Exhibit 4.26
Execution Copy
LETTER OF CREDIT FACILITY, REIMBURSEMENT AND SECURITY AGREEMENT
This Letter of Credit Facility, Reimbursement and Security Agreement (this
"Agreement") dated as of September 6, 2002 is made by and between Clean Harbors,
Inc., a Massachusetts corporation (the "Applicant"), and Fleet National Bank
(the "Bank").
1. Definitions. For purposes of this Agreement, the following terms shall
have the following meanings:
(a) "Ableco" means Ableco Finance LLC, as agent for the Lenders under
the Ableco Financing Agreement.
(b) "Ableco Financing Agreement" means the Financing Agreement dated as
of the date hereof among the Applicant, certain of the Applicant's subsidiaries,
the lenders from time to time party thereto and Ableco, as the same may be
amended, supplemented or otherwise modified from time to time.
(c) "Availability Period" means the period from and including the
Effective Date to but excluding the earlier of (x) the Commitment Termination
Date, and (y) the date upon which the LC Commitment terminates pursuant to the
terms hereof.
(d) "Bank Charges" has the meaning ascribed thereto in Paragraph 13
below.
(e) "Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed.
(f) "Collateral" means (i) the Collateral Account, and any and all cash,
deposits, money, checks, drafts, wire transfers, funds and other amounts from
time to time credited to or deposited or held in the Collateral Account, and
(ii) any and all interest, dividends, distributions and other income accruing on
or payable in respect of the Collateral, and (iii) any and all proceeds of the
foregoing.
(g) "Collateral Account" means the high yield savings account
#__________ (and any and all sub-accounts thereof, replacement accounts therefor
and other accounts relating thereto) maintained by the Applicant at the Bank for
the benefit of the Bank.
(h) "Collateral Amount" means the value of the Collateral held in or
credited to the Collateral Account.
(i) "Commitment Termination Date" means March 31, 2003.
(j) "Congress" means Congress Financial Corporation (New England), as
agent for the lenders under the Congress Credit Agreement.
(k) "Congress Credit Agreement" means the Loan and Security Agreement
dated as of September 6, 2002, by and among the Applicant and certain of its
subsidiaries, the lenders thereunder, and Congress, as the Revolving Credit
Agent, as the same may be replaced, renewed or refinanced from time to time.
(l) "Control Agreement" means the Deposit Account Control and
Intercreditor Agreement dated as of the date hereof among the Bank, the
Applicant and Ableco substantially in the form of Exhibit A hereto.
(m) "Credit Documents" means this Agreement, the Letters of Credit, the
Control Agreement, and any other instruments or documents delivered or to be
delivered from time to time pursuant to this Agreement, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
their respective terms.
(n) "Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
(o) "Effective Date" has the meaning ascribed thereto in Paragraph 19
below.
(p) "Event of Default" has the meaning ascribed thereto in Paragraph 21
below.
(q) "Fees" has the meaning ascribed thereto in Paragraph 13 below.
(r) "LC Commitment" means the commitment of the Bank to issue Letters of
Credit hereunder. The original maximum amount of the LC Commitment is equal to
$100,000,000.
(s) "LC Exposure" means, at any time, the sum of (x) 100% of the
aggregate undrawn amount of all outstanding standby and documentary Letters of
Credit issued by the Bank to or for the account of the Applicant at such time at
such time plus (y) the aggregate amount of all LC Disbursements made by the Bank
in respect of Letters of Credit issued by the Bank to or for the account of the
Pledgor that have not yet been reimbursed by or on behalf of the Applicant at
such time.
(t) "LC Disbursement" has the meaning ascribed thereto in Paragraph 5
below.
(u) "Letter of Credit" has the meaning ascribed thereto in Paragraph 2
below.
(v) "LIBOR" means the rate specified by the Bank from time to time as
the applicable London interbank offered rate ("LIBOR") for U.S. dollar deposits
in the London interbank market with a maturity of 30 days from the date of
deposit.
(w) "Material Adverse Effect" means, in respect of any entity, a
material adverse effect on such entity's business, properties or financial
condition.
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(x) "Material Indebtedness" means the indebtedness of the Applicant to
Congress under the Congress Credit Agreement, the indebtedness of the Applicant
to Ableco under the Ableco Financing Agreement, and any other indebtedness of
the Applicant (other than the Letters of Credit) in an aggregate principal
amount exceeding $100,000.
(y) "Maturity Date" means September 9, 2005.
(z) "Obligations" means any and all of the Applicant's debts,
obligations and liabilities under the Credit Documents, whether direct or
indirect, liquidated or unliquidated, absolute or contingent, due or to become
due, now existing or hereafter arising, including, without limitation, the
Applicant's obligation to immediately reimburse the Bank for all LC
Disbursements, and all Fees, Bank Charges, interest (including interest that
accrues after the commencement of any proceeding in respect of any partial
liquidation or reorganization, or bankruptcy, insolvency, receivership or other
statutory or common law proceedings or arrangements involving the Applicant or
the readjustment of its liabilities or any assignment for the benefit of
creditors or any marshalling of the Applicant's assets or liabilities and other
costs and expenses as provided hereunder), expenses, indemnification
obligations, and other amounts from time to time owing from the Applicant to the
Bank.
