, projections and other information
respecting the Collateral and the business of Borrowers, as Agent may, from time
to time, reasonably request. Agent and each Lender are hereby authorized to
deliver a copy of any financial statement or any other information relating to
the business of Borrowers to any court or other Governmental Authority or to any
participant or assignee or prospective participant or assignee of any Lender.
Borrowers hereby irrevocably authorize and direct all accountants or auditors to
deliver to Agent and Lenders, at Borrowers' expense, copies of the financial
statements of Borrowers and any reports or management letters prepared by such
accountants or auditors on behalf of Borrowers and to disclose to Agent and to
each Lender such information as they may have regarding the business of
Borrowers. Any documents, schedules, invoices or other papers delivered to Agent
and to each Lender may be destroyed or otherwise disposed of by Agent and
Lenders one (1) year after the same are delivered, except as otherwise
designated by Borrowers to Agent and Lenders in writing.

9.7    Sale of Assets, Consolidation, Merger, Dissolution, Etc. Borrowers
shall not, and shall not permit any Subsidiary to (and Agent and Lenders do not
authorize any Borrower to), directly or indirectly,

(a)    merge into or consolidate or amalgamate with any other
Person or permit any other Person to merge into or consolidate with it (except
that any Borrower (other than the Parent) may be merged into, consolidated with,
or amalgamated with any other Borrower and any wholly-owned Subsidiary of any
Borrower may be merged into such Borrower); or

(b)    sell, assign, lease, transfer, abandon or otherwise dispose
of any Capital Stock or Indebtedness to any other Person or any of its assets to
any other Person, except for (i)

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sales of Inventory in the ordinary course of business, (ii) the disposition of
Equipment as permitted under the Term Loan Agreement, and (iii) the issuance and
sale by Parent of Capital Stock of Parent after the date hereof; provided, that,
(A) Agent shall have received not less than ten (10) Business Days prior written
notice of such issuance and sale by Parent, which notice shall specify the
parties to whom such shares are to be sold, the terms of such sale, the total
amount which it is anticipated will be realized from the issuance and sale of
such stock and the net cash proceeds which it is anticipated will be received by
Borrower from such sale, (B) Parent shall not be required to pay any cash
dividends or repurchase or redeem such Capital Stock or make any other payments
in respect thereof, (C) the terms of such Capital Stock, and the terms and
conditions of the purchase and sale thereof, shall not include any terms that
include any limitation on the right of Parent or any other Borrower to request
or receive Loans or Letter of Credit Accommodations or the right of Parent or
any other Borrower to amend or modify any of the terms and conditions of this
Agreement or any of the other Financing Agreements or otherwise in any way
relate to or affect the arrangements of Borrowers with Agent or Lenders or are
more restrictive or burdensome to Borrowers than the terms of any Capital Stock
in effect on the date hereof, and (D) as of the date of such issuance and sale
and after giving effect thereto, no Default or Event of Default shall exist or
have occurred;

(c)    wind up, liquidate or dissolve (except in the case of the
Inactive Subsidiaries); or

(d)    agree to do any of the foregoing.

9.8    Encumbrances. Borrowers shall not, and shall not permit any
Subsidiary to, create, incur, assume, suffer or permit to exist any security
interest, mortgage, pledge, lien, charge or other encumbrance of any nature
whatsoever on any of its assets or properties, including the Collateral, except:
(a) the security interests, hypothecs and liens of Agent; (b) liens securing the
payment of taxes, either not yet overdue or the validity of which are being
contested in good faith by appropriate proceedings diligently pursued and
available to Borrowers or any Subsidiary, as the case may be and with respect to
which adequate reserves have been set aside on its books; (c) non-consensual
statutory liens (other than liens securing the payment of taxes) arising in the
ordinary course of Borrowers' or such Subsidiary's business to the extent: (i)
such liens secure Indebtedness which is not overdue or (ii) such liens secure
Indebtedness relating to claims or liabilities which are fully insured and being
defended at the sole cost and expense and at the sole risk of the insurer or
being contested in good faith by appropriate proceedings diligently pursued and
available to Borrowers or any Subsidiary, in each case prior to the commencement
of foreclosure or other similar proceedings and with respect to which adequate
reserves have been set aside on its books; (d) zoning restrictions, easements,
licenses, covenants and other restrictions affecting the use of Real Property
which do not interfere in any material respect with the use of such Real
Property or ordinary conduct of the business of Borrowers or any Subsidiary as
presently conducted thereon or materially impair the value of the Real Property
which may be subject thereto; (e) purchase money security interests in Equipment
(including Capital Leases) and purchase money mortgages on Real Property to
secure Indebtedness permitted under Section 9.9(b) hereof; (f) security
interests and liens in favor of the Term Loan Agent under the Term Loan
Agreement, or of the L/C Issuer in the cash and Cash Equivalents maintained in a
blocked deposit account maintained at the L/C Issuer under the Cash Collateral
Control Agreement (as those terms are defined in the Term Loan Agreement as in

65

effect on the date hereof); and (g) the security interests and liens set forth
on Schedule 8.4 to the Information Certificates.

9.9    Indebtedness. Borrowers shall not, and shall not permit any
Subsidiary to, incur, create, assume, become or be liable in any manner with
respect to, suffer or permit to exist, any Indebtedness or guarantee, assume,
endorse, or otherwise become responsible for (directly or indirectly) the
performance, dividends or other obligations of any Person, except:

(a)    the Obligations;

(b)    purchase money Indebtedness (including Capital Leases)
arising after the date hereof to the extent secured by purchase money security
interests in Equipment (including Capital Leases) and purchase money mortgages
on Real Property not to exceed $10,000,000 in the aggregate at any time
outstanding so long as such security interests and mortgages do not apply to any
property of Borrowers other than the Equipment or Real Property so acquired, and
the Indebtedness secured thereby does not exceed the cost of the Equipment or
Real Property so acquired, as the case may be;

(c)    guarantees by any Subsidiaries of Borrowers of the
Obligations in favor of Agent and Lenders;

(d)    unsecured Indebtedness among the Borrowers incurred in the
ordinary course of business which Indebtedness is hereby subordinated to the
prior indefeasible payment in full in cash of the Obligations;

(e)    Indebtedness of Borrowers under interest swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
exchange agreements and similar contractual agreements entered into for the
purpose of protecting a Person against fluctuations in interest rates; provided,
that, such arrangements are with banks or other financial institutions that have
combined capital and surplus and undivided profits of not less than $250,000,000
and are not for speculative purposes and such Indebtedness shall be unsecured;

(f)    lease obligations or purchase money indebtedness (including
capital leases) to the extent not incurred or secured by liens (including
capital leases) in violation of any other provision of this Agreement; provided,
that, (i) Borrowers may only make regularly scheduled payments of principal and
interest in respect of such indebtedness in accordance with the terms of the
agreement or instrument evidencing or giving rise to such indebtedness as in
effect on the date hereof, (ii) Borrowers shall not, directly or indirectly, (A)
amend, modify, alter or change the terms of such indebtedness or any agreement,
document or instrument related thereto as in effect on the date hereof, or (B)
redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set
aside or otherwise deposit or invest any sums for such purpose (except as
otherwise permitted in this Agreement), and (iii) Borrowers shall furnish to
Lender all notices or demands in connection with such indebtedness either
received by any Borrower or on its behalf, promptly after the receipt thereof,
or sent by any Borrower or on its behalf, concurrently with the sending thereof,
as the case may be;

(g)    the Term Debt and guaranties thereof; provided that (i)
Borrowers shall not, directly or indirectly, (A) amend, modify, alter or change
the terms of such indebtedness or any agreement, document or instrument related
thereto as in effect on the date hereof, or (B)

66

redeem, retire, defease, purchase or otherwise acquire Term Debt, or set aside
or otherwise deposit or invest any sums for such purpose, and (ii) Borrowers
shall furnish to Agent all notices or demands in connection with Term Debt
either received by any Borrower or on its behalf, promptly after the receipt
thereof, or sent by any Borrower or on its behalf, concurrently with the sending
thereof, as the case may be;

(h)    unsecured Indebtedness of Borrowers arising after the date
hereof to any third person (other than Indebtedness otherwise permitted under
this Section 9.9), provided, that, each of the following conditions is satisfied
as determined by Agent: (i) such Indebtedness shall be on terms and conditions
acceptable to Agent and shall be subject and subordinate in right of payment to
the right of Agent and Lenders to receive the prior indefeasible payment and
satisfaction in full payment of all of the Obligations pursuant to the terms of
an intercreditor agreement between Agent and such third party, in form and
substance satisfactory to Agent, (ii) Agent shall have received not less than
ten (10) days prior written notice of the intention of any Borrower to incur
such Indebtedness, which notice shall set forth in reasonable detail
satisfactory to Agent the amount of such Indebtedness, the person or persons to
whom such Indebtedness will be owed, the interest rate, the schedule of
repayments and maturity date with respect hereto and such other information as
Agent may reasonably request with respect thereto, (iii) Agent shall have
received true, correct and complete copies of all agreements, documents and
instruments evidencing or otherwise related to such Indebtedness, (iv) on and
before the date of incurring such Indebtedness and after giving effect thereto,
no Default or Event of Default shall exist or have occurred, (v) Borrowers shall
not, directly or indirectly, (A) amend, modify, alter or change the terms of
such Indebtedness or any agreement, document or instrument related thereto,
except, that, Borrowers may, after prior written notice to Agent, amend, modify,
alter or change the terms thereof so as to extend the maturity thereof, or defer
the timing of any payments in respect thereof, or to forgive or cancel any
portion of such Indebtedness (other than pursuant to payments thereof), or to
reduce the interest rate or any fees in connection therewith, or (B) redeem,
retire, defease, purchase or otherwise acquire such Indebtedness (except
pursuant to regularly scheduled payments permitted herein), or set aside or
otherwise deposit or invest any sums for such purpose, and (vi) Borrowers shall
furnish to Agent all notices or demands in connection with such Indebtedness
either received by any Borrower or on its behalf promptly after the receipt
thereof, or sent by any Borrower or on its behalf concurrently with the sending
thereof, as the case may be;

(i)    the reimbursement obligations of the Borrowers to the L/C
Issuer under the Letter of Credit Facility, Reimbursement and Security Agreement
as in effect on the date of this Agreement between the Parent and the L/C Issuer
(as that term is defined under the Term Loan Agreement as in effect on the date
hereof), (i) provided, that, Borrowers shall provide to Agent true, correct, and
complete copies of such agreement and all other agreements, documents, and
instruments entered into in connection therewith and (ii) Borrowers shall not,
directly or indirectly, (A) amend, modify, alter or change the terms of such
Indebtedness or any agreement, document or instrument related thereto as in
effect on the date hereof except, that, Borrowers may, after prior written
notice to Lender, amend, modify, alter or change the terms thereof so as to
extend the maturity thereof, or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness (other than
pursuant to payments thereof), or to reduce the interest rate or any fees in
connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose; and

67

(j)    the Indebtedness set forth on Schedule 9.9 to the
Information Certificates; provided, that, (i) Borrowers may only make regularly
scheduled payments of principal and interest in respect of such Indebtedness in
accordance with the terms of the agreement or instrument evidencing or giving
rise to such Indebtedness as in effect on the date hereof, (ii) Borrowers shall
not, directly or indirectly, (A) amend, modify, alter or change the terms of
such Indebtedness or any agreement, document or instrument related thereto as in
effect on the date hereof except, that, Borrowers may, after prior written
notice to Lender, amend, modify, alter or change the terms thereof so as to
extend the maturity thereof, or defer the timing of any payments in respect
thereof, or to forgive or cancel any portion of such Indebtedness (other than
pursuant to payments thereof), or to reduce the interest rate or any fees in
connection therewith, or (B) redeem, retire, defease, purchase or otherwise
acquire such Indebtedness, or set aside or otherwise deposit or invest any sums
for such purpose, and (iii) Borrowers shall furnish to Agent all notices or
demands in connection with such Indebtedness either received by any Borrower or
on its behalf, promptly after the receipt thereof, or sent by any Borrower or on
its behalf, concurrently with the sending thereof, as the case may be.

9.10   Loans, Investments, Etc. Borrowers shall not, and shall not permit
any Subsidiary to, directly or indirectly, make, or suffer or permit to exist,
any loans or advance money or property to any person, or any investment in (by
capital contribution, dividend or otherwise) or purchase or repurchase the
Capital Stock or Indebtedness or all or a substantial part of the assets or
property of any person, or form or acquire any Subsidiaries, or agree to do any
of the foregoing, except:

(a)    the endorsement of instruments for collection or deposit in
the ordinary course of business;

(b)    investments in cash or Cash Equivalents, provided, that,
(i) no Revolving Loans are then outstanding and (ii) the terms and conditions of
Section 5.2 hereof shall have been satisfied with respect to the deposit account
or investment account in which such cash or Cash Equivalents are held;

(c)    (A) the existing equity investments of Borrowers as of the
date hereof in its Subsidiaries, provided, that, Borrowers shall have no
obligation to make any other investment in, or loans to, or other payments in
respect of, any such Subsidiaries, and (B) investments in the ordinary course of
business by the Parent or any other Borrower in or to its respective
wholly-owned Subsidiaries organized outside of the United States, or provided
that the aggregate amount of all such capital contributions, investments and
other amounts paid by any Borrower to any such Subsidiaries organized outside of
the United States (exclusive of (A) investments made as part of the Acquisition
or (B) incurred in connection with arranging financial assurances required under
applicable Environmental Laws) shall not exceed $5,000,000 in the case of
Subsidiaries organized under the laws of a Canadian province, $500,000 in the
case of any other Subsidiary organized outside of the United States, in each
case at any time outstanding;

(d)    equity investments of Borrowers in any wholly-owned
Subsidiary incorporated under the laws of any State of the United States of
America formed or acquired after the date hereof, provided, that, (i) promptly
upon such formation or acquisition, Borrowers shall cause any such Subsidiary to
execute and deliver to Agent, in form and substance satisfactory to Agent, (A)
an absolute and unconditional guarantee of payment of the

68

Obligations, (B) a security agreement granting to Agent a first security
interest and lien (except as otherwise consented to in writing by Agent) upon
all of the assets of such Subsidiary, and (C) such other agreements, documents
and instruments as Agent may require, including, but not limited to, supplements
and amendments hereto and other loan agreements or instruments evidencing
Indebtedness of such new Subsidiary to Agent and Lenders, (ii) promptly upon
Agent's request: (A) Borrowers shall execute and deliver to Agent, in form and
substance satisfactory to Agent, a pledge and security agreement granting to
Agent a first pledge of and lien on all of the issued and outstanding shares of
Capital Stock of such Subsidiary, and (B) Borrowers shall deliver the original
stock certificates evidencing such shares of Capital Stock (or such other
evidence as may be issued in the case of a limited liability company or other
entity) together with stock powers with respect thereto duly executed in blank
(or the equivalent thereof in the case of a limited liability company), (iii) as
of the date of any payment in respect of such investment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred, and (iv)
in no event shall the aggregate amount of all capital contributions, investments
or other amounts paid by any Borrower to any Subsidiary formed or acquired after
the date hereof or to any other person for or otherwise in connection with the
formation or acquisition thereof exceed $1,000,000;

(e)  stock or obligations issued to Borrowers by any Person (or the
representative of such Person) in respect of Indebtedness of such Person owing
to Borrowers in connection with the insolvency, bankruptcy, receivership or
reorganization of such Person or a composition or readjustment of the debts of
such Person; provided, that, the original of any such stock or instrument
evidencing such obligations shall be promptly delivered to Agent, upon Agent's
request, together with such stock power, assignment or endorsement by Borrowers
as Agent may request;

(f)  of account debtors to Borrowers arising from Accounts which are
past due evidenced by a promissory note made by such account debtor payable to
Borrowers; provided, that, promptly upon the receipt of the original of any such
promissory note by Borrowers, such promissory note shall be endorsed to the
order of Agent by Borrowers and promptly delivered to Agent as so endorsed; and

(g)  the loans and advances set forth on Schedule 9.10 to the
Information Certificates; provided, that, as to such loans and advances, (i)
Borrowers shall not, directly or indirectly, amend, modify, alter or change the
terms of such loans and advances or any agreement, document or instrument
related thereto, and (ii) Borrowers shall furnish to Agent all notices or
demands in connection with such loans and advances either received by any
Borrower or on its behalf, promptly after the receipt thereof, or sent by any
Borrower or on its behalf, concurrently with the sending thereof, as the case
may be.

9.11 Dividends and Redemptions. Borrowers shall not, directly or
indirectly, declare or pay any dividends on account of any shares of class of
Capital Stock of any Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of Capital Stock
(or set aside or otherwise deposit or invest any sums for such purpose) for any
consideration or apply or set apart any sum, or make any other distribution (by
reduction of capital or otherwise) in respect of any such shares or agree to do
any of the foregoing, except in any case in the form of shares of Capital Stock
consisting of common stock; provided however, that (a) any Borrower

69

may pay dividends to the Parent, (b) any Subsidiary of any Borrower may pay
dividends to such Borrower, and (c) the Parent may pay cash dividends at an
annual rate of $4.00 per share on its 112,000 currently outstanding shares of
Series B convertible preferred stock and any dividends required or permitted to
be paid in cash on the shares of its Series C convertible preferred stock
described in Section 4.1(o), provided that, in the case of dividends authorized
by clauses (a), (b) and (c) above, no such payment shall be made if an Event of
Default shall have occurred and be continuing or would result from the making of
such payment, and in the case of (d) above, no such payment shall be made if,
immediately before or after giving effect to any such payment, the Excess
Availability shall be less than $30,000,000.

9.12 Transactions with Affiliates. Borrowers shall not, directly or
indirectly, (a) purchase, acquire or lease any property from, or sell, transfer
or lease any property to, any officer, director, agent or other person
affiliated with any Borrower, except in the ordinary course of and pursuant to
the reasonable requirements of any Borrower's business and upon fair and
reasonable terms no less favorable to such Borrower than such Borrower would
obtain in a comparable arm's length transaction with an unaffiliated person, or
(b) make any payments of management, consulting or other fees for management or
similar services, or of any Indebtedness owing to any officer, employee,
shareholder, director or other Affiliate of any Borrower except reasonable
compensation to officers, employees and directors for services rendered to
Borrowers in the ordinary course of business. 9.13 Compliance with ERISA.

(a)  Borrowers shall and shall cause each of their ERISA Affiliates
to: (i) maintain each Plan (other than a Multiemployer Plan) in compliance in
all material respects with the applicable provisions of ERISA, the Code and
other Federal and State law; (ii) cause each Plan which is qualified under
Section 401(a) of the Code to maintain such qualification; (iii) not terminate
any of such Plans so as to incur any liability to the Pension Benefit Guaranty
Corporation; (iv) not allow or suffer to exist any prohibited transaction
involving any of such Plans or any trust created thereunder which would subject
Borrower or such ERISA Affiliate to a tax or penalty or other liability on
prohibited transactions imposed under Section 4975 of the Code or ERISA; (v)
make all required contributions to any Plan which it is obligated to pay under
Section 302 of ERISA, Section 412 of the Code or the terms of such Plan; (vi)
not allow or suffer to exist any accumulated funding deficiency, whether or not
waived, with respect to any such Plan; or (vii) not allow or suffer to exist any
occurrence of a reportable event or any other event or condition which presents
a material risk of termination by the Pension Benefit Guaranty Corporation of
any such Plan that is a single employer plan, which termination could result in
any liability to the Pension Benefit Guaranty Corporation.

(b)  Borrowers shall cause the Canadian Pension Plan to be
administered in accordance with the requirements of the applicable pension plan
texts, funding agreements, the Income Tax Act (Canada) and applicable provincial
pension benefits legislation. Upon Agent's request, Borrowers shall use their
best efforts to deliver to Agent an undertaking of the funding agent for the
Canadian Pension Plan stating that the funding agent will notify Agent within
seven (7) days of the failure of any Borrower to make any required contribution
to the Canadian Pension Plan. Borrowers shall not accept payment of any amount
from the Canadian Pension Plan (other than amounts on account of expenses
reasonably incurred in connection with the operations of such Canadian Pension
Plan) without the prior written consent of Agent. Without

70

the prior written consent of Agent, Borrowers shall not terminate, or cause to
be terminated, the Canadian Pension Plan, if such plan would have a solvency
deficiency on termination. Borrowers shall promptly provide Agent with any
documentation relating to the Canadian Pension Plan as Agent may reasonably
request. Borrowers shall notify Agent within thirty (30) days of (i) a material
increase in the liabilities of the Canadian Pension Plan, (ii) the establishment
of a new registered pension plan, (iii) commencing payment of contributions to
the Canadian Pension Plan to which any Borrower had not previously been
contributing.

9.14 End of Fiscal Years: Fiscal Quarters. Each Borrower shall, for
financial reporting purposes, cause its, and each of its Subsidiaries' (a)
fiscal years to end on December 31st of each year and (b) fiscal quarters to end
on March 31st, June 30th, September 30th and December 31st of each year.

9.15 Change in Business. Borrowers shall not engage in any business other
than the business of Borrowers on the date hereof and any business reasonably
related, ancillary or complimentary to the business in which Borrowers are
engaged on the date hereof.

9.16 Limitation of Restrictions Affecting Subsidiaries. Borrowers shall
not, directly, or indirectly, create or otherwise cause or suffer to exist any
encumbrance or restriction which prohibits or limits the ability of any
Subsidiary of any Borrower to (a) pay dividends or make other distributions or
pay any Indebtedness owed to Borrowers or any Subsidiary of any Borrower; (b)
make loans or advances to any Borrower or any Subsidiary of Borrower; (c)
transfer any of its properties or assets to any Borrower or any Subsidiary of
any Borrower; or (d) create, incur, assume or suffer to exist any lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than encumbrances and restrictions arising under (i) applicable law, (ii)
this Agreement, (iii) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of any Borrower or any of its
Subsidiaries, (iv) customary restrictions on dispositions of real property
interests found in reciprocal easement agreements of any Borrower or its
Subsidiaries, (v) any agreement relating to permitted Indebtedness incurred by a
Subsidiary of any Borrower prior to the date on which such Subsidiary was
acquired by any Borrower and outstanding on such acquisition date, and (vi) the
extension or continuation of contractual obligations in existence on the date
hereof, provided, that, any such encumbrances or restrictions contained in such
extension or continuation are no less favorable to Agent and Lenders than those
encumbrances and restrictions under or pursuant to the contractual obligations
so extended or continued.

9.17 Consolidated EBITDA. Borrowers shall not permit (i) for any fiscal
quarter ending on or after June 30, 2003, Consolidated Annualized EBITDA of the
Parent and its Subsidiaries and (ii) for each fiscal quarter ending thereafter,
Consolidated EBITDA of the Parent and its Subsidiaries for the four fiscal
quarters ending as of the end of the applicable fiscal quarter set forth below,
to be less than the applicable amount set forth below:

Fiscal Quarter End                   Consolidated EBITDA
------------------                   -------------------
(annualized or trailing four
quarters, as applicable)

-----------------------------------------------------------------
December 31, 2002                        $56,000,000
-----------------------------------------------------------------

71

-------------------------------------------------------------------
March 31, 2003                      $ 63,700,000
-------------------------------------------------------------------
June 30, 2003                       $ 76,200,000
-------------------------------------------------------------------
September 30, 2003                  $ 82,100,000
-------------------------------------------------------------------
December 31, 2003                   $ 90,000,000
-------------------------------------------------------------------
March 31, 2004                      $ 99,100,000
-------------------------------------------------------------------
June 30, 2004                       $108,000,000
-------------------------------------------------------------------
September 30, 2004                  $116,000,000
-------------------------------------------------------------------
December 31, 2004                   $125,000,000
-------------------------------------------------------------------
March 31, 2005                      $129,300,000
-------------------------------------------------------------------
June 30, 2005                       $134,000,000
-------------------------------------------------------------------
September 30, 2005                  $140,000,000
-------------------------------------------------------------------
December 31, 2005                   $145,000,000
-------------------------------------------------------------------
March 31, 2006                      $145,000,000
-------------------------------------------------------------------
June 30, 2006                       $150,000,000
-------------------------------------------------------------------
September 30, 2006                  $155,000,000
-------------------------------------------------------------------
December 31, 2006                   $160,000,000
-------------------------------------------------------------------
March 31, 2007                      $162,000,000
-------------------------------------------------------------------
June 30, 2007                       $165,000,000
-------------------------------------------------------------------
September 30, 2007                  $167,000,000
-------------------------------------------------------------------
December 31, 2007                   $170,000,000
-------------------------------------------------------------------

9.18 Fixed Charge Coverage Ratio. Borrowers shall not permit the Fixed
Charge Coverage Ratio of the Parent and its Subsidiaries for each period of four
(4) consecutive fiscal quarters, (or, in the case of each fiscal quarter ending
on or prior to June 30, 2003, such lesser number of consecutive fiscal quarters
as shall then have been completed since the fiscal quarter commencing on October
1, 2002) of the Parent and its Subsidiaries for which the last quarter ends on a
date set forth below to be less than the amount set forth opposite such date:

Fiscal Quarter End                Ratio
------------------                -----

December 31, 2002                      0.65:1
-----------------------------------------------------------------
March 31, 2003                         0.75:1
-----------------------------------------------------------------
June 30, 2003                          0.85:1
-----------------------------------------------------------------
September 30, 2003                     0.90:1
-----------------------------------------------------------------
December 31, 2003                      1:1
-----------------------------------------------------------------
March 31, 2004                         1.1:1
-----------------------------------------------------------------

72

--------------------------------------------------------------------
June 30, 2004                                        1.2:1
--------------------------------------------------------------------
September 30, 2004                                   1.4:1
--------------------------------------------------------------------
December 31, 2004                                    1.45:1
--------------------------------------------------------------------
For each fiscal quarter thereafter                   1.5:1
--------------------------------------------------------------------

9.19 License Agreements.

(a)  Borrowers shall (i) promptly and faithfully observe and perform
all of the material terms, covenants, conditions and provisions of the material
License Agreements to be observed and performed by it, at the times set forth
therein, if any, (ii) not do, permit, suffer or refrain from doing anything that
could reasonably be expected to result in a default under or breach of any of
the terms of any material License Agreement, (iii) not cancel, surrender,
modify, amend, waive or release any material License Agreement in any material
respect or any term, provision or right of the licensee thereunder in any
material respect, or consent to or permit to occur any of the foregoing; except,
that, subject to Section 9.19(b) below, Borrowers may cancel, surrender or
release any material License Agreement in the ordinary course of the business of
Borrower; provided, that, Borrowers shall give Agent not less than thirty (30)
days prior written notice of their intention to so cancel, surrender and release
any such material License Agreement, (iv) give Agent prompt written notice of
any material License Agreement entered into by any Borrower after the date
hereof, together with a true, correct and complete copy thereof and such other
information with respect thereto as Agent may request, (v) give Agent prompt
written notice of any material breach of any obligation, or any default, by any
party under any material License Agreement, and deliver to Agent (promptly upon
the receipt thereof by Borrower in the case of a notice to any Borrower, and
concurrently with the sending thereof in the case of a notice from any Borrower)
a copy of each notice of default and every other notice and other communication
received or delivered by any Borrower in connection with any material License
Agreement which relates to the right of a Borrower to continue to use the
property subject to such License Agreement, and (vi) furnish to Agent, promptly
upon the request of Agent, such information and evidence as Agent may require
from time to time concerning the observance, performance and compliance by any
Borrower or the other party or parties thereto with the terms, covenants or
provisions of any material License Agreement.

(b)  Borrowers will either exercise any option to renew or extend the
term of each material License Agreement in such manner as will cause the term of
such material License Agreement to be effectively renewed or extended for the
period provided by such option and give prompt written notice thereof to Agent
or give Agent prior written notice that Borrowers do not intend to renew or
extend the term of any such material License Agreement or that the term thereof
shall otherwise be expiring, not less than sixty (60) days prior to the date of
any such non-renewal or expiration. In the event of the failure of Borrowers to
extend or renew any material License Agreement, Agent shall have, and is hereby
granted, the irrevocable right and authority, at its option, to renew or extend
the term of such material License Agreement, whether in its own name and behalf,
or in the name and behalf of a designee or nominee of Agent or in the name and
behalf of such Borrower, as Agent shall determine at any time that an Event of
Default shall exist or have occurred and be continuing. Agent may, but shall not
be required to,

73

perform any or all of such obligations of any Borrower under any of the License
Agreements, including, but not limited to, the payment of any or all sums due
from Borrower thereunder. Any sums so paid by Agent shall constitute part of the
Obligations.

9.20 Inactive Subsidiaries. Borrowers shall not permit any Inactive
Subsidiary to (a) become an active company having operations or conduct
business, or (b) own any assets other than assets with a fair market value not
in excess of $25,000 in the aggregate for all Inactive Subsidiaries.

9.21 Costs and Expenses. Borrowers shall pay to Agent on demand all costs,
expenses, filing fees and taxes paid or payable in connection with the
preparation, negotiation, execution, delivery, recording, administration,
collection, liquidation, enforcement and defense of the Obligations, Agent's and
Lender's rights in the Collateral, this Agreement, the other Financing
Agreements and all other documents related hereto or thereto, including any
amendments, supplements or consents which may hereafter be contemplated (whether
or not executed) or entered into in respect hereof and thereof, including: (a)
all costs and expenses of filing or recording (including Uniform Commercial Code
financing statement filing taxes and fees, documentary taxes, intangibles taxes
and mortgage recording taxes and fees, if applicable); (b) costs and expenses
and fees for insurance premiums, environmental audits, surveys, assessments,
engineering reports and inspections, appraisal fees and search fees, costs and
expenses of remitting loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Blocked Accounts, together with
Agent's customary charges and fees with respect thereto; (c) charges, fees or
expenses charged by any bank or issuer in connection with the Letter of Credit
Accommodations; (d) costs and expenses of preserving and protecting the
Collateral; (e) costs and expenses paid or incurred by Agent and Lenders in
connection with obtaining payment of the Obligations, enforcing the security
interests and liens of Agent, selling or otherwise realizing upon the
Collateral, and otherwise enforcing the provisions of this Agreement and the
other Financing Agreements or defending any claims made or threatened against
Agent or any Lender arising out of the transactions contemplated hereby and
thereby (including preparations for and consultations concerning any such
matters); (f) all out-of-pocket expenses and costs heretofore and from time to
time hereafter incurred by Agent during the course of periodic field
examinations of the Collateral and Borrowers' operations, plus a per diem charge
at the rate of $750 per person per day for Agent's examiners in the field and
office; and (g) the fees and disbursements of counsel (including legal
assistants) to Agent and, if an Event of Default has occurred and is continuing,
Lenders, in connection with any of the foregoing.

9.22 Further Assurances. At the request of Agent at any time and from time
to time, Borrowers shall, at their expense, duly execute and deliver, or cause
to be duly executed and delivered, such further agreements, documents and
instruments, and do or cause to be done such further acts as may be necessary or
proper to evidence, perfect, maintain and enforce the security interests and the
priority thereof in the Collateral and to otherwise effectuate the provisions or
purposes of this Agreement or any of the other Financing Agreements. Agent may
at any time and from time to time request a certificate from an officer of
Borrowers representing that all conditions precedent to the making of Loans and
providing Letter of Credit Accommodations contained herein are satisfied. In the
event of such request by Agent, Lenders may, at their option, cease to make any
further Loans and Agent may, at its option, cease to provide any

74

further Letter of Credit Accommodations until Agent has received such
certificate and, in addition, Agent has determined that such conditions are
satisfied.

9.23 Applications under Insolvency Statutes. Each Borrower acknowledges
that its business and financial relationships with Agent and Lenders are unique
from its relationship with any other of its creditors, and agrees that it shall
not file any plan of arrangement under the Companies' Creditors Arrangement Act
(Canada) or make any proposal under the Bankruptcy and Insolvency Act (Canada)
which provides for, or would permit directly or indirectly, Agent or any Lender
to be classified with any other creditor for purposes of such plan or proposal
or otherwise.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

10.1   Events of Default. The occurrence or existence of any one or more of
the following events are referred to herein individually as an "Event of
Default", and collectively as "Events of Default":

(a)  (i) Any Borrower fails to pay when due any of the Obligations
(other than third party fees and expenses provided under Section 9.21 of this
Agreement), (ii) any Borrower fails to pay any third party fees or expenses of
Agent or Lenders provided under Section 9.21 of this Agreement within five (5)
Business Days of the due date, or (iii) any Borrower fails to perform any of the
covenants contained in Sections 9.2, 9.3, 9.6, 9.15, 9.19 or 9.20 of this
Agreement and such failure shall continue for ten (10) days; provided, that,
such ten (10) day period shall not apply in the case of: (A) a failure to
observe such covenant which is not capable of being cured at all or within such
ten (10) day period or which has been the subject of a prior failure within a
six (6) month period, or (B) an intentional breach of any Borrower of any such
covenant, or (iv) any Borrower fails to perform any of the other terms,
covenants, conditions or provisions contained in this Agreement or any of the
other Financing Agreements;

(b)  any representation, warranty or statement of fact made by any
Borrower to Agent and/or Lenders in this Agreement, the other Financing
Agreements or any other agreement, schedule, confirmatory assignment or
otherwise shall when made or deemed made be false or misleading in any material
respect;

(c)  any Obligor revokes, terminates or fails to perform any of the
terms, covenants, conditions or provisions of any guarantee, endorsement or
other agreement of such party in favor of Agent and/or Lenders;

(d)  any judgment for the payment of money is rendered against any
Borrower or any Obligor in excess of the US Dollar Equivalent of $500,000 in any
one case or in the aggregate and shall remain undischarged or unvacated for a
period in excess of thirty (30) days or execution shall at any time not be
effectively stayed, or any judgment other than for the payment of money, or
injunction, attachment, garnishment or execution is rendered against any
Borrower or any Obligor or any of their assets;

(e)  any Obligor (being a natural person or a general partner of an
Obligor which is a partnership) dies or any Borrower or any Obligor, which is a
partnership, limited liability company, limited liability partnership,
corporation or business trust, dissolves or suspends or discontinues doing
business;

75

(f)  Any Borrower or any Obligor becomes insolvent (however defined or
evidenced), makes an assignment for the benefit of creditors, makes or sends
notice of a bulk transfer or calls a meeting of its creditors or principal
creditors;

(g)  a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect, or a petition, case, application
or proceeding under any bankruptcy or insolvency laws of Canada (including the
Bankruptcy and Insolvency Act (Canada) and the Companies' Creditors Arrangement
Act (Canada)) or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at law or in equity) is filed
against any Borrower or any Obligor or all or any part of its properties and
such petition or application is not dismissed within thirty (30) days after the
date of its filing or any Borrower or any Obligor shall file any answer
admitting or not contesting such petition or application or indicates its
consent to, acquiescence in or approval of, any such action or proceeding or the
relief requested is granted sooner;

(h)  a case or proceeding under the bankruptcy laws of the United
States of America now or hereafter in effect, or a petition, case, application
or proceeding under any bankruptcy or insolvency laws of Canada (including the
Bankruptcy and Insolvency Act (Canada) and the Companies' Creditors Arrangement
Act (Canada)) or under any insolvency, reorganization, receivership,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction now or hereafter in effect (whether at a law or equity) is filed by
any Borrower or any Obligor or for all or any part of its property; or

(i)  any default by any Borrower or any Obligor under any agreement,
document or instrument relating to any Indebtedness for borrowed money owing to
any person other than to Agent and Lenders hereunder or under the other
Financing Agreements, or any capitalized lease obligations, contingent
Indebtedness in connection with any guarantee, letter of credit, indemnity or
similar type of instrument in favor of any person other than to Agent and
Lenders hereunder or under the other Financing Agreements, in any case in an
amount in excess of the US Dollar Equivalent of $250,000, which default
continues for more than the applicable cure period, if any, with respect
thereto, or any default by any Borrower or any Obligor under any Material
Contract, which default continues for more than the applicable cure period, if
any, with respect thereto;

(j)  any bank at which any deposit account of any Borrower is
maintained shall fail to comply with any of the terms of any Deposit Account
Control Agreement to which such bank is a party or any securities intermediary,
commodity intermediary or other financial institution at any time in custody,
control or possession of any investment property of any Borrower shall fail to
comply with any of the terms of any Investment Property Control Agreement to
which such person is a party;

(k)  any material provision hereof or of any of the other Financing
Agreements shall for any reason cease to be valid, binding and enforceable with
respect to any party hereto or thereto (other than as to Agent or any Lender) in
accordance with its terms, or any such party shall challenge the enforceability
hereof or thereof, or shall assert in writing, or take any action or fail to
take any action based on the assertion that any provision hereof or of any of
the other Financing Agreements has ceased to be or is otherwise not valid,
binding or enforceable in

76

accordance with its terms, or any security interest provided for herein or in
any of the other Financing Agreements shall cease to be a valid and perfected
first priority security interest in any of the Collateral purported to be
subject thereto (except as otherwise permitted herein or therein);

(l)  an ERISA Event shall occur which results in or could reasonably
be expected to result in liability of any Borrower in an aggregate amount in
excess of $250,000;

(m)  any Change of Control;

(n)  the indictment by any Governmental Authority, or as Agent may
reasonably and in good faith determine, the threatened indictment by any
Governmental Authority of any Borrower of which any Borrower or Agent or any
Lender receives notice, in either case, as to which there is a reasonable
possibility of an adverse determination, in the good faith determination of
Agent, under any criminal statute, or commencement or threatened commencement of
criminal or civil proceedings against any Borrower, pursuant to which statute or
proceedings the penalties or remedies sought or available include forfeiture of
(i) any of the Collateral having a value in excess of the US Dollar Equivalent
of $250,000, or (ii) any other property of any Borrower which is necessary or
material to the conduct of its business;

(o)  any default or event of default shall exist or occur and be
continuing under the Term Loan Agreement or any party to the Intercreditor
Agreement (other than Agent) shall breach the terms thereof;

(p)  there shall be a material adverse change in the business, assets
or prospects of any Borrower or any Obligor after the date hereof;

(q)  a requirement from the Minister of National Revenue for payment
pursuant to Section 224 or any successor section of the Income Tax Act (Canada)
or Section 317, or any successor section in respect of any Borrower of the
Excise Tax Act (Canada) or any comparable provision of similar legislation shall
have been received by Agent or any Lender or any other Person in respect of any
Borrower or otherwise issued in respect of any Borrower; or

(r)  there shall be an event of default under any of the other
Financing Agreements.

10.2 Remedies.

(a)  At any time an Event of Default exists or has occurred and is
continuing, Agent shall have all rights and remedies provided in this Agreement,
the other Financing Agreements, the UCC, PPSA and other applicable law, all of
which rights and remedies may be exercised without notice to or consent by any
Borrower or any Obligor, except as such notice or consent is expressly provided
for hereunder or required by applicable law. All rights, remedies and powers
granted to Lender hereunder, under any of the other Financing Agreements, the
UCC, PPSA or other applicable law, are cumulative, not exclusive and
enforceable, in Agent's discretion, alternatively, successively, or concurrently
on any one or more occasions, and shall include, without limitation, the right
to apply to a court of equity for an injunction to restrain a breach or
threatened breach by any Borrower of this Agreement or any of the other
Financing Agreements. Agent may, at any time or times, proceed directly against
any Borrower or any Obligor to collect the Obligations without prior recourse to
the Collateral.

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(b)  Without limiting the foregoing, at any time an Event of Default
exists or has occurred and is continuing, Agent may, in its discretion and
shall, upon the request of the Majority Lenders, without limitation, (i)
accelerate the payment of all Obligations and demand immediate payment thereof
to Agent and Lenders (provided, that, upon the occurrence of any Event of
Default described in Sections 10.1(g) and 10.1(h), all Obligations shall
automatically become immediately due and payable), (ii) with or without judicial
process or the aid or assistance of others, enter upon any premises on or in
which any of the Collateral may be located and take possession of the Collateral
or complete processing, manufacturing and repair of all or any portion of the
Collateral, (iii) require Borrowers, at Borrowers' expense, to assemble and make
available to Agent (or Canadian Lender in the case of a Canadian Borrower) any
part or all of the Collateral at any place and time designated by Agent (or
Canadian Lender in the case of a Canadian Borrower), (iv) collect, foreclose,
receive, appropriate, setoff (even though the Obligations may be unmatured and
regardless of the adequacy of other Collateral) and realize upon any and all
Collateral, (v) remove any or all of the Collateral from any premises on or in
which the same may be located for the purpose of effecting the sale, foreclosure
or other disposition thereof or for any other purpose, (vi) sell, lease,
transfer, assign, deliver or otherwise dispose of any and all Collateral
(including entering into contracts with respect thereto, public or private sales
at any exchange, broker's board, at any office of Agent (or Canadian Lender in
the case of a Canadian Borrower) or elsewhere) at such prices or terms as Agent
(or Canadian Lender in the case of a Canadian Borrower) may deem reasonable, for
cash, upon credit or for future delivery, with the Agent (or Canadian Lender in
the case of a Canadian Borrower) having the right to purchase the whole or any
part of the Collateral at any such public sale, all of the foregoing being free
from any right or equity of redemption of Borrowers, which right or equity of
redemption is hereby expressly waived and released by each Borrower and/or (vii)
terminate this Agreement. If any of the Collateral is sold or leased by Agent
(or Canadian Lender in the case of a Canadian Borrower) upon credit terms or for
future delivery, the Obligations shall not be reduced as a result thereof until
payment therefor is finally collected by Agent (or Canadian Lender in the case
of a Canadian Borrower). If notice of disposition of Collateral is required by
law, ten (10) days prior notice by Agent (or Canadian Lender in the case of a
Canadian Borrower) to Borrowers designating the time and place of any public
sale or the time after which any private sale or other intended disposition of
Collateral is to be made, shall be deemed to be reasonable notice thereof and
each Borrower waives any other notice. In the event Agent (or Canadian Lender in
the case of a Canadian Borrower) institutes an action to recover any Collateral
or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower
waives the posting of any bond which might otherwise be required. At any time an
Event of Default exists or has occurred and is continuing, upon Agent's request,
Borrowers will either, as Agent shall specify, furnish cash collateral to the
issuer to be used to secure and fund Agent's reimbursement obligations to the
issuer in connection with any Letter of Credit Accommodations or furnish cash
collateral to Agent for the Letter of Credit Accommodations. Such cash
collateral shall be in the amount equal to one hundred ten (110%) percent of the
amount of the Letter of Credit Accommodations plus the amount of any fees and
expenses payable in connection therewith through the end of the expiration of
such Letter of Credit Accommodations.

(c)  Agent may (and shall, upon the request of the Majority Lenders),
and Canadian Lender may (in the case of a Canadian Borrower) at any time or
times that an Event of Default exists or has occurred and is continuing, enforce
Borrowers' rights against any account debtor, secondary obligor or other obligor
in respect of any of the Accounts or other Receivables. Without limiting the
generality of the foregoing, Agent may at such time or times (i) notify any

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or all account debtors, secondary obligors or other obligors in respect thereof
that the Receivables have been assigned to Agent and that Agent has a security
interest therein and Agent (or Canadian Lender in the case of a Canadian
Borrower) may direct any or all accounts debtors, secondary obligors and other
obligors to make payment of Receivables directly to Agent (or Canadian Lender in
the case of a Canadian Borrower), (ii) extend the time of payment of,
compromise, settle or adjust for cash, credit, return of merchandise or
otherwise, and upon any terms or conditions, any and all Receivables or other
obligations included in the Collateral and thereby discharge or release the
account debtor or any secondary obligors or other obligors in respect thereof
without affecting any of the Obligations, (iii) demand, collect or enforce
payment of any Receivables or such other obligations, but without any duty to do
so, and Agent and Lenders shall not be liable for the failure to collect or
enforce the payment thereof nor for the negligence of its agents or attorneys
with respect thereto, and (iv) take whatever other action Agent (or Canadian
Lender in the case of a Canadian Borrower) may deem necessary or desirable for
the protection of its interests. At any time that an Event of Default exists or
has occurred and is continuing, at Agent's (or Canadian Lender in the case of a
Canadian Borrower) request, all invoices and statements sent to any account
debtor shall state that the Accounts and such other obligations have been
assigned to Agent (or Canadian Lender in the case of a Canadian Borrower) and
are payable directly and only to Agent, and Borrowers shall deliver to Agent
such originals of documents evidencing the sale and delivery of goods or the
performance of services giving rise to any Accounts as Agent (or Canadian Lender
in the case of a Canadian Borrower) may require. In the event any account debtor
returns Inventory when an Event of Default exists or has occurred and is
continuing, Borrowers shall, upon Agent's (or Canadian Lender in the case of a
Canadian Borrower) request, hold the returned Inventory in trust for Agent (or
Canadian Lender in the case of a Canadian Borrower), segregate all returned
Inventory from all of its other property, dispose of the returned Inventory
solely according to Agent's instructions, and not issue any credits, discounts
or allowances with respect thereto without Agent (or Canadian Lender in the case
of a Canadian Borrower) prior written consent.

(d)  To the extent that applicable law imposes duties on Agent and
Lenders to exercise remedies in a commercially reasonable manner (which duties
cannot be waived under such law), Borrowers acknowledge and agree that it is not
commercially unreasonable for Agent and Lenders (i) to fail to incur expenses
reasonably deemed significant by Agent or Lenders to prepare Collateral for
disposition or otherwise to complete raw material or work in process into
finished goods or other finished products for disposition, (ii) to fail to
obtain third party consents for access to Collateral to be disposed of, or to
obtain or, if not required by other law, to fail to obtain consents of any
Governmental Authority or other third party for the collection or disposition of
Collateral to be collected or disposed of, (iii) to fail to exercise collection
remedies against account debtors, secondary obligors or other persons obligated
on Collateral or to remove liens or encumbrances on or any adverse claims
against Collateral, (iv) to exercise collection remedies against account debtors
and other persons obligated on Collateral directly or through the use of
collection agencies and other collection specialists, (v) to advertise
dispositions of Collateral through publications or media of general circulation,
whether or not the Collateral is of a specialized nature, (vi) to contact other
persons, whether or not in the same business as Borrowers, for expressions of
interest in acquiring all or any portion of the Collateral, (vii) to hire one or
more professional auctioneers to assist in the disposition of Collateral,
whether or not the collateral is of a specialized nature, (viii) to dispose of
Collateral by utilizing Internet sites that provide for the auction of assets of
the types included in the Collateral or that have the reasonable capability of
doing so, or that match buyers and sellers of assets, (ix) to dispose of

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assets in wholesale rather than retail markets, (x) to disclaim disposition
warranties, (xi) to purchase insurance or credit enhancements to insure Agent
and Lenders against risks of loss, collection or disposition of Collateral or to
provide to Agent and Lenders a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by Agent
and Lenders, to obtain the services of other brokers, investment bankers,
consultants and other professionals to assist Lender in the collection or
disposition of any of the Collateral. Borrowers acknowledge that the purpose of
this Section is to provide non-exhaustive indications from Borrowers of what
actions or omissions by Agent or Lenders would not be commercially unreasonable
in Agent's and/or Lenders' exercise of remedies against the Collateral and that
other actions or omissions by Agent and Lenders shall not be deemed commercially
unreasonable solely on account of not being indicated in this Section. Without
limitation of the foregoing, nothing contained in this Section shall be
construed to grant any rights to Borrowers or to impose any duties on Agent or
Lenders that would not have been granted or imposed by this Agreement or by
applicable law in the absence of this Section.

(e)  For the purpose of enabling Agent or Lenders to exercise the
rights and remedies hereunder, each Borrower hereby grants to Agent and Lenders,
to the extent assignable, an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to Borrowers) to use, assign,
license or sublicense any of the trademarks, service-marks, trade names,
business names, trade styles, designs, logos and other source of business
identifiers and other Intellectual Property and general intangibles now owned or
hereafter acquired by Borrowers, wherever the same maybe located, including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for the compilation
or printout thereof.

(f)  For the purpose of enabling the Agent and Lenders to exercise
their rights and remedies hereunder, Borrowers hereby grant to Agent an
irrevocable right of access, easement and license (exercisable without payment
of any fee or other compensation to Borrowers) to enter into any Real Property
of Borrowers and to use and operate any Equipment or other goods thereon and to
utilize any Inventory of the Borrower in connection with the fulfillment and
completion of any contractual or other obligations of Borrowers to their account
debtors and customers.

(g)  Agent may apply the cash proceeds of Collateral actually received
by Agent from any sale, lease, foreclosure or other disposition of the
Collateral first to reimburse Agent for all costs and expenses of collection or
enforcement including attorneys' fees and legal expenses and second to payment
of the Obligations, in whole or in part and in such order as Agent may elect or
the Majority Lenders may direct, whether or not then due. Borrowers shall remain
liable to Agent for the payment of any deficiency with interest at the highest
rate provided for herein and all costs and expenses of collection or
enforcement, including attorneys' fees and legal expenses.

(h)  Without limiting the foregoing, upon the occurrence of a Default
or Event of Default, Agent may, at its option, and upon request of the Majority
Lenders shall, without notice, (i) cease making Loans or arranging for Letter of
Credit Accommodations or reduce the lending formulas or amounts of Revolving
Loans and Letter of Credit Accommodations available to Borrowers (provided,
that, upon the occurrence of any Event of Default described in Sections 10.1(g)
or 10.1(h), the agreements of Agent and Lenders herein to make Loans and

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arrange for Letter of Credit Accommodations shall automatically cease), and/or
(ii) terminate any provision of this Agreement providing for any future Loans or
Letter of Credit Accommodations to be made by Agent or Lenders to Borrowers.

(i)  Regardless of the adequacy of any collateral, if any of the
Obligations are due and payable and have not been paid or any Event of Default
shall have occurred, any deposits or other sums credited by or due from any
Agent or Lender to any Borrower or any Obligor and any securities or other
property of any Borrower or any Obligor in the possession of Agent or such
Lender may, at any time, without demand or notice (any such notice being
expressly waived by Borrowers and Obligors), in whole or in part, be applied to
or set off by Agent and/or such Lender against the payment of Obligations and
any and all other liabilities or obligations, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of
Borrowers or Obligors to Agent and/or such Lender. Each of the Lenders agrees
with each other Lender that (i) if an amount to be set off is to be applied to
Obligations of Borrowers or Obligors to such Lender, such amount shall be
applied ratably to all Obligations owed to such Lender, and (ii) if such Lender
shall receive from Borrowers or Obligors or any other source, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
or by enforcement of the claims evidenced by the Financing Agreements, by
proceedings against the Borrowers or Obligors at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, any amount in excess of its ratable portion of the
payments received by all of the Lenders with respect to the Obligations, such
Lender will make such disposition and arrangements with the Agent and other
Lenders with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in Agent and each
Lender receiving in respect of the Obligations owed it, its proportionate
payment as contemplated by this Agreement; provided that if all or any part of
such excess payment is thereafter recovered from such Lender, such disposition
and arrangements shall be rescinded and the amount restored to the extent of
such recovery, but without interest. ANY AND ALL RIGHTS TO REQUIRE AGENT OR ANY
LENDER TO EXERCISE ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL
WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH
RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF ANY BORROWER OR ANY
OBLIGOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED.

(j)  Agent may appoint or reappoint by instrument in writing, any
person or persons, whether an officer or officers or any employee or employees
of Agent or not, to be a receiver or receivers (hereinafter called a "Receiver",
which term when used herein shall include a receiver and manager) of any
Collateral of any Canadian Borrower (including any interest, income or profits
therefrom) and may remove any Receiver so appointed and appoint another in
his/her stead. Any such Receiver shall, so far as concerns responsibility for
his/her acts, be deemed the agent of the Canadian Borrower and not Agent, and
Agent shall not be in any way responsible for any misconduct, negligence or
non-feasance on the part of any such Receiver, his/her servants, agents or
employees. Subject to the provisions of the instrument appointing him/her, any
such Receiver shall have power to take possession of Collateral, to preserve
Collateral or its value, to carry on or concur in carrying on all or any part of
the business of the applicable Canadian Borrower and to sell, lease, license or
otherwise dispose of or concur in selling, leasing, licensing or otherwise
disposing of Collateral. To facilitate the foregoing powers, any such Receiver
may, to the exclusion of all others, including the applicable Canadian

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Borrower, enter upon, use and occupy all premises owned or occupied by the
applicable Canadian Borrower wherein Collateral may be situate, maintain
Collateral upon such premises, borrow money on a secured or unsecured basis and
use Collateral directly in carrying on the applicable Canadian Borrower's
business or as security for loans or advances to enable the Receiver to carry on
applicable Canadian Borrower's business or otherwise, as such Receiver shall, in
its discretion, determine. Except as may be otherwise directed by Agent, all
proceeds of Collateral received from time to time by such Receiver in carrying
out his/her appointment shall be received in trust for and paid over to Agent
(or upon Agent's direction to Canadian Lender). Every such Receiver may, in the
discretion of the Agent be vested with all or any of the rights and powers of
the Agent. Agent may, either directly or through its agents or nominees,
exercise any or all powers and rights given to a Receiver by virtue of the
foregoing provisions of this paragraph.

(k)  On and after an Event of Default and for so long as the same is
continuing, Borrowers shall pay all costs, charges and expenses incurred by
Agent, any Lender or any Receiver or any nominee or agent of Agent, whether
directly or for services rendered (including, without limitation, solicitor's
costs on a solicitor and his own client basis, auditor's costs, other legal
expenses and Receiver remuneration) in enforcing this Agreement or any other
Financing Agreement and in enforcing or collecting Obligations and all such
expenses together with any money owing as a result of any borrowing permitted
hereby shall be a charge on the proceeds of realization and shall be secured
hereby.

SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW.

11.1   Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver.

(a)  The validity, interpretation and enforcement of this Agreement
and the other Financing Agreements (except as otherwise expressly provided
therein) and any dispute arising out of the relationship between the parties
hereto, whether in contract, tort, equity or otherwise, shall be governed by the
internal laws of The Commonwealth of Massachusetts (without giving effect to
principles of conflicts of law).

(b)  Each Borrower, Agent, and each Lender irrevocably consent and
submit to the non-exclusive jurisdiction of the Suffolk County Superior Court of
The Commonwealth of Massachusetts and any court to which an appeal may be taken
therefrom and the United States District Court for the District of
Massachusetts, whichever Agent may elect, and in addition, Borrowers irrevocably
consent and submit to the non-exclusive jurisdiction of the Ontario Superior
Court of Justice, in each case, whichever Agent may elect and waive any
objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Agreement or any of the other Financing
Agreements or in any way connected with or related or incidental to the dealings
of the parties hereto in respect of this Agreement or any of the other Financing
Agreements or the transactions related hereto or thereto, in each case whether
now existing or hereafter arising, and whether in contract, tort, equity or
otherwise, and agree that any dispute with respect to any such matters shall be
heard only in the courts described above (except that Agent and Lenders shall
have the right to bring any action or proceeding against any Borrower or its
property in the courts of any other jurisdiction which Agent deems

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necessary or appropriate in order to realize on the Collateral or to otherwise
enforce its rights against any Borrower or its property).

(c)  Each Borrower hereby waives personal service of any and all
process upon it and consents that all such service of process may be made by
certified mail (return receipt requested) directed to its address set forth
herein and service so made shall be deemed to be completed five (5) days after
the same shall have been so deposited in the US mails, or, at Agent's option, by
service upon Borrowers in any other manner provided under the rules of any such
courts. Within thirty (30) days after such service, Borrowers shall appear in
answer to such process, failing which Borrowers shall be deemed in default and
judgment may be entered by Lender against Borrowers for the amount of the claim
and other relief requested.

(d)  EACH BORROWER, AGENT, AND EACH LENDER EACH HEREBY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i)
ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR
THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. EACH
BORROWER, AGENT, AND EACH LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY AND THAT BORROWER OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OF A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(e)  Neither Agent nor any Lender shall have any liability to any
Borrower (whether in tort, contract, equity or otherwise) for losses suffered by
any Borrower in connection with, arising out of, or in any way related to the
transactions or relationships contemplated by this Agreement, or any act,
omission or event occurring in connection herewith, unless it is determined by a
final and non-appealable judgment or court order binding on Agent or such
Lender, that the losses were the result of acts or omissions constituting gross
negligence or willful misconduct of Agent or such Lender. In any such
litigation, Agent and each Lender shall be entitled to the benefit of the
rebuttable presumption that it acted in good faith and with the exercise of
ordinary care in the performance by it of the terms of this Agreement. Except as
prohibited by law, each Borrower waives any right which it may have to claim or
recover in any litigation with Agent and any Lender any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. Each Borrower: (i) certifies that neither Agent, any Lender nor
any representative, agent or attorney acting for or on behalf of Agent or any
Lender has represented, expressly or otherwise, that Agent or any Lender would
not, in the event of litigation, seek to enforce any of the waivers provided for
in this Agreement or any of the other Financing Agreements, and (ii)
acknowledges that in entering into this Agreement and the other Financing
Agreements, Agent and Lenders are relying upon, among other things, the waivers
and certifications set forth in this Section 11.1 and elsewhere herein and
therein.

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11.2   Waiver of Notices. Each Borrower hereby expressly waives demand,
presentment, protest and notice of protest and notice of dishonor with respect
to any and all instruments and chattel paper, included in or evidencing any of
the Obligations or the Collateral, and any and all other demands and notices of
any kind or nature whatsoever with respect to the Obligations, the Collateral
and this Agreement, except such as are expressly provided for herein. No notice
to or demand on any Borrower which Agent or any Lender may elect to give shall
entitle any Borrower to any other or further notice or demand in the same,
similar or other circumstances.

11.3   Amendments and Waivers. Neither this Agreement nor any
provision hereof shall be amended, modified, waived or discharged orally or by
course of conduct, but only by a written agreement signed by authorized officers
of Agent and Majority Lenders, and as to amendments, as also signed by an
authorized officer of Borrowers; provided, that, no amendment, waiver or consent
shall be effective, unless (i) in writing and signed by each Lender, to do any
of the following:

(a)    increase or decrease the Maximum Credit, the US Maximum Credit or
Canadian Maximum Credit or any Lender's Revolving Loan Limit or Pro
Rata Share;

(b)    reduce the principal of, or interest on, any amount payable
hereunder, other than those payable only to Congress in its capacity
as Agent which may be reduced by Congress unilaterally;

(c)    decrease any interest rate or fees payable hereunder to Lenders;

(d)    postpone any date fixed for any payment of principal of, or interest
on, any amounts payable hereunder, other than those payable only to
Congress in its capacity as Agent, which may be postponed by
Congress unilaterally;

(e)    increase any advance percentage contained in the definition of the
term US Borrowing Base or Canadian Borrowing Base;

(f)    reduce the number of Lenders that shall be required for Lenders or
any of them to take any action hereunder;

(g)    release or discharge any Person liable for the performance of any
obligations of Borrowers hereunder or under any of the Financing
Agreements;

(h)    amend any provision of this Agreement that requires the consent of
all Lenders to consent to or waive any breach thereof;

(i)    amend the definition of the term "Majority Lenders";

(j)    amend Section 2.1(d) or (e) or this Section 11.3;

(k)    release any substantial portion of the Collateral, unless otherwise
permitted pursuant to the terms of this Agreement; or

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(i)  in writing and signed by the Agent and financial institution
issuing the Letter of Credit Accommodations, to amend any
provision of this Agreement or any other Financing Agreement
affecting Letter of Credit Accommodations; or

(ii) in writing and signed by Agent, in addition to the Lenders if
required above, to affect the rights or duties of Agent under
this Agreement, or any other Financing Agreement.

Agent and Lenders shall not, by any act, delay, omission or otherwise be
deemed to have expressly or impliedly waived any of their rights, powers and/or
remedies unless such waiver shall be in writing and signed by an authorized
officer of Agent and the requisite Lenders. Any such waiver shall be enforceable
only to the extent specifically set forth therein. A waiver by Agent and/or
Lenders of any right, power and/or remedy on any one occasion shall not be
construed as a bar to or waiver of any such right, power and/or remedy which
Agent and Lenders would otherwise have on any future occasion, whether similar
in kind or otherwise.

11.4   Waiver of Counterclaims. Each Borrower waives all rights to
interpose any claims, deductions, setoffs or counterclaims of any nature (other
then compulsory counterclaims) in any action or proceeding with respect to this
Agreement, the Obligations, the Collateral or any matter arising therefrom or
relating hereto or thereto.

11.5   Indemnification. Each Borrower shall indemnify and hold Agent and
each Lender, and their respective directors, agents, employees and counsel,
harmless from and against any and all losses, claims, damages, liabilities,
costs or expenses imposed on, incurred by or asserted against any of them in
connection with any litigation, investigation, claim or proceeding commenced or
threatened related to the negotiation, preparation, execution, delivery,
enforcement, performance or administration of this Agreement, any other
Financing Agreements, or any undertaking or proceeding related to any of the
transactions contemplated hereby or any act, omission, event or transaction
related or attendant thereto, including amounts paid in settlement, court costs,
and the fees and expenses of counsel. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 11.5 may be
unenforceable because it violates any law or public policy, each Borrower shall
pay the maximum portion which it is permitted to pay under applicable law to
Agent and Lenders in satisfaction of indemnified matters under this Section
11.5. The foregoing indemnity shall survive the payment of the Obligations and
the termination or non-renewal of this Agreement.

11.6   Currency Indemnity. If, for the purposes of obtaining judgment in
any court in any jurisdiction with respect to this Agreement or any of the other
Financing Agreements, it becomes necessary to convert into the currency of such
jurisdiction (the "Judgment Currency") any amount due under this Agreement or
under any of the other Financing Agreements in any currency other than the
Judgment Currency (the "Currency Due"), then conversion shall be made at the
rate of exchange prevailing on the Business Day before the day on which judgment
is given. For this purpose, "rate of exchange" means the rate at which Agent is
able, on the relevant date, to purchase the Currency Due with the Judgment
Currency in accordance with its normal practice. In the event that there is a
change in the rate of exchange prevailing between the Business Day before the
day on which the judgment is given and the date of receipt by Agent of the
amount due, Borrowers will, on the date of receipt by Agent, pay such additional
amounts,

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if any, or be entitled to receive reimbursement of such amount, if any, as may
be necessary to ensure that the amount received by Agent and Lenders on such
date is the amount in the Judgment Currency which when converted at the rate of
exchange prevailing on the date of receipt by Agent is the amount then due under
this Agreement or such other of the Financing Agreements in the Currency Due. If
the amount of the Currency Due which Agent is able to purchase is less than the
amount of the Currency Due originally due to it, Borrowers shall indemnify and
save Agent and Lenders harmless from and against loss or damage arising as a
result of such deficiency. The indemnity contained herein shall constitute an
obligation separate and independent from the other obligations contained in this
Agreement and the other Financing Agreements, shall give rise to a separate and
independent cause of action, shall apply irrespective of any indulgence granted
by Agent from time to time and shall continue in full force and effect
notwithstanding any judgment or order for a liquidated sum in respect of an
amount due under this Agreement or any of the other Financing Agreements or
under any judgment or order.

SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS

12.1   Term.

(a)  This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall continue
in full force and effect for a term ending on the date three (3) years from the
date hereof (the "Termination Date"); provided, that, this Agreement and all
other Financing Agreements must be terminated simultaneously. In addition,
Borrowers may terminate this Agreement at any time upon ten (10) days prior
written notice to Agent (which notice shall be irrevocable) and Agent and
Majority Lenders may terminate this Agreement at any time on or after an Event
of Default. Upon the effective date of termination or non-renewal of this
Agreement, Borrowers shall pay to Agent for the benefit of Lenders, in full, all
outstanding and unpaid Obligations and shall furnish cash collateral to Agent
(or at Agent's option, a letter of credit issued for the account of Borrowers
and at Borrowers' expense, in form and substance satisfactory to Agent, by an
issuer acceptable to Lender and payable to Lender as beneficiary) in such
amounts as Agent determines are reasonably necessary to secure (or reimburse)
Agent and Lenders from loss, cost, damage or expense, including attorneys' fees
and legal expenses, in connection with any contingent Obligations, including
issued and outstanding Letter of Credit Accommodations and checks or other
payments provisionally credited to the Obligations and/or as to which Lender has
not yet received final and indefeasible payment. Such payments in respect of the
Obligations and cash collateral shall be remitted by wire transfer in Federal
funds to such bank account of Agent, as Agent may, in its discretion, designate
in writing to Borrowers for such purpose. Interest shall be due until and
including the next business day, if the amounts so paid by Borrowers to the bank
account designated by Agent are received in such bank account later than 12:00
noon, Boston, Massachusetts time.

(b)  No termination of this Agreement or the other Financing
Agreements shall relieve or discharge Borrowers of their respective duties,
obligations and covenants under this Agreement or the other Financing Agreements
until all Obligations have been fully and finally discharged and paid, and
Agent's continuing security interest in the Collateral and the rights and
remedies of Agent and Lenders hereunder, under the other Financing Agreements
and applicable law, shall remain in effect until all such Obligations have been
fully and finally discharged and paid. Accordingly, each Borrower waives any
rights which it may have under the UCC or the

86

PPSA to demand the filing of termination statements with respect to the
Collateral, and Agent shall not be required to send such termination statements
to Borrowers, or to file them with any filing office, unless and until this
Agreement is terminated in accordance with its terms and all of the Obligations
are paid and satisfied in full in immediately available funds.

(c)  If for any reason this Agreement is terminated prior to the end
of the term of this Agreement, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual agreement of the parties
as to a reasonable calculation of Lenders' lost profits as a result thereof and
the Lenders' agreement to defer the payment of fees that would otherwise be
charged for a financing of this kind, Borrowers agree to pay to Agent for the
ratable benefit of Lenders, upon the effective date of such termination, an
early termination fee in the amount set forth below if such termination is
effective in the period indicated:

Amount                     Period

(i)    two (2%) percent of the    From the date hereof to and
Maximum Credit             including the first anniversary of
the date hereof;

(ii)   one (1%) percent of the    From the day after the first
Maximum Credit             anniversary of the date hereof to
and including the second
anniversary of the date hereof;
and

(iii)  one half of one (.50%)     From the day after the second
percent of the Maximum     anniversary of the date hereof to
Credit                     and including the third
anniversary of the date of this
Agreement.

Such early termination fee shall be presumed to be the amount of damages
sustained by Lenders as a result of such early termination and Borrowers agree
that it is reasonable under the circumstances currently existing. In addition,
Lenders shall be entitled to such early termination fee upon the occurrence of
any Event of Default described in Sections 10.1(g) and 10.1(h) hereof, even if
Agent and Majority Lenders do not exercise the right to terminate this
Agreement, but elect, at their sole option, to provide financing to Borrowers or
permit the use of cash collateral under the United States Bankruptcy Code. The
early termination fee provided for in this Section 12.1 shall be deemed included
in the Obligations.

12.2   Interpretative Provisions.

(a)  All terms used herein which are defined in Article 1 or Article
9 of the UCC shall have the meanings given therein unless otherwise defined in
this Agreement.

(b)  All references to the plural herein shall also mean the
singular and to the singular shall also mean the plural unless the context
otherwise requires.

(c)  All references to Borrower and Lender pursuant to the
definitions set forth in the recitals hereto, or to any other person herein,
shall include their respective successors and assigns.

(d)  The words "hereof", "herein", "hereunder", "this Agreement" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not

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any particular provision of this Agreement and as this Agreement now exists or
may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

(e)  The word "including" when used in this Agreement shall mean
"including, without limitation".

(f)  All references to the term "good faith" used herein when
applicable to Agent or Lenders shall mean, notwithstanding anything to the
contrary contained herein or in the UCC, honesty in fact in the conduct or
transaction concerned. Borrower shall have the burden of proving any lack of
good faith on the part of Agent or Lenders alleged by Borrower at any time.

(g)  An Event of Default shall exist or continue or be continuing
until such Event of Default is waived in accordance with Section 11.3 or is
cured in a manner satisfactory to Agent and Majority Lenders, if such Event of
Default is capable of being cured as determined by Agent and Majority Lenders.

(h)  Any accounting term used in this Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given in
accordance with GAAP, and all financial computations hereunder shall be computed
unless otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as used
in the preparation of the financial statements of Borrower most recently
received by Agent and Lenders prior to the date hereof.

(i)  In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including", the words
"to" and "until" each mean "to but excluding" and the word "through" means "to
and including".

(j)  Unless otherwise expressly provided herein, (i) references
herein to any agreement, document or instrument shall be deemed to include all
subsequent amendments, modifications, supplements, extensions, renewals,
restatements or replacements with respect thereto, but only to the extent the
same are not prohibited by the terms hereof or of any other Financing Agreement,
and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, recodifying, supplementing or interpreting the statute or regulation.

(k)  The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.

(l)  This Agreement and other Financing Agreements may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.

(m)  This Agreement and the other Financing Agreements are the
result of negotiations among and have been reviewed by counsel to Lender and the
other parties, and are the products of all parties. Accordingly, this Agreement
and the other Financing Agreements shall not be construed against Agent and
Lenders merely because of Agent's involvement in their preparation.

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(n)    This Agreement and the other Financing Agreements are
instruments entered into under seal.

12.3 Notices. All notices, requests and demands hereunder shall be in
writing and deemed to have been given or made: if delivered in person,
immediately upon delivery; if by telex, telegram or facsimile transmission,
immediately upon sending and upon confirmation of receipt; if by nationally
recognized overnight courier service with instructions to deliver the next
Business Day, one (1) Business Day after sending; and if by certified mail,
return receipt requested, five (5) days after mailing. All notices, requests and
demands upon the parties are to be given to the following addresses (or to such
other address as any party may designate by notice in accordance with this
Section 12.3):

If to Borrowers:         Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02184
Attention:  Chief Financial Officer
Telephone No.: (617) 849-1800
Telecopy No.: (617) 848-1632

with a copy to:          Davis Malm & D'Agostine, P.C.
One Boston Place
Boston, MA 02108-4470
Attention: C. Michael Malm, Esq.
Telephone No.: 617-367-2500
Telecopy No.: 617-523-6215

If to Agent and Lenders: Congress Financial Corporation (New England)
One Post Office Square, Suite 3600
Boston, MA 02109
Attention: John Husson, First Vice President
Telephone No.: 617-338-1998
Telecopy No.: 617-338-1497

with a copy to:          Brown Rudnick Berlack Israels LLC
One Financial Center
Boston, MA 02111
Attention: Jeffery L. Keffer, Esq.
Telephone No.: 617-856-8200
Telecopy No.: 17-856-8201

12.4 Partial Invalidity. If any provision of this Agreement is held to be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate this Agreement as a whole, but this Agreement shall be construed as
though it did not contain the particular provision held to be invalid or
unenforceable and the rights and obligations of the parties shall be construed
and enforced only to such extent as shall be permitted by applicable law.

12.5 Successors. This Agreement, the other Financing Agreements and any
other document referred to herein or therein shall be binding upon and inure to
the benefit of and be enforceable by Agent, Lenders, Borrowers, and their
respective successors and assigns, except

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that no Borrower may assign its rights under this Agreement, the other Financing
Agreements and any other document referred to herein or therein without the
prior written consent of Agent and Lenders

12.6 Assignment by Lenders. Except as provided herein, each Lender may
assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of its
Pro Rata Share and the same portion of the Loans at the time owing to it and its
participating interest in the risk relating to any Letters of Credit
Accommodations); provided that (i) unless such assignment is to an Affiliate of
a Lender or to a Person which is, at the time of such assignment, a Lender
hereunder, so long as no Default or Event of Default shall have occurred and be
continuing, the Agent shall have given its prior written consent to such
assignment (with such consent not to be unreasonably withheld), (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender's rights and obligations under this Agreement, (iii) each
assignment shall be in an amount that is not less than $5,000,000 and if
greater, in whole multiples of $1,000,000, and (iv) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit D hereto (an "Assignment and Acceptance"), subject to such
assignment. Upon such execution, delivery, acceptance and recording, from and
after the effective date for such assignment specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days after
the execution thereof, (i) the assignee thereunder shall be a party hereto and,
to the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee, if any, referred to in Section 12.8, be released from its
obligations under this Agreement.

12.7 Certain Representations and Warranties; Limitations; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:

(a)    other than the representation and warranty that it is legally
authorized to enter into the Assignment and Acceptance and the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, the assigning Lender makes no representation or warranty, express
or implied, and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Financing Agreements or any other instrument
or document furnished pursuant hereto or the attachment, perfection or priority
of any security interest or mortgage;

(b)    the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of Borrowers
and their Subsidiaries or any Obligor, or the performance or observance by
Borrowers and their Subsidiaries or any Obligor of any of their obligations
under this Agreement or any of the other Financing Agreements or any other
instrument or document furnished pursuant hereto or thereto;

(c)    such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 9.6 and such

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other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;

(d)    such assignee will, independently and without reliance upon the
assigning Lender, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement;

(e)    such assignee represents and warrants that it is an Eligible
Assignee;

(f)    such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Financing Agreements as are delegated to the Agent by the terms
hereof or thereof, together with such powers as are reasonably incidental
thereto;

(g)    such assignee agrees that it is bound by and will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement and other Financing Agreements are required to be performed by it as a
Lender;

(h)    such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance;

(i)    such assignee acknowledges that it has made arrangements with
the assigning Lender satisfactory to such assignee with respect to its share of
interest, letter of credit fees and other fees payable to Lenders hereunder; and

(j)    such assignee agrees that it is bound by the terms of the
Intercreditor Agreement including, without limitation, the provisions thereof
giving the Term Loan Agent the option to purchase its Revolving Loans and Pro
Rata Share of other Obligations in accordance with the terms thereof.

12.8 Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Lenders and the Pro Rata Share
of, and principal amount of the Loans owing to and participations in Letter of
Credit Accommodations purchased by, the Lenders from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and
Borrowers, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by Borrowers and the
Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to the
Agent a registration fee in the sum of $3,500.

