EXHIBIT 4.5
GENERAL SECURITY AGREEMENT
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This General Security Agreement dated May 8, 1995 is by Clean Harbors, Inc., a
Massachusetts corporation ("Guarantor") in favor of Congress Financial
Corporation (New England), a Massachusetts corporation ("Lender").
W I T N E S S E T H
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WHEREAS, Lender has entered or is about to enter into certain financing
arrangements with Clean Harbors Environmental Services, Inc., a Massachusetts
corporation, Clean Harbors Technology Corporation, a Massachusetts corporation,
Clean Harbors Kingston Facility Corporation, a Massachusetts corporation, Clean
Harbors of Braintree, Inc., a Massachusetts corporation, Clean Harbors of
Chicago, Inc., a Massachusetts corporation, Clean Harbors of Natick, Inc., a
Massachusetts corporation, Clean Harbors of Connecticut, Inc., a Connecticut
corporation, Clean Harbors of Cleveland, Inc., a Massachusetts corporation,
Murphy's Waste Oil Service, Inc., a Massachusetts corporation, Mr. Frank, Inc.,
an Illinois corporation and Spring Grove Resource Recovery, Inc., a Delaware
corporation (each, a "Borrower" and, collectively, the "Borrowers") pursuant to
which Lender may make loans and provide other financial accommodations to
Borrowers; and
WHEREAS, Guarantor has executed and delivered or is about to execute and
deliver to Lender a guarantee in favor of Lender pursuant to which Guarantor
absolutely and unconditionally guarantees to Lender the payment and performance
of all now existing and hereafter arising obligations, liabilities and
indebtedness of Borrowers to Lender; and
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
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All terms used herein which are defined in Article 1 or Article 9 of the
Uniform Commercial Code shall have the meanings given therein unless otherwise
defined in this Agreement. If not defined herein, capitalized terms used herein
shall have the meaning given to them in the Loan Agreement. All references to
the plural herein shall also mean the singular and to the singular shall also
mean the plural. All references to Guarantor, Borrowers 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. 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 any particular
provision of this Agreement and as this Agreement now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced. An
Event of Default shall exist or continue or be continuing until such Event of
Default is waived in accordance with Section 7.3. Any accounting term used
herein unless otherwise defined in this Agreement shall have the meanings
customarily given to such term in accordance with GAAP. 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 Guarantor to payment
for goods sold or leased or for services rendered, which are not evidenced by
instruments or chattel paper, and whether or not earned by performance.
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1.2 "Equipment" shall mean all of Guarantor's now owned and hereafter acquired
equipment, machinery, computers and computer hardware and software (whether
owned or licensed), 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.
1.3 "Event of Default" shall have the meaning set forth in Section 6.1 hereof.
1.4 "Financing Agreements" shall mean, collectively, the Loan Agreement, this
Agreement and all notes, guarantees, security agreements and other agreements,
documents and instruments now or at any time hereafter executed and/or delivered
by any Borrower, Guarantor or any Obligor in connection with the Loan Agreement,
as the same now exist or may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced.
1.5 "Information Certificate" shall mean the Information Certificate of
Guarantor constituting Exhibit A hereto containing material information with
respect to Guarantor, its business and assets provided by or on behalf of
Guarantor to Lender in connection with the preparation of this Agreement and the
other Financing Agreements and the financing arrangements provided for herein.
1.6 "Inventory" shall mean all of Guarantor's now owned and hereafter existing
or acquired raw materials, work in process, finished goods and all other
inventory of whatsoever kind or nature, wherever located.
1.7 "Loan Agreement" shall mean the Loan and Security Agreement, dated May 8,
1995, among Borrowers and Lender, as the same now exists and may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
1.8 "Obligations" shall mean any and all obligations, liabilities and
indebtedness of every kind, nature and description owing by Guarantor to Lender
and/or its affiliates, including principal, interest, charges, fees, costs and
expenses, however evidenced, whether as principal, surety, endorser, guarantor
or otherwise, whether arising under this Agreement or otherwise, 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 Guarantor under the United States Bankruptcy Code or any
similar statute (including, without limitation, the payment of interest and
other amounts which would accrue and become due but for the commencement of 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 Lender.
1.9 "Obligor" shall mean any other 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 Borrowers.