2. Commitment to Issue Letters of Credit; Letters of Credit Outstanding at
Expiration of Availability Period. Subject to the terms and conditions of this
Agreement, the Bank agrees to issue for the account of the Applicant, from time
to time during the Availability Period, one or more standby or documentary
letters of credit (each, a "Letter of Credit") in an aggregate undrawn amount
that will not result in (a) the LC Exposure exceeding the LC Commitment at such
time or (b) (i) the product of (x) one hundred three percent (103%) multiplied
by (y) the LC Exposure exceeding (ii) the Collateral Amount at such time. Upon
expiration of the Availability Period, the Borrower shall have no right to
request the issuance of, and the Bank shall have no obligation to issue any
additional Letters of Credit hereunder. Any Letters of Credit outstanding at the
expiration of the Availability Period shall remain outstanding until the
respective stated expiration dates thereof; provided that such outstanding
Letters of Credit may be amended, renewed or extended subject to the terms and
conditions contained in this Agreement, and provided further that the face
amount of any such Letter of Credit may not be increased in connection with any
such amendment, renewal or extension, and no such Letter of Credit may be
amended, renewed or extended after the occurrence and during the continuance of
an Event of Default.
3. Requests for Issuance of Letters of Credit. To request the issuance of a
Letter of Credit (or the amendment, renewal, or extension of an outstanding
Letter of Credit) hereunder, the Applicant shall submit to FCC by electronic or
facsimile transmission (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a duly completed letter of credit application
on the Bank's standard form. Subject to the terms and conditions hereof, the
Bank shall issue (or amend, renew or extend) a Letter of Credit in the name of
the Applicant in conformity with such application. During the Availability
Period, a Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit,
the Applicant shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension, (a) the LC Exposure
shall not exceed the LC Commitment at such time and (b) (i) the product of (x)
one hundred three
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percent (103%) multiplied by (y) the LC Exposure not exceed (ii) the Collateral
Amount at such time. After expiration of the Availability Period, a Letter of
Credit shall be amended, renewed or extended only if (and upon amendment,
renewal or extension of each Letter of Credit, the Applicant shall be deemed to
represent and warrant that), after giving effect to such amendment, renewal or
extension, the product of (A) one hundred three percent (103%) multiplied by (B)
the LC Exposure shall not exceed the Collateral Amount at such time. Each
request for a Letter of Credit hereunder shall be irrevocable. Each Letter of
Credit issued hereunder shall be in such form and shall contain such terms,
conditions and provisions as the Bank, in its reasonable discretion, may elect.
4. Expiration Date. Unless otherwise agreed by the Bank from time to time,
each Letter of Credit shall expire (without giving effect to any extension
thereof by reason of an interruption of business) at or prior to the close of
business on the earlier of (a) the date 365 days, in the case of standby Letters
of Credit, or 180 days, in the case of documentary Letters of Credit, after the
date of the issuance of such Letter of Credit (or, in the case of any renewal or
extension (including any "evergreen" or automatic renewal or extension) of any
standby Letter of Credit, 365 days after such renewal or extension) and (b) the
Maturity Date. No Letter of Credit may be extended beyond the Maturity Date.
5. Reimbursement. The Applicant agrees to immediately reimburse the Bank
for the full amount of any and all disbursements or payments related to each
Letter of Credit, including, without limitation, any and all drawings made
thereunder (each, an "LC Disbursement") by paying to the Bank an amount equal to
such LC Disbursement not later than (i) 1:00 p.m., Boston, Massachusetts time,
on the Business day that the Applicant receives notice of such LC Disbursement,
if such notice is received prior to 11:00 a.m., Boston, Massachusetts time, or
(ii) the Business day immediately following the day that the Applicant receives
such notice, if such notice is not received prior to such time. To the extent
that sufficient funds are available in the Collateral Account at the time any LC
Disbursement becomes due and payable, payment of the Applicant's reimbursement
obligations in respect of such LC Disbursement shall be effected though an
automatic withdrawal of an amount equal to such LC Disbursement from the
Collateral Account, and the Applicant hereby irrevocably authorizes and directs
the Bank to take any and all action necessary to effectuate such withdrawal. If,
when applied to any LC Disbursement, the funds in the Collateral Account prove
insufficient to satisfy in full the Applicant's reimbursement obligations in
respect of such LC Disbursement, the Applicant shall immediately upon demand pay
to the Bank an amount equal to the amount by which such LC Disbursement exceeded
the amount available in the Collateral Account; provided that such obligation
shall become effective immediately, without demand or other notice of any kind,
if an Event of Default described in clauses (e) or (f) of Paragraph 21 below
shall have occurred and be continuing. Any LC Disbursement remaining unpaid
after demand therefor (or during continuance of an Event of Default described in
clauses (e) or (f) of Paragraph 21 below) shall accrue interest, from and
including the date on which such LC Disbursement arose through, but excluding,
the date on which such LC Disbursement is paid in full in cash, at a rate per
annum equal to LIBOR plus one half of one percent (.50%). The Applicant hereby
irrevocably waives the right to direct the application of any and all payments
in respect of LC Disbursements received from or on behalf of the Applicant, and
the Applicant hereby irrevocably agrees that the Bank shall have the continuing
exclusive right to apply any and all such payments as the Bank may deem
advisable.
