EXHIBIT 4.20
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT, dated as of April 12, 2001 by and among CLEAN
HARBORS, INC., a Massachusetts corporation ("Clean Harbors"), THE SUBSIDIARIES
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OF CLEAN HARBORS LISTED ON THE SIGNATURE PAGES HERETO (collectively with Clean
Harbors, the "Credit Parties"), CONGRESS FINANCIAL CORPORATION (NEW ENGLAND), a
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Massachusetts corporation, as the Senior Creditor under the Credit Agreement
described below (together with the equivalent party with respect to any
Refinanced Senior Indebtedness (as defined below), herein called the "Senior
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Creditor"), and ▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY, ▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE
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INSURANCE COMPANY, SIGNATURE 4 LIMITED, SIGNATURE 5 L.P., SPECIAL VALUE BOND
FUND, LLC, ARROW INVESTMENT PARTNERS and ▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇▇▇▇▇ FOUNDATION
(collectively the "Subordinated Creditors" and each a "Subordinated Creditor").
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W I T N E S S E T H:
In order to induce the Senior Creditor to enter into such Existing Credit
Agreement and to make the Revolving Credit Loans and Term Loans contemplated
thereby, the Credit Parties and the Subordinated Creditors hereby agree with the
Senior Creditor that so long as any part of the Senior Indebtedness as described
in Section 1.2 below is outstanding and so long as any Lender shall have any
obligation to make any loan, advance any credit, issue or honor any of Letter
Credit issued under the Credit Agreement, each of the Subordinated Creditors and
the Credit Parties will comply with such of the following provisions as are
applicable to it:
1. Certain Definitions.
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1.1 Reference to Credit Agreement. Reference is hereby made to the Amended
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and Restated Loan and Security Agreement dated as of April 12, 2001 by and among
the Credit Parties, as borrowers and guarantors, and the Senior Creditor, as the
Lender, as amended, modified, restated or supplemented from time to time without
violation of Section 8 hereof (the "Existing Credit Agreement" and together with
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any Refinanced Credit Agreement (as defined below), the "Credit Agreement").
Capitalized terms defined in the Existing Credit Agreement and not otherwise
defined herein are used herein with the meanings so defined.
1.2 Senior Indebtedness. The term "Senior Indebtedness" shall mean all
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"Existing Senior Indebtedness" and all "Refinanced Senior Indebtedness". The
term "Existing Senior Indebtedness" shall mean indebtedness, obligations and
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liabilities of the Credit Parties to the Senior Creditor its successors and
assigns, now existing or hereafter arising, direct or indirect, absolute or
contingent, secured or unsecured, arising out of or in connection with any of
the Financing Agreements, any and all interest payable pursuant to the Existing
Credit Agreement and/or under any promissory notes which may be issued by any
Credit Party to any Lender pursuant to the Existing Credit Agreement at the
interest rates provided therein (including interest which accrues after the
commencement of any proceeding in respect of any Reorganization (as hereinafter
defined)), all premium and termination fees if any payable in accordance with
the terms of the Financing Agreements and all other fees and expenses and
other amounts due from time to time under the Financing Agreements. The term
"Refinanced Senior Indebtedness" shall mean indebtedness, obligations and
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liabilities of the Credit Parties to any lender or lenders, their successors and
assigns, hereafter incurred to refinance the Existing Senior Indebtedness in an
original principal amount not to exceed the then outstanding principal amount,
together with accrued interest and all other amounts then due and owing under
the Existing Senior Indebtedness, direct or indirect, absolute or contingent,
secured or unsecured, arising out of or in connection with any of the Financing
Agreements relating to such refinancing, provided the terms of the Refinanced
Senior Indebtedness and the Financing Agreements related thereto do not, violate
Section 8 hereof (the "Refinanced Financing Agreements", with the agreement
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equivalent to the Existing Credit Agreement herein called, the "Refinanced
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Credit Agreement"), any and all interest payable pursuant to the Refinanced
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Financing Agreements and/or under any promissory notes which may be issued by
any Credit Party to any lender pursuant to the Refinanced Financing Agreements
at the interest rates provided therein (including interest which accrues after
the commencement of any proceeding in respect of any Reorganization (hereafter
defined)), all premium and termination fees if any payable in accordance with
the terms of the Refinanced Financing Agreements and all other fees and expenses
and other amounts due from time to time under the Refinanced Financing
Agreements. The term "Senior Indebtedness" shall include all amounts payable
under the Financing Agreements or any Refinanced Financing Agreements in
accordance with their terms, irrespective of whether any Credit Party may be
excused from payment of any interest, fees or other amounts payable thereunder
as a result of any Reorganization. All Senior Indebtedness shall be entitled to
the benefit of this Agreement without notice thereof being given to any
Subordinated Creditor.