1.10 "Person" or "person" shall mean any individual, sole proprietorship,
partnership, corporation (including, without limitation, any corporation which
elects subchapter S status under the Internal Revenue Code of 1986, as amended),
business trust, unincorporated association, joint stock corporation, trust,
joint venture or other entity or any government or any agency or instrumentality
or political subdivision thereof.
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1.11 "Records" shall mean all of Guarantor's 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 Guarantor with respect to the
foregoing maintained with or by any other person).
SECTION 2. GRANT OF SECURITY INTEREST
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To secure payment and performance of all Obligations, Guarantor hereby grants
to Lender a continuing security interest in, a lien upon, and a right of set off
against, and hereby assigns to Lender as security, the following property and
interests in property, whether now owned or hereafter acquired or existing, and
wherever located (collectively, the "Collateral"):
2.1 Accounts;
2.2 all present and future contract rights, general intangibles (including, but
not limited to, tax and duty refunds, registered and unregistered patents,
trademarks, service marks, copyrights, trade names, applications for the
foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer
lists, licenses, whether as licensor or licensee, choses in action and other
claims and existing and future leasehold interests in equipment, real estate and
fixtures), chattel paper, documents, instruments, letters of credit, bankers'
acceptances and guaranties;
2.3 all present and future monies, securities, credit balances, deposits,
deposit accounts and other property of Guarantor now or hereafter held or
received by or in transit to Lender or its affiliates or at any other depository
or other institution from or for the account of Guarantor whether for
safekeeping, pledge, custody, transmission, collection or otherwise, and all
present and future liens, security interests, rights, remedies, title and
interest in, to and in respect of Accounts and other Collateral, including,
without limitation, (a) rights and remedies under or relating to guaranties,
contracts of suretyship, letters of credit and credit and other insurance
related to the Collateral, (b) rights of stoppage in transit, replevin,
repossession, reclamation and other rights and remedies of an unpaid vendor,
lienor or secured party, (c) goods described in invoices, documents, contracts
or instruments with respect to, or otherwise representing or evidencing,
Accounts or other Collateral, including, without limitation, returned,
repossessed and reclaimed goods, and (d) deposits by and property of account
debtors or other persons securing the obligations of account debtors;
2.4 Inventory;
2.5 Equipment;
2.6 Records; and
2.7 all products and proceeds of the foregoing, in any form, including, without
limitation, insurance proceeds and any claims against third parties for loss or
damage to or destruction of any or all of the foregoing.
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SECTION 3. COLLATERAL COVENANTS
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3.1 Accounts Covenants.
(a) Lender shall have the right at any time or times, in Lender's name or
in the name of a nominee of Lender, to verify the validity, amount or any other
matter relating to any Account or other Collateral, by mail, telephone,
facsimile transmission or otherwise.
(b) Guarantor shall deliver or cause to be delivered to Lender, with
appropriate endorsement and assignment, with full recourse to Guarantor, all
chattel paper and instruments which Guarantor now owns or may at any time
acquire immediately upon Guarantor's receipt thereof, except as Lender may
otherwise agree.
(c) Lender may, at any time or times that an Event of Default exists or has
occurred and is continuing, (i) notify any or all account debtors that the
Accounts have been assigned to Lender and that Lender has a security interest
therein and Lender may direct any or all accounts debtors to make payment of
Accounts directly to Lender, (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 Accounts or other obligations included in
the Collateral and thereby discharge or release the account debtor or any other
party or parties in any way liable for payment thereof without affecting any of
the Obligations, (iii) demand, collect or enforce payment of any Accounts or
such other obligations, but without any duty to do so, and Lender shall not be
liable for its 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 Lender 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 Lender's request, all invoices and statements sent to any
account debtor shall state that the Accounts and such other obligations have
been assigned to Lender and are payable directly and only to Lender and
Guarantor shall deliver to Lender such originals of documents evidencing the
sale and delivery of goods or the performance of services giving rise to any
Accounts as Lender may require.