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6. Obligations Absolute. The obligation of the Applicant to reimburse the
Bank for payments made with respect to any Letter of Credit shall be absolute,
unconditional and irrevocable, without necessity of presentment, demand,
protest, or other formalities. Such obligations of the Applicant shall be paid
strictly in accordance with the terms hereof under all circumstances, including
the following circumstances:
(a) any lack of validity of enforceability of this Agreement, any Letter
of Credit, any other Credit Document or any term or provision contained in any
thereof;
(b) the existence of any claim, set-off, defense or other right which
Applicant may at any time have against a beneficiary or any transferee of any
Letter of Credit (or any persons or entities for whom any such transferee may be
acting), the Bank or any other person, whether in connection with this
Agreement, any Letter of Credit, or any transaction in connection with any
Letter of Credit (including any underlying transaction between the Applicant and
the beneficiary for which the Letter of Credit was procured);
(c) any draft, demand, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(d) payment by the Bank under any Letter of Credit against presentation
of a demand, draft or certificate or other document which substantially
complies, but does not strictly comply, with the terms of such Letter of Credit;
(e) the fact that an Event of Default shall have occurred and be
continuing; or
(f) any other event, circumstances or happening whatsoever, whether or
not similar to any of the foregoing, that might, but for the provisions of this
Paragraph 6, constitute a legal or equitable discharge of the Applicant's
obligations hereunder.
7. Applicant's Assumption of Risk. As between the Bank and the Applicant,
the Applicant assumes all risks relating to the acts and omissions of, or the
misuse of any Letter of Credit by, the beneficiaries of any Letter of Credit. In
furtherance and not in limitation of the foregoing, to the fullest extent
permitted by law, the Bank shall not be responsible: (a) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if such document shall prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (b) for the validity, efficacy
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights and benefits thereunder or
the proceeds thereof, in whole or in part; (c) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; (d) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (e) for errors in
interpretation of technical terms; (f) for any loss or delay in the transmission
or otherwise of any document required in order to make a payment under any
Letter of Credit or of the proceeds thereof; (g) for the use of the proceeds of
any drawing under any Letter of Credit; and (h) for any consequences arising
from causes beyond the control of the Bank. None of the above shall
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affect, impair or prevent the vesting of any of the rights or powers of the Bank
hereunder. Nothing contained herein shall be deemed to limit any waiver,
covenants or indemnities made by the Applicant in favor of the Bank in any
letter of credit application, reimbursement agreement or similar document,
instrument or agreement between the Applicant and the Bank.
8. Indemnity Relating to Letters of Credit. In addition to any and all
amounts payable as elsewhere provided in this Agreement, the Applicant hereby
agrees to pay and to protect, indemnify, and the Bank harmless from and against
any and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees and allocated costs of internal
counsel) which either of such parties may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance (or amendment, renewal or
extension) of any Letter of Credit or the use of the proceeds thereof, or (B)
the failure of the Bank to honor a demand for payment under any Letter of Credit
as a result of any act or omission, whether rightful or wrongful, or as a result
of any present or future de jure or de facto government, in each case other than
to the extent any such claims, demand, liability, damages, losses, costs charges
or expenses are solely the result of the gross negligence or willful misconduct
of the Bank (as determined by a court of competent jurisdiction by final and
non-appealable judgment).
9. Governing Law, Etc., of Letters of Credit. All Letters of Credit issued
hereunder shall be subject to the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No. 500
("UCP") (and any subsequent amendments or revisions thereof) or the
International Standby Practices ("ISP") International Chamber of Commerce,
Publication No. 590 (and any subsequent amendments and revisions thereof), as
applicable, and as to matters not governed by UCP or ISP, shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts
and applicable U.S. Federal law.
10. Expiration of Commitment. Unless previously terminated, the LC
Commitment shall expire at the close of business on the Commitment Termination
Date.
11. Permitted Uses. The Letters of Credit will be used only for general
corporate and working capital purposes of the Applicant.
12. Security.
(a) As security for the full payment, performance and discharge of the
Obligations, the Applicant hereby delivers and pledges to the Bank and grants to
the Bank a first priority lien upon and continuing security interest in the
Collateral. To the extent the Bank receives payment on account of the
Obligations, which payment is thereafter set aside or required to be repaid by
the Bank in whole or in part, then, to the extent of any sum not finally
retained by the Bank (regardless of whether such sum is recovered from the Bank
by the Applicant, or the Applicant's estate or trustee or any party acting for,
on behalf of or through the Applicant as the Applicant's representative), the
Obligations shall be reinstated and the lien and security interest created
hereby shall remain in full force and effect (or be reinstated) until the
Applicant shall have made payment to the Bank, which payment shall be due on
demand.
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(b) Except for the security interest created hereunder (and the
subordinated second priority security interest granted by the Applicant in favor
of Ableco), the Applicant is the owner of the Collateral free from any lien or
security interest. The Applicant agrees not to grant any lien on or security
interest in, or permit the existence of any lien on or security interest in, the
Collateral Account or any of the other Collateral (except in favor of the Bank,
and except for the subordinated second priority security interest in favor of
Ableco).
(c) The Applicant will promptly execute and deliver to the Bank such
financing statements, certificates and other documents or instruments as may be
necessary to enable the Bank to perfect, protect or from time to time renew the
security interest granted hereby, including, without limitation, such financing
statements, control agreements, certificates and other documents as may be
necessary to perfect a security interest in any additional Collateral hereafter
acquired by the Applicant or in any replacements or proceeds thereof. The
Applicant authorizes the Bank to file and refile (at the Applicant's expense)
such financing statements, continuation statements and other documents
(including, without limitation, this Agreement) in such offices as the Bank may
reasonably deem necessary or appropriate in order to perfect and preserve the
rights and interests granted to the Bank hereunder, and agrees that it will join
with the Bank in executing any such financing statements, continuation
statements or other documents as the Bank may reasonably deem necessary. The
Applicant authorizes and appoints the Bank, in case of need, to execute such
financing statements, assignments, certificates and other documents pertaining
to the Bank's security interest in the Collateral in its stead if the Applicant
fails to so execute such documents, with full power of substitution, as the
Applicant's attorney in fact.