1.3 Subordinated Indebtedness. The term "Subordinated Indebtedness" shall
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mean:
(a) All indebtedness, liabilities and obligations of the Credit Parties
to the Subordinated Creditors, now existing or hereafter incurred, however made
or incurred, direct or indirect, absolute or contingent, secured or unsecured
and however evidenced, under the Securities Purchase Agreement, dated as of
April 12, 2001, among Clean Harbors and the Subordinated Creditors (as amended
from time to time, the "Securities Purchase Agreement"), the 16% Senior
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Subordinated Notes due 2008 issued by Clean Harbors and the Subsidiary
Guaranties in favor of the Subordinated Creditors executed by certain
subsidiaries of Clean Harbors (collectively, the "Subordinated Debt Documents").
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(b) All obligations (contingent or otherwise) under all agreements and
instruments heretofore or hereafter securing the obligations of the Credit
Parties in respect of the Subordinated Debt Documents, including any guaranty
thereof by any Affiliate of any Credit Party.
2. Terms of Subordination.
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2.1 Transfer. Any Person to which any of the Subordinated Indebtedness is
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transferred, sold or who otherwise acquires an interest therein shall become a
party hereto, shall be deemed a "Subordinated Creditor" for all purposes hereof
and shall be bound by all of the terms hereof automatically upon acceptance of
such Subordinated Indebtedness or interest
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therein without further action on the part of such Person, the Subordinated
Creditors, the Credit Parties or the Senior Creditor.
2.2 Payment Subordinated. Anything in the Subordinated Debt Documents
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notwithstanding, the payment of the Subordinated Indebtedness is and shall be
expressly subordinate and junior in right of payment and, as provided in Section
6 hereof, exercise of remedies, to the prior payment in full of the Senior
Indebtedness to the extent and in the manner provided herein, and the
Subordinated Indebtedness is hereby subordinated as a claim against the Credit
Parties or any of the assets of the Credit Parties to the prior payment in full
of the Senior Indebtedness, whether such claim be (i) in the event of any
distribution of the assets of the Credit Parties upon any voluntary or
involuntary dissolution, winding-up, total or partial liquidation or
reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceedings or arrangements involving the Credit Parties or the
readjustment of their liabilities or any assignment for the benefit of creditors
or any marshalling of their assets or liabilities (collectively called a
"Reorganization"), or (ii) other than in connection with a Reorganization,
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except to the extent such payment is permitted by Section 2.6 hereof. In
furtherance of the foregoing, the Credit Parties agree that they will not make,
and each of the Subordinated Creditors and each other holder of all or any
portion of the Subordinated Indebtedness agrees that it will not accept or
receive, any payment of Subordinated Indebtedness, including, without
limitation, any payment received through the exercise of any right of setoff,
counterclaim or crossclaim, until all of the Senior Indebtedness has been paid
in full or provision made for the full payment thereof in cash, except to the
extent such payment is permitted by Section 2.6 hereof.