3.2 Equipment Covenants. With respect to the Equipment, (a) Guarantor shall
keep the Equipment in good order, repair, running and marketable condition
(ordinary wear and tear excepted); (b) Guarantor shall use the Equipment with
all reasonable care and caution and in accordance with applicable standards of
any insurance and in conformity with all applicable laws; (c) the Equipment is
and shall be used in Guarantor's business and not for personal, family,
household or farming use; (d) Guarantor shall not remove any Equipment from the
locations set forth or permitted herein, except to the extent necessary to have
any Equipment repaired or maintained in the ordinary course of the business of
Guarantor or to move Equipment directly from one location set forth or permitted
herein to another such location and except for the movement of motor vehicles
used by or for the benefit of Borrower in the ordinary course of business; (e)
the Equipment is now and shall remain personal property and Guarantor shall not
permit any of the Equipment to be or become a part of or affixed to real
property; and (f) Guarantor assumes all responsibility and liability arising
from the use of the Equipment.
3.3 Power of Attorney. Guarantor hereby irrevocably designates and appoints
Lender (and all persons designated by Lender) as Guarantor's true and lawful
attorney-in-fact, and authorizes Lender, in Guarantor's or Lender's name, to: at
any time an Event of Default or event which with notice or passage of time or
both would constitute an Event of Default exists or has occurred and is
continuing (i) demand payment on Accounts or other proceeds of Collateral, (ii)
enforce payment of Accounts by legal proceedings or otherwise, (iii) exercise
all of Guarantor's rights and remedies to collect any Account or other
Collateral, (iv) sell or assign any Account
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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 Account, (vii) prepare, file and sign Guarantor's name
on any proof of claim in bankruptcy or other similar document against an account
debtor, (viii) notify the post office authorities to change the address for
delivery of Guarantor's mail to an address designated by Lender, and open and
dispose of all mail addressed to Guarantor, and (ix) do all acts and things
which are necessary, in Lender's determination, to fulfill Guarantor's
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 or proceeds
thereof, (ii) have access to any lockbox or postal box into which Guarantor's
mail is deposited, (iii) endorse Guarantor's name upon any items of payment or
proceeds thereof and deposit the same in the Lender's account for application to
the Obligations, (iv) endorse Guarantor's name upon any chattel paper, document,
instrument, invoice, or similar document or agreement relating to any Account or
any goods pertaining thereto or any other Collateral, and (v) sign Guarantor's
name on any verification of Accounts and notices thereof to account debtors and
(vi) execute in Guarantor's name and file any UCC financing statements or
amendments thereto. Guarantor hereby releases Lender and its 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 Lender's own gross negligence or wilful misconduct as
determined pursuant to a final non-appealable order of a court of competent
jurisdiction.
3.4 Right to Cure. Lender may, at its option, (a) cure any default by Guarantor
under any agreement with a third party or pay or bond on appeal any judgment
entered against Guarantor, (b) discharge taxes, liens, security interests or
other encumbrances at any time levied on or existing with respect to the
Collateral and (c) pay any amount, incur any expense or perform any act which,
in Lender's judgment, is necessary or appropriate to preserve, protect, insure
or maintain the Collateral and the rights of Lender with respect thereto. Lender
may add any amounts so expended to the Obligations and charge Guarantor's
account therefor, such amounts to be repayable by Guarantor on demand. Lender
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
Guarantor. Any payment made or other action taken by Lender under this Section
shall be without prejudice to any right to assert an Event of Default hereunder
and to proceed accordingly.
3.5 Access to Premises. From time to time as requested by Lender, at the cost
and expense of Guarantor, (a) Lender or its designee shall have complete access
to all of Guarantor's premises during normal business hours and after notice to
Guarantor, or at any time and without notice to Guarantor 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 Guarantor's books and records,
including, without limitation, the Records, and (b) Guarantor shall promptly
furnish to Lender such copies of such books and records or extracts therefrom as
Lender may request, and (c) use during normal business hours such of Guarantor's
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 4. REPRESENTATIONS AND WARRANTIES
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Guarantor hereby represents and warrants to Lender the following (which shall
survive the execution and delivery of this Agreement):
4.1 Corporate Existence, Power and Authority; Subsidiaries. Guarantor is a
corporation duly organized and in good standing under the laws of its state of
incorporation and
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is duly qualified as a foreign corporation and in good standing in all states 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 Guarantor's financial condition, results of operation or
business or the rights of Lender 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 thereunder are all within
Guarantor's corporate powers, have been duly authorized and are not in
contravention of law or the terms of Guarantor's certificate of incorporation,
by-laws, or other organizational documentation, or any indenture, agreement or
undertaking to which Guarantor is a party or by which Guarantor or its property
are bound. This Agreement and the other Financing Agreements constitute legal,
valid and binding obligations of Guarantor enforceable in accordance with their
respective terms. Guarantor does not have any subsidiaries except as set forth
on the Information Certificate.