(d) Provided no Default or Event of Default shall have occurred or be
continuing or shall arise therefrom, unless Ableco has notified the Bank that an
event of default has occurred and is continuing under the Ableco Financing
Agreement, on the fifteenth day of each calendar month (or, if such day is not a
Business Day, on the next succeeding Business Day), commencing on October 15,
2002, the Bank shall withdraw from the Collateral Account the aggregate amount
of interest that has accrued on the funds on deposit in the Collateral Account
during the prior month and shall transfer such interest to the Applicant in
accordance with the wire instructions of the Applicant set forth on Schedule I
hereto (whereupon such interest shall no longer be subject to the security
interest granted to the Bank hereunder). Upon any such disbursement, the
Applicant shall be deemed to have represented to the Bank that both immediately
before and immediately after giving effect to such disbursement, no Default or
Event of Default shall have occurred and be continuing.
(e) Provided no Default or Event of Default shall have occurred or be
continuing or shall arise therefrom, from time to time (but not more frequently
than once in any calendar month) after the earlier of (i) 3 Business Days after
the last day of the Availability Period and (ii ) the Commitment Termination
Date, upon the written request of Ableco, the Bank shall withdraw from the
Collateral Account the amount, if any, by which (x) the aggregate amount of
funds on deposit in the Collateral Account (exclusive of interest amounts
referred to in clause (d) above) exceeds (y) the product of (A) one hundred
three percent (103%) multiplied by (B) the LC Exposure at such time, and shall
transfer such excess amount to Ableco in accordance with the wire transfer
instructions of Ableco set forth on Schedule I hereto to be applied by Ableco
against the Applicant's obligations to Ableco (whereupon such excess amount
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shall no longer be subject to the security interest granted to the Bank
hereunder). Upon any such disbursement, the Applicant shall be deemed to have
represented to the Bank both immediately before and immediately after giving
effect to such disbursement no Default or Event of Default shall have occurred
and be continuing.
(f) The Applicant shall have no right to request or receive
disbursements from the Collateral Account, except as provided in clauses (d) and
(e) of this Paragraph 12. The Applicant hereby irrevocably authorizes and
directs the Bank to make the transfers described in clauses (d) and (e) of this
Paragraph 12, and hereby agrees that in no event shall the Bank be liable or
obligated to the Applicant for any transfer made in accordance with such
clauses, or for any failure by the Bank to make any such transfer if the Bank,
in its reasonable determination, believes that a Default or Event of Default has
occurred and is continuing under this Agreement or the Credit Documents, or that
such transfer may expose the Bank to any obligation, liability or expense (other
than any administrative costs and expenses related to or incurred in connection
with the transfers described in clauses (d) and (e) of this Paragraph 12).
(g) All items of income, if any, including dividends, interest and other
income, gain, expense and loss on the Collateral shall be reported by the Bank
in the name and tax identification of the Applicant. (h) The Applicant
acknowledges and agrees that, regardless of the adequacy of the Collateral or
any other security for the Obligations, the Bank may withdraw from the
Collateral Account at any time and from time to time (whether before or after
the occurrence of an Event of Default) and apply such funds as may be necessary
(i) to reimburse the Bank for any drawing made on any Letter of Credit, and (ii)
to cover any fees, costs, expenses (including reasonable attorney's fees) and
other amounts for which the Applicant may from time to time be liable to the
Bank.
(i) In addition to the Bank's rights under the foregoing clause (h),
upon the occurrence and during the continuance of any Event of Default, the Bank
shall have the right at any time and from time to time without the necessity of
making demand upon or giving notice to the Applicant (i) to withdraw funds from
the Collateral Account and apply such funds to the repayment of the then unpaid
amount of all Obligations, (ii) to set-off the funds in the Collateral Account
and any deposits or other sums at any time credited thereto against the
Obligations, and (iii) to exercise any and all rights and remedies of a secured
party under the Uniform Commercial Code (as in effect in Massachusetts),
including, without limitation, the rights of a secured party under Section 9-607
of the Uniform Commercial Code. The Applicant hereby waives presentment, demand,
notice, protest and all other demands and notices in connection with this
Agreement or the enforcement of the Bank's rights hereunder or in connection
with any of the Obligations.
(j) In the event that the Bank elects to exercise any of its remedies
with respect to the Collateral following an Event of Default, the Bank shall
apply the proceeds of the Collateral as follows: (i) first, to the payment of
any and all fees, costs and expenses incurred by the Bank in exercising its
rights (including, without limitation, reasonable attorney's fees), and (ii)
second, to the repayment of any and all Obligations then due and payable, and
(iii) third, to the extent any Obligations have yet to mature or become due and
payable at the time the Bank
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exercises its rights with respect to the Collateral, the Bank shall hold such
proceeds as collateral for, and shall apply such proceeds to, the repayment of
any remaining Obligations as and when the same shall become due and payable. In
the event the proceeds of the Collateral are insufficient to pay all of the
Obligations in full, the Applicant shall be liable for the deficiency, together
with interest thereon at a rate per annum equal to LIBOR plus one half of one
percent (.50%), and the cost and expenses of collection of such deficiency,
including (to the extent permitted by law), without limitation, reasonable
attorneys' fees, expenses and disbursements.