2.3 Distributions in Reorganization.
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(a) In the event of any Reorganization relative to the Credit Parties
or their properties, then all of the Senior Indebtedness shall first be paid in
full in cash before any payment is made in respect of the Subordinated
Indebtedness, and in any such proceedings any payment or distribution of any
kind or character, whether in cash, property or securities (other than Junior
Securities, hereafter defined), which may be payable or deliverable in respect
of the Subordinated Indebtedness shall be paid or delivered directly to the
Senior Creditor for application in payment of the Senior Indebtedness, unless
and until all such Senior Indebtedness shall have been paid or satisfied in full
in cash, and each holder of Subordinated Indebtedness does hereby authorize the
Senior Creditor to accept and receipt for any payment or distribution and to
apply such payment or distribution to the payment of the then unpaid Senior
Indebtedness, and to do any and all things and to execute all instruments
necessary to effectuate the foregoing. In the event that, upon any such
Reorganization, any payment or distribution of assets of the Credit Parties of
any kind or character, whether in cash, property or securities (other than
Junior Securities), shall be received by any holder of Subordinated Indebtedness
before all Senior Indebtedness is paid in full in cash, such payment or
distribution shall be immediately paid over to the Senior Creditor for
application to the payment of all Senior Indebtedness remaining unpaid until all
such Senior Indebtedness shall have been paid in full, after giving effect to
any concurrent payment or distribution to the holders of such Senior
Indebtedness. Notwithstanding any provisions of this Section 2.3, in the event
that a plan is proposed in the course of a Reorganization (a "Bankruptcy Plan")
(x) if the Senior Creditor consents thereto in writing, each holder of
Subordinated Indebtedness shall be entitled to retain any cash, securities or
other
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property payable to it in accordance with the terms of such Bankruptcy Plan and
(y) in any event, each holder of Subordinated Indebtedness shall be entitled to
receive and retain any Junior Securities distributed to it in accordance with
the terms of such Bankruptcy Plan. "Junior Securities" means any payment or
distribution of capital stock or other securities of any Credit Party or other
Person provided for by a Bankruptcy Plan, which stock or securities are
subordinated in right of payment to all then outstanding Senior Indebtedness to
substantially the same extent as, or to a greater extent than, the Subordinated
Indebtedness is subordinated to Senior Indebtedness as provided in this
Agreement.
(b) Each Subordinated Creditor hereby appoints, which appointment is
irrevocable and coupled with an interest, the Senior Creditor as such
Subordinated Creditor's true and lawful attorney, with full power of
substitution, in the name of such Subordinated Creditor, the Senior Creditor, or
otherwise, for the sole use and benefit of the Senior Creditor, to the extent
permitted by law, to prove and vote all claims relating to the Subordinated
Indebtedness if such Subordinated Creditor fails to file a proof of claim or
vote its claim within 20 days following written demand therefor by the Senior
Creditor.
(c) At any meeting of creditors of the Credit Parties or in the event
of any case or proceeding, voluntary or involuntary, for the distribution,
division or application of all or part of the assets of the Credit Parties or
the proceeds thereof, whether such case or proceeding be for the liquidation,
dissolution or winding up of the Credit Parties or their business, a
receivership, insolvency or bankruptcy case or proceeding, an assignment for the
benefit of creditors or a proceeding by or against the Credit Parties for relief
under the federal Bankruptcy Code or any other bankruptcy, reorganization or
insolvency law or any other law relating to the relief of debtors, readjustment
of indebtedness, Reorganization, arrangement, composition or extension or
marshalling of assets or otherwise, the Senior Creditor is hereby irrevocably
authorized to receive or collect any cash or other assets of the Credit Parties
distributed, divided or applied by way of dividend or payment, or any securities
issued on account of any Subordinated Indebtedness, and apply such cash to or to
hold such other assets or securities as collateral for the Senior Indebtedness,
and to apply to the Senior Indebtedness any cash proceeds of any realization
upon such other assets or securities that the Senior Creditor, in its
discretion, elects to effect, until all of the Senior Indebtedness shall have
been paid in full in cash, rendering to the Subordinated Creditors any surplus
to which the Subordinated Creditors are then entitled.
2.4 Effect of Provisions. The provisions hereof are solely for the purpose
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of defining the relative rights of the holders of Senior Indebtedness on the one
hand, and the holders of Subordinated Indebtedness on the other hand, and none
of such provisions shall impair, as between the Credit Parties and any holder of
the Subordinated Indebtedness, the obligations of the Credit Parties, which are
unconditional and absolute, to pay to such holder all Subordinated Indebtedness
in accordance with the terms thereof nor, except as provided in Section 6 below,
shall any such provisions prevent any holder of Subordinated Indebtedness from
exercising all remedies otherwise permitted by applicable law or under the terms
of such Subordinated Indebtedness upon a default thereunder, subject to the
rights, if any, of holders of Senior Indebtedness under the provisions of this
Agreement.