4.2 Chief Executive Office; Collateral Locations. The chief executive office of
Guarantor and Guarantor's Records concerning Accounts are located only at the
address set forth below and its only other places of business and the only other
locations of Collateral, if any, are the addresses set forth in the Information
Certificate, subject to the right of Guarantor to establish new locations in
accordance with Section 5.2 below. The Information Certificate correctly
identifies any of such locations which are not owned by Guarantor and sets forth
the owners and/or operators thereof.
4.3 Priority of Liens; Title to Properties. The security interests and liens
granted to Lender under this Agreement and the other Financing Agreements
constitute valid and perfected first priority liens and security interests in
and upon the Collateral subject only to the liens indicated on Schedule 4.3
hereto and the other liens permitted under Section 5.8 hereof. Guarantor has
good and marketable title to all of its properties and assets subject to no
liens, mortgages, pledges, security interests, encumbrances or charges of any
kind, except those granted to Lender and such others as are specifically listed
on Schedule 4.3 hereto or permitted under Section 5.8 hereof.
4.4 Tax Returns. Guarantor 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
(without requests for extension except as previously disclosed in writing to
Lender). All information in such tax returns, reports and declarations is
complete and accurate in all material respects. Guarantor 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 Guarantor
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, county, local, foreign and other taxes whether or not yet due
and payable and whether or not disputed.
4.5 Litigation. Except as set forth on the Information Certificate, there is no
present investigation by any governmental agency pending, or to the best of
Guarantor's knowledge threatened, against or affecting Guarantor, its assets or
business and there is no action, suit, proceeding or claim by any Person
pending, or to the best of Guarantor's knowledge threatened, against Guarantor
or its assets or goodwill, or against or affecting any transactions contemplated
by this Agreement, which if adversely determined against Guarantor would result
in any material adverse change in the assets, business or prospects of Guarantor
or which would impair the ability of Guarantor to perform its obligations
hereunder or under any of the other Financing Agreements to which it is a party
or of Lender to enforce the Obligations or realize upon any Collateral.
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4.6 Compliance with Other Agreements and Applicable Laws. Guarantor is not 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 Guarantor 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 or local governmental authority.
4.7 Accuracy and Completeness of Information. All information furnished by or
on behalf of Guarantor in writing to Lender in connection with this Agreement or
any of the other Financing Agreements or any transaction contemplated hereby or
thereby, including, without limitation, all information on the Information
Certificate is 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 Guarantor,
which has not been fully and accurately disclosed to Lender in writing.
4.8 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 under the Loan Agreement and shall be conclusively presumed
to have been relied on by Lender regardless of any investigation made or
information possessed by Lender. The representations and warranties set forth
herein shall be cumulative and in addition to any other representations or
warranties which Guarantor shall now or hereafter give, or cause to be given, to
Lender.
SECTION 5. AFFIRMATIVE AND NEGATIVE COVENANTS
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5.1 Maintenance of Existence. Guarantor shall at all times preserve, renew and
keep in full, force and effect its corporate existence and 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 business as presently or proposed to be
conducted. Guarantor shall give Lender thirty (30) days prior written notice of
any proposed change in its corporate name, which notice shall set forth the new
name and Guarantor shall deliver to Lender a copy of the amendment to the
Certificate of Incorporation of Guarantor providing for the name change
certified by the Secretary of State of the jurisdiction of incorporation of
Guarantor as soon as it is available.
5.2 New Collateral Locations. Guarantor may open any new location within the
continental United States provided (a) Guarantor gives Lender written notice (i)
thirty (30) days prior to the intended opening of any such new location where
the value of the Collateral located or to be located at such location does or
will equal or exceed $100,000 and (ii) within ten (10) days of the intended
opening of any new location where the value of the Collateral located or to be
located at such location is less than $100,000 and (b) execute and deliver, or
causes to be executed and delivered, to Lender such agreements, documents, and
instruments as Lender may deem reasonably necessary or desirable to protect its
interests in the Collateral at such location, including, without limitation, UCC
financing statements.