12.9 Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of such Lender's rights and
obligations under this Agreement and the other Financing Agreements; provided
that (i) each such participation shall be in an amount of not less than
$2,500,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrowers, and (iii) the only
rights granted to the participant pursuant to such participation arrangements
with respect to waivers, amendments or modifications of the Financing Agreements
shall be the rights to approve waivers, amendments

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or modifications that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Pro Rata Share of such
Lender as it relates to such participant, reduce the amount of the fees payable
under this Agreement to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest.

12.10 Assignee or Participant Affiliated with any Borrower. If any assignee
Lender is an Affiliate of Borrower, then any such assignee Lender shall have no
right to vote as a Lender hereunder or under any of the other Financing
Agreements for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Financing Agreements
or for purposes of making requests to the Agent pursuant to Section 10, and the
determination of the Majority Lenders shall for all purposes of this Agreement
and the other Financing Agreements be made without regard to such assignee
Lender's interest in any of the Obligations. If any Lender sells a participating
interest in any of the Obligations to a participant, and such participant is a
Borrower or an Affiliate of a Borrower, then such transferor Lender shall
promptly notify the Agent of the sale of such participation. Any such transferor
Lender shall have no right to vote as a Lender hereunder or under any of the
other Financing Agreements for purposes of granting consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Financing
Agreements or for purposes of making requests to the Agent pursuant to Section
10 to the extent that such participation is beneficially owned by a Borrower or
any Affiliate of a Borrower, and the determination of the Majority Lenders shall
for all purposes of this Agreement and the other Financing Agreements be made
without regard to the interest of such transferor Lender in the Loans to the
extent of such participation.

12.11 Miscellaneous Assignment Provisions. Any assigning Lender shall
retain its rights to be indemnified pursuant to Sections 6.8, 9.4, 11.5 and 11.6
with respect to any claims or actions arising prior to the date of such
assignment. If Congress transfers all of its interest, rights and obligations
under this Agreement, the Agent shall, in consultation with the Borrowers and
with the consent of the Majority Lenders, appoint another financial institution
to act as a Reference Bank hereunder. Anything contained in this Section 12.11
to the contrary notwithstanding, any Lender may at any time pledge all or any
portion of its interest and rights under this Agreement to any of the twelve
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. (S)341. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other
Financing Agreements.

12.12 Confidentiality.

(a)   Agent and Lenders shall use all reasonable efforts to keep
confidential, in accordance with its customary procedures for handling
confidential information and safe and sound lending practices, any non-public
information supplied to it by Borrowers pursuant to this Agreement which is
clearly and conspicuously marked as confidential at the time such information is
furnished by Borrowers to Agent and Lenders, provided, that, nothing contained
herein shall limit the disclosure of any such information: (i) to the extent
required by statute, rule, regulation, subpoena or court order, (ii) to bank
examiners and other regulators, auditors and/or accountants, (iii) in connection
with any litigation to which Agent or any such Lender is a party, (iv) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) shall have
first agreed in writing

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to treat such information as confidential in accordance with this Section 12.12,
or (v) to counsel for Agent or any Lender or any participant or assignee (or
prospective participant or assignee).

(b)   In no event shall this Section 12.12 or any other provision of
this Agreement or applicable law be deemed: (i) to apply to or restrict
disclosure of information that has been or is made public by any Borrower or any
third party without breach of this Section 12.12 or otherwise become generally
available to the public other than as a result of a disclosure in violation
hereof, (ii) to apply to or restrict disclosure of information that was or
becomes available to Agent or any Lender on a non-confidential basis from a
person other than a Borrower, (iii) require Agent or any Lender to return any
materials furnished by Borrowers to Agent or any Lenders, or (iv) prevent Agent
and Lenders from responding to routine informational requests in accordance with
the Code of Ethics for the Exchange of Credit Information promulgated by The
Robert Morris Associates or other applicable industry standards relating to the
exchange of credit information. The obligations of Agent and Lenders under this
Section 12.12 shall supersede and replace the obligations of Agent and Lenders
under any confidentiality letter signed prior to the date hereof

12.13 Entire Agreement. This Agreement, the other Financing Agreements, any
supplements hereto or thereto, and any instruments or documents delivered or to
be delivered in connection herewith or therewith represents the entire agreement
and understanding concerning the subject matter hereof and thereof between the
parties hereto, and supersede all other prior agreements, understandings,
negotiations and discussions, representations, warranties, commitments,
proposals, offers and contracts concerning the subject matter hereof, whether
oral or written. In the event of any inconsistency between the terms of this
Agreement and any schedule or exhibit hereto, the terms of this Agreement shall
govern.

12.14 Counterparts, Etc. This Agreement or any of the other Financing
Agreements may be executed in any number of counterparts, each of which shall be
an original, but all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of this Agreement or any of the
other Financing Agreements by telefacsimile shall have the same force and effect
as the delivery of an original executed counterpart of this Agreement or any of
such other Financing Agreements. Any party delivering an executed counterpart of
any such agreement by telefacsimile shall also deliver an original executed
counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of such agreement.

12.15 Choice of Language. The parties hereto confirm that they have
requested that this Agreement and all documents related hereto be drafted in
English. Les parties aux presentes ont exige que cette convention ainsi que tout
document connexe soient rediges en anglais.

SECTION 13. THE AGENT.

13.1  Authorization.

(a)   The Agent is authorized to take such action on behalf of each
of the Lenders and to exercise all such powers as are hereunder and under any of
the other Financing Agreements and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, including the
authority, without the necessity of any notice to or further consent of the
Lenders, from time to time to take any action with respect to any Collateral

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or the Financing Agreements which may be necessary to perfect, maintain
perfected or insure the priority of the security interest in and liens upon the
Collateral granted pursuant hereto or to the other Financing Agreements, and,
provided that no duties or responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the Agent.

(b)   The relationship between the Agent and each of the Lenders is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the Lenders.
Nothing contained in this Agreement nor the other Financing Agreements shall be
construed to create an agency, trust or other fiduciary relationship between the
Agent and any of the Lenders.

(c)   As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Financing Agreements, the Agent is nevertheless a
"representative" of the Lenders, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the Lenders
and the Agent with respect to all collateral security and guaranties
contemplated by the Financing Agreements. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or otherwise,
relating to the attachment, perfection, priority or enforcement of any security
interests, mortgages or deeds of trust in collateral security intended to secure
the payment or performance of any of the Obligations, all for the benefit of the
Lenders and the Agent.

13.2  Employees and Agents. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Agreement and the other Financing Agreements. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.

13.3  No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Financing Agreements, or
in connection herewith or therewith, or be responsible for the consequences of
any oversight or error of judgment whatsoever, unless it is determined by a
final and non-appealable judgment or court order binding on Agent, that the acts
or omissions of such Agent or such other Person constituted willful misconduct
or gross negligence.

13.4  No Representations.

(a)   The Agent shall not be responsible for the execution or
validity or enforceability of this Agreement, the Letter of Credit
Accommodations, any of the other Financing Agreements or any instrument at any
time constituting, or intended to constitute, collateral security for any of the
Financing Agreements, or for the value of any such collateral security or for
the validity, enforceability, or collectability of any such amounts owing with
respect to any of the Financing Agreements, or for any recitals or statements,
warranties or representations made herein or in any of the other Financing
Agreements or in any certificate or

94

instrument hereafter furnished to it by or on behalf of Borrowers or any of
their Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for any of the Financing Agreements or to inspect any of the
properties, books or records of Borrowers or any of their Subsidiaries. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by Borrowers shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now make any
representations or warranties, express or implied, nor does it assume any
liability to the Lenders, with respect to the credit worthiness or financial
conditions of Borrowers or any of its Subsidiaries. Each Lender acknowledges
that it has, independently and without reliance upon the Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement.

(b)   For purposes of determining compliance with the conditions set
forth in Section 4, each Lender that has executed this Agreement shall be deemed
to have consented to, approved or accepted, or to be satisfied with, each
document and matter either sent, or made available, by the Agent to such Lender
for consent, approval, acceptance or satisfaction, or required thereunder to be
to be consent to or approved by or acceptable or satisfactory to such Lender,
unless an officer of the Agent active upon the Borrower's account shall have
received notice from such Lender not less than one (1) Business Day prior to the
date of the closing hereunder specifying such Lender's objection thereto and
such objection shall not have been withdrawn by notice to the Agent to such
effect on or prior to such date.

13.5  Payments.

(a)   A payment by Borrowers to the Agent hereunder or under any of
the other Financing Agreements for the account of any Lender shall constitute a
payment to such Lender. The Agent agrees promptly to distribute to each Lender
such Lender's pro rata share of payments received by the Agent for the account
of the Lenders except as otherwise expressly provided herein or in any of the
other Financing Agreements.

(b)   If in the opinion of the Agent the distribution of any amount
received by it in such capacity hereunder or under any of the other Financing
Agreements might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.

(c)   Notwithstanding anything to the contrary contained in this
Agreement or any of the other Financing Agreements, any Lender that fails (i) to
make available to the Agent its pro rata share of any Loan or to purchase any
participation in a Letter of Credit Accommodation, or (ii) to comply with the
provisions of Section 10.2(i) with respect to making dispositions and
arrangements with the other Lenders, where such Lender's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Lenders, in each case as, when and
to the full extent required by the

95

provisions of this Agreement, shall be deemed delinquent (a "Delinquent Lender")
and shall be deemed a Delinquent Lender until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and all
payments due to it from Borrowers and other Obligors, whether on account of
outstanding Revolving Loans, Term Loans, interest, fees or otherwise, to the
remaining non-delinquent Lenders for application to, and reduction of, their
respective pro rata shares of all outstanding Revolving Loans and other
Obligations. The Delinquent Lender hereby authorizes the Agent to distribute
such payments to the non-delinquent Lenders in proportion to their respective
pro rata shares of all outstanding Revolving Loans and other Obligations. A
Delinquent Lender shall be deemed to have satisfied in full a delinquency when
and if, as a result of application of the assigned payments to all outstanding
Revolving Loans and other Obligations of the non-delinquent Lenders, the
Lenders' respective pro rata shares of all outstanding Revolving Loans and other
Obligations have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.

(d)   At the Borrowers' request, the Agent or an Eligible Assignee
reasonably acceptable to the Agent shall have the right (but not the obligation)
to purchase from any Delinquent Lender, and each Delinquent Lender shall, upon
such request, sell and assign to the Agent or such Eligible Assignee, all of the
Delinquent Lender's outstanding Revolving Loans and participations in Letter of
Credit Accommodations hereunder. Such sale shall be consummated promptly after
the Agent has arranged for a purchase by the Agent or an Eligible Assignee
pursuant to an Assignment and Acceptance, and at a price equal to the
outstanding principal balance of the Delinquent Lender's Revolving Loans plus
accrued interest and fees, without premium or discount.

13.6  Holders of Letter of Credit Accommodation Participations. The Agent
may deem and treat the purchaser of any participation in Letter of Credit
Accommodations as the absolute owner or purchaser thereof for all purposes
hereof until it shall have been furnished in writing with a different name by
such payee or by a subsequent holder, assignee or transferee.

13.7  Indemnity. The Lenders ratably agree hereby to indemnify and hold
harmless the Agent and the Reference Bank from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent and/or the Reference Bank
has not been reimbursed by the Borrowers as required by Section 11.5), and
liabilities of every nature and character arising out of or related to this
Agreement or any of the other Financing Agreements or the transactions
contemplated or evidenced hereby or thereby, or the Agent's or the Reference
Bank's actions taken hereunder or thereunder, unless it is determined by a court
of competent jurisdiction by a final and non-appealable judgment or court order
binding on Agent or Reference Bank, as the case may be, that such loss was the
result of acts or omissions of the Agent or the Reference Bank, as the case may
be, constituting willful misconduct or gross negligence.

13.8  Agent as Lender. In its individual capacity, Congress shall have the
same obligations and the same rights, powers and privileges in respect to the
Loans made by it and as the purchaser of a participation in any Letter of Credit
Accommodation, as it would have were it not also the Agent.

96

13.9  Resignation; Removal. The Agent may resign at any time by giving
sixty (60) days prior written notice thereof to the Lenders and Borrowers. Upon
any such resignation, the Majority Lenders shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. If no successor Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Agreement and the other Financing Agreements shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.

13.10 Notification of Defaults and Events of Default. Agent shall not be
deemed to have notice of a Default or an Event of Default unless it is notified
thereof by a Borrower or a Lender with reference to this Agreement. Each Lender
hereby agrees that, upon learning of the existence of a Default or Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 13.10 it shall promptly
notify the other Lenders of the existence of such Default or Event of Default.

13.11 Duties in the Case of Enforcement. Each Lender agrees that, except as
set forth in Section 10.1(h), no Lender shall have the right individually (i) to
realize upon the security created under this Agreement or the other Financing
Agreements, (ii) to enforce any provision of this Agreement or the other
Financing Agreements or to exercise any remedy hereunder or thereunder, or (iii)
to make demand under this Agreement or any other Financing Agreement. In case
one or more Events of Default have occurred and shall be continuing, and whether
or not acceleration of the Obligations shall have occurred, the Agent shall, if
(a) so requested by the Majority Lenders and (b) the Lenders have provided to
the Agent such additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to enforce the
provisions hereof, the Financing Agreements authorizing the sale or other
disposition of all or any part of the Collateral, and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Majority Lenders may direct the Agent in writing as to
the method and the extent of any such sale or other disposition, the Lenders
hereby agreeing to indemnify and hold the Agent, harmless from all liabilities
incurred in respect of all actions taken or omitted in accordance with such
directions, provided that the Agent need not comply with any such direction to
the extent that the Agent reasonably believes the Agent's compliance with such
direction to be unlawful or commercially unreasonable in any applicable
jurisdiction.

13.12 Agency for Perfection. Each Lender hereby appoints each other Lender
as agent for the purpose of perfecting the Lenders' security interest in assets
which, in accordance with Article 9 of the UCC can be perfected only by
possession. Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and, promptly upon
the Agent's request therefore shall deliver such Collateral to the Agent or in
accordance with the Agent's instructions.

97

13.13 Field Audit and Examination Reports; Disclaimer by Lenders. In the
event that the Agent provides to Lenders copies of field audits or examination
reports (each a "Report" and collectively, "Reports"), in Agent's discretion,
each Lender:

(a)   expressly agrees and acknowledges that the Agent (i) makes no
representation or warranty as to the accuracy of any Report; or (ii) shall be
liable for any information contained in any Report;

(b)   expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrowers and will rely significantly upon each Borrowers' books and records, as
well as on representations of each Borrower's personnel;

(c)   agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and

(d)   without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Agent and any
such other Lender preparing a Report harmless from any action the indemnifying
Lender may take or conclusion the indemnifying Lender may reach or draw from any
Report in connection with any loans or other credit accommodations that the
indemnifying Lender has made or may make to any of the Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of any of the Borrowers; and (ii) to pay and protect, and
indemnify, defend and hold the Agent and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses and other amounts (including attorney's fees and expenses)
incurred by the Agent and any such other Lender preparing a Report as the direct
or indirect result of any third parties who might obtain all or part of any
Report through the indemnifying Lender.

13.14 Agent as fonde de pouvoir. Without prejudice to the provisions of
this Agreement, each Lender hereby designates and appoints the Agent as the
person holding the power of attorney (fonde de pouvoir) of the Lenders as
contemplated under Article 2692 of the Civil Code of Quebec, to enter into, to
take and to hold on their behalf, and for their benefit, the Deed of Hypothec,
and to exercise such powers and duties which are conferred upon the Agent under
the Deed of Hypothec. Any Person who becomes a Lender shall be deemed to have
consented to and confirmed the Agent as the person holding the power of attorney
(fonde de pouvoir) as aforesaid and to have ratified, as of the date it becomes
a Lender, all actions taken by the Agent in such capacity. As the person holding
the power of attorney (fonde de pouvoir), the Agent shall be entitled to
delegate from time to time any of its powers or duties under the Deed of
Hypothec to any Person and on such terms and conditions as the Agent may
determine from time to time.

Without prejudice to the designations and appointment of the Agent as the
person holding the power of attorney (fonde de pouvoir) as aforesaid, each
Lender hereby additionally designates and appoints the Agent as agent and
custodian for and on behalf of each of them to hold and to be the sole
registered holder of any bond issued under the Deed of Hypothec, notwithstanding
Section 32 of An Act respecting the special powers of legal persons (Quebec) or
any other requirement of law. In this respect, (i) the Agent, as agent and
custodian of the

98

Lenders, shall keep a record indicating the names and addresses of, and the pro
rata portion of the obligations and indebtedness secured by the Movable
Hypothec, owing to the persons for and on behalf of whom the aforesaid bond is
so held from time to time and (ii) each Lender will be entitled to the benefits
of any Collateral subject to the Deed of Hypothec and will participate in the
proceeds of realization of any such collateral, the whole in accordance with the
terms hereof. The Agent, in such capacity as agent and custodian shall, (x) have
the sole and exclusive right and authority to exercise, except as may be
otherwise specifically restricted by the terms hereof, all rights and remedies
given to the Agent with respect to the Collateral under the Deed of Hypothec and
Movable Hypothec, applicable law or otherwise, and (y) benefit from and be
subject to all provisions hereof with respect to the Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the liability
or responsibility to and indemnification by the Lenders. Any Person who becomes
a Lender shall be deemed to have consented to and confirmed the Agent as the
agent and custodian as aforesaid and to have ratified, as of the date it becomes
a Lender, all actions taken by the Agent in such capacity. As agent and
custodian, the Agent shall be entitled to delegate from time to time any of its
powers or duties hereunder to any Person and on such terms and conditions as the
Agent may determine from time to time.

SECTION 14. JOINT AND SEVERAL LIABILITY; GUARANTEES.

14.1   Joint and Several Liability. All Loans made and Letter of Credit
Accommodations issued hereunder are made to or for the mutual benefit, directly
and indirectly, of each of the Borrowers and in consideration of the agreement
of the other Borrowers to accept joint and several liability for the
Obligations. Each Borrower jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several and direct and primary liability for the full and indefeasible
payment when due and performance of all Obligations and for the prompt and full
payment and performance of all of the promises, covenants, representations, and
warranties made or undertaken by each Borrower under the Financing Agreements
and Borrowers agree that such liability is independent of the duties,
obligations, and liabilities of each of the joint and several Borrowers. In
furtherance of the foregoing, each Borrower jointly and severally, absolutely
and unconditionally guarantees to Agent and Lenders the full and indefeasible
payment and performance when due of all the Obligations.

14.2   Suretyship Waivers and Consents.

(a)  Each Borrower acknowledges that the obligations of such
Borrower undertaken herein might be construed to consist, at least in part, of
the guarantee of obligations of persons other than such Borrower (including the
other Borrowers) and, in full recognition of that fact and in full recognition
of the joint and several and direct and primary liability of each Borrower
hereunder, each Borrower consents and agrees that Agent and Lenders may, at any
time and from time to time, without notice or demand (except as provided in and
in accordance with the terms of this Agreement), whether before or after any
actual or purported termination, repudiation or revocation of this Agreement by
any Borrower, and without affecting the enforceability or continuing
effectiveness hereof as to each Borrower: (i) increase, extend, or otherwise
change the time for payment or the terms of the Obligations or any part thereof;
(ii) supplement, restate, modify, amend, increase, decrease, or waive, or enter
into or give any agreement, approval or consent with respect to, the Obligations
or any part thereof, or any of the Financing Agreements or any additional
security or guarantees, or any condition, covenant,

99

default, remedy, right, representation, or term thereof or thereunder; (iii)
accept new or additional instruments, documents, or agreements in exchange for
or relative to any of the Financing Agreements or the Obligations or any part
thereof; (iv) accept partial payments on the Obligations; (v) receive and hold
additional security or guarantees for the Obligations or any part thereof; (vi)
release, reconvey, terminate, waive, abandon, fail to perfect, subordinate,
exchange, substitute, transfer, or enforce any security or guarantees, and apply
any security and direct the order or manner of sale thereof as Agent in its sole
and absolute discretion may determine; (vii) release any person from any
personal liability with respect to the Obligations or any part thereof; (viii)
settle, release on terms satisfactory to Agent or by operation of applicable
laws or otherwise liquidate or enforce any Obligations and any security therefor
or guaranty thereof in any manner, consent to the transfer of any security and
bid and purchase at any sale; or (ix) consent to the merger, change, or any
other restructuring or termination of the corporate or partnership existence of
any Borrower, and correspondingly restructure the Obligations, and any such
merger, change, restructuring, or termination shall not affect the liability of
any Borrower or the continuing effectiveness hereof, or the enforceability
hereof with respect to all or any part of the Obligations.

(b)   Agent and Lenders may enforce this Agreement independently as
to each Borrower and independently of any other remedy or security Agent and
Lenders at any time may have or hold in connection with the Obligations, and it
shall not be necessary for Agent and Lenders to marshal assets in favor of any
Borrower or any Obligor or to proceed upon or against or exhaust any security or
remedy before proceeding to enforce this Agreement. Each Borrower expressly
waives any right to require Agent to marshal assets in favor of any Borrower or
any guarantor of the Obligations or to proceed against any other Borrower, and
agrees that Agent may proceed against Borrowers or any Collateral in such order
as Agent shall determine in its sole and absolute discretion.

(c)   Agent and Lenders may file a separate action or actions against
any Borrower, whether such action is brought or prosecuted with respect to any
security or against any guarantor of the Obligations, or whether any other
person is joined in any such action or actions. Each Borrower agrees that Agent
and Lenders and each Borrower and any affiliate of any Borrower may deal with
each other in connection with the Obligations or otherwise, or alter any
contracts or agreements now or hereafter existing between any of them, in any
manner whatsoever, all without in any way altering or affecting the continuing
efficacy of this Agreement. Each Borrower, as a joint and several Borrower and
guarantor hereunder, expressly waives the benefit of any statute of limitations
affecting its joint and several liability and guarantee hereunder (but not its
primary liability) or the enforcement of the Obligations or any rights of Agent
and Lender created or granted herein.

(d)   Agent's and Lender's rights hereunder shall be reinstated and
revived, and the enforceability of this Agreement shall continue, with respect
to any amount at any time paid on account of the Obligations which thereafter
shall be required to be restored or returned by Agent and Lenders, all as though
such amount had not been paid. The rights of Agent and Lenders created or
granted herein and the enforceability of this Agreement at all times shall
remain effective to cover the full amount of all the Obligations even though the
Obligations, including any part thereof or any other security or guaranty
therefor, may be or hereafter may become invalid or otherwise unenforceable as
against any Borrower and whether or not any Borrower shall have any personal
liability with respect thereto.

100

(e)   Each Borrower expressly waives any and all defenses now or
hereafter arising or asserted by reason of (i) any disability or other defense
of the other Borrowers with respect to the Obligations; (ii) the
unenforceability or invalidity of any security or guaranty for the Obligations
or the lack of perfection or continuing perfection or failure of priority of any
security for the Obligations; (iii) the cessation for any cause whatsoever of
the liability of any Borrower (other than by reason of the full payment and
performance of all Obligations); (iv) any failure of Lender to marshal assets in
favor of any Borrower; (v) any failure of Agent or Lenders to give notice to any
Borrower of sale or other disposition of Collateral of another Borrower or any
defect in any notice that may be given in connection with any such sale or
disposition of Collateral of any Borrower securing the Obligations; (vi) any
failure of Agent or Lenders to comply with applicable law in connection with the
sale or other disposition of any Collateral or other security of any Borrower,
for any Obligation, including any failure of Agent or Lenders to conduct a
commercially reasonable sale or other disposition of any Collateral or other
security of the other Borrowers for any Obligation; (vii) any act or omission of
Agent or Lenders or others that directly or indirectly results in or aids the
discharge or release of the other Borrowers or the Obligations of the other
Borrowers or any security or guaranty therefor by operation of law or otherwise;
(viii) any law which provides that the obligation of a surety or guarantor must
neither be larger in amount nor in other respects more burdensome than that of
the principal or which reduces a surety's or guarantor's obligation in
proportion to the principal obligation; (ix) any failure of Agent or Lenders to
file or enforce a claim in any bankruptcy or other proceeding with respect to
any Borrower; (x) the avoidance of any lien or security interest in assets of
the other Borrowers in favor of Agent or Lenders for any reason; or (xi) any
action taken by Agent or Lenders that is authorized by this section or any other
provision of any Loan Document. Until such time, if any, as all of the
Obligations have been indefeasibly paid and performed in full and no portion of
any commitment of Agent or Lenders to Borrowers under any Financing Agreement
remains in effect, Borrowers' rights of subrogation, contribution,
reimbursement, or indemnity against the other shall be fully and completely
subordinated to the indefeasible repayment in full of the Obligations, and each
Borrower expressly waives any right to enforce any remedy that it now has or
hereafter may have against any other Person and waives the benefit of, or any
right to participate in, any Collateral now or hereafter held by Agent or
Lenders.

(f)   To the fullest extent permitted by applicable law, each
Borrower expressly waives and agrees not to assert, any and all defenses in its
favor based upon an election of remedies by Agent or Lenders which destroys,
diminishes, or affects such Borrower's subrogation rights against the other
Borrowers, or against any Obligor, and/or (except as explicitly provided for
herein) any rights to proceed against each other Borrower, or any other party
liable to Agent or Lenders, for reimbursement, contribution, indemnity, or
otherwise.

(g)   Borrowers and each of them warrant and agree that each of the
waivers and consents set forth herein are made after consultation with legal
counsel and with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy, or otherwise adversely affect rights which Borrowers
otherwise may have against each other, Agent or Lenders, or others, or against
Collateral, and that, under the circumstances, the waivers and consents herein
given are reasonable and not contrary to public policy or law. If any of the
waivers or consents herein are determined to be contrary to any applicable law
or public policy, such waivers and consents shall be effective to the maximum
extent permitted by law.

101

(h)   Notwithstanding any provision herein to the contrary, the joint
and several liability and guarantees of the Canadian Borrowers shall be limited
to the maximum amount permitted under any laws to which a Canadian Borrower is
subject.

14.3  Contribution Agreement. As an inducement to Agent and Lenders to
enter into the Financing Agreements and to make the loans and extend credit to
the Borrowers, each Borrower and each Obligor agrees to indemnify and hold the
other harmless from and each shall have a continuing right of contribution
against the other Borrowers and any Obligors, if and to the extent that a
Borrower makes or is caused to make disproportionate payments in excess of that
Borrower's Proportionate Share of the Loans or contributions (from dispositions
of its assets or otherwise) to the repayment and satisfaction of the
Obligations. These indemnification and contribution obligations shall be
unconditional and continuing obligations of the Borrowers and Obligors and shall
not be waived, rescinded, modified, limited or terminated in any way whatsoever
without the prior written consent of Agent, in its sole discretion. For purposes
hereof, the "Proportionate Share" of a Borrower shall mean the Adjusted Net
Worth of such Borrower divided by the Adjusted Net Worth of all the Borrowers in
the aggregate on the date of this Agreement.

14.4  PREJUDGMENT REMEDIES. EACH BORROWER HEREBY WAIVES SUCH RIGHTS AS IT
MAY HAVE TO NOTICE AND/OR HEARING UNDER ANY APPLICABLE FEDERAL OR STATE LAWS
INCLUDING, WITHOUT LIMITATION, CONNECTICUT GENERAL STATUTES SECTIONS 52-278A,
ET-SEQ., AS AMENDED, PERTAINING TO THE EXERCISE BY AGENT OR LENDERS OF SUCH
RIGHTS AS THE AGENT AND LENDERS MAY HAVE INCLUDING, BUT NOT LIMITED TO, THE
RIGHT TO SEEK PREJUDGMENT REMEDIES AND/OR DEPRIVE ANY BORROWER OF OR AFFECT THE
USE OF OR POSSESSION OR ENJOYMENT OF A BORROWER'S PROPERTY PRIOR TO THE
RENDITION OF A FINAL JUDGMENT AGAINST A BORROWER. EACH BORROWER FURTHER WAIVES
ANY RIGHT IT MAY HAVE TO REQUIRE AGENT OR LENDERS TO PROVIDE A BOND OR OTHER
SECURITY AS A PRECONDITION TO OR IN CONNECTION WITH ANY PREJUDGMENT REMEDY
SOUGHT BY LENDER.

[Remainder of Page Intentionally Left Blank]

102

Signature Page to Loan and Security Agreement

IN WITNESS WHEREOF, Lender and Borrower have caused these presents to be
duly executed as of the day and year first above written.

AGENT                                                          BORROWERS
-----                                                          ---------

CONGRESS FINANCIAL CORPORATION (NEW ENGLAND)                   CLEAN HARBORS, INC.
ALTAIR DISPOSAL SERVICES, LLC
By: /s/ George J. Psomas                                       BATON ROUGE DISPOSAL, LLC
-------------------------------------------
BRIDGEPORT DISPOSAL, LLC
Title: Senior Vice President                                   CLEAN HARBORS ANDOVER, LLC
----------------------------------------
CLEAN HARBORS ANTIOCH, LLC
US LENDER:                                                     CLEAN HARBORS ARAGONITE, LLC
----------                                                     CLEAN HARBORS ARIZONA, LLC
CLEAN HARBORS OF BALTIMORE, INC.
CONGRESS FINANCIAL CORPORATION                                 CLEAN HARBORS BATON ROUGE, LLC
(NEW ENGLAND)                                                  CLEAN HARBORS BDT, LLC
CLEAN HARBORS BUTTONWILLOW, LLC
By: /s/ George J. Psomas                                       CLEAN HARBORS CHATTANOOGA, LLC
-------------------------------------------
CHEMICAL SALES, LLC
Title: Senior Vice President                                   CLEAN HARBORS COFFEYVILLE, LLC
----------------------------------------
CLEAN HARBORS COLFAX, LLC
CLEAN HARBORS DEER PARK, L.P.
Address:                                                       CLEAN HARBORS DEER TRAIL, LLC
--------                                                       CLEAN HARBORS DISPOSAL SERVICES, INC.
CLEAN HARBORS FINANCIAL SERVICES COMPANY
One Post Office Square, Suite 3600                             CLEAN HARBORS FLORIDA, LLC
Boston, MA  02109                                              CLEAN HARBORS GRASSY MOUNTAIN, LLC
CLEAN HARBORS KANSAS, LLC
CLEAN HARBORS LAPORTE, L.P.
CANADIAN LENDER:                                               CLEAN HARBORS LAUREL, LLC
CLEAN HARBORS LONE MOUNTAIN, LLC
CONGRESS FINANCIAL CORPORATION (CANADA)                        CLEAN HARBOR LOAN STAR CORP.
CLEAN HARBORS LOS ANGELES, LLC
CLEAN HARBORS OF TEXAS, LLC
By: /s/ H. Rosenfeld                                           CLEAN HARBORS PECATONICA, LLC
-------------------------------------------
CLEAN HARBORS PLAQUEMINE, LLC
Title: Senior Vice President                                   CLEAN HARBORS PPM, LLC
----------------------------------------

Address: _____________________________________

141 Adelaide Street West, Suite 1500
Toronto, Ontario M5H 3L9

CLEAN HARBORS REIDSVILLE, LLC
CLEAN HARBORS SAN JOSE, LLC
CLEAN HARBORS TENNESSEE, LLC
CLEAN HARBORS WESTMORLAND, LLC
CLEAN HARBORS WHITE CASTLE, LLC
CROWLEY DISPOSAL, LLC
DISPOSAL PROPERTIES, LLC
GSX DISPOSAL, LLC
HARBOR MANAGEMENT CONSULTANTS, INC.
HARBOR INDUSTRIAL SERVICES TEXAS, L.P.
HILLIARD DISPOSAL, LLC
ROEBUCK DISPOSAL, LLC
SAWYER DISPOSAL SERVICES, LLC
TULSA DISPOSAL, LLC
CLEAN HARBORS ENVIRONMENTAL SERVICES, INC
CLEAN HARBORS OF BRAINTREE, INC.
CLEAN HARBORS OF NATICK, INC.
CLEAN HARBORS SERVICES, INC.
MURPHY'S WASTE OIL SERVICE INC.
CLEAN HARBORS KINGSTON FACILITY CORPORATION
CLEAN HARBORS OF CONNECTICUT,INC.
SPRING GROVE RESOURCE RECOVERY, INC.
CLEAN HARBORS CANADA, INC. (CURRENTLY SAFETY-KLEEN,
LTD.)
CLEAN HARBORS QUEBEC, INC. (CURRENTLY SAFETY-KLEEN
SERVICES (QUEBEC) LTD.)
CLEAN HARBORS MERCIER, INC. (CURRENTLY SAFETY-KLEEN
SERVICES (MERCIER) LTD.)
510127 N.B. INC.

By: /s/ Stephen Moynihan
-------------------------------------------------
Title: Senior Vice President
----------------------------------------------

Chief Executive Office:
----------------------
1501 Washington Street
Braintree, MA 02184

EXHIBIT A

Information Certificates

EXHIBIT B

Compliance Certificate

[Letterhead of Borrower]

________________________, 200_

Congress Financial Corporation (New England)
One Post Office Square, Suite 3600
Boston, MA  02109

The undersigned, the chief financial officer of Clean Harbors, Inc. and its
Subsidiaries (the "Borrowers") certifies, represents, and warrants to Congress
Financial Corporation (New England) (the "Agent") and to the other Lenders under
the Loan Agreement (as hereinafter defined) in accordance with the requirements
of Section 9.6(a) of that certain Loan and Security Agreement dated September 6,
2002, among the Agent, Lenders, and Borrowers (the "Loan Agreement").
Capitalized terms used in this Compliance Certificate, unless otherwise defined
herein, shall have the meanings ascribed to them in the Loan Agreement.

1.   The attached financial statements for Parent for the period(s) ending
__________ are correct and fairly present the financial position and results of
the operations of Parent and its Subsidiaries as of the end of and through the
specified period(s).

2.   Based upon my review of the attached financial statements of Parent
and its Subsidiaries for the [Fiscal Year] [monthly period] ending
_____________, 200_, I hereby certify that:

(a)  Parent's EBITDA is _______________ which [is not less than] [is less
than] the minimum amount of $____________ required under Section 9.17
of the Loan Agreement

(b)  Parent's Fixed Charge Coverage Ratio is ____ to 1:00 which [is not
less than] [is less than] the minimum ratio of ___ to 1:00 required
under 9.18 of the Loan Agreement.

3.   No Default exists on the date hereof, other than: ___________ [if
none, so state]; and

4.   No Event of Default exists on the date hereof, other than ____________
[if none, so state].

Very truly yours,

CLEAN HARBORS, INC., as Borrower
Representative

By:    _________________________________
Name:  _________________________________
Title: Chief Financial Officer

EXHIBIT C

Permitted Holders

Name                      Type of Securities              No. of Shares         Percent of Total
----                      ------------------              -------------         ----------------

Alan S. McKim               Common Stock                    4,231,762                 32.7%

EXHIBIT D

Form of Assignment and Acceptance

FORM OF
ASSIGNMENT AND ACCEPTANCE

Reference is made to the Loan and Security Agreement, dated as of September 6,
2002 (as amended, supplemented, waived or otherwise modified from time to time,
the "Loan Agreement"), among Clean Harbors, Inc. and its Subsidiaries
(collectively, "Borrowers"), Congress Financial Corporation (New England)
("Agent"), as agent for the financial institutions parties thereto as Lenders
("Lenders"). Unless otherwise defined herein, capitalized terms defined in the
Loan Agreement are used herein as defined therein.

________________________ (the "Assignor") and ______________________ (the
"Assignee") agree as follows:

1.   Subject to the conditions of this Assignment and Acceptance, the
Assignor hereby irrevocably sells and assigns to the Assignee without recourse
to the Assignor except with respect to the representations of Assignor set forth
herein, and the Assignee hereby irrevocably purchases and assumes from the
Assignor without recourse to the Assignor, except with respect to the
representations of Assignor set forth herein, as of the Effective Date (as
defined below), an interest (the "Assigned Interest") in and to the Assignor's
rights, benefits, indemnities, and obligations of the Assignor under the Loan
Agreement, the Financing Agreements, and the Collateral with respect to those
credit facilities provided for in the Loan Agreement as are set forth on
Schedule 1 (individually, an "Assigned Facility"; collectively, the "Assigned
Facilities") in a principal amount for each Assigned Facility as set forth on
Schedule 1 together with an Pro Rata Share and Revolving Loan Limit, as set
forth in Schedule 1, in all unpaid interest and fees accrued from the Effective
Date, subject to the terms of the Loan Agreement. The Assigned Interest is equal
to Assignee's Pro Rata Share, as reflected on Schedule 1, of each of the credit
facilities provided for in the Loan Agreement.

2.   The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Agreement, any other Financing Agreement or any other instrument or document
furnished pursuant thereto, or the perfection or priority of any security
interest purported to be created by any Financing Agreement, except that
Assignor represents to Assignee as follows: (i) that it is legally authorized to
enter into this Assignment and Acceptance, (ii) that it is the legal and
beneficial owner of the Assigned Interests, (iii) that it has not created any
lien or adverse claim upon the Assigned Interest, (iv) the Assigned Interest is
free and clear of any such adverse claim and any other lien or encumbrance and
(v) as of the Effective Date (but calculated prior to the assignment
contemplated hereby), Assignor's records reflect that to the best of Assignor's
knowledge the aggregate outstanding principal balance of each of the Loans and
LC Participation in the Letter of Credit Accommodations held by Assignor is as
set forth on Schedule 1 hereto; and (b) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers, and their Subsidiaries or any Obligor or the performance or
observance by Borrowers of any of their

respective obligations under the Loan Agreement or any other Financing Agreement
or any other instrument or document furnished pursuant hereto or thereto.

3.     The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance and that it is an
Eligible Assignee; (b) confirms that it has received a copy of the Loan
Agreement, together with copies of the financial statements delivered pursuant
thereto and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it has and that it will, independently and without
reliance upon the Assignor, the Agent or any other Lender and based on such
documents and information as it has deemed and shall deem appropriate at the
time, make and continue to make its own credit decisions in taking or not taking
action under the Loan Agreement, the other Financing Agreements or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Agreement, the other Financing
Agreements or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; (e) agrees that it will be bound by the
provisions of the Loan Agreement, and other Financing Agreements and will
perform in accordance with its terms all the obligations which by the terms of
the Loan Agreement and other Financing Agreements are required to be performed
by it as a Lender; and (f) agrees that it is bound by the terms of the
Intercreditor Agreement including, without limitation, the terms thereof giving
the Term Loan Agent the option to purchase its Revolving Loans and Pro Rata
Share of other Obligations in accordance with the terms thereof.

4.     The effective date of this Assignment and Acceptance shall be
_________ __, 200_ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, each party hereto shall deliver its duly executed
counterpart hereof to the Agent for acceptance by Agent and recording in the
Register by the Agent. Upon each such recordation, the Assignor agrees to pay to
the Agent a registration fee of $3,500.

5.     From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignee whether such amounts have
accrued prior to the Effective Date or accrued subsequent to the Effective Date.
The Assignor and the Assignee shall make all appropriate adjustments in payments
by the Agent for periods prior to the Effective Date or with respect to the
making of this assignment directly between themselves.

6.     From and after the Effective Date, (a) the Assignee shall be a
party to the Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Financing Agreements and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement (provided, that any right of the Assignor to the payment of expenses
and indemnities under the Loan Agreement in respect of the period preceding the
Effective Date shall continue in full force and effect notwithstanding the
provisions of this Assignment and Acceptance).

7.     This Assignment and Acceptance is intended to take effect as an
instrument under seal and shall be governed by, and construed and interpreted in
accordance with, the laws of The Commonwealth of Massachusetts.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.

SCHEDULE 1 to the
Assignment and Acceptance

Re: Loan and Security Agreement, dated as of
September 6, 2002, as amended, among
CLEAN HARBORS, INC. AND ITS SUBSIDIARIES
(as "Borrowers")
the Lenders from time to time parties thereto and
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND), as Agent

Name of Assignor:  ______________________

Name of Assignee: ______________________________

Effective Date of Assignment:  ____________, 200_

1.     Assignor's Interests (prior to given effect to assignment)

Type of Loan/Credit     Principal Amount
Facility               Assigned           Pro Rata Share       Revolving Loan Limit
----------------------  -------------------    ----------------     -----------------------

Revolving Loans         $                              %

LC Participation        $                              %

2.     Assigned Facilities

Type of Loan/Credit     Principal Amount
Facility               Assigned           Pro Rata Share       Revolving Loan Limit
----------------------  -------------------    ----------------     -----------------------

Revolving Loans         $                              %

LC Participation        $                              %

------------------------------------------------------------------------------------------
ASSIGNOR:                                                    ASSIGNEE:

------------------------------------------------------------------------------------------

By:   _______________________________________   By:   __________________________________
Name: _______________________________________   Name: __________________________________
Title:______________________________________    Title:__________________________________
Address:________________________________
___________________________________
Facsimile No.:

------------------------------------------------------------------------------------------

Wire Transfer Instructions

ABA No.      ___________________________
Account No.  ___________________________
Attention:   ___________________________

Consented to:

Congress Financial Corporation (New England), as Agent

By:____________________________

SCHEDULE 1

Lenders' Pro Rata Shares,

And Revolving Loan Limits

Pro Rata Share                 Revolving
US Credit Facility                     of US Credit Facility          Loan Limit
------------------                     ---------------------          ----------

Congress Financial Corporation
(New England)                                 100%                    US Maximum Credit

Pro Rata Share of              Revolving
Canadian Credit Facility               Canadian Credit Facility       Loan Limit
------------------------               ------------------------       ----------

Congress Financial Corporation
(Canada)                                      100%                    Canadian Maximum Credit

SCHEDULE 2

Inactive Subsidiaries

Mr. Frank, Inc.

SK D'Incineration Inc.

Northeast Casualty Real Property LLC

EXHIBIT 4.25

FINANCING AGREEMENT

Dated as of September 6, 2002

by and among

CLEAN HARBORS, INC.,

CERTAIN OF ITS SUBSIDIARIES SIGNATORY HERETO,
as Borrowers,

CERTAIN OF ITS SUBSIDIARIES SIGNATORY HERETO,
as Guarantors,

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Lenders

and

ABLECO FINANCE LLC,
as Agent

TABLE OF CONTENTS

Page
----

ARTICLE I DEFINITIONS; CERTAIN TERMS .........................................................     1
Section 1.01    Definitions ..............................................................     1
Section 1.02    Terms Generally ..........................................................    24
Section 1.03    Accounting and Other Terms ...............................................    25
Section 1.04    Time References ..........................................................    25

ARTICLE II THE LOANS .........................................................................    25
Section 2.01    Commitments ..............................................................    25
Section 2.02    Making the Loans .........................................................    27
Section 2.03    Repayment of Loans; Evidence of Debt .....................................    27
Section 2.04    Interest .................................................................    28
Section 2.05    Term Loan Commitments; Prepayment of Loans ...............................    29
Section 2.06    Fees .....................................................................    31
Section 2.07    Securitization ...........................................................    31
Section 2.08    Taxes ....................................................................    31
Section 2.09    LIBOR Not Determinable; Illegality or Impropriety ........................    33
Section 2.10    Indemnity ................................................................    34
Section 2.11    Continuation and Conversion of Loans .....................................    34

ARTICLE III [RESERVED] .......................................................................    35

ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION .............................................    35
Section 4.01    Audit and Collateral Monitoring Fees .....................................    35
Section 4.02    Payments; Computations and Statements                                         35
Section 4.03    Sharing of Payments, Etc .................................................    36
Section 4.04    Apportionment

of Payments ................................................    36
Section 4.05    Increased Costs and Reduced Return .......................................    37
Section 4.06    Joint and Several Liability of the Borrowers .............................    38

ARTICLE V CONDITIONS TO LOANS ................................................................    39
Section 5.01    Conditions Precedent to Effectiveness ....................................    39
Section 5.02    Conditions Precedent to All Loans ........................................    45
Section 5.03    Conditions Subsequent to All Loans .......................................    46

ARTICLE VI REPRESENTATIONS AND WARRANTIES ....................................................    47
Section 6.01    Representations and Warranties ...........................................    47

ARTICLE VII COVENANTS OF THE LOAN PARTIES ....................................................    59
Section 7.01    Affirmative Covenants ....................................................    59
Section 7.02    Negative Covenants .......................................................    69
Section 7.03    Financial Covenants ......................................................    75

ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL ...    77
Section 8.01    Management of Collateral .................................................    77
Section 8.02    Accounts Receivable Documentation ........................................    78

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Section 8.03   Status of Accounts Receivable and Other Collateral ..............   78
Section 8.04   Collateral Custodian ............................................   79

ARTICLE IX EVENTS OF DEFAULT ........................................................   79
Section 9.01   Events of Default ...............................................   79

ARTICLE X AGENT .....................................................................   83
Section 10.01  Appointment .....................................................   83
Section 10.02  Nature of Duties ................................................   84
Section 10.03  Rights, Exculpation, Etc ........................................   84
Section 10.04  Reliance ........................................................   85
Section 10.05  Indemnification .................................................   85
Section 10.06  Agent Individually ..............................................   86
Section 10.07  Successor Agent .................................................   86
Section 10.08  Collateral Matters ..............................................   86
Section 10.09  Agency for Perfection ...........................................   88

ARTICLE XI GUARANTY .................................................................   88
Section 11.01  Guaranty ........................................................   88
Section 11.02  Guaranty Absolute ...............................................   88
Section 11.03  Waiver ..........................................................   89
Section 11.04  Continuing Guaranty; Assignments ................................   89
Section 11.05  Subrogation .....................................................   89
Section 11.06  Judgment Currency ...............................................   90

ARTICLE XII MISCELLANEOUS ...........................................................   91
Section 12.01  Notices, Etc ....................................................   91
Section 12.02  Amendments, Etc .................................................   92
Section 12.03  No Waiver; Remedies, Etc ........................................   92
Section 12.04  Expenses; Taxes; Attorneys' Fees ................................   92
Section 12.05  Right of Set-off ................................................   93
Section 12.06  Severability ....................................................   94
Section 12.07  Assignments and Participations ..................................   94
Section 12.08  Counterparts ....................................................   96
Section 12.09  GOVERNING LAW ...................................................   97
Section 12.10  CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE ...........   97
Section 12.11  WAIVER OF JURY TRIAL, ETC .......................................   97
Section 12.12  Consent by the Agent and Lenders ................................   98
Section 12.13  No Party Deemed Drafter .........................................   98
Section 12.14  Reinstatement; Certain Payments .................................   98
Section 12.15  Indemnification .................................................   98
Section 12.16  Agent for Borrowers .............................................   99
Section 12.17  Records .........................................................  100
Section 12.18  Binding Effect ..................................................  100
Section 12.19  Interest ........................................................  100
Section 12.20  Confidentiality .................................................  101
Section 12.21  Integration .....................................................  102

TABLE OF CONTENTS ...................................................................    i

-ii-

SCHEDULE AND EXHIBITS

Schedule 1.01(A)        Lenders and Lenders' Commitments
Schedule 1.01(B)        Facilities
Schedule 1.01(C)        Canadian Security Agreements
Schedule 1.01(D)        Inactive Subsidiaries
Schedule 1.01(E)        Closing Costs
Schedule 5.01(d)(xxiv)  CK Rolling Stock
Schedule 5.03(a)        SK Rolling Stock
Schedule 5.03(b)        Post-Closing Real Estate Obligations
Schedule 5.03(e)        Canadian Secured Creditor Waivers
Schedule 6.01(e)        Subsidiaries
Schedule 6.01(f)        Litigation; Commercial Tort Claims
Schedule 6.01(i)        ERISA
Schedule 6.01(o)        Real Property
Schedule 6.01(r)        Environmental Matters; Permits
Schedule 6.01(s)        Insurance
Schedule 6.01(v)        Bank Accounts
Schedule 6.01(w)        Intellectual Property
Schedule 6.01(x)        Material Contracts
Schedule 6.01(dd)       Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office;
FEIN
Schedule 6.01(ee)       Tradenames
Schedule 6.01(ff)       Collateral Locations
Schedule 6.01(ii)       Assumed Liabilities
Schedule 7.02(a)        Existing Liens
Schedule 7.02(b)        Existing Indebtedness
Schedule 7.02(e)        Existing Investments
Schedule 7.02(k)        Limitations on Dividends and Other Payment Restrictions

Exhibit A       Form of Guaranty
Exhibit B       Form of Security Agreement
Exhibit C       Form of Pledge Agreement
Exhibit D       Form of Notice of Borrowing
Exhibit E       Form of Intercreditor Agreement
Exhibit F       Form of Opinion of Counsel
Exhibit G       Form of Joinder Agreement
Exhibit H       Form of Assignment and Acceptance
Exhibit I       Form of Contribution Agreement
Exhibit J       Form of Custody Agreement
Exhibit K       Form of Intercompany Subordination Agreement

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FINANCING AGREEMENT

Financing Agreement, dated as of September 6, 2002, by and among Clean
Harbors, Inc., a Massachusetts corporation (the "Parent"), each subsidiary of
the Parent listed as a "Borrower" on the signature pages hereto (together with
the Parent, each a "Borrower" and collectively, the "Borrowers"), each
subsidiary of the Parent listed as a "Guarantor" on the signature pages hereto
(each a "Guarantor" and collectively, the "Guarantors"), the financial
institutions from time to time party hereto (each a "Lender" and collectively,
the "Lenders"), and Ableco Finance LLC, a Delaware limited liability company
("Ableco"), as agent for the Lenders (in such capacity, the "Agent").

RECITALS

The Borrowers have asked the Lenders to extend credit to the Borrowers
consisting of (a) a term loan A in the aggregate principal amount of
$100,000,000 and (b) a term loan B in the aggregate principal amount of
$35,000,000, provided that the principal amount of each term loan may be
increased in accordance with the terms hereof. The proceeds of the term loans
shall be used (i) to facilitate the Acquisition (as hereinafter defined), (ii)
to refinance existing indebtedness of the Borrowers and pay the prepayment and
defeasance costs in connection therewith, (iii) to provide cash collateral for
letters of credit issued for the account of the Borrowers and the Guarantors,
(iv) for general working capital requirements and other general corporate
purposes of the Borrowers and (v) to pay fees and expenses related to the
Acquisition and this Agreement. The Lenders are severally, and not jointly,
willing to extend such credit to the Borrowers subject to the terms and
conditions hereinafter set forth.

In consideration of the premises and the covenants and agreements
contained herein, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS; CERTAIN TERMS

Section 1.01  Definitions. As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:

"Ableco" has the meaning specified therefor in the preamble hereto.

"Account Debtor" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.

"Account Receivable" means, with respect to any Person, any and all
rights of such Person to payment for goods sold and/or services rendered,
including accounts, general intangibles and any and all such rights evidenced by
chattel paper, instruments or documents, whether due or to become due and
whether or not earned by performance, and whether now or hereafter acquired or
arising in the future, and any proceeds arising therefrom or relating thereto.

"Acquisition" means the purchase by the Parent and certain of the
Borrowers of the Acquisition Assets and the assumption by the Parent and certain
of the Borrowers of certain of the liabilities relating thereto, pursuant to the
Acquisition Agreement.

"Acquisition Agreement" means the Acquisition Agreement, dated as of
February 22, 2002, as amended as of March 8, April 30 and September 6, 2002, by
and between Safety-Kleen Services, Inc. and the Parent, as in effect on the date
hereof.

"Acquisition Assets" means all of the property and assets (tangible and
intangible) sold, assigned or otherwise transferred to, or assumed or otherwise
acquired by, the Parent and certain of the Borrowers pursuant to the Sale Order
and the Acquisition Agreement.

"Acquisition Documents" means the Acquisition Agreement, each bill of
sale, each assignment agreement, each assumption agreement and all other
agreements, instruments and documents entered into or delivered in connection
with the Acquisition.

"Action" has the meaning specified therefor in Section 12.12.

"Additional Lender" has the meaning specified therefor in Section
2.01(c)(i).

"Adjusted Excess Availability" means the difference between (a) the sum
of (i) Excess Availability (as defined in the Revolving Credit Agreement as in
effect on the date hereof) of the Loan Parties under the Revolving Credit
Agreement after giving effect to the making of the Loans hereunder and (ii) the
aggregate amount of all unrestricted Cash and Cash Equivalents (exclusive of the
aggregate amount of all cash pledged to the L/C Issuer) and (b) the sum of (i)
the aggregate amount of the fees, costs, charges and expenses incurred by the
Loan Parties in connection with the Acquisition and the financing transactions
contemplated hereunder that are set forth in the flow of funds agreement dated
as of the date hereof among the Loan Parties, the Agent, the Lenders, the
Revolving Agent and the Revolving Lenders and (ii) $41,500,000 in respect of the
cash needed to collateralize the letters of credit to be issued by the L/C
Issuer on or before February 28, 2003.

"Administrative Borrower" has the meaning specified therefor in Section
12.16.

"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting power
for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise. Notwithstanding anything herein to the contrary, in no event shall
the Agent or any Lender be considered an "Affiliate" of any Loan Party.

"Agent" has the meaning specified therefor in the preamble hereto.

"Agent Advances" has the meaning specified therefor in Section
10.08(a).

"Agent's Account" means an account at a bank designated by the Agent
from time to time as the account into which the Loan Parties shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.

"Agreement" means this Financing Agreement, including all amendments,
modifications and supplements and any exhibits or schedules to any of the
foregoing, and shall refer to the Agreement as the same may be in effect at the
time such reference becomes operative.

-2-

"Assignment and Acceptance" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Agent, in
accordance with Section 12.07 hereof and substantially in the form of Exhibit H
hereto or such other form acceptable to the Agent.

"Authorized Officer" means, with respect to any Person, the chief
executive officer, chief financial officer, president or executive vice
president of such Person.

"Bank" means JPMorgan Chase Bank, its successors or any other bank
designated by the Administrative Agent to the Administrative Borrower from time
to time.

"Bankruptcy Code" means the United States Bankruptcy Code (11 U.S.C.ss.
101, et seq.), as amended, and any successor statute.

"Board" means the Board of Governors of the Federal Reserve System of
the United States.

"Board of Directors" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.

"Borrower" has the meaning specified therefor in the preamble hereto.

"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required to close,
provided, that with respect to the borrowing, payment or continuation of, or
determination of interest rate on LIBOR Loans, Business Day shall mean any
Business Day on which dealings in Dollars may be carried on in the interbank
eurodollar markets in New York City and London.

"Canadian Loan Party" means each of Clean Harbors Canada, Inc., Clean
Harbors Mercier, Inc., Clean Harbors Quebec, Inc., 510127 N.B. Inc., and each
other Subsidiary of the Parent organized in Canada that is a Loan Party.

"Canadian Mortgage" means each Mortgage made by a Loan Party with
respect to a Facility located in Canada.

"Canadian Security Agreements" means each of the agreements, documents
and instruments set forth in Schedule 1.01(C).

"Canadian Security Documents" means each Canadian Security Agreement
and each Canadian Mortgage.

"Capital Expenditures" means, with respect to any Person for any
period, the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or in a similar fixed asset account
on its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries during such period to acquire
by purchase or otherwise the business or fixed assets of, or the Capital Stock
of, any other Person.

-3-

"Capital Guideline" means any law, rule, regulation, policy, guideline
or directive (whether or not having the force of law and whether or not the
failure to comply therewith would be unlawful) of any central bank or
Governmental Authority (i) regarding capital adequacy, capital ratios, capital
requirements, the calculation of a bank's capital or similar matters, or (ii)
affecting the amount of capital required to be obtained or maintained by any
Lender or any Person controlling any Lender or the manner in which any Lender or
any Person controlling any Lender allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances, commitments,
assets or liabilities.

"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, and (ii) with
respect to any Person that is not a corporation, any and all partnership,
membership or other equity interests of such Person.

"Capitalized Lease" means, with respect to any Person, any lease of
real or personal property by such Person as lessee which is (i) required under
GAAP to be capitalized on the balance sheet of such Person or (ii) a transaction
(other than an operating lease of Rolling Stock) of a type commonly known as a
"synthetic lease" (i.e. a lease transaction that is treated as an operating
lease for accounting purposes but with respect to which payments of rent are
intended to be treated as payments of principal and interest on a loan for
Federal income tax purposes).

"Capitalized Lease Obligations" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.

"Cash and Cash Equivalents" means all cash and any presently existing
or hereafter arising deposit account balances, certificates of deposit or other
financial instruments properly classified as cash equivalents under GAAP.

"Cash Collateral Control Agreement" means the deposit account control
agreement, in form and substance satisfactory to the Agent, by and between the
Agent and the L/C Issuer and acknowledged by the Loan Parties.

"CH Facilities" has the meaning specified therefor in Section 6.01(r).

"CH Rolling Stock " has the meaning specified therefor in Section
5.01(d)(xxiv).

"Change of Control" means each occurrence of any of the following:

(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act), other than a
Permitted Holder, of beneficial ownership of more than 33% of the aggregate
outstanding voting power of the Capital Stock of the Parent;

(b) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Parent
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Parent was approved by
a vote of at least a majority the directors of the Parent then still in office
who were either directors at the beginning of such period, or whose

-4-

election or nomination for election was previously approved) cease for any
reason (other than death or cessation of legal capacity) to constitute a
majority of the Board of Directors of the Parent;

(c) any Loan Party shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting power of
the Capital Stock of each of its Subsidiaries (other than Inactive Subsidiaries)
extant as of the Effective Date, free and clear of all Liens (other than any
Liens granted hereunder and Permitted Liens) except pursuant to a transaction
permitted under Section 7.02(c); or

(d) (i) any Loan Party consolidates with or merges into another entity
or conveys, transfers or leases all or substantially all of its property and
assets to another Person, or (ii) any entity consolidates with or merges into
any Loan Party in a transaction pursuant to which the outstanding voting Capital
Stock of such Loan Party is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in this
clause (ii) in which either (A) in the case of any such transaction involving
the Parent, no person or group (within the meaning of Section 13(d)(3) of the
Exchange Act) [other than a Permitted Holder] has, directly or indirectly,
acquired beneficial ownership of more than 33% of the aggregate outstanding
voting Capital Stock of the Parent or (B) in the case of any such transaction
involving a Loan Party other than the Parent, another Loan Party has beneficial
ownership of 100% of the aggregate voting power of all Capital Stock of the
resulting, surviving or transferee entity.

"Collateral" means all of the property and assets and all interests
therein and proceeds thereof now owned or hereafter acquired by any Person upon
which a Lien is granted or purported to be granted by such Person as security
for all or any part of the Obligations.

"Commitment Increase" shall have the meaning specified therefor in
Section 2.01(c).

"Commitments" means, with respect to each Lender, such Lender's Term
Loan A Commitment and Term Loan B Commitment.

"Consolidated Annualized EBITDA" means, as of any date of
determination, the product of (i) the aggregate amount of Consolidated EBITDA
for those fiscal quarters commencing on or after October 1, 2002 and ending on
or prior to such date of determination, multiplied by (ii) a fraction, the
numerator of which shall be the number 12 and the denominator of which shall
equal the total number of calendar months that have elapsed since October 1,
2002.

"Consolidated EBITDA" means, with respect to any Person for any period,
the Consolidated Net Income of such Person and its Subsidiaries for such period,
plus (i) without duplication, the sum of the following amounts of such Person
and its Subsidiaries for such period, in each case to the extent deducted in
determining Consolidated Net Income of such Person for such period: (A)
Consolidated Net Interest Expense, (B) income tax expense determined on a
consolidated basis in accordance with GAAP, (C) depreciation expense determined
on a consolidated basis in accordance with GAAP, and (D) amortization expense
determined on a consolidated basis in accordance with GAAP.

-5-

"Consolidated Funded Indebtedness" means, with respect to any Person at
any date, all Indebtedness of such Person, determined on a consolidated basis in
accordance with GAAP, which is either an Obligation or by its terms matures more
than one year after the date of calculation, and any such Indebtedness maturing
within one year from such date which is renewable or extendable at the option of
such Person to a date more than one year from such date, including, in any
event, with respect to the Parent and its Subsidiaries, the Revolving Credit
Indebtedness, but excluding, for the avoidance of doubt, all Contingent
Obligations with respect to undrawn letters of credit, surety bonds and other
performance bonds issued for the account of such Person to the extent such
letters of credit, surety bonds and other performance bonds constitute Permitted
Indebtedness.

"Consolidated Net Income" means, with respect to any Person for any
period, the net, after tax income (loss) of such Person and its Subsidiaries for
such period, determined on a consolidated basis and in accordance with GAAP, but
excluding from the determination of Consolidated Net Income (without
duplication) (a) any extraordinary or non recurring gains or losses or gains or
losses from Dispositions, (b) restructuring charges, (c) effects of discontinued
operations, (d) interest income and (e) extraordinary or non recurring costs
otherwise included in the calculation of Consolidated Net Income that were
incurred during 2002 in connection with the Acquisition and the related
financing transactions.

"Consolidated Net Interest Expense" means, with respect to any Person
for any period, gross interest expense of such Person and its Subsidiaries for
such period determined on a consolidated basis and in accordance with GAAP
(including, without limitation, interest expense paid to Affiliates of such
Person), less (i) the sum of (A) interest income for such period, (B) gains for
such period on Hedging Agreements (to the extent not included in interest income
above and to the extent not deducted in the calculation of gross interest
expense) and (C) amortization of extraordinary or non recurring costs otherwise
included in gross interest expense that were incurred during 2002 in connection
with the Acquisition and the related financing transactions (but only to the
extent such costs would be deducted in the determination of Consolidated Net
Income without regard to the exclusion set forth in clause (e) of the definition
of "Consolidated Net Income"), plus (ii) the sum of (A) losses for such period
on Hedging Agreements (to the extent not included in gross interest expense) and
(B) the upfront costs or fees for such period associated with Hedging Agreements
(to the extent not included in gross interest expense), in each case, determined
on a consolidated basis and in accordance with GAAP.

"Contingent Obligation" means, with respect to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of a primary obligor, (ii) the obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement, (iii) any obligation of such Person,
whether or not contingent, (A) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (B) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (C) to
purchase property, assets, securities or services primarily for the purpose of

-6-

assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (D) otherwise to assure or
hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term "Contingent Obligation" shall not
include any product warranties extended in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation with respect to which
such Contingent Obligation is made (or, if less, the maximum amount of such
primary obligation for which such Person may be liable pursuant to the terms of
the instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability with respect thereto
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

"Contribution Agreement" means the Contribution Agreement, dated as of
the Effective Date, duly executed by each Loan Party, substantially in the form
of Exhibit I.

"Control Agreement" means a control agreement, in form and substance
reasonably satisfactory to the Agent, executed and delivered by the applicable
Loan Party, the Agent, and the applicable securities intermediary with respect
to a securities account or a bank with respect to a deposit account.

"Custodian Agreement" means the Custodian Agreement, dated as of the
Effective Date, duly executed by each Loan Party, the Rolling Stock Collateral
Custodian and the Collateral Agent, substantially in the form of Exhibit J.

"Default" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.

"Deferred Facilities" has the meaning specified therefor in Section
5.01(d)(iii).

"Disposition" means any transaction, or series of related transactions,
pursuant to which any Person or any of its Subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case, whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, excluding any sales of Inventory in the ordinary course of
business on ordinary business terms.

"Dollar," "Dollars" and the symbol "$" each means lawful money of the
United States of America.

"Early Termination Fee" means:

(a)  with respect to the prepayment of the Term Loan A pursuant to
Section 2.05(b)(i), a fee equal to (i) the aggregate principal amount of the
Term Loan A then outstanding, multiplied by (ii) (A) 2.0%, if the Term Loan A is
prepaid at any time from the Effective Date until and including the first
anniversary of the Effective Date, (B) 1.0%, if the Term Loan A is prepaid at
any time after the first anniversary of the Effective Date until and including
the second anniversary of the Effective Date, and (C) 0.5%, if the Term Loan A
is prepaid at any time after the second anniversary of the Effective Date; and

-7-

(b)  with respect to the prepayment of the Term Loan B pursuant to
Section 2.05(b)(ii), a fee equal to (i) the original aggregate principal amount
of the Term Loan B, multiplied by (ii) (A) 3.0%, if the Term Loan B is prepaid
at any time from the Effective Date until and including the third anniversary of
the Effective Date, and (B) 1.5%, if the Term Loan B is prepaid at any time
after the third anniversary of the Effective Date.

"Effective Date" means the date, on or before September 10, 2002, on
which all of the conditions precedent set forth in Section 5.01 are satisfied or
waived and the initial Loans are made.

"Employee Plan" means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or that was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of any Loan Party or any of its ERISA
Affiliates.

"Environmental Claims" means any written complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, notice of violation,
judicial or administrative proceeding, judgment, letter or other communication
from any governmental agency, department, bureau, office or other authority,
Person or any third party involving violations of Environmental Laws, Handling
of Hazardous Materials or Releases of Hazardous Materials from or relating to
(i) any assets, Facilities, properties or businesses of any Loan Party or any
predecessor in interest; (ii) the Acquisition Assets; (iii) from or onto any
facilities receiving or Handling Hazardous Materials Handled by any Loan Party,
its Subsidiaries or any predecessor in interest; or (iv) from adjoining
properties or businesses.

"Environmental Indemnity Agreement" means an Environmental Indemnity
Agreement, in form and substance satisfactory to the Agent, made by a Loan Party
and/or one of its Subsidiaries in favor of the Agent.

"Environmental Laws" means the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), 42 U.S.C. 9601 et seq., as amended;
the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6901 et seq., as
amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et seq., as amended; the
Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as amended; the Occupational
Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq., as amended; Toxic
Substances Control Act ("TOSCA"), 15 U.S.C. 2601 et seq., as amended; Hazardous
Materials Transportation Act, 49 U.S.C. 5101 et seq., as amended; the Federal
Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7 U.S.C. 136-136y et
seq., as amended; the Emergency Planning and Community Right-to-Know Act of 1986
(Title III of SARA or "EPCRA"); 42 U.S.C. 11001, et seq., as amended, and any
other foreign, federal, state, local or municipal laws, statutes, regulations,
guidance documents, rules having the force of law or ordinances imposing
liability or establishing standards of conduct for Handling of Hazardous
Materials and the protection of the health, safety and the environment.

"Environmental Liabilities" means any monetary obligations, losses,
liabilities (including strict liability), damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any
Environmental Claim filed by any Governmental Authority, Person or any third
party which relate to the Acquisition Assets or any violations of

-8-

Environmental Laws, Handling of Hazardous Materials, Remedial Actions, Releases
or threatened Releases of Hazardous Materials from or onto (i) any property
presently or formerly owned by any Loan Party or any of its Subsidiaries or a
predecessor in interest, or (ii) any facility that received Hazardous Materials
that were generated or Handled by any Loan Party or any of its Subsidiaries or a
predecessor in interest.

"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities.

"Environmental Permits" means any permits, licenses, certificates,
exemptions, authorizations, registrations or approvals required by any
Governmental Authority or under Environmental Laws.

"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case, as in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.

"ERISA Affiliate" means, with respect to any Person, any trade or
business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a "controlled group"
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.

"Event of Default" means any of the events set forth in Section 9.01.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Existing Credit Facility" means the Amended and Restated Loan
Agreement dated as of April 12, 2001 by and among the Parent and certain of the
Parent's Subsidiaries, as borrowers, and Congress Financial Corporation (New
England), as lender, as amended, modified and supplemented prior to the
Effective Date.

"Existing Lender" means the lender party to the Existing Credit
Facility.

"Extraordinary Receipts" means any cash received by the Parent or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds described in Section 2.05(c)(i) or (ii) hereof), including, without
limitation, (i) foreign, United States, state or local tax refunds, (ii) pension
plan reversions, (iii) proceeds of insurance, (iv) judgments, proceeds of
settlements or other consideration of any kind in connection with any cause of
action, (v) condemnation awards (and payments in lieu thereof), and (vi)
indemnity payments.

"Facility" means each parcel of real property listed on Schedule
1.01(B) hereto, including, without limitation, the land on which such facility
is located, all buildings and other improvements thereon, all fixtures located
at or used in connection with such facility, all whether now or hereafter
existing.

"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal to, for each day during such period, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the

-9-

quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it.

"Financial Statements" means (i) the audited consolidated balance
sheets of the Parent and its Subsidiaries as of December 31, 2001, and the
related consolidated statements of operations, cash flows and stockholders'
equity for the two Fiscal Years then ended, (ii) the audited consolidated
balance sheets of the Chemical Services Division of Safety-Kleen Corp. (which
consists primarily of the Sellers and the Canadian Subsidiaries of Safety-Kleen
Services, Inc.) as of August 31, 1999, 2000 and 2001; and (iii) the unaudited
consolidated balance sheet of the Parent and its Subsidiaries as of June 30,
2002, and the related consolidated statements of operations, cash flows and
stockholders' equity for the six months then ended.

"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries
ending on December 31 of each year.

"Fixed Charge Coverage Ratio" means, with respect to any Person for any
period, the ratio of (i) Consolidated EBITDA of such Person and its Subsidiaries
for such period, to (ii) the sum of (A) all principal of Indebtedness of such
Person and its Subsidiaries scheduled to be paid or prepaid (excluding any
prepayment of the Loans) during such period (and in the case of Revolving Credit
Indebtedness, to the extent there is an equivalent permanent reduction in the
commitments thereunder), plus (B) Consolidated Net Interest Expense of such
Person and its Subsidiaries for such period, plus (C) income taxes paid or
payable by such Person and its Subsidiaries during such period, plus (D) cash
dividends or distributions paid by such Person and its Subsidiaries (other than,
in the case of any Loan Party, dividends or distributions paid by such Loan
Party to any other Loan Party) during such period, plus (E) Capital Expenditures
made by such Person and its Subsidiaries during such period. In determining the
Fixed Charge Coverage Ratio for a particular period (w) pro forma effect will be
given to: (1) the incurrence, repayment or retirement of any Indebtedness by
such Person and its Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired on the first day of such period and
(2) the acquisition (whether by purchase, merger or otherwise) or disposition
(whether by sale, merger or otherwise) of any property or assets acquired or
disposed of by such Person and its Subsidiaries since the first day of such
period, as if such acquisition or disposition occurred on the first day of such
period; (x) interest on Indebtedness bearing a floating interest rate will be
computed as if the rate at the time of computation had been the applicable rate
for the entire period; (y) if such Indebtedness bears, at the option of such
Person and its Subsidiaries, a fixed or floating rate of interest, interest
thereon will be computed by applying, at the option of such Person, either the
fixed or floating rate; and (z) the amount of Indebtedness under a revolving
credit facility will be computed based upon the average daily balance of such
Indebtedness during such period.

"Funding Fee" has the meaning specified therefor in Section 2.06(d).

"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, applied on a consistent basis, provided that
for the purpose of Section 7.03 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the date hereof
and consistent with those used in the preparation of the Financial Statements,
provided, further, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03 hereof, the Agent and the Administrative Borrower
shall negotiate in good faith amendments to the provisions of this Agreement
that relate to the calculation of such

-10-

covenant with the intent of having the respective positions of the Lenders and
the Borrowers after such change in GAAP conform as nearly as possible to their
respective positions as of the date of this Agreement and, until any such
amendments have been agreed upon, the covenants in Section 7.03 hereof shall be
calculated as if no such change in GAAP has occurred.

"Governmental Authority" means any nation or government, any foreign,
federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

"Guaranteed Obligations" has the meaning specified therefor in Section
11.01.

"Guarantor" means (i) each Subsidiary of the Parent listed as a
"Guarantor" on the signature pages hereto, and (ii) each other Person which
guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of the
Obligations.

"Guaranty" means (i) the guaranty of each Guarantor party hereto
contained in Article XI hereof, and (ii) each guaranty substantially in the form
of Exhibit A, made by any other Guarantor in favor of the Agent for the benefit
of the Lenders pursuant to Section 7.01(b) or otherwise.

"Handle" means any manner of generating, accumulating, storing,
treating, disposing of, transporting, transferring, labeling, handling,
manufacturing or using, as any of such terms may further be defined in any
Environmental Law, of any Hazardous Materials.

"Hazardous Material" shall include, without regard to amount and/or
concentration (i) any element, compound, or chemical that is defined, listed or
otherwise classified as a contaminant, pollutant, toxic pollutant, toxic or
hazardous substances, extremely hazardous substance or chemical under
Environmental Laws; (ii) any wastes regulated, defined, listed or otherwise
classified by Environmental Laws, including but not limited to hazardous waste,
agricultural wastes, biological waste, medical waste, biohazardous or infectious
waste, special waste, recyclable materials, sludge, used oils, construction and
demolition debris and solid waste; (iii) petroleum, petroleum-based or
petroleum-derived products; (iv) polychlorinated biphenyls; (v) any substance
exhibiting a hazardous waste characteristic including but not limited to
corrosivity, ignitibility, toxicity or reactivity as well as any radioactive or
explosive materials; and (vi) any raw materials, building components, including
but not limited to asbestos-containing materials and manufactured products
containing Hazardous Materials.

"Hedging Agreement" means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or other
agreement or arrangement designed to protect against fluctuations in interest
rates or currency, commodity or equity values (including, without limitation,
any option with respect to any of the foregoing and any combination of the
foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.

"Highest Lawful Rate" means, with respect to the Agent or any Lender,
the maximum non-usurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to the Agent or such Lender which are
currently in effect or, to the extent allowed by law, under

-11-

such applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow.

"Inactive Subsidiaries" means the Subsidiaries of the Parent listed on
Schedule 1.01(D).

"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money; (ii) all obligations of
such Person for the deferred purchase price of property or services (other than
trade payables or other accounts payable incurred in the ordinary course of such
Person's business and not outstanding for more than 90 days after the date such
payable was created); (iii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest payments
are customarily made; (iv) all reimbursement, payment or other obligations and
liabilities of such Person created or arising under any conditional sales or
other title retention agreement with respect to property used and/or acquired by
such Person, even though the rights and remedies of the lessor, seller and/or
lender thereunder may be limited to repossession or sale of such property; (v)
all Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Agent and in accordance
with accepted practice, of such Person under Hedging Agreements; (viii) all
Contingent Obligations; (ix) liabilities incurred under Title IV of ERISA with
respect to any plan (other than a Multiemployer Plan) covered by Title IV of
ERISA and maintained for employees of such Person or any of its ERISA
Affiliates; (x) withdrawal liability incurred under ERISA by such Person or any
of its ERISA Affiliates with respect to any Multiemployer Plan; and (xi) all
obligations referred to in clauses (i) through (x) of this definition of another
Person secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) a Lien upon property owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness. The Indebtedness of any Person shall include the
Indebtedness of any partnership of or joint venture in which such Person is a
general partner or a joint venturer.