2.5 Subrogation, etc. Subject to the payment in full of all Senior
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Indebtedness, the holders of the Subordinated Indebtedness shall be subrogated
to the rights of the holders of
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Senior Indebtedness to receive payments or distributions of assets of the Credit
Parties made on the Senior Indebtedness until the Subordinated Indebtedness
shall be paid in full in cash and, for the purposes of such subrogation, no
payments or distributions to the holders of Senior Indebtedness of any cash,
property or securities to which the holders of the Subordinated Indebtedness
would be entitled except for the provisions of this Agreement, and no payment
over pursuant to the provisions of this Agreement to the holders of Senior
Indebtedness, by the holders of the Subordinated Indebtedness, shall, as between
the Credit Parties, the creditors of the Credit Parties (other than the holders
of Senior Indebtedness) and the holders of the Subordinated Indebtedness, be
deemed to be a payment by the Credit Parties to or on account of Senior
Indebtedness; it being understood that the provisions of this Agreement are and
are intended solely for the purpose of defining the relative rights of the
holders of the Subordinated Indebtedness on the one hand, and the holders of
Senior Indebtedness on the other hand.
2.6 Permitted Payments.
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(a) Notwithstanding anything to the contrary set forth herein, (i)
so long as (x) no Payment Default exists, and so long as (y) the Subordinated
Creditors have not received a Blockage Notice with respect to any other Event of
Default, the Credit Parties may, from time to time, pay or cause to be paid to
the Subordinated Creditors and the Subordinated Creditors may accept and retain
scheduled payments of principal and of interest on the Subordinated Indebtedness
in the amounts and on the dates required to be paid by the Credit Parties under
the Subordinated Debt Documents, as originally executed and delivered or as
amended from time to time without violation of Section 6, and (ii) so long as
(x) no Payment Default exists, (y) the Subordinated Creditors have not received
a Blockage Notice with respect to any other Event of Default and (z) no Default
or Event of Default shall result from the making of any such payment and such
payment is made to the extent and only to the extent permitted under Schedule A
to this Agreement, the Credit Parties may make prepayments of principal and
interest in respect of the Subordinated Indebtedness. In addition to payments
permitted under the first sentence of this Section 2.6(a), if the then holders
of the Senior Indebtedness shall not have accelerated the payment of the Senior
Indebtedness within 180 days after receipt by the Subordinated Creditors of a
Blockage Notice, then after the expiration of such 180-day period (or if during
said 180-day period such Event of Default is cured by the Credit Parties or is
waived by the then holders of the Senior Indebtedness, then after the time of
such cure or waiver), and if no Payment Default exists, the Credit Parties may
from time to time pay or cause to be paid to the Subordinated Creditors and the
Subordinated Creditors may accept and retain payments of interest on the
Subordinated Indebtedness (not in excess of the scheduled payments of interest
required to be made by the Credit Parties under the Subordinated Debt Documents,
as originally executed and delivered or as amended from time to time without
violation of Section 6 hereof, including any interest payments which were not
paid as a result of such Blockage Notice or the prior existence of a Payment
Default), provided, that if thereafter any Payment Default occurs or any other
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Blockage Notice is sent, then the first sentence of this Section 2.6(a) shall
again apply. If the Subordinated Creditors or any other holder of the
Subordinated Indebtedness receives payment from the Credit Parties pursuant to
the first sentence of this Section 2.6(a), such payment shall be deemed to
constitute a representation of the Credit Parties to the Senior Creditor and to
the Subordinated Creditors that no Event of Default exists, that such payment is
permitted to be paid by the Credit Parties under this Agreement, and the
Subordinated Creditors shall be entitled to keep and retain such payment.
Notwithstanding anything which may be to the contrary herein,
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the Senior Creditor shall not be entitled to block payments pursuant to a
Blockage Notice delivered hereunder for more than 180 days during any 360 day
period or send more than three (3) Blockage Notices during the term of this
Agreement.
(b) For purposes hereof, the terms:
(i) "Payment Default" shall mean any failure by the Credit Parties to
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pay any principal of or premium, if any, or interest on any Senior Indebtedness
or any fee owing to the Senior Creditor or any Lender under the Credit Agreement
when the same becomes due and payable, whether at maturity or at date fixed for
the payment of any installment or prepayment thereof or by declaration or
acceleration or otherwise (but after giving effect to the period of grace, if
any, applicable thereto). No Payment Default shall be deemed to have been cured
unless the full amount of the overdue payment to which such Payment Default
relates shall have been paid in full prior to any acceleration of the Senior
Indebtedness or unless waived by the then holders of the Senior Indebtedness.
(ii) "Blockage Notice" shall mean a written notice from the Senior
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Creditor to the Subordinated Creditors of the existence of an Event of Default.