5.3 Compliance with Laws, Regulations, Etc. Guarantor shall, 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 Federal, State or local governmental
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authority, including, without limitation, the Employee Retirement Security Act
of 1974, as amended, the Occupational Safety and Hazard 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, without limitation, all of
the Environmental Laws, if failure to so comply could result in the imposition
of substantial fines or penalties or otherwise materially and adversely affect
the business, assets or prospects of the Guarantors and Borrowers on a
consolidated basis.
(a) Guarantor shall 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 Guarantor who are familiar
with the requirements of the Environmental Laws. Copies of all such periodic
reviews shall be made available by Guarantor for inspection by Lender and, upon
Lender'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 Guarantor to Lender. Guarantor
shall take prompt and appropriate action to respond to any non-compliance with
any of the Environmental Laws and shall regularly report to Lender on such
response.
(b) Guarantor shall give both oral and written notice to Lender promptly
upon Guarantor's receipt of any notice of, or Guarantor's otherwise obtaining
knowledge of any of the following which could result in the imposition of
substantial fines or penalties or otherwise materially and adversely affect the
business, assets or prospects of the Guarantor and the 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 violation of any
Environmental Law by Guarantor or (B) the release, spill or discharge,
threatened or actual, of any Hazardous Material or (C) the generation, use,
storage, treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Material in a manner that is not in compliance with
Environmental Laws or any order, license, permit, certificate, approval or
similar authorization relating thereto, (D) any other environmental, health or
safety matter, which may materially and adversely affect Guarantor or its
business, operations or assets, or (E) any properties at which Guarantor
transported, stored or disposed of any Hazardous Materials.
(c) Without limiting the generality of the foregoing, whenever Lender
reasonably determines that there is non-compliance, or any condition which
requires any action by or on behalf of Guarantor 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 Guarantor and the Borrowers on a
consolidated basis, Guarantor shall, at Lender's request and Guarantor's
expense: (i) cause an independent environmental engineer acceptable to Lender to
conduct such assessments, investigations or tests of the site where Guarantor's
non-compliance or alleged non-compliance with such Environmental Laws has
occurred as to such non-compliance and prepare and deliver to Lender 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 Lender a supplemental report of such
engineer whenever the scope of such non-compliance, or Guarantor's response
thereto or the estimated costs thereof, shall change in any material respect.
(d) Guarantor shall maintain in full force and effect all orders, licenses,
permits, certificates, approvals and similar authorizations necessary or
appropriate for the
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conduct of their business, unless the failure to have or maintain the same will
not have a material adverse affect the business, assets or prospects of the
Guarantor and the Borrowers on a consolidated basis and shall promptly give
notice to Lender of any rescission, termination, lapse, breach, modification or
amendment thereof which might have a material adverse effect on the business,
assets or prospects of the Guarantor and Borrowers on a consolidated basis.
(e) Guarantor shall indemnify and hold harmless Lender, its 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, without limitation, the costs of
any required or necessary repair, cleanup or other remedial work with respect to
any property of Guarantor and the preparation and implementation of any closure,
remedial or other required plans or any actions of Lender relating thereto.
(f) Borrowers acknowledge and agree that neither the Financing Agreements
or the actions of Lender pursuant thereto shall operate or be deemed (i) to
place upon Lender any responsibility for the operation, control, care, service,
management, maintenance or repair of property or facilities of Borrowers or (ii)
to make Lender the "owner" or "operator" of any property or facilities of
Borrowers or a "responsible party" within the meaning of applicable
Environmental Laws. For purposes of this Section 5.3, "substantial fines or
penalties" will be determined based upon fines or penalties that have been
assessed by governmental agencies or courts in other instances of noncompliance
or violation of Environmental Laws by similarly situated entities. All
representations, warranties, covenants and indemnifications in Section 8.8 of
the Loan Agreement and this Section 5.3 shall survive the payment of the
Obligations and the termination or non-renewal of the Loan Agreement.
5.4 Payment of Taxes and Claims. Guarantor shall 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 Guarantor and with respect to which adequate reserves have been set
aside on its books. Guarantor shall be liable for any tax or penalties imposed
on Lender as a result of the financing arrangements provided for herein and
Guarantor agrees to indemnify and hold Lender harmless with respect to the
foregoing, and to repay to Lender on demand the amount thereof, and until paid
by Guarantor such amount shall be added and deemed part of the Loans, provided,
that, nothing contained herein shall be construed to require Guarantor to pay
any income or franchise taxes attributable to the income of Lender from any
amounts charged or paid hereunder to Lender. The foregoing indemnity shall
survive the payment of the Obligations, the termination of this Agreement and
the termination or non-renewal of the Loan Agreement.