(k) If, following the repayment of all of the Applicant's Obligations,
the termination and/or expiration of all Letters of Credit issued hereunder, and
the termination of the LC Commitment, there shall remain any surplus Collateral
in the Collateral Account, such surplus shall be paid to the Applicant (or to
any person or party lawfully entitled thereto (including, if applicable, Ableco
or any other subordinated creditor of the Applicant). In exercising any rights
with respect to the Collateral, so long as the Bank acts in a commercially
reasonable manner, the Bank may proceed in any manner which the Bank, in its
sole discretion, shall elect, without in any way incurring any liability or
obligations to the Applicant.
13. Fees and Charges. The Applicant agrees to pay the Bank's customary
commissions, discounts, interest, charges, fees or expenses (collectively, "Bank
Charges") in connection with the issuance, amendment, extension or renewal of
any Letter of Credit and any drawings thereunder. Bank Charges shall be payable
monthly in arrears, on the first day of each month and on the Maturity Date. The
Applicant further agrees to pay to the Bank, as compensation for issuing the
Letters of Credit hereunder and for all services which the Bank may render
hereunder, a per annum letter of credit fee equal in amount to three tenths of
one percent (.30%) multiplied by the face amount of all outstanding Letters of
Credit ("Fees"). Such Fees shall be payable quarterly in advance, on the first
day of each calendar quarter and on the Maturity Date. Fees and Bank Charges
paid shall not be refundable under any circumstances, absent manifest error in
the determination thereof. Bank Charges and Fees which are not paid when due
shall accrue interest at a rate per annum equal to LIBOR plus one half of one
percent (.50%) from the due date through the date of payment and shall be
payable on demand. In the event that any Bank Charges and Fees are not paid when
due, the Bank may, at its own election, effect payment of such Bank Charges
and/or Fees and any interest due thereon by withdrawing an amount equal thereto
from the Collateral Account, and the Applicant hereby irrevocably authorizes and
directs the Bank to take any and all action necessary to effectuate such
withdrawal.
14. General Indemnification. The Applicant agrees to pay all costs and
expenses (including the reasonable fees and disbursements of counsel) incurred
by the Bank in connection with the creation and enforcement of this Agreement
and the other Credit Documents and the collection of all amounts payable
hereunder and thereunder. All costs and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) incurred by the Bank (a) in all
efforts made to enforce payment of any of the Obligations or effect collection
of any Collateral, (b) in connection with the entering into, any modification,
amendment, administration and enforcement of this Agreement or any other Credit
Document, in connection with any issuance, amendment, extension or renewal of
any Letter of Credit issued hereunder, in connection with any consents or
waivers hereunder and in connection with any related agreements, documents and
instruments, (c) in instituting, maintaining, preserving, enforcing and
foreclosing on the
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Bank's security interest in or lien on any of the Collateral, whether through
judicial proceedings or otherwise, (d) in defending or prosecuting any actions
or proceedings arising out of or relating to the transactions of the Bank with
the Applicant, and (e) in connection with any advice given to the Bank with
respect to its rights and obligations under this Agreement, the Letters of
Credit or any other Credit Documents, shall all be part of the Obligations
secured by the Collateral. The Applicant shall indemnify the Bank and its
officers, directors, affiliates, employees and agents (which indemnity shall
survive the termination of this Agreement) from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, reasonable fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against any such indemnified party in any
litigation, proceeding or investigation (including any limitation, any
proceeding or investigation arising out of any environmental laws) instituted or
conducted by any governmental agency or instrumentality or any other person or
entity in connection with any Letter of Credit, or any transaction contemplated
by, or referred to in, or any matter related to, this Agreement or any other
Credit Document, whether or not the Bank is a party thereto, except to the
extent that any of the foregoing arises out of the gross negligence or willful
misconduct of such indemnified party (as determined by a court of competent
jurisdiction by final and non-appealable judgment).
15. Taxes. Each payment hereunder shall be made free and clear of, and
without deduction or withholding for, any taxes, duties, levies, imposts or
other charges of a similar nature other than taxes on overall net income or
receipts and franchise taxes (imposed in lieu of net income taxes) ("Taxes"),
except as required by law, and in the event that any deduction or withholding
for Taxes shall be so required, the Applicant shall pay such additional amounts
as may be necessary so that the net amount of such payment, after reduction by
the amount of such Taxes, is equal to the amount that the Applicant is obligated
to pay absent the requirement to deduct such Taxes.
16. Representations and Warranties. The Applicant hereby represents and
warrants to the Bank that: (a) it is a corporation duly incorporated and validly
existing under the laws of the Commonwealth of Massachusetts; (b) its execution
, delivery and performance of this Agreement are within its corporate powers,
have been duly authorized by all necessary corporate action and do not
contravene any material law, regulation or order or its Articles of Organization
or By-Laws or any material agreement binding upon it or its assets (including,
without limitation any agreement relating to Material Indebtedness); (c) this
Agreement is its legal, valid and binding obligation enforceable against it in
accordance with its terms; (d) no authorization, consent, approval or license
from, or filing or registration with any court, governmental authority or public
office is necessary in connection with the execution, delivery and performance
of this Agreement, except such as have been obtained and are in full force and
effect; and (e) there are no pending or threatened actions, suits or proceedings
against or affecting it before any arbitrator, court commission or other
governmental authority, which, individually or in the aggregate would, if
adversely determined, have a Material Adverse Effect on it.