3. Agreement to Hold In Trust. If the Subordinated Creditors or any
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other holders of Subordinated Indebtedness shall receive any payments on account
of the Subordinated Indebtedness in violation of this Agreement, they shall hold
such payments in trust for the benefit of the holder or holders of the Senior
Indebtedness and pay them over to the Senior Creditor for application in payment
of the Senior Indebtedness.
4. Requirement of Notices.
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4.1 By the Senior Creditor. The Senior Creditor agrees to notify the
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Subordinated Creditors of any Payment Default, of any acceleration of the Senior
Indebtedness or of any change in the Senior Creditor.
4.2 By the Subordinated Creditors. The Subordinated Creditors agree to
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notify the Senior Creditor prior to any acceleration of the Subordinated
Indebtedness or upon the happening of any of the following:
(a) The failure of the Credit Parties to make any payment on the
Subordinated Indebtedness as and when due; or
(b) The transfer of any Subordinated Indebtedness, specifying the
name and address of the transferee.
4.3 Effect of Failure to Give Notice. Notwithstanding the foregoing, the
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failure of any party to give any notice required under this Section 4 shall not
affect the subordination of the Subordinated Indebtedness.
5. Legend. The Credit Parties and the Subordinated Creditors, for
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themselves and their successors and assigns, covenant to cause each instrument
representing or evidencing any
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of the Subordinated Indebtedness to have affixed upon it a legend which reads
substantially as follows:
"This instrument is subject to a Subordination Agreement dated as of April
12, 2001 among the payee hereof, the maker hereof, and Congress Financial
Corporation (New England), which, among other things, subordinates the
makers' obligations to the payee to the makers' obligations to the holders
of Senior Indebtedness as defined in said Agreement."
6. Limit on Right of Action, No Amendments. The Subordinated Creditors,
for themselves and their successors and assigns, agree for the benefit of the
holders of the Senior Indebtedness that so long as any part of the Senior
Indebtedness remains outstanding or any holder of the Senior Indebtedness shall
have any obligation to make any loans, extend any credit, or issue or honor any
Letter of Credit Accommodation issued under the Credit Agreement, the
Subordinated Creditors will not take any action to accelerate or demand the
payment of the Subordinated Indebtedness or to foreclose or otherwise realize on
any security or guaranty given by the Credit Parties or any of their Affiliates
to secure or guarantee the Subordinated Indebtedness (except and only to the
extent required to toll the running of any applicable statute of limitations)
prior to the earliest of (i) a Reorganization or (ii) the acceleration of the
Senior Indebtedness by the holders thereof; provided that notwithstanding the
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foregoing, the Subordinated Creditors shall be entitled to accelerate the
Subordinated Indebtedness as a result of any default by the Credit Parties in
their obligations under the Subordinated Debt Documents one hundred eighty (180)
days after the Subordinated Creditors give the Senior Creditor written notice of
their intent to accelerate (the "Standstill Period") and may thereafter take
action to collect or enforce the Subordinated Indebtedness, provided any
proceeds received or recoverable by the Subordinated Creditors in connection
therewith shall be held in trust as provided in Section 3 of this Agreement and
paid over to Senior Creditor as provided under the other provisions of this
Agreement; provided, however, that the Subordinated Creditors shall not take and
shall suspend any action taken to collect and enforce the Subordinated
Indebtedness (but may continue the acceleration thereof) effective upon receipt
of notice from the Senior Creditor of the acceleration of the Senior
Indebtedness and for so long as the Senior Creditor is actively taking actions
to collect and enforce the Senior Indebtedness in such manner as the Senior
Creditor shall determine, in its discretion, except that Subordinated Creditors
may bring suit and obtain judgments and judgment liens with respect to the
Subordinated Indebtedness but not take any action to execute on any such liens
unless required to protect such judgment lien's priority as against other
judgment creditors (other than with respect to the security interests and liens
of the Senior Creditor). The foregoing provisions of this Section 6 are solely
for the purpose of defining the relative rights of the holders of Senior
Indebtedness on the one hand and the holders of the Subordinated Indebtedness on
the other hand and shall not limit or otherwise affect any rights which the
holders of the Subordinated Indebtedness may have against the Credit Parties
under the terms of the Subordinated Debt Documents.