5.5 Insurance. Guarantor shall, 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 Lender as to form, amount and insurer.
Guarantor shall furnish certificates, policies or endorsements to Lender as
Lender shall require as proof of such insurance, and, if Guarantor fails to do
so, Lender is authorized, but not required, to obtain such insurance at the
expense of Guarantor. All policies shall provide for at least thirty (30) days
prior written notice to Lender of any cancellation or reduction of coverage and
that Lender may act as attorney for Guarantor in obtaining, and at any time an
Event of Default exists or has
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occurred and is continuing, adjusting, settling, amending and canceling such
insurance. Guarantor shall cause Lender to be named as a loss payee and an
additional insured (but without any liability for any premiums) under such
insurance policies and Guarantor shall obtain non-contributory lender's loss
payable endorsements to all insurance policies in form and substance
satisfactory to Lender. Such lender's loss payable endorsements shall specify
that the proceeds of such insurance shall be payable to Lender as its interests
may appear and further specify that Lender shall be paid regardless of any act
or omission by Guarantor or any of its affiliates. At its option, Lender may
apply any insurance proceeds received by Lender 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 Lender may determine
or hold such proceeds as cash collateral for the Obligations.
5.6 Financial Statements and Other Information. Guarantor shall 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
Guarantor and its subsidiaries (if any) in accordance with GAAP. Guarantor shall
furnish or cause to be furnished to Lender (a) such financial statements
(including balance sheets, statements of income and loss and statement of
shareholders' equity) all in reasonable detail fairly presenting the financial
position and results of the operations of Guarantor as of the end and through
such period as Lender may from time to time reasonably request and (b) such
budgets, forecasts, projections and other information respecting the Collateral
and the business of Guarantor, as Lender may, from time to time, reasonably
request. Lender is hereby authorized to deliver a copy of any financial
statement or any other information relating to the business of Guarantor to any
court or other government agency or to any participant or assignee or
prospective participant or assignee. Guarantor hereby irrevocably authorizes and
directs all accountants or auditors to deliver to Lender, at Guarantor's
expense, copies of the financial statements of Guarantor and any reports or
management letters prepared by such accountants or auditors on behalf of
Guarantor and to disclose to Lender such information as they may have regarding
the business of Guarantor. Any documents, schedules, invoices or other papers
delivered to Lender may be destroyed or otherwise disposed of by Lender one (1)
year after the same are delivered to Lender, except as otherwise designated by
Guarantor to Lender in writing.
5.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Guarantor shall
not, directly or indirectly, (a) merge into or with or consolidate with any
other Person or permit any other Person to merge into or with or consolidate
with it, or (b) sell, assign, lease, transfer, abandon or otherwise dispose of
any stock or indebtedness to any other Person or any of its assets to any other
Person or (c) form or acquire any subsidiaries unless (i) such subsidiaries are
identified as S.I.C. 4953 (Refuse Systems) corporations and/or are engaged in
other businesses reasonably related to such industry classification as approved
by Lender in its reasonable judgment, (ii) upon formation or acquisition, any
such subsidiary becomes a Borrower under the Loan Agreement and pledges its
assets to Lender and (iii) not more than $10,000,000 shall be invested or
otherwise committed by Guarantor to all new subsidiaries, in the aggregate,
during the term of this Agreement, or (d) wind up, liquidate or dissolve or (e)
agree to do any of the foregoing. For purposes of clause (c)(iii) above, the
amount invested or otherwise committed by Guarantor to any subsidiary shall be
deemed to be equal to the cash expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or indebtedness of, or
a joint venture interest in, or for loans, advances, capital contributions or
transfer of property to such subsidiary.
5.8 Encumbrances. Guarantor shall not create, incur, assume or suffer to exist
any security interest, mortgage, pledge, lien, charge or other encumbrance of
any nature whatsoever on any of its assets or properties, including, without
limitation, the Collateral, except: (a) liens
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and security interests of Lender; and (b) the security interests and liens which
would be permitted under Section 9.8 of the Loan Agreement if Guarantor were a
Borrower thereunder.