"Indemnified Matters" has the meaning specified therefor in Section
12.15.

"Indemnitees" has the meaning specified therefor in Section 12.15.

"Insolvency Proceeding" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other
bankruptcy or insolvency law, assignments for the benefit of creditors, formal
or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.

"Intellectual Property" means all foreign and domestic (i) trademarks,
service marks, brand names, certification marks, collective marks, d/b/a's,
Internet domain names, logos, symbols, trade dress, assumed names, fictitious
names, trade names, and other indicia of origin, all applications and
registrations for all of the foregoing, and all goodwill associated therewith
and symbolized thereby, including without limitation all extensions,
modifications and renewals of same; (ii) inventions, discoveries and ideas,
whether patentable or not, and all patents, registrations, and applications
therefor, including without limitation divisions, continuations,
continuations-in-part and renewal applications, and including without limitation
renewals, extensions and reissues; (iii) confidential and proprietary
information, trade secrets and know-

-12-

how, including without limitation processes, schematics, databases, formulae,
drawings, prototypes, models, designs and customer lists (collectively, "Trade
Secrets"); (iv) published and unpublished works of authorship, whether
copyrightable or not, copyrights therein and thereto, and registrations and
applications therefor, and all renewals, extensions, restorations and reversions
thereof; and (v) all other intellectual property or proprietary rights and
claims or causes of action arising out of or related to any infringement,
misappropriation or other violation of any of the foregoing, including without
limitation rights to recover for past, present and future violations thereof.

"Intercompany Subordination Agreement" means an Intercompany
Subordination Agreement made by a Loan Party in favor of the Agent for the
benefit of the Lenders, substantially in the form of Exhibit K.

"Intercreditor Agreement" means the Intercreditor and Lien
Subordination Agreement, substantially in the form of Exhibit E, by and between
the Agent and the Revolving Credit Agent and acknowledged by the Loan Parties.

"Interest Period" means, with respect to any LIBOR Loan, the period
commencing on the borrowing date or the date of any continuation of such LIBOR
Loan, as the case may be, and ending three months thereafter, provided that (i)
each Interest Period shall begin on the first day of a month and end on the last
day of a month, provided that the initial Interest Period shall commence on the
Effective Date and end on the last day of the third month immediately succeeding
the Effective Date, (ii) any Interest Period that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day, unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day, (iii) no
Interest Period for any LIBOR Loan shall end after the Term A Maturity Date, and
(iv) no more than one (1) Interest Period for the Borrowers may exist at any one
time.

"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.

"Inventory" means, with respect to any Person, all goods and
merchandise of such Person, including, without limitation, all raw materials,
work-in-process, packaging, supplies, materials and finished goods of every
nature used or usable in connection with the shipping, storing, advertising or
sale of such goods and merchandise, whether now owned or hereafter acquired, and
all such other property the sale or other disposition of which would give rise
to an Account Receivable or cash.

"Joinder Agreement" shall have the meaning specified therefor in
Section 2.01(c).

"Judgment Currency" has the meaning specified therefor in Section
11.06.

"L/C Issuer" means Fleet National Bank.

"Lease" means any lease of real property to which any Loan Party or any
of its Subsidiaries is a party as lessor or lessee.

"Lender" has the meaning specified therefor in the preamble hereto.

"Liabilities" has the meaning specified therefor in Section 2.07.

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"LIBOR" means, with respect to each day during each Interest Period
pertaining to a LIBOR Loan, the rate of interest quoted by the British Bankers'
Association as set forth on Bloomberg page BBAM (or such other display page on
the Bloomberg system as may replace display page BBAM), two Business Days prior
to such Interest Period as the "London Interbank Offered Rate" applicable to
three months. In the event that the Bloomberg system is not operative or is
otherwise not accessible by the Agent or the "London Interbank Offered Rate" is
no longer quoted therein, LIBOR shall be the rate determined by the Agent to be
the rate at which deposits in Dollars are offered by the Reference Bank to first
class banks in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its eurodollar loans are then
being conducted at approximately 11:00 a.m. (New York City time), two Business
Days prior to the beginning of such Interest Period, in an amount approximately
equal to the principal amount of the LIBOR Loan to which such Interest Period is
to apply and for a period of time comparable to such Interest Period.

"LIBOR Rate" means, for each Interest Period for each LIBOR Loan, the
rate per annum determined by the Agent (rounded upwards if necessary, to the
next 1/16%) by dividing (a) LIBOR for such Interest Period by (b) 100% minus the
Reserve Percentage. The LIBOR Rate shall be adjusted on and as of the effective
day of any change in the Reserve Percentage.

"LIBOR Loan" means a Term Loan A bearing interest based upon LIBOR.

"Lien" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.

"Loan Account" means an account maintained hereunder by the Agent on
its books of account at the Payment Office and, with respect to the Borrowers,
in which the Borrowers will be charged with all Loans made to, and all other
Obligations incurred by, the Borrowers.

"Loan Document" means this Agreement, any Guaranty, any Security
Agreement, any Pledge Agreement, any Control Agreement, any Mortgage, any
Environmental Indemnity Agreement, the Canadian Security Documents, any UCC
Filing Authorization Letter, the Contribution Agreement, the Intercompany
Subordination Agreement, the Intercreditor Agreement, the Cash Collateral
Control Agreement, the Custodian Agreement and any other agreement, instrument,
and other document executed and delivered pursuant hereto or thereto or
otherwise evidencing or securing any Loan or any other Obligation.

"Loan Party" means any Borrower and any Guarantor.

"Loans" means the Term Loan A and the Term Loan B made by the Lenders
to the Borrowers pursuant to Article II hereof.

"Material Adverse Effect" means a material adverse effect on any of (i)
the operations, business, assets, properties, condition (financial or otherwise)
or prospects of any Loan Party or the Loan Parties taken as a whole, (ii) the
ability of any Loan Party to perform any of its obligations under any Loan
Document to which it is a party, (iii) the legality, validity or enforceability
of this Agreement or any other Loan Document, (iv) the rights and remedies of
the

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Agent or any Lender under any Loan Document, or (v) the validity, perfection or
priority of a Lien in favor of the Agent for the benefit of the Lenders on any
of the Collateral.

"Material Contract" means, with respect to any Person, (i) each
Acquisition Document, (ii) each contract or agreement to which such Person or
any of its Subsidiaries is a party involving aggregate consideration payable to
or by such Person or such Subsidiary of $2,000,000 or more (other than purchase
orders in the ordinary course of the business of such Person or such Subsidiary
and other than contracts that by their terms may be terminated by such Person or
Subsidiary in the ordinary course of its business upon less than 60 days' notice
without penalty or premium) and (iii) each other contract or agreement material
to the business, operations, condition (financial or otherwise), performance,
prospects or properties of such Person or such Subsidiary.

"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.

"Mortgage" means a mortgage (including, without limitation, a leasehold
mortgage), deed of trust or deed to secure debt, in recordable form and
otherwise in form and substance satisfactory to the Agent, made by a Loan Party
in favor of the Agent for the benefit of the Lenders, securing the Obligations
and delivered to the Agent pursuant to Section 5.01(d), Section 7.01(b), Section
7.01(o) or otherwise.

"Motor Vehicle Laws" shall mean all Federal (including, the federal
government of Canada), state, provincial and local laws, regulations, rules and
judicial or agency determinations and orders applicable to the ownership and/or
operation of vehicles (including, without limitation, the Rolling Stock), or the
business of the transportation of goods by motor vehicle, including, without
limitation, laws, regulations, rules and judicial or agency determinations and
orders promulgated or administered by the Federal Highway Administration, the
Federal Motor Carrier Safety Administration, the National Highway Traffic Safety
Administration, the Surface Transportation Board and other state, provincial and
local Governmental Authorities with respect to vehicle safety and registration
and motor carrier insurance, financial assurance, credit extension, contract
carriage, tariff and reporting requirements.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years.

"Net Book Value" means, with respect to any Rolling Stock, the value of
such Rolling Stock (as reflected in the general ledger of such Person after
customary depreciation and reserves established by such Person in good faith and
in accordance with GAAP).

"Net Cash Proceeds" means (i) with respect to any Disposition by any
Person or any of its Subsidiaries, the amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through the
payment or disposition of deferred consideration) by or on behalf of such Person
or such Subsidiary, in connection therewith after deducting therefrom only (A)
the amount of any Indebtedness secured by any Lien permitted by Section 7.02(a)
on any asset (other than Indebtedness assumed by the purchaser of such asset)
which is required to be, and is, repaid in connection with such Disposition
(other than Indebtedness under this Agreement), (B) reasonable expenses related
thereto incurred by such Person or such Subsidiary in connection therewith and
(C) transfer taxes paid to any taxing

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authorities by such Person or such Subsidiary in connection therewith and (ii)
with respect to the issuance or incurrence of any Indebtedness by any Person or
any of its Subsidiaries, or the sale or issuance by any Person or any of its
Subsidiaries of any shares of its Capital Stock, the aggregate amount of cash
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment or disposition of deferred consideration)
by or on behalf of such Person or such Subsidiary in connection therewith, after
deducting therefrom only (A) reasonable expenses related thereto incurred by
such Person or such Subsidiary in connection therewith and (B) transfer taxes
paid by such Person or such Subsidiary in connection therewith; in each case of
clause (i) and (ii) to the extent, but only to the extent, that the amounts so
deducted are (x) actually paid to a Person that, except in the case of
reasonable out-of-pocket expenses, is not an Affiliate of such Person or any of
its Subsidiaries and (y) properly attributable to such transaction or to the
asset that is the subject thereof.

"Notice of Borrowing" has the meaning specified therefor in Section
2.02(a).

"Oak Hill" means Oak Hill Advisors, L.P., a Delaware limited
partnership.

"Obligations" means all present and future indebtedness, obligations,
and liabilities of each Loan Party to the Agent and the Lenders under the Loan
Documents, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by such Person under
the Loan Documents, and (b) the obligation of such Person to reimburse any
amount in respect of any of the foregoing that the Agent or any Lender (in its
sole discretion) may elect to pay or advance on behalf of such Person.

"Operating Lease Obligations" means all obligations for the payment of
rent for any real or personal property under leases or agreements to lease,
other than Capitalized Lease Obligations.

"Owned Intellectual Property" has the meaning specified therefor in
Section 6.01(w).

"Parent" has the meaning specified therefor in the preamble hereto.

"Participant Register" has the meaning specified therefor in Section
12.07(b)(v).

"Payment Office" means the Agent's office located at 450 Park Avenue,
28/th/ Floor, New York, New York 10022, or at such other office or offices of
the Agent as may be designated in writing from time to time by the Agent to the
Administrative Borrower.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.

"Permitted Holder" means (i) Alan S. McKim and his heirs, legal
representatives and legatees, (ii) the trustees of a trust for the benefit of
Mr. McKim, which trust is revocable solely by Mr. McKim, (iii) Mr. McKim's
spouse or children, (iv) a trust created for the exclusive

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benefit of Mr. McKim's spouse or children or for the exclusive benefit of Mr.
McKim and such persons, (v) any charitable trust or foundation qualified under
Section 501(c)(3) of the Internal Revenue Code established by Mr. McKim and for
which he serves as a trustee or director, and (vi) Ableco, Oak Hill and their
respective Affiliates.

"Permitted Indebtedness" means:

(a)  any Indebtedness owing to the Agent and any Lender under this
Agreement and the other Loan Documents;

(b)  any other Indebtedness listed on Schedule 7.02(b), and the
extension of maturity, refinancing or modification of the terms thereof;
provided, however, that (i) such extension, refinancing or modification is
pursuant to terms that are not less favorable to the Loan Parties and the
Lenders than the terms of the Indebtedness being extended, refinanced or
modified and (ii) after giving effect to such extension, refinancing or
modification, the amount of such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;

(c)  Indebtedness evidenced by Capitalized Lease Obligations entered
into in order to finance Capital Expenditures made by the Loan Parties in
accordance with the provisions of Section 7.02(g), which Indebtedness, when
aggregated with the principal amount of all Indebtedness incurred under this
clause (c) and clause (d) of this definition, does not exceed $10,000,000 in the
aggregate for all such Indebtedness incurred after the Effective Date;

(d)  Indebtedness permitted by clause (e) of the definition of
"Permitted Liens";

(e)  Indebtedness permitted under Section 7.02(e);

(f)  Subordinated Indebtedness;

(g)  Revolving Credit Indebtedness in an aggregate principal amount not
to exceed at any time outstanding the lower of (i) $100,000,000, and (ii) the
aggregate amount available to the Loan Parties under each Borrowing Base (as
defined in the Revolving Credit Agreements as in effect on the date hereof) and
the lending sublimits set forth in Sections 2.1 and 2.2 of the Revolving Credit
Agreement plus ten percent (10%) of such amount available under this clause
(ii), provided that the Revolving Credit Agent and the Loan Parties shall have
executed and delivered to the Agent the Intercreditor Agreement; and the
extension of maturity, replacement, refinancing or modification of the terms
thereof, provided that such extension, replacement, refinancing or modification
(x) is pursuant to terms that are not less favorable (as determined in the
Agent's discretion) to the Loan Parties and the Lenders than the terms of the
Revolving Credit Indebtedness being so extended, replaced, refinanced or
modified, (y) is subject to the Intercreditor Agreement or a similar
intercreditor agreement having substantially the same terms and conditions as
the Intercreditor Agreement and (z) shall not provide for the incurrence of
Indebtedness thereunder in excess of $100,000,000 at any time outstanding;

(h)  Indebtedness of any Loan Party incurred in connection with the
issuance of litigation, environmental, ERISA-related, surety, reclamation, or
other performance bonds, in an aggregate principal amount at any one time
outstanding for all the Loan Parties not to exceed $50,000,000; and

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(i)  Indebtedness of any Loan Party incurred in connection with the
issuance of letters of credit on behalf of such Loan Party in the ordinary
course of business (other than letters of credit issued under the Revolving
Credit Agreement the obligations for which constitute Revolving Credit
Indebtedness permitted under paragraph (g) above), provided that (i) the
aggregate amount of such letters of credit shall not exceed $100,000,000 at any
time, (ii) the obligations of the Loan Parties in respect of each letter of
credit are fully secured by cash deposited with the issuer of such letter of
credit (which cash shall constitute proceeds of the Term Loan A), (iii) the
issuer of each letter of credit and the Agent have entered into a deposit
account control agreement (including the Cash Collateral Control Agreement), in
form and substance satisfactory to the Agent, pertaining to the Agent's Lien on
the cash collateralizing such letter of credit, which Lien shall be subject only
to the prior Lien of such issuer, and (iv) all interest, dividends and other
earnings, income and distributions in respect of the cash collateralizing each
such letter of credit shall, in the absence of a continuing Event of Default, be
freely withdrawable by the applicable Loan Party.

"Permitted Investments" means (i) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case, maturing within six months from the date of acquisition thereof; (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the United States Government or any agency thereof, (v) money
market accounts maintained with mutual funds having assets in excess of
$2,500,000,000; (vi) tax exempt securities rated A or better by Moody's or A+ or
better by Standard & Poor's and (vii) other investments in an aggregate amount
at any time outstanding not exceeding $2,000,000 so long as the Agent has a
perfected, first priority Lien thereon.

"Permitted Liens" means:

(a)  Liens securing the Obligations;

(b)  Liens for taxes, assessments and governmental charges the payment
of which is not required under Section 7.01(c);

(c)  Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other similar Liens arising (provided they are
subordinate to the Agent's Liens on Collateral) in the ordinary course of
business and securing obligations (other than Indebtedness for borrowed money)
that are not overdue by more than 30 days or are being contested in good faith
and by appropriate proceedings promptly initiated and diligently conducted, and
a reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;

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(d)  Liens described on Schedule 7.02(a), but not the extension of
coverage thereof to other property or the extension of maturity, refinancing or
other modification of the terms thereof or the increase of the Indebtedness
secured thereby;

(e)  (i) purchase money Liens on equipment acquired or held by any Loan
Party or any of its Subsidiaries in the ordinary course of its business to
secure the purchase price of such equipment or Indebtedness incurred solely for
the purpose of financing the acquisition of such equipment or (ii) Liens
existing on such equipment at the time of its acquisition; provided, however,
that (A) no such Lien shall extend to or cover any other property of any Loan
Party or any of its Subsidiaries, (B) the principal amount of the Indebtedness
secured by any such Lien shall not exceed the lesser of 80% of the fair market
value or the cost of the property so held or acquired and (C) the aggregate
principal amount of Indebtedness incurred after the Effective Date that is
secured by any or all such Liens shall not exceed $10,000,000;

(f)  deposits and pledges of cash securing (i) obligations incurred in
respect of workers' compensation, unemployment insurance or other forms of
governmental insurance or benefits, (ii) the performance of bids, tenders,
leases, contracts (other than for the payment of money) and statutory
obligations or (iii) obligations on surety or appeal bonds, but only to the
extent such deposits or pledges are incurred or otherwise arise in the ordinary
course of business and secure obligations not past due;

(g)  easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not (i) secure
obligations for the payment of money or (ii) materially impair the value of such
property or its use by any Loan Party or any of its Subsidiaries in the normal
conduct of such Person's business;

(h)  Liens granted under the Revolving Credit Documents (as in effect
on the date hereof) to secure the Revolving Credit Indebtedness permitted
pursuant to subsection (g) of the definition of "Permitted Indebtedness",
provided that the Revolving Credit Agent and the Loan Parties shall have
executed and delivered to the Agent the Intercreditor Agreement; and

(i)  Liens in favor of the issuers of the letters of credit permitted
by subsection (i) of the definition of "Permitted Indebtedness" so long as (i)
such Liens attach solely to the cash collateralizing such letters of credit and
(ii) the issuer of each letter of credit and the Agent have entered into a
deposit account control agreement (including the Cash Collateral Control
Agreement), in form and substance satisfactory to the Agent, pertaining to the
Agent's Lien on such cash, which Lien shall be subject only to the prior Lien of
such issuer.

"Person" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.

"Plan" means any Employee Plan or Multiemployer Plan.

"Pledge Agreement" means a Pledge and Security Agreement made by a Loan
Party in favor of the Agent for the benefit of the Lenders, substantially in the
form of Exhibit C, securing the Obligations and delivered to the Agent.

"Post-Default Rate" means a rate of interest per annum equal to the
rate of interest otherwise in effect from time to time pursuant to the terms of
this Agreement plus 3.25%, or, if a

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rate of interest is not otherwise in effect, the greater of (i) the Reference
Rate plus 7.75% and (ii) 12.50%.

"Pro Rata Share" means:

(a)  with respect to a Lender's obligation to make the Term Loan A and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Term Loan A Commitment, by
(ii) the Total Term Loan A Commitment,

(b)  with respect to a Lender's obligation to make the Term Loan B and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Term Loan B Commitment, by
(ii) the Total Term Loan B Commitment, and

(c)  with respect to all other matters (including, without limitation,
the indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) the unpaid principal amount of such Lender's portion of
the Loans, by (ii) the aggregate unpaid principal amount of all Loans.

"Rating Agencies" has the meaning specified therefor in Section 2.07.

"Reference Bank" means JPMorgan Chase Bank, its successors or any other
commercial bank designated by the Agent to the Administrative Borrower from time
to time.

"Reference Rate" means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate. The reference rate, base rate or prime rate is
determined from time to time by the Reference Bank as a means of pricing some
loans to its borrowers and neither is tied to any external rate of interest or
index nor necessarily reflects the lowest rate of interest actually charged by
the Reference Bank to any particular class or category of customers. Each change
in the Reference Rate shall be effective from and including the date such change
is publicly announced as being effective.

"Reference Rate Loan" means a Term Loan A bearing interest based upon
the Reference Rate.

"Register" has the meaning specified therefor in Section 12.07(b)(ii).

"Registered" means, with respect to any Intellectual Property, issued,
registered, renewed or the subject of a pending application.

"Registered Loan" has the meaning specified therefore in Section
12.07(b)(ii).

"Regulation T", "Regulation U" and "Regulation X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.

"Release" means any spilling, leaking, pumping, emitting, emptying,
discharging, injecting, escaping, leaching, migrating, dumping, or disposing of
Hazardous Materials (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous Materials) into the
environment.

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"Related Fund" means, with respect to any Lender or Oak Hill, any
Affiliate (other than individuals) of such Person, including, without
limitation, a fund or account managed by such Person or an Affiliate of such
Person or its investment manager.

"Remedial Action" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
minimize a Release or threatened Release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.

"Reportable Event" means an event described in Section 4043 of ERISA
(other than an event not subject to the provision for 30-day notice to the PBGC
under the regulations promulgated under such Section).

"Required Lenders" means Lenders whose Pro Rata Share of the Loans
aggregate at least 51%.

"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.

"Revolving Credit Agent" means Congress Financial Corporation (New
England).

"Revolving Credit Agreement" means the Loan and Security Agreement,
dated as of September 6, 2002, by and among the Borrowers, the Guarantors, the
Revolving Credit Lenders and the Revolving Credit Agent, as the same may be
replaced, renewed or refinanced from time to time in accordance with Section
7.02(m) hereof.

"Revolving Credit Documents" means, collectively, (i) the Revolving
Credit Agreement, and (ii) all other agreements, instruments, and other
documents executed and delivered pursuant to the foregoing.

"Revolving Credit Indebtedness" means the Indebtedness of the Loan
Parties owing to the Revolving Credit Agent and the Revolving Credit Lenders
under the Revolving Credit Agreement.

"Revolving Loan Lenders" means the lenders party to the Revolving
Credit Agreement.

"Rolling Stock" means all trucks, trailers, tractors, service vehicles,
automobiles and other registered mobile equipment.

"Rolling Stock Collateral Custodian" has the meaning specified therefor
in Section 8.04(a).

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"Sale Order" means the order by the Bankruptcy Court entered into on
June 18, 2002 authorizing the Sellers to sell the Acquisition Assets to the
Parent and certain of the Borrowers free and clear of all Liens other than the
"Permitted Exceptions" (as defined in the Acquisition Agreement).

"SEC" means the Securities and Exchange Commission or any other similar
or successor agency of the Federal government administering the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect from time to time.

"Securitization" has the meaning specified therefor in Section 2.07.

"Securitization Parties" has the meaning specified therefor in Section
2.07.

"Security Agreement" means a Security Agreement made by a Loan Party in
favor of the Agent for the benefit of the Lenders, substantially in the form of
Exhibit B, securing the Obligations and delivered to the Agent.

"Sellers" means Safety-Kleen Services, Inc., a Delaware corporation,
and certain of its domestic Subsidiaries, each as a debtor-in-possession.

"SK Facilities" has the meaning specified therefor in Section 6.01(r).

"SK Rolling Stock " has the meaning specified therefor in Section
5.03(a).

"Solvent" means, with respect to any Person on a particular date, that
on such date (i) the fair value of the property of such Person is not less than
the total amount of the liabilities of such Person, (ii) the present fair
salable value of the assets of such Person is not less than the amount that will
be required to pay the probable liability of such Person on its existing debts
as they become absolute and matured, (iii) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations and
other commitments as they mature in the normal course of business, (iv) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.

"Standard & Poor's" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc. and any successor thereto.

"Subordinated Indebtedness" means Indebtedness of any Loan Party the
terms of which are satisfactory to the Agent and the Required Lenders and which
has been expressly subordinated in right of payment to all Indebtedness of such
Loan Party under the Loan Documents (i) by the execution and delivery of a
subordination agreement, in form and substance satisfactory to the Agent and the
Required Lenders, or (ii) otherwise on terms and conditions (including, without
limitation, subordination provisions, payment terms, interest rates, covenants,
remedies, defaults and other material terms) satisfactory to the Agent and the
Required Lenders.

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"Subsidiary" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business entity (i) the accounts of
which would be consolidated with those of such Person in such Person's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP or (ii) of which more than 50% of (A) the outstanding
Capital Stock having (in the absence of contingencies) ordinary voting power to
elect a majority of the board of directors or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.

"Technology Systems" means the electronic data processing, business
management, information, recordkeeping, communications and telecommunications
systems (including all computer programs, software, databases, firmware,
hardware and related documentation) which are used by the Loan Parties in their
respective businesses.

"Term A Maturity Date" means September 10, 2005, or such earlier date
on which the Term Loan A shall become due and payable in accordance with the
terms of this Agreement and the other Loan Documents.

"Term B Maturity Date" means September 10, 2007, or such earlier date
on which the Term Loan B shall become due and payable in accordance with the
terms of this Agreement and the other Loan Documents.

"Term Loan A" means, collectively, the loans made by the Lenders to the
Borrowers on the Effective Date pursuant to Section 2.01(a)(i) and the loans (if
any) made by the Additional Lenders to the Borrowers after the Effective Date
pursuant to Section 2.01(c)(iii).

"Term Loan A Commitment" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan A to the Borrowers in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated, increased
or reduced from time to time in accordance with the terms of this Agreement,
including, without limitation, Section 2.01(c).

"Term Loan B" means, collectively, the loans made by the Lenders to the
Borrowers on the Term Loan B Effective Date pursuant to Section 2.01(a)(ii) and
the loans (if any) made by the Lenders to the Borrowers after the Effective Date
pursuant to Section 2.01(c)(iv).

"Term Loan B Commitment" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan B to the Borrowers in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated, increased
or reduced from time to time in accordance with the terms of this Agreement,
including, without limitation, Section 2.01(c).

"Termination Date" means the date on which all Obligations shall become
due and payable in accordance with the terms of this Agreement and the other
Loan Documents.

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"Termination Event" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Loan Party or any of its ERISA
Affiliates to incur liability under Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the
Internal Revenue Code, (iii) the filing of a notice of intent to terminate an
Employee Plan or the treatment of an Employee Plan amendment as a termination
under Section 4041 of ERISA, (iv) the institution of proceedings by the PBGC to
terminate an Employee Plan, or (v) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Employee Plan.

"Title Insurance Policy" means a mortgagee's loan policy of title
insurance, on forms and otherwise in form and substance satisfactory to the
Agent, together with all endorsements made from time to time thereto, issued by
or on behalf of a title insurance company satisfactory to the Agent, insuring
the Lien created by a Mortgage in an amount and subject only to such exceptions
and otherwise on terms satisfactory to the Agent, delivered to the Agent.

"Total Commitment" means the sum of the Term Loan A Commitments and the
Term Loan B Commitments.

"Total Term Loan A Commitment" means the sum of the Term Loan A
Commitments.

"Total Term Loan B Commitment" means the sum of the Term Loan B
Commitments.

"Transaction Documents" means the Loan Documents and the Acquisition
Documents.

"UCC Filing Authorization Letter" means a letter duly executed by each
Loan Party authorizing the Agent to file appropriate financing statements on
Form UCC-1 without the signature of such Loan Party in such office or offices as
may be necessary or, in the opinion of the Agent, desirable to perfect the
security interests purported to be created by each Security Agreement, each
Pledge Agreement and each Mortgage.

"Uniform Commercial Code" has the meaning specified therefor in Section
1.03.

"WARN" has the meaning specified therefor in Section 6.01(z).

Section 1.02  Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder",

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and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, (d) all references
herein to Articles, Sections, Exhibits and Schedules shall be construed to refer
to Articles and Sections of, and Exhibits and Schedules to, this Agreement and
(e) the words "asset" and "property" shall be construed to have the same meaning
and effect and to refer to any right or interest in or to assets and properties
of any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible. References in this Agreement to "determination" by the Agent include
good faith estimates by the Agent (in the case of quantitative determinations)
and good faith beliefs by the Agent (in the case of qualitative determinations).

Section 1.03  Accounting and Other Terms. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code as in effect from time to
time in the State of New York (the "Uniform Commercial Code") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as the Agent may otherwise determine.

Section 1.04  Time References. Unless otherwise indicated herein, all
references to time of day refer to Eastern Standard Time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to and including"; provided, however, that with respect to a computation
of fees or interest payable to the Agent or any Lender, such period shall in any
event consist of at least one full day.

ARTICLE II

THE LOANS

Section 2.01  Commitments. (a) Subject to the terms and conditions and
relying upon the representations and warranties herein set forth:

(i)   each Lender with a Term Loan A Commitment severally
agrees to make its portion of the Term Loan A to the Borrowers on the Effective
Date, in the principal amount not to exceed the amount of such Lender's Term
Loan A Commitment; and

(ii)  each Lender with a Term Loan B Commitment severally
agrees to make its portion of the Term Loan B to the Borrowers on the Effective
Date, in the principal amount not to exceed the amount of such Lender's Term
Loan B Commitment.

(b)   Notwithstanding the foregoing, (i) the aggregate
principal amount of the Term Loan A made on the Effective Date shall not exceed
the Total Term Loan A Commitment and (ii) the aggregate principal amount of the
Term Loan B made on the Effective Date shall not exceed the Total Term Loan B
Commitment. Any principal amount of the Loans which is repaid or prepaid may not
be reborrowed.

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(c)   (i)    Notwithstanding anything to the contrary
contained in this Agreement, the Borrowers may request that the Term Loan A be
increased (the "Commitment Increase") by up to $25,000,000 in the aggregate.
Such Commitment Increase shall be effected as follows: the Borrowers may arrange
for one or more banks or financial institutions not a party hereto (an
"Additional Lender") to become parties to and Lenders under this Agreement,
provided that (A) the Agent shall have consented to such Additional Lender, such
consent not to be unreasonably withheld, (B) if the aggregate amount of such
Commitment Increase equals or is less than $20,000,000, the Borrowers shall, on
the effective date of such Commitment Increase, repay no less than $5,000,000 of
the outstanding principal amount of the Term Loan A held by Ableco, Oak Hill and
their respective Related Funds (which repayment (x) shall be allocated among
Ableco, Oak Hill and their respective Related Funds in accordance with their Pro
Rata Shares of the Term Loan A and (y) may be effected by applying the proceeds
of the additional Term Loan B referenced in Section 2.01(c)(iv)) and (C) if the
aggregate amount of such Commitment Increase exceeds $20,000,000, then
immediately prior to the effective date of such Commitment Increase, the
aggregate outstanding principal amount of the Term Loan A owing to Ableco, Oak
Hill and their respective Related Funds shall not exceed $50,000,000.
Notwithstanding anything contained in this Agreement to the contrary, no Lender
shall have any obligation whatsoever to increase the amount of its Term Loan A
Commitment.

(ii)   Any Additional Lender that is willing to
become a party hereto and a Lender hereunder and that has been approved by the
Agent shall enter into a joinder agreement with the Loan Parties and the Agent,
substantially in the form of Exhibit G hereto (a "Joinder Agreement"), which
agreement shall specify, among other things, the Term Loan A Commitment of such
Additional Lender hereunder. When such Additional Lender becomes a Lender
hereunder as set forth in the Joinder Agreement, Schedule 1.01(A) shall, without
further action, be deemed to have been amended as appropriate to reflect the
Term Loan A Commitment of such Additional Lender. Upon the execution by the
Agent, the Loan Parties and such Additional Lender of such Joinder Agreement,
such Additional Lender shall become and be deemed a Lender for all purposes of
this Agreement and the other Loan Documents and shall enjoy all rights and
assume all obligations of the Lenders set forth in this Agreement and the other
Loan Documents, and its Term Loan A Commitment shall be the amount specified in
its Joinder Agreement.

(iii)  In no event shall the Term Loan A Commitment
of an Additional Lender become effective until the Agent shall have received
such agreements, instruments, approvals, legal opinions and other documents as
the Agent shall reasonably request. On the effective date set forth in the
Joinder Agreement, the Additional Lender will, subject to the terms of this
Agreement, make a Term Loan A to the Borrowers in the principal amount of its
Term Loan A Commitment and such Term Loan A shall constitute a Loan for all
purposes of this Agreement and the other Loan Documents.

(iv)   In connection with any Commitment Increase,
each of Ableco, Oak Hill and their respective Affiliates (including any funds or
accounts managed by the same investment advisor as Ableco or Oak Hill, as
applicable) shall have the option to increase the principal amount of the Term
Loan B by up to $5,000,000 in the aggregate. On the effective date of the
Commitment Increase, if Ableco, Oak Hill or any of their respective Affiliates
(including any funds or accounts managed by the same investment advisor as
Ableco or Oak Hill, as applicable) elect to make an additional Term Loan B to
the Borrowers in accordance with the immediately preceding sentence, (A)
Schedule 1.01(A) shall, without further action, be

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deemed to have been amended as appropriate to reflect the increase of such
Lender's Term Loan B Commitment and (B) such Lender will, subject to the terms
of this Agreement, make an additional Term Loan B to the Borrowers in the
principal amount equal to the increase in its Term Loan B Commitment and such
additional Term Loan B shall constitute a Loan for all purposes of this
Agreement and the other Loan Documents.

Section 2.02  Making the Loans. (a) The Administrative Borrower shall
give the Agent prior telephonic notice (immediately confirmed in writing, in
substantially the form of Exhibit D hereto (a "Notice of Borrowing")), not later
than 12:00 noon (New York City time) on the date which is five (5) Business Days
prior to the date of the proposed Loan (or such shorter period as the Agent is
willing to accommodate from time to time, but in no event later than 12:00 noon
(New York City time) on the borrowing date of the proposed Loan). Such Notice of
Borrowing shall be irrevocable and shall specify (i) the principal amount of the
proposed Loan, (ii) the use of the proceeds of such proposed Loan, and (iii) the
proposed borrowing date, which must be a Business Day, and, with respect to the
Loans (other than the Loans made pursuant to Section 2.01(c)), must be the
Effective Date. The Agent and the Lenders may act without liability upon the
basis of written, telecopied or telephonic notice believed by the Agent in good
faith to be from the Administrative Borrower (or from any Authorized Officer
thereof designated in writing purportedly from the Administrative Borrower to
the Agent). Each Borrower hereby waives the right to dispute the Agent's record
of the terms of any such telephonic Notice of Borrowing. The Agent and each
Lender shall be entitled to rely conclusively on any Authorized Officer's
authority to request a Loan on behalf of the Borrowers until the Agent receives
written notice to the contrary. The Agent and the Lenders shall have no duty to
verify the authenticity of the signature appearing on any written Notice of
Borrowing.

(b)    Each Notice of Borrowing pursuant to this Section 2.02
shall be irrevocable and the Borrowers shall be bound to make a borrowing in
accordance therewith.

(c)    Subject to Section 2.01(c), all Loans under this
Agreement shall be made by the Lenders simultaneously and proportionately to
their Pro Rata Shares of the Total Term Loan A Commitment and the Total Term
Loan B Commitment, as the case may be, it being understood that no Lender shall
be responsible for any default by any other Lender in that other Lender's
obligations to make a Loan requested hereunder, nor shall the Commitment of any
Lender be increased or decreased as a result of the default by any other Lender
in that other Lender's obligation to make a Loan requested hereunder, and each
Lender shall be obligated to make the Loans required to be made by it by the
terms of this Agreement regardless of the failure by any other Lender.

Section 2.03  Repayment of Loans; Evidence of Debt. (a) The
outstanding principal of the Term Loan A shall be due and payable on the Term A
Maturity Date. The outstanding principal of the Term Loan B shall be due and
payable on the Term B Maturity Date.

(b)    Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrowers to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.

(c)    The Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender hereunder and (iii) the

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amount of any sum received by the Agent hereunder for the account of the Lenders
and each Lender's share thereof.

(d)    The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrowers to repay
the Loans in accordance with the terms of this Agreement.

(e)    Any Lender may request that Loans made by it be
evidenced by a promissory note. In such event, the Borrowers shall execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) in
a form furnished by the Agent and reasonably acceptable to the Administrative
Borrower. Thereafter, the Loans evidenced by such promissory note and interest
thereon shall at all times (including after assignment pursuant to Section
12.07) be represented by one or more promissory notes in such form payable to
the order of the payee named therein (or, if such promissory note is a
registered note, to such payee and its registered assigns).

Section 2.04   Interest. (a) Term Loan A. The Term Loan A shall be a
LIBOR Loan, except as otherwise provided in Section 2.09. The portion of the
Term Loan A that is a LIBOR Loan shall bear interest on the principal amount
thereof from time to time outstanding, from the date of the Term Loan A until
such principal amount becomes due, at a rate per annum equal to the LIBOR Rate
for the Interest Period in effect for such portion of the Term Loan A plus
7.25%. The portion of the Term Loan A that is a Reference Rate Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of the Term Loan A until such principal amount becomes due, at a rate per
annum equal to the Reference Rate plus 4.50%.

(b)    Term Loan B. The Term Loan B shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Term Loan B until such principal amount becomes due, at a rate per annum equal
to 22%; provided, however, that, so long as no Event of Default has occurred and
is continuing, interest on the outstanding principal amount of the Term Loan B
at a per annum rate equal to 11% shall, in the absence of an election by the
Administrative Borrower to pay such interest in cash, be paid by capitalizing
such interest and adding such capitalized interest to the then outstanding
principal amount of the Term Loan B. Any interest to be capitalized shall be
capitalized on the date such interest is to be paid pursuant to Section 2.04(d)
and added to the then outstanding principal amount of the Term Loan B and
thereafter shall bear interest as provided hereunder as if it had originally
been part of the outstanding principal of the Term Loan B.

(c)    Default Interest. To the extent permitted by law, upon
the occurrence and during the continuance of an Event of Default, the principal
of, and all accrued and unpaid interest on, all Loans, fees, indemnities, any
other Obligations of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.

(d)    Interest Payment. Interest on each Loan (other than
capitalized interest) shall accrue and be payable (in the manner described in
Section 4.02) monthly, in

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arrears, on the first day of each month, commencing on the first day of the
month following the month in which such Loan is made and at maturity (whether
upon demand, by acceleration or otherwise). Interest at the Post-Default Rate
shall be payable on demand. Each Borrower hereby authorizes the Agent to, and
the Agent may, from time to time, charge the Loan Account pursuant to Section
4.02 with the amount of any interest payment due hereunder.

(e)    General. All interest shall be computed on the basis of
a year of 360 days for the actual number of days, including the first day but
excluding the last day, elapsed.

Section 2.05   Term Loan Commitments; Prepayment of Loans.

(a)    Commitment Increase. The amount of the Total Term Loan
A Commitment and the Total Term Loan B Commitment shall increase solely in
accordance with the terms of Section 2.01(c).

(b)    Optional Prepayment.

(i)     Term Loan A. The Borrowers may, upon at least
five (5) Business Days' prior written notice to the Agent, prepay the principal
of the Term Loan A, in whole but not in part. Any prepayment made pursuant to
this clause (b)(i) shall be accompanied by the payment of accrued interest to
the date of such payment on the amount prepaid together with the payment of the
applicable Early Termination Fee.

(ii)    Term Loan B. The Borrowers may, upon at least
five (5) Business Days' prior written notice to the Agent, prepay the principal
of the Term Loan B, in whole but not in part. Any prepayment made pursuant to
this clause (b)(ii) shall be accompanied by the payment of accrued interest to
the date of such payment on the amount prepaid together with the payment of the
applicable Early Termination Fee.

(c)    Mandatory Prepayment.

(i)     Immediately upon any Disposition by any Loan
Party or its Subsidiaries pursuant to Section 7.02(c)(ii), the Borrowers shall
prepay the outstanding principal amount of the Term Loan A (or, if the Term Loan
A has been paid in full, the Term Loan B) in an amount equal to 100% of the Net
Cash Proceeds received by such Person in connection with such Disposition to the
extent that the aggregate amount of Net Cash Proceeds received by all Loan
Parties and their Subsidiaries (and not paid to the Agent as a prepayment of the
Loans) shall exceed, for all such Dispositions since the Effective Date,
$500,000. Nothing contained in this subsection (ii) shall permit any Loan Party
or any of its Subsidiaries to make a Disposition of any property other than in
accordance with Section 7.02(c)(ii).

(ii)    Upon the issuance or incurrence by any Loan
Party or any of its Subsidiaries of any Indebtedness referred to in clause (f)
of the definition of "Permitted Indebtedness", or the sale or issuance by any
Loan Party or any of its Subsidiaries of any shares of its Capital Stock (other
than the issuance or sale of such shares permitted under Section 7.02(l)), the
Borrowers shall prepay the outstanding amount of the Term Loan A (or if the Term
Loan A has been paid in full, the Term Loan B) in an amount equal to 100% of the
Net Cash Proceeds received by such Person in connection therewith. The
provisions of this subsection (iii)

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shall not be deemed to be implied consent to any such issuance, incurrence or
sale otherwise prohibited by the terms and conditions of this Agreement.

(iii)    Upon the receipt by any Loan Party or any of
its Subsidiaries of any Extraordinary Receipts (other than Extraordinary
Receipts comprising insurance proceeds) in an aggregate amount greater than
$100,000 or Extraordinary Receipts comprising insurance proceeds, in each case
since the Effective Date, the Borrowers shall prepay the outstanding principal
of the Term Loan A (or, if the Term Loan A has been repaid in full, the Term
Loan B) in an amount equal to 100% of such Extraordinary Receipts, net of any
reasonable expenses incurred in collecting such Extraordinary Receipts, provided
that:

(A)   in the case of Extraordinary
Receipts comprising proceeds of business interruption insurance or foreign,
United States, state or local tax refunds, such Extraordinary Receipts
shall be applied to prepay the Loans in accordance with this Section
2.05(c)(iii) only in the event a Default or Event of Default has occurred
and is continuing on the date such Extraordinary Receipts are received by
such Loan Party; and

(B)   except during the continuance of
a Default or Event of Default, Extraordinary Receipts comprising insurance
proceeds that are not otherwise subject to clause (A) above shall not be
required to be so prepaid on the date such proceeds are received by such
Loan Party to the extent (I) such proceeds are used to replace or restore
the properties or assets used in such Person's business in respect of which
such proceeds were paid if the Administrative Borrower delivers a
certificate to the Agent within 30 days of such event stating that such
proceeds shall be used to replace or restore any such properties or assets
to be used in such Person's business within a period specified in such
certificate not to exceed 180 days after the receipt of such proceeds
(which certificate shall set forth estimates of the proceeds to be so
expended) and (II) such proceeds are deposited in a deposit account subject
to a Control Agreement. If all or any portion of such proceeds not so
applied to the prepayment of the Term Loans are not so used within the
period specified in the relevant certificate furnished pursuant hereto (not
to exceed 180 days), such remaining portion shall prepay the outstanding
principal of the Loans on the last day of such specified period. In
addition, upon the occurrence and during the continuance of an Event of
Default, the Agent may apply such proceeds to the prepayment of the Loans.

(iv)     Upon the occurrence of a Change of Control
under paragraph (a) of the definition of the term "Change of Control", the
Borrowers shall, upon demand from the Agent, prepay the outstanding principal of
the Term Loan A and the Term Loan B. Any prepayment made pursuant to this clause
(c)(iv) shall be accompanied by the payment of accrued interest to the date of
such payment on the amount prepaid together with the payment of a prepayment fee
equal to 1% of the principal amount of the Term Loan B so prepaid, and each
Lender holding a Term Loan B shall be entitled to receive its ratable portion of
such prepayment fee pursuant to Section 4.02.

(d)    Application of Payments. Each prepayment pursuant to
subsections (c)(i), (c)(ii) and (c)(iii) above shall be applied, first, to the
Term Loan A, and second, to the Term Loan B.

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(e)    Interest and Fees. Any prepayment made pursuant to this
Section 2.05 shall be accompanied by accrued interest on the principal amount
being prepaid to the date of prepayment, and if such prepayment would reduce the
amount of the outstanding Loans to zero, such prepayment shall be accompanied by
the payment of all fees accrued to such date pursuant to Section 2.06.

(f)    Cumulative Prepayments. Except as otherwise expressly
provided in this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to payments made or required to be made under any
other subsection of this Section 2.05.

Section 2.06   Fees.

(a)    Funding Fee. The Borrowers shall pay to the Agent for
the account of the Lenders, in accordance with their Pro Rata Shares of any
additional Term Loan B made after the Effective Date in accordance with Section
2.01(c)(iv), a non-refundable funding fee (the "Funding Fee") equal to 2% of the
aggregate original principal amount of such additional Term Loan B, which shall
be deemed fully earned when paid and shall be payable on the date of the making
of such additional Term Loan B.

Section 2.07   Securitization. The Loan Parties hereby acknowledge
that the Lenders and their Affiliates may sell or securitize the Loans (a
"Securitization") through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by
Moody's, Standard & Poor's or one or more other rating agencies (the "Rating
Agencies"). The Loan Parties shall cooperate with the Lenders and their
Affiliates to effect the Securitization including, without limitation, by (a)
amending this Agreement and the other Loan Documents, and executing such
additional documents, as reasonably requested by the Lenders in connection with
the Securitization, provided that (i) any such amendment or additional
documentation does not impose material additional costs on the Loan Parties and
(ii) any such amendment or additional documentation does not materially
adversely affect the rights, or materially increase the obligations, of the Loan
Parties under the Loan Documents or change or affect in a manner adverse to the
Loan Parties the financial terms of the Loans, (b) providing such information as
may be reasonably requested by the Lenders in connection with the rating of the
Loans or the Securitization, and (c) providing in connection with any rating of
the Loans a certificate (i) agreeing to indemnify the Lenders and their
Affiliates, any of the Rating Agencies, or any party providing credit support or
otherwise participating in the Securitization (collectively, the "Securitization
Parties") for any losses, claims, damages or liabilities (the "Liabilities") to
which the Lenders, their Affiliates or such Securitization Parties may become
subject insofar as the Liabilities arise out of or are based upon any untrue
statement of any material fact contained in any Loan Document or in any writing
delivered by or on behalf of any Loan Party to the Lenders in connection with
any Loan Document or arise out of or are based upon the omission to state
therein a material fact required to be stated therein, or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and such indemnity shall survive any transfer by the
Lenders or their successors or assigns of the Loans and (ii) agreeing to
reimburse the Lenders and their Affiliates for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities.

Section 2.08   Taxes. (a) All payments made by any Loan Party
hereunder or under any other Loan Document shall be made without set-off,
counterclaim, deduction or other

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defense. All such payments shall be made free and clear of and without deduction
for any present or future income, franchise, sales, use, excise, stamp or other
taxes, levies, imposts, deductions, charges, fees, withholdings, restrictions or
conditions of any nature now or hereafter imposed, levied, collected, withheld
or assessed by any jurisdiction (whether pursuant to Federal, state, local or
foreign law) or by any political subdivision or taxing authority thereof or
therein, and all interest, penalties or additional amounts, excluding taxes on
the net income of any Lender or the Agent imposed by the jurisdiction in which
such Lender or the Agent is organized or any political subdivision thereof or
taxing authority thereof or any jurisdiction in which such Person's principal
office is located or any political subdivision thereof or taxing authority
thereof (such nonexcluded taxes, levies, imposts, deductions, charges, fees,
withholdings, restrictions, conditions, interest, penalties and additional
amounts being hereinafter collectively referred to as "Taxes"). If any Loan
Party shall be required to deduct or to withhold any Taxes from or in respect of
any amount payable hereunder or under any other Loan Document,

(i)      the amount so payable shall be increased so
that after making all required deductions and withholdings (including Taxes on
amounts payable pursuant to this sentence) the Lenders or the Agent, as the case
may be, receive an amount equal to the sum they would have received had no such
deduction or withholding been made,

(ii)     such Loan Party shall make such deduction or
withholding,

(iii)    such Loan Party shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law, and

(iv)     as promptly as possible thereafter, such Loan
Party shall send the Lenders and the Agent an official receipt (or, if an
official receipt is not available, such other documentation as shall be
satisfactory to the Lenders or the Agent, as the case may be) evidencing payment
of the amount or amounts so deducted or withheld. In addition, each Loan Party
agrees to pay any present or future taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery, performance,
recordation or filing of, or otherwise with respect to, this Agreement or any
other Loan Document other than the foregoing excluded taxes (hereinafter
referred to as "Other Taxes").

(b)    The Loan Parties hereby jointly and severally indemnify
and agree to hold the Lenders and the Agent harmless from and against Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.08) paid by any Lender
or the Agent and any liability (including penalties, interest and expenses for
nonpayment, late payment or otherwise) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Such indemnification shall be paid within 10 days from the date on
which any such Lender or the Agent makes written demand therefor, which demand
shall identify in reasonable detail the nature and amount of such Taxes or Other
Taxes.

(c)    Each Lender that is organized in a jurisdiction outside
the United States hereby agrees that it shall, no later than the Effective Date
or, in the case of a Lender which becomes a party hereto pursuant to Section
12.07 hereof after the Effective Date, the date upon which such Lender becomes a
party hereto (and from time to time thereafter upon the reasonable request of
the Administrative Borrower or the Agent, but only if such Lender is legally
able to do so), deliver to the Administrative Borrower and the Agent either (i)
two accurate, complete and signed copies of either (x) U.S. Internal Revenue
Service Form W-8ECI

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or successor form, or (y) U.S. Internal Revenue Service Form W-8BEN or successor
form, in each case, indicating that such Lender is on the date of delivery
thereof entitled to receive payments of interest hereunder free from, or subject
to a reduced rate of, withholding of United States Federal income tax or (ii) in
the case of such a Lender that is entitled to claim exemption from withholding
of United States Federal income tax under Section 871(h) or Section 881(c) of
the Internal Revenue Code, (x) a certificate to the effect that such Lender is
(A) not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) not a "10 percent shareholder" of the Parent within the
meaning of Section 881(c)(3)(B) of the Internal Revenue Code and (C) not a
controller foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Internal Revenue Code and (y) two
accurate, complete and signed copies of U.S. Internal Revenue Service Form
W-8BEN or successor form.

(d)    If any Loan Party fails to perform any of its
obligations under this Section 2.08, the Loan Parties shall indemnify the
Lenders and the Agent for any taxes, interest or penalties that may become
payable as a result of any such failure. The obligations of the Loan Parties
under this Section 2.08 shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.

Section 2.09   LIBOR Not Determinable; Illegality or Impropriety. (a)
In the event, and on each occasion, that on or before the day on which LIBOR is
to be determined in connection with the continuation of a LIBOR Loan as such or
a conversion of a Reference Rate Loan into a LIBOR Loan pursuant to Section 2.11
hereof, the Agent has determined in good faith that, or has been advised by the
Required Lenders that, (i) LIBOR cannot be reasonably determined for any reason,
(ii) LIBOR will not adequately and fairly reflect the cost of maintaining LIBOR
Loans or (iii) Dollar deposits in the principal amount of the applicable LIBOR
Loans are not available in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations in respect of the Lenders' LIBOR
Loans are then being conducted, the Agent shall, as soon as practicable
thereafter, give written notice of such determination to the Administrative
Borrower and the other Lenders. In the event of any such determination, any
request by the Administrative Borrower to continue a LIBOR Loan or to convert a
Reference Rate Loan into a LIBOR Loan pursuant to Section 2.11 shall, until, (i)
in the case of such a determination by the Required Lenders, the Agent has been
advised by the Required Lenders and the Agent has so advised the Administrative
Borrower that, or (ii) in the case of a determination by the Agent, the Agent
has advised the Administrative Borrower and the other Lenders that, the
circumstances giving rise to such notice no longer exist, be deemed to be a
request for a Reference Rate Loan. Each determination by the Agent and/or the
Required Lenders hereunder shall be conclusive and binding absent manifest
error.

(b)    In the event that it shall be unlawful or improper for
any Lender to make, maintain or fund any LIBOR Loan as contemplated by this
Agreement, then such Lender shall forthwith give notice thereof to the Agent and
the Administrative Borrower describing such illegality or impropriety in
reasonable detail. Effective immediately upon the giving of such notice, the
obligation of such Lender to continue to make LIBOR Loans shall be suspended for
the duration of such illegality or impropriety and, if and when such illegality
or impropriety ceases to exist, such suspension shall cease, and such Lender
shall notify the Agent and the Administrative Borrower. If any such change shall
make it unlawful or improper for any Lender to maintain any outstanding LIBOR
Loan as a LIBOR Loan, such Lender shall, upon the happening of such event,
notify the Agent and the Administrative Borrower, and the Administrative
Borrower shall immediately, or if permitted by applicable law, rule, regulation,

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order, decree, interpretation, request or directive, at the end of the then
current Interest Period for such LIBOR Loan, convert each such LIBOR Loan into a
Reference Rate Loan.

Section 2.10   Indemnity. (a) The Borrowers hereby jointly and
severally indemnify each Lender against any loss or expense that such Lender
actually sustains or incurs (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain any LIBOR Loan, and including loss
of anticipated profits) as a consequence of (i) any failure by the Borrowers to
fulfill on the date of any borrowing hereunder the applicable conditions set
forth in Article V or in any Joinder Agreement, (ii) any failure by the
Borrowers to borrow any LIBOR Loan hereunder, to convert any Reference Rate Loan
into a LIBOR Loan or to continue a LIBOR Loan as such after notice of such
borrowing, conversion or continuation has been given pursuant to Section 2.02 or
2.11 hereof, (iii) any payment, prepayment (mandatory or optional) or conversion
of a LIBOR Loan required by any provision of this Agreement or otherwise made on
a date other than the last day of the Interest Period applicable thereto, (iv)
any default in payment or prepayment of the principal amount of any LIBOR Loan
or any part thereof or interest accrued thereon, as and when due and payable (at
the due date thereof, by notice of prepayment or otherwise), or (v) the
occurrence of any Event of Default, including, in each such case, any loss
(including, without limitation, loss of anticipated profits) or reasonable
expense sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof as a LIBOR
Loan. Such loss or reasonable expense shall include but not be limited to an
amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid or prepaid or
converted or continued or not borrowed or converted or continued (based on LIBOR
applicable thereto) for the period from the date of such payment, prepayment,
conversion, continuation or failure to borrow, convert or continue on the last
day of the Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the last day of the Interest Period for such Loan
that would have commenced on the date of such failure to borrow, convert or
continue) over (ii) the amount of interest (as reasonably determined by such
Lender) that would be realized by such Lender in re-employing the funds so paid,
prepaid, converted or continued or not borrowed, converted or continued for such
Interest Period. A certificate of any Lender setting forth in reasonable detail
any amount or amounts that such Lender is entitled to receive pursuant to this
Section 2.10 and the basis for the determination of such amount or amounts shall
be delivered to the Borrower and shall be conclusive and binding absent manifest
error.

(b)    Notwithstanding paragraph (a) of this Section 2.10, the
Agent will use reasonable efforts to minimize or reduce any such loss or expense
resulting from the mandatory prepayments required by Section 2.05 of this
Agreement by applying all payments and prepayments to Reference Rate Loans prior
to any application of payments to LIBOR Loans.

Section 2.11   Continuation and Conversion of Loans. Subject to
Section 2.09 hereof, the Administrative Borrower shall have the right, at any
time, on three (3) Business Days' prior irrevocable written or telecopy notice
to the Agent, to continue any LIBOR Loan, or any portion thereof, into a
subsequent Interest Period or to convert any Reference Rate Loan or portion
thereof into a LIBOR Loan, subject to the following:

(a)    no LIBOR Loan may be continued as such and no Reference
Rate Loan may be converted into a LIBOR Loan, when any Event of Default or
Default shall have occurred and be continuing at such time,

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(b)    in the case of a continuation of a LIBOR Loan as such
or a conversion of a Reference Rate Loan into a LIBOR Loan, the aggregate
principal amount of such LIBOR Loan shall not be less than $1,000,000 and in
multiples of $500,000 if in excess thereof;

(c)    any portion of a Loan maturing or required to be repaid
in less than one month may not be converted into or continued as a LIBOR Loan;
and

(d)    if any conversion of a LIBOR Loan shall be effected on
a day other than the last day of an Interest Period, the Borrowers shall
reimburse each Lender on demand for any loss incurred or to be incurred or to be
incurred by it in the reemployment of the funds released by such conversion as
provided in Section 2.10 hereof.

In the event that the Administrative Borrower shall not give notice to continue
any LIBOR Loan into a subsequent Interest Period, such Loan shall automatically
become a Reference Rate Loan at the expiration of the then current Interest
Period.

ARTICLE III

[RESERVED]

ARTICLE IV

FEES, PAYMENTS AND OTHER COMPENSATION

Section 4.01   Audit and Collateral Monitoring Fees. The Borrowers
acknowledge that pursuant to Section 7.01(f), representatives of the Agent may
visit any or all of the Loan Parties and/or conduct audits, inspections,
valuations and/or field examinations of any or all of the Loan Parties at any
time and from time to time in a manner so as to not unduly disrupt the business
of the Loan Parties. The Borrower agrees to pay (i) $1,500 per day per examiner
plus the examiner's out-of-pocket costs and reasonable expenses incurred in
connection with all such visits, audits, inspections, valuations and field
examinations and (ii) the cost of all visits, audits, inspections, valuations
and field examinations conducted by a third party on behalf of the Agent.

Section 4.02   Payments; Computations and Statements. (a) The
Borrowers will make each payment under this Agreement not later than 12:00 noon
(New York City time) on the day when due, in lawful money of the United States
of America and in immediately available funds, to the Agent's Account. All
payments received by the Agent after 12:00 noon (New York City time) on any
Business Day will be credited to the Loan Account on the next succeeding
Business Day. All payments shall be made by the Borrowers without set-off,
counterclaim, deduction or other defense to the Agents and the Lenders. Except
as provided in Section 2.02, after receipt, the Agent will promptly thereafter
cause to be distributed like funds relating to the payment of principal ratably
to the Lenders in accordance with their Pro Rata Shares and like funds relating
to the payment of any other amount payable to any Lender to such Lender, in each
case to be applied in accordance with the terms of this Agreement, provided that
the Agent will cause to be distributed all interest and fees received from or
for the account of the Borrowers not less than once each month and in any event
promptly after receipt thereof. The Lenders and the Borrowers hereby authorize
the Agent to, and the Agent may, from time to time, charge the Loan Account of
the Borrowers with any amount due and payable by the Borrowers under any Loan

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Document. Each of the Lenders and the Borrowers agrees that the Agent shall have
the right to make such charges whether or not any Default or Event of Default
shall have occurred and be continuing. Any amount charged to the Loan Account of
the Borrowers shall be deemed a Loan hereunder made by the Lenders to the
Borrowers, funded by the Agent on behalf of the Lenders and shall be added to
the then outstanding principal amount of the Loans and thereafter shall bear
interest as provided hereunder as if it had originally been part of the
outstanding principal of the Term Loan B. Whenever any payment to be made under
any such Loan Document shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be. All computations of fees shall be made by the Agent
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
fees are payable. Each determination by the Agent of an interest rate or fees
hereunder shall be conclusive and binding for all purposes in the absence of
manifest error.

(b)    The Agent shall provide the Administrative Borrower,
promptly after the end of each calendar month, a summary statement (in the form
from time to time used by the Agent) of the opening and closing daily balances
in the Loan Account of the Borrowers during such month, the amounts and dates of
all Loans made to the Borrowers, the amounts and dates of all payments on
account of the Loans during such month and the Loans to which such payments were
applied, the amount of interest accrued on the Loans during such month,
specifying the face amount thereof, and the amount and nature of any charges to
the Loan Account made during such month on account of fees, commissions,
expenses and other Obligations. All entries on any such statement shall be
presumed to be correct and, thirty (30) days after the same is sent, shall be
final and conclusive absent manifest error.

Section 4.03   Sharing of Payments, Etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) on account of any Obligation in excess of its ratable
share of payments on account of similar obligations obtained by all the Lenders,
such Lender shall forthwith purchase from the other Lenders such participations
in such similar obligations held by them as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender of any interest or other amount paid by the purchasing Lender
in respect of the total amount so recovered). The Borrowers agree that any
Lender so purchasing a participation from another Lender pursuant to this
Section 4.03 may, to the fullest extent permitted by law, exercise all of its
rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.

Section 4.04   Apportionment of Payments. Subject to Section 2.02
hereof:

(a)    all payments of principal and interest in respect of
outstanding Loans, all payments of fees (other than the fees set forth in
Section 2.06 hereof and the audit and collateral monitoring fee provided for in
Section 4.01) and all other payments in respect of any other Obligations, shall
be allocated by the Agent among such of the Lenders as are entitled thereto, in
proportion to their respective Pro Rata Shares or otherwise as provided herein
or, in

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respect of payments not made on account of Loans, as designated by the Person
making payment when the payment is made.

(b)      After the occurrence and during the continuance of an
Event of Default, the Agent shall apply all payments in respect of any
Obligations and all proceeds of the Collateral, subject to the provisions of
this Agreement, (i) first, ratably to pay the Obligations in respect of any
fees, expense reimbursements, indemnities and other amounts then due to the
Agent until paid in full; (ii) second, ratably to pay the Obligations in respect
of any fees and indemnities then due to the Lenders until paid in full; (iii)
third, ratably to pay interest due in respect of the Term Loan A until paid in
full; (iv) fourth, ratably to pay principal of the Term Loan A until paid in
full; (v) fifth, ratably to pay interest due in respect of the Term Loan B until
paid in full; (vi) sixth, ratably to pay principal of the Term Loan B until paid
in full, and (vii) seventh, to the ratable payment of all other Obligations then
due and payable.

(c)      In each instance, so long as no Event of Default has
occurred and is continuing, Section 4.04(b) shall not be deemed to apply to any
payment by the Borrowers specified by the Administrative Borrower to the Agent
to be for the payment of Obligations then due and payable under any provision of
this Agreement or the prepayment of all or part of the principal of any Loan in
accordance with the terms and conditions of Section 2.05.

(d)      For purposes of Section 4.04(b), "paid in full" with
respect to interest shall include interest accrued after the commencement of any
Insolvency Proceeding irrespective of whether a claim for such interest is
allowable in such Insolvency Proceeding.

(e)      In the event of a direct conflict between the priority
provisions of this Section 4.04 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that both such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 4.04 shall control and govern.

Section 4.05 Increased Costs and Reduced Return. (a) If any Lender or
the Agent shall have determined that the adoption or implementation of, or any
change in, any law, rule, treaty or regulation, or any policy, guideline or
directive of, or any change in, the interpretation or administration thereof by,
any court, central bank or other administrative or Governmental Authority, or
compliance by any Lender or the Agent or any Person controlling any such Lender
or the Agent with any directive of, or guideline from, any central bank or other
Governmental Authority or the introduction of, or change in, any accounting
principles applicable to any Lender or the Agent or any Person controlling any
such Lender or the Agent (in each case, whether or not having the force of law),
shall (i) subject any Lender or the Agent, or any Person controlling any such
Lender or the Agent to any tax, duty or other charge with respect to this
Agreement or any Loan made by such Lender or the Agent, or change the basis of
taxation of payments to any Lender or the Agent or any Person controlling any
such Lender or the Agent of any amounts payable hereunder (except for taxes on
the overall net income of any Lender or the Agent or any Person controlling any
such Lender or the Agent), (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against any Loan or against assets of or
held by, or deposits with or for the account of, or credit extended by, any
Lender or the Agent or any Person controlling any such Lender or the Agent or
(iii) impose on any Lender or the Agent or any Person controlling any such
Lender or the Agent any other condition regarding this Agreement or any Loan,
and the result of any event referred to in

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clauses (i), (ii) or (iii) above shall be to increase the cost to any Lender or
the Agent of making any Loan, or agreeing to make any Loan, or to reduce any
amount received or receivable by any Lender or the Agent hereunder, then, upon
demand by any such Lender or the Agent, the Borrowers shall pay to such Lender
or the Agent such additional amounts as will compensate such Lender or the Agent
for such increased costs or reductions in amount.

(b)      If any Lender or the Agent shall have determined that any
Capital Guideline or the adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by any Lender or the Agent or any
Person controlling such Lender or the Agent with any Capital Guideline or with
any request or directive of any such Governmental Authority with respect to any
Capital Guideline, or the implementation of, or any change in, any applicable
accounting principles (in each case, whether or not having the force of law),
either (i) affects or would affect the amount of capital required or expected to
be maintained by any Lender or the Agent or any Person controlling such Lender
or the Agent, and any Lender or the Agent determines that the amount of such
capital is increased as a direct or indirect consequence of any Loans made or
maintained or any Lender's or the Agent's or any such other controlling Person's
other obligations hereunder, or (ii) has or would have the effect of reducing
the rate of return on any Lender's or the Agent's any such other controlling
Person's capital to a level below that which such Lender or the Agent or such
controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, or any agreement to make Loans, or
such Lender's, the Agent's or such other controlling Person's other obligations
hereunder (in each case, taking into consideration, such Lender's, the Agent's
or such other controlling Person's policies with respect to capital adequacy),
then, upon demand by any Lender or the Agent, the Borrowers shall pay to such
Lender or the Agent from time to time such additional amounts as will compensate
such Lender or the Agent for such cost of maintaining such increased capital or
such reduction in the rate of return on such Lender's or the Agent's or such
other controlling Person's capital.

(c)      All amounts payable under this Section 4.05 shall bear
interest from the date that is ten (10) days after the date of demand by any
Lender or the Agent until payment in full to such Lender or the Agent at the
Reference Rate. A certificate of such Lender or the Agent claiming compensation
under this Section 4.05, specifying the event herein above described and the
nature of such event shall be submitted by such Lender or the Agent to the
Administrative Borrower, setting forth the additional amount due and an
explanation of the calculation thereof, and such Lender's or the Agent's reasons
for invoking the provisions of this Section 4.05, and shall be final and
conclusive absent manifest error.

Section 4.06 Joint and Several Liability of the Borrowers. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the Obligations. Each of the
Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several
liability with the other Borrowers, with respect to the payment and performance
of all of the Obligations (including, without limitation, any Obligations
arising under this Section 4.06), it being the intention of the parties hereto
that all of the Obligations

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shall be the joint and several obligations of each of the Borrowers without
preferences or distinction among them. If and to the extent that any of the
Borrowers shall fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in accordance with the
terms thereof, then in each such event, the other Borrowers will make such
payment with respect to, or perform, such Obligation. Subject to the terms and
conditions hereof, the Obligations of each of the Borrowers under the provisions
of this Section 4.06 constitute the absolute and unconditional, full recourse
Obligations of each of the Borrowers, enforceable against each such Person to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement, the other Loan Documents or any
other circumstances whatsoever.

(b)      The provisions of this Section 4.06 are made for the
benefit of the Agent, the Lenders and their successors and assigns, and may be
enforced by them from time to time against any or all of the Borrowers as often
as occasion therefor may arise and without requirement on the part of the Agent,
the Lenders or such successors or assigns first to marshal any of its or their
claims or to exercise any of its or their rights against any of the other
Borrowers or to exhaust any remedies available to it or them against any of the
other Borrowers or to resort to any other source or means of obtaining payment
of any of the Obligations hereunder or to elect any other remedy. The provisions
of this Section 4.06 shall remain in effect until all of the Obligations shall
have been paid in full or otherwise fully satisfied.

(c)      Each of the Borrowers hereby agrees that it will not
enforce any of its rights of contribution or subrogation against the other
Borrowers with respect to any liability incurred by it hereunder or under any of
the other Loan Documents, any payments made by it to the Agent or the Lenders
with respect to any of the Obligations or any Collateral, until such time as all
of the Obligations have been paid in full in cash. Any claim which any Borrower
may have against any other Borrower with respect to any payments to the Agent or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.

ARTICLE V

CONDITIONS TO LOANS

Section 5.01 Conditions Precedent to Effectiveness. This Agreement
shall become effective as of the Business Day (the "Effective Date") when each
of the following conditions precedent shall have been satisfied in a manner
satisfactory to the Agent:

(a)      Payment of Fees, Etc. The Borrowers shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Sections 2.06 and 12.04.

(b)      Representations and Warranties; No Event of Default. The
following statements shall be true and correct: (i) the representations and
warranties contained in Article VI and in each other Loan Document, certificate
or other writing delivered to the Agent or any Lender pursuant hereto or thereto
on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this

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Agreement or the other Loan Documents becoming effective in accordance with
its or their respective terms.

(c)      Legality. The making of the initial Loans shall not
contravene any law, rule or regulation applicable to the Agent or any Lender.

(d)      Delivery of Documents. The Agent shall have received on or
before the Effective Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Effective Date:

(i)    a Security Agreement, duly executed by each Loan
Party;

(ii)   a Pledge Agreement, duly executed by each Loan
Party, together with the original stock certificates representing all of the
common stock of such Loan Party's Subsidiaries and all intercompany promissory
notes of such Loan Parties, accompanied by undated stock powers executed in
blank and other proper instruments of transfer;

(iii)  a Mortgage, duly executed by the applicable Loan
Party, with respect to each Facility, except for the Facilities identified in
Schedule 5.03(b) (the "Deferred Facilities");

(iv)   evidence satisfactory to the Agent and the title
insurance company issuing the relevant Title Insurance Policy of the suitability
for recording of each Mortgage (other than Mortgages for the Deferred
Facilities) in such office or offices as may be necessary or, in the opinion of
the Agent, desirable to perfect the Lien purported to be created thereby or to
otherwise protect the rights of the Agent and the Lenders thereunder;

(v)    a Title Insurance Policy (or marked commitments to
issue the same) or, if acceptable to the Agent in its sole discretion, a
bring-down of the existing Title Insurance Policy, with respect to each Mortgage
(other than Mortgages for the Deferred Facilities), dated as of the Effective
Date;

(vi)   an ALTA survey of each Facility (other than those
Facilities indicated on Schedule 1.01(B) as either not requiring an ALTA survey
or as being Deferred Facilities), in form and substance satisfactory to the
Agent, and certified to the Agent and to the issuer of the Title Insurance
Policy covering such Facility using a form of certification satisfactory to such
parties;

(vii)  a copy of each letter issued by the applicable
State Governmental Authority, or other evidence satisfactory to the Agent,
evidencing compliance by each Facility (other than those Facilities indicated on
Schedule 1.01(B) as either not requiring such evidence or as being Deferred
Facilities) with all applicable building codes, fire codes, other health and
safety rules and regulations, parking, density and height requirements and other
building, subdivision and zoning laws, orders, rules, regulations and
requirements of all governmental or quasi-governmental authorities having
jurisdiction (including, without limitation, copies of all applicable
certificates of occupancy);

(viii) the Canadian Security Documents, duly executed by
the Canadian Loan Parties;

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(ix)   a UCC Filing Authorization Letter, duly executed by
each Loan Party, together with appropriate financing statements on Form UCC-1
duly filed in such office or offices as may be necessary or, in the opinion of
the Agent, desirable to perfect the security interests purported to be created
by each Security Agreement, each Pledge Agreement and each Mortgage and
appropriate PPSA financing statements duly filed in such office or offices as
may be necessary or, in the opinion of the Agent, desirable to perfect the
security interest purported to be created by each Canadian Mortgage and each
Canadian Security Agreement;

(x)    certified copies of request for copies of
information on Form UCC-11, listing all effective financing statements which
name as debtor any Loan Party and which are filed in the offices referred to in
paragraph (ix) above, together with copies of such financing statements, none of
which, except as otherwise agreed in writing by the Agent, shall cover any of
the Collateral and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except as otherwise
agreed to in writing by the Agent, shall not show any such Liens, and certified
copies of PPSA search results from the applicable Canadian jurisdiction listing
all security interests against any Loan Party and which are filed in the
applicable personal property security office of such Canadian jurisdiction and
which do not disclose, except as otherwise agreed in writing by the Agent,
security interests affecting any of the Collateral;

(xi)   a copy of the resolutions of each Loan Party,
certified as of the Effective Date by an Authorized Officer thereof, authorizing
(A) the borrowings hereunder and the transactions contemplated by the Loan
Documents to which such Loan Party is or will be a party, (B) the execution,
delivery and performance by such Loan Party of each Loan Document to which such
Loan Party is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith
and (C) the execution, delivery and performance by such Loan Party (to the
extent applicable) of each Acquisition Document to which such Loan Party is or
will be a party and the execution and delivery of the other documents to be
delivered by such Loan Party in connection therewith;

(xii)  a certificate of an Authorized Officer of each Loan
Party, certifying the names and true signatures of the representatives of such
Loan Party authorized to sign each Loan Document to which such Loan Party is or
will be a party and the other documents to be executed and delivered by such
Loan Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;

(xiii) a certificate of the appropriate official(s) of the
state of organization and each state of foreign qualification of each Loan Party
certifying as to the subsistence in good standing of, and (to the extent
available in the applicable jurisdiction) the payment of taxes by, such Loan
Party in such states, which certificates shall be certified as of a recent date
not more than 30 days prior to the Effective Date;

(xiv)  a certificate as of a recent date not more than 30
days prior to the Effective Date by an appropriate official of the state of
organization of such Loan Party which shall set forth the same complete name of
such Loan Party as is set forth herein and the organizational number of such
Loan Party, if an organized number is issued in such jurisdiction, and a list of
the charter, certificate of formation, certificate of limited partnership or
other publicly filed organizational documents of such Loan Party, together with
a copy of each such

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document certified (but not necessarily within 30 days prior to the Effective
Date) by such official;

(xv)    a copy of the charter and by-laws, limited
liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;

(xvi)   (A) an opinion of Davis Malm & D'Agostine, P.C.,
Massachusetts counsel to the Loan Parties, substantially in the form of Exhibit
F-1 and as to such other matters as the Agent may reasonably request, and (B) an
opinion of McCarthy Tetrault LLP, Canadian counsel to the Loan Parties,
substantially in the form of Exhibit F-2 and as to such other matters as the
Agent may reasonably request, and (C) a copy of the opinion of Blaney McMurty
LLP, Canadian counsel to the Sellers' Canadian Subsidiaries subject to the
Acquisition, delivered to the Loan Parties pursuant to the Acquisition
Documents, which shall expressly provide that the Agent and the Lenders may rely
thereon;

(xvii)  a certificate of an Authorized Officer of each
Loan Party, certifying as to the matters set forth in subsection (b) of this
Section 5.01;

(xviii) a copy of the Financial Statements and the
financial projections described in Section 6.01(g)(ii) hereof, certified (in the
case of those Financial Statements and financial projections of the Parent and
its Subsidiaries) as of the Effective Date as true and correct by an Authorized
Officer of the Parent;

(xix)   a certificate of the chief financial officer of
the Parent, setting forth in reasonable detail the calculations required to
establish compliance, on a pro forma basis after giving effect to the Loans,
with each of the financial covenants contained in Section 7.03;

(xx)    a certificate of the chief financial officer of
each Loan Party, certifying as to the solvency of such Loan Party, which
certificate shall be satisfactory in form and substance to the Agent;

(xxi)   evidence of the insurance coverage required by
Section 7.01 and the terms of each Security Agreement and each Mortgage and such
other insurance coverage with respect to the business and operations of the Loan
Parties as the Agent may reasonably request, in each case, where requested by
the Agent, with such endorsements as to the named insureds or loss payees
thereunder as the Agent may request and providing that such policy may be
terminated or canceled (by the insurer or the insured thereunder) only upon 30
days' prior written notice to the Agent and each such named insured or loss
payee, together with evidence of the payment of all premiums due in respect
thereof for such period as the Agent may request;

(xxii)  a certificate of an Authorized Officer of the
Administrative Borrower, certifying the names and true signatures of the persons
that are authorized to provide Notices of Borrowing and all other notices under
this Agreement and the other Loan Documents;

(xxiii) a landlord waiver, in form and substance
satisfactory to the Agent and which may be included as a provision contained in
the relevant Lease, executed by

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each landlord with respect to the Parent's headquarters located in Braintree,
Massachusetts and the property located in Columbia, South Carolina where the
financial books and records relating to the Acquired Assets are located;

(xxiv)   all documents or other instruments duly executed
by the applicable Loan Party, in form and substance satisfactory to the Agent,
that is necessary to enable the Agent to perfect its security interest in the
Rolling Stock described in Schedule 5.01(d)(xxiv) (the "CH Rolling Stock"),
which Schedule shall include for each piece of CH Rolling Stock information with
respect to the manufacturer, the year made, the model, the vehicle
identification number, the state in which it is licensed, the license number,
the owner, state in which it is titled and the certificate of title or ownership
identification number;

(xxv)    copies of the Acquisition Documents, the
Revolving Credit Documents and the other Material Contracts as in effect on the
Effective Date (exclusive of any financing documents which are being prepaid or
defeased as of the Effective Date), certified as true and correct copies thereof
by an Authorized Officer of the Administrative Borrower, together with a
certificate of an Authorized Officer of the Administrative Borrower stating that
such agreements remain in full force and effect and that none of the Loan
Parties has breached or defaulted in any of its obligations under such
agreements;

(xxvi)   (A) a termination and release agreement with
respect to the Existing Credit Facility and all related documents, duly executed
by the Loan Parties and the Existing Lender, together with a satisfaction of
mortgage for each mortgage filed by the Existing Lender on the Existing Credit
Facility, satisfactory arrangements with respect to the release of Lien by the
Existing Lender on each certificate of title with respect to the CH Rolling
Stock and UCC-3 termination statements for all UCC-1 financing statements filed
by the Existing Lender and covering any portion of the Collateral, and (B)
similar instruments of release, discharge and satisfaction, in form and
substance satisfactory to the Agent, with respect to (I) the Liens of
Toronto-Dominion Bank on any personal property constituting a portion of the
Acquisition Assets and (II) each other financing or similar arrangement
encumbering any Facility;

(xxvii)  a satisfactory ASTM 1527-00 Phase I Environmental
Site Assessment ("Phase I ESA") and Limited Compliance Assessment, provided by
the Loan Parties to the Agent, and, if requested by the Agent based upon the
results of such Phase I ESA, a Phase II Environmental Site Assessment of each
Facility, in form and substance and by an independent firm satisfactory to the
Agent;

(xxviii) the Contribution Agreement, duly executed by each
Loan Party;

(xxix)   the Intercompany Subordination Agreement, duly
executed by each Loan Party;

(xxx)    the Intercreditor Agreement, duly executed by the
Agent, the Revolving Credit Agent and the Loan Parties;

(xxxi)   the Cash Collateral Control Agreement, duly
executed by the Agent, the L/C Issuer and the Loan Parties;

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(xxxii)  the Custodian Agreement, duly executed by the
Loan Parties and the Rolling Stock Collateral Custodian; and

(xxxiii) such other agreements, instruments, approvals,
opinions and other documents, each satisfactory to the Agent in form and
substance, as the Agent may reasonably request.