The Subordinated Creditors shall not amend or permit amendment of the terms
of any instrument or agreement evidencing any Subordinated Indebtedness in any
manner that would amend the payment terms of the Subordinated Debt Documents
(other than extensions or deferrals of scheduled dates of payment or waivers of
defaults), any financial covenant or other negative covenant set forth in the
Securities Purchase Agreement or the rate and manner of
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payment of interest, premiums or fees due under the Subordinated Debt Documents,
except to the extent such amendment is no more onerous to the Credit Parties
(provided, the Subordinated Creditors and the Credit Parties may amend the terms
of any financial covenant in the Subordinated Debt Documents or any defined term
used therein or to provide for new financial covenants if the same conform to
any such term or covenants in any Credit Agreement or in any Refinance Credit
Agreement regardless of whether or not more onerous) or except as otherwise
permitted under the Credit Agreement.
7. No Security to the Subordinated Creditors. The Credit Parties shall not
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grant and the Subordinated Creditors shall not accept any security of any nature
in property real or personal of the Credit Parties to secure the Subordinated
Indebtedness. Any security interest granted in violation of the terms of this
Agreement shall be null and void and of no force and effect against the holders
of the Senior Indebtedness. In foreclosing or realizing on the security
interests granted in favor of the holders of the Senior Indebtedness in the
Collateral, so long as the Senior Creditor acts in a commercially reasonable
manner, the Senior Creditor may proceed in any manner which the Senior Creditor,
in its sole discretion, shall choose, even though a higher price might have been
realized if the Senior Creditor had proceeded to foreclose or realize on its
security interests in another manner.
8. Right to Amend, etc. The holders of the Senior Indebtedness shall have
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the right, in their sole discretion (and without in any way diminishing or
altering their rights hereunder or the subordination provisions contained
herein), to modify, amend, waive or release any of the terms of the Credit
Agreement, the Financing Agreements or the Senior Indebtedness or of any other
document relative thereto and to exercise or refrain from exercising any powers
or rights which it may have thereunder; provided that in no event shall the
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Financing Agreements or the Refinanced Financing Agreements contain any
provision that would (i) directly prohibit the Credit Parties from making
payments in respect of the Subordinated Indebtedness in any manner which is not
already specifically prohibited by this Agreement or directly prohibit the
amendment of any instrument or agreement evidencing Subordinated Indebtedness
except as provided in Section 6 hereof, (ii) extend the maturity of any Senior
Indebtedness to a date that is beyond the maturity date of the Subordinated
Indebtedness without the consent of the holders of a majority of the
Subordinated Indebtedness, (iii) cause the maximum principal amount of the
Senior Indebtedness to exceed $65,000,000 at any time, or (iv) amend the
definition of Collateral set forth in the Existing Credit Agreement except as
may be necessary to conform to amendments to the Uniform Commercial Code.
9. Further Assurances. The Credit Parties and the Subordinated Creditors for
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themselves and their respective successors and assigns, agree to execute and
deliver to the Senior Creditor, at the expense of the Credit Parties, such
further documents and instruments and to take such further action as the Senior
Creditor may at any time or times reasonably request in order to carry out the
provisions and intent of this Agreement.
10. Notices. All notices and other communications hereunder shall be in
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writing and shall be personally delivered or mailed by first class mail, postage
prepaid, as follows:
(a) If to the Subordinated Creditors:
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to such party at its address set forth on Annex 1 attached
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(b) If to the Credit Parties:
Clean Harbors, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax no. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇ & ▇'▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇▇ ▇▇▇▇
Fax no. (▇▇▇) ▇▇▇-▇▇▇▇
(c) If to the Senior Creditor:
Congress Financial Corporation (New England)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Brown, Rudnick, Freed & Gesmer
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or addresses as the party to whom such notice is
directed may have designated in writing to the other parties hereto. A notice
shall be deemed to have been given upon the earlier to occur of (i) three (3)
days after the date on which it is deposited in the U.S. mails or (ii) receipt
by the party to whom such notice is directed.
11. Successors: Continuing Effect. etc. This Agreement is being entered into
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for the benefit of, and shall be binding upon, the holders of the Senior
Indebtedness and the holders of the Subordinated Indebtedness and their
respective successors and assigns. This Agreement shall be a continuing
agreement and shall be irrevocable and shall remain in full force and effect so
long as there is both Senior Indebtedness (including, if applicable, any portion
of the Senior Creditors commitment or obligation to make loans, extend credit or
issue or honor Letter of Credit Accommodations issued under the Credit
Agreement) and Subordinated Indebtedness outstanding.