5.9 Costs and Expenses. Guarantor shall pay to Lender 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, 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, but not limited to: (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) all title insurance
and other insurance premiums, appraisal fees and search fees; (c) costs and
expenses of preserving and protecting the Collateral; (d) costs and expenses
paid or incurred in connection with obtaining payment of the Obligations,
enforcing the security interests and liens of Lender, 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 Lender arising out of the transactions contemplated hereby
and thereby (including, without limitation, preparations for and consultations
concerning any such matters); and (e) the fees and disbursements of counsel
(including legal assistants) to Lender in connection with any of the foregoing.
5.10 Further Assurances. At the request of Lender at any time and from time to
time, Guarantor shall, at its expense, at any time or times 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. Where permitted by law, Guarantor hereby authorizes Lender to
execute and file one or more UCC financing statements signed only by Lender.
SECTION 6. EVENTS OF DEFAULT AND REMEDIES
------------------------------
6.1 Events of Default. The occurrence or existence of any Event of Default
under the Loan Agreement is referred to herein individually as an "Event of
Default", and collectively as "Events of Default".
6.2 Remedies.
(a) At any time an Event of Default exists or has occurred and is
continuing, Lender shall have all rights and remedies provided in this
Agreement, the other Financing Agreements, the Uniform Commercial Code and other
applicable law, all of which rights and remedies may be exercised without notice
to or consent by Guarantor 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 Uniform Commercial Code or other applicable law, are
cumulative, not exclusive and enforceable, in Lender'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 Guarantor of this
Agreement or any of the other Financing Agreements. Lender may, at any time or
times, proceed directly against Guarantor 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, Lender may, in its discretion and without
limitation, (i) accelerate the payment of all Obligations and demand immediate
payment thereof to Lender (provided, that, upon the occurrence of any Event of
Default described in Sections 10.1(g) and 10.1(h) of the Loan Agreement, 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 Guarantor, at Guarantor's expense, to
assemble and make available to Lender any part or all of the Collateral at any
place and time designated by Lender, (iv) collect, foreclose, receive,
appropriate, setoff 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, without limitation,
entering into contracts with respect thereto, public or private sales at any
exchange, broker's board, at any office of Lender or elsewhere) at such prices
or terms as Lender may deem reasonable, for cash, upon credit or for future
delivery, with the Lender 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 Guarantor, which right or equity of redemption
is hereby expressly waived and released by Guarantor. If any of the Collateral
is sold or leased by Lender upon credit terms or for future delivery, the
Obligations shall not be reduced as a result thereof until payment therefor is
finally collected by Lender. If notice of disposition of Collateral is required
by law, five (5) days prior notice by Lender to Guarantor 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 Guarantor waives any other notice. In the event
Lender institutes an action to recover any Collateral or seeks recovery of any
Collateral by way of prejudgment remedy, Guarantor waives the posting of any
bond which might otherwise be required.
(c) Lender may apply the cash proceeds of Collateral actually received by
Lender from any sale, lease, foreclosure or other disposition of the Collateral
to payment of the Obligations, in whole or in part and in such order as Lender
may elect, whether or not then due. Guarantor shall remain liable to Lender for
the payment of any deficiency with interest at the highest rate provided for in
the Loan Agreement and all costs and expenses of collection or enforcement,
including attorneys' fees and legal expenses.
(d) Whether or not Guarantor is insolvent, and whether or not any
deficiency balance is anticipated, any rights of the Lender hereunder may be
exercised by a court appointed receiver. In connection therewith, such a
receiver shall be appointed upon a petition, motion, or application filed by the
Lender with any court of competent jurisdiction and, effective after the
occurrence and during the continuation of an Event of Default, Guarantor hereby
irrevocably consents to and approves, without prior notice or hearing, the
immediate appointment of a receiver (in connection with a foreclosure action or
otherwise) and waives any right to object thereto without regard to the value of
the Collateral or the adequacy of any Collateral.
(e) As the subject matter of this Agreement involves general intangibles
such as permits, licenses, certificates, approvals, and authorizations by
governmental authorities which by their nature are unique, the Guarantor agrees
and acknowledges that its failure to observe the provisions hereof will cause
irreparable harm to the Lender for which there is no adequate remedy at law and
so the provisions hereof shall be specifically enforceable by Lender in a court
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of equity by injunctive relief without any requirement for Lender to produce a
bond or other security or prove or allege that its remedies at law are
inadequate.