(e)      The Sale Order. The Sale Order shall have been signed and
entered by the Bankruptcy Court and the Agent shall have received a certified
copy of the same and such order shall be in full force and effect and shall not
have been reversed, stayed, modified or amended absent the consent of the Agent
and the Required Lenders. The Sale Order shall provide that, upon payment to the
Sellers of the consideration specified in the Acquisition Agreement, good and
marketable title to the Acquisition Assets shall be transferred to the Loan
Parties free and clear of all Liens, except the Liens constituting "Permitted
Exceptions" (as defined in the Acquisition Agreement), and shall otherwise be in
form and substance satisfactory to the Agent and the Required Lenders. The Sale
Order shall have been entered by the Bankruptcy Court and (x) no appeals shall
have been filed within the time period specified by Rule 8002(a) of the Federal
Rules of Bankruptcy Procedure, (y) in the event a timely appeal has been filed,
the effectiveness of such order has not been stayed in accordance with Rule 8005
of the Federal Rules of Bankruptcy Procedure or (z) in the event such order was
stayed pending appeal, such stay has been terminated by a subsequent court
order.

(f)      The Acquisition. On or prior to the Effective Date, the
Agent and the Lenders shall have received true and correct copies of all
Acquisition Documents as in effect on the Effective Date, and the Acquisition
Documents as in effect on the Effective Date shall be in form and substance
satisfactory to the Agent and the Required Lenders and shall not have been
amended or otherwise modified without the prior written consent of the Agent and
the Required Lenders. The Acquisition, including all of the terms and conditions
thereof, shall have been duly authorized and all Acquisition Documents shall
have been duly executed and delivered by all parties thereto and shall be in
full force and effect. The Acquisition shall have been consummated in accordance
with all applicable law (including, without limitation, the Bankruptcy Code),
the Acquisition Documents and the Sale Order. At the time of consummation
thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, any Governmental Authorities and any other
Person required in order to consummate the Acquisition shall have been obtained
and shall be in full force and effect.

(g)      Convertible Preferred Stock. The Parent shall have
received no less than $25,000,000 of cash proceeds from the sale of its Series C
convertible preferred stock to certain investors affiliated with Ableco and Oak
Hill. The terms and conditions of such equity shall be satisfactory to the Agent
and the Required Lenders in their sole discretion. On or prior to the Effective
Date, there shall have been delivered to the Agent true and correct copies of
all documents evidencing the equity described above, as in effect on the
Effective Date, and all terms and provisions of such documents as in effect on
the Effective Date shall be in form and substance satisfactory to the Agent and
the Required Lenders and shall not have been amended, modified or otherwise
changed without the prior written consent of the Agent and the Required Lenders.

(h)      Revolving Credit Documents; Adjusted Excess Availability.
On or prior to the Effective Date, there shall have been delivered to the Agent
true and correct copies of all Revolving Credit Documents as in effect on the
Effective Date, and all terms and provisions

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of the Revolving Credit Documents as in effect on the Effective Date shall be in
form and substance satisfactory to the Agent and the Required Lenders and shall
not have been amended, modified or otherwise changed without the prior written
consent of the Agent and the Required Lenders. After giving effect to all Loans
to be made on the Effective Date and after giving effect to the Acquisition, (i)
the Adjusted Excess Availability of the Loan Parties shall not be less than
$25,000,000 and (ii) all liabilities of the Loan Parties (other than
intercompany liabilities) shall not be past due unless such liabilities are the
subject of a bona fide dispute for which adequate reserves have been set aside
for the payment thereof in accordance with GAAP. The Parent shall deliver to the
Agent a certificate of the chief financial officer of the Parent certifying as
to the matters set forth in clauses (i) and (ii) above and containing the
calculation of Adjusted Excess Availability.

(i)      Material Adverse Effect. The Agent shall have determined,
in its sole judgment, that no event or development shall have occurred since
June 30, 2002 which could have a Material Adverse Effect.

(j)      Approvals. All consents, authorizations and approvals of,
and filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Loans or the conduct of the Loan Parties' business shall have been obtained
and shall be in full force and effect.

(k)      Proceedings; Receipt of Documents. All proceedings in
connection with the making of the initial Loans and the other transactions
contemplated by this Agreement and the other Loan Documents, and all documents
incidental hereto and thereto, shall be satisfactory to the Agent and its
counsel, and the Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such documents as
the Agent or such counsel may reasonably request.

(l)      Ratings. The Agent shall have received a letter from each
Rating Agency setting forth such Rating Agency's rating of the Term Loan A.

(m)      Rolling Stock Collateral Custodian. The Agent shall be
satisfied with the Rolling Stock Collateral Custodian's application filings of
the certificates of title or ownership of the CH Rolling Stock of the Loan
Parties to note the Lien of the Agent thereon and administration, management,
processing and custodianship of the certificates of title or ownership of such
Rolling Stock on and after the Effective Date.

Section 5.02 Conditions Precedent to All Loans. The obligation of the
Agent or any Lender to make any Loan in accordance with Section 2.01(c) is
subject to the fulfillment, in a manner satisfactory to the Agent, of each of
the following conditions precedent:

(a)      Payment of Fees, Etc. The Borrowers shall have paid all
fees, costs, expenses and taxes then payable by the Borrowers pursuant to this
Agreement and the other Loan Documents, including, without limitation, Sections
2.06 and 12.04 hereof.

(b)      Representations and Warranties; No Event of Default. The
following statements shall be true and correct, and the submission by the
Administrative Borrower to the Agent of a Notice of Borrowing with respect to
each such Loan, and the Borrowers' acceptance of the proceeds of such Loan,
shall each be deemed to be a representation and warranty by each Loan Party on
the date of such Loan that: (i) the representations and

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warranties contained in Article VI and in each other Loan Document, certificate
or other writing delivered the Agent or any Lender pursuant hereto or thereto on
or prior to the date of such Loan are true and correct on and as of such date as
though made on and as of such date, (ii) at the time of and after giving effect
to the making of such Loan and the application of the proceeds thereof, no
Default or Event of Default has occurred and is continuing or would result from
the making of the Loan to be made on such date and (iii) the conditions set
forth in this Section 5.02 have been satisfied as of the date of such request.

(c)      Legality. The making of such Loan shall not contravene any
law, rule or regulation applicable to the Agent or any Lender.

(d)      Notices. The Agent shall have received a Notice of
Borrowing pursuant to Section 2.02 hereof.

(e)      Delivery of Documents. The Agent shall have received a
Joinder Agreement, duly executed by the applicable Additional Lender, and such
other agreements, instruments, approvals, opinions and other documents, each in
form and substance satisfactory to the Agent, as the Agent may reasonably
request.

(f)      Proceedings; Receipt of Documents. All proceedings in
connection with the making of such Loan and the other transactions contemplated
by this Agreement and the other Loan Documents, and all documents incidental
hereto and thereto, shall be satisfactory to the Agent and its counsel, and the
Agent and such counsel shall have received all such information and such
counterpart originals or certified or other copies of such documents, in form
and substance satisfactory to the Agent, as the Agent or such counsel may
reasonably request.

Section 5.03 Conditions Subsequent to All Loans. The obligation of the
Agent or any Lender to make additional Loans or continue to maintain the Loans
after the Effective Date is subject to the fulfillment, on or before the date
applicable thereto, of each of the conditions subsequent set forth below (the
failure by Borrowers to so perform or cause to be performed constituting an
Event of Default):

(a)      Within 60 days of the Effective Date, deliver to the Agent
(or, at the direction of the Agent, to the Rolling Stock Collateral Agent) all
documents or other instruments duly executed by the applicable Loan Party, in
form and substance satisfactory to the Agent, that are necessary to enable the
Agent to perfect its security interest in the Rolling Stock described in
Schedule 5.03(a) (the "SK Rolling Stock"), which Schedule shall include for each
piece of SK Rolling Stock information with respect to the manufacturer, the year
made, the model, the vehicle identification number, the state in which it is
licensed, the license number, the owner, state in which it is titled and the
certificate of title or ownership identification number; provided that the Loan
Parties shall not be deemed to be in default under this Section 5.03(a) if they
are unable, despite their reasonable best efforts, to deliver to the Agent (or
the Rolling Stock Collateral Agent, as the case may be) such documents in
respect of all of the SK Rolling Stock so long as (i) the documents so delivered
represent no less than eighty percent (80%) of all of the SK Rolling Stock and
(ii) the orderly liquidation value of the SK Rolling Stock for which such
documents are so delivered, determined by a third party appraiser reasonably
acceptable to the Agent, shall equal or exceed ninety percent (90%) of the
orderly liquidation value of all of the SK Rolling Stock;

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(b)      On or before each deadline set forth in Schedule 5.03(b)
pertaining to certain real estate matters not completed by the Effective Date,
satisfy the post-closing obligation corresponding to such deadline as set forth
in such Schedule, in each case to the reasonable satisfaction of the Agent;

(c)      Within 14 days of the Effective Date, deliver evidence to
the Agent of the transfer by the applicable Governmental Authorities to the
applicable Loan Parties of all of the material Environmental Permits set forth
on Schedule 6.01(r)(ii);

(d)      Within 30 days of the Effective Date, deliver evidence to
the Agent of the filing with the United States Patent and Trademark Office,
United States Copyright Office and other official offices, of all documentation
necessary to confirm each Loan Party's ownership of the Owned Intellectual
Property;

(e)      Within 30 days of the Effective Date, deliver to the Agent
(i) waivers or discharges from those certain creditors as set forth in Schedule
5.03(e), as to the Liens registered against one or more of the Canadian Loan
Parties as set forth in Schedule 5.03(e), or (ii) other evidence satisfactory to
the Agent that such Liens do not attach to any assets of the Canadian Loan
Parties except to the extent such Liens are Permitted Liens, in each case in
form and substance satisfactory to the Agent; and

(f)      Within 5 days of the Effective Date, deliver to the Agent
(i) a fully executed copy of the defeasance escrow agreement among the City of
Kimball, Nebraska, the Parent, Clean Harbors Environmental Services, Inc. and
State Street Bank and Trust Company, as trustee (the "Trustee") for those
certain Economic Development Revenue Bonds (Clean Harbors, Inc.) Series 1996
(the "Bonds") in the original principal amount of $10,000,000 issued pursuant to
the Indenture of Trust dated as of September 1, 1996 (as amended to date, the
"Indenture"), certified as true and correct by the Parent, (ii) the Verification
Report of The Arbitrage Group, Inc. with respect to the governmental securities
purchased by the Parent and deposited with the Trustee to effect the defeasance
of the Bonds in accordance with the Indenture, (iii) the opinion of Davis Malm &
D'Agostine, P.C. with respect to the defeasance of the Bonds and (iv) a letter
from Standard & Poor's rating the Bonds, as defeased pursuant to the defeasance
escrow agreement, no less than AAA.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

Section 6.01 Representations and Warranties. Each Loan Party hereby
represents and warrants to the Agent and the Lenders as follows:

(a)      Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated (both before
and after giving effect to the Acquisition) and, in the case of the Borrowers,
to make the borrowings hereunder, and to execute and deliver each Transaction
Document to which it is a party, and to consummate the transactions contemplated
thereby, and (iii) before and after giving effect to the Acquisition, is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned or leased by it

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or in which the transaction of its business makes such qualification necessary,
except where the failure to be so qualified and in good standing could not
reasonably be expected to have a Material Adverse Effect.

(b)      Authorization, Etc. The execution, delivery and
performance by each Loan Party of each Transaction Document to which it is or
will be a party (including, without limitation, the notation of the Lien in
favor of the Agent on the certificates of title or ownership of the Rolling
Stock of the Parent and its Subsidiaries), (i) have been duly authorized by all
necessary action, (ii) do not and will not contravene its charter or by-laws,
its limited liability company or operating agreement or its certificate of
partnership or partnership agreement, as applicable, or any applicable law or
any Transaction Document, any Material Contract or any other contractual
restriction binding on or otherwise affecting it or any of its properties, (iii)
do not and will not result in or require the creation of any Lien (other than
pursuant to any Loan Document) upon or with respect to any of its properties,
and (iv) do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its properties.

(c)      Governmental Approvals. Before and after giving effect to
the Acquisition, no authorization or approval or other action by, and no notice
to or filing with, any Governmental Authority is required in connection with the
due execution, delivery and performance by any Loan Party of any Loan Document
or any other Transaction Document to which it is or will be a party, except for
authorizations or approvals which have been obtained and notices and filings
which have been made on or before the Effective Date.

(d)      Enforceability of Loan Documents. This Agreement is, and
each other Loan Document and Transaction Document to which any Loan Party is or
will be a party, when delivered hereunder, will be, a legal, valid and binding
obligation of such Person, enforceable against such Person in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws.

(e)      Subsidiaries. (i) Schedule 6.01(e) is a complete and
correct description of the name, jurisdiction of incorporation and ownership of
the outstanding Capital Stock of the Subsidiaries of the Parent in existence on
the date hereof after giving effect to the Acquisition. After giving effect to
the Acquisition, all of the issued and outstanding shares of Capital Stock of
such Subsidiaries have been validly issued and are fully paid and nonassessable,
and the holders thereof are not entitled to any preemptive, first refusal or
other similar rights. Except as indicated on such Schedule, all such Capital
Stock is owned by the Parent or one or more of its wholly-owned Subsidiaries,
free and clear of all Liens. There are no (A) outstanding debt or equity
securities of the Parent or any of its Subsidiaries, (B) outstanding obligations
of the Parent or any of its Subsidiaries convertible into or exchangeable for,
or warrants, options or other rights for the purchase or acquisition from the
Parent or any of its Subsidiaries, or (C) other obligations of any Subsidiary
which, in the case of items described in clauses (A), (B) or (C), result in any
obligation to issue, directly or indirectly, any shares of Capital Stock of any
Subsidiary of the Parent.

(ii) The Inactive Subsidiaries (A) have no business
operations and conduct no business and (B) own no assets except for assets with
a fair market value of less than $25,000 in the aggregate.

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(f)      Litigation; Commercial Tort Claims. Except as set forth in
Schedule 6.01(f), (i) there is no pending or, to the best knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party before any
court or other Governmental Authority or any arbitrator that (A) if adversely
determined, could have a Material Adverse Effect or (B) relates to this
Agreement or any other Loan Document or any transaction contemplated hereby or
thereby and (ii) as of the Effective Date, none of the Loan Parties holds any
commercial tort claims in respect of which a claim has been filed in a court of
law or a written notice by an attorney has been given to a potential defendant.

(g)      Financial Condition.

(i)   The Financial Statements, copies of which have been
delivered to the Agent and each Lender, fairly present the consolidated
financial condition of the Parent and its Subsidiaries or the Chemical Services
Division of Safety-Kleen Corp. (which consists primarily of the Sellers and the
Canadian Subsidiaries of Safety-Kleen Services, Inc.), as the case may be, as at
the respective dates thereof and the consolidated results of operations of the
Parent and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since June 30, 2002, no event or
development has occurred that has had or could have a Material Adverse Effect.

(ii)  The Parent has heretofore furnished to the Agent and
each Lender (A) projected quarterly balance sheets and statements of operations
and cash flows of the Parent and its Subsidiaries for the period from October 1,
2002, through December 31, 2004, and (B) projected annual balance sheets,
statements of operations and cash flows of the Parent and its Subsidiaries for
the Fiscal Years ending in 2002 through 2007, which projected financial
statements shall be updated from time to time pursuant to Section 7.01(a)(vii).
Such projections, as so updated, shall be believed by the Parent at the time
furnished to be reasonable, shall have been prepared on a reasonable basis and
in good faith by the Parent, and shall have been based on assumptions believed
by the Parent to be reasonable at the time made and upon the best information
then reasonably available to the Parent, and the Parent shall not be aware of
any facts or information that would lead it to believe that such projections, as
so updated, are incorrect or misleading in any material respect.

(h)      Compliance with Law, Etc. No Loan Party is in violation of
its organizational documents, any law, rule, regulation, judgment or order of
any Governmental Authority (including, without limitation, any Motor Vehicle
Law) applicable to it or any of its property or assets, or any material term of
any agreement or instrument (including, without limitation, any Revolving Credit
Document, any Acquisition Document or any other Material Contract) binding on or
otherwise affecting it or any of its properties, and no Default or Event of
Default has occurred and is continuing.

(i)      ERISA. Except as set forth on Schedule 6.01(i), (i) each
Employee Plan is in substantial compliance with ERISA and the Internal Revenue
Code, (ii) no Termination Event has occurred nor is reasonably expected to occur
with respect to any Employee Plan, (iii) the most recent annual report (Form
5500 Series) with respect to each Employee Plan, including any required Schedule
B (Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agent, is complete and correct and
fairly presents the funding status of such Employee Plan, and since the date of
such report there has been no material adverse change in such funding status,
(iv) copies of each agreement entered into with the PBGC, the U.S. Department of
Labor or the Internal Revenue

-49-

Service with respect to any Employee Plan have been delivered to the Agent, (v)
no Employee Plan had an accumulated or waived funding deficiency or permitted
decrease which would create a deficiency in its funding standard account or has
applied for an extension of any amortization period within the meaning of
Section 412 of the Internal Revenue Code at any time during the previous 60
months, and (vi) no Lien imposed under the Internal Revenue Code or ERISA exists
or is likely to arise on account of any Employee Plan within the meaning of
Section 412 of the Internal Revenue Code. Except as set forth on Schedule
6.01(i), no Loan Party or any of its ERISA Affiliates has incurred any
withdrawal liability under ERISA with respect to any Multiemployer Plan, or is
aware of any facts indicating that it or any of its ERISA Affiliates may in the
future incur any such withdrawal liability. No Loan Party or any of its ERISA
Affiliates nor any fiduciary of any Employee Plan has (i) engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Internal Revenue Code, (ii) failed to pay any required installment or other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such required installment or payment, (iii) engaged in a
transaction within the meaning of Section 4069 of ERISA or (iv) incurred any
liability to the PBGC which remains outstanding other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. There are no pending or, to the best knowledge of any Loan Party,
threatened claims, actions, proceedings or lawsuits (other than claims for
benefits in the normal course) asserted or instituted against (i) any Employee
Plan or its assets, (ii) any fiduciary with respect to any Employee Plan, or
(iii) any Loan Party or any of its ERISA Affiliates with respect to any Employee
Plan. Except as required by Section 4980B of the Internal Revenue Code, no Loan
Party or any of its ERISA Affiliates maintains an employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of any Loan Party or any of its ERISA Affiliates or coverage after a
participant's termination of employment.

(j)      Taxes, Etc. All Federal, state and local tax returns and
other reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon any Loan Party or any property of any Loan
Party and which have become due and payable on or prior to the date hereof have
been paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof on the Financial Statements of the Parent and its
Subsidiaries in accordance with GAAP.

(k)      Regulations T, U and X. Before and after giving effect to
the Acquisition, no Loan Party is or will be engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation T, U or X), and no proceeds of any Loan will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.

(l)      Nature of Business. After giving effect to the
Acquisition, no Loan Party is engaged in any business other than the ownership,
leasing, management and/or operation of waste facilities, and the provision of
environmental, industrial maintenance and related services.

(m)      Adverse Agreements, Etc. After giving effect to the
Acquisition, no Loan Party is a party to any agreement or instrument, or subject
to any charter, limited liability company agreement, partnership agreement or
other corporate, partnership or limited

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liability company restriction or any judgment, order, regulation, ruling or
other requirement of a court or other Governmental Authority, which has, or in
the future could have, a Material Adverse Effect.

(n)      Permits, Etc. Before and after giving effect to the
Acquisition, each Loan Party has, and is in compliance with, all permits,
licenses, authorizations, approvals, entitlements and accreditations required
for such Person lawfully to own, lease, manage or operate, or to acquire, each
business currently owned, leased, managed or operated, or to be acquired, by
such Person, except for certain Environmental Permits relating to the SK
Facilities for which applications have been filed on or prior the Effective Date
but which are not yet effective as described in Section 6.01(r). Before and
after giving effect to the Acquisition, except as set forth in Schedule 6.01(r),
no condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such existing permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect.

(o)      Properties. (i) After giving effect to the Acquisition,
each Loan Party has good and marketable title to, valid leasehold interests in,
or valid licenses to use, all property and assets material to its business, free
and clear of all Liens, except, with respect to all Facilities subject to a
Mortgage, those exceptions set forth in the applicable Title Insurance Policy
and, with respect to all other property and assets, any Permitted Lien. All such
properties and assets are in good working order and condition, ordinary wear and
tear excepted.

(ii)   Schedule 6.01(o) sets forth a complete and accurate
list, as of the Effective Date (after giving effect to the Acquisition), of the
location, by state and street address, of all real property owned, leased or
licensed by each Loan Party (other than an Inactive Subsidiary) and identifies
the interest (fee, leasehold or license) of such Loan Party therein. No Person
has any right of first refusal, option or other preferential right to purchase
any such owned real property. As of the Effective Date, each Loan Party has
valid leasehold interests in the Leases described on Schedule 6.01(o) to which
it is a party. True, complete and correct copies of each such Lease have been
delivered to the Agent prior to the date hereof. Schedule 6.01(o) sets forth
with respect to each such Lease, the commencement date, termination date,
renewal options (if any) and annual base rents. Each such Lease is valid and
enforceable in accordance with its terms in all material respects and is in full
force and effect. No consent or approval of any landlord or other third party in
connection with any such Lease is necessary for any Loan Party to enter into and
execute the Loan Documents or the Acquisition Documents to which it is a party,
except as set forth on Schedule 6.01(o). To the best knowledge of any Loan
Party, no other party to any such Lease is in default of its obligations
thereunder, and no Loan Party (or any other party to any such Lease) has at any
time delivered or received any notice of default which remains uncured under any
such Lease and, as of the Effective Date (after giving effect to the
Acquisition), no event has occurred which, with the giving of notice or the
passage of time or both, would constitute a default under any such Lease.

(iii)  All Rolling Stock of the Loan Parties which, under
applicable law (including, without limitation, any Motor Vehicle Law), is
required to be registered is (in the case of the CH Rolling Stock) or will
within 60 days following the Effective Date (in the case of the SK Rolling Stock
described in Section 5.03(a)) be properly registered in the name of a Loan
Party, and all Rolling Stock of the Loan Parties, the ownership of which, under
applicable law (including, without limitation, any Motor Vehicle Law), is
evidenced by a

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certificate of title or ownership, is (or will be, as appropriate) properly
titled in the name of a Loan Party. The Rolling Stock listed on Schedule
5.01(d)(xxiv) and Schedule 5.03(a) constitute all of the Rolling Stock owned by
the Loan Parties on the Effective Date and the Rolling Stock not subject to a
certificate of title or ownership under applicable law (including, without
limitation, any Motor Vehicle Law) is noted therein.

(p)      Full Disclosure. Each Loan Party has disclosed to the
Agent all agreements, instruments and corporate or other restrictions to which
it is subject, and all other matters known to it, that, individually or in the
aggregate, could result in a Material Adverse Effect. None of the other reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Agent in connection with the negotiation of this
Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which it was made, not misleading; provided that,
with respect to projected financial information, each Loan Party represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time. There is no contingent liability or fact that may
have a Material Adverse Effect which has not been set forth in a footnote
included in the Financial Statements or a Schedule hereto.

(q)      [Intentionally Omitted].

(r)      Environmental Matters; Permits. Except as set forth on
Schedule 6.01(r)(i):

(i)   the Loan Parties' businesses, Facilities (including
both the Facilities operated prior to the Effective Date by Subsidiaries of the
Parent (the "CH Facilities") and those Facilities which are included in the
Acquisition Assets (the "SK Facilities")), operations, properties and assets are
in material compliance with Environmental Laws;

(ii)  the Loan Parties have obtained and are in material
compliance with all material Environmental Permits necessary to operate, use or
occupy all of the Loan Parties' businesses, Facilities, operations, properties
and assets, except for Environmental Permits relating to the SK Facilities which
are not yet effective but for which requisite applications have been filed.
Schedule 6.01(r)(ii) sets forth those SK Facilities where the Loan Parties have
filed all requisite applications for transfer of such material Environmental
Permits with the appropriate Governmental Authorities, but as of the Effective
Date the Governmental Authorities have not transferred such material
Environmental Permits, and all of the material Environmental Permits set forth
on Schedule 6.01(r)(ii) will be transferred by the Governmental Authorities
within fourteen (14) days of the Effective Date;

(iii) the Loan Parties have obtained and are in full
compliance with all financial assurance requirements under RCRA and any similar
Environmental Law, as specifically set forth but not limited to 40 C.F.R. 264
and 265, necessary to operate, use or occupy all of the Loan Parties'
businesses, Facilities, operations, properties and assets, except that in the
case of the SK Facilities, the Loan Parties have made the appropriate
arrangements to obtain and be in full compliance with all such financial
assurance requirements within seven (7) days following the Effective Date
through application of a portion of the proceeds of the Term Loan A as security
for letters of credit required in connection with obtaining such financial
assurance;

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(iv)    the Loan Parties are in material compliance with
all applicable writs, orders, consent decrees, judgments, and injunctions by any
Governmental Authority, decrees, informational requests or demands issued
pursuant to, or arising under, any Environmental Laws;

(v)     the Loan Parties reasonably anticipate that they
will not be required to spend more than $1,000,000 for any Facility or
$5,000,000 in the aggregate for all Facilities to comply with any Environmental
Laws that have been promulgated and enacted by a Governmental Authority, but
will not be effective until some time after the Effective Date, except to the
extent those expenditures are already specifically included within the aggregate
amounts described in clause (x) or (xi) below or in the Capital Expenditures set
forth in Section 7.02(g);

(vi)    except for Releases for which the related
Environmental Liabilities are specifically included within the aggregate amounts
described in clauses (x) through (xii) below, there has been no Release relating
to any of the Acquisition Assets or any of the facilities, assets or properties
owned or operated by any Loan Party, its Subsidiaries or, to the best knowledge
of the Loan Parties, a predecessor in interest, which could reasonably be
expected to result in any Environmental Liabilities in excess of $1,000,000 for
any Facility or $5,000,000 in the aggregate for all Facilities;

(vii)   [intentionally omitted]

(viii)  except for Environmental Claims specifically
included within the aggregate amount described in clauses (x) through (xii)
below, to the best knowledge of the Loan Parties, no Environmental Claims have
been asserted against any treatment, storage or disposal facility that received
or Handled Hazardous Materials Handled by any Loan Party, its Subsidiaries or
any predecessor in interest which could reasonably be expected to result in any
Environmental Liabilities in excess of $1,000,000 individually or $5,000,000 in
the aggregate;

(ix)    except for Environmental Claims specifically
included within the aggregate amounts described in clauses (x) through (xii)
below, no Environmental Claims have been asserted against any Loan Party, its
Subsidiaries or, to the best knowledge of the Loan Parties, any predecessor in
interest nor does any Loan Party have knowledge or notice of any threatened or
pending Environmental Claims against any Loan Party, its Subsidiaries or any
predecessor in interest which could reasonably be expected to result in any
Environmental Liabilities in excess of $1,000,000 individually or $5,000,000 in
the aggregate;

(x)     the Loan Parties will not assume any
Environmental Liabilities related to the Acquisition that are more than ten
(10%) percent above $265,000,000, calculated in accordance with GAAP;

(xi)    excluding any Environmental Liabilities related
to the Acquisition Assets, the Loan Parties will not spend more than ten percent
(10%) above $29,250,000 for closure, post closure and post closure care of the
CH Facilities, as those terms are used in RCRA and any similar Environmental
Law, as specifically set forth but not limited to 40 C.F.R. 264 and 265;

(xii)   excluding any Environmental Liabilities related
to the Acquisition Assets, to the best knowledge of the Loan Parties, there are
no Remedial Actions that will cost, in the aggregate, more than $1,000,000 per
calendar year for the foreseeable future;

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(xiii)  all representations, including without limitation
applications, warranty statements and accompanying materials provided in support
of such representations, provided by the Loan Parties to obtain insurance, are
truthful and complete in all respects, and the Loan Parties have done nothing to
prejudice their rights to obtain the benefits of their insurance by failing to
comply with any of the provisions, conditions or requirements of its policies of
insurance;

(xiv)   there are no Environmental Liens associated or,
to the best knowledge of the Loan Parties, threatened to be associated with any
of the Acquisition Assets or Loan Parties' businesses, Facilities, operations,
properties and assets; and

(xv)    except for work, repairs, contributions and
Capital Expenditures specifically included in the aggregate amounts set forth in
clauses (x) through (xii) above or Section 7.02(g), to the best knowledge of the
Loan Parties, (A) no work, repairs, construction or Capital Expenditures are
required to be made as a condition of continued compliance of the Facilities or
the Loan Parties' business with any Environmental Laws, or any license,
Environmental Permit or approval issued pursuant thereto or (B) no license,
Environmental Permit or approval referred to above is about to be reviewed,
made, subject to limitations or conditions, revoked, withdrawn or terminated.

Schedule 6.01(r)(ii) sets forth each material license, permit and regulatory
approval required under any Environmental Law in connection with the operation
of each waste disposal, waste treatment or waste transfer facility operated by
each Loan Party, the expiration date of such license, permit or approval, and
the dollar amount of any financial assurance bond or other similar surety
instrument issued on behalf of such Loan Party in connection with its operation
of any such Facility.

(s)       Insurance. Each Loan Party keeps its property adequately
insured and maintains (i) insurance to such extent and against such risks,
including fire, as is customary with companies in the same or similar
businesses, (ii) workmen's compensation insurance in the amount required by
applicable law, (iii) public liability insurance, which shall include product
liability insurance, in the amount customary with companies in the same or
similar business against claims for personal injury or death on properties
owned, occupied or controlled by it, (iv) insurance with respect to liability
for bodily injury and property damage resulting from the operation of the
Rolling Stock by each Loan Party in amounts customary with companies in the same
or similar business and in accordance with applicable law and (v) such other
insurance as may be required by law or as may be reasonably required by the
Agent (including, without limitation, against larceny, embezzlement or other
criminal misappropriation). Schedule 6.01(s) sets forth a list of all insurance
maintained by each Loan Party on the Effective Date (after giving effect to the
Acquisition).

(t)       Use of Proceeds. The proceeds of the Loans shall be used
to (i) to facilitate the Acquisition, (ii) refinance existing indebtedness of
the Borrowers and pay the prepayment and defeasance cost in connection
therewith, (iii) provide cash collateral for letters of credit issued for the
account of the Loan Parties the reimbursement obligations for which constitute
Permitted Indebtedness, (iv) pay fees and expenses in connection with the
Acquisition and the transactions contemplated hereby and (v) fund working
capital of the Borrowers.

(u)       Solvency. After giving effect to the transactions
contemplated by this Agreement, the Revolving Credit Agreements, the Sale Order
and the Acquisition Documents

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and before and after giving effect to each Loan, each Loan Party is, and the
Loan Parties on a consolidated basis are, Solvent.

(v)       Location of Bank Accounts. Schedule 6.01(v) sets forth a
complete and accurate list as of the Effective Date (after giving effect to the
Acquisition) of all deposit, checking and other bank accounts, all securities
and other accounts maintained with any broker dealer and all other similar
accounts maintained by each Loan Party, together with a description thereof
(i.e., the bank or broker dealer at which such deposit or other account is
maintained and the account number and the purpose thereof).

(w)       Intellectual Property. Except as set forth on Schedule
6.01(w) and after giving effect to the Acquisition, each Loan Party owns or
licenses or otherwise has the valid right to use all Intellectual Property and
Technology Systems that are necessary for the operation of its business as
currently conducted or contemplated, without infringement upon or conflict with
the rights of any other Person with respect thereto. Set forth on Schedule
6.01(w) is a complete and accurate list as of the Effective Date (after giving
effect to the Acquisition) of all material or Registered Intellectual Property
(other than confidential and proprietary information, Trade Secrets and
know-how) that is owned by a Loan Party (the "Owned Intellectual Property") and
all Material Contracts relating to Intellectual Property licensed from third
parties, including with respect to Technology Systems (the "Licensed
Intellectual Property"). Except as set forth on Schedule 6.01(w), no licensed
Intellectual Property is required in order to conduct the business of each Loan
Party as currently conducted or contemplated as of the Effective Date (after
giving effect to the Acquisition) other than the Licensed Intellectual Property.
No party to any Material Contract relating to Licensed Intellectual Property has
given any Loan Party notice of its intention to cancel, terminate or fail to
renew any such Material Contract. After giving effect to the Acquisition,
neither the business of each Loan Party as currently conducted or contemplated,
nor any slogan or other advertising device, product, process, method, substance,
part or other material now employed, or now contemplated to be employed, by any
Loan Party, infringes upon or conflicts with any rights owned by any other
Person, none of the Loan Parties has received notice of any claim or litigation
regarding any of the foregoing, nor is any such claim or litigation pending or
threatened. All Owned Intellectual Property is valid, subsisting and
enforceable, and no material Registered Owned Intellectual Property has been
abandoned, canceled or adjudicated invalid (excepting any expirations in the
ordinary course), or is subject to any outstanding order, judgment or decree
restricting its use or adversely affecting or reflecting a Loan Party's rights
thereto, or is the subject of any suit, action, reissue, reexamination, public
protest, interference, arbitration, mediation, opposition, cancellation or other
proceeding. The Loan Parties have timely made all filings and payments with the
appropriate foreign and domestic agencies required to maintain in subsistence
all Registered Owned Intellectual Property. Except as indicated on Schedule
6.01(w), no due dates for filings or payments concerning the material Owned
Intellectual Property (including without limitation office action responses,
affidavits of use, affidavits of continuing use, renewals, requests for
extension of time, maintenance fees, application fees and foreign convention
priority filings) fall due within ninety (90) days of the Effective Date,
whether or not such due dates are extendable. All documentation necessary to
confirm and effect each Loan Party's ownership of Owned Intellectual Property,
if acquired from other Persons, has been recorded in the United States Patent
and Trademark Office, the United States Copyright Office and other official
offices, except for those recordations referenced in Section 5.03(d). Each Loan
Party has taken all reasonable measures to protect the secrecy, confidentiality
and value of all Trade Secrets used in its business (collectively, "Business
Trade Secrets") (including without limitation entering into

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appropriate confidentiality agreements with all officers, directors, employees,
and other Persons with access to the Business Trade Secrets). To each Loan
Party's knowledge, the Business Trade Secrets have not been disclosed to any
Persons other than such Loan Party's employees or contractors who had a need to
know and use such Business Trade Secrets in the ordinary course of employment or
contract performance and who executed appropriate confidentiality agreements.

(x)       Material Contracts. Set forth on Schedule 6.01(x) is a
complete and accurate list as of the Effective Date (after giving effect to the
Acquisition) of all Material Contracts (other than the Loan Documents) of each
Loan Party, showing the parties and subject matter thereof and amendments and
modifications thereto. Each such Material Contract (i) is in full force and
effect and is binding upon and enforceable against each Loan Party that is a
party thereto and, to the best knowledge of such Loan Party, all other parties
thereto in accordance with its terms, (ii) has not been otherwise amended or
modified, and (iii) is not in default due to the action of any Loan Party or, to
the best knowledge of any Loan Party, any other party thereto.

(y)       Holding Company and Investment Company Acts. None of the
Loan Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.

(z)       Employee and Labor Matters. There is (i) no unfair labor
practice complaint pending or, to the best knowledge of any Loan Party,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (ii) no
strike, labor dispute, slowdown, stoppage or similar action or grievance pending
or threatened against any Loan Party or (iii) to the best knowledge of any Loan
Party, no union representation question existing with respect to the employees
of any Loan Party and no union organizing activity taking place with respect to
any of the employees of any Loan Party. No Loan Party or any of its ERISA
Affiliates has incurred any liability or obligation under the Worker Adjustment
and Retraining Notification Act ("WARN") or similar state law, which remains
unpaid or unsatisfied. The hours worked and payments made to employees of any
Loan Party have not been in violation of the Fair Labor Standards Act or any
other applicable legal requirements. After giving effect to the Acquisition, all
material payments due from any Loan Party on account of wages and employee
health and welfare insurance and other benefits have been paid or accrued as a
liability on the books of such Loan Party.

(aa)      Customers and Suppliers. There exists no actual or
threatened termination, cancellation or limitation of, or modification to or
change in, the business relationship between (i) any Loan Party, on the one
hand, and any customer or any group thereof, on the other hand, whose agreements
with any Loan Party are individually or in the aggregate material to the
business or operations of such Loan Party, or (ii) any Loan Party, on the one
hand, and any material supplier thereof, on the other hand; and there exists no
present state of facts or circumstances that could give rise to or result in any
such termination, cancellation, limitation, modification or change.

(bb)      No Bankruptcy Filing. No Loan Party is contemplating
either an Insolvency Proceeding or the liquidation of all or a major portion of
such Loan Party's assets or

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property, and no Loan Party has any knowledge of any Person contemplating an
Insolvency Proceeding against it.

(cc)     Separate Existence.

(i)   All customary formalities regarding the corporate
existence of each Loan Party has been at all times since its formation and will
continue to be observed.

(ii)  Each Loan Party has at all times since its formation
accurately maintained, and will continue to accurately maintain, its financial
statements, accounting records and other organizational documents separate from
those of any Affiliate of such Loan Party and any other Person. No Loan Party
has at any time since its formation commingled, and will not commingle, its
assets with those of any of its Affiliates or any other Person. Each Loan Party
has at all times since its formation accurately maintained, and will continue to
accurately maintain its own bank accounts and separate books of account.

(iii) Each Loan Party has at all times since its formation
paid, and will continue to pay, its own liabilities from its own separate
assets.

(iv)  Each Loan Party has at all times since its formation
identified itself, and will continue to identify itself, in all dealings with
the public, under its own name and as a separate and distinct Person. No Loan
Party has at any time since its formation identified itself, or will identify
itself, as being a division or a part of any other Person (except that the
Canadian Loan Parties and Laidlaw Environmental Services de Mexico, S.A. de
C.V., were prior to the Acquisition identified as being part of the "Chemical
Services Division" of Safety-Kleen Corp. and its Subsidiaries).

(dd)     Name; Jurisdiction of Organization; Organizational ID
Number; Chief Place of Business; Chief Executive Office; FEIN. Schedule 6.01(dd)
sets forth a complete and accurate list as of the date hereof of (i) the exact
legal name of each Loan Party, (ii) the jurisdiction of organization of each
Loan Party, (iii) the organizational identification number of each Loan Party
(or indicates that such Loan Party has no organizational identification number),
(iv) each place of business of each Loan Party, (v) the chief executive office
of each Loan Party and (vi) the federal employer identification number of each
Loan Party.

(ee)     Tradenames. Schedule 6.01(ee) hereto sets forth a complete
and accurate list as of the Effective Date (after giving effect to the
Acquisition) of all tradenames used by each Loan Party.

(ff)     Locations of Collateral. There is no location at which any
Loan Party has any Collateral (except for Rolling Stock in transit) other than
(i) those locations listed on Schedule 6.01(ff) and (ii) any other locations
approved in writing by the Collateral Agent from time to time. Schedule 6.01(ff)
hereto contains a true, correct and complete list, as of the Effective Date, of
the legal names and addresses of each warehouse at which Collateral of each Loan
Party is stored. None of the receipts received by any Loan Party from any
warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person's
assigns.

(gg)     Security Interests. (i) Each Security Agreement creates in
favor of the Agent, for the benefit of the Lenders, a legal, valid and
enforceable security interest in the

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Collateral secured thereby. Upon the filing of the UCC-1 financing statements
described in Section 5.01(d)(ix) and the recording of the Collateral Assignments
for Security referred to in each Security Agreement in the United States Patent
and Trademark Office and the United States Copyright Office, as applicable, and
the submission of an appropriate application requesting that the Lien of the
Agent be noted on the certificate of title or ownership for any Rolling Stock,
completed and authenticated by the applicable Loan Party, together with the
certificate of title or ownership, with respect to such Rolling Stock, to the
applicable state agency and the recording of the filings required under any
other similar law of any foreign jurisdiction, such security interests in and
Liens on the Collateral granted thereby shall be perfected, first priority
(except to the extent specified in the Intercreditor Agreement with respect to
certain Collateral) security interests, and no further recordings or filings are
or will be required in connection with the creation, perfection or enforcement
of such security interests and Liens, other than (i) the filing of continuation
statements in accordance with applicable law, (ii) the recording of the
Collateral Assignments for Security pursuant to each Security Agreement in the
United States Patent and Trademark Office and the United States Copyright
Office, as applicable, with respect to after-acquired U.S. patent and trademark
applications and registrations and U.S. copyrights and (iii) the recordation of
appropriate evidence of the security interest in the appropriate foreign
registry with respect to all foreign intellectual property.

(ii) Each Canadian Security Agreement creates in favor of the Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral secured thereby. Upon the filing of the PPSA financing statements
described in Section 5.01(d)(ix) and the recording of the Canadian Security
Agreement in the Canadian Intellectual Property Office, such Liens on the
Collateral granted thereby shall be perfected, first priority (except to the
extent specified in the Intercreditor Agreement with respect to certain
Collateral) security interests, and no further recordings or filings are or will
be required in connection with the creation, perfection or enforcement of such
Liens, other than (i) the filing of continuation statements in accordance with
applicable law, (ii) the recording of the Canadian Security Agreement in the
Canadian Intellectual Property Office with respect to after-acquired Canadian
intellectual property and (iii) the recordation of appropriate evidence of the
Lien on the appropriate foreign registry with respect to all foreign
intellectual property.

(hh)     Acquisition Documents. (i) No party to any Acquisition
Document is in default on any of its obligations under such Acquisition
Document, (ii) all representations and warranties made by the Parent in the
Acquisition Documents and in the certificates delivered in connection therewith
are true and correct in all material respects as of the date hereof and, to the
best knowledge of the Parent, all material representations and warranties made
in the Acquisition Documents by or on behalf of the Sellers, or any other party
thereto other than the Parent, are true and correct in all material respects as
of the date hereof, (iii) all written information with respect to the Parent and
the Acquisition, and, to the best knowledge of the Borrowers, the business and
Acquisition Assets acquired in connection with the Acquisition, furnished to
Agent by the Borrowers or on behalf of the Borrowers, were, at the time the same
were so furnished, complete and correct in all material respects, or have been
subsequently supplemented by other written information, to the extent necessary
to give Agent and Lenders a true and accurate knowledge of the subject matter of
each of them in relation to Borrowers, the Acquisition, and the business and
Acquisition Assets acquired in connection with the Acquisition, in all material
respects, (iv) no representation, warranty or statement made by the Parent or,
to its best knowledge, the Sellers or any other party thereto other than the
Parent, at the time they were made in any Acquisition Document, or any
agreement, certificate, statement or document required to be delivered pursuant
to any Acquisition Document contains any untrue

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statement of material fact or omits to state a material fact necessary in order
to make the statements contained in such Acquisition Documents not misleading in
light of the circumstances in which they were made, and (v) in connection with
the Acquisition, certain of the Borrowers are acquiring the Acquisition Assets
and, on the date hereof, after giving effect to the transactions contemplated by
this Agreement, by the Acquisition Agreement and by the other Acquisition
Documents, the Sale Order and Loan Documents, will have good title to such
Acquisition Assets free and clear of all Liens other than the Liens created by
the Loan Documents and other than Permitted Liens.

(ii)     Consummation of the Acquisition. (i) The Parent has
delivered to the Agent a complete and correct copy of the Acquisition Documents,
including all schedules and exhibits thereto, (ii) each Acquisition Document
sets forth the entire agreement and understanding of the parties thereto
relating to the subject matter thereof, and there are no other agreements,
arrangements or understandings, written or oral, relating to the matters covered
thereby, (iii) no Acquisition Document has been amended or otherwise modified
without the prior written consent of the Agent, (iv) the execution, delivery and
performance of the Acquisition Documents have been duly authorized by all
necessary action on the part of each such Person, (v) the Acquisition has been
effected in accordance with the terms of the Sale Order, the Acquisition
Documents and all applicable law (including, without limitation, the Bankruptcy
Code), (vi) at the time of consummation of the Acquisition, there does not exist
any judgment, order or injunction prohibiting or imposing any material adverse
condition upon the consummation of the Acquisition, (vii) at the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all Government
Authorities required in order to consummate the Acquisition shall have been
obtained, given, filed or taken and shall be in full force and effect, (viii)
all actions taken by the Loan Parties pursuant to or in furtherance of the
Acquisition have been taken in compliance in all material respects with
respective Acquisition Documents, the Bankruptcy Code and the Sale Order, (ix)
the Loan Parties did not incur or assume any liabilities or obligations pursuant
to or in connection with the Acquisition other than those liabilities and
obligations set forth on Schedule 6.01(ii) hereto, and (x) each Acquisition
Document is the legal, valid and binding obligation of the parties thereto,
enforceable against such parties in accordance with its terms.

(jj)     Schedules. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.

(kk)     Representations and Warranties in Documents; No Default.
All representations and warranties set forth in this Agreement and the other
Loan Documents are true and correct in all respects at the time as of which such
representations were made and on the Effective Date. No Event of Default has
occurred and is continuing and no condition exists which constitutes a Default
or an Event of Default.

ARTICLE VII

COVENANTS OF THE LOAN PARTIES

Section 7.01 Affirmative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party will,
unless the Required Lenders shall otherwise consent in writing:

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(a)      Reporting Requirements. Furnish to the Agent and each
Lender:

(i)    as soon as available and in any event within 45
days after the end of the first three fiscal quarters of each Fiscal Year of the
Parent commencing with the fiscal quarter ending September 30, 2002,
consolidated balance sheets and consolidated statements of operations, cash
flows and stockholders' equity of the Parent and its Subsidiaries as at the end
of such quarter, and for the period commencing at the end of the immediately
preceding Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the figures for the corresponding date or period
of the immediately preceding Fiscal Year, all in reasonable detail and certified
by an Authorized Officer of the Parent as fairly presenting, in all material
respects, the financial position of the Parent and its Subsidiaries as of the
end of such quarter and the results of operations and cash flows of the Parent
and its Subsidiaries for such quarter, in accordance with GAAP applied in a
manner consistent with that of the most recent audited financial statements of
the Parent and its Subsidiaries furnished to the Agent and the Lenders, subject
to normal year-end adjustments;

(ii)   as soon as available, and in any event within 90
days after the end of each Fiscal Year of the Parent and its Subsidiaries,
consolidated balance sheets and consolidated statements of operations, cash
flows and stockholders' equity of the Parent and its Subsidiaries as at the end
of such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the immediately preceding Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, and accompanied by a
report and an unqualified opinion, prepared in accordance with generally
accepted auditing standards, of independent certified public accountants of
recognized standing selected by the Parent and satisfactory to the Agent (which
opinion shall be without (A) a "going concern" or like qualification or
exception, (B) any qualification or exception as to the scope of such audit, or
(C) any qualification which relates to the treatment or classification of any
item and which, as a condition to the removal of such qualification, would
require an adjustment to such item, the effect of which would be to cause any
noncompliance with the provisions of Section 7.03), together with a written
statement of such accountants (1) to the effect that, in making the examination
necessary for their certification of such financial statements, they have not
obtained any knowledge of the existence of an Event of Default or a Default
under any financial covenant contained in Section 7.03 and (2) if such
accountants shall have obtained any knowledge of the existence of any such Event
of Default or Default, describing the nature thereof;

(iii)  as soon as available, and in any event within 30
days (or, for the months during 2002, 45 days) after the end of each fiscal
month of the Parent and its Subsidiaries commencing with the first fiscal month
of the Parent and its Subsidiaries ending after the Effective Date, internally
prepared consolidated balance sheets and consolidated statements of operations
as at the end of such fiscal month, and for the period commencing at the end of
the immediately preceding Fiscal Year and ending with the end of such fiscal
month, all in reasonable detail and certified by an Authorized Officer of the
Parent as fairly presenting, in all material respects, the financial position of
the Parent and its Subsidiaries as at the end of such fiscal month and the
results of operations of the Parent and its Subsidiaries for such fiscal month,
in accordance with GAAP applied in a manner consistent with that of the most
recent audited financial statements furnished to the Agent and the Lenders,
subject to normal year-end adjustments;

(iv)   simultaneously with the delivery of the financial
statements of the Parent and its Subsidiaries required by clauses (i), (ii) and
(iii) of this Section 7.01(a), a

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certificate of an Authorized Officer of the Parent (A) stating that such
Authorized Officer has reviewed the provisions of this Agreement and the other
Loan Documents and has made or caused to be made under his or her supervision a
review of the condition and operations of the Parent and its Subsidiaries during
the period covered by such financial statements with a view to determining
whether the Parent and its Subsidiaries were in compliance with all of the
provisions of this Agreement and such Loan Documents at the times such
compliance is required hereby and thereby, and that such review has not
disclosed, and such Authorized Officer has no knowledge of, the existence during
such period of an Event of Default or Default or, if an Event of Default or
Default existed, describing the nature and period of existence thereof and the
action which the Parent and its Subsidiaries propose to take or have taken with
respect thereto and (B) attaching a schedule showing the calculations specified
in Section 7.03;

(v)    as soon as available and in any event within 30
days (or, for the months during 2002, 45 days) after the end of each fiscal
month of the Parent and its Subsidiaries commencing with the month ending
September 30, 2002, reports in form and detail satisfactory to the Agent and
certified by an Authorized Officer of the Administrative Borrower as being
accurate and complete with respect to the Rolling Stock of the Loan Parties, a
certificate setting forth, as of the end of the previous fiscal month and for
the portion of the Fiscal Year then ended, (A) a summary report of the Rolling
Stock of the Loan Parties, indicating changes in value and depreciation amounts,
(B) a list of Rolling Stock of the Loan Parties purchased or otherwise acquired
during such period, setting forth the following information: the date of
acquisition, the manufacturer, the year made, the model, the vehicle
identification number, the state in which it is licensed, the license number,
the owner, state in which it is titled and the certificate of title or ownership
identification number, together with a copy of the invoice, purchase order,
registration or other document setting forth the vehicle identification number
of such vehicle, which list shall supplement and update Schedule 5.01(d)(xxiv)
and Schedule 5.3(a), (C) a list of Rolling Stock of the Loan Parties sold or
contracted for sale during such period, (D) the Dollar amount spent on such
purchases or acquisitions during such period, (E) a report reconciling the
records of the Loan Parties against the most recent report of the Rolling Stock
Collateral Custodian with respect to the Rolling Stock and (F) any other
information relating to the Rolling Stock as the Agents may reasonably request;

(vi)   (A) as soon as possible and in any event not later
than 30 days prior to the end of each Fiscal Year, financial projections,
supplementing and superseding the financial projections referred to in Section
6.01(g)(ii)(A), prepared on a quarterly basis and otherwise in form and
substance satisfactory to the Agent, for the immediately succeeding Fiscal Year
for the Parent and its Subsidiaries and (B) as soon as possible and in any event
not later than 30 days prior to the end of each fiscal quarter, financial
projections, supplementing and superseding the financial projections referred to
in Section 6.01(g)(ii)(B), prepared on a quarterly basis and otherwise in form
and substance satisfactory to the Agent, for each remaining quarterly period in
such Fiscal Year, all such financial projections to be reasonable, to be
prepared on a reasonable basis and in good faith, and to be based on assumptions
believed by the Parent to be reasonable at the time made and from the best
information then available to the Parent;

(vii)  promptly after submission to any Governmental
Authority, all documents and information furnished to such Governmental
Authority in connection with any investigation of any Loan Party other than
routine inquiries by such Governmental Authority;

(viii) as soon as possible, and in any event within 3
Business Days after the occurrence of an Event of Default or Default or the
occurrence of any event or

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development that could have a Material Adverse Effect, the written statement of
an Authorized Officer of the Administrative Borrower setting forth the details
of such Event of Default or Default or other event or development having a
Material Adverse Effect and the action which the affected Loan Party proposes to
take with respect thereto;

(ix)   (A) as soon as possible and in any event within 10
days after any Loan Party or any ERISA Affiliate thereof knows or has reason to
know that (1) any Reportable Event with respect to any Employee Plan has
occurred, (2) any other Termination Event with respect to any Employee Plan has
occurred, or (3) an accumulated funding deficiency has been incurred or an
application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Plan, a statement of an Authorized
Officer of the Administrative Borrower setting forth the details of such
occurrence and the action, if any, which such Loan Party or such ERISA Affiliate
proposes to take with respect thereto, (B) promptly and in any event within
three days after receipt thereof by any Loan Party or any ERISA Affiliate
thereof from the PBGC, copies of each notice received by any Loan Party or any
ERISA Affiliate thereof of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan, (C) promptly and in any event within
10 days after the filing thereof with the Internal Revenue Service if requested
by the Agent, copies of each Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Employee Plan and Multiemployer
Plan, (D) promptly and in any event within 10 days after any Loan Party or any
ERISA Affiliate thereof knows or has reason to know that a required installment
within the meaning of Section 412 of the Internal Revenue Code has not been made
when due with respect to an Employee Plan, (E) promptly and in any event within
3 days after receipt thereof by any Loan Party or any ERISA Affiliate thereof
from a sponsor of a Multiemployer Plan or from the PBGC, a copy of each notice
received by any Loan Party or any ERISA Affiliate thereof concerning the
imposition or amount of withdrawal liability under Section 4202 of ERISA or
indicating that such Multiemployer Plan may enter reorganization status under
Section 4241 of ERISA, and (F) promptly and in any event within 10 days after
any Loan Party or any ERISA Affiliate thereof sends notice of a plant closing or
mass layoff (as defined in WARN) to employees, copies of each such notice sent
by such Loan Party or such ERISA Affiliate thereof;

(x)    promptly after the commencement thereof but in any
event not later than 5 days after service of process with respect thereto on, or
the obtaining of knowledge thereof by, any Loan Party, notice of each action,
suit or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could have a
Material Adverse Effect;

(xi)   as soon as possible and in any event within 5 days
after execution, receipt or delivery thereof, copies of any material notices
that any Loan Party executes or receives in connection with any Revolving Credit
Document, any Acquisition Document or any other Material Contract;

(xii)  as soon as possible and in any event within 5 days
after execution, receipt or delivery thereof, copies of any material notices
that any Loan Party executes or receives in connection with the sale or other
Disposition of the Capital Stock of, or all or substantially all of the assets
of, any Loan Party;

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(xiii) promptly after the sending or filing thereof,
copies of all statements, reports and other information any Loan Party sends to
any holders of its publicly-held securities or files with the SEC or any
national (domestic or foreign) securities exchange;

(xiv)  promptly upon receipt thereof, copies of all
financial reports (including, without limitation, management letters), if any,
submitted to any Loan Party by its auditors in connection with any annual or
interim audit of the books thereof; and

(xv)   weekly, an availability report with respect to the
Accounts Receivable borrowing base contained in each Revolving Credit Agreement,
in the same form and substance, and at the same time, as delivered to each
Revolving Credit Agent;

(xvi)  at the earlier of (x) the delivery of the financial
statements required to be delivered pursuant to Section 7.01(a)(i) after the end
of each fiscal quarter of the Parent and (y) within 30 days after the date on
which the Net Book Value of Rolling Stock of the Loan Parties purchased,
acquired or otherwise obtained during the period since the latest delivery
pursuant to this clause (xvi) exceeds $200,000, the originals of all
certificates of title or ownership for such Rolling Stock, and duly executed and
completed title or ownership applications with appropriate state agencies to
enable such Rolling Stock to be retitled with the Agent listed as a lienholder
thereof and an updated Schedule 5.01(d)(xxiv) or Schedule 5.03(a), as
applicable), which Schedule shall include for all Rolling Stock of the Loan
Parties information with respect to the manufacturer, the year made, the model,
the vehicle identification number, the state in which it is licensed, the
license number, the owner, state in which it is titled and the certificate of
title or ownership identification number; and

(xvii) promptly upon request, such other information
concerning the condition or operations, financial or otherwise, of any Loan
Party as the Agent may from time to time may reasonably request, including,
without limitation, financial information pertaining to any operating division
or unit of any Loan Party.

(b)       Additional Guaranties and Collateral Security. Cause:

(i)    each Subsidiary of any Loan Party not in existence
on the Effective Date to execute and deliver to the Agent promptly and in any
event within 3 days after the formation, acquisition or change in status thereof
(A) a Guaranty guaranteeing the Obligations, (B) a Security Agreement, (C) if
such Subsidiary has any Subsidiaries, a Pledge Agreement together with (x)
certificates evidencing all of the Capital Stock of any Person owned by such
Subsidiary, (y) undated stock powers executed in blank with signature
guaranteed, and (z) such opinion of counsel and such approving certificate of
such Subsidiary as the Agent may reasonably request in respect of complying with
any legend on any such certificate or any other matter relating to such shares,
(D) one or more Mortgages creating on the real property of such Subsidiary a
perfected, first priority Lien on such real property, a Title Insurance Policy
covering such real property, a current ALTA survey thereof and a surveyor's
certificate, each in form and substance satisfactory to the Agent, together with
such other agreements, instruments and documents as the Agent may require
whether comparable to the documents required under Section 7.01(o) or otherwise,
(E) any Canadian Security Documents, if applicable, and (F) such other
agreements, instruments, approvals, legal opinions or other documents reasonably
requested by the Agent in order to create, perfect, establish the first priority
of or otherwise protect any Lien purported to be covered by any such Security
Agreement, Pledge Agreement or

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Mortgage or Canadian Security Document or otherwise to effect the intent that
such Subsidiary shall become bound by all of the terms, covenants and agreements
contained in the Loan Documents and that all property and assets of such
Subsidiary shall become Collateral for the Obligations; and

(ii)   each owner of the Capital Stock of any such
Subsidiary to execute and deliver promptly and in any event within 3 days after
the formation or acquisition of such Subsidiary a Pledge Agreement, together
with (A) certificates evidencing all of the Capital Stock of such Subsidiary,
(B) undated stock powers or other appropriate instruments of assignment executed
in blank with signature guaranteed, (C) such opinion of counsel and such
approving certificate of such Subsidiary as the Agent may reasonably request in
respect of complying with any legend on any such certificate or any other matter
relating to such shares and (D) such other agreements, instruments, approvals,
legal opinions or other documents requested by the Agent.

(c)      Compliance with Laws, Etc. (i) Comply, and cause each of
its Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including, without limitation, all Environmental
Laws and Motor Vehicle Laws), such compliance to include, without limitation,
(A) paying before the same become delinquent all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits or
upon any of its properties, and (B) paying all lawful claims (including, without
limitation, all Environmental Claims) which if unpaid might become a Lien or
charge upon any of its properties, except to the extent contested in good faith
by proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof in accordance with GAAP.

(ii)   Establish and maintain, at its expense, a system
and policies to assure and monitor its continued compliance with all
Environmental Laws in all of its operations, which system and policies shall
include periodic reviews of such compliance by employees or agents of the Loan
Parties who are familiar with the requirements of the Environmental Laws. Copies
of all such periodic reviews shall be made available by the Loan Parties for
inspection by the Agent and, upon the Agent's request, copies of all
environmental reviews, surveys, audits, assessments, feasibility studies and
results of remedial investigations shall be promptly furnished, or caused to be
furnished, by the Loan Parties to the Agent. The Loan Parties shall take prompt
and appropriate action to respond to any non-compliance with any of the
Environmental Laws and shall regularly report to the Agent on such response.

(d)      Preservation of Existence, Etc. Maintain and preserve, and
cause each of its Subsidiaries (other than Inactive Subsidiaries) to maintain
and preserve, its existence, rights and privileges, and become or remain, and
cause each of its Subsidiaries (other than Inactive Subsidiaries) to become or
remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of
its business makes such qualification necessary, except where the failure to be
so qualified could not reasonably be expected to have a Material Adverse Effect.

(e)      Keeping of Records and Books of Account. Keep, and cause
each of its Subsidiaries to keep, adequate records and books of account, with
complete entries made to permit the preparation of financial statements in
accordance with GAAP.

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(f)      Inspection Rights. Permit, and cause each of its
Subsidiaries to permit, the agents and representatives of the Agent at any time
and from time to time during normal business hours, at the expense of the
Borrowers, to examine and make copies of and abstracts from its records and
books of account, to visit and inspect its properties, to verify materials,
leases, notes, accounts receivable, deposit accounts and its other assets, to
conduct audits, physical counts, valuations, appraisals, Phase I Environmental
Site Assessments (and, if requested by the Agent based upon the results of any
such Phase I Environmental Site Assessment, a Phase II Environmental Site
Assessment) or examinations and to discuss its affairs, finances and accounts
with any of its directors, officers, managerial employees, independent
accountants or any of its other representatives. In furtherance of the
foregoing, each Loan Party hereby authorizes its independent accountants, and
the independent accountants of each of its Subsidiaries, to discuss the affairs,
finances and accounts of such Person (independently or together with
representatives of such Person) with the agents and representatives of the Agent
in accordance with this Section 7.01(f).

(g)      Maintenance of Properties, Etc. Maintain and preserve, and
cause each of its Subsidiaries to maintain and preserve, all of its properties
which are necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted, and comply, and
cause each of its Subsidiaries to comply, at all times with the provisions of
all leases relating to such properties to which it is a party as lessee or under
which it occupies property, so as to prevent any loss or forfeiture thereof or
thereunder.

(h)      Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to its
properties (including all real properties leased or owned by it) and business,
in such amounts and covering such risks as is required by any Governmental
Authority having jurisdiction with respect thereto or as is carried generally in
accordance with sound business practice by companies in similar businesses
similarly situated and in any event in amount, adequacy and scope reasonably
satisfactory to the Agent. All policies covering the Collateral are to be made
payable to the Agent for the benefit of the Lenders, as its interests may
appear, in case of loss, under a standard non-contributory "lender" or "secured
party" clause and are to contain such other provisions as the Agent may require
to fully protect the Lenders' interest in the Collateral and to any payments to
be made under such policies. All certificates of insurance are to be delivered
to the Agent and the policies are to be premium prepaid, with the loss payable
and additional insured endorsement in favor of the Agent and such other Persons
as the Agent may designate from time to time, and shall provide for not less
than 30 days' prior written notice to the Agent of the exercise of any right of
cancellation. If any Loan Party or any of its Subsidiaries fails to maintain
such insurance, the Agent may arrange for such insurance, but at the Borrowers'
expense and without any responsibility on the Agent's part for obtaining the
insurance, the solvency of the insurance companies, the adequacy of the
coverage, or the collection of claims. Upon the occurrence and during the
continuance of an Event of Default, the Agent shall have the sole right, in the
name of the Lenders, any Loan Party and its Subsidiaries, to file claims under
any insurance policies, to receive, receipt and give acquittance for any
payments that may be payable thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other documents
that may be necessary to effect the collection, compromise or settlement of any
claims under any such insurance policies.

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(i)      Obtaining of Permits, Etc. (i) Obtain, maintain and
preserve, and cause each of its Subsidiaries to obtain, maintain and preserve,
and take all necessary action to timely renew, all permits, licenses,
authorizations, approvals, entitlements and accreditations which are necessary
or useful in the proper conduct of its business.

(ii) Cause all Rolling Stock, now owned or hereafter acquired by any Loan Party,
which, under applicable law, is required to be registered, to be properly
registered (including, without limitation, the payment of all necessary taxes
and receipt of any applicable permits) in the name of such Loan Party and cause
all Rolling Stock, now owned or hereafter acquired by any Loan Party, the
ownership of which, under applicable law (including, without limitation, any
Motor Vehicle Law), is evidenced by a certificate of title or ownership, to be
properly titled in the name of such Loan Party, with the Agent's Lien noted
thereon.

(j)      Environmental. (i) Keep any property either owned or
operated by it or any of its Subsidiaries free of any Environmental Liens and
maintain each Loan Parties' businesses, Facilities, operations, properties and
assets in material compliance with Environmental Laws; (ii) provide the Agents
written notice within five (5) days of any Release of a Hazardous Material in
excess of any reportable quantity from or onto property at any time owned or
operated by it or any of its Subsidiaries and take any material Remedial Actions
required to abate said Release; (iii) provide the Agents with written notice
within ten (10) days of the receipt of any of the following: (A) notice that an
Environmental Lien has been filed against any property of any Loan Party or any
of its Subsidiaries; (B) commencement of any Environmental Claim in excess of
$1,000,000 or notice that an Environmental Claim will be filed against any Loan
Party or any of its Subsidiaries; and (C) notice of a violation, citation or
other administrative order which could have a Material Adverse Effect, (iv)
defend, indemnify and hold harmless the Agent and the Lenders and their
transferees, and their respective employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs or expenses (including, without limitation, attorney
and consultant fees, investigation and laboratory fees, court costs and
litigation expenses) arising out of (A) the generation, presence, disposal,
Release or threatened Release of any Hazardous Materials on, under, in,
originating or emanating from any property at any time owned or operated by any
Loan Party or any of its Subsidiaries (or its predecessors in interest or
title), (B) any personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to the presence or Release of such
Hazardous Materials, (C) any request for information, investigation, lawsuit
brought or threatened, settlement reached or order by a Governmental Authority
relating to the presence or Release of such Hazardous Materials, (D) any
violation of any Environmental Law and/or (E) any Environmental Claim filed
against the Agent or any Lender, (v) maintain and preserve all Environmental
Permits necessary to operate, use or occupy each of the Loan Parties'
businesses, Facilities, operations, properties and assets, (vi) maintain and
comply with all financial assurance requirements under RCRA and any similar
Environmental Law, as specifically set forth but not limited to 40 C.F.R. 264
and 265, necessary to operate, use or occupy each of the Loan Parties'
businesses, Facilities, operations, properties and assets, (vii) comply with all
applicable writs, orders, consent decrees, judgments, injunctions,
communications by any Governmental Authority, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws, (viii)
provide the Agent with prompt written notice in the event any Loan Party is
required to spend more than $1,000,000 individually or $5,000,000 in the
aggregate to comply with any Environmental Laws that have been promulgated and
enacted by a Governmental Authority throughout the term of this Agreement, and
(ix) file and submit truthful and complete representations, including without

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limitation applications, warranty statements and accompanying materials provided
in support of such representations, submitted by the Loan Parties to obtain
insurance.

Without limiting the generality of the foregoing, whenever the Agent reasonably
determines that there is non-compliance, or any condition which requires any
action by or on behalf of any Loan Party in order to avoid any material
non-compliance, with any Environmental Law which could result in the imposition
of substantial fines or penalties or otherwise materially and adversely affect
the business, assets or prospects of the Loan Parties on a consolidated basis,
the Loan Parties shall, at the Agent's request and Borrowers' expense: (i) cause
an independent environmental engineer acceptable to the Agent to conduct such
assessments, investigations or tests of the site where any Loan Party's
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to the Agent a report
as to such non-compliance setting forth the results of such tests, a proposed
plan for responding to any environmental problems described therein, and an
estimate of the costs thereof and (ii) provide to the Agent a supplemental
report of such engineer whenever the scope of such non-compliance, or the
applicable Loan Party's response thereto or the estimated costs thereof, shall
change in any material respect.

Borrowers acknowledge and agree that neither the Loan Documents or the actions
of the Agent or any Lender pursuant thereto shall operate or be deemed (i) to
place upon the Agent or any Lender any responsibility for the operation,
control, care, service, management, maintenance or repair of property or
facilities of Loan Parties or (ii) to make the Agent or any Lender the "owner"
or "operator" of any property or facilities of the Loan Parties or a
"responsible party" within the meaning of applicable Environmental Laws. The
indemnification provisions of this Section 7.01(j) shall survive the repayment
of the Obligations and discharge of any Liens granted under the Loan Documents.

(k)      Further Assurances. Take such action and execute,
acknowledge and deliver, and cause each of its Subsidiaries to take such action
and execute, acknowledge and deliver, at its sole cost and expense, such
agreements, instruments or other documents as the Agent may require from time to
time in order (i) to carry out more effectively the purposes of this Agreement
and the other Loan Documents, (ii) to subject to valid and perfected first
priority (except to the extent specified in the Intercreditor Agreement and the
Cash Collateral Control Agreement with respect to certain Collateral) Liens any
of the Collateral or any other property of any Loan Party and its Subsidiaries,
(iii) to establish and maintain the validity and effectiveness of any of the
Loan Documents and the validity, perfection and priority of the Liens intended
to be created thereby, and (iv) to better assure, convey, grant, assign,
transfer and confirm unto the Agent and each Lender the rights now or hereafter
intended to be granted to it under this Agreement or any other Loan Document. In
furtherance of the foregoing, to the maximum extent permitted by applicable law,
each Loan Party (i) authorizes the Agent to execute any such agreements,
instruments or other documents in such Loan Party's name and to file such
agreements, instruments or other documents in any appropriate filing office,
(ii) authorizes the Agent to file any financing statement required hereunder or
under any other Loan Document, and any continuation statement or amendment with
respect thereto, in any appropriate filing office without the signature of such
Loan Party, and (iii) ratifies the filing of any financing statement, and any
continuation statement or amendment with respect thereto, filed without the
signature of such Loan Party prior to the date hereof.

(l)      Change in Collateral; Collateral Records. (i) Give the
Agent not less than 30 days' prior written notice of any change in the location
of any Collateral, other than

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to locations set forth on Schedule 6.01(ff) and with respect to which the Agent
has filed financing statements and otherwise fully perfected its Liens thereon,
(ii) advise the Agent promptly, in sufficient detail, of any material adverse
change relating to the type, quantity or quality of the Collateral or the Lien
granted thereon and (iii) execute and deliver, and cause each of its
Subsidiaries to execute and deliver, to the Agent for the benefit of the Lenders
from time to time, solely for the Agent's convenience in maintaining a record of
Collateral, such written statements and schedules as the Agent may reasonably
require, designating, identifying or describing the Collateral.