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12. Credit Agreement. Notwithstanding any other provision of this
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Subordination Agreement, the rights of the holders of the Senior Indebtedness
are subject to the provisions of the Credit Agreement. Unless the context shall
so otherwise clearly indicate, the terms "holder of Senior Indebtedness" and
"holders of Senior Indebtedness," as used herein shall be deemed to include the
Senior Creditor and any successor or assign thereof acting pursuant to the
Credit Agreement.
13. Miscellaneous. In case any provision in this Agreement shall be invalid,
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illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby. This
Agreement may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which shall be an original, but
all of which together shall constitute one and the same instrument. This
Agreement shall be governed by the laws of The Commonwealth of Massachusetts.
SIGNATURES APPEAR ON THE NEXT PAGE
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IN WITNESS WHEREOF, the parties have executed this Agreement as a sealed
instrument as of the date first above written.
CLEAN HARBORS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS ENVIRONMENTAL SERVICES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS OF BRAINTREE, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:__________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS OF NATICK, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:__________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS SERVICES, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
▇▇▇▇▇▇'▇ WASTE OIL SERVICE, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
12
CLEAN HARBORS KINGSTON FACILITY CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS OF CONNECTICUT, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
▇▇. ▇▇▇▇▇, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
SPRING GROVE RESOURCE RECOVERY, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
HARBOR MANAGEMENT CONSULTANTS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By:___________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
CLEAN HARBORS OF BALTIMORE, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:Senior Vice President
13
▇▇▇▇ ▇▇▇▇▇▇▇ LIFE INSURANCE COMPANY
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Managing Director
▇▇▇▇ ▇▇▇▇▇▇▇ VARIABLE LIFE INSURANCE COMPANY
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Authorized Signatory
SIGNATURE 4 LIMITED
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company,
as Portfolio Advisor
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Managing Director
SIGNATURE 5, L.P.
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Life Insurance Company,
as Portfolio Advisor
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: __________________________
Name:▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:Managing Director
SPECIAL VALUE BOND FUND, LLC
By: SVIM/MSM, LLC
as Manager
By: ▇▇▇▇▇▇▇▇▇▇ & CO., LLC
as Managing Member of the Manager
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
By: _______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Member
14
ARROW INVESTMENT PARTNERS
By: Grandview Capital Management, LLC,
Investment Manager
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇▇▇▇▇ FOUNDATION
By: Grandview Capital Management, LLC,
Investment Manager
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
By: _______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
By:____________________________
Name:▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title:Senior Vice President
12
SCHEDULE A
PERMITTED PREPAYMENTS
Subject to the conditions set forth in Section 2.6(a)(ii) of this Agreement,
the Credit Parties may make prepayments of principal and accrued interest on the
Senior Subordinated Notes; provided, that, (i) the Credit Parties shall give
-------- ----
Senior Creditor not more than sixty (60) days nor less than thirty (30) days
prior notice of any such prepayment, (ii) on each of the sixty (60) consecutive
days prior to the making of any such prepayment and on the date thereof after
giving effect thereto, the Credit Parties shall maintain Excess Availability (as
defined under the Existing Credit Agreement) of not less than $2,500,000, (iii)
prior to making any such prepayment the Credit Parties shall have repaid at
least $9,000,000 of principal on the Term Loan B (as defined in the Existing
Loan Agreement) and (iv) the Credit Parties shall make such prepayment only from
the following sources: (a) fifty percent (50%) of Excess Cash Flow (as defined
below) or (b) 100% of the net proceeds from the issuance of equity securities by
Parent. For purposes hereof, Excess Cash Flow shall mean EBITDA (as defined in
the Existing Loan Agreement) of the Credit Parties for the prior twelve
consecutive month period less (1) all capital expenditures made by the Credit
Parties during such period that are paid in cash and not financed with
indebtedness other than the Loans (as defined in the Existing Loan Agreement),
(2) the amount of income, real estate, franchise and like taxes paid or withheld
by the Credit Parties during such period, (3) payments and prepayments on
indebtedness for borrowed money by the Credit Parties during such period and (4)
interest expense paid in cash by the Borrowers during such period.