SECTION 7. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW
------------------------------------------------------------
7.1 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 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) Guarantor irrevocably consents and submits to the non-exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and the United
States District Court for the District of Massachusetts and waives 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 or related or incidental to the dealings of Guarantor and
Lender in respect of this Agreement or 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
agrees that any dispute with respect to any such matters shall be heard only in
the courts described above (except that Lender shall have the right to bring any
action or proceeding against Guarantor or its property in the courts of any
other jurisdiction which Lender deems necessary or appropriate in order to
realize on the Collateral or to otherwise enforce its rights against Guarantor
or its property).
(c) Guarantor 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 on the signature
pages hereof and service so made shall be deemed to be completed five (5) days
after the same shall have been so deposited in the U.S. mails, or, at Lender's
option, by service upon Guarantor in any other manner provided under the rules
of any such courts. Within thirty (30) days after such service, Guarantor shall
appear in answer to such process, failing which Guarantor shall be deemed in
default and judgment may be entered by Lender against Guarantor for the amount
of the claim and other relief requested.
(d) GUARANTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION 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 GUARANTOR AND LENDER 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. GUARANTOR 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 GUARANTOR OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY
OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR
AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) (i) Lender shall not have any liability to Guarantor (whether in tort,
contract, equity or otherwise) for losses suffered by Guarantor in connection
with, arising out of, or in any way related to the transactions or relationships
contemplated by this Agreement, or any
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act, omission or event occurring in connection herewith, unless it is determined
by a final and non-appealable judgment or court order binding on Lender that the
losses were the result of acts or omissions constituting gross negligence or
willful misconduct. In any such litigation, 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 and the other Financing Agreements.
(ii) The exercise by Lender of any one or more of the rights and
remedies set forth herein shall not operate or be deemed (A) to place upon
Lender any responsibility for the operation, control, care, service, management,
maintenance or repair of any property or facilities of Guarantor, or (B) make
Lender the "owner" or "operator" of any property or facilities of Guarantor or a
"responsible party" within the meaning of applicable Environmental Laws.
7.2 Waiver of Notices. Guarantor hereby expressly waives demand, presentment,
protest and notice of protest and notice of dishonor with respect to any and all
instruments and commercial 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 Guarantor which Lender may elect to give shall entitle Guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
7.3 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 an authorized officer of Lender.
Lender shall not, by any act, delay, omission or otherwise be deemed to have
expressly or impliedly waived any of its rights, powers and/or remedies unless
such waiver shall be in writing and signed by an authorized officer of Lender.
Any such waiver shall be enforceable only to the extent specifically set forth
therein. A waiver by Lender 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 Lender would otherwise have on any future occasion, whether
similar in kind or otherwise.
7.4 Waiver of Counterclaims. Guarantor 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.
7.5 Indemnification. Guarantor shall indemnify and hold Lender, and its
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, without limitation, 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 may be unenforceable because it
violates any law or public policy, Guarantor shall pay the maximum portion which
it is permitted to pay under applicable law to Lender in satisfaction of
indemnified matters under this Section. The foregoing indemnity shall survive
the payment of the Obligations, the termination of this Agreement and the
termination or non-renewal of the Loan Agreement. All of the foregoing costs and
expenses shall be part of the Obligations and secured by the Collateral.
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SECTION 8. MISCELLANEOUS
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8.1 Notices. All notices, requests and demands hereunder shall be in writing
and (a) made to Lender at its address One Post Office Square, Boston, MA 02109
and to Guarantor at its chief executive office set forth below, or to such other
address as either party may designate by written notice to the other in
accordance with this provision, and (b) deemed to have been given or made: if
delivered in person, immediately upon delivery; if by 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.
8.2 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.
8.3 Successors. This Agreement, the other Financing Agreements and any other
document referred to herein or therein shall be binding upon Guarantor and its
successors and assigns and inure to the benefit of and be enforceable by Lender
and its successors and assigns, except that Guarantor may not 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 Lender.
8.4 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.
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IN WITNESS WHEREOF, Guarantor has caused these presents to be duly executed as
of the day and year first above written.
GUARANTOR
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CLEAN HARBORS, INC.
By:_____________________________________
Name: James A. Pitts
Title: Executive Vice President
Chief Executive Office
----------------------
Wood Road
Braintree, MA 02184
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