(m)      Landlord Waivers; Collateral Access Agreements. (i) At any
time any Collateral with a book value in excess of $250,000 (when aggregated
with all other Collateral at the same location) is located on any real property
of a Loan Party (whether such real property is now existing or acquired after
the Effective Date) which is not owned by a Loan Party, obtain written
subordinations or waivers, in form and substance satisfactory to the Agent, of
all present and future Liens which the owner or lessor of such premises may be
entitled to assert against the Collateral; and

(ii) Use commercially reasonable efforts to obtain written
access agreements, in form and substance satisfactory to the Agent, providing
access to Collateral located on any premises not owned by a Loan Party in order
to remove such Collateral from such premises during an Event of Default.

(n)      Subordination. Cause all Indebtedness and other
obligations now or hereafter owed by it to any of its Affiliates, to be
subordinated in right of payment and security to the Indebtedness and other
Obligations owing to the Agent and the Lenders in accordance with a
subordination agreement in form and substance satisfactory to the Agent.

(o)      After Acquired Real Property. Upon the acquisition by it
or any of its Subsidiaries after the date hereof of any interest (whether fee or
leasehold) in any real property (wherever located) (each such interest being an
"After Acquired Property") (x) with a Current Value (as defined below) in excess
of $100,000 in the case of a fee interest, or (y) requiring the payment of
annual rent exceeding in the aggregate $100,000 in the case of leasehold
interest, promptly (but in any event within three Business Days) so notify the
Agent, setting forth with specificity a description of the interest acquired,
the location of the real property, any structures or improvements thereon and
either an appraisal or such Loan Party's good-faith estimate of the current
value of such real property (for purposes of this Section, the "Current Value").
The Agent shall notify such Loan Party whether it intends to require a Mortgage
and the other documents referred to below or in the case of leasehold, a
leasehold Mortgage or landlord's waiver (pursuant to Section 7.01(m) hereof).
Upon receipt of such notice requesting a Mortgage, the Person which has acquired
such After Acquired Property shall immediately furnish to the Agent the
following, each in form and substance satisfactory to the Agent: (i) a Mortgage
with respect to such real property and related assets located at the After
Acquired Property, each duly executed by such Person and in recordable form;
(ii) evidence of the recording of the Mortgage referred to in clause (i) above
in such office or offices as may be necessary or, in the opinion of the Agent,
desirable to create and perfect a valid and enforceable first priority lien on
the property purported to be covered thereby or to otherwise protect the rights
of the Agent and the Lenders thereunder, (iii) a Title Insurance Policy, (iv) an
ALTA survey of such real property, certified to the Agent and to the issuer of
the Title Insurance Policy by a licensed professional surveyor and using a form
of certification reasonably satisfactory to the Agent, (v) Phase I Environmental
Site Assessments with respect to such real property,

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certified to the Agent by a company reasonably satisfactory to the Agent, (vi)
in the case of a leasehold interest, a certified copy of the lease between the
landlord and such Person with respect to such real property in which such Person
has a leasehold interest, and the certificate of occupancy with respect thereto,
(vii) in the case of a leasehold interest, an attornment and nondisturbance
agreement between the landlord (and any fee mortgagee) with respect to such real
property and the Agent, and (viii) evidence satisfactory to the Agent of the
compliance of such real property with all applicable building codes, subdivision
and zoning laws, rules and regulations, and (ix) such other documents or
instruments (including guarantees and opinions of counsel) as the Agent may
reasonably require. The Borrowers shall pay all fees and expenses, including
reasonable attorneys' fees and expenses, and all title insurance charges and
premiums, in connection with each Loan Party's obligations under this Section
7.01(o).

(p)      Fiscal Year. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on December 31 of each calendar year unless the Agent
consents to a change in such Fiscal Year (and appropriate related changes to
this Agreement).

Section 7.02 Negative Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:

(a)      Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien upon or with respect to any of its properties, whether now owned or
hereafter acquired; file or suffer to exist under the Uniform Commercial Code or
any similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names it or any of its Subsidiaries as debtor; sign or
suffer to exist any security agreement authorizing any secured party thereunder
to file such financing statement (or the equivalent thereof); sell any of its
property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable) with recourse to it or any of its Subsidiaries or assign or
otherwise transfer, or permit any of its Subsidiaries to assign or otherwise
transfer, any account or other right to receive income; other than, as to all of
the above, Permitted Liens.

(b)      Indebtedness. Create, incur, assume, guarantee or suffer
to exist, or otherwise become or remain liable with respect to, or permit any of
its Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness other than
Permitted Indebtedness.

(c)      Fundamental Changes; Dispositions. Wind-up, liquidate or
dissolve, or merge, consolidate or amalgamate with any Person, or convey, sell,
lease or sublease, transfer or otherwise dispose of, whether in one transaction
or a series of related transactions, all or any part of its business, property
or assets, whether now owned or hereafter acquired (or agree to do any of the
foregoing), or purchase or otherwise acquire, whether in one transaction or a
series of related transactions, all or substantially all of the assets of any
Person (or any division thereof) (or agree to do any of the foregoing), or
permit any of its Subsidiaries to do any of the foregoing; provided, however,
that

(i) any Borrower (other than the Parent) may be merged
into or consolidated with any other Borrower and any wholly-owned Subsidiary of
any Loan Party (other than a Borrower) may be merged into such Loan Party or
another wholly-owned

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Subsidiary of such Loan Party, or may consolidate with another wholly-owned
Subsidiary of such Loan Party, so long as (A) no other provision of this
Agreement would be violated thereby, (B) such Loan Party gives the Agent at
least 30 days' prior written notice of such merger or consolidation, (C) no
Default or Event of Default shall have occurred and be continuing either before
or after giving effect to such transaction, (D) the Lenders' rights in any
Collateral, including, without limitation, the existence, perfection and
priority of any Lien thereon, are not adversely affected by such merger or
consolidation and (E) the surviving Subsidiary, if any, is joined as a Loan
Party hereunder and is a party to a Guaranty and a Security Agreement and the
Capital Stock of which Subsidiary is the subject of a Pledge Agreement, in each
case, which is in full force and effect on the date of and immediately after
giving effect to such merger or consolidation;

(ii)   any Loan Party and its Subsidiaries may (A) dispose
of obsolete or worn-out equipment (other than Rolling Stock) in the ordinary
course of business, and (B) sell or otherwise dispose of other property or
assets (other than any Capital Stock or Facility of any Loan Party) for cash in
an aggregate amount not less than the fair market value of such property or
assets, provided that (1) the Net Cash Proceeds of all such Dispositions are
paid to the Agent for the benefit of the Lenders pursuant to the terms of
Section 2.05(c)(i), (2) if the aggregate amount of Net Cash Proceeds of all such
Dispositions exceeds $500,000 in any twelve month period, the Loan Parties may
sell or otherwise dispose of additional property or assets during such period so
long as (I) at least five Business Days prior to selling or disposing of such
property or assets, the Loan Parties furnish to the Agent an appraisal,
reasonably satisfactory to the Agent, of the fair market value of the property
or assets subject to such sale or disposition and (II) the other provisions of
this paragraph (ii) are satisfied, and (3) in all cases, so long as, before and
after giving effect to the transactions permitted thereby, there exists no
continuing Event of Default; and

(iii)  so long as no Event of Default has occurred and is
continuing, any Loan Party may (A) license, on a non-exclusive basis, any of its
patents, trademarks or copyrights in the ordinary course of business, and (B)
enter into leases, as lessor, in respect of space at any Facility so long as the
applicable tenant executes and delivers to the Agent, to the extent reasonably
requested by the Agent, an estoppel letter and a subordination and
non-disturbance agreement the form and substance of which are reasonably
satisfactory to the Agent.

(d)      Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as described in
Section 6.01(l).

(e)      Loans, Advances, Investments, Etc. Make or commit or agree
to make any loan, advance guarantee of obligations, other extension of credit or
capital contributions to, or hold or invest in or commit or agree to hold or
invest in, or purchase or otherwise acquire or commit or agree to purchase or
otherwise acquire any shares of the Capital Stock, bonds, notes, debentures or
other securities of, or make or commit or agree to make any other investment in,
any other Person, or purchase or own any futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or permit any of its Subsidiaries to
do any of the foregoing, except for: (i) investments existing on the date
hereof, as set forth on Schedule 7.02(e) hereto, but not any increase in the
amount thereof as set forth in such Schedule or any other modification of the
terms thereof, (ii) investments made by the Parent or any other Loan Party in or
to its respective wholly-owned Subsidiaries and by such Subsidiaries to it, made
in the ordinary course of

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business, provided that the aggregate principal amount of such investments made
in or to the Loan Parties' Subsidiaries organized outside of the United States
(exclusive of (A) investments in the Capital Stock of such Subsidiaries
resulting from the allocation of the consideration paid by the Loan Parties for
the Acquisition Assets and (B) Indebtedness incurred by a Loan Party on behalf
of one or more of its Subsidiaries which is permitted under clause (i) of the
definition of "Permitted Indebtedness") shall not exceed, in the case of such
Subsidiaries organized under the laws of a Canadian province, $5,000,000 or, in
the case of any other Subsidiary organized outside the United States, $500,000,
in each case at any one time outstanding, and (iii) Permitted Investments.

(f)      Inactive Subsidiaries. Permit any Inactive Subsidiary to
(i) become an active company, have operations or conduct business or (ii) own
any assets other than assets with a fair market value not in excess of $25,000
in the aggregate for all Inactive Subsidiaries.

(g)      Capital Expenditures. Make or commit or agree to make, or
permit any of its Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all Capital Expenditures made by the Loan Parties and their
Subsidiaries to exceed the applicable amount for the corresponding Fiscal Year
set forth below:

------------------------------------------------------
CapEx Amount                       Fiscal Year
------------------------------------------------------
$45,000,000                        2003
------------------------------------------------------
$32,000,000                        2004
------------------------------------------------------
$28,000,000                        2005
------------------------------------------------------
$25,000,000                        2006
------------------------------------------------------
$25,000,000                        2007
------------------------------------------------------

; provided, however, if the amount of Capital Expenditures permitted to be made
by the Loan Parties pursuant to the foregoing in any Fiscal Year (before giving
effect to any increase in such permitted expenditure amount pursuant to this
proviso) is greater than the amount of such Capital Expenditures actually made
by the Loan Parties during such Fiscal Year, such excess may be carried forward
to the next succeeding Fiscal Year and utilized to make Capital Expenditures in
such Fiscal Year (but not in any subsequent Fiscal Year).

(h)      Restricted Payments. (i) Declare or pay any dividend or
other distribution, direct or indirect, on account of any Capital Stock of any
Loan Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make
any repurchase, redemption, retirement, defeasance, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Capital Stock of any Loan Party or any direct or indirect parent of any Loan
Party, now or hereafter outstanding, (iii) make any payment to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights for
the purchase or acquisition of shares of any class of Capital Stock of any Loan
Party, now or hereafter outstanding, (iv) return any Capital Stock to any
shareholders or other equity holders of any Loan Party or any of its
Subsidiaries, or make any other distribution of property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto as
such or (v) pay any management fees or any other fees or expenses (including the
reimbursement thereof by any Loan Party or any of its Subsidiaries) pursuant to
any management, consulting or other services agreement to any of the
shareholders or other equityholders of any Loan Party or any of its Subsidiaries
or other

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Affiliates, or to any other Subsidiaries or Affiliates of any Loan Party;
provided, however, (A) any Loan Party may pay dividends to the Parent, (B) any
Subsidiary of any Borrower may pay dividends to such Borrower, (C) the Parent
may pay dividends in the form of common Capital Stock, and (D) the Parent may
pay cash dividends at an annual rate of $4.00 per share on its 112,000 currently
outstanding shares of Series B convertible preferred stock and any dividends
required or permitted to be paid in cash on the shares of its Series C
convertible preferred stock described in Section 5.01(g), provided that (I) in
each case of clauses (A) through (D) above, at the election of the Agent, which
the Agent may and, upon the direction of the Required Lenders, shall make by
notice to the Administrative Borrower, no such payment shall be made if an Event
of Default shall have occurred and be continuing or would result from the making
of any such payment and (II) in the case of clause (D) above, no such payment
shall be made if, immediately before or after giving effect to any such payment,
Adjusted Excess Availability (in the case of any such payments made on or prior
to March 1, 2003) or Excess Availability (as defined in the Revolving Credit
Agreement as in effect on the date hereof) (in the case of any such payments
made after March 1, 2003) under the Revolving Credit Agreement is less than
$30,000,000.

(i)      Federal Reserve Regulations. Permit any Loan or the
proceeds of any Loan under this Agreement to be used for any purpose that would
cause such Loan to be a margin loan under the provisions of Regulation T, U or X
of the Board.

(j)      Transactions with Affiliates. Enter into, renew, extend or
be a party to, or permit any of its Subsidiaries to enter into, renew, extend or
be a party to, any transaction or series of related transactions (including,
without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any
Affiliate, except (i) in the ordinary course of business in a manner and to an
extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to it or its Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
with another Loan Party and (iii) transactions permitted by Section 7.02(e).

(k)      Limitations on Dividends and Other Payment Restrictions
Affecting Subsidiaries. Create or otherwise cause, incur, assume, suffer or
permit to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of any Subsidiary of any Loan Party (i) to pay dividends
or to make any other distribution on any shares of Capital Stock of such
Subsidiary owned by any Loan Party or any of its Subsidiaries, (ii) to pay or
prepay or to subordinate any Indebtedness owed to any Loan Party or any of its
Subsidiaries, (iii) to make loans or advances to any Loan Party or any of its
Subsidiaries or (iv) to transfer any of its property or assets to any Loan Party
or any of its Subsidiaries, or permit any of its Subsidiaries to do any of the
foregoing; provided, however, that nothing in any of clauses (i) through (iv) of
this Section 7.02(k) shall prohibit or restrict compliance with:

(A) this Agreement, the other Loan Documents and the
Revolving Credit Agreement;

(B) any agreements in effect on the date of this
Agreement and described on Schedule 7.02(k);

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(C) any applicable law, rule or regulation
(including, without limitation, applicable currency control laws and applicable
state corporate statutes restricting the payment of dividends in certain
circumstances);

(D) in the case of clause (iv) any agreement setting
forth customary restrictions on the subletting, assignment or transfer of any
property or asset that is a lease, license, conveyance or contract of similar
property or assets; or

(E) in the case of clause (iv) any agreement,
instrument or other document evidencing a Permitted Lien from restricting on
customary terms the transfer of any property or assets subject thereto.

(l)      Limitation on Issuance of Capital Stock. Issue or sell or
enter into any agreement or arrangement for the issuance and sale of, or permit
any of its Subsidiaries to issue or sell or enter into any agreement or
arrangement for the issuance and sale of, any shares of its Capital Stock, any
securities convertible into or exchangeable for its Capital Stock or any
warrants, except (i) for the Series B and Series C convertible preferred stock
of the Parent outstanding on the Effective Date, (ii) the Parent may issue and
sell shares of its common Capital Stock to its officers, directors and employees
pursuant to stock option and stock purchase plans in effect on the Effective
Date, and (iii) for the issuance or sale by the Parent of shares of its common
Capital Stock so long as the proceeds from such issuance or sale are applied to
prepay the Loans in accordance with Section 2.05(c)(ii).

(m)      Modifications of Indebtedness, Organizational Documents
and Certain Other Agreements; Etc. (i) Amend, modify or otherwise change (or
permit the amendment, modification or other change in any manner of) any of the
provisions of any of its or its Subsidiaries' Indebtedness (including, without
limitation, any Revolving Credit Document) or of any instrument or agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating to any such Indebtedness if such
amendment, modification or change would shorten the final maturity or average
life to maturity of, or require any payment to be made earlier than the date
originally scheduled on, such Indebtedness, would increase the interest rate
applicable to such Indebtedness, would change the subordination provision, if
any, of such Indebtedness, or would otherwise be adverse to the Lenders or the
issuer of such Indebtedness in any respect, (ii) except for the Obligations,
make any voluntary or optional payment or prepayment (other than to the
Revolving Credit Lenders pursuant to the Revolving Credit Documents) or
redemption, defeasance, sinking fund payment or other acquisition for value of
any of its or its Subsidiaries' Indebtedness (including, without limitation, by
way of depositing money or securities with the trustee therefor before the date
required for the purpose of paying any portion of such Indebtedness when due),
or refund, refinance, replace or exchange any other Indebtedness for any such
Indebtedness (except to the extent such Indebtedness is otherwise expressly
permitted by the definition of "Permitted Indebtedness"), or make any payment,
prepayment, redemption, defeasance, sinking fund payment or repurchase of any
outstanding Indebtedness as a result of any asset sale, change of control,
issuance and sale of debt or equity securities or similar event, or give any
notice with respect to any of the foregoing, (iii) except as permitted by
Section 7.02(c), amend, modify or otherwise change its name, jurisdiction of
organization, organizational identification number or FEIN or (iv) amend, modify
or otherwise change its certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by it, with respect to any of its Capital Stock (including any
shareholders' agreement), or enter into

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any new agreement with respect to any of its Capital Stock, except any such
amendments, modifications or changes or any such new agreements or arrangements
pursuant to this clause (iv) that either individually or in the aggregate, could
not have a Material Adverse Effect.

(n)      Investment Company Act of 1940. Engage in any business,
enter into any transaction, use any securities or take any other action or
permit any of its Subsidiaries to do any of the foregoing, that would cause it
or any of its Subsidiaries to become subject to the registration requirements of
the Investment Company Act of 1940, as amended, by virtue of being an
"investment company" or a company "controlled" by an "investment company" not
entitled to an exemption within the meaning of such Act.

(o)      Acquisition Costs. Except for amounts paid prior to June
30, 2002 and disclosed in Parent's Quarterly Report on Form 10-Q for the fiscal
quarter then ended, pay more than a total of $32,000,000 of fees, costs, charges
and other expenses incurred in connection with (i) the repayment and defeasance
of any Loan Parties' Indebtedness upon the making of the Loans (exclusive of the
principal of and interest on the Indebtedness so repaid and defeased), (ii) the
work performed by Loan Parties' environmental consultants related to the
Acquisition Assets and (iii) the services rendered by Loan Parties' legal
counsel in connection with the consummation of the Acquisition and the financing
transactions contemplated hereunder.

(p)      ERISA. (i) Engage, or permit any ERISA Affiliate to
engage, in any transaction described in Section 4069 of ERISA; (ii) engage, or
permit any ERISA Affiliate to engage, in any prohibited transaction described in
Section 406 of ERISA or 4975 of the Internal Revenue Code for which a statutory
or class exemption is not available or a private exemption has not previously
been obtained from the U.S. Department of Labor; (iii) adopt or permit any ERISA
Affiliate to adopt any employee welfare benefit plan within the meaning of
Section 3(1) of ERISA which provides benefits to employees after termination of
employment other than as required by Section 601 of ERISA or applicable law;
(iv) fail to make any contribution or payment to any Multiemployer Plan which it
or any ERISA Affiliate may be required to make under any agreement relating to
such Multiemployer Plan, or any law pertaining thereto; or (v) fail, or permit
any ERISA Affiliate to fail, to pay any required installment or any other
payment required under Section 412 of the Internal Revenue Code on or before the
due date for such installment or other payment.

(q)      Environmental. (i) Permit the use, handling, generation,
storage, treatment, Release or disposal of Hazardous Materials at any property
owned or leased by it or any of its Subsidiaries, except in compliance with
Environmental Laws and so long as such use, handling, generation, storage,
treatment, Release or disposal of Hazardous Materials does not result in a
Material Adverse Effect, or (ii) prejudice its rights to obtain the benefits of
its insurance by failing to comply with any of the provisions, conditions or
requirements of its policies of insurance.

(r)      Certain Agreements. Agree to any amendment or other change
to or waiver of any of its rights under any Material Contract to the extent such
amendment, change or waiver is materially adverse to the interests of such Loan
Party or the Agent or the Lenders.

(s)      Amendment to Acquisition Documents. Amend, modify, change,
agree to any amendment, modification or other change to (or make any payment
consistent with any amendment or other change to) or waive any of its rights
under any of the Acquisition Documents.

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Section 7.03 Financial Covenants. So long as any principal of or
interest on any Loan or any other Obligation (whether or not due) shall remain
unpaid or any Lender shall have any Commitment hereunder, each Loan Party shall
not, unless the Required Lenders shall otherwise consent in writing:

(a)      Leverage Ratio. Permit the ratio of Consolidated Funded
Indebtedness to (i) for any fiscal quarter ending on or prior to June 30, 2003,
Consolidated Annualized EBITDA of the Parent and its Subsidiaries and (ii) for
each fiscal quarter ending thereafter, Consolidated EBITDA of the Parent and its
Subsidiaries as of the end of each period of four (4) consecutive fiscal
quarters of the Parent and its Subsidiaries for which the last quarter ends on a
date set forth below, to be greater than the applicable ratio set forth below:

Fiscal Quarter End                        Leverage Ratio

December 31, 2002                         3.5:1

March 31, 2003                            3.75:1

June 30, 2003                             3.15:1

September 30, 2003                        3.0:1

December 31, 2003                         2.5:1

March 31, 2004                            2.1:1

June 30, 2004                             1.9:1

September 30, 2004                        1.6:1

December 31, 2004 and                     1.5:1
for each fiscal quarter thereafter

(b)      Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio of the Parent and its Subsidiaries for each period of four (4)
consecutive fiscal quarters (or, in the case of each fiscal quarter ending on or
prior to June 30, 2003, such lesser number of consecutive fiscal quarters as
shall then have been completed since the fiscal quarter commencing on October 1,
2002) of the Parent and its Subsidiaries for which the last quarter ends on a
date set forth below to be less than the amount set forth opposite such date:

----------------------------------------------------------------
Fixed Charge Coverage
Fiscal Quarter End                        Ratio
----------------------------------------------------------------
December 31, 2002                         0.65:1
----------------------------------------------------------------
March 31, 2003                            0.75:1
----------------------------------------------------------------
June 30, 2003                             0.85:1
----------------------------------------------------------------
September 30, 2003                        0.90:1
----------------------------------------------------------------
December 31, 2003                         1:1
----------------------------------------------------------------
March 31, 2004                            1.1:1
----------------------------------------------------------------
June 30, 2004                             1.2:1
----------------------------------------------------------------
September 30, 2004                        1.4:1
----------------------------------------------------------------

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--------------------------------------------------------------
December 31, 2004                         1.45:1
--------------------------------------------------------------
For each fiscal quarter thereafter        1.5:1
--------------------------------------------------------------

(c)      Consolidated EBITDA. Permit (i) for any fiscal quarter
ending on or prior to June 30, 2003, Consolidated Annualized EBITDA of the
Parent and its Subsidiaries and (ii) for each fiscal quarter ending thereafter,
Consolidated EBITDA of the Parent and its Subsidiaries for the four fiscal
quarters ending as of the end of the applicable fiscal quarter set forth below,
to be less than the applicable amount set forth below:

--------------------------------------------------------------
Consolidated EBITDA (annualized
or trailing four quarters, as
Fiscal Quarter End            applicable)
--------------------------------------------------------------
December 31, 2002             $56,000,000
--------------------------------------------------------------
March 31, 2003                $63,700,000
--------------------------------------------------------------
June 30, 2003                 $76,200,000
--------------------------------------------------------------
September 30, 2003            $82,100,000
--------------------------------------------------------------
December 31, 2003             $90,000,000
--------------------------------------------------------------
March 31, 2004                $99,100,000
--------------------------------------------------------------
June 30, 2004                 $108,000,000
--------------------------------------------------------------
September 30, 2004            $116,000,000
--------------------------------------------------------------
December 31, 2004             $125,000,000
--------------------------------------------------------------
March 31, 2005                $129,300,000
--------------------------------------------------------------
June 30, 2005                 $134,000,000
--------------------------------------------------------------
September 30, 2005            $140,000,000
--------------------------------------------------------------
December 31, 2005             $145,000,000
--------------------------------------------------------------
March 31, 2006                $145,000,000
--------------------------------------------------------------
June 30, 2006                 $150,000,000
--------------------------------------------------------------
September 30, 2006            $155,000,000
--------------------------------------------------------------
December 31, 2006             $160,000,000
--------------------------------------------------------------
March 31, 2007                $162,000,000
--------------------------------------------------------------
June 30, 2007                 $165,000,000
--------------------------------------------------------------
September 30, 2007            $167,000,000
--------------------------------------------------------------
December 31, 2007             $170,000,000
--------------------------------------------------------------

ARTICLE VIII

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MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL

Section 8.01   Management of Collateral. (a) After the occurrence and
during the continuance of an Event of Default, the Agent may send a notice of
assignment and/or notice of the Lenders' security interest to any and all
Account Debtors or third parties holding or otherwise concerned with any of the
Collateral, and thereafter the Agent shall have the sole right to collect the
Accounts Receivable and/or take possession of the Collateral and the books and
records relating thereto, subject to the terms of the Intercreditor Agreement.
After the occurrence and during the continuance of an Event of Default, and
subject to the Intercreditor Agreement and the prior rights of the Revolving
Credit Agent, no Loan Party shall, without prior written consent of the Agent,
grant any extension of time of payment of any Account Receivable, compromise or
settle any Account Receivable for less than the full amount thereof, release, in
whole or in part, any Person or property liable for the payment thereof, or
allow any credit or discount whatsoever thereon.

(b)     Each Loan Party hereby appoints the Agent or its
designee on behalf of the Agent as the Loan Parties' attorney-in-fact with power
exercisable during the continuance of an Event of Default to endorse any Loan
Party's name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Accounts Receivable, to sign any Loan
Party's name on any invoice or bill of lading relating to any of the Accounts
Receivable, drafts against Account Debtors with respect to Accounts Receivable,
assignments and verifications of Accounts Receivable and notices to Account
Debtors with respect to Accounts Receivable, to send verification of Accounts
Receivable, and to notify the Postal Service authorities to change the address
for delivery of mail addressed to any Loan Party to such address as the Agent
may designate and to do all other acts and things necessary to carry out this
Agreement, subject to the terms of the Intercreditor Agreement. All acts of said
attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission (other than
acts of omission or commission constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction), or for any error of judgment or mistake of fact or law; this
power being coupled with an interest is irrevocable until all of the Loans and
other Obligations under the Loan Documents are paid in full and all of the Loan
Documents are terminated.

(c)     Nothing herein contained shall be construed to
constitute the Agent as agent of any Loan Party for any purpose whatsoever, and
the Agent shall not be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located and regardless of the cause thereof (other than from acts of omission
or commission constituting gross negligence or willful misconduct as determined
by a final judgment of a court of competent jurisdiction). The Agent shall not,
under any circumstance or in any event whatsoever, have any liability for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any of the Accounts Receivable or any instrument received in
payment thereof or for any damage resulting therefrom (other than acts of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The Agent,
by anything herein or in any assignment or otherwise, does not assume any of the
obligations under any contract or agreement assigned to the Agent and shall not
be responsible in any way for the performance by any Loan Party of any of the
terms and conditions thereof.

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(d)     After the occurrence and during the continuance of an
Event of Default, and subject to the Intercreditor Agreement and the prior
rights of the Revolving Credit Agent, if any Account Receivable includes a
charge for any tax payable to any Governmental Authority, the Agent is hereby
authorized (but in no event obligated) in its discretion to pay the amount
thereof to the proper taxing authority for the Loan Parties' account and to
charge the Loan Parties therefor. The Loan Parties shall notify the Agent if any
Account Receivable includes any taxes due to any such Governmental Authority
and, in the absence of such notice, the Agent shall have the right to retain the
full proceeds of such Account Receivable and shall not be liable for any taxes
that may be due by reason of the sale and delivery creating such Account
Receivable.

(e)     Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Agent and the Lenders herein provided,
and the obligations of the Loan Parties set forth herein, are cumulative of, may
be exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.

Section 8.02   Accounts Receivable Documentation. After the occurrence
and during the continuance of an Event of Default, and subject to the
Intercreditor Agreement and the prior rights of the Revolving Credit Agent, each
Loan Party will at such intervals as the Agent may require, execute and deliver
confirmatory written assignments of the Accounts Receivable to the Agent and
furnish such further schedules and/or information as the Agent may require
relating to the Accounts Receivable, including, without limitation, sales
invoices or the equivalent, credit memos issued, remittance advices, reports and
copies of deposit slips and copies of original shipping or delivery receipts for
all merchandise sold. In addition, the Loan Parties shall notify the Agent of
any non-compliance in respect of the representations, warranties and covenants
contained in Section 8.03. The items to be provided under this Section 8.02 are
to be in form reasonably satisfactory to the Agent and are to be executed and
delivered to the Agent from time to time solely for its convenience in
maintaining records of the Collateral. The Loan Parties' failure to give any of
such items to the Agent shall not affect, terminate, modify or otherwise limit
the Agent's Lien on the Collateral. The Loan Parties shall not re-date any
invoice or sale or make sales on extended dating beyond that customary in the
Loan Parties' industry, and shall not re-bill any Accounts Receivable without
promptly disclosing the same to the Agent and providing the Agent with a copy of
such re-billing, identifying the same as such. If the Loan Parties become aware
of anything materially detrimental to any of the Loan Parties' customers'
credit, the Loan Parties will promptly advise the Agent thereof.

Section 8.03   Status of Accounts Receivable and Other Collateral.
With respect to Collateral of any Loan Party at the time the Collateral becomes
subject to the Agent's Lien, each Loan Party covenants, represents and warrants:
(a) each Account Receivable shall be a good and valid account representing an
undisputed bona fide indebtedness incurred or an amount indisputably owed by the
Account Debtor therein named, for a fixed sum as set forth in the invoice
relating thereto with respect to an absolute sale and delivery upon the
specified terms of goods sold or services rendered by such Loan Party; (b) no
Account Receivable shall be subject to any known defense, offset, counterclaim,
discount or allowance except as may be stated in the invoice relating thereto,
discounts and allowances as may be customary in such Loan Party's business and
as otherwise disclosed to the Agent; (c) none of the transactions underlying or
giving rise to any Account Receivable shall violate any applicable state or
federal laws or regulations, and all documents relating thereto shall be legally
sufficient under such laws or

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regulations and shall be legally enforceable in accordance with their terms; (e)
all agreements, instruments and other documents relating to any Account
Receivable shall be true and correct and in all material respects what they
purport to be; (f) all signatures and endorsements that appear on all material
agreements, instruments and other documents relating to any Account Receivable
shall be genuine and all signatories and endorsers shall have full capacity to
contract; (g) such Loan Party will, immediately upon learning thereof, report to
the Agent any material loss or destruction of, or substantial damage to, any of
the Collateral, and any other matters affecting the value, enforceability or
collectibility of any of the Collateral; and (h) such Loan Party is not and
shall not be entitled to pledge the Agent's or any Lender's credit on any
purchases or for any purpose whatsoever.

Section 8.04   Collateral Custodian. (a)Without limiting the Agent's
or the Lenders' rights with respect to the Collateral, the Agent has implemented
an arrangement, on terms and pursuant to written agreements in form and
substance satisfactory to the Agent, pursuant to which a third party collateral
custodian or agent, acceptable to the Agent (together with any substitute or
supplemental collateral custodian or agent, the "Rolling Stock Collateral
Custodian") has been engaged, at the expense of the Borrowers, to hold physical
possession of original certificates of title or ownership, vehicle registrations
and other similar instruments and documents with respect to the Rolling Stock
included in the Collateral, upon which certificates of title or ownership the
Agent's Liens shall be noted, and pursuant to which arrangements, on terms and
conditions satisfactory to the Agent, the Rolling Stock Collateral Custodian
will, among other things, monitor and render reports to the Agent regarding the
acquisition and disposition of such Rolling Stock by the Loan Parties as
permitted by this Agreement, and receive and maintain documentation evidencing
compliance with vehicle titling and registration requirements under applicable
law (including, without limitation, all Motor Vehicle Law), and will assist and
cooperate with the Agent in making the necessary arrangements for such Liens and
any releases thereof with respect to the dispositions of Rolling Stock permitted
under this Agreement.

(b)     Subject to the terms of the Intercreditor Agreement,
upon the occurrence and during the continuance of any Default or Event of
Default, the Agent may at any time and from time to time employ and maintain on
the premises of any Loan Party a custodian selected by the Agent who shall have
full authority to do all acts necessary to protect the Agent's and the Lenders'
interests. Each Loan Party hereby agrees to, and to cause its Subsidiaries to,
cooperate with any such custodian and to do whatever the Agent may reasonably
request to preserve the Collateral. All costs and expenses incurred by the Agent
by reason of the employment of the custodian shall be the responsibility of the
Borrowers and charged to the Loan Account.

ARTICLE IX

EVENTS OF DEFAULT

Section 9.01   Events of Default. If any of the following Events of
Default shall occur and be continuing:

(a)     any Borrower shall fail to pay any principal of or
interest on any Loan, any Agent Advance or any fee, indemnity or other amount
payable under this Agreement or any other Loan Document when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise);

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(b)     (i) any representation or warranty made or deemed made
by or on behalf of any Loan Party or by any officer of the foregoing under or in
connection with any Transaction Document or under or in connection with any
report, certificate, or other document delivered to the Agent or any Lender
pursuant to any Transaction Document shall have been incorrect in any material
respect when made or deemed made, or (ii) any representation or warranty made or
deemed made by or on behalf of any Seller or by any officer of a Seller under or
in connection with any Acquisition Document or under or in connection with any
report, certificate, or other document delivered to a Loan Party pursuant to any
Acquisition Document shall have been incorrect in any material respect when made
or deemed made;

(c)     any Loan Party shall fail to perform or comply with any
covenant or agreement contained in paragraphs (b), (c), (d), (f), (h), (j) or
(l) of Section 7.01, Section 7.02 or Section 7.03 or Article VIII, or any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in any Security Agreement to which it is a party, any Pledge Agreement to which
it is a party or any Mortgage to which it is a party or any Canadian Security
Document to which it is a party;

(d)     any Loan Party shall default in the performance or
observance of (i) the covenants contained in Section 7.01(a) of this Agreement
(other than subparagraphs (vii), (viii), (ix), (x) and (xi) thereof) and such
default shall continue unremedied for a period of 10 days, (ii) the covenants
contained in subparagraphs (vii), (viii), (ix), (x) and (xi) of Section 7.01(a)
of this Agreement and such default shall continue unremedied for a period of 3
days, or (iii) any other covenant contained in Section 7.01 of this Agreement
(to the extent not otherwise provided for in paragraphs (a), (b) or (c) of this
Section 9.01) and such default shall continue unremedied for a period of 15
days;

(e)     any Loan Party shall fail to perform or comply with any
other term, covenant or agreement contained in any Loan Document to be performed
or observed by it and, except as set forth in subsections (a), (b), (c) or (d)
of this Section 9.01, such failure, if capable of being remedied, shall remain
unremedied for 15 days after the earlier of the date a senior officer of any
Loan Party becomes aware of such failure and the date written notice of such
default shall have been given by the Agent to such Loan Party;

(f)     any Loan Party shall fail to pay any principal of or
interest on any of its Indebtedness (excluding Indebtedness evidenced by this
Agreement) in excess of $500,000, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand or
otherwise) and such failure shall continue after the applicable grace period, if
any, specified in the agreement or instrument relating to such Indebtedness, or
any other default under any agreement or instrument relating to any such
Indebtedness, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or instrument, if
the effect of such default or event is to accelerate, or to permit the
acceleration of, the maturity of such Indebtedness; or any such Indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), redeemed, purchased or defeased
or an offer to prepay, redeem, purchase or defease such Indebtedness shall be
required to be made, in each case, prior to the stated maturity thereof;

(g)     any Loan Party (i) shall institute any proceeding or
voluntary case seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under

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any law relating to bankruptcy, insolvency, reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a receiver,
trustee, custodian or other similar official for any such Person or for any
substantial part of its property, (ii) shall be generally not paying its debts
as such debts become due or shall admit in writing its inability to pay its
debts generally, (iii) shall make a general assignment for the benefit of
creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);

(h)     any proceeding shall be instituted against any Loan
Party seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for any
such Person or for any substantial part of its property, and either such
proceeding shall remain undismissed or unstayed for a period of 45 days or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against any such Person or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its property) shall occur;

(i)     any provision of any Loan Document shall at any time
for any reason (other than pursuant to the express terms thereof) cease to be
valid and binding on or enforceable against any Loan Party intended to be a
party thereto, or the validity or enforceability thereof shall be contested by
any party thereto, or a proceeding shall be commenced by any Loan Party or any
Governmental Authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or any Loan Party shall
deny in writing that it has any liability or obligation purported to be created
under any Loan Document;

(j)     any Security Agreement, any Pledge Agreement, any
Mortgage, any Canadian Security Document or any other security document, after
delivery thereof pursuant hereto, shall for any reason fail or cease to create a
valid and perfected and, except to the extent permitted by the terms hereof or
thereof, first priority Lien in favor of the Agent for the benefit of the
Lenders on any Collateral purported to be covered thereby;

(k)     any bank at which any deposit account, blocked account,
or lockbox account of any Loan Party is maintained shall fail to comply with any
of the terms of any deposit account, blocked account, lockbox account or similar
agreement to which such bank is a party or any securities intermediary,
commodity intermediary or other financial institution at any time in custody,
control or possession of any investment property of any Loan Party shall fail to
comply with any of the terms of any investment property control agreement to
which such Person is a party;

(l)     one or more judgments or orders for the payment of
money exceeding $250,000 in the aggregate shall be rendered against any Loan
Party and remain unsatisfied and either (i) enforcement proceedings shall have
been commenced by any creditor upon any such judgment or order, or (ii) there
shall be a period of 10 consecutive days after entry thereof during which a stay
of enforcement of any such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that any such judgment or
order shall not give rise to an Event of Default under this subsection (l) if
and for so long as (A) the amount of such judgment or order is covered by a
valid and binding policy of insurance between the defendant and the insurer
covering full payment thereof and (B) such insurer has

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been notified, and has not disputed the claim made for payment, of the amount of
such judgment or order;

(m)     any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than fifteen (15)
days;

(n)     any material damage to, or loss, theft or destruction
of, any Collateral, whether or not insured, or any strike, lockout, labor
dispute, embargo, condemnation, act of God or public enemy, or other casualty
which causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of any
Loan Party, if any such event or circumstance could reasonably be expected to
have a Material Adverse Effect;

(o)     any cessation of a substantial part of the business of
any Loan Party for a period which materially and adversely affects the ability
of such Person to continue its business on a profitable basis;

(p)     the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by any Loan Party,
if such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect;

(q)     the indictment, or the threatened indictment of any
Loan Party under any criminal statute, or commencement or threatened
commencement of criminal or civil proceedings against any Loan Party, pursuant
to which statute or proceedings the penalties or remedies sought or available
include forfeiture to any Governmental Authority of any material portion of the
property of such Person;

(r)     any Loan Party or any of its ERISA Affiliates shall
have made a complete or partial withdrawal from a Multiemployer Plan, and, as a
result of such complete or partial withdrawal, any Loan Party or any of its
ERISA Affiliates incurs a withdrawal liability in an annual amount exceeding
$1,000,000; or a Multiemployer Plan enters reorganization status under Section
4241 of ERISA, and, as a result thereof any Loan Party's or any of its ERISA
Affiliates' annual contribution requirements with respect to such Multiemployer
Plan increases in an annual amount exceeding $1,000,000;

(s)     any Termination Event with respect to any Employee Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
any Loan Party by the Agent, (i) such Termination Event (if correctable) shall
not have been corrected, and (ii) the then current value of such Employee Plan's
vested benefits exceeds the then current value of assets allocable to such
benefits in such Employee Plan by more than $1,000,000 (or, in the case of a
Termination Event involving liability under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of
the Internal Revenue Code, the liability is in excess of such amount);

(t)     any Loan Party shall be liable for any Environmental
Liabilities (other than those described in Section 6.01(r)(xi) and 6.01(r)(xii))
the payment of which could reasonably be expected to have a Material Adverse
Effect;

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(u)     an "Event of Default" shall have occurred and be
continuing under the Revolving Credit Agreement;

(v)     a Change of Control shall have occurred;

(w)     any breach, default, event of default or termination
shall occur under any Acquisition Document or other Material Contract after
giving effect to applicable grace periods, if any, contained in any such
Acquisition Document or other Material Contract that gives any third party the
right to terminate any such Acquisition Document or other Material Contract or
that otherwise could reasonably be expected to have a Material Adverse Effect;
or

(x)     an event or development occurs which could reasonably
be expected to have a Material Adverse Effect;

then, and in any such event, the Agent may, and shall at the request
of the Required Lenders, by notice to the Administrative Borrower, (i) terminate
or reduce all Commitments, whereupon all Commitments shall immediately be so
terminated or reduced, (ii) declare all or any portion of the Loans then
outstanding to be due and payable, whereupon all or such portion of the
aggregate principal of all Loans, all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement and the other Loan
Documents shall become due and payable immediately, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Loan Party and (iii) exercise any and all of its other rights and
remedies under applicable law, hereunder and under the other Loan Documents;
provided, however, that upon the occurrence of any Event of Default described in
subsection (g) or (h) of this Section 9.01, without any notice to any Loan Party
or any other Person or any act by the Agent or any Lender, all Commitments shall
automatically terminate and all Loans then outstanding, together with all
accrued and unpaid interest thereon, all fees and all other amounts due under
this Agreement and the other Loan Documents shall become due and payable
automatically and immediately, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by each Loan Party.

ARTICLE X

AGENT

Section 10.01  Appointment. Each Lender (and each subsequent maker of
any Loan by its making thereof) hereby irrevocably appoints and authorizes the
Agent to perform the duties of the Agent as set forth in this Agreement
including: (i) to receive on behalf of each Lender any payment of principal of
or interest on the Loans outstanding hereunder and all other amounts accrued
hereunder for the account of the Lenders and paid to the Agent, and, subject to
Section 2.02 of this Agreement, to distribute promptly to each Lender its Pro
Rata Share of all payments so received; (ii) to distribute to each Lender copies
of all material notices and agreements received by the Agent and not required to
be delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agent shall not have any liability to the Lenders for the Agent's
inadvertent failure to distribute any such notices or agreements to the Lenders;
(iii) to maintain, in accordance with its customary business practices, ledgers
and records reflecting the status of the Obligations, the Loans, and related
matters and to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Collateral and related matters;
(iv) to execute or file any and all financing or similar statements or notices,
amendments, renewals, supplements, documents, instruments, proofs of claim,
notices and other

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written agreements with respect to this Agreement or any other Loan Document;
(v) to make the Loans and Agent Advances, for the Agent or on behalf of the
applicable Lenders as provided in this Agreement or any other Loan Document;
(vi) to perform, exercise, and enforce any and all other rights and remedies of
the Lenders with respect to the Loan Parties, the Obligations, or otherwise
related to any of same to the extent reasonably incidental to the exercise by
the Agent of the rights and remedies specifically authorized to be exercised by
the Agent by the terms of this Agreement or any other Loan Document; (vii) to
incur and pay such fees necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to this Agreement or any other
Loan Document; and (viii) subject to Section 10.03 of this Agreement, to take
such action as the Agent deems appropriate on its behalf to administer the Loans
and the Loan Documents and to exercise such other powers delegated to the Agent
by the terms hereof or the other Loan Documents (including, without limitation,
the power to give or to refuse to give notices, waivers, consents, approvals and
instructions and the power to make or to refuse to make determinations and
calculations) together with such powers as are reasonably incidental thereto to
carry out the purposes hereof and thereof. As to any matters not expressly
provided for by this Agreement and the other Loan Documents (including, without
limitation, enforcement or collection of the Loans), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be binding upon all Lenders and all
makers of Loans; provided, however, that the Agent shall not be required to take
any action which, in the reasonable opinion of the Agent, exposes the Agent to
liability or which is contrary to this Agreement or any other Loan Document or
applicable law.

Section 10.02  Nature of Duties. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any other Loan Document except as expressly set
forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the value
of the Collateral, and the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the initial Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, the Agent shall provide to such
Lender any documents or reports delivered to the Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If the Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, the Agent shall send notice thereof
to each Lender. The Agent shall promptly notify each Lender any time that the
Required Lenders have instructed the Agent to act or refrain from acting
pursuant hereto.

Section 10.03  Rights, Exculpation, Etc. The Agent and its directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent

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jurisdiction. Without limiting the generality of the foregoing, the Agent (i)
may treat the payee of any Loan as the owner thereof until the Agent receives
written notice of the assignment or transfer thereof, pursuant to Section 12.07
hereof, signed by such payee and in form satisfactory to the Agent; (ii) may
consult with legal counsel (including, without limitation, counsel to the Agent
or counsel to the Loan Parties), independent public accountants, and other
experts selected by any of them and shall not be liable for any action taken or
omitted to be taken in good faith by any of them in accordance with the advice
of such counsel or experts; (iii) make no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements,
certificates, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (iv) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Person, the existence or possible existence of any Default or Event of Default,
or to inspect the Collateral or other property (including, without limitation,
the books and records) of any Person; (v) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (vi) shall not
be deemed to have made any representation or warranty regarding the existence,
value or collectibility of the Collateral, the existence, priority or perfection
of the Agent's Lien thereon, or any certificate prepared by any Loan Party in
connection therewith, nor shall the Agent be responsible or liable to the
Lenders for any failure to monitor or maintain any portion of the Collateral.
The Agent shall not be liable for any apportionment or distribution of payments
made in good faith pursuant to Section 4.04, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount which they are determined
to be entitled. The Agent may at any time request instructions from the Lenders
with respect to any actions or approvals which by the terms of this Agreement or
of any of the other Loan Documents the Agent is permitted or required to take or
to grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting under this Agreement or any of the
other Loan Documents in accordance with the instructions of the Required
Lenders.

Section 10.04  Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.

Section 10.05  Indemnification. To the extent that the Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify the Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against the Agent in any way relating to or arising out
of this Agreement or any of the other Loan Documents or any action taken or
omitted by the Agent under this Agreement or any of the other Loan Documents, in
proportion to each Lender's Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to

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Section 10.08; provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements for which there has
been a final judicial determination that such liability resulted from the
Agent's gross negligence or willful misconduct. The obligations of the Lenders
under this Section 10.05 shall survive the payment in full of the Loans and the
termination of this Agreement.

Section 10.06  Agent Individually. With respect to its Pro Rata Share
of the Total Commitment hereunder and the Loans made by it, the Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender or maker of a Loan. The terms "Lenders" or "Required Lenders" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Agent in its individual capacity as a Lender or one of the Required Lenders. The
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Borrower as if
it were not acting as the Agent pursuant hereto without any duty to account to
the other Lenders.

Section 10.07  Successor Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days' prior
written notice to the Administrative Borrower and each Lender. Such resignation
shall take effect upon the acceptance by a successor Agent of appointment
pursuant to clauses (b) and (c) below or as otherwise provided below.

(b)     Upon any such notice of resignation, the Required
Lenders shall appoint a successor Agent. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the Agent, and the Agent shall be discharged from its duties and obligations
under this Agreement and the other Loan Documents. After the Agent's resignation
hereunder as the Agent, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement and the other Loan Documents.

(c)     If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the Agent shall then appoint a
successor Agent who shall serve as the Agent until such time, if any, as the
Required Lenders appoint a successor Agent as provided above.

Section 10.08  Collateral Matters.

(a)     The Agent may from time to time make such disbursements
and advances ("Agent Advances") which the Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Borrowers of the Loans and other
Obligations or to pay any other amount chargeable to the Borrowers pursuant to
the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Section 12.04. The Agent Advances shall be repayable on
demand, be secured by the Collateral and bear interest at a rate per annum equal
to the rate of interest then applicable to the Term Loan B. The Agent Advances
shall constitute Obligations hereunder which may be charged to the Loan Account
in accordance with Section 4.02. The Agent shall notify each

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Lender and the Administrative Borrower in writing of each such Agent Advance,
which notice shall include a description of the purpose of such Agent Advance.
Without limitation to its obligations pursuant to Section 10.05, each Lender
agrees that it shall make available to the Agent, upon the Agent's demand, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of each such Agent Advance. If such funds are not made available to
the Agent by such Lender, the Agent shall be entitled to recover such funds on
demand from such Lender, together with interest thereon for each day from the
date such payment was due until the date such amount is paid to the Agent, at
the Federal Funds Rate for three Business Days and thereafter at the Reference
Rate.

(b)     The Lenders hereby irrevocably authorize the Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral upon termination of the Total Commitment and payment
and satisfaction of all Loans and all other Obligations which have matured and
which the Agent has been notified in writing are then due and payable; or
constituting property being sold or disposed of in the ordinary course of any
Loan Party's business and in compliance with the terms of this Agreement and the
other Loan Documents; or constituting property in which the Loan Parties owned
no interest at the time the Lien was granted or at any time thereafter; or if
approved, authorized or ratified in writing by the Lenders. Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent's authority to
release particular types or items of Collateral pursuant to this Section
10.08(b).

(c)     Without in any manner limiting the Agent's authority to
act without any specific or further authorization or consent by the Lenders (as
set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Agent, the authority to release Collateral conferred upon the
Agent under Section 10.08(b). Upon receipt by the Agent of confirmation from the
Lenders of its authority to release any particular item or types of Collateral,
and upon prior written request by any Loan Party, the Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders upon such Collateral; provided, however, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligations
or entail any consequence other than the release of such Liens without recourse
or warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Lien upon (or obligations of any Loan Party in
respect of) all interests in the Collateral retained by any Loan Party.

(d)     The Agent shall have no obligation whatsoever to any
Lender to assure that the Collateral exists or is owned by the Loan Parties or
is cared for, protected or insured or has been encumbered or that the Lien
granted to the Agent pursuant to this Agreement or any other Loan Document has
been properly or sufficiently or lawfully created, perfected, protected or
enforced or is entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent in this Section 10.08 or in any other Loan Document, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to any other Lender, except as otherwise provided herein.

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Section 10.09  Agency for Perfection. Each Lender hereby appoints the
Agent and each other Lender as agent and bailee for the purpose of perfecting
the security interests in and liens upon the Collateral in assets which, in
accordance with Article 9 of the Uniform Commercial Code, can be perfected only
by possession or control (or where the security interest of a secured party with
possession or control has priority over the security interest of another secured
party) and each Agent and each Lender hereby acknowledges that it holds
possession of or otherwise controls any such Collateral for the benefit of the
Agent and the Lenders as secured party. Should any Lender obtain possession or
control of any such Collateral, such Lender shall notify the Agent thereof, and,
promptly upon the Agent's request therefor shall deliver such Collateral to the
Agent or in accordance with the Agent's instructions. Each Loan Party by its
execution and delivery of this Agreement hereby consents to the foregoing.

ARTICLE XI

GUARANTY

Section 11.01  Guaranty. Each Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of the Borrowers now
or hereafter existing under any Loan Document, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding of any Borrower whether or not allowed in such
proceeding), fees, commissions, expense reimbursements, indemnifications or
otherwise (such obligations, to the extent not paid by the Borrowers, being the
"Guaranteed Obligations"), and agrees to pay any and all expenses (including
reasonable counsel fees and expenses) incurred by the Agent and the Lenders in
enforcing any rights under the guaranty set forth in this Article XI. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by the Borrowers to the Agent and the Lenders under any Loan
Document but for the fact that they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Borrower. In no event
shall the obligation of any Guarantor hereunder exceed the maximum amount such
Guarantor could guarantee under any bankruptcy, insolvency or other similar law.

Section 11.02  Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Agent or the Lenders with respect thereto. The obligations of each Guarantor
under this Article XI are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce such obligations, irrespective of whether any action is brought
against any Loan Party or whether any Loan Party is joined in any such action or
actions. The liability of each Guarantor under this Article XI shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:

(a)     any lack of validity or enforceability of any Loan
Document or any agreement or instrument relating thereto;

(b)     any change in the time, manner or place of payment of,
or in any other term of, all or any of the Guaranteed Obligations, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in

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the Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or otherwise;

(c)     any taking, exchange, release or non-perfection of any
Collateral, or any taking, release or amendment or waiver of or consent to
departure from any other guaranty, for all or any of the Guaranteed Obligations;

(d)     any change, restructuring or termination of the
corporate, limited liability company or partnership structure or existence of
any Loan Party; or

(e)     any other circumstance (including, without limitation,
any statute of limitations) or any existence of or reliance on any
representation by the Agents or the Lenders that might otherwise constitute a
defense available to, or a discharge of, any Loan Party or any other guarantor
or surety.

This Article XI shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Agent, the Lenders or any other Person upon
the insolvency, bankruptcy or reorganization of any Borrower or otherwise, all
as though such payment had not been made.

Section 11.03  Waiver. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Article XI and any requirement that the Agent or
the Lenders exhaust any right or take any action against any Loan Party or any
other Person or any Collateral. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 11.03 is knowingly made in
contemplation of such benefits. Each Guarantor hereby waives any right to revoke
this Article XI, and acknowledges that this Article XI is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.

Section 11.04  Continuing Guaranty; Assignments. This Article XI is a
continuing guaranty and shall (a) remain in full force and effect until the
later of the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article XI and the Termination Date, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the benefit of
and be enforceable by the Agent and the Lenders and their successors, pledgees,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Lender may pledge, assign or otherwise transfer all or any portion of
its rights and obligations under this Agreement (including, without limitation,
all or any portion of its Commitments and its Loans) to any other Person, and
such other Person shall thereupon become vested with all the benefits in respect
thereof granted such Lender herein or otherwise, in each case as provided in
Section 12.07.

Section 11.05  Subrogation. No Guarantor will exercise any rights that
it may now or hereafter acquire against any Loan Party or any other guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this Article XI, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the Agent
and the Lenders against any Loan Party or any other guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including,

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without limitation, the right to take or receive from any Loan Party or any
other guarantor, directly or indirectly, in cash or other property or by set-off
or in any other manner, payment or security solely on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations and all
other amounts payable under this Article XI shall have been paid in full in cash
and the Termination Date shall have occurred. If any amount shall be paid to any
Guarantor in violation of the immediately preceding sentence at any time prior
to the later of the payment in full in cash of the Guaranteed Obligations and
all other amounts payable under this Article XI and the Termination Date, such
amount shall be held in trust for the benefit of the Agent and the Lenders and
shall forthwith be paid to the Agent and the Lenders to be credited and applied
to the Guaranteed Obligations and all other amounts payable under this Article
XI, whether matured or unmatured, in accordance with the terms of this
Agreement, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Article XI thereafter arising. If (i) any Guarantor
shall make payment to the Agent and the Lenders of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Article XI shall be paid in full in cash and (iii)
the Termination Date shall have occurred, the Agent and the Lenders will, at
such Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.

Section 11.06  Judgment Currency. The specification under this
Agreement of Dollars and payment in New York City is of the essence. Each
Guarantor's obligations hereunder and under the other Loan Documents to make
payments inDollars and shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than Dollars, except to the extent that such tender or recovery results in
the effective receipt by the Lenders or the Agent of the full amount of Dollars
expressed to be payable to the Agent and the Lenders under this Agreement or the
other Loan Documents. If, for the purpose of obtaining or enforcing judgment in
any court, it is necessary to convert into or from any currency other than
Dollars (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in Dollars, the rate of exchange used shall be that at
which the Lenders or the Agent could, in accordance with normal banking
procedures, purchase Dollars with the Judgment Currency on the Business Day
preceding that on which final judgment is given. The obligation of each
Guarantor in respect of any such sum due from it to the Lender or the Agent
hereunder shall, notwithstanding any judgment in such Judgment Currency, be
discharged only to the extent that, on the Business Day immediately following
the date on which the Lender or the Agent receives any sum adjudged to be so due
in the Judgment Currency, the Lenders or the Agent may, in accordance with
normal banking procedures, purchase Dollars with the Judgment Currency. If the
Dollars so purchased are less than the sum originally due to the Agent or the
Lender in Dollars, each Guarantor agrees, as a separate obligation and
notwithstanding any such judgment, to indemnify the Lenders or the Agent against
such loss, and if the Dollars so purchased exceed the sum originally due to the
Lenders or the Agent in Dollars, the Lenders or the Agent agrees to remit to
such Guarantor such excess.

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ARTICLE XII

MISCELLANEOUS

Section 12.01  Notices, Etc. All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Loan Party, at the following address:

Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Attention: Chief Financial Officer
Telephone:  781-849-1800, Ext. 4450
Telecopier: 781-848-1632

with a copy to:

Davis, Malm & D'Agostine, P.C.
One Boston Place, 37th Floor
Boston, MA 02108
Attention: C. Michael Malm, Esq.
Telephone:  617-367-2500
Telecopier: 617-523-6215

if to the Agent, to it at the following address:

Ableco Finance LLC
450 Park Avenue, 28/th/ Floor
New York, New York 10022
Attention: Daniel E. Wolf
Telephone:  212-891-2121
Telecopier: 212-891-1541

with a copy to:

Schulte Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Attention: Lawrence S. Goldberg, Esq.
Telephone:  212-756-2000
Telecopier: 212-593-5955

or, as to each party, at such other address as shall be designated by
such party in a written notice to the other parties complying as to delivery
with the terms of this Section 12.01. All such notices and other communications
shall be effective, (i) if mailed, when received or three days after deposited
in the mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to the Agent pursuant to Article II shall not be effective until received by the
Agent.

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Section 12.02  Amendments, Etc. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by any Loan Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders or by the Agent with the consent of the
Required Lenders, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall (i) increase the Commitment
of any Lender, reduce the principal of, or interest on, the Loans payable to any
Lender, reduce the amount of any fee payable for the account of any Lender, or
postpone or extend any date fixed for any payment of principal of, or interest
or fees on, the Loans payable to any Lender, in each case without the written
consent of any Lender affected thereby, (ii) increase the Total Commitment
without the written consent of each Lender, (iii) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans that is
required for the Lenders or any of them to take any action hereunder, (iv) amend
the definition of "Required Lenders" or "Pro Rata Share", (v)(A) release all or
a substantial portion of the Collateral (except as otherwise provided in this
Agreement and the other Loan Documents), (B) consent to any Disposition of
Collateral, or waive any provision of Section 2.05 with respect to any such
Disposition, in either case following the date on which the aggregate amount of
Net Cash Proceeds received by the Loan Parties shall exceed, for all such
Dispositions since the Effective Date, $8,000,000, (C) subordinate any Lien
granted in favor of the Agent for the benefit of the Lenders, or (D) release any
Borrower or any Guarantor or (vi) amend, modify or waive Section 4.04 or this
Section 12.02 of this Agreement, in each case, without the written consent of
each Lender. Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing and signed by the Agent, affect the rights or duties of
the Agent (but not in its capacity as a Lender) under this Agreement or the
other Loan Documents.

Section 12.03  No Waiver; Remedies, Etc. No failure on the part of the
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any other Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agent and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or remedies provided by law. The rights of the Agent and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent and the Lenders to exercise any of their
rights under any other Loan Document against such party or against any other
Person.

Section 12.04  Expenses; Taxes; Attorneys' Fees. The Borrowers will
pay on demand, all costs and expenses incurred by or on behalf of the Agent
(and, in the case of clauses (b) through (m) below, each Lender), regardless of
whether the transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
the Agent (and, in the case of clauses (b) through (m) below, each Lender),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searches and reviewing environmental assessments,
miscellaneous disbursements, examination, travel, lodging and meals, arising
from or relating to: (a) the negotiation, preparation, execution, delivery,
performance and administration of this Agreement and the other Loan Documents
(including, without limitation, the preparation of any additional Loan Documents
pursuant to Section 7.01(b) or the review of any of the agreements, instruments
and documents referred to in Section 7.01(f)), (b) any requested amendments,
waivers or consents to this Agreement or the

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other Loan Documents whether or not such documents become effective or are
given, (c) the preservation and protection of any of the Lenders' rights under
this Agreement or the other Loan Documents, (d) the defense of any claim or
action asserted or brought against the Agent or any Lender by any Person that
arises from or relates to this Agreement, any other Loan Document, the Agent's
or the Lenders' claims against any Loan Party, or any and all matters in
connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by the Agent or any Lender, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from any Loan
Party, (j) all liabilities and costs arising from or in connection with the
past, present or future operations of any Loan Party involving any damage to
real or personal property or natural resources or harm or injury alleged to have
resulted from any Release of Hazardous Materials on, upon or into such property,
(k) any Environmental Liabilities incurred in connection with the investigation,
removal, cleanup and/or remediation of any Hazardous Materials present or
arising out of the operations of any facility of any Loan Party, (l) any
Environmental Liabilities incurred in connection with any Environmental Lien; or
(m) the receipt by the Agent or any Lender of any advice from professionals with
respect to any of the foregoing. Without limitation of the foregoing or any
other provision of any Loan Document: (x) the Borrowers agree to pay all stamp,
document, transfer, recording (including mortgage recording) or filing taxes or
fees and similar impositions now or hereafter determined by the Agent or any
Lender to be payable in connection with this Agreement or any other Loan
Document, and the Borrowers agree to save the Agent and each Lender harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions, (y) the Borrowers agree to pay all broker fees
that may become due in connection with the transactions contemplated by this
Agreement and the other Loan Documents, and (z) if the Borrowers fail to perform
any covenant or agreement contained herein or in any other Loan Document, the
Agent may itself perform or cause performance of such covenant or agreement, and
the expenses of the Agent incurred in connection therewith shall be reimbursed
on demand by the Borrowers.

Section 12.05  Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, any Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) and to the
fullest extent permitted by law, set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
Indebtedness at any time owing by the Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not the Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. The
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by the Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and the Lenders under this Section 12.05
are in addition to the other rights and remedies (including other rights of
set-off) which the Agent and the Lenders may have under this Agreement or any
other Loan Documents of law or otherwise.

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Section 12.06  Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

Section 12.07  Assignments and Participations. (a) This Agreement and
the other Loan Documents shall be binding upon and inure to the benefit of each
Loan Party and the Agent and each Lender and their respective successors and
assigns; provided, however, that none of the Loan Parties may assign or transfer
any of its rights hereunder without the prior written consent of each Lender and
any such assignment without the Lenders' prior written consent shall be null and
void.

(b)     Each Lender may, with the written consent of the Agent
(provided that no written consent of the Agent shall be required in connection
with any assignment by a Lender (i) to an Affiliate of such Lender or a Related
Fund or (ii) during the existence of an Event of Default), assign to one or more
other lenders or other entities all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitments and the Loans made by it); provided, however, that (i) such
assignment is in an amount which is at least $1,000,000 or a multiple of
$1,000,000 in excess thereof (or the remainder of such Lender's Commitment)
(except such minimum amount shall not apply to an assignment by a Lender to an
Affiliate of such Lender or a fund or account managed by such Lender or an
Affiliate of such Lender), (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any promissory note subject to such assignment and
such parties shall deliver to the Agent a processing and recordation fee of
$3,500 (except the payment of such fee shall not be required in connection with
an assignment by a Lender to an Affiliate of such Lender or a Related Fund) and
(iii) no written consent of the Agent shall be required in connection with any
assignment by a Lender to an Affiliate of such Lender or a Related Fund. Upon
such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least three Business Days after the delivery thereof to the Agent (or such
shorter period as shall be agreed to by the Agent and the parties to such
assignment), (A) the assignee thereunder shall become a "Lender" hereunder and,
in addition to the rights and obligations hereunder held by it immediately prior
to such effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (B) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement (and, in
the case of an Assignment and Acceptance covering all or the remaining portion
of an assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto).

(i)     By executing and delivering an Assignment and
Acceptance, the assigning Lender and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (A) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (B) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Loan Party or any of its

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Subsidiaries or the performance or observance by any Loan Party of any of its
obligations under this Agreement or any other Loan Document furnished pursuant
hereto; (C) such assignee confirms that it has received a copy of this Agreement
and the other Loan Documents, together with such other documents and information
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (D) such assignee will, independently and
without reliance upon the assigning Lender, the Agent or any Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents; (E) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental hereto and thereto; and (F) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement and the other Loan Documents are required to be
performed by it as a Lender.

(ii)    The Agent shall, on behalf of the Borrowers,
maintain, or cause to be maintained, at the Payment Office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans (the "Registered Loans")
owing to each Lender from time to time. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agent and the Lenders shall treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Administrative
Borrower and any Lender at any reasonable time and from time to time upon
reasonable prior notice. In the event any assignment permitted under Section
12.07(b) is not reflected in the Register, the assigning Lender shall maintain a
register comparable to the Register in order to reflect such assignment.

(iii)   Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with any
promissory notes subject to such assignment, the Agent shall, if the Agent
consents to such assignment and if such Assignment and Acceptance has been
completed (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register.

(iv)    A Registered Loan (and the registered note, if
any, evidencing the same) may be assigned or sold in whole or in part only by
registration of such assignment or sale on the Register (and each registered
note shall expressly so provide). Any assignment or sale of all or part of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by registration of such assignment or sale on the Register,
together with the surrender of the registered note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such registered note, whereupon, at the request
of the designated assignee(s) or transferee(s), one or more new registered notes
in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the registration of assignment or sale of
any Registered Loan (and the registered note, if any, evidencing the same), the
Agent shall treat the Person in whose name such Registered Loan (and the
registered note, if any, evidencing the same) is registered as the owner thereof
for the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary.

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(v)     In the event that any Lender sells
participations in a Registered Loan, such Lender shall maintain a register on
which it enters the name of all participants in the Registered Loans held by it
(the "Participant Register"). A Registered Loan (and the registered note, if
any, evidencing the same) may be participated in whole or in part only by
registration of such participation on the Participant Register (and each
registered note shall expressly so provide). Any participation of such
Registered Loan (and the registered note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.

(vi)    Any foreign Person who purchases or is assigned
or participates in any portion of such Registered Loan shall provide the Agent
and the Lender with a completed Internal Revenue Service Form W-8BEN
(Certificate of Foreign Status) or a substantially similar form for such
purchaser, participant or any other affiliate who is a holder of beneficial
interests in the Registered Loan.

(c)     Each Lender holding a Term Loan A agrees that, until
the 90/th/ day after the Effective Date, it will, at the written request of the
Administrative Borrower, assign all or a portion of its interest in the Term
Loan A to one or more other lenders not a party hereto that are proposed by the
Borrowers so long as (i) such assignment shall be effected in accordance with
Section 12.07(b), except that (A) the amount of such assignment shall be at
least $5,000,000 or a multiple of $1,000,000 in excess thereof and (B) the Agent
shall not charge the $3,500 processing and recordation fee in connection with
such assignment, (ii) such assignment shall be on customary commercial terms and
conditions (without representation, warranty or recourse by the assigning
Lender), (iii) the rate of interest on the Term Loan A assigned to such other
lender shall be equal to or less than LIBOR plus 7.25% per annum and (iv) no
Event of Default shall exist either immediately before or after giving effect to
such assignment.

(d)     Each Lender may sell participations to one or more
banks or other entities in or to all or a portion of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of its Commitments and the Loans made by it);
provided, that (i) such Lender's obligations under this Agreement (including
without limitation, its Commitments hereunder) and the other Loan Documents
shall remain unchanged; (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, and the Borrowers,
the Agent and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement and the other Loan Documents; and (iii) a participant shall not be
entitled to require such Lender to take or omit to take any action hereunder
except (A) action directly effecting an extension of the maturity dates or
decrease in the principal amount of the Loans, (B) action directly effecting an
extension of the due dates or a decrease in the rate of interest payable on the
Loans or the fees payable under this Agreement, or (C) actions directly
effecting a release of all or a substantial portion of the Collateral or any
Loan Party (except as set forth in Section 10.08 of this Agreement or any other
Loan Document). The Loan Parties agree that each participant shall be entitled
to the benefits of Section 2.08 and Section 4.05 of this Agreement with respect
to its participation in any portion of the Commitments and the Loans as if it
was a Lender.

Section 12.08  Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of this Agreement by telecopier shall be equally

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as effective as delivery of an original executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by telecopier
also shall deliver an original executed counterpart of this Agreement but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Agreement. The foregoing
shall apply to each other Loan Document mutatis mutandis.

Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED IN THE STATE OF NEW YORK.

Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND
VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE
COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
LOAN PARTY HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY
HEREBY IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS
ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING AND
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE
ADMINISTRATIVE BORROWER AT ITS ADDRESS FOR NOTICES AS SET FORTH IN SECTION 12.01
AND TO THE SECRETARY OF STATE OF THE STATE OF NEW YORK, SUCH SERVICE TO BECOME
EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT AND THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANY LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
ANY LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH
RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.

Section 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE
AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM CONCERNING ANY

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RIGHTS UNDER THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR UNDER ANY AMENDMENT,
WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN
THE FUTURE MAY BE DELIVERED IN CONNECTION THEREWITH, OR ARISING FROM ANY
FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES
THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS.
EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT
FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT.

Section 12.12 Consent by the Agent and Lenders. Except as
otherwise expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"Action") of the Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which the Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
the Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.

Section 12.13 No Party Deemed Drafter. Each of the parties hereto
agrees that no party hereto shall be deemed to be the drafter of this Agreement.

Section 12.14 Reinstatement; Certain Payments. If any claim is
ever made upon the Agent or any Lender for repayment or recovery of any amount
or amounts received by the Agent or such Lender in payment or on account of any
of the Obligations, the Agent or such Lender shall give prompt notice of such
claim to each other Lender and the Administrative Borrower, and if the Agent or
such Lender repays all or part of such amount by reason of (i) any judgment,
decree or order of any court or administrative body having jurisdiction over the
Agent or such Lender or any of its property, or (ii) any good faith settlement
or compromise of any such claim effected by the Agent or such Lender with any
such claimant, then and in such event each Loan Party agrees that (A) any such
judgment, decree, order, settlement or compromise shall be binding upon it
notwithstanding the cancellation of any Indebtedness hereunder or under the
other Loan Documents or the termination of this Agreement or the other Loan
Documents, and (B) it shall be and remain liable to the Agent or such Lender
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by the Agent or such Lender.

Section 12.15 Indemnification.

(a)    General Indemnity. In addition to each Loan Party's
other Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless the Agent and each
Lender and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the "Indemnitees") from and against
any and all losses, damages, liabilities, obligations, penalties, fees,
reasonable costs and expenses (including, without limitation, reasonable

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attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) the Agent's or any Lender's furnishing of funds to the Borrowers
under this Agreement or the other Loan Documents, including, without limitation,
the management of any such Loans, (iii) any matter relating to the financing
transactions contemplated by this Agreement or the other Loan Documents or by
any document executed in connection with the transactions contemplated by this
Agreement or the other Loan Documents, or (iv) any claim, litigation,
investigation or proceeding relating to any of the foregoing, whether or not any
Indemnitee is a party thereto (collectively, the "Indemnified Matters");
provided, however, that the Loan Parties shall not have any obligation to any
Indemnitee under this subsection (a) for any Indemnified Matter caused by the
gross negligence or willful misconduct of such Indemnitee, as determined by a
final judgment of a court of competent jurisdiction.

(b)    Environmental Indemnity. Without limiting Section 12.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indemnitees against any and all Environmental Liabilities and
all other claims, demands, penalties, fines, liability (including strict
liability), losses, damages, costs and expenses (including without limitation,
reasonable legal fees and expenses, consultant fees and laboratory fees),
arising out of (i) any Releases or threatened Releases (x) at any property
presently or formerly owned or operated by any Loan Party or any Subsidiary of
any Loan Party, or any predecessor in interest, or (y) of any Hazardous
Materials generated and disposed of by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; (ii) any violations of Environmental
Laws; (iii) any Environmental Claim relating to any Loan Party or any Subsidiary
of any Loan Party, or any predecessor in interest; (iv) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
exposure to Hazardous Materials used, handled, generated, transported or
disposed by any Loan Party or any Subsidiary of any Loan Party, or any
predecessor in interest; and (v) any breach of any warranty or representation
regarding environmental matters made by the Loan Parties in Section 6.01(r) or
the breach of any covenant made by the Loan Parties in Section 7.01(j).
Notwithstanding the foregoing, the Loan Parties shall not have any obligation to
any Indemnitee under this subsection (b) regarding any potential environmental
matter covered hereunder which is caused by the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction.

(c)    The indemnification for all of the foregoing losses,
damages, fees, costs and expenses of the Indemnitees are chargeable against the
Loan Account. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in this Section 12.15 may be unenforceable because it is
violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. The indemnities set forth in this Section
12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.

Section 12.16 Agent for Borrowers. Each Borrower hereby
irrevocably appoints Clean Harbors, Inc. as the borrowing agent and
attorney-in-fact for the Borrowers (the "Administrative Borrower") which
appointment shall remain in full force and effect unless and

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until the Agent shall have received prior written notice signed by all of the
Borrowers that such appointment has been revoked and that another Borrower has
been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide to the Agent
and receive from the Agent all notices with respect to Loans obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Loans and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this Agreement.
It is understood that the handling of the Loan Account and Collateral of the
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to the Borrowers in order to utilize the collective
borrowing powers of the Borrowers in the most efficient and economical manner
and at their request, and that neither the Agent nor the Lenders shall incur
liability to the Borrowers as a result hereof. Each of the Borrowers expects to
derive benefit, directly or indirectly, from the handling of the Loan Account
and the Collateral in a combined fashion since the successful operation of each
Borrower is dependent on the continued successful performance of the integrated
group. To induce the Agent and the Lenders to do so, and in consideration
thereof, each of the Borrowers hereby jointly and severally agrees to indemnify
the Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by any
of the Borrowers or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of the Borrowers
as herein provided, (b) the Agent and the Lenders relying on any instructions of
the Administrative Borrower, or (c) any other action taken by the Agent or any
Lender hereunder or under the other Loan Documents.]

Section 12.17 Records. The unpaid principal of and interest on the
Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to Section 2.06 hereof shall at all times be
ascertained from the records of the Agent, which shall be conclusive and binding
absent manifest error.

Section 12.18 Binding Effect. This Agreement shall become
effective when it shall have been executed by each Loan Party, the Agent and
each Lender and when the conditions precedent set forth in Section 5.01 hereof
have been satisfied or waived in writing by the Agent, and thereafter shall be
binding upon and inure to the benefit of each Loan Party, the Agent and each
Lender, and their respective successors and assigns, except that the Loan
Parties shall not have the right to assign their rights hereunder or any
interest herein without the prior written consent of each Lender, and any
assignment by any Lender shall be governed by Section 12.07 hereof.