17. Solvency. The Applicant further represents and warrants to the Bank
that as of the Effective Date and after giving effect to the issuance of the
initial Letters of Credit hereunder: (a) the aggregate value of all properties
of the Applicant at their present fair saleable value on a going concern basis
(i.e., the amount that may be realized within a reasonable time,
10
considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that could be
obtained for such properties within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions), exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
the Applicant; (b) the Applicant does not and will not, on a consolidated basis,
have an unreasonably small capital with which to conduct the Applicant's
business operations as heretofore conducted; and (c) the Applicant has and will
continue to have in the foreseeable future, on a consolidated basis, sufficient
cash flow to enable the Applicant to pay the Applicant's debts as they mature.
18. Covenants. The Applicant covenants and agrees with the Bank that: (a)
the Applicant will maintain cash or other Collateral at all times in the
Collateral Account in an amount equal to or greater than the product of (i) one
hundred three percent (103%) multiplied by (ii) the LC Exposure, and that, if at
any time the product of (x) one hundred three percent (103%) multiplied by (y)
the LC Exposure exceeds the Collateral Amount, the Applicant will immediately
upon demand by the Bank, deposit or cause to be deposited in the Collateral
Account an amount of cash at least equal to the amount of such excess; (b) the
Applicant will deliver to the Bank, as soon as available and in any event within
30 days (or, for the months of September through December of 2002, 45 days)
after the end of each month, (i) consolidated statements of the Applicant's
operations and cash flows for such month and for the period from the beginning
of the respective fiscal year to the end of such month, and the related
consolidated balance sheets of the Applicant as at the end of such period,
setting forth in each case in comparative form the corresponding consolidated
figures for the corresponding period in the preceding fiscal year, and (ii) a
certificate of a financial officer of the Applicant, which certificate shall
state that said consolidated financial statements referred to in the preceding
clause (i) fairly present in all material respects the financial condition and
results of operations of the Applicant, in each case in accordance with GAAP,
consistently applied, as at the end of, and for, such period (subject to normal
year-end audit adjustments and the omission of footnotes); (c) the Applicant
will deliver to the Bank, promptly following any request therefor, such other
information regarding the Applicant's operations, business affairs and financial
condition, or compliance with the terms of this Agreement, as the Bank may
reasonably request; and (d) the Applicant will deliver to the Bank prompt
written notice of (i) the occurrence of any Default or Event of Default, (ii)
the occurrence of any Default or Event of Default under the Ableco Financing
Agreement and/or under the Congress Credit Agreement, and (iii) any development
that results in, or could reasonably be expected to result in, a Material
Adverse Effect on the Applicant.
19. Conditions to Effectiveness. The obligation of the Bank to issue the
initial Letter of Credit hereunder, shall not become effective until the date
(the "Effective Date") on which each of the following conditions is satisfied
(or waived in accordance with Paragraph 27 below):
(a) the Bank shall have received from each party hereto (i) a
counterpart of this Agreement executed by such party or (ii) written evidence
satisfactory to the Bank that such party has executed a counterpart hereof;
(b) the Applicant shall have delivered or caused to be delivered to the
Bank for deposit in the Collateral Account, cash in an amount not less than
$41,000,000;
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(c) the Bank shall have received such documents and certificates as the
Bank or its special counsel, Xxxxxx & Dodge LLP ("Special Counsel") may
reasonably request relating to the Applicant's organization, existence and good
standing, the authorization of this Agreement and requests for Letters of Credit
to be issued hereunder, and any other legal matters relating to the Applicant or
this Agreement, the Letters of Credit or the other Credit Documents, all in form
and substance reasonably satisfactory to the Bank and Special Counsel;
(d) the Bank shall have received evidence satisfactory to the Bank and
Special Counsel that the Applicant shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings that may be necessary or, in the Bank's opinion or
the opinion of Special Counsel, desirable in order to create in the Bank's
favor, and for the Bank's benefit, a valid and perfected first priority security
interest in the Collateral;
(e) the Bank shall have received from each party thereto (i) a
counterpart of a Control Agreement signed on behalf of such party, or (ii)
written evidence satisfactory to the Bank that such party has signed a
counterpart thereof;
(f) the Bank shall have received a favorable written opinion (addressed
to the Bank and dated the Effective Date) of Xxxxx, Xxxx & X'Xxxxxxxx, P.C.,
counsel to the Applicant, substantially in the form of Exhibit B annexed hereto
and covering such matters relating to the Applicant and this Agreement as the
Bank shall reasonably request (and the Applicant hereby requests such counsel to
deliver such opinion);
(g) the Bank shall have received a certificate, dated as of the
Effective Date and signed by a financial officer of the Applicant, confirming
compliance with the conditions set forth in clauses (a) and (b) of Paragraph 20
below;
(h) the Bank shall have received from the Applicant certified copies of
the Congress Credit Agreement and the Ableco Financing Agreement;
(i) there shall have occurred no material adverse change (in the Bank's
reasonable opinion) in the Applicant's business, properties or financial
condition;
(j) the Bank shall have received all fees and other amounts due and
payable to the Bank and Special Counsel at or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Applicant hereunder; and
(k) the Bank shall have received all such other documents as the Bank or
Special Counsel shall have reasonably requested (including, without limitation,
any corporate authority, indemnification or letter of credit application
required by the Bank in connection with the issuance of Letters of Credit or the
opening or maintenance of the Collateral Account and the investment of funds
therein) and the same shall be reasonably satisfactory to each of the Bank and
Special Counsel.