Section 12.19 Interest. It is the intention of the parties hereto
that the Agent and each Lender shall conform strictly to usury laws applicable
to it. Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to the Agent or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to the
Agent or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to the Agent
or any Lender that is contracted for, taken, reserved, charged or received

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by the Agent or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by the Agent or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by the Agent or such Lender, as applicable, to
the Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Agent or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by the Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the Agent or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by the Agent or such
Lender to the Borrowers). All sums paid or agreed to be paid to the Agent or any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to the Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Loans until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at an time and from time to time (x) the amount of interest payable to the Agent
or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Agent or such Lender pursuant to this Section 12.19 and (y) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to the Agent or such Lender would be less than the amount of
interest payable to the Agent or such Lender computed at the Highest Lawful Rate
applicable to the Agent or such Lender, then the amount of interest payable to
the Agent or such Lender in respect of such subsequent interest computation
period shall continue to be computed at the Highest Lawful Rate applicable to
the Agent or such Lender until the total amount of interest payable to the Agent
or such Lender shall equal the total amount of interest which would have been
payable to the Agent or such Lender if the total amount of interest had been
computed without giving effect to this Section 12.19.

For purposes of this Section 12.19, the term "applicable law"
shall mean that law in effect from time to time and applicable to the loan
transaction between the Borrowers, on the one hand, and the Agent and the
Lenders, on the other, that lawfully permits the charging and collection of the
highest permissible, lawful non-usurious rate of interest on such loan
transaction and this Agreement, including laws of the State of New York and, to
the extent controlling, laws of the United States of America.

The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.

Section 12.20 Confidentiality. The Agent and each Lender agrees
(on behalf of itself and each of its affiliates, directors, officers, employees
and representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by the
Loan Parties pursuant to this Agreement or the other Loan Documents which is
identified in writing by the Loan Parties as being confidential at the time the
same is delivered to such Person

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(and which at the time is not, and does not thereafter become, publicly
available or available to such Person from another source not known to be
subject to a confidentiality obligation to such Person not to disclose such
information), provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule, regulation or
judicial process, (ii) to counsel for the Agent or any Lender, (iii) to
examiners, auditors, accountants or Securitization Parties, (iv) in connection
with any litigation to which the Agent or any Lender is a party or (v) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant (or prospective assignee or participant) first agrees,
in writing, to be bound by confidentiality provisions similar in substance to
this Section 12.20. The Agent and each Lender agrees that, upon receipt of a
request or identification of the requirement for disclosure pursuant to clause
(iv) hereof, it will make reasonable efforts to keep the Loan Parties informed
of such request or identification; provided that the each Loan Party
acknowledges that the Agent and each Lender may make disclosure as required or
requested by any Governmental Authority or representative thereof and that the
Agent and each Lender may be subject to review by Securitization Parties or
other regulatory agencies and may be required to provide to, or otherwise make
available for review by, the representatives of such parties or agencies any
such non-public information.

Section 12.21 Integration. This Agreement, together with the other
Loan Documents, reflects the entire understanding of the parties with respect to
the transactions contemplated hereby and shall not be contradicted or qualified
by any other agreement, oral or written, before the date hereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.

BORROWERS:

CLEAN HARBORS, INC.
ALTAIR DISPOSAL SERVICES, LLC
BATON ROUGE DISPOSAL, LLC
BRIDGEPORT DISPOSAL, LLC
CLEAN HARBORS ANDOVER, LLC
CLEAN HARBORS ANTIOCH, LLC
CLEAN HARBORS ARAGONITE, LLC
CLEAN HARBORS ARIZONA, LLC
CLEAN HARBORS BATON ROUGE, LLC
CLEAN HARBORS BDT, LLC
CLEAN HARBORS BUTTONWILLOW, LLC
CLEAN HARBORS CHATTANOOGA, LLC
CHEMICAL SALES, LLC
CLEAN HARBORS COFFEYVILLE, LLC
CLEAN HARBORS COLFAX, LLC
CLEAN HARBORS DEER PARK, L.P.
CLEAN HARBORS DEER TRAIL, LLC
CLEAN HARBORS DISPOSAL SERVICES, INC.
CLEAN HARBORS FINANCIAL SERVICES
COMPANY
CLEAN HARBORS FLORIDA, LLC
CLEAN HARBORS GRASSY MOUNTAIN, LLC
CLEAN HARBORS KANSAS, LLC
CLEAN HARBORS LAPORTE, L.P.
CLEAN HARBORS LAUREL, LLC
CLEAN HARBORS LONE MOUNTAIN, LLC
CLEAN HARBORS LONE STAR CORP.
CLEAN HARBORS LOS ANGELES, LLC
CLEAN HARBORS OF TEXAS, LLC
CLEAN HARBORS PECATONICA, LLC
CLEAN HARBORS PLAQUEMINE, LLC
CLEAN HARBORS PPM, LLC
CLEAN HARBORS REIDSVILLE, LLC
CLEAN HARBORS SAN JOSE, LLC
CLEAN HARBORS TENNESSEE, LLC
CLEAN HARBORS WESTMORLAND, LLC
CLEAN HARBORS WHITE CASTLE, LLC
CROWLEY DISPOSAL, LLC
DISPOSAL PROPERTIES, LLC
GSX DISPOSAL, LLC

HARBOR INDUSTRIAL SERVICES TEXAS,
L.P.
HILLIARD DISPOSAL, LLC
ROEBUCK DISPOSAL, LLC
SAWYER DISPOSAL SERVICES, LLC
TULSA DISPOSAL, LLC
CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.
CLEAN HARBORS OF BRAINTREE, INC.
CLEAN HARBORS OF NATICK, INC.
CLEAN HARBORS SERVICES, INC.
MURPHY'S WASTE OIL SERVICE, INC.
CLEAN HARBORS KINGSTON FACILITY
CORPORATION
CLEAN HARBORS OF CONNECTICUT, INC.
HARBOR MANAGEMENT CONSULTANTS, INC.
SPRING GROVE RESOURCE RECOVERY, INC.

By: /s/ Stephen H. Moynihan
------------------------------------------
Name: Stephen H. Moynihan
Title: Senior Vice President

GUARANTORS:

CLEAN HARBORS OF BALTIMORE, INC.

By: /s/ Stephen H. Moynihan
------------------------------------------
Name: Stephen H. Moynihan
Title: Senior Vice President

AGENT AND LENDER:

ABLECO FINANCE LLC

By: /s/ Kevin P. Genda
------------------------------------------
Name:  Kevin P. Genda
Title: SVP

LENDER:

OAK HILL SECURITIES FUND, L.P.

By: Oak Hill Securities GenPar, L.P., its
general partner

By: Oak Hill Securities MGP, Inc., its
general partner

By: /s/ William H. Bohmsack, Jr.
----------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

OAK HILL SECURITIES FUND II, L.P.

By:  Oak Hill Securities GenPar II, L.P.,
its general partner

By:  Oak Hill Securities MGP II, Inc.,
its general partner

By: /s/ William H. Bohmsack, Jr.
----------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

LERNER ENTERPRISES, L.P.:

By: Oak Hill Asset Management, Inc., as
advisor and attorney-in-fact to Lerner
Enterprises, L.P.

By: /s/ William H. Bohmsack, Jr.
----------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

P&PK FAMILY LTD. PARTNERSHIP:

By: Oak Hill Asset Management, Inc., as
advisor advisor and attorney-in-fact
to P&PK Family Ltd. Partnership

By: /s/ William H. Bohmsack, Jr.
----------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

CARDINAL INVESTMENT PARTNERS I, L.P.:

By: Oak Hill Advisors, L.P., as advisor
and attorney-in-fact to Cardinal
Investment Partners I, L.P.

By: Oak Hill Advisors MGP, Inc., its
general partner

By: /s/ William H. Bohmsack, Jr.
----------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Managing Director

Exhibit 4.26

Execution Copy

LETTER OF CREDIT FACILITY, REIMBURSEMENT AND SECURITY AGREEMENT

This Letter of Credit Facility, Reimbursement and Security Agreement (this
"Agreement") dated as of September 6, 2002 is made by and between Clean Harbors,
Inc., a Massachusetts corporation (the "Applicant"), and Fleet National Bank
(the "Bank").

1. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:

(a) "Ableco" means Ableco Finance LLC, as agent for the Lenders under
the Ableco Financing Agreement.

(b) "Ableco Financing Agreement" means the Financing Agreement dated as
of the date hereof among the Applicant, certain of the Applicant's subsidiaries,
the lenders from time to time party thereto and Ableco, as the same may be
amended, supplemented or otherwise modified from time to time.

(c) "Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (x) the Commitment Termination
Date, and (y) the date upon which the LC Commitment terminates pursuant to the
terms hereof.

(d) "Bank Charges" has the meaning ascribed thereto in Paragraph 13
below.

(e) "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed.

(f) "Collateral" means (i) the Collateral Account, and any and all cash,
deposits, money, checks, drafts, wire transfers, funds and other amounts from
time to time credited to or deposited or held in the Collateral Account, and
(ii) any and all interest, dividends, distributions and other income accruing on
or payable in respect of the Collateral, and (iii) any and all proceeds of the
foregoing.

(g) "Collateral Account" means the high yield savings account
#__________ (and any and all sub-accounts thereof, replacement accounts therefor
and other accounts relating thereto) maintained by the Applicant at the Bank for
the benefit of the Bank.

(h) "Collateral Amount" means the value of the Collateral held in or
credited to the Collateral Account.

(i) "Commitment Termination Date" means March 31, 2003.

(j) "Congress" means Congress Financial Corporation (New England), as
agent for the lenders under the Congress Credit Agreement.

(k) "Congress Credit Agreement" means the Loan and Security Agreement
dated as of September 6, 2002, by and among the Applicant and certain of its
subsidiaries, the lenders thereunder, and Congress, as the Revolving Credit
Agent, as the same may be replaced, renewed or refinanced from time to time.

(l) "Control Agreement" means the Deposit Account Control and
Intercreditor Agreement dated as of the date hereof among the Bank, the
Applicant and Ableco substantially in the form of Exhibit A hereto.

(m) "Credit Documents" means this Agreement, the Letters of Credit, the
Control Agreement, and any other instruments or documents delivered or to be
delivered from time to time pursuant to this Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
their respective terms.

(n) "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.

(o) "Effective Date" has the meaning ascribed thereto in Paragraph 19
below.

(p) "Event of Default" has the meaning ascribed thereto in Paragraph 21
below.

(q) "Fees" has the meaning ascribed thereto in Paragraph 13 below.

(r) "LC Commitment" means the commitment of the Bank to issue Letters of
Credit hereunder. The original maximum amount of the LC Commitment is equal to
$100,000,000.

(s) "LC Exposure" means, at any time, the sum of (x) 100% of the
aggregate undrawn amount of all outstanding standby and documentary Letters of
Credit issued by the Bank to or for the account of the Applicant at such time at
such time plus (y) the aggregate amount of all LC Disbursements made by the Bank
in respect of Letters of Credit issued by the Bank to or for the account of the
Pledgor that have not yet been reimbursed by or on behalf of the Applicant at
such time.

(t) "LC Disbursement" has the meaning ascribed thereto in Paragraph 5
below.

(u) "Letter of Credit" has the meaning ascribed thereto in Paragraph 2
below.

(v) "LIBOR" means the rate specified by the Bank from time to time as
the applicable London interbank offered rate ("LIBOR") for U.S. dollar deposits
in the London interbank market with a maturity of 30 days from the date of
deposit.

(w) "Material Adverse Effect" means, in respect of any entity, a
material adverse effect on such entity's business, properties or financial
condition.

2

(x) "Material Indebtedness" means the indebtedness of the Applicant to
Congress under the Congress Credit Agreement, the indebtedness of the Applicant
to Ableco under the Ableco Financing Agreement, and any other indebtedness of
the Applicant (other than the Letters of Credit) in an aggregate principal
amount exceeding $100,000.

(y) "Maturity Date" means September 9, 2005.

(z) "Obligations" means any and all of the Applicant's debts,
obligations and liabilities under the Credit Documents, whether direct or
indirect, liquidated or unliquidated, absolute or contingent, due or to become
due, now existing or hereafter arising, including, without limitation, the
Applicant's obligation to immediately reimburse the Bank for all LC
Disbursements, and all Fees, Bank Charges, interest (including interest that
accrues after the commencement of any proceeding in respect of any partial
liquidation or reorganization, or bankruptcy, insolvency, receivership or other
statutory or common law proceedings or arrangements involving the Applicant or
the readjustment of its liabilities or any assignment for the benefit of
creditors or any marshalling of the Applicant's assets or liabilities and other
costs and expenses as provided hereunder), expenses, indemnification
obligations, and other amounts from time to time owing from the Applicant to the
Bank.

2. Commitment to Issue Letters of Credit; Letters of Credit Outstanding at
Expiration of Availability Period. Subject to the terms and conditions of this
Agreement, the Bank agrees to issue for the account of the Applicant, from time
to time during the Availability Period, one or more standby or documentary
letters of credit (each, a "Letter of Credit") in an aggregate undrawn amount
that will not result in (a) the LC Exposure exceeding the LC Commitment at such
time or (b) (i) the product of (x) one hundred three percent (103%) multiplied
by (y) the LC Exposure exceeding (ii) the Collateral Amount at such time. Upon
expiration of the Availability Period, the Borrower shall have no right to
request the issuance of, and the Bank shall have no obligation to issue any
additional Letters of Credit hereunder. Any Letters of Credit outstanding at the
expiration of the Availability Period shall remain outstanding until the
respective stated expiration dates thereof; provided that such outstanding
Letters of Credit may be amended, renewed or extended subject to the terms and
conditions contained in this Agreement, and provided further that the face
amount of any such Letter of Credit may not be increased in connection with any
such amendment, renewal or extension, and no such Letter of Credit may be
amended, renewed or extended after the occurrence and during the continuance of
an Event of Default.

3. Requests for Issuance of Letters of Credit. To request the issuance of a
Letter of Credit (or the amendment, renewal, or extension of an outstanding
Letter of Credit) hereunder, the Applicant shall submit to FCC by electronic or
facsimile transmission (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a duly completed letter of credit application
on the Bank's standard form. Subject to the terms and conditions hereof, the
Bank shall issue (or amend, renew or extend) a Letter of Credit in the name of
the Applicant in conformity with such application. During the Availability
Period, a Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit,
the Applicant shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension, (a) the LC Exposure
shall not exceed the LC Commitment at such time and (b) (i) the product of (x)
one hundred three

3

percent (103%) multiplied by (y) the LC Exposure not exceed (ii) the Collateral
Amount at such time. After expiration of the Availability Period, a Letter of
Credit shall be amended, renewed or extended only if (and upon amendment,
renewal or extension of each Letter of Credit, the Applicant shall be deemed to
represent and warrant that), after giving effect to such amendment, renewal or
extension, the product of (A) one hundred three percent (103%) multiplied by (B)
the LC Exposure shall not exceed the Collateral Amount at such time. Each
request for a Letter of Credit hereunder shall be irrevocable. Each Letter of
Credit issued hereunder shall be in such form and shall contain such terms,
conditions and provisions as the Bank, in its reasonable discretion, may elect.

4. Expiration Date. Unless otherwise agreed by the Bank from time to time,
each Letter of Credit shall expire (without giving effect to any extension
thereof by reason of an interruption of business) at or prior to the close of
business on the earlier of (a) the date 365 days, in the case of standby Letters
of Credit, or 180 days, in the case of documentary Letters of Credit, after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension (including any "evergreen" or automatic renewal or extension) of any
standby Letter of Credit, 365 days after such renewal or extension) and (b) the
Maturity Date. No Letter of Credit may be extended beyond the Maturity Date.

5. Reimbursement. The Applicant agrees to immediately reimburse the Bank
for the full amount of any and all disbursements or payments related to each
Letter of Credit, including, without limitation, any and all drawings made
thereunder (each, an "LC Disbursement") by paying to the Bank an amount equal to
such LC Disbursement not later than (i) 1:00 p.m., Boston, Massachusetts time,
on the Business day that the Applicant receives notice of such LC Disbursement,
if such notice is received prior to 11:00 a.m., Boston, Massachusetts time, or
(ii) the Business day immediately following the day that the Applicant receives
such notice, if such notice is not received prior to such time. To the extent
that sufficient funds are available in the Collateral Account at the time any LC
Disbursement becomes due and payable, payment of the Applicant's reimbursement
obligations in respect of such LC Disbursement shall be effected though an
automatic withdrawal of an amount equal to such LC Disbursement from the
Collateral Account, and the Applicant hereby irrevocably authorizes and directs
the Bank to take any and all action necessary to effectuate such withdrawal. If,
when applied to any LC Disbursement, the funds in the Collateral Account prove
insufficient to satisfy in full the Applicant's reimbursement obligations in
respect of such LC Disbursement, the Applicant shall immediately upon demand pay
to the Bank an amount equal to the amount by which such LC Disbursement exceeded
the amount available in the Collateral Account; provided that such obligation
shall become effective immediately, without demand or other notice of any kind,
if an Event of Default described in clauses (e) or (f) of Paragraph 21 below
shall have occurred and be continuing. Any LC Disbursement remaining unpaid
after demand therefor (or during continuance of an Event of Default described in
clauses (e) or (f) of Paragraph 21 below) shall accrue interest, from and
including the date on which such LC Disbursement arose through, but excluding,
the date on which such LC Disbursement is paid in full in cash, at a rate per
annum equal to LIBOR plus one half of one percent (.50%). The Applicant hereby
irrevocably waives the right to direct the application of any and all payments
in respect of LC Disbursements received from or on behalf of the Applicant, and
the Applicant hereby irrevocably agrees that the Bank shall have the continuing
exclusive right to apply any and all such payments as the Bank may deem
advisable.

4

6. Obligations Absolute. The obligation of the Applicant to reimburse the
Bank for payments made with respect to any Letter of Credit shall be absolute,
unconditional and irrevocable, without necessity of presentment, demand,
protest, or other formalities. Such obligations of the Applicant shall be paid
strictly in accordance with the terms hereof under all circumstances, including
the following circumstances:

(a) any lack of validity of enforceability of this Agreement, any Letter
of Credit, any other Credit Document or any term or provision contained in any
thereof;

(b) the existence of any claim, set-off, defense or other right which
Applicant may at any time have against a beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such transferee may be
acting), the Bank or any other person, whether in connection with this
Agreement, any Letter of Credit, or any transaction in connection with any
Letter of Credit (including any underlying transaction between the Applicant and
the beneficiary for which the Letter of Credit was procured);

(c) any draft, demand, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;

(d) payment by the Bank under any Letter of Credit against presentation
of a demand, draft or certificate or other document which substantially
complies, but does not strictly comply, with the terms of such Letter of Credit;

(e) the fact that an Event of Default shall have occurred and be
continuing; or

(f) any other event, circumstances or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Paragraph 6, constitute a legal or equitable discharge of the Applicant's
obligations hereunder.

7. Applicant's Assumption of Risk. As between the Bank and the Applicant,
the Applicant assumes all risks relating to the acts and omissions of, or the
misuse of any Letter of Credit by, the beneficiaries of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest extent
permitted by law, the Bank shall not be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if such document shall prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) for the validity, efficacy
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights and benefits thereunder or
the proceeds thereof, in whole or in part; (c) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; (d) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (e) for errors in
interpretation of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any
Letter of Credit or of the proceeds thereof; (g) for the use of the proceeds of
any drawing under any Letter of Credit; and (h) for any consequences arising
from causes beyond the control of the Bank. None of the above shall

5

affect, impair or prevent the vesting of any of the rights or powers of the Bank
hereunder. Nothing contained herein shall be deemed to limit any waiver,
covenants or indemnities made by the Applicant in favor of the Bank in any
letter of credit application, reimbursement agreement or similar document,
instrument or agreement between the Applicant and the Bank.

8. Indemnity Relating to Letters of Credit. In addition to any and all
amounts payable as elsewhere provided in this Agreement, the Applicant hereby
agrees to pay and to protect, indemnify, and the Bank harmless from and against
any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees and allocated costs of internal
counsel) which either of such parties may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance (or amendment, renewal or
extension) of any Letter of Credit or the use of the proceeds thereof, or (B)
the failure of the Bank to honor a demand for payment under any Letter of Credit
as a result of any act or omission, whether rightful or wrongful, or as a result
of any present or future de jure or de facto government, in each case other than
to the extent any such claims, demand, liability, damages, losses, costs charges
or expenses are solely the result of the gross negligence or willful misconduct
of the Bank (as determined by a court of competent jurisdiction by final and
non-appealable judgment).

9. Governing Law, Etc., of Letters of Credit. All Letters of Credit issued
hereunder shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No. 500
("UCP") (and any subsequent amendments or revisions thereof) or the
International Standby Practices ("ISP") International Chamber of Commerce,
Publication No. 590 (and any subsequent amendments and revisions thereof), as
applicable, and as to matters not governed by UCP or ISP, shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts
and applicable U.S. Federal law.

10. Expiration of Commitment. Unless previously terminated, the LC
Commitment shall expire at the close of business on the Commitment Termination
Date.

11. Permitted Uses. The Letters of Credit will be used only for general
corporate and working capital purposes of the Applicant.

12. Security.

(a) As security for the full payment, performance and discharge of the
Obligations, the Applicant hereby delivers and pledges to the Bank and grants to
the Bank a first priority lien upon and continuing security interest in the
Collateral. To the extent the Bank receives payment on account of the
Obligations, which payment is thereafter set aside or required to be repaid by
the Bank in whole or in part, then, to the extent of any sum not finally
retained by the Bank (regardless of whether such sum is recovered from the Bank
by the Applicant, or the Applicant's estate or trustee or any party acting for,
on behalf of or through the Applicant as the Applicant's representative), the
Obligations shall be reinstated and the lien and security interest created
hereby shall remain in full force and effect (or be reinstated) until the
Applicant shall have made payment to the Bank, which payment shall be due on
demand.

6

(b) Except for the security interest created hereunder (and the
subordinated second priority security interest granted by the Applicant in favor
of Ableco), the Applicant is the owner of the Collateral free from any lien or
security interest. The Applicant agrees not to grant any lien on or security
interest in, or permit the existence of any lien on or security interest in, the
Collateral Account or any of the other Collateral (except in favor of the Bank,
and except for the subordinated second priority security interest in favor of
Ableco).

(c) The Applicant will promptly execute and deliver to the Bank such
financing statements, certificates and other documents or instruments as may be
necessary to enable the Bank to perfect, protect or from time to time renew the
security interest granted hereby, including, without limitation, such financing
statements, control agreements, certificates and other documents as may be
necessary to perfect a security interest in any additional Collateral hereafter
acquired by the Applicant or in any replacements or proceeds thereof. The
Applicant authorizes the Bank to file and refile (at the Applicant's expense)
such financing statements, continuation statements and other documents
(including, without limitation, this Agreement) in such offices as the Bank may
reasonably deem necessary or appropriate in order to perfect and preserve the
rights and interests granted to the Bank hereunder, and agrees that it will join
with the Bank in executing any such financing statements, continuation
statements or other documents as the Bank may reasonably deem necessary. The
Applicant authorizes and appoints the Bank, in case of need, to execute such
financing statements, assignments, certificates and other documents pertaining
to the Bank's security interest in the Collateral in its stead if the Applicant
fails to so execute such documents, with full power of substitution, as the
Applicant's attorney in fact.

(d) Provided no Default or Event of Default shall have occurred or be
continuing or shall arise therefrom, unless Ableco has notified the Bank that an
event of default has occurred and is continuing under the Ableco Financing
Agreement, on the fifteenth day of each calendar month (or, if such day is not a
Business Day, on the next succeeding Business Day), commencing on October 15,
2002, the Bank shall withdraw from the Collateral Account the aggregate amount
of interest that has accrued on the funds on deposit in the Collateral Account
during the prior month and shall transfer such interest to the Applicant in
accordance with the wire instructions of the Applicant set forth on Schedule I
hereto (whereupon such interest shall no longer be subject to the security
interest granted to the Bank hereunder). Upon any such disbursement, the
Applicant shall be deemed to have represented to the Bank that both immediately
before and immediately after giving effect to such disbursement, no Default or
Event of Default shall have occurred and be continuing.

(e) Provided no Default or Event of Default shall have occurred or be
continuing or shall arise therefrom, from time to time (but not more frequently
than once in any calendar month) after the earlier of (i) 3 Business Days after
the last day of the Availability Period and (ii ) the Commitment Termination
Date, upon the written request of Ableco, the Bank shall withdraw from the
Collateral Account the amount, if any, by which (x) the aggregate amount of
funds on deposit in the Collateral Account (exclusive of interest amounts
referred to in clause (d) above) exceeds (y) the product of (A) one hundred
three percent (103%) multiplied by (B) the LC Exposure at such time, and shall
transfer such excess amount to Ableco in accordance with the wire transfer
instructions of Ableco set forth on Schedule I hereto to be applied by Ableco
against the Applicant's obligations to Ableco (whereupon such excess amount

7

shall no longer be subject to the security interest granted to the Bank
hereunder). Upon any such disbursement, the Applicant shall be deemed to have
represented to the Bank both immediately before and immediately after giving
effect to such disbursement no Default or Event of Default shall have occurred
and be continuing.

(f) The Applicant shall have no right to request or receive
disbursements from the Collateral Account, except as provided in clauses (d) and
(e) of this Paragraph 12. The Applicant hereby irrevocably authorizes and
directs the Bank to make the transfers described in clauses (d) and (e) of this
Paragraph 12, and hereby agrees that in no event shall the Bank be liable or
obligated to the Applicant for any transfer made in accordance with such
clauses, or for any failure by the Bank to make any such transfer if the Bank,
in its reasonable determination, believes that a Default or Event of Default has
occurred and is continuing under this Agreement or the Credit Documents, or that
such transfer may expose the Bank to any obligation, liability or expense (other
than any administrative costs and expenses related to or incurred in connection
with the transfers described in clauses (d) and (e) of this Paragraph 12).

(g) All items of income, if any, including dividends, interest and other
income, gain, expense and loss on the Collateral shall be reported by the Bank
in the name and tax identification of the Applicant. (h) The Applicant
acknowledges and agrees that, regardless of the adequacy of the Collateral or
any other security for the Obligations, the Bank may withdraw from the
Collateral Account at any time and from time to time (whether before or after
the occurrence of an Event of Default) and apply such funds as may be necessary
(i) to reimburse the Bank for any drawing made on any Letter of Credit, and (ii)
to cover any fees, costs, expenses (including reasonable attorney's fees) and
other amounts for which the Applicant may from time to time be liable to the
Bank.

(i) In addition to the Bank's rights under the foregoing clause (h),
upon the occurrence and during the continuance of any Event of Default, the Bank
shall have the right at any time and from time to time without the necessity of
making demand upon or giving notice to the Applicant (i) to withdraw funds from
the Collateral Account and apply such funds to the repayment of the then unpaid
amount of all Obligations, (ii) to set-off the funds in the Collateral Account
and any deposits or other sums at any time credited thereto against the
Obligations, and (iii) to exercise any and all rights and remedies of a secured
party under the Uniform Commercial Code (as in effect in Massachusetts),
including, without limitation, the rights of a secured party under Section 9-607
of the Uniform Commercial Code. The Applicant hereby waives presentment, demand,
notice, protest and all other demands and notices in connection with this
Agreement or the enforcement of the Bank's rights hereunder or in connection
with any of the Obligations.

(j) In the event that the Bank elects to exercise any of its remedies
with respect to the Collateral following an Event of Default, the Bank shall
apply the proceeds of the Collateral as follows: (i) first, to the payment of
any and all fees, costs and expenses incurred by the Bank in exercising its
rights (including, without limitation, reasonable attorney's fees), and (ii)
second, to the repayment of any and all Obligations then due and payable, and
(iii) third, to the extent any Obligations have yet to mature or become due and
payable at the time the Bank

8

exercises its rights with respect to the Collateral, the Bank shall hold such
proceeds as collateral for, and shall apply such proceeds to, the repayment of
any remaining Obligations as and when the same shall become due and payable. In
the event the proceeds of the Collateral are insufficient to pay all of the
Obligations in full, the Applicant shall be liable for the deficiency, together
with interest thereon at a rate per annum equal to LIBOR plus one half of one
percent (.50%), and the cost and expenses of collection of such deficiency,
including (to the extent permitted by law), without limitation, reasonable
attorneys' fees, expenses and disbursements.

(k) If, following the repayment of all of the Applicant's Obligations,
the termination and/or expiration of all Letters of Credit issued hereunder, and
the termination of the LC Commitment, there shall remain any surplus Collateral
in the Collateral Account, such surplus shall be paid to the Applicant (or to
any person or party lawfully entitled thereto (including, if applicable, Ableco
or any other subordinated creditor of the Applicant). In exercising any rights
with respect to the Collateral, so long as the Bank acts in a commercially
reasonable manner, the Bank may proceed in any manner which the Bank, in its
sole discretion, shall elect, without in any way incurring any liability or
obligations to the Applicant.

13. Fees and Charges. The Applicant agrees to pay the Bank's customary
commissions, discounts, interest, charges, fees or expenses (collectively, "Bank
Charges") in connection with the issuance, amendment, extension or renewal of
any Letter of Credit and any drawings thereunder. Bank Charges shall be payable
monthly in arrears, on the first day of each month and on the Maturity Date. The
Applicant further agrees to pay to the Bank, as compensation for issuing the
Letters of Credit hereunder and for all services which the Bank may render
hereunder, a per annum letter of credit fee equal in amount to three tenths of
one percent (.30%) multiplied by the face amount of all outstanding Letters of
Credit ("Fees"). Such Fees shall be payable quarterly in advance, on the first
day of each calendar quarter and on the Maturity Date. Fees and Bank Charges
paid shall not be refundable under any circumstances, absent manifest error in
the determination thereof. Bank Charges and Fees which are not paid when due
shall accrue interest at a rate per annum equal to LIBOR plus one half of one
percent (.50%) from the due date through the date of payment and shall be
payable on demand. In the event that any Bank Charges and Fees are not paid when
due, the Bank may, at its own election, effect payment of such Bank Charges
and/or Fees and any interest due thereon by withdrawing an amount equal thereto
from the Collateral Account, and the Applicant hereby irrevocably authorizes and
directs the Bank to take any and all action necessary to effectuate such
withdrawal.

14. General Indemnification. The Applicant agrees to pay all costs and
expenses (including the reasonable fees and disbursements of counsel) incurred
by the Bank in connection with the creation and enforcement of this Agreement
and the other Credit Documents and the collection of all amounts payable
hereunder and thereunder. All costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) incurred by the Bank (a) in all
efforts made to enforce payment of any of the Obligations or effect collection
of any Collateral, (b) in connection with the entering into, any modification,
amendment, administration and enforcement of this Agreement or any other Credit
Document, in connection with any issuance, amendment, extension or renewal of
any Letter of Credit issued hereunder, in connection with any consents or
waivers hereunder and in connection with any related agreements, documents and
instruments, (c) in instituting, maintaining, preserving, enforcing and
foreclosing on the

9

Bank's security interest in or lien on any of the Collateral, whether through
judicial proceedings or otherwise, (d) in defending or prosecuting any actions
or proceedings arising out of or relating to the transactions of the Bank with
the Applicant, and (e) in connection with any advice given to the Bank with
respect to its rights and obligations under this Agreement, the Letters of
Credit or any other Credit Documents, shall all be part of the Obligations
secured by the Collateral. The Applicant shall indemnify the Bank and its
officers, directors, affiliates, employees and agents (which indemnity shall
survive the termination of this Agreement) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, reasonable fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against any such indemnified party in any
litigation, proceeding or investigation (including any limitation, any
proceeding or investigation arising out of any environmental laws) instituted or
conducted by any governmental agency or instrumentality or any other person or
entity in connection with any Letter of Credit, or any transaction contemplated
by, or referred to in, or any matter related to, this Agreement or any other
Credit Document, whether or not the Bank is a party thereto, except to the
extent that any of the foregoing arises out of the gross negligence or willful
misconduct of such indemnified party (as determined by a court of competent
jurisdiction by final and non-appealable judgment).

15. Taxes. Each payment hereunder shall be made free and clear of, and
without deduction or withholding for, any taxes, duties, levies, imposts or
other charges of a similar nature other than taxes on overall net income or
receipts and franchise taxes (imposed in lieu of net income taxes) ("Taxes"),
except as required by law, and in the event that any deduction or withholding
for Taxes shall be so required, the Applicant shall pay such additional amounts
as may be necessary so that the net amount of such payment, after reduction by
the amount of such Taxes, is equal to the amount that the Applicant is obligated
to pay absent the requirement to deduct such Taxes.

16. Representations and Warranties. The Applicant hereby represents and
warrants to the Bank that: (a) it is a corporation duly incorporated and validly
existing under the laws of the Commonwealth of Massachusetts; (b) its execution
, delivery and performance of this Agreement are within its corporate powers,
have been duly authorized by all necessary corporate action and do not
contravene any material law, regulation or order or its Articles of Organization
or By-Laws or any material agreement binding upon it or its assets (including,
without limitation any agreement relating to Material Indebtedness); (c) this
Agreement is its legal, valid and binding obligation enforceable against it in
accordance with its terms; (d) no authorization, consent, approval or license
from, or filing or registration with any court, governmental authority or public
office is necessary in connection with the execution, delivery and performance
of this Agreement, except such as have been obtained and are in full force and
effect; and (e) there are no pending or threatened actions, suits or proceedings
against or affecting it before any arbitrator, court commission or other
governmental authority, which, individually or in the aggregate would, if
adversely determined, have a Material Adverse Effect on it.

17. Solvency. The Applicant further represents and warrants to the Bank
that as of the Effective Date and after giving effect to the issuance of the
initial Letters of Credit hereunder: (a) the aggregate value of all properties
of the Applicant at their present fair saleable value on a going concern basis
(i.e., the amount that may be realized within a reasonable time,

10

considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that could be
obtained for such properties within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions), exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
the Applicant; (b) the Applicant does not and will not, on a consolidated basis,
have an unreasonably small capital with which to conduct the Applicant's
business operations as heretofore conducted; and (c) the Applicant has and will
continue to have in the foreseeable future, on a consolidated basis, sufficient
cash flow to enable the Applicant to pay the Applicant's debts as they mature.

18. Covenants. The Applicant covenants and agrees with the Bank that: (a)
the Applicant will maintain cash or other Collateral at all times in the
Collateral Account in an amount equal to or greater than the product of (i) one
hundred three percent (103%) multiplied by (ii) the LC Exposure, and that, if at
any time the product of (x) one hundred three percent (103%) multiplied by (y)
the LC Exposure exceeds the Collateral Amount, the Applicant will immediately
upon demand by the Bank, deposit or cause to be deposited in the Collateral
Account an amount of cash at least equal to the amount of such excess; (b) the
Applicant will deliver to the Bank, as soon as available and in any event within
30 days (or, for the months of September through December of 2002, 45 days)
after the end of each month, (i) consolidated statements of the Applicant's
operations and cash flows for such month and for the period from the beginning
of the respective fiscal year to the end of such month, and the related
consolidated balance sheets of the Applicant as at the end of such period,
setting forth in each case in comparative form the corresponding consolidated
figures for the corresponding period in the preceding fiscal year, and (ii) a
certificate of a financial officer of the Applicant, which certificate shall
state that said consolidated financial statements referred to in the preceding
clause (i) fairly present in all material respects the financial condition and
results of operations of the Applicant, in each case in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments and the omission of footnotes); (c) the Applicant
will deliver to the Bank, promptly following any request therefor, such other
information regarding the Applicant's operations, business affairs and financial
condition, or compliance with the terms of this Agreement, as the Bank may
reasonably request; and (d) the Applicant will deliver to the Bank prompt
written notice of (i) the occurrence of any Default or Event of Default, (ii)
the occurrence of any Default or Event of Default under the Ableco Financing
Agreement and/or under the Congress Credit Agreement, and (iii) any development
that results in, or could reasonably be expected to result in, a Material
Adverse Effect on the Applicant.

19. Conditions to Effectiveness. The obligation of the Bank to issue the
initial Letter of Credit hereunder, shall not become effective until the date
(the "Effective Date") on which each of the following conditions is satisfied
(or waived in accordance with Paragraph 27 below):

(a) the Bank shall have received from each party hereto (i) a
counterpart of this Agreement executed by such party or (ii) written evidence
satisfactory to the Bank that such party has executed a counterpart hereof;

(b) the Applicant shall have delivered or caused to be delivered to the
Bank for deposit in the Collateral Account, cash in an amount not less than
$41,000,000;

11

(c) the Bank shall have received such documents and certificates as the
Bank or its special counsel, Palmer & Dodge LLP ("Special Counsel") may
reasonably request relating to the Applicant's organization, existence and good
standing, the authorization of this Agreement and requests for Letters of Credit
to be issued hereunder, and any other legal matters relating to the Applicant or
this Agreement, the Letters of Credit or the other Credit Documents, all in form
and substance reasonably satisfactory to the Bank and Special Counsel;

(d) the Bank shall have received evidence satisfactory to the Bank and
Special Counsel that the Applicant shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings that may be necessary or, in the Bank's opinion or
the opinion of Special Counsel, desirable in order to create in the Bank's
favor, and for the Bank's benefit, a valid and perfected first priority security
interest in the Collateral;

(e) the Bank shall have received from each party thereto (i) a
counterpart of a Control Agreement signed on behalf of such party, or (ii)
written evidence satisfactory to the Bank that such party has signed a
counterpart thereof;

(f) the Bank shall have received a favorable written opinion (addressed
to the Bank and dated the Effective Date) of Davis, Malm & D'Agostine, P.C.,
counsel to the Applicant, substantially in the form of Exhibit B annexed hereto
and covering such matters relating to the Applicant and this Agreement as the
Bank shall reasonably request (and the Applicant hereby requests such counsel to
deliver such opinion);

(g) the Bank shall have received a certificate, dated as of the
Effective Date and signed by a financial officer of the Applicant, confirming
compliance with the conditions set forth in clauses (a) and (b) of Paragraph 20
below;

(h) the Bank shall have received from the Applicant certified copies of
the Congress Credit Agreement and the Ableco Financing Agreement;

(i) there shall have occurred no material adverse change (in the Bank's
reasonable opinion) in the Applicant's business, properties or financial
condition;

(j) the Bank shall have received all fees and other amounts due and
payable to the Bank and Special Counsel at or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Applicant hereunder; and

(k) the Bank shall have received all such other documents as the Bank or
Special Counsel shall have reasonably requested (including, without limitation,
any corporate authority, indemnification or letter of credit application
required by the Bank in connection with the issuance of Letters of Credit or the
opening or maintenance of the Collateral Account and the investment of funds
therein) and the same shall be reasonably satisfactory to each of the Bank and
Special Counsel.

12

20. Conditions to Each Letter of Credit. The obligation of the Bank to
issue, amend, renew or extend any Letter of Credit hereunder is subject in each
case to the satisfaction of the following conditions:

(a) The Applicant's representations and warranties set forth in this
Agreement shall be true and correct in all material respects on and as of the
date of issuance, amendment, renewal or extension of such Letter of Credit, both
before and after giving effect thereto (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, such
representation or warranty shall be or have been true and correct as of such
specific date).

(b) On and as of the date of issuance, amendment, renewal or extension
of such Letter of Credit, both before and after giving effect thereto, no
Default or Event of Default under this Agreement shall have occurred and be
continuing.

(c) In the case of the issuance, amendment, renewal or extension of any
Letter of Credit during the Availability Period, after giving effect to such
issuance, amendment, renewal or extension, (i) the LC Exposure shall not exceed
the LC Commitment at such time and (ii) (x) the product of (A) one hundred three
percent (103%) multiplied by (B) the LC Exposure shall not exceed (y) the
Collateral Amount at such time.

(d) In the case of the amendment, renewal or extension of any Letter of
Credit after the Availability Period, after giving effect to such amendment,
renewal or extension, the product of (i) one hundred three percent (103%)
multiplied by (ii) the LC Exposure shall not exceed the Collateral Amount at
such time.

21. Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:

(a) the Applicant (i) fails to make any payment of amounts owing in
respect of any LC Disbursement as the same become due, (ii) fails to pay any
interest, Bank Charges or Fees due hereunder within three (3) days following
demand by the Bank therefor (which may be made by facsimile or by e-mail), or
(iii) fails to reimburse or make payment to the Bank for any other cost or
expense reimbursable or payable hereunder within five (5) days following demand
by the Bank for such reimbursement or payment (which demand may be made by
facsimile or by e-mail);

(b) any representation or warranty in this Agreement, any other Credit
Document, or any written statement, report, financial statement, document,
opinion, or certificate made or delivered to the Bank by the Applicant is untrue
or incorrect in any material respect as of the date when made or deemed made;

(c) the Applicant fails or neglects to perform, keep or observe any
covenant provision or agreement contained in clauses (a),(b) or (d) of Paragraph
18;

(d) the Applicant fails or neglects to perform, keep or observe any
covenant, provision or agreement contained in this Agreement (other than any
provision embodied in or covered by clauses (a), (b), or (c) of this Paragraph
21) and the same shall remain unremedied for

13

thirty (30) consecutive days after the earlier of (i) actual knowledge thereof
by any officer of the Applicant or (y) notice thereof from the Bank to the
Applicant;

(e) (i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (x) liquidation, reorganization or other relief
in respect of the Applicant or any of the Applicant's subsidiaries or any of
their respective debts, or of any substantial part of their respective assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (y) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Applicant or any subsidiary of the Applicant or for any substantial part of
their respective assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered, or (ii) the Collateral shall be
attached, seized, levied upon or subjected to a writ or distress warrant, or
come within the possession of any receiver, trustee, custodian or assignee for
the benefit of the creditors of the Applicant or any subsidiary of the
Applicant;

(f) the Applicant or any subsidiary thereof shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (d) of this Paragraph, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for itself or any substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) take any action for the purpose of effecting
any of the foregoing or (vii) admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due;

(g) the Applicant shall fail to make any payment (whether of
principal, interest or otherwise and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable, after
giving effect to any grace period with respect thereto, or any event or
condition shall occur that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;

(h) any of the following shall occur: (i) the liens created hereunder
or under any document or instrument executed in connection herewith shall at any
time (other than by reason of the relinquishment by the Bank of such lien) cease
in any material respect to constitute valid and perfected liens on the
Collateral intended to be covered thereby, (ii) the enforceability of any Credit
Document shall be contested by the Applicant; (iii) Ableco shall assert any
claim against the Bank or contest the validity or priority of the Bank's lien on
the Collateral; or (iv) any default or event of default shall occur under the
Congress Credit Agreement or the Ableco Financing Agreement; or

14

(i) a final judgment or judgments for the payment of money (i) in
excess of $250,000 in the aggregate (exclusive of judgment amounts fully covered
by insurance where the insurer has admitted liability in respect of such
judgment) or (i) in excess of $1,000,000 in the aggregate (regardless of
insurance coverage), shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against the Applicant or any
subsidiary thereof and the same shall not be discharged (or provision shall not
be made for such discharge), bonded, or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the Applicant or
such subsidiary shall not, within said period of 60 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.

If any Event of Default shall have occurred and be continuing, the Bank may (i)
terminate the LC Commitment hereunder, and thereupon the LC Commitment shall
terminate immediately, (ii) declare any or all of the Obligations to be
immediately due and payable and the same shall become due and payable
immediately without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Applicant; (iii) exercise any and all
rights and remedies provided to the Bank under this Agreement or any other
Credit Document; and/or (iv) exercise any and all rights and remedies available
to the Bank under the Uniform Commercial Code and/or at law or in equity,
provided, however, that upon the occurrence of any Event of Default specified in
clauses (e) and (f) above, all of the Obligations shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Applicant. All rights and remedies
afforded to the Bank by reason of this Agreement are separate and cumulative,
and the exercise or failure to exercise any such right or remedy shall not be
deemed to exclude, limit or prejudice the exercise of any other right or remedy
available to the Bank.

22.  General Right of Set-Off. If a Default or Event of Default shall have
occurred and be continuing, the Bank is hereby authorized at any time and from
time to time, without notice to or consent by the Applicant, to the fullest
extent permitted by law, to set off and apply any and all deposits (whether
general or special, time or demand, provisional or final, and including, without
limitation, the Collateral in the Collateral Account) at any time held and other
indebtedness at any time owing by the Bank, as the case may be, to or for the
credit or the account of the Applicant against any of and all the Obligations,
irrespective of whether or not the Bank shall have made any demand under this
Agreement or any other Credit Document and although such Obligations may be
unmatured. The rights of the Bank under this Paragraph 22 are in addition to any
other rights and remedies (including other rights of setoff) available to the
Bank under this Agreement, at law or in equity.

23.  Notices. Any notice or communication required to be delivered under
this Agreement or any other Credit Document shall be in writing and, unless
otherwise provided herein, shall be sent by registered or certified U.S. mail
(postage prepaid and return receipt requested), by a reliable hand-delivery or
overnight courier service or by telecopier, to be confirmed immediately by
sending the original documentation by registered or certified U.S. mail or by a
reliable hand-delivery or overnight courier service. All notices shall be
delivered or otherwise conveyed to the parties at their respective addresses and
telephone and telecopier members as follows:

15

(a)  if to Applicant, to Clean Harbors, Inc., 1501 Washington Street,
Braintree, Massachusetts 02185-9048, Attention: Stephen Moynihan (Fax no. (781)
849-4472), with a copy to Davis, Malm & D'Agostine, P.C., One Boston Place,
37/th/ Floor, Boston, Massachusetts 02108, Attention: C. Michael Malm, Esq. (Fax
no. (617) 367-2500);

(b)  if to the Bank, to Fleet National Bank, c/o Fleet Capital
Corporation, One Federal Street, Mail Stop: MA DE 10307X, Boston, Massachusetts
02110, Attention: Mark Schafer (Fax no. (617) 654-1167), with copies to Fleet
National Bank, 400 Galleria Parkway, Suite 1950, Atlanta, Georgia 30339,
Attention: Account Administration Manager (Fax no. (770) 859-2480), and Palmer &
Dodge LLP, 111 Huntington Avenue, Boston, Massachusetts 02199, Attention: David
Ruediger, Esq. (Fax no. (617) 227-4420); or

(c)  to such other addresses and telephone and facsimile numbers as
any party shall designate to the other parties in writing.

24.  Assignment. The rights of the Bank hereunder, shall inure to the
benefit of their respective successors and assigns. The Bank may, without
consent of the Applicant, assign this Agreement in whole or in part or grant
participations in their respective interests hereunder. The Applicant may not
assign the Applicant's interests hereunder without the prior written consent of
the Bank.

25.  LC Account. The Bank shall maintain an account (the "LC Account") on
the Bank's books to record (a) all Letters of Credit, (b) LC Disbursements, and
(c) all payments made by the Applicant. All entries in the LC Account shall be
made in accordance with the Bank's customary accounting practices as in effect
from time to time. The entries in the LC Account, as recorded on the Bank's most
recent printout or other written statement, shall be presumptive evidence of the
amounts due and owing or outstanding to the Bank by the Applicant; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect the Applicant's duty to pay LC Disbursements.

26.  GOVERNING LAW; WAIVER OF JURY TRIAL; JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS. EACH OF THE UNDERSIGNED WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE THIS PROVISIONS OF THIS
AGREEMENT OR ANY RELATED DOCUMENT OR AGREEMENT. THE APPLICANT SUBMITS, IN ANY
LEGAL ACTION RELATED HERETO, TO THE NONEXCLUSIVE JURISDICTION OF STATE AND
FEDERAL COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES ANY
OBJECTION THE APPLICANT MAY HAVE AS TO THE BRINGING OR MAINTAINING OF ANY SUCH
ACTION WITH ANY SUCH COURT.

27.  Amendment; Waiver. Any provision of this Agreement or any other
document related hereto may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Applicant and the Bank. Neither any
delay nor any omission by the Bank to exercise any right, power or remedy shall
operate as a waiver thereof, nor shall a single or partial

16

exercise thereof preclude any other or further exercise thereof or any exercise
of any other right, power or remedy. This Agreement cannot be changed or
terminated orally.

28. Entire Agreement; Conflicts. This Agreement contains the parties' sole
and entire understanding and agreement with respect to its entire subject
matter, and all prior negotiations, discussions, commitments, agreements and
understandings heretofore had between the parties with respect thereto are
hereby merged herein. In the event of any conflict between the terms hereof and
the terms contained in any application for a Letter of Credit, the terms hereof
shall govern.

29. Counterparts. This Agreement may be executed in two or more
counterparts which, when taken together, shall constitute one complete document.
Any party to this Agreement may execute this Agreement by facsimile
transmission.

[SIGNATURE PAGE FOLLOWS]

17

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.

CLEAN HARBORS, INC.

By: /s/ Stephen Moynihan
---------------------------
Name:  Stephen Moynihan
Title: Senior Vice President

FLEET NATIONAL BANK

By: /s/ Mark B. Schafer
---------------------------
Name:  Mark B. Schafer
Title: Vice President

Exhibit 4.27

EXECUTION COPY

DEPOSIT ACCOUNT CONTROL AND INTERCREDITOR AGREEMENT

This DEPOSIT ACCOUNT CONTROL AND INTERCREDITOR AGREEMENT (this "Agreement")
dated as of September 6, 2002 is made by and among CLEAN HARBORS, INC., a
Massachusetts corporation (the "Pledgor"), FLEET NATIONAL BANK, in its
capacities as issuer of letters of credit under the Fleet Facility Agreement
referred to below and as depositary bank ("Fleet") and ABLECO FINANCE LLC, in
its capacity as agent for the lenders under the Ableco Financing Agreement
referred to below ("Ableco").

WHEREAS, the Pledgor and Fleet are parties to that certain Letter of Credit
Facility, Reimbursement and Security Agreement dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Fleet
Facility Agreement") between Pledgor and Fleet, pursuant to which, among other
things, (i) Fleet has agreed, subject to the terms and conditions contained
therein, to issue certain letters of credit for the account of the Pledgor, (ii)
the Pledgor has deposited cash into the Collateral Account (as defined below),
and (iii) the Pledgor has pledged, assigned and granted to Fleet a present and
continuing senior first priority lien on and security interest in and to the
Collateral Account and in all funds and other amounts from time to time credited
to or deposited or held in the Collateral Account as security for the
obligations of the Pledgor to Fleet; and

WHEREAS, the Pledgor, certain of the Pledgor's subsidiaries (the
"Borrowers"), the lenders party thereto from time to time (the "Lenders") and
Ableco are parties to that certain Financing Agreement dated as of the date
hereof (as amended, supplemented or otherwise modified from time to time, the
"Ableco Financing Agreement"), pursuant to which, among other things, the
Lenders have agreed, subject to the terms and conditions contained therein, to
make certain term loans and extend certain other credit accommodations to the
Borrowers, and the Pledgor has pledged, assigned and granted to Ableco, for the
benefit of the Lenders, a subordinated second priority lien on and security
interest in the Collateral Account and in the funds and other amounts from time
to time deposited or held in the Collateral Account as security for the
obligations of the Pledgor to Ableco and the Lenders; and

WHEREAS, the parties wish to set forth the relative priorities of the
interests of Fleet and Ableco in the Collateral Account and in the funds and
other amounts from time to time deposited or held in the Collateral Account;

NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.   Definitions. For purposes hereof the following terms have the following
definitions:

(a)  "Ableco Documents" shall mean the Ableco Financing Agreement, the
other Loan Documents (as such term is defined in the Ableco Financing
Agreement), all notes issued in connection with the Ableco Financing Agreement,
and any and all other agreements, instruments or documents delivered or to be
delivered by the Pledgor, the other Borrowers, or any of their affiliates to
Ableco and the Lenders in connection therewith, in each case, as the same may be
supplemented and amended from time to time.

(b)  "Ableco Obligations" shall mean any and all indebtedness, obligations
and liabilities of the Pledgor to Ableco and the Lenders under the Ableco
Documents, whether now existing or hereafter arising, whether direct or
indirect, absolute or contingent, due or to become due, including without
limitation, the Pledgor's obligation to repay the extensions of credit under the
Ableco Financing Agreement, and all interest, fees, expenses, indemnification
obligations and other amounts from time to time owing from the Pledgor to
Ableco, including, without limitation, interest which accrues after the
commencement of any proceeding in respect of any partial liquidation or
reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving the Pledgor or the readjustment
of its liabilities or any assignment for the benefit of creditors or any
marshalling of the Pledgor's assets or liabilities, and all premium and
termination fees, if any, and other fees and expenses payable in accordance with
the terms of the Ableco Documents.

(c)  "Collateral" shall mean (i) the Collateral Account, and any and all
cash, deposits, money, checks, drafts, wire transfers, funds and other amounts
from time to time credited to or deposited or held in the Collateral Account,
and (ii) any and all interest, dividends, distributions and other income
accruing on or payable in respect of the Collateral, and (iii) any and all
proceeds of the foregoing.

(d)  "Collateral Account" shall mean the high yield savings deposit account
#__________ (and any and all sub-accounts thereof, replacement accounts
therefore and other accounts relating thereto) maintained by the Pledgor at
Fleet for the benefit of Fleet.

1

(e)  "Fleet Documents" shall mean the Fleet Facility Agreement, the letters
of credit issued thereunder, all letter of credit application and reimbursement
agreements executed and/or delivered by the Pledgor to Fleet in connection
therewith, and all other related agreements, instruments or documents delivered
or to be delivered by Pledgor in connection therewith, in each case, as the same
may be supplemented and amended from time to time.

(f)  "Fleet Obligations" shall mean any and all indebtedness, obligations
and liabilities of the Pledgor to Fleet under the Fleet Documents and under this
Agreement, whether now existing or hereafter arising, whether direct or
indirect, absolute or contingent, due or to become due, including without
limitation, the Pledgor's obligation to reimburse Fleet for all drawings under
letters of credit issued under the Fleet Documents, and all interest, fees,
expenses, indemnification obligations and other amounts from time to time owing
from the Pledgor to Fleet under the Fleet Documents and under this Agreement,
including, without limitation, interest which accrues after the commencement of
any proceeding in respect of any partial liquidation or reorganization, or
bankruptcy, insolvency, receivership or other statutory or common law
proceedings or arrangements involving the Pledgor or the readjustment of its
liabilities or any assignment for the benefit of creditors or any marshalling of
the Pledgor's assets or liabilities, and all premium and termination fees, if
any, and other fees and expenses payable in accordance with the terms of the
Fleet Documents.

(g)  "Fleet's LC Commitment" shall mean the commitment of Fleet to issue
letters of credit to or for the account of the Pledgor under the Fleet
Documents.

(h)  "Fleet's LC Exposure" shall mean, at any time, the sum of (i) 100% of
the aggregate undrawn amount of all outstanding standby and documentary letters
of credit issued by Fleet to or for the account of the Pledgor at such time plus
(y) the aggregate amount of all disbursements made by Fleet in respect of
letters of credit issued by Fleet to or for the account of the Pledgor that have
not yet been reimbursed by or on behalf of the Pledgor at such time.

(i)  "Termination of the Fleet Obligations" shall mean the time when all of
the Fleet Obligations have been fully paid in cash, no letters of credit are
outstanding, and Fleet has no further obligation to issue additional letters of
credit or extend credit accommodations to or for the account of the Pledgor
under the Fleet Facility Agreement.

(j)  "Termination Notice" shall mean a written notice from Fleet to the
Pledgor and Ableco stating that Termination of the Fleet Obligations has
occurred.

2.   Acknowledgment of Security Interests. The Pledgor and Ableco hereby
acknowledge and agree that unless and until such time as Fleet shall have
delivered to the Pledgor and Ableco a Termination Notice, the Collateral Account
and all of the Collateral are and will continue to be subject to the senior
first priority liens and security interests of Fleet, and that the liens and
security interests of Fleet are senior in priority to all other liens, security
interests and encumbrances of any kind, including, without limitation, any liens
in favor of Ableco. The Pledgor and Fleet hereby acknowledge and agree that the
Collateral Account and all of the Collateral are subject to the liens and
security interests of Ableco, which liens and security interests, unless and
until such time as Fleet shall have delivered to the Pledgor and Ableco a
Termination Notice, are and will continue to be junior and subordinated in all
respects to the liens and security interests in favor of Fleet.

3.   Representations, Warranties and Covenants of the Pledgor Regarding the
Collateral.

(a)  Except for (i) the senior first priority liens and security interests
in favor of Fleet, and (ii) the subordinated second priority liens and security
interests in favor of Ableco, the Pledgor is the owner of the Collateral free
and clear of any and all liens, security interests or other encumbrances of any
kind. The Pledgor agrees not to grant any lien on or security interest in, or
permit the existence of any lien or encumbrance on or security interest in, the
Collateral Account or any of the other Collateral (except for the senior first
priority liens and security interests in favor of Fleet and the subordinated
second priority liens and security interests in favor of Ableco).

(b)  The Pledgor (i) hereby agrees to promptly execute and deliver to Fleet
and Ableco such financing statements (to the extent, if any, that the Pledgor's
signature is required thereon), certificates and other documents or instruments
as may be necessary or appropriate to enable Fleet and/or Ableco to perfect,
protect or from time to time renew the liens and security interests granted
hereby, including, without limitation, such financing statements, control
agreements, certificates and other documents as may be necessary to perfect a
security interest in any additional Collateral hereafter acquired by the Pledgor
or in any replacements or proceeds thereof, and (ii) hereby authorizes Fleet and
Ableco to execute (to the extent, if any, that any signature is required
thereon), file and refile, in their own names or in the name of the Pledgor, in
each case at the Pledgor's expense, such financing statements, continuation
statements and other documents (including, without limitation, this Agreement)
in such offices as the Pledgor may reasonably deem necessary or appropriate in
order to perfect and preserve the rights and

2

interests granted to Fleet and Ableco. The Pledgor hereby irrevocably appoints
each of Fleet and Ableco as its true and lawful attorney for the purpose of
executing and filing any such financing statements or other agreements or
instruments.

4.   Control over the Collateral Account and the Collateral; Subordination of
Rights and Interests of Ableco. Each of the parties hereto hereby acknowledges
and agrees as follows:

(a)  Unless and until such time as Fleet shall have delivered a Termination
Notice to the Pledgor and Ableco, (i) Fleet has and shall continue to have
"control" of the Collateral Account and the Collateral (within the meaning of
such term under Section 9-104 of the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts) and full power and authority to set-off, apply,
debit, withdraw, dispose of and transfer funds from the Collateral Account
without the necessity of notifying or obtaining the consent of the Pledgor or
Ableco, (ii) except as otherwise provided in Sections 4(e), 6(a) and 6(b) of
this Agreement, Fleet shall not be obligated to comply with, and shall have no
liability to the Pledgor or Ableco for refusing to comply with, any instructions
originated by the Pledgor or Ableco with respect to the Collateral Account or
the Collateral, including, without limitation, any instructions or directions
with respect to the disposition of funds in the Collateral Account, (iii)
regardless of the time, order or manner of attachment or perfection, or any
provision of the Ableco Documents to the contrary, the rights and interests of
Fleet in and to the Collateral Account and the Collateral have and shall
continue to have priority over and shall be senior in all respects to any rights
or interests of Ableco in and to the Collateral Account and the Collateral, and
(iv) it is the intent of the parties hereto that, except as otherwise provided
in Section 6(b), Termination of the Fleet Obligations shall have occurred before
any portion of the Collateral is delivered to Ableco or applied to the Ableco
Obligations.

(b)  Until such time as the Ableco Obligations have been paid in full and
the Ableco Financing Agreement shall have terminated, (i) Ableco has and shall
continue to have "control" of the Collateral Account and the Collateral (within
the meaning of such term under Section 9-104 of the Uniform Commercial Code as
in effect in The Commonwealth of Massachusetts) and shall be able to direct the
disposition of funds from the Collateral Account without the necessity of
notifying or obtaining the consent of the Pledgor, and (ii) except as otherwise
provided in Section 6(a), Fleet will comply with all notifications it receives
directing it to transfer, redeem, or permit the withdrawal of any property in
the Collateral Account originated by Ableco without further consent by the
Pledgor; provided that, unless and until such time as Fleet shall have delivered
a Termination Notice to Ableco, Ableco shall not, except as otherwise provided
in Section 6(b), direct or instruct Fleet to take any action with respect to the
Collateral Account or the Collateral or otherwise assert or attempt to enforce
or avail itself of any lien or security interest in the Collateral or otherwise
realize upon the Collateral, and, except as otherwise provided in Section 6(b),
Fleet shall not be obligated to comply with any direction or instruction
originated by Ableco with respect to the Collateral Account or the Collateral,
including, without limitation, any instruction or direction regarding the
disposition of funds in the Collateral Account.

(c)  Unless and until such time as (i) Fleet shall have delivered a
Termination Notice to the Pledgor, and (ii) the Ableco Obligations have been
repaid in full and the Ableco Financing Agreement has terminated, the Pledgor
shall have no right to access or withdraw any of the Collateral from the
Collateral Account or to instruct or direct Fleet to make withdrawals from or
transfer or dispose of any funds in the Collateral Account; and Fleet shall not,
except as otherwise provided in Section 6(a), comply with any withdrawal
request, direction or instruction originated by the Pledgor with respect to the
Collateral Account and the Collateral unless Ableco has previously consented to
such withdrawal request, direction or instruction in writing and notified Fleet
to comply with same. Promptly, but in any event within 3 business days after
Termination of the Fleet Obligations, Fleet shall deliver the Termination Notice
to the Pledgor and Ableco.

(d)  Notwithstanding anything in this Agreement or in the Ableco Documents
to the contrary, (i) the respective rights and priorities of the liens and
security interests of Fleet and Ableco set forth herein shall not be altered,
impaired or affected in any way by any amendment, modification, supplement to or
restatement of the Fleet Documents, any increase in Fleet's LC Commitment or in
Fleet's LC Exposure, any application of the Collateral against the Fleet
Obligations, or any release or reduction in the amount of the Collateral (and
Fleet expressly reserves the right, prior to the delivery of a Termination
Notice to Ableco, to amend, modify, supplement or restate the Fleet Documents,
to increase Fleet's LC Commitment, to apply the Collateral against the Fleet
Obligations, or to release all or any portion of the Collateral, without the
necessity of giving notice to or obtaining the consent of Ableco), and (ii)
until such time as Fleet shall have delivered a Termination Notice to the
Pledgor and Ableco, except as otherwise provided in Section 6(b), Fleet shall at
all times be authorized to, and shall act and refrain from acting in respect of,
and otherwise deal with, the Collateral and the Collateral Account, in its sole
and absolute discretion, without any obligation whatsoever on the part of Fleet
to notify or obtain the consent of the Pledgor or Ableco.

(e)  At the time of delivery by Fleet to the Pledgor and Ableco of a
Termination Notice, the liens and security interests of Fleet in the Collateral
and the Collateral Account shall automatically be released, discharged and
terminated and Fleet shall, at the request of Ableco, or at the election of
Fleet (which election may be made by Fleet at any time in its sole discretion),
cause (and the Pledgor hereby authorizes and directs Fleet to cause) any
remaining Collateral in the Collateral Account to be

3

delivered to Ableco (or to a depository institution specified in writing by
Ableco), to be held by or for the benefit of Ableco as security for the Ableco
Obligations of Ableco and the Lenders.

(f)  If at any time Fleet shall exercise any of its rights with respect to
the Collateral (including, the right to apply any portion of the Collateral
against the Fleet Obligations or to set-off, foreclose, liquidate or otherwise
realize upon any portion of the Collateral), Fleet shall apply the proceeds of
the Collateral and the Collateral Account as follows: (i) first, to the payment
of any and all fees, costs and expenses incurred by Fleet in exercising its
rights (including, without limitation, reasonable attorney's fees), and (ii)
second, to the repayment of any and all Fleet Obligations. If, following
Termination of the Fleet Obligations, there shall remain any surplus Collateral
in the Collateral Account which would otherwise, but for the security interest
of Ableco, be payable to the Pledgor, Fleet shall, unless directed otherwise by
a court of competent jurisdiction or by Ableco, deliver such surplus Collateral
to Ableco (or to a depository institution specified in writing by Ableco) to be
held by or for the benefit of Ableco and the Lenders as collateral for and/or
applied to the repayment of the Ableco Obligations in accordance with the terms
of the Ableco Documents. In exercising any rights with respect to the
Collateral, so long as Fleet acts in a commercially reasonable manner, Fleet may
proceed in any manner which Fleet, in its sole discretion, shall elect, without
in any way incurring any liability or obligations to the Pledgor or Ableco.
Except as otherwise expressly set forth in Section 6 of this Agreement, in no
event shall Fleet be obligated to deliver any portion of the Collateral to the
Pledgor or Ableco unless and until such time as Termination of the Fleet
Obligations has occurred.

(g)  In the event that Fleet shall exercise any of its rights with respect
to the Collateral under the Fleet Documents or under the provisions of any
applicable law (including, without limitation, the right of set-off), any
portion of the Collateral applied to the repayment of the Fleet Obligations
shall automatically be released and Ableco shall have no rights, claims or
interests against Fleet or against such portion of the Collateral. Ableco agrees
that promptly upon the written request of Fleet therefor, Ableco shall execute,
deliver and file any and all such termination statements, lien releases or other
agreements or instruments as Fleet shall reasonably deem necessary or
appropriate in order to give effect to the foregoing provisions of this Section
4(g).

5.   Application, Set-off and other Rights of Fleet. The Pledgor and Ableco
acknowledge and agree that under the terms of the Fleet Documents and applicable
law, regardless of the adequacy of the Collateral or any other property or
collateral securing the Fleet Obligations, Fleet (a) may withdraw and apply from
the Collateral Account at any time and from time to time such funds as may be
necessary (i) to reimburse Fleet for any drawing made on any letter of credit
issued by Fleet under the terms of the Fleet Documents, and (ii) to cover any
fees, costs, expenses (including reasonable attorney's fees)and other amounts
for which the Pledgor may from time to time be liable to Fleet under the terms
of the Fleet Documents, (b) may set-off the Collateral and the Collateral
Account and any deposits or other sums at any time credited thereto against the
Fleet Obligations, and (c) has all rights and remedies of a secured party under
the Uniform Commercial Code (as in effect in Massachusetts), including, without
limitation, the rights of a secured party under Section 9-607 of the Uniform
Commercial Code. In no event shall the liens, rights and interests of Ableco, or
any term or provision of this Agreement, impair or affect in any way any rights
or remedies (including, without limitation, any rights of set off) that Fleet
may have against the Pledgor, the Collateral Account, the Collateral or any
other property or assets of the Pledgor prior to the date on which Fleet
delivers the Termination Notice to the Pledgor and Ableco.

6.   Periodic Withdrawals from the Collateral Account. The Pledgor and Ableco
acknowledge and agree that pursuant to the terms of the Fleet Documents so long
as no Default or Event of Default (as such term is defined in the Fleet
Documents on the date hereof) shall have occurred and be continuing or shall
arise therefrom:

(a)  unless Ableco has notified Fleet that an event of default has occurred
and is continuing under the Ableco Financing Agreement, on the fifteenth day of
each calendar month (or if such day is not a business day, on the next
succeeding business day), commencing on October 15, 2002, Fleet shall withdraw
from the Collateral Account the aggregate amount of interest that has accrued on
the funds on deposit in the Collateral Account during the prior month, and shall
transfer such interest to Pledgor in accordance with the wire transfer
instructions of the Pledgor set forth on Schedule I hereto (whereupon such
interest shall no longer be subject to the liens and security interests of Fleet
or Ableco); and

(b)  from time to time (but not more frequently than once each month) after
the earlier of (x) 3 Business Days after the date on which Fleet's LC Commitment
terminates, and (y) March 31, 2003, upon the written request of Ableco, Fleet
shall withdraw from the Collateral Account the amount, if any, by which (i) the
aggregate amount of funds on deposit in the Collateral Account (exclusive of the
interest amounts referred to in Section 6(a)) exceeds (ii) the product of (A)
one hundred three percent (103%) multiplied by (B) Fleet's LC Exposure at such
time, and shall transfer such excess amount to Ableco in accordance with the
wire transfer instructions of Ableco set forth on Schedule I hereto to be
applied by Ableco against the Ableco Obligations (whereupon such excess amount
shall no longer be subject to the liens and security interests of Fleet).

4

Each of the Pledgor and Ableco hereby irrevocably authorize and direct Fleet to
make the transfers described in this Section 6, and hereby agree that in no
event shall Fleet be liable or obligated to the Pledgor or Ableco for any
transfer made in accordance with this Section 6, or for any failure by Fleet to
make any such transfer if Fleet, in its reasonable determination, believes that
a Default or Event of Default has occurred and is continuing under the Fleet
Documents, or that such transfer may expose Fleet to any obligation, liability
or expense (other than any administrative costs and expenses related to or
incurred in connection with the transfers described in this Section 6).

7.   No Consent Required; Authority of Fleet to Act. Notwithstanding any
separate agreement that the Pledgor may have with Ableco or any other party, the
Pledgor and Ableco acknowledge and agree that unless and until such time as
Fleet shall have delivered a Termination Notice to the Pledgor and Ableco, Fleet
shall be authorized and directed to take such actions with respect to the
Collateral and the Collateral Account as Fleet, in its sole discretion,
determines to be necessary, appropriate or in the best interests of Fleet
(including, without limitation, exercising any rights of set-off which Fleet may
have with respect to the Collateral or the Collateral Account), in each case,
without the necessity of giving prior notice to, or obtaining any consent from,
the Pledgor or Ableco.

8.   Standard of Care. Neither Fleet nor any of its officers, directors,
employees, agents or affiliates shall be liable for any action taken or not
taken by it under, or in connection with, this Agreement, except for gross
negligence or willful misconduct by Fleet as determined by a final and
non-appealable judgment of a court of competent jurisdiction. IN NO EVENT SHALL
FLEET BE LIABLE FOR INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OF ANY KIND
WHATSOEVER (INCLUDING LOST PROFITS AND LOST BUSINESS OPPORTUNITIES) EVEN IF IT
IS INFORMED OF THE POSSIBILITY OF SUCH DAMAGES AND REGARDLESS OF THE FORM OF
ACTION IN WHICH ANY SUCH DAMAGES MAY BE CLAIMED. SO LONG AS FLEET SHALL HAVE
ACTED (OR REFRAINED FROM ACTING) IN GOOD FAITH, IT SHALL NOT BE LIABLE FOR ANY
ERROR OF JUDGMENT IN ANY ACTION TAKEN, SUFFERED OR OMITTED BY, OR FOR ANY
MISTAKE OF FACT OR LAW, UNLESS SUCH ACTION IS FOUND TO CONSTITUTE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT BY A FINAL AND NON-APPEALABLE JUDGMENT OF A
COURT OF COMPETENT JURISDICTION. Fleet will not incur any liability hereunder by
acting or not acting in reliance upon any notice, consent, certificate,
statement or other instrument or writing believed by it to be genuine and signed
or sent by the proper party or parties. Fleet shall not incur liability
hereunder for any notice, consent, certificate, wire instruction, telecopy, or
other writing which is delayed, canceled or changed without the actual knowledge
of Fleet. Fleet shall not incur any liability for acts or omissions of any
domestic or foreign depository or book-entry system for the central handling of
financial assets or any domestic or foreign custodian or subcustodian. Fleet
shall not be responsible for the title, value, validity or genuineness of any
Collateral subject to this Agreement. Fleet shall have no liability to the
Pledgor or any other person or entity for remitting any portion of the
Collateral in the Collateral Account to Ableco after the delivery by Fleet of a
Termination Notice even if contrary instructions have been delivered to Fleet by
the Pledgor and Fleet shall have no duty to investigate whether and to what
extent any Ableco Obligations shall then be outstanding.

9.   No Additional Duties. Fleet shall have no responsibilities, obligations or
duties other than those expressly set forth in this Agreement, and no implied
duties, responsibilities or obligations shall be read into this Agreement;
without limiting the foregoing, Fleet shall have no duty to preserve, exercise
or enforce rights in the Collateral (against prior parties or otherwise). This
Agreement is not intended by the parties to impose or create any obligations or
duties upon Fleet greater than, or in addition to, the customary and usual
obligations and duties of Fleet to the Pledgor, except as otherwise provided in
Section 6. The Pledgor and Fleet acknowledge that this Agreement supplements the
Pledgor's existing cash management and other relationships with Fleet and in no
way is this Agreement intended to abridge any rights that Fleet might otherwise
have under the Fleet Documents or applicable law. Fleet makes no representations
and assumes no responsibility as to the validity, enforceability or perfection,
if any, of Ableco's purported liens and security interests in the Collateral,
other than Fleet's obligation to act in accordance with the material terms of
this Agreement.

10.  Force Majeure. Fleet shall not be responsible for delays or failures in
performance resulting from acts beyond its control, including Acts of God,
strikes, lockouts, riots, acts of war or terrorism, epidemics, nationalization,
expropriation, currency restrictions, governmental regulations superimposed
after the fact, fire, communication line failures, power failures, earthquakes
or other disasters.

11.  Release and Indemnification. The Pledgor and Ableco hereby release Fleet
and its respective affiliates, officers and employees from any and all claims,
causes of action, liabilities, losses, lawsuits, recoupment, demands and/or
damages, fines, penalties and expenses that may arise as a result of the
transactions contemplated by this Agreement or as a result of Fleet entering
into or acting in accordance with this Agreement, making any transfers of funds
contemplated by this Agreement, or

5

following any instructions given to Fleet by Ableco or the Pledgor in accordance
with the terms of this Agreement, except for proven gross negligence or willful
misconduct by Fleet. The Pledgor agrees to indemnify and hold harmless Fleet and
its respective affiliates, officers and employees from and against any and all
claims, causes of action, liabilities, losses, lawsuits, recoupment, demands
and/or damages, fines, penalties and expenses, including, without limitation,
out of pocket expenses and any and all court costs and reasonable attorneys'
fees, that may arise as a result of Fleet entering into or taking or failing to
take any action under this Agreement, making any transfers of funds contemplated
by this Agreement, or following any instructions given to Fleet by Ableco or the
Pledgor under this Agreement, except for gross negligence or willful misconduct
by Fleet as determined by a final non-appealable judgment of a court of
competent jurisdiction. This indemnification shall survive the termination of
this Agreement. Ableco will indemnify Fleet, and its officers, directors,
employees, and agents, against claims, liabilities, and reasonable expenses
(including reasonable attorney fees and disbursements) arising out of (i)
directions or instructions given by Ableco to Fleet under this Agreement, (ii)
actions taken by Fleet in compliance with such directions or instructions, and
(iii) transfers of funds from the Collateral Account to Ableco as provided in
this Agreement, except to the extent the claims, liabilities, or expenses are
caused by Fleet's gross negligence or willful misconduct as determined by a
final non-appealable judgment of a court of competent jurisdiction.

12.  Reporting of Income. All items of income, if any, including dividends,
interest and other income, gain, expense and loss on the Collateral shall be
reported by Fleet in the name and tax identification number of the Pledgor.

13.  Construction; Amendment; Conflict; Entire Agreement. If any term or
provision of this Agreement is determined to be invalid or unenforceable, the
remainder of this Agreement shall be construed in all respects as if the invalid
or unenforceable term or provision were omitted. No amendment, modification or
termination of this Agreement or waiver of any right hereunder shall be binding
on any party hereto unless it is in writing and is signed by the party to be
charged. Each of the parties hereto intends that a facsimile transmission of a
duly executed counterpart hereof shall be valid in all respects, as an original.
This Agreement may be executed in any number of counterparts all of which shall
constitute one original agreement. In the event of a conflict between this
Agreement and any other Fleet Document, as between Fleet and the Pledgor, the
terms of such other Fleet Document shall prevail; provided that if the terms of
any Fleet Document relating to the Collateral Account afford the Pledgor access
to or the right to withdraw funds from the Collateral Account, the terms of this
Agreement shall prevail. This Agreement sets forth the entire agreement of the
Pledgor, Ableco and Fleet with respect to the relative priorities of Fleet and
Ableco in the Collateral, and supersedes all prior agreements (written or oral)
and negotiations and all contemporaneous oral agreements concerning such subject
matter and negotiations.

14.  Representations and Warranties; Ableco/Fleet Covenant. Each of the parties
represents and warrants that (i) it is duly incorporated or organized and is
validly existing in good standing in its jurisdiction of incorporation or
organization, (ii) the execution, delivery and performance of this Agreement and
all documents and instruments to be delivered hereunder or thereunder have been
duly authorized, (iii) the person executing this Agreement on its behalf has
been duly authorized to act on its behalf, (iv) this Agreement constitutes a
legal, valid, binding and enforceable agreement, and (v) entering into this
Agreement will not violate any agreement, law, rule or regulation by which it is
bound or by which any of its assets are affected. Ableco covenants that it shall
deliver to Fleet prompt written notice of the occurrence of any Event of Default
under the Ableco Financing Agreement, and Fleet covenants that it shall deliver
to Ableco prompt written notice of the occurrence of any Event of Default under
the Fleet Facility Agreement; provided that the failure of any party to give
notice as required hereby shall not affect the relative priorities of the
respective security interests of Fleet and Ableco as provided herein or the
validity or effectiveness of any such notice as against the Pledgor, and
provided further that neither Fleet nor Ableco shall incur any liability to any
other party hereto as a result of its failure to give notice as required hereby.

15.  Termination. This Agreement may be terminated by Fleet upon thirty (30)
days written notice to the Pledgor and Ableco. Upon written notice from Ableco
to Fleet of the repayment of the Ableco Obligations and the termination of the
Ableco Financing Agreement, Ableco's security interest and lien in the
Collateral shall terminate, Ableco shall have no obligation to Fleet hereunder
(other than Ableco's indemnification obligations under Section 11) and Fleet
shall have no further obligation to Ableco.

16.  Successors and Assigns; Governing Law. This Agreement shall be binding upon
and inure to the benefit of the successors and assigns (including, without
limitation, any person or entity that succeeds to acquires any interest in any
of the Ableco Obligations), representatives and heirs, of the respective parties
hereto and shall be construed in accordance with the laws of The Commonwealth of
Massachusetts (the "Governing Law State") without regard to its conflict of law
principles and the rights and remedies of the parties shall be determined in
accordance with such laws. Notwithstanding any other agreement to the contrary,
with respect to the Collateral, Massachusetts is Fleet's jurisdiction for
purposes of the Uniform Commercial Code.

6

17.  Notices. Any notice, request or other communication required or permitted
to be given under this Agreement shall be in writing and deemed to have been
properly given when delivered in person, or when sent by telecopy or other
electronic means (acceptable to Fleet) and electronic confirmation of error-free
receipt is received, or after being sent by certified or registered United
States mail, return receipt requested, postage prepaid:

If to Fleet:

Fleet National Bank
c/o Fleet Capital Corporation
One Federal Street
Mail Stop: MA DE 10307X
Boston, MA 02110
Attention:  Mark B. Schafer
Telephone: 617-654-1187
Telecopy: 617-654-1167

If to the Pledgor:

Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185-9048
Attention: Stephen Moynihan
Telephone: 781-849-4339
Telecopy:  781-849-4472

If to Ableco:

Ableco Finance LLC
450 Park Avenue
28/th/ Floor
New York, NY 10022
Attention: Daniel Wolf
Telephone: 212-891-2121
Telecopy:  212-891-1541

Fleet shall not be deemed to have or be charged with notice or knowledge of any
fact or matter unless a written notice thereof has been received by Fleet at the
address and to the person designated in (or subsequently designated in
accordance with) this Agreement.

18.  JURY TRIAL WAIVER. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT AND/OR THE COLLATERAL. EACH PARTY ACKNOWLEDGES
THAT THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO EACH PARTY TO ENTER THIS
AGREEMENT, AND THAT EACH PARTY IS RELYING UPON THE FOREGOING WAIVER IN ITS
FUTURE DEALINGS WITH EACH OTHER PARTY WITH RESPECT TO THE SUBJECT MATTER HEREOF.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED WITHOUT AUTHENTICATION
AS A WRITTEN CONSENT TO TRIAL BY THE COURT.

[Signature page follows.]

7

IN WITNESS WHEREOF, the Pledgor, Fleet and Ableco have caused this Deposit
Account Control and Intercreditor Agreement to be duly executed as of the day
first above written.

PLEDGOR:

CLEAN HARBORS, INC.

By:    /s/ Stephen Moynihan
----------------------------------
Name:  Stephen Moynihan
Title: Senior Vice President

FLEET:

FLEET NATIONAL BANK

By:    /s/ Mark B. Schafer
----------------------------------
Name:  Mark B. Schafer
Title: Vice President

ABLECO:

ABLECO FINANCE LLC, AS AGENT

By:    /s/ Kevin P. Genda
----------------------------------
Name:  Kevin P Genda
Title: SVP

8

Exhibit 10.44

MASTER WASTE DISPOSAL AGREEMENT

This Master Waste Disposal Agreement is executed as of this 10th day of
September, 2002, by and between Safety-Kleen Services, Inc., a Delaware
corporation (together with all of its operating subsidiaries hereinafter
referred to as "Safety-Kleen") and Clean Harbors Environmental Services, Inc.,
(together with all of its operating subsidiaries, hereinafter collectively
referred to as "Clean Harbors"), a Massachusetts corporation and a wholly owned
subsidiary of Clean Harbors, Inc. ("CHI").

WHEREAS, Safety-Kleen has, through its subsidiaries, operated (i) the
Chemical Services Division, which is primarily engaged in the business of
providing hazardous, industrial and non-hazardous waste collection, treatment,
storage and disposal in the United States and Canada (the "CSD"), and (ii) the
Branch Sales and Services Division which is primarily engaged in the business of
collection and recycling of hazardous, industrial and non-hazardous waste as an
operating division of Safety-Kleen (the "BSSD") (Clean Harbors and the BSSD
hereinafter referred to individually as a "Party" and collectively as the
"Parties); and

WHEREAS, in addition to its business with third-party customers, the CSD
currently handles the collection, treatment and disposal of certain hazardous,
industrial and non-hazardous waste generated by BSSD and certain of its
customers; and

WHEREAS, CHI is a party to a certain Acquisition Agreement dated as of
February 22, 2002 ("Acquisition Agreement") between Safety-Kleen Services, Inc.
and CHI pursuant to which CHI has agreed to purchase and Safety-Kleen Services,
Inc. has agreed to sell substantially all of the assets of the CSD, including
the stock of certain of the CSD companies; and

WHEREAS, it is the intention of Clean Harbors to combine the CSD with the
similar business now being conducted by Clean Harbors; and

WHEREAS, it is of critical importance to Clean Harbors and CHI, and a
condition of CHI's willingness to enter into and close under the Acquisition
Agreement, that Safety-Kleen enter into a Master Waste Disposal Agreement
whereby Safety-Kleen and any successor entity (or entities) from its Chapter 11
Bankruptcy proceeding will thereafter utilize Clean Harbors to dispose of or
process certain of the Waste generated or handled by the BSSD as identified in
Exhibit A (Exhibit A reflects the Waste generated or handled by the BSSD and
disposed of or processed by the CSD on or about the date of the Acquisition
Agreement) attached hereto and incorporated herein, to the extent that such
Waste is transferable by the BSSD, at prices determined in accordance with this
Agreement; and

WHEREAS, it is of critical importance to Safety-Kleen, and a condition of
Safety-Kleen's willingness to enter into and close the Acquisition Agreement,
that Clean Harbors enter into a Master Waste Disposal Agreement whereby Clean
Harbors and any successor entity (or entities) will thereafter utilize
Safety-Kleen to dispose of or process certain Waste generated or handles by
Clean Harbors, as identified in Exhibit B (Exhibit B reflects the Waste
generated or handled by the CSD and disposed of or processed by the BSSD on or
about the date of the

Acquisition Agreement) attached hereto and incorporated herein, to the extent
such Waste is transferable by Clean Harbors, at prices determined in accordance
with this Agreement; and

WHEREAS, it is the intent of Safety-Kleen that it utilize Clean Harbors to
dispose of or process certain of the Waste generated or handled by the BSSD in
the same manner that Safety-Kleen utilized the CSD to dispose of or process such
Waste prior to the closing of the Acquisition Agreement; and

WHEREAS, it is the intent of Clean Harbors that it utilize Safety-Kleen to
dispose of or process certain of the Waste generated or handled by the CSD in
the same manner that Safety-Kleen utilized the BSSD to dispose of or process
such Waste prior to the closing of the Acquisition Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the
covenants set forth below the parties agree as follow:

1.  Definitions. As used in this Agreement and any Appendix hereto, the
following capitalized terms shall have the meanings stated below, or as
indicated elsewhere in this Agreement.

"Acquisition Agreement" has the meaning set forth in the Recitals.

"Alternate Facility" has the meaning set forth in Section 4.

"Alternate Facility Notice" has the meaning set forth in Section 4.

"Business Days" shall mean Monday through Friday excluding national
holidays.

"CHI" has the meaning set forth in the Preamble.

"Clean Harbors" has the meaning set forth in the Preamble.

"CSD" has the meaning set forth in the Recitals.

"Disposal Contract" shall mean a contract or contracts mutually agreed upon
by the Parties with respect to waste disposal or processing services to be
provided by the Parties, in the forms attached hereto as Exhibit C and Exhibit
D, as the same may be modified in writing by the Parties from time to time.

"Disposal Decision" shall mean a determination by a Facility to accept or
reject a given Waste for disposal or processing, based on the acceptance
criteria of the Facility.

"Disposal Request" shall mean notification of a Party, either orally or in
writing, of a desire by the other Party to deliver a Waste to a Facility for
disposal or processing. No Disposal Request may be made until a favorable
Disposal Decision has been made and an appropriate Disposal Contract shall have
been executed by the Parties.

2

"Facility" shall mean any treatment, storage or disposal facility (i) that
is permitted by applicable governmental authority to accept any type of Waste,
(ii) which the Parties, either directly or through any subsidiary or affiliate,
owns or operates, and (iii) which the Parties designate in writing on the list
of Facilities. An initial list of the Clean Harbors Facilities is attached
hereto as Exhibit E. An initial list of the Safety-Kleen facilities is attached
hereto as Exhibit F. Conversely, the term "Facility" shall not apply, after
sixty (60) days prior written notice to the other Party, to any of such
Facilities which are no longer permitted to accept Waste by applicable
government regulations and/or the policies and procedures of the affected Party.

"Party" has the meaning set forth in the Recitals.

"Parties" has the meaning set forth in the Recitals.

"Permit" shall mean a Facility's respective RCRA or TSCA permit, as from
time to time amended or modified, together with all appropriate other local,
state, provincial and federal permits applicable to the Waste handled or managed
by the particular Facility.

"RCRA" shall mean the Resource Conservation and Recovery Act of 1976, as
amended, and any regulation issued thereunder.

"Safety-Kleen" has the meaning set forth in the Preamble.

"TSCA" shall mean the Toxic Substances Control Act of 1976, as amended, and
any regulations issued thereunder.

"Waste" shall mean each Party's respective Waste set forth on Exhibit A and
Exhibit B.

2.  Term. The term of this Agreement shall be for a period of three (3)
years, commencing on the Closing Date, as defined in the Acquisition Agreement,
and terminating on the third anniversary date thereof.

3.  Calculation of Disposal Fees. Provided that the Party seeking payment
of fees is in compliance with the terms and provisions of the respective
Disposal Contracts, the fees payable by the Party obligated to pay for disposal
of Waste, at any of the Facilities shall be determined in accordance with the
schedule attached hereto as Exhibit G. Exhibit G will be reviewed and revised at
each quarterly meeting as described in Section 16 to ensure it reflects market
pricing for such disposal or processing of Wastes.

4.  Disposal Commitment; Acceptance of Waste. Except as otherwise set forth
in this Section 4, during the term of this Agreement each Party shall deliver
the Waste listed on Exhibit A or Exhibit B, as the case may be, which it
generates or handles through the BSSD or the CSD, as the case may be, for
disposal, processing or treatment at the Facilities, and each Party shall
accept, store, treat, process and dispose of all such Waste so delivered
pursuant to this Agreement; provided, however, that the foregoing shall not
prohibit or restrict either Party from utilizing an unrelated third party for
disposal, processing or treatment of such Waste which is not being handled by
the other Party at one of the Facilities, if such Party shall first have
requested that the Waste be managed at one of the Facilities and the other Party
shall either (i) notify such Party that it cannot handle or manage the
particular Waste or (ii) fail to make a Disposal

3

Decision within the appropriate Disposal Decision Deadline set forth in Section
6 below. In addition, following thirty (30) days written notice (the "Alternate
Facility Notice") from a disposing Party that it has identified an alternate
facility (the "Alternate Facility") operated by an unrelated third party that
will reduce its transportation charges for any of its Waste, such Party may
dispose of such Waste at the Alternate Facility unless the other Party notifies
the disposing Party within such thirty (30) day period that it will change the
fees payable by the disposing Party so that the aggregate amount to be paid
(including disposal fees and transportation charges) is equivalent whether such
Waste is disposed of at the other Party's Facility or the Alternate Facility.
Immediately after giving an Alternate Facility Notice and, in the event the
other Party does not change its fees after receiving an Alternative Facility
Notice, each six (6) months thereafter for the term of this Agreement, the
disposing Party can be required by the other Party to produce documentation (to
the extent not against any applicable law) to certify the facts set forth in
such Alternate Facility Notice. If a Party initially declines to reduce its
disposal fees after receiving an Alternate Facility Notice and the disposing
Party utilizes the Alternate Facility described in the Alternate Facility
Notice, for the remaining term of this Agreement, the Party may subsequently
decide to change its disposal fees so that the aggregate amount to be paid
(including disposal fees, transportation charges and any contract termination
charges) is equivalent whether such Waste is disposed of at the other Party's
Facility or the Alternate Facility, in which case, the disposing Party must
begin utilizing the other Party's Facility to dispose of such Waste.
Notwithstanding anything to the contrary contained herein, CHI will not be
required to deliver Waste of certain of its customers to the extent that such
customers restrict the locations where such Waste may be handled to locations
which do not include any of Safety-Kleen's Facilities.

5.  Waste Profiles. For the term of this Agreement, each Party may utilize
the waste profile sheets currently established and on file for Waste presently
originating from the BSSD, the CSD or directly from its respective customers;
provided, however, each Party reserves the right to require periodic
recertification (including, a representative sample of Waste) of any Waste
stream for which a waste profile sheet is currently maintained, and such other
recertification as may be required by the requesting Party's policies and
procedures or by government regulations.

6.  Disposal Decision and Disposal Request Deadlines. Each Party shall
render Disposal Decisions on Waste offered for disposal or processing by the
other Party in accordance with the following schedule: (a) for Disposal
Decisions that require the receiving Party to perform laboratory analysis, a
decision will be rendered and communicated within ten (10) Business Days from
receiving a complete Waste profile sheet and sample, and (b) for Disposal
Decisions for which the shipping Party has provided the laboratory analysis in
accordance with Section 5, or for which laboratory analysis is not required, a
Disposal Decision will be rendered and communicated within three (3) Business
Days from receipt of completed paperwork.

Each Party shall communicate a scheduled delivery date within two (2)
Business Days after a Disposal Request is received from the other Party.

7.  Termination of Disposal. In the event that either Party decides or is
required by law to cease accepting a Waste at a Facility for which a waste
profile sheet then exists, the other Party shall be given thirty (30) days
advance written notice thereof, provided that in the event

4

that the affected Party is obligated to cease accepting a Waste due to a force
majeure event, as defined below, this notice provision shall not apply. During
any period when a Party ceases to accept a particular Waste pursuant to this
Section 7, or is otherwise unable or unwilling to render services for any
reason, shall be authorized to contract with competitors of the Party unable or
unwilling to accept the Waste on such terms as may be necessary to dispose of
such particular Waste.

8.  Other Obligations of the Parties. Each Party may impose a late charge
of up to one and one-half percent (1-1/2%) per month on amounts due under a
Disposal Contract not paid in full within thirty (30) days after the date of the
invoice. Except as superceded by the terms of this Agreement, delivery by a
Party of Waste to the Facilities and disposal or processing of said Waste at
such Facilities shall be pursuant, where applicable, to the terms of the
Disposal Contracts, and any inconsistency between this Agreement and the
Disposal Contracts shall be resolved in favor of and governed by this Agreement.

9.  Indemnification by Clean Harbors. Clean Harbors shall indemnify, defend
and save harmless Safety-Kleen, and its subsidiary companies and its affiliates,
and their present and future officers or directors (or officials), employees and
agents, from and against any and all liabilities, penalties, fines, forfeitures,
demands, claims, causes of action, suits, and costs and expenses incidental
thereto (including cost of defense, settlement, and reasonable attorneys' fee),
which any or all of them may hereafter suffer, incur, be responsible for or pay
out as a result of bodily injuries (including death) to any person, damage
(including loss of use) to any property (public or private), contamination of or
adverse effects on the environment, or any violation or alleged violation of
statutes, ordinances, orders, rules or regulations of any governmental entity or
agency, to the extent caused by (i) the breach of any warranties by Clean
Harbors, or (ii) any negligent or willful act or omission of, or the breach of
any environmental law by Clean Harbors, its employees or its subcontractors in
the performance of this Agreement, except to the extent of the indemnification
by Safety-Kleen provided for in Section 10 hereof.

10. Indemnification by Safety-Kleen. Safety-Kleen shall indemnify and save
harmless Clean Harbors and its affiliates, and its present and future officers
or directors (or officials), employees and agents, from and against any and all
liabilities, penalties, fines, forfeitures, demands, claims, causes of action,
suits, and costs and expenses incidental thereto (including cost of defense,
settlement, and reasonable attorneys' fees), which any or all of them any
hereafter suffer, incur, be responsible for or pay out as a result of bodily
injuries (including death) to any person, damage (including loss of use) to any
property (public or private), contamination of or adverse effects on the
environment, or any violation or alleged violation of statutes, ordinances,
orders, rules or regulations of any governmental entity or agency, to the extent
caused by(i) the breach of any warranties by Safety-Kleen, or (ii) any negligent
or willful act or omission of, or the breach of any environmental law by
Safety-Kleen, its employees or its subcontractors in the performance of this
Agreement, except to the extent of the indemnification by Clean Harbors provided
for in Section 9 hereof.

11. Indemnification Procedures. The Party seeking indemnification
(indemnitee) shall give written notice to the indemnifying party (indemnitor) of
a claim for indemnification within a reasonable time following indemnitee's
first knowledge of the event or occurrence which gives rise to that claim. Upon
receipt of notice, indemnitor shall have the right to certain counsel to

5

defend, negotiate, adjust and/or settle a claim against indemnitee and
indemnitor will pay reasonable attorneys' fees and other litigation expenses;
provided, however, if indemnitor affirms its obligations to indemnify indemnitee
with respect to a specific claim with counsel reasonably acceptable to
indemnitee, then indemnitor shall thereafter not be responsible for the payment
of legal fees for indemnitee's counsel and indemnitee may continue to have its
counsel participate in any legal proceedings at indemnitee's sole cost and
expense. Indemnitor has no obligation to indemnify indemnitee to the extent
indemnitee fails to provide timely notice of a claim and such failure materially
prejudices indemnitor's ability to defend, negotiate, adjust and/or settle the
claim. Notwithstanding the foregoing or anything herein to the contrary,
indemnitor shall not settle a claim against indemnitee without indemnitee's
prior written approval.

In no event shall either Party be liable to the other Party for any
punitive, special, indirect, incidental or consequential damages, whether based
in contract, warranty, indemnity or tort, negligence or strict liability.

12.  Force Majeure. The performance of this Agreement, except for the
payment of money for services already rendered, may be suspended by either Party
(a) in the event that the delivery or transportation of Waste by such Party is
prevented by a cause or causes beyond the reasonable control of such Party , or
(b) in the event that the transportation, storage, treatment, processing or
disposal of Waste by such Party is prevented by a cause or causes beyond the
reasonable control of such Party. Such causes shall include, but not be limited
to, acts of God, acts of war, riot, fire, explosion, accident, flood, or
sabotage; lack of adequate fuel, power, raw materials, labor or transportation
facilities; government laws, regulations, requirements, orders or actions;
breakage or failure of machinery or apparatus; national defense requirements;
injunctions or restraining orders; labor trouble, strike, lockout or injunction
(provided that neither Party shall be required to settle a labor dispute against
its own best judgment).

The Party asserting a right to suspend performance under this Section
shall, within a reasonable time after it has knowledge of the effective cause,
notify the other Party in writing of the cause for suspension, the performance
suspended and the anticipated duration of suspension, and shall use its
reasonable best efforts to rectify the effective cause of the suspension.

13.  Extension of Time; Waiver of Performance. The Parties may extend the
time for or waive the performance of any of the obligations or warranties of the
other, or waive compliance by the other with any of the covenants or conditions
contained in this Agreement. Any such extension or waiver shall be in writing
and shall be signed by the Party extending or waiving the performance or
decision deadline.

14.  Notice. Except for notice given pursuant to Section 8 hereof, any
notice to a Party pursuant to this Agreement shall be given by certified or
registered mail, or by private carrier providing evidence of receipt as part of
its services, addressed as follows:

6

if to Clean Harbors:                        Clean Harbors Environmental
Services, Inc.
1501 Washington Street
Braintree, MA 02185

Attn: President

with a copy to:                             Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Attn: William J. Geary
Executive Vice President and
General Counsel

if to Safety-Kleen:                         Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, SC 29201
Attn: President

with a copy to:                             Safety-Kleen Services, Inc.
1301 Gervais Street, Suite 300
Columbia, SC 29201
Attn: General Counsel

or to such other address as may be designated in writing by either Party
from time to time in accordance herewith, and shall be deemed delivered when
placed in the mail or given to private carrier so addressed, with postage
prepaid.

15.  Contract Administrators. During the term of this Agreement, Clean
Harbors and Safety-Kleen shall each designate a representative who shall act as
the contact for matters arising under this Agreement and who shall assist in the
administration of this Agreement.

16.  Quarterly Meeting. Representatives of Safety-Kleen and Clean Harbors
shall meet at least once in each calendar quarter during the term of this
Agreement to review the implementation of this Agreement, unless otherwise
agreed to in writing. Alternatively, if agreed to by the Parties, such meeting
may take place by telephone conference call.

17.  Access to Records; Confidential Information. The Parties shall afford
their respective representatives such access during normal business hours and
upon reasonable notice to each other's business records as may be necessary to
ascertain their compliance with the terms of this Agreement, including, in the
case of environmental audits from time to time conducted by either Party, access
to such records of the Facilities demonstrating compliance with applicable
environmental laws or regulations. Except as required by law or as is necessary
to perform this Agreement, any information obtained by either Party from the
other shall not be disclosed or used by such Party for any purpose other than
for which it was intended pursuant to this Agreement, and except as required by
law, neither Party shall disclose to others the terms of this Agreement.
Notwithstanding the foregoing, nothing contained herein or elsewhere in this

7

Agreement shall require either Party to disclose to the other Party or permit
the other Party to examine proprietary or confidential information.

18.  Mediation of Disputes. The Parties agree to mediate any dispute or
claim between them arising out of this Agreement before resorting to arbitration
or court action. Mediation is a process in which parties attempt to resolve a
dispute by submitting it to an impartial, neutral mediator who is authorized to
facilitate the resolution of the dispute but who is not empowered to impose a
settlement on the parties. Mediation fees, if any, shall be divided equally
among the Parties involved. Before the mediation begins, the Parties agree to
sign a document limiting the admissibility in arbitration or any civil action of
anything said, any admission made, and any documents prepared, in the course of
the mediation, consistent with Evidence Code Section 1119. If any Party
commences an arbitration or court action based on a dispute or claim to which
this Section 18 applies without first attempting to resolve the matter through
mediation, then in the discretion of the arbitrator(s) or judge, that Party
shall not be entitled to recover attorneys' fees even if they would otherwise be
available to that Party in any such arbitration or court action.

19.  Assignment. This Agreement shall not be transferred or assigned except
to a parent, successor, subsidiary or other affiliated company of either Party
and except as collateral security to an institutional lender which shall have
all of the rights of a secured Party under the Uniform Commercial Code;
provided, however, that no such transfer or assignment shall operate to relieve
either Party of its responsibilities under this Agreement.

20.  Construction of Agreement. This instrument is to take effect as a
sealed instrument and is to be construed according to the laws of the
Commonwealth of Delaware. This instrument sets forth the entire agreement
between the Parties with respect to the subject matter hereof and is binding
upon and inures to the benefit of the Parties hereto and their respective
subsidiaries, affiliates, legal successors and assigns. It may be canceled,
modified or amended only by a written instrument executed by the Parties. In no
event shall the preprinted terms or conditions found on any Safety-Kleen or
Clean Harbors purchase or work order or similar document be considered an
amendment, modification or supplement to this Agreement, even if such document
is signed by representatives of both Parties; such preprinted terms and
conditions shall be considered null and void and of no effect. The captions are
used only as a matter of convenience, and are not to be considered a part of
this Agreement or to be used in determining the intent of the Parties to it.

21.  Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and constitute
one and the same agreement.

22.  Confidentiality. The Parties shall protect the confidentiality of
confidential business information obtained in connection with this Agreement
("Confidential Business Information"). Confidential Business Information shall
include, without limitation, the terms of this Agreement, the terms and
conditions of any pricing arrangements made pursuant tot his Agreement, the
identity of either Party's customers, suppliers, or vendors. All information
supplied by a Party to the other Party or otherwise obtained by a Party pursuant
to this Agreement or in connection with the preparation of handling documents,
any information regarding the other Party's plans,

8

programs, plants, processes, products, costs, customers, suppliers, vendors,
equipment or operations that may come within the knowledge of the other Party in
connection with the activities arising from the performance of this Agreement,
and any other information relating to the business or affairs of either Party
shall hereafter indicate in writing to the other Party to be "proprietary" or
"confidential." Except for the identity of a Party's customers, Confidential
Business Information shall not include information that is required to be
disclosed under state or federal laws or regulations, or any information that
(i) has been published and has become a part of the public domain by the acts or
omissions of a Party (ii) was in the other Party's possession prior to
disclosure or (ii) has been received from a third Party without restrictions on
its disclosure. Neither Party shall disclose any Confidential Business
Information to any person, other than its employees or agents who require such
Confidential Business Information in connection with the performance of services
pursuant to this Agreement. Both Parties shall use reasonable efforts to ensure
that such employees and agents shall themselves protect the confidentiality of
such Confidential Business Information. Upon termination of this Agreement, the
Parties shall return to the other Party (and require its employees and agents to
do likewise) all copies of documents containing Confidential Business
Information (other than documents specifically required by law to be retained by
the other Party) and may retain one copy of its own for archival purposes only
provided, however, the confidentiality of the archival copy is maintained and
shall survive termination of this Agreement.

9

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date
first above written.

CLEAN HARBORS ENVIRONMENTAL SERVICES, INC.

By:  /s/ Alan McKim
-----------------------------------
Its: President

SAFETY-KLEEN SERVICES, INC.

By:  /s/ James K. Lehman
-----------------------------------
Its: Sole Director

Exhibit 10.45

BILL OF SALE AND ASSIGNMENT

THIS BILL OF SALE AND ASSIGNMENT, made, executed and delivered this 10/th/
day of September, 2002 (the "Closing Date"), by Safety-Kleen Services, Inc., a
Delaware corporation (the "Company"), and the Company's Selling Subs listed on
Schedule 9.1 to the Acquisition Agreement (as defined below) (the Company and
the Selling Subs being referred to below each a "Seller", and together, the
"Sellers") to Clean Harbors, Inc., a Massachusetts corporation (the "Purchaser")
and the Purchaser's Purchasing Subs listed on the signature page to this Bill of
Sale and Assignment. Capitalized terms used herein but not defined herein shall
have the meanings ascribed to such terms in the Acquisition Agreement.

W I T N E S S E T H:

WHEREAS, the Company and the Purchaser have entered into an Acquisition
Agreement, dated as of February 22, 2002, as amended to date (as so amended, the
"Acquisition Agreement"), pursuant to which the Company has agreed to sell,
assign, transfer, convey and deliver, or to cause to be sold, assigned, conveyed
or delivered, and the Purchaser and the Purchasing Subs have agreed to purchase
and accept, the Acquired Assets; and

WHEREAS, the parties desire to carry out the intent and purpose of the
Acquisition Agreement by the Sellers' execution and delivery to the Purchaser
and the Purchasing Subs of this instrument evidencing the vesting in the
Purchaser and the Purchasing Subs of the Acquired Assets owned by the Sellers.

NOW, THEREFORE, in consideration of the premises and of other valuable
consideration to the Company paid by the Purchaser, at or before the execution
and delivery hereof, the receipt and sufficiency of which by the Company is
hereby acknowledged, the Sellers, by this Bill of Sale and Assignment, do
convey, grant, bargain, sell, transfer, set over, assign, alien, remise,
release, deliver and confirm unto the Purchaser and the Purchasing Subs and
their successors and assigns forever, all of the Sellers' right, titles and
interests in and to the Acquired Assets (which do not include the Excluded
Assets).

TO HAVE AND HOLD all of the Acquired Assets unto the Purchaser and the
Purchasing Subs, and their successors and assigns to its and their own use and
behoof forever, subject to the provisions of the Acquisition Agreement.

Section 1.  Each of the Sellers hereby constitutes and appoints the
Purchaser, its successors and assigns, as such Seller's true and lawful
attorney, with full power of substitution, in such Seller's name and stead, but
on behalf and for the benefit of

1

the Purchaser and the Purchasing Subs, and their successors and assigns, to
demand and receive any and all of the Acquired Assets, and to give receipts and
releases for and in respect of the same, and any part thereof, and from time to
time to institute and prosecute in such Seller's name, or otherwise, for the
benefit of the Purchaser and the Purchasing Subs, and their successors and
assigns, any and all proceedings at law, in equity or otherwise, which the
Purchaser, its successors or assigns, may deem proper for the collection or
reduction to possession of any of the Acquired Assets or for the collection and
enforcement of any claim or right of any kind hereby sold, conveyed, transferred
or assigned, or intended so to be, and to do all acts and things in relation to
the Acquired Assets which the Purchaser and the Purchasing Subs, and their
successors or assigns shall deem desirable, each of the Sellers hereby declaring
that the foregoing powers are coupled with an interest and are and shall be
irrevocable by such Seller or by its dissolution or in any other manner or for
any reason whatsoever.

Section 2.  Each of the Sellers hereby covenants that, from time to time
after the delivery of this instrument, at the Purchaser's request and without
further consideration, the Sellers will do, execute, acknowledge, and deliver,
or will cause to be done, executed, acknowledged and delivered, all and every
such further acts, deeds, conveyances, transfers, assignments, powers of
attorney and assurances as reasonably may be required more effectively to
convey, transfer to and vest in the Purchaser and the Purchasing Subs any of the
Acquired Assets.

Section 3.  Nothing in this instrument, express or implied, is intended or
shall be construed to confer upon, or give to, any Person other than the
Purchaser and the Purchasing Subs, and their successors and assigns, any remedy
or claim under or by reason of this instrument or any terms, covenants or
condition hereof, and all terms, covenants and conditions, promises and
agreements contained in this instrument shall be for the sole and exclusive
benefit of the Purchaser and the Purchasing Subs, and their successors and
assigns.

Section 4.  This instrument shall be binding upon the Sellers, the
Purchaser and the Purchasing Subs, and their respective successors and assigns,
effective immediately upon its delivery to the Purchaser.

Section 5.  Nothing contained in this Bill of Sale and Assignment shall in
any way supersede, modify, replace, amend, change rescind, expand, exceed or
enlarge or in any way affect the provisions, including the warranties,
covenants, agreements, conditions, or in general, any rights and remedies, and
any of the obligations of the Company or the Purchaser set forth in the
Acquisition Agreement.

Section 6.  This Bill of Sale and Assignment shall be governed by and
construed in accordance with the Laws of the State of Delaware without regard to
the

2

rules of conflict of laws of the State of Delaware or any other jurisdiction.
Until confirmation of the Bankruptcy Plan, the Purchaser, the Purchasing Subs
and the Sellers irrevocably and unconditionally consent to submit to the
jurisdiction of the Bankruptcy Court for any litigation arising out of or
relating to this Bill of Sale and Assignment and the transactions contemplated
hereby (and agree not to commence any litigation relating thereto except in the
Bankruptcy Court).

Section 7.  No amendment or modification of this Bill of Sale and
Assignment shall be effective unless it is set forth in writing and signed by
each of the parties hereto.

Section 8.  This Bill of Sale and Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same original.

********

3

IN WITNESS WHEREOF, each of the Sellers, the Purchaser and the Purchasing
Subs have caused this Bill of Sale and Assignment to be signed by their
respective duly authorized officers as of the date set forth above.

SAFETY-KLEEN SERVICES, INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SELLING SUBS:

SAFETY-KLEEN (CONSULTING), INC.

By: /s/ Larry W. Singleton
----------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (LONE AND GRASSY MOUNTAIN), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TULSA), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

4

SAFETY-KLEEN (SAN ANTONIO), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (WICHITA), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (DELAWARE), INC.

By: /s/ Larry W. Singleton
----------------------------------------
Name:  Larry W. Singleton
Title: President

SK SERVICES (EAST), L.C.

By: /s/ Larry W. Singleton
----------------------------------------
Safety-Kleen (Delaware, Inc.), its Sole Shareholder
Name:  Larry W. Singleton
Title: President of Sole Shareholder

5

SK SERVICES, L.C.

By: /s/ Larry W. Singleton
------------------------------------
Safety-Kleen (Delaware), Inc.,
Its Sole Shareholder
Name:  Larry W. Singleton
Title: President of Sole Shareholder

SAFETY-KLEEN (ROSEMOUNT), INC.

By: /s/ Larry W. Singleton
------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (SAWYER), INC.

By: /s/ Larry W. Singleton
------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (PPM), INC.

By: /s/ D. M. Sprinkle
------------------------------------
Name:  David M. Sprinkle
Title: President

NINTH STREET PROPERTIES, INC.

By: /s/ Larry W. Singleton
------------------------------------
Name:  Larry W. Singleton
Title: President

6

SAFETY-KLEEN (SAN JOSE), INC.

By: /s/ D. M. Sprinkle
------------------------------------
Name:  David M. Sprinkle
Title: President

CHEMCLEAR, INC. OF LOS ANGELES

By: /s/ D. M. Sprinkle
------------------------------------
Name:  David M. Sprinkle
Title: President

USPCI, INC. OF GEORGIA

By: /s/ Larry W. Singleton
------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN HOLDINGS, INC.

By: /s/ Larry W. Singleton
------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (WESTMORLAND), INC.

By: /s/ D. M. Sprinkle
------------------------------------
Name:  David M. Sprinkle
Title: President

7

SAFETY-KLEEN (BUTTONWILLOW), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (NE), INC.

By: /s/ David M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CROWLEY), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (LAPORTE), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TG), INC.

By: /s/ D. M. Sprinkle
----------------------------------
Name:  David M. Sprinkle
Title: President

8

SAFETY-KLEEN (ROEBUCK), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TS), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (COLFAX), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

GSX CHEMICAL SERVICES OF OHIO, INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

LEMC, INC.

By: /s/ Larry W. Singleton
----------------------------------------
Name:  Larry W. Singleton
Title: President

9

SAFETY-KLEEN CHEMICAL SERVICES, INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (ALTAIR), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (FS), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BDT), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name: David M. Sprinkle
Title: President

SAFETY-KLEEN (GS), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

10

SAFETY-KLEEN (CLIVE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (WT), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN OSCO HOLDINGS, INC.

By: /s/ Larry W. Singleton
----------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (NASHVILLE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

11

SAFETY-KLEEN (BARTOW), INC.

By: /s/ D. M Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CALIFORNIA), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CHATTANOOGA), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (PECATONICA), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (WHITE CASTLE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

12

SAFETY-KLEEN (PUERTO RICO), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BRIDGEPORT), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (DEER PARK), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BATON ROUGE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (PLAQUEMINE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

13

SAFETY-KLEEN (CUSTOM TRANSPORT), INC.

By: /s/ Larry W. Singleton
----------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (LOS ANGELES), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TIPTON), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (GLOUCESTER), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  D. M. Sprinkle
Title: President

SAFETY-KLEEN (DEER TRAIL), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

14

SAFETY-KLEEN (MT. PLEASANT), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (MINNEAPOLIS), INC.

By: /s/ Larry W. Singleton
----------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (ARAGONITE), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (SUSSEX), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (ENCOTEC), INC.

By: /s/ D. M. Sprinkle
----------------------------------------
Name:  David M. Sprinkle
Title: President

15

CLEAN HARBORS, INC.

By: /s/ Alan McKim
-----------------------------------
Name:  Alan McKim
Title: President

PURCHASING SUBS:

Altair Disposal Services, LLC
Baton Rouge Disposal, LLC
Bridgeport Disposal, LLC
Clean Harbors Andover, LLC
Clean Harbors Antioch, LLC
Clean Harbors Aragonite, LLC
Clean Harbors Arizona, LLC
Clean Harbors Baton Rouge, LLC
Clean Harbors BDT, LLC
Clean Harbors Buttonwillow, LLC
Clean Harbors Chattanooga, LLC
Clean Harbors Chemical Sales, LLC
Clean Harbors Coffeyville, LLC
Clean Harbors Colfax, LLC
Clean Harbors Deer Park, L.P.
Clean Harbors Deer Trail, LLC
Clean Harbors Florida, LLC
Clean Harbors Grassy Mountain, LLC
Clean Harbors Kansas, LLC
Clean Harbors LaPorte, L.P.
Clean Harbors Laurel, LLC
Clean Harbors Lone Mountain, LLC
Clean Harbors Los Angeles, LLC
Clean Harbors of Texas, LLC

16

Clean Harbors Pecatonica, LLC
Clean Harbors Plaquemine, LLC
Clean Harbors PPM, LLC
Clean Harbors Reidsville, LLC
Clean Harbors San Jose, LLC
Clean Harbors Tennessee, LLC
Clean Harbors Westmorland, LLC
Clean Harbors White Castle, LLC
Crowley Disposal, LLC
Disposal Properties, LLC
GSX Disposal, LLC
Harbor Industrial Services Texas, L.P.
Hilliard Disposal, LLC
Roebuck Disposal, LLC
Sawyer Disposal Services, LLC
Tulsa Disposal, LLC
Northeast Casualty Real Property, LLC

By: /s/ Alan McKim
----------------------------------
Name:  Alan McKim
Title: President

[Bill of Sale]

17

Exhibit 10.46

ASSUMPTION AGREEMENT

THIS ASSUMPTION AGREEMENT made as of September 10, 2002 by Clean
Harbors, Inc., a Massachusetts corporation ("Obligor"), in favor of Safety-Kleen
Services, Inc., a Delaware corporation (the "Company"), and the Company's
Selling Subs listed on Schedule 9.1 to the Acquisition Agreement (as defined
below) (the Company and the Selling Subs being collectively referred to
hereafter as the "Sellers"). Capitalized terms used herein but not defined
herein shall have the meanings ascribed to such terms in the Acquisition
Agreement.

W I T N E S S E T H:

WHEREAS, Obligor and the Company are parties to an Acquisition
Agreement, dated as of February 22, 2002, as amended to date (as so amended, the
"Acquisition Agreement"), relating to the sale of certain assets by the Sellers
to Obligor. The Obligor has agreed to assume from the Sellers and their
Affiliates the Assumed Liabilities as set forth in the Acquisition Agreement;
and

WHEREAS, the parties desire to carry out the intent and purpose of the
Agreements by Obligor's execution and delivery to the Sellers of this instrument
evidencing the assumption of certain liabilities and obligations of the Sellers.

NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

Section 1. As of the date hereof, Obligor, pursuant to Section 1.3 of
the Acquisition Agreement, hereby covenants and agrees to assume and thereafter
pay, perform or otherwise discharge the Assumed Liabilities, in accordance with
their terms, as set forth in Section 1.3 of the Acquisition Agreement.

Section 2. Obligor hereby covenants that from time to time after
delivery of this Assumption Agreement at the request of the Sellers and without
further cost or expense to the Sellers, unless otherwise provided in the
Acquisition Agreement, Obligor will execute and deliver such other instruments
which the Sellers may reasonably request in order to more effectively consummate
the assumption of the Assumed Liabilities contemplated by the Acquisition
Agreement.

Section 3. Nothing in this instrument, express or implied, is intended
or shall be construed to confer upon, or give to, any person, firm or
corporation, other than the Sellers and their successors and assigns, any remedy
or claim under or by reason of

1

this instrument or any terms, covenants or condition hereof, and all the terms,
covenants and conditions, promises and agreements in this instrument shall be
for the sole and exclusive benefit of the Sellers and their successors and
assigns.

Section 4. Notwithstanding anything to the contrary contained herein or
in the Acquisition Agreement, the assumption by Obligor of the Assumed
Liabilities as set forth above shall not be construed to defeat, impair or limit
in any way (i) any rights or remedies of Obligor against third parties to
contest or dispute the validity or amount of any of such Assumed Liabilities or
(ii) any other rights or remedies of the Obligor under the Acquisition
Agreement.

Section 5. Nothing contained herein shall release the Company or
Obligor from any of its duties or obligations under the Acquisition Agreement or
in any way diminish, limit or modify any of the representations, warranties,
covenants or agreements set forth in the Acquisition Agreement.

Section 6. This Assumption Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to the rules
of conflict of laws of the Sate of Delaware or any other jurisdiction. Until
confirmation of the Bankruptcy Plan, Obligor and the Sellers irrevocably and
unconditionally consent to submit to the jurisdiction of the Bankruptcy Court
for any litigation arising out of or relating to this Assumption Agreement and
the transactions contemplated hereby (and agree not to commence any litigation
relating thereto except in the Bankruptcy Court).

Section 7. This Assumption Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns.

Section 8. This Assumption Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same original.

********

2

IN WITNESS WHEREOF, this Assumption Agreement has been duly executed
and delivered by the duly respective authorized officers of each of Obligor and
the Sellers as of the date first above written.

CLEAN HARBORS, INC.

By: /s/ Alan McKim
---------------------------------------------
Name:  Alan McKim
Title: President

SAFETY-KLEEN SERVICES, INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SELLING SUBS:

SAFETY-KLEEN (CONSULTING), INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (LONE AND GRASSY MOUNTAIN), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

3

SAFETY-KLEEN (TULSA), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (SAN ANTONIO), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (WICHITA), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (DELAWARE), INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President of Sole Shareholder

4

SK SERVICES (EAST), L.C.

By: /s/ Larry W. Singleton
---------------------------------------------
Safety-Kleen (Delaware), Inc.,
its Sole Shareholder
Name:  Larry W. Singleton
Title: President of Sole Shareholder

SK SERVICES, L.C.

By: /s/ Larry W. Singleton
---------------------------------------------
Safety-Kleen (Delaware), Inc.,
its Sole Shareholder
Name:  Larry W. Singleton
Title: President of Sole Shareholder

SAFETY-KLEEN (ROSEMOUNT), INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (SAWYER), INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (PPM), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

5

NINTH STREET PROPERTIES, INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (SAN JOSE), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

CHEMCLEAR, INC. OF LOS ANGELES

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

USPCI, INC. OF GEORGIA

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN HOLDINGS, INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

6

SAFETY-KLEEN (WESTMORLAND), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BUTTONWILLOW), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (NE), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CROWLEY), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (LAPORTE), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

7

SAFETY-KLEEN (TG), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (ROEBUCK), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TS), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (COLFAX), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

GSX CHEMICAL SERVICES OF OHIO, INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

8

LEMC, INC.

By: /s/ Larry W. Singleton
---------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN CHEMICAL SERVICES, INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (ALTAIR), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (FS), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BDT), INC.

By: /s/ D. M. Sprinkle
---------------------------------------------
Name:  David M. Sprinkle
Title: President

9

SAFETY-KLEEN (GS), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CLIVE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (WT), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN OSCO HOLDINGS, INC.

By: /s/ Larry W. Singleton
-----------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (NASHVILLE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

10

SAFETY-KLEEN (BARTOW), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CALIFORNIA), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN  (CHATTANOOGA), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (PECATONICA), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

11

SAFETY-KLEEN (WHITE CASTLE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (PUERTO RICO), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BRIDGEPORT), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (DEER PARK), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (BATON ROUGE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

12

SAFETY-KLEEN (PLAQUEMINE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (CUSTOM TRANSPORT), INC.

By: /s/ Larry W. Singleton
-----------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (LOS ANGELES), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (TIPTON), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (GLOUCESTER), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

13

SAFETY-KLEEN (DEER TRAIL), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (MT. PLEASANT), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (MINNEAPOLIS), INC.

By: /s/ Larry W. Singleton
-----------------------------------------------
Name:  Larry W. Singleton
Title: President

SAFETY-KLEEN (ARAGONITE), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

SAFETY-KLEEN (SUSSEX), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

14

SAFETY-KLEEN (ENCOTEC), INC.

By: /s/ D. M. Sprinkle
-----------------------------------------------
Name:  David M. Sprinkle
Title: President

[Assumption Agreement]

15

Execution Copy

Exhibit 10.47

================================================================================

SECURITIES PURCHASE AGREEMENT

among

CLEAN HARBORS, INC.

and

THE BUYERS LISTED ON SCHEDULE A HERETO

September 6, 2002

================================================================================

TABLE OF CONTENTS

Page

1. PURCHASE AND SALE OF PREFERRED SHARES.......................................... 2

2. BUYER'S REPRESENTATIONS AND WARRANTIES......................................... 2

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.................................. 4

4. COVENANTS...................................................................... 29

5. TRANSFER AGENT INSTRUCTIONS.................................................... 31

6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL................................. 32

7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.............................. 33

8. INDEMNIFICATION................................................................ 36

9. MISCELLANEOUS.................................................................. 37

EXHIBITS

Exhibit A    -  Form of Certificate
Exhibit B    -  Form of Investors Rights Agreement
Exhibit C    -  Form of Voting Agreement
Exhibit D       Irrevocable Transfer Agent Instructions
Exhibit E       Sale Order
Exhibit F    -  Form of Company Counsel Opinion

-ii-

INDEX

Page

19.99% Rule..................................................................................  5
1933 Act.....................................................................................  1
1934 Act.....................................................................................  8
Agreement....................................................................................  1
Articles of Organization.....................................................................  6
Bankruptcy Code.............................................................................. 29
Business Day.................................................................................  2
Business Intellectual Property............................................................... 19
Business Trade Secrets....................................................................... 19
Buyers.......................................................................................  1
By-laws......................................................................................  7
CAA.......................................................................................... 24
Capital Stock................................................................................  7
CERCLA....................................................................................... 24
Certificate..................................................................................  1
Closing......................................................................................  2
Closing Date.................................................................................  2
Code......................................................................................... 15
Common Stock.................................................................................  1
Company......................................................................................  1
Company Financial Statements.................................................................  9
Congress..................................................................................... 34
Congress Loan Documents...................................................................... 35
Congress Loans............................................................................... 34
Copyrights................................................................................... 20
CSD Acquisition..............................................................................

1
CSD Acquisition Assets....................................................................... 28
CSD Acquisition Documents.................................................................... 28
CSD Balance Sheets...........................................................................  9
CSD Business.................................................................................  5
CWA.......................................................................................... 24
DTC.......................................................................................... 32
Employee Plans............................................................................... 15
Environmental Claims......................................................................... 23
Environmental Laws........................................................................... 24
Environmental Liabilities.................................................................... 24
Environmental Lien........................................................................... 24
Environmental Permits........................................................................ 24
EPCRA........................................................................................ 24
ERISA........................................................................................ 15
ERISA Affiliate.............................................................................. 15
FIFRA........................................................................................ 24
Financing Agreement..........................................................................  1

-iii-

Foreign Pension Plan............................................................................................ 16
FRBP............................................................................................................ 34
GAAP............................................................................................................  8
Governmental Authority.......................................................................................... 24
Handle.......................................................................................................... 24
Hazardous Materials............................................................................................. 25
Indebtedness.................................................................................................... 12
Indemnified Liabilities......................................................................................... 37
Indemnitees..................................................................................................... 37
Initial Lenders.................................................................................................  1
Intellectual Property........................................................................................... 19
Intellectual Property Contracts................................................................................. 20
Investment Company Status....................................................................................... 29
Investors Rights Agreement......................................................................................  1
Irrevocable Transfer Agent Instructions......................................................................... 32
Legal Requirements.............................................................................................. 14
Licensed Intellectual Property.................................................................................. 20
Liens...........................................................................................................  6
Material Adverse Effect.........................................................................................  5
McKim...........................................................................................................  1
OSHA............................................................................................................ 24
Patents......................................................................................................... 20
PBGC............................................................................................................ 16
Permits......................................................................................................... 26
Policies........................................................................................................ 25
Preferred Shares................................................................................................  2
Preferred Stock.................................................................................................  1
Preferred Stock Certificates....................................................................................  2
Principal Market................................................................................................ 31
Purchase Price..................................................................................................  2
RCRA............................................................................................................ 24
Registered...................................................................................................... 20
Regulation D....................................................................................................  3
Release......................................................................................................... 25
Remedial Action................................................................................................. 25
Required Policies............................................................................................... 25
Resolutions..................................................................................................... 35
Rule 144........................................................................................................  3
Sale Order...................................................................................................... 34
SEC.............................................................................................................  3
SEC Documents...................................................................................................  8
Securities......................................................................................................  5
Series B Preferred Stock........................................................................................  6
Shareholder's Rights Plan....................................................................................... 28
Stockholder Approval............................................................................................ 32
Subsidiaries....................................................................................................  4

-ii-

Suit..................................................................... 18
Technology Systems....................................................... 20
Title IV Plan............................................................ 15
TOSCA.................................................................... 24
Trade Secrets............................................................ 20
Trademarks............................................................... 20
Transaction Documents....................................................  5
Voting Agreement.........................................................  2
Voting Shareholders......................................................  1

-iii-

SECURITIES PURCHASE AGREEMENT

SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of
September 6, 2002, by and among Clean Harbors, Inc., a Massachusetts
corporation, with headquarters located at 1501 Washington Street, Braintree,
Massachusetts 02184 (the "Company") and the Buyers listed on the signature pages
hereto (the "Buyers").

WHEREAS, the Company proposes to purchase substantially all of
the assets of the Chemical Services Division of Safety-Kleen Corp. and its
subsidiaries, each as a debtor-in-possession (collectively, "CSD"), pursuant to
Sections 363/365 of the United States Bankruptcy Code (the "CSD Acquisition");

WHEREAS, simultaneously herewith, the Company and certain of
its Subsidiaries, as borrowers, certain of the Company's Subsidiaries, as
guarantors, the lenders from time to time parties thereto, as lenders, (the
"Initial Lenders") and Ableco Finance, LLC, as agent for the Initial Lenders,
have entered into a Financing Agreement, dated as of the date hereof (such
agreement as in effect on the date hereof, the "Financing Agreement"), pursuant
to which the Initial Lenders have agreed to make senior and senior subordinated
loans and other extensions of credit to the Company to finance the CSD
Acquisition, to refinance certain indebtedness and for other proper purposes;

WHEREAS, the Buyers, each of whom is an affiliate of one of
the Initial Lenders, desire to purchase from the Company, and the Company
desires to sell and issue to the Buyers shares of Series C Convertible Preferred
Stock, par value $0.01 per share, of the Company (the "Preferred Stock"), which
are convertible into shares (the "Conversion Shares") of the Company's Common
Stock, par value $0.01 per share (the "Common Stock"), and have the rights,
restrictions, privileges and preferences set forth in the Certificate of Vote of
Directors Establishing a Series of a Class of Stock, (the "Certificate"), which
shall contain the vote and the description of Series C Convertible Preferred
Stock in the form attached hereto as Exhibit A;

WHEREAS, contemporaneously with the execution and delivery of
this Agreement, the Company, the Buyers and Alan S. McKim and the Trustees of
the Alan S. McKim Children's Trust, who are significant shareholders of the
Company (collectively, "McKim") are executing and delivering to each other an
Investors Rights Agreement substantially in the form attached hereto as Exhibit
B (the "Investors Rights Agreement"), pursuant to which the Company has agreed,
among other things, to provide to the Buyers certain registration rights under
the Securities Act of 1933, as amended (the "1933 Act") and the rules and
regulations promulgated thereunder and applicable state securities laws and
McKim has, among other things, agreed to grant the Buyers certain rights to
tag-along to sales of Common Stock by McKim;

WHEREAS, contemporaneously with the execution and delivery of
this Agreement, the Company and certain shareholders of the Company (the "Voting
Shareholders") are executing and delivering to the Buyers a Voting Agreement
substantially in the form attached hereto as Exhibit C (the "Voting Agreement"),
pursuant to which the Voting Shareholders have

-1-

agreed, among other things, to vote in favor of any matter brought to a vote of
the shareholders of the Company regarding the transactions contemplated hereby
and the other Transaction Documents (as defined herein); and

WHEREAS, the location of defined terms in this Agreement is
set forth on the Index of Terms attached hereto.

NOW, THEREFORE, in consideration of the foregoing premises and
the covenants and agreements contained herein, the parties agree as follows:

1. PURCHASE AND SALE OF PREFERRED SHARES.

a. Purchase of Preferred Shares. Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below
and in reliance on the representations, warranties, covenants and other
agreements herein, the Company shall issue and sell to each Buyer, and each
Buyer severally agrees to purchase from the Company, the respective number of
shares of Preferred Stock (the "Preferred Shares") set forth opposite such
Buyer's name on Schedule A (the "Closing") at a purchase price of $1,000 per
share, or an aggregate purchase price for all Preferred Shares of $25,000,000
the "Purchase Price").

b. The Closing. The date and time of the Closing (the
"Closing Date") shall be 10:00 a.m., New York City time, on September 9, 2002,
or if earlier, on the first Business Day after which all conditions to closing
identified in Sections 6 and 7 hereof have been satisfied or waived by the party
entitled to grant such waiver (or such later date as is mutually agreed to by
the Company and the Buyers). The Closing shall occur on the Closing Date at the
offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022.
For all purposes of this Agreement, the term "Business Day" means any day other
than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed.

c. Payment and Delivery. Subject to the terms and
conditions of this Agreement, on the Closing Date,

(i)  each Buyer shall pay its respective share of the
Purchase Price set forth on Schedule A to the Company for the Preferred Shares
to be issued and sold to such Buyer by wire transfer of immediately available
funds in accordance with the Company's written wire instructions; and

(ii) the Company shall deliver to each Buyer stock
certificates (in the denominations as such Buyer shall request) (the "Preferred
Stock Certificates"), representing such number of the Preferred Shares which
such Buyer is then purchasing hereunder, in each case, duly executed on behalf
of the Company and registered in the name of such Buyer or its nominee(s).

2. BUYER'S REPRESENTATIONS AND WARRANTIES.

Each Buyer represents and warrants with respect to only itself
that:

-2-

a. Organization and Qualification. Such Buyer is an entity
duly authorized and validly existing under the laws of its jurisdiction of
organization and has the requisite power to carry on its business as it is now
being conducted and currently proposed to be conducted.

b. Authorization; Enforcement; Validity. This Agreement and
the Investors Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Buyer and are legal, valid and binding
obligations of such Buyer, enforceable against such Buyer in accordance with
their terms, subject as to enforceability to general principles of equity and to
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of
applicable creditors' rights and remedies.

c. Investment Purpose. Such Buyer is acquiring the Securities
for its own (or an Affiliate's) account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the 1933 Act; provided, however,
that by making the representations herein, such Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time.

d. Accredited Investor Status. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a)(3) of Regulation D ("Regulation
D") as promulgated by the United States Securities and Exchange Commission (the
"SEC") under the 1933 Act.

e. Reliance on Exemptions. Such Buyer understands that the
Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of the United States federal and state
securities laws and that the Company is relying upon the truth and accuracy of,
and such Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.

f. Transfer or Resale. Such Buyer understands that except as
provided in the Investors Rights Agreement, the Securities have not been and are
not being registered under the 1933 Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (i) subsequently
registered thereunder, (ii) such Securities to be sold, assigned or transferred
may be sold, assigned or transferred pursuant to an exemption from such
registration, or (iii) such Buyer provides the Company with reasonable
assurance, upon request by the Company, that such Securities can be sold,
assigned or transferred pursuant to Rule 144 promulgated under the 1933 Act (or
a successor rule thereto) ("Rule 144").

g. Legends. Such Buyer understands that, until such time as
the sale of the Securities have been registered under the 1933 Act as
contemplated by the Investors Rights Agreement, the stock certificates
representing the Securities, except as set forth below, shall bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of such stock certificates):

-3-

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) EXCEPT PURSUANT TO (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS OR (B) PURSUANT TO RULE 144 UNDER SAID ACT
OR (C) ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE 1933
ACT RELATING TO THE DISPOSITION OF SECURITIES.

The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, (i) such Securities are registered for resale under the 1933 Act,
(ii) in connection with a sale transaction, such holder provides the Company
with an opinion of counsel, in a form reasonably acceptable to the Company, to
the effect that a public sale, assignment or transfer of the Securities may be
made without registration under the 1933 Act, or (iii) such holder provides the
Company with reasonable assurances that the Securities can be sold pursuant to
Rule 144 without any restriction as to the number of securities acquired as of a
particular date that can then be immediately sold.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company represents and warrants to each of the Buyers (it
being understood and agreed that, unless the context otherwise requires, such
representations and warranties are made assuming the completion of the CSD
Acquisition in accordance with the CSD Acquisition Documents and after giving
full effect thereto), that:

a. Organization and Qualification. The Company and its
"Subsidiaries" (which for purposes of this Agreement means any entity in which
the Company, directly or indirectly, owns 50% or more of the capital stock or
other equity, economic or similar interests or owns capital stock or holds an
equity, economic or similar interest which ownership entitles the Company to
elect 50% or more of the board of directors or similar governing body of such
entity, and assuming the CSD Acquisition has been completed) are entities duly
organized and validly existing in good standing under the laws of the
jurisdiction in which they are incorporated, and have the requisite corporate or
other power and authorization to own their properties and to carry on their
business as now being conducted and currently proposed to be conducted. Each of
the Company and its Subsidiaries is duly qualified as a foreign corporation to
do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect. As
used in this Agreement, "Material Adverse Effect" means any material adverse
effect on the business, properties, assets, operations, results of operations,
prospects or financial condition of the Company and its Subsidiaries, taken as a
whole, on the business, assets

-4-

(tangible and intangible), accounts receivable, rights, contracts, agreements,
instruments, equipment, inventory, intellectual property, claims, property (real
or otherwise), licenses, Permits, authorizations, approvals, bank accounts,
lockbox arrangements, banks and records and goodwill and liabilities of the
Chemical Services Division of Safety-Kleen Services, Inc. acquired or assumed
(by agreement, operation of law or otherwise) by the Company pursuant to the CSD
Acquisition Documents (the "CSD Business"), or on the transactions contemplated
hereby or by the agreements and instruments to be entered into in connection
herewith, or on the authority or ability of the Company to perform its
obligations under the Transaction Documents (as defined below) or the
Certificate. A true, complete and correct list of the Company's Subsidiaries is
set forth on Schedule 3(a).

b. Authorization; Enforcement; Validity. The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Investors Rights Agreement, the Voting
Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section 5)
and each of the other agreements entered into by the parties hereto in
connection with the transactions contemplated by this Agreement, including the
Financing Agreement, the Congress Loan Documents and the CSD Acquisition
Documents (the "Transaction Documents"), and to issue the Preferred Shares and
the Conversion Shares issuable upon conversion of the Preferred Shares in
accordance with the terms of the Certificate (the Preferred Shares and the
Conversion Shares collectively referred to as the "Securities") in accordance
with the terms hereof and thereof. The execution and delivery of the Transaction
Documents by the Company and the execution and filing of the Certificate by the
Company and the consummation by it of the transactions contemplated hereby and
thereby, including, without limitation, the issuance and reservation for
issuance of the Preferred Shares and the Conversion Shares issuable upon
conversion thereof have been duly authorized by the Company's Board of Directors
and no further consent or authorization is required by the Company, its Board of
Directors or its stockholders (except to the extent that stockholder approval
may be required pursuant to the rules of the NASD for the issuance of a number
of Conversion Shares greater in the aggregate than 19.99% of the number of
shares of Common Stock outstanding immediately prior to the Closing Date (the
"19.99% Rule")). The Transaction Documents have been duly executed and delivered
by the Company. The Transaction Documents constitute the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies. The
Certificate will be filed on or prior to the Closing Date with the Secretary of
State of the Commonwealth of Massachusetts and will be in full force and effect
on or prior to the Closing Date, enforceable against the Company in accordance
with its terms and shall not have been amended unless in compliance with its
terms.

c. Capitalization. The authorized capital stock of the Company
consists of (i) 20,000,000 shares of Common Stock, of which as of August 31,
2002 12,164,312 shares are issued and outstanding, no shares are held in
treasury, 2,087,625 shares are reserved for issuance pursuant to the Company's
stock option and purchase plans, and no shares are issuable or reserved for
issuance pursuant to securities (other than the Preferred Shares and shares
reserved for issuance pursuant to the Company's stock option and purchase plans
and 340,480 shares of Common Stock reserved for issuance pursuant to the
conversion of the Series

-5-

B Convertible Preferred Stock, par value $0.01 per share, of the Company (the
"Series B Preferred Stock")) and 1,237,808 shares of Common Stock reserved for
issuance pursuant to the exercise of outstanding warrants to purchase Common
Stock) exercisable or exchangeable for, or convertible into, shares of Common
Stock and (ii) 2,000,000 shares of preferred stock, 894,585 shares of which are
designated Series A Preferred Stock of the Company, none of which are issued and
outstanding and 156,416 shares of which of which are designated as Series B
Convertible Preferred Stock, 112,000 of which are issued and outstanding. All of
such outstanding shares have been, or upon issuance will be, validly issued and
are fully paid and nonassessable. Except as disclosed in Schedule 3(c), (A) no
Capital Stock of the Company or any of its Subsidiaries are subject to
preemptive rights or any other similar rights (arising under Massachusetts law,
the Company's Articles of Organization (defined below) or By-laws (defined
below) or any agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound) or any pledges, claims, liens, mortgages, charges, encumbrances and
security interests of any kind or nature whatsoever (collectively, "Liens" )
granted or created by the Company; (B) there are no outstanding debt securities
issued by the Company or any of its Subsidiaries which are convertible or
exercisable into or exchangeable for Capital Stock of the Company or any of its
Subsidiaries; (C) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, any Capital Stock of
the Company or any of its Subsidiaries, or contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional Capital Stock of the Company or any
of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls
or commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any Capital Stock of the
Company or any of its Subsidiaries; (D) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to register the
sale of any of their Capital Stock under the 1933 Act (other than the Investors
Rights Agreement); (E) there is no outstanding Capital Stock or instrument of
the Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem any Capital Stock or any debt security of the Company or any of
its Subsidiaries (other than in the Certificate); (F) there is no outstanding
Capital Stock or instrument of the Company or any of its Subsidiaries containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Securities as described in this Agreement; and (G) the Company does not have
any stock appreciation rights or "phantom stock" plans or agreements or any
similar plan or agreement. The Company has furnished to each Buyer (or its
representatives) true, complete and correct copies of the Company's Articles of
Organization, as amended and as in effect on the date hereof (the "Articles of
Organization"), and the Company's By-laws, as amended and as in effect on the
date hereof (the "By-laws"), and the terms of all securities convertible into or
exercisable or exchangeable for Capital Stock and the material rights of the
holders thereof in respect thereto, including, without limitation, stock options
granted under any benefit plan or stock option plan of the Company. For purposes
of this Agreement, the term "Capital Stock" means (A) with respect to any Person
that is a corporation, any and all shares, interests, participations or other
equivalents (however designated and whether or not voting) of corporate stock,
and (B) with respect to any Person that is not a corporation, any and all
partnership, membership or other equity interests of such Person.

-6-

d.   Issuance of Securities. The Preferred Shares are duly
authorized and, upon issuance in accordance with the terms hereof, shall be (i)
validly issued, fully paid and non-assessable, (ii) free from all taxes, and
Liens with respect to the issuance thereof and (iii) entitled to the rights and
preferences set forth in the Certificate. As of the Closing Date, at least
2,380,953 shares of Common Stock (subject to adjustment pursuant to the
Company's covenant set forth in Section 4(e) below) will have been duly
authorized and reserved for issuance of the Conversion Shares. Upon conversion
or issuance in accordance with the Certificate, as applicable, the Conversion
Shares will be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issue thereof, with the holders
being entitled to all rights accorded to a holder of Common Stock. Based in part
on the representations made by the Buyers in Section 2 hereof, the issuance by
the Company of the Securities is exempt from registration under the 1933 Act.

e.   No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company, the performance by the Company of its
obligations under the Certificate, the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
reservation for issuance and issuance of the Conversion Shares) and the
performance by the Company and its Subsidiaries of their respective obligations
under the CSD Acquisition Documents and the consummation by the Company and its
Subsidiaries of the transactions contemplated by the CSD Acquisition Documents
do not and will not (i) result in a violation of the Articles of Organization or
the By-laws; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, indenture, lease or instrument, permit, concession,
franchise or license to which the Company or any of its Subsidiaries is a party;
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the Principal Market (as defined below)) applicable to
the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected. Neither the Company nor
its Subsidiaries is in violation, in any material respect, of any term of its
Articles of Organization or its By-laws or their organizational charter or
by-laws or other constituent documents, respectively. Except as disclosed in
Schedule 3(e) and as specifically contemplated by this Agreement and as required
under the 1933 Act or under any applicable state securities laws, the Company is
not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or Governmental Authority in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents, to perform its obligations under the Certificate in
accordance with the terms hereof or thereof, to complete the CSD Acquisition or
to perform its obligations under any of the CSD Acquisition Documents. Except as
disclosed in Schedule 3(e), all consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company and its Subsidiaries are unaware of any facts or circumstances which
might give rise to any of the foregoing. The Company is not in violation of the
listing requirements of the Principal Market and has no actual knowledge of any
facts which would reasonably lead to delisting or suspension of the Common Stock
by the Principal Market in the foreseeable future.

f.   SEC Documents; Financial Statements.

-7-

(i)  Except as set forth on Schedule 3(f), since January 1, 2001,
the Company has filed all reports, schedules, forms, statements and other
documents required to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act")
(all of the foregoing filed prior to the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the "SEC
Documents"). As of the date of filing of such SEC Documents, such SEC Documents,
as it may have been subsequently amended by filings made by the Company with the
SEC prior to the date hereof, complied in all material respects with the
requirements of the 1934 Act and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents. None of the SEC
Documents, as of the date filed and as they may have been subsequently amended
by filings made by the Company with the SEC prior to the date hereof, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company and its
Subsidiaries as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). None of the Company nor any of its
Subsidiaries have any material liabilities or obligations of any nature (whether
known or unknown, and whether absolute, accrued, contingent, matured,
liquidated, unasserted or otherwise) of a kind required by generally accepted
accounting principles ("GAAP") to be set forth on a financial statement that is
not fully and adequately reflected or reserved against in the financial
statements contained in the Company's most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q filed with the SEC, other than liabilities
expressly assumed in connection with the CSD Acquisition and liabilities and
obligations incurred since June 30, 2002 in the ordinary course of business
consistent with past practice that are not material in amount.

(ii) The Company has delivered to each Buyer (or its
representatives) true, complete and correct copies of the audited balance sheets
of the CSD Business as of the fiscal years of the CSD Business ended August 31,
1999, 2000 and 2001, together with a report thereon from Arthur Andersen LLP
(collectively, the "CSD Balance Sheets"). The Company has also delivered to each
Buyer (or its representatives) true, complete and correct copies of the
unaudited consolidated balance sheet of the Company and its Subsidiaries as of
June 30, 2002 and the related consolidated statements of operations, cash flows
and stockholders' equity for the six month period then ended (the "Company
Financial Statements ". The CSD Balance Sheets and the Company Financial
Statements fairly present the consolidated financial condition of the Company
and its Subsidiaries or the CSD, as the case may be, as at the respective dates
thereof and the consolidated results of operations of the Company and its
Subsidiaries for the fiscal periods ended on such respective dates, all in
accordance with GAAP. To the best of the Company's knowledge, after due inquiry
of the

-8-

management of the CSD responsible for the preparation of the CSD Balance Sheets,
the CSD Balance Sheets fairly present in accordance with GAAP in all material
respects each item of working capital, line item by line item as of the dates
indicated thereon.

(iii) The Company has heretofore furnished to each Buyer (A)
projected quarterly balance sheets and statements of operations and cash flows
of the Company and its Subsidiaries (after giving effect to the CSD Acquisition)
for the period from October 1, 2002 through December 31, 2004 and (B) projected
annual balance sheets and statements of operations and cash flows of the Company
and its Subsidiaries for the fiscal years ending in 2002 through 2007. Such
projections are believed by the Company to be reasonable, have been prepared on
a reasonable basis and in good faith by the Company in light of (w) the
historical financial performance of the Company, (x) to the best knowledge of
management of the Company, after reasonable inquiry, the projected financial
performance of CSD, (y) current and reasonably foreseeable business conditions
and (z) believed by the Company to be reasonable at the time made and upon the
best information then reasonably available to the Company. The Company is not
aware of any facts or information that would lead it to believe that such
projections are incorrect or misleading in any material respect.

g.   Full Disclosure. No other information provided by or on
behalf of the Company to the Buyers which is not included in the SEC Documents,
including, without limitation, information referred to in Section 2(f), contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they are or were made, not misleading. The Company is
not required to file and will not be required to file any agreement, note,
lease, mortgage, deed or other instrument entered into prior to the date hereof
and to which the Company or any Subsidiary is a party or by which the Company or
any Subsidiary is bound which has not been previously filed as an exhibit to its
reports filed with the SEC under the 1934 Act.

h.   Absence of Certain Changes. Since June 30, 2002, neither the
Company nor any of its Subsidiaries has:

(i)   suffered any Material Adverse Effect or any event,
change occurrence or development, reasonably likely to cause or have a Material
Adverse Effect;

(ii)  conducted its business and operations other than in
the ordinary course of business and consistent with past practices;

(iii) except for the dividend of $1.00 per share paid in
cash on July 15, 2002, to the holders of the Company's 112,000 outstanding
shares of Series B Convertible Preferred Stock, declared, set aside or paid any
dividend on, or other distribution (whether in cash, stock or property, or any
combination thereof) in respect of, any of the Company's or any of its
Subsidiary's Capital Stock, or purchased, redeemed or otherwise acquired or
agreed to purchase, redeem or otherwise acquire, any Capital Stock of the
Company or its Subsidiaries or any options, warrants, calls or rights to acquire
any such Capital Stock, other than dividends from any wholly-owned Subsidiary of
the Corporation to the Corporation or another wholly-owned Subsidiary of the
Corporation;

-9-

(iv)   undergone a material change in accounting method,
principles or practices, except as may be required by a concurrent change in
GAAP or disclosed in the footnotes to any of the financial statements included
in the SEC Documents;

(v)    except as required by this Agreement, authorized for
issuance, sold, delivered, granted or issued any options, warrants, calls,
subscriptions or other rights for, or otherwise agreed or committed to issue,
sell, deliver or grant any shares of any class of Capital Stock of the Company
or any of its Subsidiaries or any securities convertible into or exchangeable or
exercisable for shares of any class of Capital Stock of the Company or its
Subsidiaries;

(vi)   except in the ordinary course of business and consistent
with past practice and except in connection with the Financing Agreement, the
Congress Loan Documents and in connection with the CSD Acquisition, as described
in Schedule 3(h)(vi), (A) created or incurred any indebtedness for borrowed
money, (B) assumed, guaranteed, endorsed or otherwise as an accommodation become
responsible for the obligations of any other Person, (C) made any loans or
advances to any other Person, or (D) mortgaged, pledged or subjected to any
Lien, any asset having a book or market value in excess of $100,000;

(vii)  granted any increase in the base compensation of, or made
any other material change in employment terms for, any of its directors,
officers and employees, except for increases or changes based upon changed
responsibilities or duties and increases or changes made in the ordinary course
of business consistent with past practice;

(viii) adopted, modified or terminated any bonus, profit-sharing,
incentive, severance or other plan or contract for the benefit of any of its
directors, officers and employees other than changes which do not materially
increase the aggregate cost of such plan or contract;

(ix)   except for the provision of services or sales in the
ordinary course of business and consistent with past practice, sold, leased,
licensed, transferred or otherwise disposed of any of its assets or property
having a book or market value in excess of $100,000;

(x)    entered into any new line of business, or incurred or
committed to incur any capital expenditures, obligations or liabilities in
connection therewith in excess of $1,000,000 in the aggregate;

(xi)   other than the CSD Acquisition, acquired or agreed to
acquire by merging or consolidating with, or agreed to acquire by purchasing a
substantial portion of the assets of, or in any other manner, any business of
any other Person for aggregate consideration valued at more than $500,000;

(xii)  made any cancellation or waiver of (A) any right material
to the operation of the business of the Company or its Subsidiaries, or (B) any
debts or claims against any affiliate of the Company;

-10-

(xiii) made any disposition of, or failed to keep in effect
any material right in, to or for the use of any material Intellectual Property
of the Company or its Subsidiaries;

(xiv)  suffered any damage, destruction or loss, whether or
not covered by insurance, that has had or is reasonably likely to have a
Material Adverse Effect;

(xv)   entered into any agreement, arrangement or
transaction with any shareholder, employee, officer or director of the Company
or any of its Subsidiaries (other than customary agreements for services as
employees, officers and directors that have been filed as exhibits to an SEC
Document) or any Person controlling, controlled by or under common control with
the Company;

(xvi)  except in connection with the CSD Acquisition as
described in subsections (x) through (xii) of Section 6.01(r) of the Financing
Agreement, incurred or project to incur any closure, clean-up or remediation
costs with respect to any current or formerly owned or leased property of the
Company or any of its Subsidiaries in excess of $1,000,000 in the aggregate; or

(xvii) agreed to do any of the things described in the
preceding clauses (i) through (xvi).