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20. Conditions to Each Letter of Credit. The obligation of the Bank to
issue, amend, renew or extend any Letter of Credit hereunder is subject in each
case to the satisfaction of the following conditions:
(a) The Applicant's representations and warranties set forth in this
Agreement shall be true and correct in all material respects on and as of the
date of issuance, amendment, renewal or extension of such Letter of Credit, both
before and after giving effect thereto (or, if any such representation or
warranty is expressly stated to have been made as of a specific date, such
representation or warranty shall be or have been true and correct as of such
specific date).
(b) On and as of the date of issuance, amendment, renewal or extension
of such Letter of Credit, both before and after giving effect thereto, no
Default or Event of Default under this Agreement shall have occurred and be
continuing.
(c) In the case of the issuance, amendment, renewal or extension of any
Letter of Credit during the Availability Period, after giving effect to such
issuance, amendment, renewal or extension, (i) the LC Exposure shall not exceed
the LC Commitment at such time and (ii) (x) the product of (A) one hundred three
percent (103%) multiplied by (B) the LC Exposure shall not exceed (y) the
Collateral Amount at such time.
(d) In the case of the amendment, renewal or extension of any Letter of
Credit after the Availability Period, after giving effect to such amendment,
renewal or extension, the product of (i) one hundred three percent (103%)
multiplied by (ii) the LC Exposure shall not exceed the Collateral Amount at
such time.
21. Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) the Applicant (i) fails to make any payment of amounts owing in
respect of any LC Disbursement as the same become due, (ii) fails to pay any
interest, Bank Charges or Fees due hereunder within three (3) days following
demand by the Bank therefor (which may be made by facsimile or by e-mail), or
(iii) fails to reimburse or make payment to the Bank for any other cost or
expense reimbursable or payable hereunder within five (5) days following demand
by the Bank for such reimbursement or payment (which demand may be made by
facsimile or by e-mail);
(b) any representation or warranty in this Agreement, any other Credit
Document, or any written statement, report, financial statement, document,
opinion, or certificate made or delivered to the Bank by the Applicant is untrue
or incorrect in any material respect as of the date when made or deemed made;
(c) the Applicant fails or neglects to perform, keep or observe any
covenant provision or agreement contained in clauses (a),(b) or (d) of Paragraph
18;
(d) the Applicant fails or neglects to perform, keep or observe any
covenant, provision or agreement contained in this Agreement (other than any
provision embodied in or covered by clauses (a), (b), or (c) of this Paragraph
21) and the same shall remain unremedied for
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thirty (30) consecutive days after the earlier of (i) actual knowledge thereof
by any officer of the Applicant or (y) notice thereof from the Bank to the
Applicant;
(e) (i) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (x) liquidation, reorganization or other relief
in respect of the Applicant or any of the Applicant's subsidiaries or any of
their respective debts, or of any substantial part of their respective assets,
under any Federal, state or foreign bankruptcy, insolvency, receivership or
similar law now or hereafter in effect or (y) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Applicant or any subsidiary of the Applicant or for any substantial part of
their respective assets, and, in any such case, such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered, or (ii) the Collateral shall be
attached, seized, levied upon or subjected to a writ or distress warrant, or
come within the possession of any receiver, trustee, custodian or assignee for
the benefit of the creditors of the Applicant or any subsidiary of the
Applicant;
(f) the Applicant or any subsidiary thereof shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (d) of this Paragraph, (iii) apply
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for itself or any substantial part
of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) take any action for the purpose of effecting
any of the foregoing or (vii) admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due;
(g) the Applicant shall fail to make any payment (whether of
principal, interest or otherwise and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable, after
giving effect to any grace period with respect thereto, or any event or
condition shall occur that results in any Material Indebtedness becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
(h) any of the following shall occur: (i) the liens created hereunder
or under any document or instrument executed in connection herewith shall at any
time (other than by reason of the relinquishment by the Bank of such lien) cease
in any material respect to constitute valid and perfected liens on the
Collateral intended to be covered thereby, (ii) the enforceability of any Credit
Document shall be contested by the Applicant; (iii) Ableco shall assert any
claim against the Bank or contest the validity or priority of the Bank's lien on
the Collateral; or (iv) any default or event of default shall occur under the
Congress Credit Agreement or the Ableco Financing Agreement; or
14
(i) a final judgment or judgments for the payment of money (i) in
excess of $250,000 in the aggregate (exclusive of judgment amounts fully covered
by insurance where the insurer has admitted liability in respect of such
judgment) or (i) in excess of $1,000,000 in the aggregate (regardless of
insurance coverage), shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction against the Applicant or any
subsidiary thereof and the same shall not be discharged (or provision shall not
be made for such discharge), bonded, or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the Applicant or
such subsidiary shall not, within said period of 60 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal.