The Company has not taken any steps, and does not currently
expect to take any steps, to seek protection pursuant to any bankruptcy law nor
does the Company or any of its Subsidiaries have any knowledge or reason to
believe that its creditors intend to initiate involuntary bankruptcy proceedings
or any actual knowledge of any fact which would reasonably lead a creditor to do
so.

i.   Material Contracts.

(i)    Neither the Company nor any of its Subsidiaries is a
party to or bound by, and neither they nor their properties are subject to, any
contracts, agreements or arrangements required to be disclosed in a Form 10-K or
10-Q under the Exchange Act which is not filed as an exhibit to one or more of
the SEC Documents filed and publicly available.

(ii)   Schedule 3(i) sets forth as of the date hereof (A) a
list of all written and oral contracts, agreements, instruments or arrangements
to which the Company or any of its Subsidiaries is a party or by which the
Company or such Subsidiary or any of their respective assets is bound which
would be required to be filed as exhibits to the Company's Annual Report on Form
10-K for the year ending December 31, 2001 or any subsequent Exchange Act filing
by the Company, including, without limitation, all such contracts, agreement,
instrument and arrangements relating to the CSD Business that would have been
required to be filed by the Company as an exhibit to an SEC Document had the CSD
Acquisition occurred prior to the date of this Agreement; and (B) the following
written and oral arrangements (all such written or oral agreements, arrangements
or commitments as are required to be set forth on Schedule 3(i) or filed as
exhibits to any SEC Document, collectively the "Material Contracts"):

-11-

(A) each partnership, joint venture or similar agreement of
the Company or any of its Subsidiaries with another Person that is material to
the operation of the business of the Company or any of its Subsidiaries or the
CSD Business;

(B) each contract or agreement under which the Company or
any of its Subsidiaries have created, incurred, assumed or guaranteed (or may
create, incur, assume or guarantee) Indebtedness of more than $100,000 in
principal amount or under which the Company or any of its Subsidiaries have
imposed (or may impose) a Lien on any of their respective assets, whether
tangible or intangible securing Indebtedness in excess of $100,000.
"Indebtedness" shall have the meaning ascribed to such term in the Certificate;

(C) each contract or agreement to which the Company or any
of its Subsidiaries is a party which involves an obligation or commitment to pay
or be paid an amount in excess of $1,000,000 per year;

(D) each contract or agreement which involves or contributes
to the Company or any of its Subsidiaries aggregate annual remuneration which
exceeds 2% of the Company's and its Subsidiaries' consolidated annual net
revenues for the twelve months ended December 31, 2000, December 31, 2001 or
December 31, 2002 (projected), in each case both before and after giving effect
to the CSD Acquisition;

(E) each contract or agreement relating to employment or
consulting which provides for annual compensation in excess of $100,000 and each
severance, termination, confidentiality, non-competition or indemnification
agreement or arrangement with any of the directors, officers, consultants or key
employees of the Company or any of its Subsidiaries;

(F) each contract or agreement to which the Company or any
of its Subsidiaries or affiliates is a party limiting, in any material respect,
the right of the Company or any of its Subsidiaries (x) to engage in, or to
compete with any Person in, any business, including each contract or agreement
containing exclusivity provisions restricting the geographical area in which, or
the method by which, any business may be conducted by the Company or any of its
Subsidiaries or affiliates or (y) to solicit any customer or client;

(G) all contracts or agreements between the Company or any
of its Subsidiaries and any shareholder, employee, officer or director of the
Company or any Subsidiary, and any Person controlling, controlled by or under
common control with the Company;

(H) each contract, agreement and franchise with any
municipality, county or city for waste collection, disposal, recycling or other
services which provides for aggregate payments in excess of $1,000,000 and is
for a term of one year or longer (whether or not subject to early termination);

(I) all other contracts or agreements which are material to
the Company and its Subsidiaries taken as a whole or the CSD Business or the
conduct of their respective businesses, other than those made in the ordinary
course of business or those which

-12-

are terminable by the Company or any of its Subsidiaries upon no greater than 60
days prior notice and without penalty or other adverse consequence;

(J)   all contracts or agreements pursuant to which the
Company or any of its Subsidiaries is required to make payment of any cure
amount under contract or agreement being assigned by the CSD to the Company or
any of its Subsidiaries; and

(K)   all other contracts or agreements obligating the
Company or any of its Subsidiaries to indemnify or guarantee the indemnification
of any other Person.

(iii) All the Material Contracts are valid, subsisting, in
full force and effect, binding upon the Company or one of its Subsidiaries in
accordance with their terms, and to the knowledge of the Company, binding upon
the other parties thereto in accordance with their terms. The Company and its
Subsidiaries have paid in full or accrued all amounts now due from them under
the Material Contracts (including all cure amounts due under contracts or
agreements referred to in Section 3(i)(ii)(J) above) and have satisfied in full
or provided for all of their liabilities and obligations under the Material
Contracts which are presently required to be satisfied or provided for, and are
not (with or without notice or lapse of time or both) in default in any material
respect under any of the Material Contracts nor to the knowledge of the Company
is any other party to any such Material Contract (with or without notice or
lapse of time or both) in default in any material respect thereunder. No notice
of termination or cancellation or intent to terminate or cancel has been given
by the Company or any Subsidiary to any other party to any Material Contract and
none of the Company nor any Subsidiary has received notice of termination or
cancellation of a Material Contract or the intention to terminate or cancel any
Material Contract from any other party thereto, and, to the Company's knowledge,
no basis exists for any such termination or cancellation of any Material
Contract.

j.   Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by any court or Governmental Authority,
self-regulatory organization or body pending or, to the knowledge of the Company
or any of its Subsidiaries, threatened against or affecting the Company, the CSD
Acquisition, the CSD Business or any of the Company's Subsidiaries or any of the
Company's or the Company's Subsidiaries' officers or directors in their
capacities as such, except as expressly set forth in Schedule 3(j), which seeks
injunctive or declaratory relief against or affecting the Company, any of its
Subsidiaries or any of their respective assets or properties or, with respect to
the Company and its Subsidiaries, that if adversely determined, could have a
Material Adverse Effect. To the knowledge of the Company, none of the directors
or officers of the Company have been a party to any securities related
litigation during the past five years.

k.   Acknowledgment Regarding Buyer's Purchase of Securities.
The Company acknowledges and agrees that each of the Buyers is acting solely in
the capacity of an arm's length purchaser with respect to the Transaction
Documents and the Certificate and the transactions contemplated hereby and
thereby. The Company further acknowledges that each Buyer is not acting as a
financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the Certificate and the transactions
contemplated hereby and thereby and any advice given by any of the Buyers or any
of their respective representatives or agents in connection with the Transaction
Documents and the

-13-

Certificate and the transactions contemplated hereby and thereby is merely
incidental to such Buyer's purchase of the Securities. The Company further
represents to each Buyer that the Company's decision to enter into the
Transaction Documents has been based solely on the independent evaluation by the
Company and its representatives.

l.   Compliance with Law. Except as set forth on Schedule
3(l), none of the Company, any of its Subsidiaries or, to the Company's
knowledge, the CSD Business (i) has violated or conducted its business or
operations in violation of, and has not used or occupied its properties or
assets in material violation of, any statute, law, ordinance, rule, regulation,
permit, order, writ, judgment, injunction, decree or award issued, enacted or
promulgated by any Governmental Authority or any arbitrator ("Legal
Requirements"), (ii) to the Company's knowledge, has been alleged to be in
material violation of any Legal Requirement, and (iii) has received any notice
of any violation or alleged material violation of, or any citation for material
non-compliance with, any Legal Requirements.

m.   No General Solicitation. Neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D under the 1933 Act) in connection with the offer or sale of the
Securities.

n.   No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
issuance by the Company of any of the Securities under the 1933 Act or cause
this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the 1933 Act or, except as set forth on Schedule 3(n),
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of the Principal Market, nor will the Company or
any of its Subsidiaries take any action or steps that would require registration
of the issuance by the Company of any of the Securities under the 1933 Act or,
except as set forth on Schedule 3(n), cause the offering of the Securities to be
integrated with other offerings.

o.   Employee Benefit Plans; Labor Matters. (i) Schedule
3(o) lists all "employee benefit plans," as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and all
material bonus, stock option, stock purchase, stock appreciation right,
incentive, deferred compensation, supplemental retirement, severance and other
similar material fringe or employee benefit plans, programs, policies or
arrangements, any material employment, consulting or executive compensation
agreements that are currently maintained or have been maintained within the last
six years by the Company or any trade or business under common control with the
Company (an "ERISA Affiliate"), within the meaning of Section 414 of the
Internal Revenue Code of 1986, as amended (the "Code"), or under which the
Company or any ERISA Affiliate has, or within the last six years had, any
liability or obligation to contribute, for the benefit of or relating to any
employee, former employee or retiree of the Company or any ERISA Affiliate
(collectively, for purposes of this Section 3(o), referred to as the "Employee
Plans").

-14-

(ii)  With respect to any Employee Plan, where applicable,
(A) such Employee Plan has been maintained in accordance with ERISA, the Code,
the terms of such Employee Plan and other applicable Legal Requirements; (B) a
favorable determination letter has been obtained from the IRS, and a copy
thereof delivered to each Buyer, for any such Employee Plan that is an "employee
pension benefit plan" within the meaning of Section 3(2) of ERISA and which is
intended to be qualified within the meaning of Section 401(a) of the Code, and
since such determination letter, no event has occurred that would disqualify
such Plan; (C) there has been no non-exempt "prohibited transaction" (including
without limitation as a result of any of the transactions contemplated hereby)
within the meaning of Section 4975(c) of the Code or Section 406 of ERISA
involving the assets of any Employee Plan; and (iv) neither the Company nor any
ERISA Affiliate is or was during the preceding six years obligated to contribute
to any multiemployer plan and neither the Company nor any ERISA Affiliate has
assumed any obligation of any predecessor of the Company with respect to any
multiemployer plan.

(iii) There are no pending actions which have been asserted
in writing or instituted (other than in respect of benefits due in the ordinary
course which, in the aggregate are not material) against the assets of any of
the Employee Plans or against the Company or any ERISA Affiliate or any
fiduciary of the Employee Plans with respect to the Employee Plans.

(iv)  Except as required by Section 4980B of the Code, no
Employee Plan or other arrangement provides medical or death benefits with
respect to current or former employees of the Company or any ERISA Affiliate
beyond their retirement or other termination of employment. Any continuation
coverage provided under any welfare benefits plans complies with Section 4980B
of the Code and is at the expense of the participant or beneficiary.

(v)   No Employee Plan has incurred an "accumulated funding
deficiency" and there has not been any unpaid required installments, within the
meaning of Section 412 of the Code, nor has there been issued a waiver or
variance of the minimum funding standards imposed by the Code with respect to
any Employee Plan that is subject to Title IV of ERISA (a "Title IV Plan"), nor
has any Lien been created under Section 302(f) of ERISA or security been
required under Section 307 of ERISA, nor are any excise taxes due or hereafter
to become due under Section 4971 or 4972 of the Code with respect to the funding
of any such plan for any plan year or other fiscal period ending on or before
the Closing Date. With respect to each Title IV Plan, there has not occurred any
reportable event within the meaning of Section 4043(b) of ERISA or the
regulations thereunder. The Pension Benefit Guaranty Corporation ("PBGC") has
not instituted or, to the knowledge of the Company or any ERISA Affiliate,
threatened a proceeding to terminate any Title IV Plan. All PBGC premiums due on
or before the Closing Date with respect to any Title IV Plan have been paid in
full, including late fees, interest and penalties, if and to the extent
applicable. True, correct and complete copies of the most recent actuarial
report which accurately reflects the funded status and contribution requirements
for each Title IV Plan have been delivered to each Buyer (or its
representatives). There has been no material adverse change in the assets,
liabilities or financial position of each Title IV Plan since the date of the
most recent actuarial report. Neither the Company nor any ERISA Affiliate has,
at any time within the five year period preceding the Closing Date, entered

-15-

into any transaction the principal purpose of which was to evade liability to
which the Company or such ERISA Affiliate would otherwise be subject under Title
IV of ERISA. The principal purpose of the Company in entering into the
transactions contemplated by this Agreement is not to evade liability to which
the Company would otherwise be subject under Title IV of ERISA.

(vi)   No Employee Plan or agreement, program, policy or other
arrangement by its terms or in effect would or could possibly require any
payment or transfer of money, property or other consideration on account of or
in connection with the transactions contemplated by this Agreement, including
but not limited to any employee (current, former or retired) of the Company or
any ERISA Affiliate (whether or not any such payment would constitute a
"parachute payment" or "excess parachute payment" within the meaning of Section
280G of the Code).

(vii)  Neither the Company nor any ERISA Affiliate has
incurred any obligations in connection with the termination of or withdrawal
from any Foreign Pension Plan (as defined below), or has any unfunded liability
with respect to benefits under any such Foreign Pension Plan. "Foreign Pension
Plan" means any plan, fund or other similar program maintained outside the
United States of America primarily for the benefit of employees residing outside
of the United States of America, or that has been maintained within the last six
years by the Company or any ERISA Affiliate or under which the Company or any
ERISA Affiliate has had any liability or obligation to contribute within the
past six years, which plan, fund or other similar program provides retirement
income for such employees, results in a deferral of income for such employees in
contemplation of retirement or provides payments to be made to such employees
upon termination of employment, and which plan is not subject to ERISA or the
Code.

(viii) Any terminated Employee Plan has been terminated in
accordance with applicable law, all benefits under any such terminated Employee
Plan have been fully paid to the participants and beneficiaries in accordance
with the terms of such Employee Plan, and neither the Company nor any ERISA
affiliate has any continuing liability or other obligation with respect to such
Employee Plan.

(ix)   Neither the Company nor its ERISA Affiliates has
incurred any material liability or obligation under the Worker Adjustment and
Retraining Notification Act or similar state Legal Requirements, which remains
unpaid or unsatisfied

(x)    Except as listed in Schedule 3(o), neither the Company
nor any ERISA Affiliate is a party to any employment, labor or collective
bargaining agreement. No labor organization or group of employees of the Company
or any ERISA Affiliate has made a pending demand for recognition or
certification to the Company or any ERISA Affiliate and there are no
representation or certification proceedings or petitions seeking a
representation proceeding presently pending or threatened to be brought or filed
with the National Labor Relations Board or any other labor relations tribunal or
authority relating to the Company or any ERISA Affiliate. Except as listed in
Schedule 3(o), there are no organizing activities involving the Company or any
ERISA affiliate pending with any labor organization or group of employees of the
Company.

-16-

(xi)  There are no unfair labor practice charges, grievances
or complaints pending or, to the knowledge of the Company or any ERISA Affiliate
threatened in writing by or on behalf of any employee or group of employees of
the Company or any ERISA Affiliate. There is no labor strike, work stoppage, or
lockout pending or affecting the Company or any ERISA Affiliate.

(xii) There are no complaints, charges, or claims against the
Company or any ERISA Affiliate pending, or to the knowledge of the Company or
any ERISA Affiliate, threatened in writing to be brought or filed, with any
authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment or any
individual by the Company. The Company and each ERISA Affiliate is in material
compliance with all Legal Requirements governing the employment of labor,
including, but not limited to, all such laws relating to wages, hours,
collective bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or Social
Security taxes and similar taxes.

p.  Intellectual Property. Except as otherwise set forth on
Schedule 3(p):

(i)   Schedule 3(p) sets forth a true, correct and complete
list and summary description of all (A) Registered or material Owned
Intellectual Property (each identified as a Patent, Trademark, Trade Secret or
Copyright, as the case may be), (B) material Technology Systems, and (C)
material Intellectual Property Contracts.

(ii)  All Business Intellectual Property is valid, subsisting
and enforceable. No Owned Intellectual Property has been abandoned, canceled or
adjudicated invalid (excepting any expirations in the ordinary course), or is
subject to any outstanding order, judgment or decree restricting its use or
adversely affecting or reflecting the Company's or the Subsidiaries' rights
thereto. To the Company's knowledge, no Licensed Intellectual Property has been
abandoned, canceled or adjudicated invalid (excepting any expirations in the
ordinary course), or is subject to any outstanding order, judgment or decree
restricting its use or adversely affecting or reflecting the Company's or the
Subsidiaries' rights thereto. The Owned Intellectual Property has been used with
all patent, trademark, copyright, confidential, proprietary, and other
Intellectual Property notices and legends prescribed by law or otherwise
permitted.

(iii) No suit, action, reissue, reexamination, public protest,
interference, arbitration, mediation, opposition, cancellation or other
proceeding (collectively, "Suit") is pending concerning any claim or position
that the Company or the Subsidiaries have violated any Intellectual Property
rights. No claim has been threatened or asserted against the Company or its
Subsidiaries or any of their indemnitees for violation of any Intellectual
Property rights. The Company and the Subsidiaries are not violating and have not
violated any Intellectual Property rights.

(iv)  No Suit is pending concerning any Intellectual Property
Contract, including any Suit concerning a claim or position that the Company or
the Subsidiaries or another Person has breached any Intellectual Property
Contract or that any Intellectual Property Contract is invalid or unenforceable.
No such claim has been threatened or asserted.

-17-

The Company and the Subsidiaries are in material compliance with, and have
conducted their business so as to comply, in all material respects, with all
terms of all Intellectual Property Contracts. There exists no event, condition
or occurrence which, with the giving of notice or lapse of time, or both, would
constitute a material breach or default by the Company or the Subsidiaries or
another Person under any Intellectual Property Contract. Each Person who is a
party to any Intellectual Property Contract had and has all rights, power and
authority necessary to enter into, be bound by and fully perform such
Intellectual Property Contract. No party to any Intellectual Property Contract
has given the Company or the Subsidiaries notice of its intention to cancel,
terminate or fail to renew any Intellectual Property Contract.

(v)    No Suit is pending concerning the Owned Intellectual
Property, including any Suit concerning a claim or position that the Owned
Intellectual Property has been violated or is invalid, unenforceable,
unpatentable, unregisterable, cancelable, not owned or not owned exclusively by
the Company or the Subsidiaries. No such claim has been threatened or asserted.
To the Company's knowledge, no valid basis for any such Suits or claims exists.

(vi)   To the Company's knowledge, no Suit is pending
concerning the Licensed Intellectual Property, including any Suit concerning a
claim or position that the Licensed Intellectual Property has been violated or
is invalid, unenforceable, unpatentable, unregisterable, cancelable, not owned
or not owned exclusively by the licensor of such Intellectual Property. No Suit
is pending concerning the right of the Company or the Subsidiaries to use the
Licensed Intellectual Property, including any Suit concerning a claim or
position that such right has been violated or is invalid, unenforceable, not
owned or not owned exclusively by the Company or the Subsidiaries. To the
Company's knowledge, no such claims have been threatened or asserted and no
valid basis for any such Suits or claims exists.

(vii)  To the Company's knowledge, no Person is violating any
Business Intellectual Property.

(viii) The Company and the Subsidiaries own or otherwise hold
valid rights to use all Intellectual Property used or contemplated to be used in
the respective businesses of the Company and the Subsidiaries. All such rights
are free of all Liens and are fully assignable by the Company and the
Subsidiaries to any Person, without payment, consent of any Person or other
condition or restriction. The Business Intellectual Property constitutes all
Intellectual Property necessary to operate the respective businesses of the
Company and the Subsidiaries as currently conducted or contemplated.

(ix)   The Company and the Subsidiaries have timely made all
filings and payments with the appropriate foreign and domestic agencies required
to maintain in subsistence all Registered Owned Intellectual Property. No due
dates for filings or payments concerning the Owned Intellectual Property
(including without limitation office action responses, affidavits of use,
affidavits of continuing use, renewals, requests for extension of time,
maintenance fees, application fees and foreign convention priority filings) fall
due within ninety (90) days of the Closing Date, whether or not such due dates
are extendable. The Company and the Subsidiaries are in compliance with all
applicable rules and regulations of such agencies with respect to Business
Intellectual Property. All documentation necessary to confirm and effect the

-18-

Company's and the Subsidiaries' ownership of Owned Intellectual Property, if
acquired from other Persons, has been recorded in the United States Patent and
Trademark Office, the United States Copyright Office and other official offices.

(x)    The Company and the Subsidiaries have taken all
reasonable measures to protect the secrecy, confidentiality and value of all
Trade Secrets used in their businesses (collectively, "Business Trade Secrets")
(including without limitation entering into appropriate confidentiality
agreements with all officers, directors, employees, and other Persons with
access to the Business Trade Secrets). To the Company's knowledge, the Business
Trade Secrets have not been disclosed to any Persons other than Company and
Subsidiaries employees or Company and Subsidiaries contractors who had a need to
know and use such Business Trade Secrets in the ordinary course of employment or
contract performance and who executed appropriate confidentiality agreements.

(xi)   The Technology Systems are adequate in all material
respects for their intended use and for the operation of such businesses as are
currently operated and as are currently contemplated to be operated by the
Companies and the Subsidiaries. The Intellectual Property Contracts set forth on
Schedule 3(p) provide the Company and Subsidiaries with all necessary rights in
connection with the use of the Technology Systems.

(xii)  As used in this Agreement, the following terms shall
have the following meanings:

(A)    "Business Intellectual Property" shall mean the Owned
Intellectual Property and the Licensed Intellectual Property.

(B)    "Intellectual Property" shall mean all foreign and
domestic (i) trademarks, service marks, brand names, certification marks,
collective marks, d/b/a's, Internet domain names, logos, symbols, trade dress,
assumed names, fictitious names, trade names, and other indicia of origin, all
applications and registrations for all of the foregoing, and all goodwill
associated therewith and symbolized thereby, including without limitation all
extensions, modifications and renewals of same (collectively, "Trademarks");
(ii) inventions, discoveries and ideas, whether patentable or not, and all
patents, registrations, and applications therefor, including without limitation
divisions, continuations, continuations-in-part and renewal applications, and
including without limitation renewals, extensions and reissues (collectively,
"Patents"); (iii) confidential and proprietary information, trade secrets and
know-how, including without limitation processes, schematics, databases,
formulae, drawings, prototypes, models, designs and customer lists
(collectively, "Trade Secrets"); (iv) published and unpublished works of
authorship, whether copyrightable or not (including without limitation computer
software), copyrights therein and thereto, and registrations and applications
therefor, and all renewals, extensions, restorations and reversions thereof
(collectively, "Copyrights"); and (v) all other intellectual property or
proprietary rights and claims or causes of action arising out of or related to
any infringement, misappropriation or other violation of any of the foregoing,
including without limitation rights to recover for past, present and future
violations thereof.

(C)    "Intellectual Property Contracts" shall mean all
agreements concerning the Business Intellectual Property, including without
limitation agreements granting

-19-

the Company and the Subsidiaries rights to use the Licensed Intellectual
Property, agreements granting rights to use Owned Intellectual Property,
confidentiality agreements, Trademark coexistence agreements, Trademark consent
agreements and nonassertion agreements.

(D)  "Licensed Intellectual Property" shall mean Intellectual
Property that the Company and the Subsidiaries are licensed or otherwise
permitted by other Persons to use, including without limitation all Intellectual
Property related to any Technology Systems owned by third parties.

(E)  "Owned Intellectual Property" shall mean Intellectual
Property owned by the Company and the Subsidiaries.

(F)  "Registered" shall mean issued, registered, renewed or
the subject of a pending application.

(G)  "Technology Systems" means the electronic data
processing, information, recordkeeping, communications, telecommunications and
computer systems (including all computer programs and software, databases,
firmware, hardware and related documentation) which are used by the Company
and/or the Subsidiaries in their respective businesses.

q. Properties. (i) The Company and its Subsidiaries have good
and marketable title to, valid leasehold interests in, or valid licenses to use,
all property and assets of the Company and its Subsidiaries (including the
property and assets of the CSD), free and clear of all Liens, except as
described on Schedule 3(q) or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company and any of its Subsidiaries. All such properties and
assets are in good working order and condition, ordinary wear and tear excepted.
Schedule 3(q) sets forth a complete and accurate list of the location, by state
and street address, of all real property owned, licensed or leased by the
Company and its Subsidiaries and identifies the interest (fee, leasehold or
license) of the Company or Subsidiary therein. The Company or its Subsidiaries
has valid leasehold interests in the leases described on Schedule 3(q) to which
it is a party. True, complete and correct copies of each such lease have been
delivered to each of the Buyers (or its representatives). Schedule 3(q) sets
forth with respect to each such lease, the commencement date, termination date,
renewal options (if any) and annual base rents. Each such lease is valid and
enforceable in accordance with its terms in all material respects and is in full
force and effect. To the best knowledge of the Company, no other party to any
such lease is in default of its obligations thereunder, and none of the Company
or any of its Subsidiaries (or any other party to any such lease) has at any
time delivered or received any notice of default which remains uncured under any
such lease and no event has occurred which, with the giving of notice or the
passage of time or both, would constitute a default under any such lease.

(ii) All Permits material to the Company or its Subsidiaries
required to have been issued to the Company or its Subsidiaries with respect to
the real property owned, licensed or leased by the Company or any of its
Subsidiaries to enable such property to be lawfully occupied and used for all of
the purposes for which it is currently occupied and used (separate and apart
from any other properties), have been lawfully issued and are in full force

-20-

and effect and all such real property complies with all applicable Legal
Requirements and Policies covering such properties in all material respects.

(iii) Neither the Company nor any of its Subsidiaries have
received any notice, nor has any knowledge, of any pending, threatened or
contemplated condemnation proceeding affecting any real property owned, licensed
or leased by the Company or any Subsidiary.

(iv)  No portion of any real property owned, licensed or
leased by the Company or any of its Subsidiaries has suffered any damage by fire
or other casualty loss which has not heretofore been completely repaired and
restored to its condition existing prior to such casualty. No portion of any
improvements (other than paving, parking and landscaped areas) constructed on
any of the real property owned, licensed or leased by the Company or any of its
Subsidiaries is located in a special flood hazard area as designated by any
Governmental Authority.

r. Environmental Laws. Except as set forth on Schedule 3(r),

(i)   The Company's and its Subsidiaries' businesses,
Facilities (as defined in the Financing Agreement), operations, properties and
assets are in material compliance with Environmental Laws.

(ii)  The Company and its Subsidiaries have obtained and are
in material compliance with all material Environmental Permits necessary to
operate, use or occupy all of the Company's and its Subsidiaries' businesses,
facilities, operations, properties and assets, except for Environmental Permits
relating to the SK Facilities (as defined in the Financing Agreement) which are
not yet effective but for which requisite applications have been filed.

(iii) Except as provided in Section 6.01(r) of the Financing
Agreement, the Company and its Subsidiaries have obtained and are in full
compliance with all financial assurance requirements under RCRA and any similar
Environmental Law, as specifically set forth but not limited to 40 C.F.R. 264
and 265, necessary to operate, use or occupy all of the Company's and its
Subsidiaries' businesses, facilities, operations, properties and assets.

(iv)  The Company and its Subsidiaries are in material
compliance with all applicable writs, orders, consent decrees, judgments and
injunctions by any Governmental Authority, decrees, informational requests or
demands issued pursuant to, or arising under, any Environmental Laws.

(v)   The Company's and its Subsidiaries' will not be required
to spend more than $1,000,000 in the aggregate for any Facility or $5,000,000
for all Facilities to comply with any Environmental Laws that have been
promulgated and enacted by a Governmental Authority, but will not be effective
until after the date of this Agreement or the Closing Date, except to the extent
those expenditures are already specifically included within the aggregate
amounts described in clause (x) or (xi) below or in the capital expenditures
described in Section 7.02(g) of the Financing Agreement.

-21-

(vi)   Except for Releases for which the related Environmental
Liabilities are specifically included within the aggregate amounts described in
clauses (ix) through (xi) below, there has been no Release at any of the
facilities, assets or properties owned or operated by the Company, its
Subsidiaries or, to the knowledge of the Company and its Subsidiaries, a
predecessor in interest.

(vii)  Except for Environmental Claims specifically included
within the aggregate amounts described in clauses (ix) through (xi), no
Environmental Claims have been asserted against any treatment, storage or
disposal facility that received or Handled Hazardous Materials generated by the
Company, its Subsidiaries or any predecessor in interest which could reasonably
be expected to result in any Environmental Liabilities in excess of $1,000,000
for any Facility or $5,000,000 in the aggregate for all Facilities.

(viii) Except for Environmental Claims specifically included
within the aggregate amounts described in clauses (ix) through (xi) below, no
Environmental Claims have been asserted against the Company, its Subsidiaries
or, to the knowledge of the Company and its Subsidiaries, any predecessor in
interest nor does the Company or its Subsidiaries have knowledge or notice of
any threatened or pending Environmental Claims against the Company, its
Subsidiaries or any predecessor in interest which could reasonably be expected
to result in any Environmental Liabilities in excess of $1,000,000 individually
or $5,000,000 in the aggregate.

(ix)   The Company and its Subsidiaries will not assume any
Environmental Liabilities related to the acquisition of CSD that are more than
ten percent above $265,000,000, calculated in accordance with GAAP.

(x)    Excluding any Environmental Liabilities related to the
CSD Acquisition assumed by the Company and its Subsidiaries, the Company's and
its Subsidiaries will not spend more than ten percent above $29,250,000 for
closure, post closure and post closure care of the CH Facilities (as defined in
the Financing Agreement), as those terms are used in RCRA and any similar
Environmental Law, as specifically set forth but not limited to 40 C.F.R. 264
and 265.

(xi)   Excluding any Environmental Liabilities of CSD assumed
by the Company and its Subsidiaries, to the knowledge of the Company's and its
Subsidiaries, there are no Remedial Actions that will cost, in the aggregate,
more than $1,000,000 per calendar year for the foreseeable future.

(xii)  All representations, including without limitation
applications, warranty statements and accompanying materials provided in support
of such representations, provided by the Company and its Subsidiaries to obtain
any Policies, are truthful and complete in all respects, and the Company and its
Subsidiaries have done nothing to prejudice it's rights to obtain the benefits
of it's Policies by failing to comply with any of the provisions, conditions or
requirements of its Polices.

(xiii) there are no Environmental Liens associated or, to the
best knowledge of the Company, threatened to be associated with any of the CSD
Acquisition Assets

-22-

or the Company's or any of its Subsidiaries' businesses, Facilities, operations,
properties and assets.

(xiv)  except for work, repairs, contributions and Capital
Expenditures (as defined in the Financing Agreement) specifically included in
the aggregate amounts set forth in clauses (ix) through (xi) above or Section
7.02(g) of the Financing Agreement, to the best knowledge of the Company, (A) no
work, repairs, construction or Capital Expenditures are required to be made as a
condition of continued compliance of the Facilities or the Company's or any of
its Subsidiaries' business with any Environmental Laws, or any license,
Environmental Permit or approval issued pursuant thereto or (B) no license,
Environmental Permit or approval referred to above is about to be reviewed, made
subject to limitations or conditions, revoked, withdrawn or terminated.

(xv)   As used in this Agreement, the following terms shall
have the following meanings:

(A)    "Environmental Claims" refers to any complaint,
summons, citation, notice, directive, order, claim, litigation, investigation,
notice of violation, judicial or administrative proceeding, judgment, letter or
other communication from any Governmental Authority, or any third party
involving violations of Environmental Laws, Handling of Hazardous Materials or
Releases of Hazardous Materials from (i) any assets, properties or businesses of
the Company or any predecessor in interest; (ii) from adjoining properties or
businesses; or (iii) from or onto any facilities which received Hazardous
Materials generated or Handled by the Company, its Subsidiaries or any
predecessor in interest.

(B)    "Environmental Laws" includes the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C.
9601 et seq., as amended; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. 6901 et seq., as amended; the Clean Air Act ("CAA"), 42 U.S.C. 7401 et
seq., as amended; the Clean Water Act ("CWA"), 33 U.S.C. 1251 et seq., as
amended; the Occupational Safety and Health Act ("OSHA"), 29 U.S.C. 655 et seq.,
as amended; Toxic Substances Control Act ("TOSCA"), 15 U.S.C. 2601 et seq., as
amended; Hazardous Materials Transportation Act, 49 U.S.C. 5101 et seq., as
amended; the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA"), 7
U.S.C. 136-136y et seq., as amended; the Emergency Planning and Community
Right-to-Know Act of 1986 (Title III of SARA or "EPCRA"); 42 U.S.C. 11001, et
seq., as amended, and any other foreign, federal, state, local or municipal
laws, statutes, regulations, guidance documents, rules or ordinances imposing
liability or establishing standards of conduct for Handling of Hazardous
Materials and the protection of the health, safety and the environment.

(C)    "Environmental Lien" means any Lien in favor of any
Governmental Authority for Environmental Liabilities.

(D)    "Environmental Liabilities" means any monetary
obligations, losses, liabilities (including strict liability), damages, punitive
damages, consequential damages, treble damages, costs and expenses (including
all reasonable out-of-pocket fees, disbursements and expenses of counsel,
out-of-pocket expert and consulting fees and out-of-pocket costs for
environmental site assessments, remedial investigation and feasibility

-23-

studies), fines, penalties, sanctions and interest incurred as a result of any
Environmental Claim filed by any Governmental Authority, Person or any third
party which relate to the CSD Acquisition Assets or any violations of
Environmental Laws, Handling of Hazardous Materials, Remedial Actions, Releases
or threatened Releases of Hazardous Materials from or onto (i) any property
presently or formerly owned by the Corporation or any of its Subsidiaries or a
predecessor in interest, or (ii) any facility that received Hazardous Materials
that were generated or Handled by the Company or any of its Subsidiaries or a
predecessor in interest.

(E) "Environmental Permits" means any permits, licenses,
certificates, exemptions, authorizations, registrations or approvals required by
any Governmental Authority or under Environmental Laws.

(F) "Governmental Authority" means any nation or government,
any foreign, federal, state, city, town, municipality, county, local or other
political subdivision thereof or thereto and any department, commission, board,
bureau, instrumentality, agency, organization, self-regulatory authority or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

(G) "Handle" means any manner of generating, accumulating,
storing, treating, disposing of, transporting, transferring, labeling, handling,
manufacturing or using, as any of such terms may further be defined in any
Environmental Law, of any Hazardous Materials.

(H) "Hazardous Materials"- shall include, without regard to
amount and/or concentration (i) any element, compound, or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substances, extremely hazardous substance or
chemical under Environmental Laws; (ii) any wastes regulated, defined, listed or
otherwise classified by Environmental Laws, including but not limited to
hazardous waste, agricultural wastes, biological waste, medical waste,
biohazardous or infectious waste, special waste, recyclable materials, sludge,
used oils, construction and demolition debris and solid waste; (iii) petroleum,
petroleum-based or petroleum-derived products; (iv) polychlorinated biphenyls;
(v) any substance exhibiting a hazardous waste characteristic including but not
limited to corrosivity, ignitibility, toxicity or reactivity as well as any
radioactive or explosive materials; and (vi) any raw materials, building
components, including but not limited to asbestos-containing materials and
manufactured products containing Hazardous Materials.

(I) "Release" means any spilling, leaking, pumping, emitting,
emptying, discharging, injecting, escaping, leaching, migrating, dumping, or
disposing of Hazardous Materials (including the abandonment or discarding of
barrels, containers or other closed receptacles containing Hazardous Materials)
into the environment.

(J) "Remedial Action" means all actions taken to (i) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate or in any other way
address Hazardous Materials in the indoor or outdoor environment; (ii) prevent
or minimize a Release or threatened Release of Hazardous Materials so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; (iii) perform pre-

-24-

remedial studies and investigations and post-remedial operation and maintenance
activities; or (iv) any other actions authorized by 42 U.S.C. 9601.

s. Insurance. Schedule 3(s) contains a list of all Policies
and sets forth, with respect to each such Policy, a description of the insured
loss coverage, the expiration date and time of coverage, the dollar limitations
of coverage, and a general description of each deductible feature. For purposes
of this Section 3(s), the term "Policies" means all insurance policies, bonds
and guarantees (including, without limitation, all performance and warranty
bonds required under outstanding contracts or purchase orders and otherwise
required pursuant to all Legal Requirements) and self insurance arrangements
that cover or purport to cover risks or losses to or associated with the
business, operations, premises, properties, assets, employees, agents and
directors (including, without limitation, those arising with respect to
environmental matters) to which the Company or any of its Subsidiaries
(including the CSD Business) is a party, a named insured or a beneficiary
thereof. The Company and its Subsidiaries maintain Policies (the "Required
Policies") with financially sound and reputable insurance companies against
risks of liability, product liability, environmental liability, casualty and
fire, theft and other losses and liabilities as required by any Legal
Requirements and as are customarily obtained to cover comparable businesses and
assets in amounts, scope and coverage which are consistent with industry
practice and adequate for the Company and its Subsidiaries (including the CSD
Business). The Required Policies are in full force and effect, and neither the
Company nor any of its Subsidiaries is in material default under any of them.
Except as set forth on Schedule 3(s), neither the Company nor any of its
Subsidiaries has received any notice of cancellation or intent to cancel or
increase the premiums with respect to any of the Policies, nor, to the Company's
knowledge, is there any basis for such action. None of the Company, any of its
Subsidiaries or, to the Company's knowledge, the CSD Business, has incurred any
material loss, damage, expense or liability covered by any Required Policy for
which it has not asserted a claim under such Required Policy. Except as set
forth on Schedule 3(s), none of the Company, any of its Subsidiaries or, to the
Company's knowledge, the CSD Business, has been refused any bonds, financial
assurance or insurance with respect to their respective assets or properties,
nor has its coverage been limited below usual and customary limits by any
bonding company, financial guarantor or insurance provider or with which it has
carried insurance during the last three years, except where such Person has been
able to obtain substitute bonds, guarantees or insurance, as applicable,
providing similar coverage at comparable costs, premiums and deductibles.

t. Regulatory Permits. Each of the Company and its
Subsidiaries has, and is in compliance with, all permits, licenses,
authorizations, approvals, entitlements and accreditations (collectively,
"Permits") required for the Company and its Subsidiaries lawfully to own, lease,
manage or operate, or to acquire, each business currently owned, leased, managed
or operated, or to be acquired, by such Person, except for certain Environmental
Permits relating to the SK Facilities (as defined in the Financing Agreement)
for which applications have been filed on or prior the Effective Date but which
are not yet effective as described in Section 6.01(r) of the Financing
Agreement. Except as set forth in Section 6.01(r) of the Financing Agreement, no
condition exists or event has occurred which, in itself or with the giving of
notice or lapse of time or both, would result in the suspension, revocation,
impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect. Schedule 3(t) contains a true,
complete and

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correct list of all material Permits of the Company and its Subsidiaries
indicating thereon the expiration date of each such Permit. To the Company's
knowledge, each material Permit of the Company and its Subsidiaries that is
scheduled to expire within 24 months of the Closing Date will be renewable by
the Company or the applicable Subsidiary without undue cost or expense to the
Company or the applicable Subsidiary.

u. Internal Accounting Controls. Except as set forth on
Schedule 3(u), the Company and each of its Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

v. Unconditional Obligation. The Company understands and
acknowledges that the number of Conversion Shares issuable upon conversion of
the Preferred Shares will increase in certain circumstances. The Company further
acknowledges that its obligation to issue shares upon conversion of the
Preferred Shares in accordance with this Agreement and Certificate is, in each
case, absolute and unconditional (except to the extent set forth in Section 11
of the Certificate) regardless of the dilutive effect that such issuance may
have on the ownership interests of other stockholders of the Company.

w. No Materially Adverse Contracts, Etc. Neither the Company
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Company's officers has or is expected in the future to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a
party to any contract or agreement which in the judgment of the Company's
officers has or is expected to have a Material Adverse Effect.

x. Customers and Suppliers. There exists no actual or
threatened termination, cancellation or limitation of, or modification to or
change in, the business relationship between (i) any of the Company or any of
its Subsidiaries, on the one hand, and any customer or any group thereof, on the
other hand, whose agreements with any of the Company or any of its Subsidiaries
are individually or in the aggregate material to the business or operations of
the Company and/or any of its Subsidiaries, or (ii) any of the Company or any of
its Subsidiaries, on the one hand, and any material supplier thereof, on the
other hand; and there exists no present state of facts or circumstances that
could give rise to or result in any such termination, cancellation, limitation,
modification or change (including without limitation, the transactions
contemplated hereby, pursuant to the Financing Agreement, the Congress Loan or
the CSD Acquisition). Schedule 3(x) lists the top fifty customers that are
common to the Company and its Subsidiaries (before giving effect to the CSD
Acquisition) showing the total revenues received during the most recently
completed fiscal year by the Company and its Subsidiaries (before giving effect
to the CSD Acquisition), on the one hand, and CSD, on the other hand. The
Company is not aware of any facts or circumstances that might give rise to a
material reduction or loss of business for the Company and its Subsidiaries
(after giving effect to

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the CSD Acquisition) from any customers listed on Schedule 3(x) as a result of
the CSD Acquisition or otherwise.

y.  Tax Status. The Company and each of its Subsidiaries (i)
has made or filed all federal, foreign, state, local and municipal income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject (unless and only to the extent that the Company and each of
its Subsidiaries has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes), (ii) has paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and for which the Company has made appropriate
reserves for on its books, and (iii) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations (referred to in clause
(i) above) apply. There are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the Company knows of no
basis for any such claim.

z.  Transactions With Affiliates. Except as set forth on
Schedule 3(z), and other than the grant of stock options described on Schedule
3(c), none of the officers, directors, stockholders or employees of the Company
or any Subsidiary, any Person controlling, controlled by or under common control
with the Company, is presently a party to any transaction with the Company or
any of its Subsidiaries, including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or, to the knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.

aa. Application of Takeover Protections. The Company and its
board of directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement), including, without
limitation, pursuant to any shareholder rights plan or similar agreement or
instrument or other similar anti-takeover provision under the Articles of
Organization or the laws of the state of its incorporation which is or could
become applicable to the Buyers as a result of the transactions contemplated by
this Agreement, including, without limitation, the Company's issuance of the
Securities and the Buyers' ownership of the Securities.

bb. Shareholder's Rights Plan. The Company has not adopted a
shareholder rights plan or similar arrangement relating to accumulations of
beneficial ownership of Common Stock or a change in control of the Company.

cc. CSD Acquisition Documents. (i) (A) The Company and each
Subsidiary (before giving effect to the CSD Acquisition), and to the Company's
knowledge, each other party to the Acquisition Agreement governing the CSD
Acquisition, each bill of sale, each assignment agreement, each assumption
agreement and all other agreements, instruments and documents entered into or
delivered in connection with the CSD Acquisition (including, without limitation
the final executed versions of each agreement attached as an exhibit to the CSD
acquisition agreement, each as amended, modified and supplement to date
(collectively, the

-27-

"CSD Acquisition Documents"), is not in default on any of its obligations under
such CSD Acquisition Document, (B) all representations and warranties made by
the Company in the CSD Acquisition Documents and in the certificates delivered
in connection therewith are true and correct in all material respects as of the
date hereof and, to the best knowledge of the Company, all material
representations and warranties made in the Acquisition Documents by or on behalf
of the sellers thereunder, or any other party thereto other than the Company,
are true and correct in all material respects as of the date hereof, (C) all
written information with respect to the Company and the CSD Acquisition, and, to
the best knowledge of the Company, the business and all of the property and
assets (tangible and intangible) sold, assigned or otherwise transferred to, or
assumed or otherwise acquired by, the Company and certain of its Subsidiaries
pursuant to the Acquisition Documents (the "CSD Acquisition Assets"), furnished
to the Buyers by the Company or on behalf of the Company, were, at the time the
same were so furnished, complete and correct in all material respects, or have
been subsequently supplemented by other written information, to the extent
necessary to give each Buyer a true and accurate knowledge of the subject matter
of each of them in relation to the Company, its Subsidiaries, the CSD
Acquisition, the CSD Business and the CSD Acquisition Assets acquired in
connection with the CSD Acquisition, in all material respects, (D) no
representation, warranty or statement made by the Company or, to its best
knowledge, the sellers or any other party thereto other than the Company, at the
time they were made in any CSD Acquisition Document, or any agreement,
certificate, statement or document required to be delivered pursuant to any CSD
Acquisition Document contains any untrue statement of material fact or omits to
state a material fact necessary in order to make the statements contained in
such CSD Acquisition Documents not misleading in light of the circumstances in
which they were made, and (E) in connection with the CSD Acquisition, the
Company and certain of its Subsidiaries are acquiring the CSD Acquisition Assets
and, on the date hereof, after giving effect to the transactions contemplated by
this Agreement and the Financing Agreement, by the CSD Acquisition Documents,
and the Sale Order (as defined herein), will have good title to such CSD
Acquisition Assets free and clear of all Liens other than the Liens created by
the Financing Agreement and the agreements and instruments entered into in
connection therewith and other than Liens permitted by such documents.

(ii) The Company (or its representatives) has delivered to
each Buyer a complete and correct copy of the CSD Acquisition Documents,
including all schedules and exhibits thereto and the Sale Order as currently in
effect, (B) each CSD Acquisition Document sets forth the entire agreement and
understanding of the parties thereto relating to the subject matter thereof, and
there are no other agreements, arrangements or understandings, written or oral,
relating to the matters covered thereby, (C) none of the CSD Acquisition
Documents nor the Sale Order has been amended or otherwise modified without the
prior written consent of the Buyers, (D) the execution, delivery and performance
of the CSD Acquisition Documents have been duly authorized by all necessary
action on the part of each such person or entity, (E) the CSD Acquisition has
been effected in accordance with the terms of the Sale Order, the Acquisition
Documents and all applicable law (including, without limitation, the United
States Bankruptcy Code (11 U.S.C. ss. 101, et seq.) (the "Bankruptcy Code"), as
amended, and any successor statute), (F) at the time of consummation of the CSD
Acquisition, there does not exist any judgment, order or injunction prohibiting
or imposing any material adverse condition upon the consummation of the CSD
Acquisition, (G) at the time of consummation thereof, all consents and approvals
of, and filings and registrations with, and all other actions in respect of, all

-28-

Legal Requirements required in order to consummate the CSD Acquisition shall
have been obtained, given, filed or taken and shall be in full force and effect,
(viii) all actions taken by the Company and its Subsidiaries pursuant to or in
furtherance of the CSD Acquisition have been taken in compliance in all material
respects with respective Acquisition Documents, the Bankruptcy Code and the Sale
Order, (ix) the Company and its Subsidiaries did not incur or assume any
liabilities or obligations pursuant to or in connection with the CSD Acquisition
other than those liabilities and obligations set forth on Schedule 3(cc)(ii),
and (x) each Acquisition Document is the legal, valid and binding obligation of
the parties thereto, enforceable against such parties in accordance with its
terms.

dd. Investment Company Status. The Company is not, and upon
consummation of the sale of the Securities and after giving effect to the CSD
Acquisition, will not be, an "investment company," a company controlled by an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.

ee. Foreign Corrupt Practices. Neither the Company nor any of
its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his
actions for, or on behalf of, the Company or any Subsidiary used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the U.S.
Foreign Corrupt Practices Act of 1977; or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.

ff. Solvency. The Company individually and together with its
Subsidiaries on a consolidated basis (both before and after giving effect to the
CSD Acquisition, the transactions contemplated by this Agreement, the Financing
Agreement and the Congress Loan Documents) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured) and
currently the Company has no information that would lead it to reasonably
conclude that the Company would not have, nor does it intend to take any action
that would impair, its ability to pay its debts from time to time incurred in
connection therewith as such debts mature.

gg. Broker's or Finder's Commissions. Except as set forth on
Schedule 3(gg), no broker's or finder's fee or commission will be payable by or
on behalf of the Company or any of its Subsidiaries with respect to the issuance
and sale of the Securities.

4.  COVENANTS.

a.  Reasonable Best Efforts. Each party shall use its
reasonable best efforts to timely satisfy each of the conditions to be satisfied
by it as provided in Sections 6 and 7 of this Agreement.

b.  Use of Proceeds. The Company will use the proceeds from
the sale of the Preferred Shares as described with particularity on Schedule
4(b).

-29-

c. Financial Information.

(i)   So long as any of the Securities remain outstanding, the
Company will provide the following information to each Buyer:

(A)   as soon as practicable and in any event within 45 days
after the end of each quarterly period (other than the last quarterly period) in
each fiscal year, consolidated statements of operations, stockholders' equity
and cash flows of the Company and its Subsidiaries for the period from the
beginning of the current fiscal year to the end of such quarterly period, and a
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such quarterly period, setting forth in each case in comparative form figures
for the corresponding period in the preceding fiscal year, and certified by the
Chief Financial Officer of the Company, subject to changes resulting from
year-end adjustments;

(B)   as soon as practicable and in any event within 90 days
after the end of each fiscal year, consolidated statements of operations,
stockholders' equity and cash flows of the Company and its Subsidiaries for such
year, and the consolidated balance sheet of the Company and its Subsidiaries as
at the end of such year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit and certified
to the Company by independent public accountants of recognized national standing
selected by the Company;

(C)   promptly after their becoming available, copies of all
registration statements and reports which the Company or any of its Subsidiaries
shall have filed with the SEC or any national securities exchange or quotation
system;

(D)   promptly after the mailing thereof to the holders of
Common Stock of the Company, copies of all financial statements, reports and
proxy statements so mailed;

(E)   promptly after their becoming available, copies of all
reports and compliance certificates filed in connection with the Financing
Agreements and the Congress Facility; and

(F)   true, complete and correct copies of all documents,
reports, financial data and other information that each Buyer may reasonably
request.

(ii)  The Company shall permit the authorized representatives
designated by each Buyer to visit and inspect any of the properties of the
Company or any of its Subsidiaries, including their books of account, and to
discuss their affairs, finances and accounts with their officers, all at such
times as each Buyer may reasonably request.

(iii) Each Buyer shall have the right to consult with and
advise the management of the Company and its subsidiaries, upon reasonable
notice at reasonable times from time to time, on all matters relating to the
operation of the Company and its Subsidiaries.

d. Reservation of Shares. The Company shall take all action
necessary to at all times have authorized, and reserved for the purpose of
issuance of shares of

-30-

Common Stock needed to provide for the issuance of the Conversion Shares
issuable upon conversion of all outstanding Preferred Shares (without regard to
any limitations on conversions) in accordance with the terms of the Certificate.

e. Listing. The Company shall promptly secure the listing of
all of the Registrable Securities (as defined in the Investors Rights Agreement)
upon each national securities exchange and automated quotation system, if any,
upon which shares of Common Stock are then listed (subject to official notice of
issuance) and shall maintain, so long as any other shares of Common Stock shall
be so listed, such listing of all Registrable Securities from time to time
issuable under the terms of the Transaction Documents and the Certificate. So
long as any Securities are outstanding, the Company shall maintain the Common
Stock's authorization for quotation on the Nasdaq National Market or for listing
on the New York Stock Exchange (as applicable, the "Principal Market"). So long
as any Preferred Shares are outstanding and other than in connection with
Organic Changes (as defined in the Certificate) that have been properly
authorized by the holders of Preferred Shares in accordance with the
Certificate, neither the Company nor any of its Subsidiaries shall take any
action which would be reasonably expected to result in the delisting or
suspension of the Common Stock from the Principal Market. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this
Section 4(f).

f. Proxy Statement. The Company shall provide each stockholder
entitled to vote at the next meeting of stockholders of the Company, which
meeting shall occur on or before April 30, 2003 and the record date for such
meeting shall be established by the Company's Board of Directors on or before
March 15, 2003; a proxy statement, together with a form of proxies, which have
been previously approved by the Buyers and a counsel of their choice, soliciting
each such stockholder's affirmative vote at such stockholder meeting for
approval for the issuance of a number of Conversion Shares greater in the
aggregate than 19.99% of the number of shares of Common Stock outstanding
immediately prior to the Closing Date pursuant to applicable law, the rules of
the NASD and any other rules and regulations of the Principal Market (such
affirmative approval being referred to herein as the "Stockholder Approval"),
and the Company shall use its best efforts to solicit proxies to vote in favor
of such issuance and to cause the Board of Directors of the Company to recommend
to the stockholders that they approve such proposal.

g. Compliance with Law. The Company shall, and shall cause its
Subsidiaries, to comply in all material respects with all applicable Legal
Requirements (including, without limitation, all Environmental Laws).

5.  TRANSFER AGENT INSTRUCTIONS.

The Company shall issue irrevocable instructions to its
transfer agent, and any subsequent transfer agent, to issue certificates or
credit shares to the applicable balance accounts at the Depository Trust Company
("DTC"), registered in the name of each Buyer or its respective nominee(s), for
the Conversion Shares in such amounts as specified from time to time by each
Buyer to the Company upon conversion of the Preferred Shares (the "Irrevocable
Transfer Agent Instructions"), a form of which is attached as Exhibit D hereto.
Prior to registration of the Conversion Shares under the 1933 Act, all such
certificates shall bear the

-31-

restrictive legend specified in Section 2(g) of this Agreement. The Company
warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5 and stop transfer instructions to
give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior
to registration of the Conversion Shares under the 1933 Act) will be given by
the Company to its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Certificate and the Investors Rights Agreement.
If a Buyer provides the Company with an opinion of counsel, in a form reasonably
acceptable to the Company, to the effect that a public sale, assignment or
transfer of Securities may be made without registration under the 1933 Act or
the Buyer provides the Company with reasonable assurances that the Securities
can be sold pursuant to Rule 144 without any restriction as to the number of
securities acquired as of a particular date that can then be immediately sold,
the Company shall permit the transfer, and, in the case of the Conversion
Shares, promptly instruct its transfer agent to issue one or more certificates,
or credit shares to one or more balance accounts at DTC, in such name and in
such denominations as specified by such Buyer and without any restrictive
legend. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyers by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this
Section 5 will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Section 5, that the Buyers shall
be entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and transfer,
without the necessity of showing economic loss and without any bond or other
security being required.

6.   CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

The obligation of the Company to issue and sell the Preferred
Shares to each Buyer at the Closing is subject to the satisfaction, at or before
the Closing Date, of each of the following conditions, provided that these
conditions are for the Company's sole benefit and may be waived by the Company
at any time in its sole discretion by providing each Buyer with prior written
notice thereof:

a. Such Buyer shall have executed each of the Transaction
Documents to which it is a party and delivered the same to the Company.

b. Such Buyer shall have delivered to the Company the Purchase
Price for the Preferred Shares being purchased by such Buyer at the Closing by
wire transfer of immediately available funds pursuant to the wire instructions
provided by the Company at least two (2) Business Days prior to the Closing.

c. The representations and warranties of such Buyer shall be
true and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by the Transaction Documents to be performed,
satisfied or complied with by such Buyer at or prior to the Closing Date.

-32-

7.   CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.

The obligation of each Buyer hereunder to purchase the
Preferred Shares from the Company at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided
that these conditions are for each Buyer's sole benefit and may be waived by
such Buyer at any time in its sole discretion by providing the Company with
prior written notice thereof:

a. (i) The Company shall have executed each of the Transaction
Documents and copies of the agreements and documents evidencing or otherwise
relating to the Financing Agreement (all certified as true, complete and correct
by the Chief Executive Officer or Chief Financial Officer of the Company) and
delivered the same to such Buyer, (ii) McKim shall have executed and delivered
to the Buyers the Investors Rights Agreement and (iii) each party to the Voting
Agreement shall have executed and delivered to the Buyers the Voting Agreement.

b. The Certificate shall have been filed with and made
effective by the Secretary of State of the Commonwealth of Massachusetts, and a
copy thereof stamped as filed by the Secretary of State of the Commonwealth of
Massachusetts shall have been delivered to such Buyer.

c. The order of the United States Bankruptcy Court approving
the CSD Acquisition (the "Sale Order") shall be in the form attached hereto as
Exhibit E and (i) shall continue to be in full force and effect without
modification, amendment or supplement, (ii) no appeal shall have been filed
within the time period specified by Rule 8002(a) of the Federal Rules of
Bankruptcy Procedure ("FRBP"), (iii) in the event a timely appeal has been
filed, the effectiveness of the Sale Order shall not have been stayed in
accordance with Rule 8005 of the FRBP and (iv) in the event such order was
stayed pending appeal, such stay shall have been terminated by a subsequent
court order.

d. The Company shall have consummated the CSD Acquisition
pursuant to the Acquisition Documents (without any further amendment or
modification thereto that has not been approved in writing by the Buyers). All
conditions precedent to the obligations of all parties to the Acquisition
Documents to the consummation of the CSD Acquisition shall have been satisfied
(or, with the prior written consent of the Buyers, waived) in the reasonable
judgment of such Buyer.

e. The Company and its Subsidiaries shall have obtained all
required licenses, waivers, consents and approvals, governmental and otherwise
in connection with the transactions contemplated by the Financing Agreement,
this Agreement and the operation of the Company's business (including the CSD
Acquisition), and such licenses, waivers and consents and approvals shall be in
full force and effect.

f. Such Buyer shall have determined, in its sole discretion,
that no event or development shall have occurred since June 30, 2002 which could
have a Material Adverse Effect and that no material disruption or adverse
developments in the financial markets

-33-

generally or affecting the securities of companies in the Company's industry
which makes it inadvisable for such Buyer to proceed with the purchase of the
Preferred Shares has occurred.

g. There shall exist no claim, action, suit, investigation,
litigation or proceeding, pending or threatened in any court or before any
arbitrator or Governmental Authority which relates to the CSD Acquisition, the
Sale Order, the Acquisition Documents, this Agreement or the Financing Agreement
or which, in the opinion of such Buyer, has any reasonable likelihood of having
a Material Adverse Effect.

h. The Company and its Subsidiaries shall have received the
proceeds of the advance under the $100,000,000 revolving credit facility ( the
"Congress Loans") to be provided by Congress Financial Corporation ("Congress")
and there shall be not less than $25 million in excess borrowings available
under the Congress Loan Documents as of the Closing Date, after giving effect to
the CSD Acquisition, the transactions contemplated hereby, under the Financing
Agreement and the Congress Loan Documents, and such Buyer shall have received
copies of the loan agreement, promissory note and other agreements, instrument,
certificates and documents securing, evidencing or otherwise relating to the
Congress Loans (the "Congress Loan Documents"), which shall be in form and
substance satisfactory to such Buyer and which shall be true, correct and
complete, as certified by the Chief Executive Officer or the Chief Financial
Officer of the Company.

i. The Common Stock (x) shall be designated for quotation or
listed on the Principal Market and (y) shall not have been suspended by the SEC
or the Principal Market from trading on the Principal Market nor shall
suspension by the SEC or the Principal Market have been threatened either (A) in
writing by the SEC or the Principal Market or (B) by falling below the minimum
listing maintenance requirements of the Principal Market.

j. The representations and warranties of the Company (both
before and after giving effect to the CSD Acquisition) shall be true, complete
and correct in all material respects (except for representations and warranties
qualified by materiality or Material Adverse Effect or such similar
qualification, which shall not be further qualified) as of the date when made
and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied with the covenants, agreements and
conditions required by the Transaction Documents to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. Such Buyer shall
have received a certificate, executed by the Chief Executive Officer or the
Chief Financial Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by
such Buyer, including, without limitation, an update as of the Closing Date
regarding the representation contained in Section 3(c) above.

k. Such Buyer shall have received the opinion of Davis, Malm &
D'Agostine, P.C., dated as of the Closing Date, in form, scope and substance
satisfactory to such Buyer and in substantially the form attached hereto as
Exhibit F.

-34-

l. The Company shall have executed and delivered to such Buyer
the Preferred Stock Certificates (in such denominations as such Buyer shall
request) for the Preferred Shares being purchased by such Buyer at the Closing.

m. The Board of Directors of the Company shall have adopted
resolutions consistent with Section 3(b) above and in a form reasonably
acceptable to such Buyer (the "Resolutions").

n. As of the Closing Date, the Company shall have reserved out
of its authorized and unissued Common Stock, solely for the purpose of effecting
the conversion of the Preferred Shares, at least 2,380,953 shares of Common
Stock.

o. The Irrevocable Transfer Agent Instructions, in the form of
Exhibit D attached hereto, shall have been delivered to such Buyer, duly
executed by the Company and acknowledged in writing by the Company's transfer
agent.

p. The Company shall have delivered to such Buyer a
certificate evidencing the incorporation and good standing of the Company and
each Subsidiary in such entity's state of incorporation or organization issued
by the Secretary of State of such state of incorporation or organization as of a
date within five days of the Closing Date.

q. The Company shall have delivered to such Buyer a certified
copy of the Articles of Organization as certified (or, in the case of the
Certificate, stamped as filed) by the Secretary of State of the Commonwealth of
Massachusetts as of a date within five (5) days of the Closing Date.

r. The Company shall have delivered to such Buyer a
secretary's certificate, dated as of the Closing Date, certifying as to (A) the
Resolutions, (B) the Articles of Organization and (C) the By-laws, each as in
effect at the Closing.

s. The Company shall have made all filings under all
applicable federal and state securities laws necessary to consummate the
issuance of the Securities pursuant to this Agreement in compliance with such
laws.

t. The Company shall have delivered to such Buyer a letter
from the Company's transfer agent certifying the number of shares of Common
Stock outstanding as of a date within five days of the Closing Date.

u. Such Buyer shall be satisfied, in its sole discretion, with
the terms, amount and scope of all Policies in effect with respect to the
Company and its Subsidiaries (both before and after giving effect to the CSD
Acquisition).

v. Such Buyer shall be satisfied, in its sole discretion, with
all ERISA, environmental, tax and labor matters relating to the Company and its
Subsidiaries (both before and after giving effect to the CSD Acquisition).

-35-

w. Such Buyer shall be satisfied, in its sole discretion, with
the terms, conditions and indemnities of each contract, agreement or instrument
being assumed or guaranteed by the Company in connection with the CSD
Acquisition.

x. After giving effect to the payment of the purchase price
for the CSD Acquisition and all expenses of the Company and its Subsidiaries in
connection therewith, the Financing Agreement and the Congress Loans, there
shall be not less than $25,000,000 of unrestricted borrowing availability under
the Congress Loan Documents, as certified to such Buyer in writing by the Chief
Executive Officer or Chief Financial Officer of the Company.

y. Such Buyer shall have received such other agreements,
instruments, certificates and other documents as it may determine are customary
for the transactions contemplated by the Transaction Documents, in each case in
form and substance satisfactory to such Buyer.

8.  INDEMNIFICATION.

In consideration of each Buyer's execution and delivery of the
Transaction Documents and acquiring the Securities thereunder and in addition to
all of the Company's other obligations under the Transaction Documents and the
Certificate, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of Preferred Shares and all of their stockholders,
officers, directors, managers, members, employees and direct or indirect
investors and any of the foregoing persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "Indemnitees")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "Indemnified Liabilities"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in the Transaction Documents, the Certificate or any other certificate,
instrument or document contemplated hereby or thereby, (b) any breach of any
covenant, agreement or obligation of the Company contained in the Transaction
Documents, the Certificate or any other certificate, instrument or document
contemplated hereby or thereby, (c) any cause of action, suit or claim brought
or made against such Indemnitee (other than a cause of action, suit or claim
which is (x) brought or made by the Company and (y) is not a shareholder
derivative suit) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of the Transaction Documents, the
Certificate or any other certificate, instrument or document contemplated hereby
or thereby, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities or
(iii) the status of such Buyer or holder of Securities as an investor in the
Company. To the extent that the foregoing undertaking by the Company may be
unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this
Section 8 shall be the same as those set forth in Section 5 of the Investors
Rights Agreement, including, without

-36-

limitation, those procedures with respect to the settlement of claims and the
Company's rights to assume the defense of claims.

9.  MISCELLANEOUS.

a. Governing Law; Jurisdiction; Jury Trial. All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York. Each party hereby irrevocably submits to the non-exclusive jurisdiction of
the state and federal courts sitting in The City of New York, Borough of
Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.

c. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

e. Entire Agreement; Amendments. This Agreement supersedes all
other prior oral or written agreements between each Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein,

-37-

neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Agreement may
be amended or waived other than by an instrument in writing signed by the
Company and the holders of at least a majority of the Preferred Shares then
outstanding. No such amendment shall be effective to the extent that it applies
to less than all of the holders of the Preferred Shares then outstanding. No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of any of the Transaction Documents or
the Certificate unless the same consideration also is offered to all of the
parties to the Transaction Documents or holders of Preferred Shares, as the case
may be.

f. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) Business Day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:

If to the Company:

Clean Harbors, Inc.
1501 Washington Street
Braintree, MA 02185
Attention: Chief Financial Officer
Telephone: 781-849-1800, Ext. 4450
Facsimile: 781-848-1632

With a copy to:

Davis, Malm & D'Agostine, P.C.
One Boston Place
Boston, Massachusetts 02108
Attention: C. Michael Malm, Esq.
Telephone: 617-365-2500
Facsimile: 617-525-6215

If to the Transfer Agent:

American Stock Transfer & Trust Company
6201 15/th/ Avenue
Brooklyn, NY 11219
Attention: Fran Noftel or Donna Ansbro
Telephone: 718-921-8200
Facsimile: 718-921-8337

-38-

If to a Buyer, to it at the address and facsimile number set forth
on the Schedule of Buyers, with copies to such Buyer's representatives as set
forth on the Schedule of Buyers, or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has
specified by written notice given to each other party five days prior to the
effectiveness of such change. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B)
mechanically or electronically generated by the sender's facsimile machine
containing the time, date, recipient facsimile number and an image of the first
page of such transmission or (C) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively.

g. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Preferred Shares. The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the holders of at least a majority of the Preferred Shares
then outstanding, including by merger or consolidation. A Buyer may assign some
or all of its rights hereunder without the consent of the Company; provided,
however, that the transferee has agreed in writing to be bound by the applicable
provisions of this Agreement.

h. No Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

i. Survival. The representations and warranties of the Company and
the Buyers contained in Sections 2 and 3, the agreements and covenants set forth
in Sections 4, 5 and 9, and the indemnification provisions set forth in Section
8, shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.

j. Publicity. The Company and each Buyer shall have the right to
approve before issuance any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions as is
required by applicable law and regulations (although each Buyer shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release and shall be provided with a copy thereof
and in no event may the Company disclose publicly the identity of any Buyer or
their nominees or affiliates without the prior consent of such Buyer).

k. Further Assurances. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents,
as the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.

-39-

l. Placement Agent. Except as disclosed in writing to the Buyers,
the Company acknowledges that it has not engaged any Person as placement agent
or broker in connection with the sale of the Preferred Shares. The Company shall
be responsible for the payment of any placement agent's fees, financial advisory
fees, or brokers' commissions (other than for persons engaged by or on behalf of
any Buyer) relating to or arising out of the transactions contemplated hereby.
The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, attorney's fees and out-of-pocket
expenses) arising in connection with any such claim.

m. No Strict Construction. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

n. Remedies. Each Buyer and each holder of the Securities shall
have all rights and remedies set forth in the Transaction Documents and the
Certificate and all rights and remedies which such holders have been granted at
any time under any other agreement or contract and all of the rights which such
holders have under any law. Any person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.

o. Payment Set Aside. To the extent that the Company makes a
payment or payments to any Buyer hereunder or pursuant to the Investors Rights
Agreement, the Certificate or the Buyers enforce or exercise their rights
hereunder or thereunder, and such payment or payments or the proceeds of such
enforcement or exercise or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable
cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.

[signature page follows]

-40-

IN WITNESS WHEREOF, the Buyers and the Company have caused this
Securities Purchase Agreement to be duly executed as of the date first written
above.

COMPANY:

CLEAN HARBORS, INC.

By: /s/ Stephen H. Moynihan
-------------------------------
Name:  Stephen H. Moynihan
Title: Senior Vice President

BUYERS:

CERBERUS CH LLC

By: Cerberus Partners, L.P.
its Managing Member

By: Cerberus Associates, L.L.C.
its General Partner

By:  /s/ Kevin Genda
---------------------------
Name:  Kevin P. Genda
Title: Senior Vice President

OAK HILL SECURITIES FUND, L.P.

By: Oak Hill Securities GenPar, L.P.
its General Partner

By: Oak Hill Securities MGP, Inc.
its General Partner

By: /s/ William H. Bohmsack, Jr.
-----------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

OAK HILL SECURITIES FUND II, L.P.

By: Oak Hill Securities GenPar II, L.P.
its General Partner

By: Oak Hill Securities MGP II, Inc.
its General Partner

By: /s/ William H. Bohmsack, Jr.
-----------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

LERNER ENTERPRISES, L.P.

By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
Lerner Enterprises, L.P.

By: /s/ William H. Bohmsack, Jr.
-----------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

P&PK FAMILY LTD. PARTNERSHIP

By: Oak Hill Asset Management, Inc.
As advisor and attorney-in-fact to
P&PK Family Ltd. Partnership

By: /s/ William H. Bohmsack, Jr.
------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Vice President

CARDINAL INVESTMENT PARTNERS I, L.P.

By: Oak Hill Advisors, L.P.
As advisor and attorney-in-fact to
Cardinal Investment Partners I, L.P.

By: Oak Hill Advisors MGP, Inc.
its General Partner

By: /s/ William H. Bohmsack, Jr.
------------------------------------
Name:  William H. Bohmsack, Jr.
Title: Managing Director

SCHEDULE A

Number of             Amount of
Investor Address                  Preferred           Commitment of         Investor's Representatives' Address
and Facsimile Number                 Shares           Preferred Shares               and Facsimile Number
--------------------------------------   --------------    --------------------    ----------------------------------------

Cerberus CH LLC                              16,750            $16,750,000         Schulte Roth & Zabel LLP
450 Park Avenue, 28/th/ Floor                                                      919 Third Avenue
New York, NY 10022                                                                 New York, NY 10022
Telephone: (212) 891-2100                                                          Attn: Stuart Freedman, Esq.
Facsimile: (212) 891-1540                                                          Telephone: (212) 756-2000
Attention: Kevin Genda and Daniel Wolf                                             Facsimile: (212) 593-5955

Oak Hill Securities Fund, L.P.                                                     Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55/th/ Street                                                              1285 Avenue of the Americas
New York, New York 10022                      3,465            $ 3,465,000         New York, NY 10019
Telephone: (212) 326-1552                                                          Telephone: (212) 373-3000
Facsimile: (212) 838-8411                                                          Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.                                                Attention: Eric Goodison

Oak Hill Securities Fund II, L.P.                                                  Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55/th/ Street                                                              1285 Avenue of the Americas
New York, New York 10022                      3,465            $ 3,465,000         New York, NY 10019
Telephone: (212) 326-1552                                                          Telephone: (212) 373-3000
Facsimile: (212) 838-8411                                                          Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.                                                Attention: Eric Goodison

Lerner Enterprises, L.P.                                                           Paul, Weiss, Rifkind, Wharton & Garrison
65 East 65/th/ Street                                                              1285 Avenue of the Americas
New York, New York 10022                       730             $   730,000         New York, NY 10019
Telephone: (212) 326-1552                                                          Telephone: (212) 373-3000
Facsimile: (212) 838-8411                                                          Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.                                                Attention: Eric Goodison

P&PK Family Ltd. Partnership                                                       Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55/th/ Street                                                              1285 Avenue of the Americas
New York, New York 10021                       165             $   165,000         New York, NY 10019
Telephone: (212) 326-1552                                                          Telephone: (212) 373-3000
Facsimile: (212) 838-8411                                                          Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.                                                Attention: Eric Goodison

Cardinal Investment Partners I, L.P.                                               Paul, Weiss, Rifkind, Wharton & Garrison
65 East 55/th/ Street                          425             $   425,000         1285 Avenue of the Americas
New York, New York 10021                                                           New York, NY 10019
Telephone: (212) 326-1552                                                          Telephone: (212) 373-3000
Facsimile: (212) 838-8411                                                          Facsimile: (212) 757-3990
Attention: William H. Bohnsack, Jr.                                                Attention: Eric Goodison