If any Event of Default shall have occurred and be continuing, the Bank may (i)
terminate the LC Commitment hereunder, and thereupon the LC Commitment shall
terminate immediately, (ii) declare any or all of the Obligations to be
immediately due and payable and the same shall become due and payable
immediately without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Applicant; (iii) exercise any and all
rights and remedies provided to the Bank under this Agreement or any other
Credit Document; and/or (iv) exercise any and all rights and remedies available
to the Bank under the Uniform Commercial Code and/or at law or in equity,
provided, however, that upon the occurrence of any Event of Default specified in
clauses (e) and (f) above, all of the Obligations shall become immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Applicant. All rights and remedies
afforded to the Bank by reason of this Agreement are separate and cumulative,
and the exercise or failure to exercise any such right or remedy shall not be
deemed to exclude, limit or prejudice the exercise of any other right or remedy
available to the Bank.
22. General Right of Set-Off. If a Default or Event of Default shall have
occurred and be continuing, the Bank is hereby authorized at any time and from
time to time, without notice to or consent by the Applicant, to the fullest
extent permitted by law, to set off and apply any and all deposits (whether
general or special, time or demand, provisional or final, and including, without
limitation, the Collateral in the Collateral Account) at any time held and other
indebtedness at any time owing by the Bank, as the case may be, to or for the
credit or the account of the Applicant against any of and all the Obligations,
irrespective of whether or not the Bank shall have made any demand under this
Agreement or any other Credit Document and although such Obligations may be
unmatured. The rights of the Bank under this Paragraph 22 are in addition to any
other rights and remedies (including other rights of setoff) available to the
Bank under this Agreement, at law or in equity.
23. Notices. Any notice or communication required to be delivered under
this Agreement or any other Credit Document shall be in writing and, unless
otherwise provided herein, shall be sent by registered or certified U.S. mail
(postage prepaid and return receipt requested), by a reliable hand-delivery or
overnight courier service or by telecopier, to be confirmed immediately by
sending the original documentation by registered or certified U.S. mail or by a
reliable hand-delivery or overnight courier service. All notices shall be
delivered or otherwise conveyed to the parties at their respective addresses and
telephone and telecopier members as follows:
15
(a) if to Applicant, to Clean Harbors, Inc., 0000 Xxxxxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000, Attention: Xxxxxxx Xxxxxxxx (Fax no. (781)
000-0000), with a copy to Xxxxx, Xxxx & X'Xxxxxxxx, P.C., Xxx Xxxxxx Xxxxx,
00/xx/ Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: C. Xxxxxxx Xxxx, Esq. (Fax
no. (000) 000-0000);
(b) if to the Bank, to Fleet National Bank, c/o Fleet Capital
Corporation, One Federal Street, Mail Stop: MA DE 10307X, Xxxxxx, Xxxxxxxxxxxxx
00000, Attention: Xxxx Xxxxxxx (Fax no. (000) 000-0000), with copies to Fleet
National Bank, 000 Xxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000,
Attention: Account Administration Manager (Fax no. (000) 000-0000), and Xxxxxx &
Dodge LLP, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxx
Xxxxxxxx, Esq. (Fax no. (000) 000-0000); or
(c) to such other addresses and telephone and facsimile numbers as
any party shall designate to the other parties in writing.
24. Assignment. The rights of the Bank hereunder, shall inure to the
benefit of their respective successors and assigns. The Bank may, without
consent of the Applicant, assign this Agreement in whole or in part or grant
participations in their respective interests hereunder. The Applicant may not
assign the Applicant's interests hereunder without the prior written consent of
the Bank.
25. LC Account. The Bank shall maintain an account (the "LC Account") on
the Bank's books to record (a) all Letters of Credit, (b) LC Disbursements, and
(c) all payments made by the Applicant. All entries in the LC Account shall be
made in accordance with the Bank's customary accounting practices as in effect
from time to time. The entries in the LC Account, as recorded on the Bank's most
recent printout or other written statement, shall be presumptive evidence of the
amounts due and owing or outstanding to the Bank by the Applicant; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect the Applicant's duty to pay LC Disbursements.
26. GOVERNING LAW; WAIVER OF JURY TRIAL; JURISDICTION. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS. EACH OF THE UNDERSIGNED WAIVES ALL RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE THIS PROVISIONS OF THIS
AGREEMENT OR ANY RELATED DOCUMENT OR AGREEMENT. THE APPLICANT SUBMITS, IN ANY
LEGAL ACTION RELATED HERETO, TO THE NONEXCLUSIVE JURISDICTION OF STATE AND
FEDERAL COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS AND WAIVES ANY
OBJECTION THE APPLICANT MAY HAVE AS TO THE BRINGING OR MAINTAINING OF ANY SUCH
ACTION WITH ANY SUCH COURT.
27. Amendment; Waiver. Any provision of this Agreement or any other
document related hereto may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by the Applicant and the Bank. Neither any
delay nor any omission by the Bank to exercise any right, power or remedy shall
operate as a waiver thereof, nor shall a single or partial
16
exercise thereof preclude any other or further exercise thereof or any exercise
of any other right, power or remedy. This Agreement cannot be changed or
terminated orally.
28. Entire Agreement; Conflicts. This Agreement contains the parties' sole
and entire understanding and agreement with respect to its entire subject
matter, and all prior negotiations, discussions, commitments, agreements and
understandings heretofore had between the parties with respect thereto are
hereby merged herein. In the event of any conflict between the terms hereof and
the terms contained in any application for a Letter of Credit, the terms hereof
shall govern.
29. Counterparts. This Agreement may be executed in two or more
counterparts which, when taken together, shall constitute one complete document.
Any party to this Agreement may execute this Agreement by facsimile
transmission.
[SIGNATURE PAGE FOLLOWS]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
CLEAN HARBORS, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
