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                      AMENDED AND RESTATED CREDIT AGREEMENT

                                      among

                                   LES, INC.,

                  LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.,

                               The Several Lenders
                       from Time to Time Parties hereto,

                         TORONTO DOMINION (TEXAS), INC.,
                       as General Administrative Agent

                           THE TORONTO-DOMINION BANK,
                       as Canadian Administrative Agent,

                            TD SECURITIES (USA) INC.,
                                  as Arranger

                            THE BANK OF NOVA SCOTIA,
                               NATIONSBANK, N.A.,
                       THE FIRST NATIONAL BANK OF CHICAGO,
                                       and
                              WACHOVIA BANK, N.A.,
                              as Managing Agents,

                             THE BANK OF NOVA SCOTIA
                                       and
                       THE FIRST NATIONAL BANK OF CHICAGO,
                           as Co-Documentation Agents,

                                       and

                               NATIONSBANK, N.A.,
                              as Syndication Agent


                            Dated as of ApriL 3, 1998


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<TABLE>

                                       
                                TABLE OF CONTENTS
                                                                                                             
<S>                                                                                                            <C>
                                                                                                               PAGE

SECTION 1.  DEFINITIONS...........................................................................................2
          1.1  Defined Terms......................................................................................2
          1.2  Other Definitional Provisions.....................................................................32

SECTION 2.  AMOUNT AND TERMS OF U.S. COMMITMENTS.................................................................33
          2.1  U.S. Term Loan Commitments........................................................................33
          2.2  Procedure for U.S. Term Loan Borrowing............................................................33
          2.3  Repayment of U.S. Term Loans......................................................................35
          2.4  Revolving Credit Commitments......................................................................38
          2.5  Procedure for Revolving Credit Borrowing..........................................................38
          2.6  Termination or Reduction of Revolving Credit Commitments..........................................39
          2.7  Evidence of Debt..................................................................................39

SECTION 3.  LETTERS OF CREDIT....................................................................................40
          3.1  L/C Commitment....................................................................................40
          3.2  Procedure for Issuance of Letter of Credit........................................................40
          3.3  Commissions, Fees and Other Charges...............................................................41
          3.4  L/C Participations................................................................................41
          3.5  Reimbursement Obligation of the Company...........................................................42
          3.6  Obligations Absolute..............................................................................43
          3.7  Letter of Credit Payments.........................................................................43
          3.8  Applications......................................................................................43

SECTION 4.           AMOUNT AND TERMS OF THE CANADIAN TERM LOAN COMMITMENTS......................................43
          4.1  Canadian Term Loan Commitments....................................................................43
          4.2  Procedure for Canadian Term Loan Borrowing........................................................44
          4.3  Reduction of Canadian Facility; Repayment of Canadian Term Loans..................................45
          4.4   Evidence of Debt.................................................................................46

SECTION 5.  AMOUNT AND TERMS OF THE ACCEPTANCES .................................................................47
          5.1  Acceptance Commitments............................................................................47
          5.2  Creation of Acceptances...........................................................................47
          5.3  Purchase of Acceptances...........................................................................48
          5.4  Stamping Fees.....................................................................................49
          5.5  Acceptance Reimbursement Obligations..............................................................49
          5.6  Acceptances to be Allocated in order to be Created Ratably........................................51
          5.7  Special Provisions Relating to Acceptance Notes...................................................51


                                       -i-
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SECTION 6.           GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT................................52
          6.1  Commitment Fees, etc. ............................................................................52
          6.2  Optional Prepayments..............................................................................52
          6.3  Mandatory Prepayments and Commitment Reductions...................................................54
          6.4  Conversion and Continuation Options...............................................................57
          6.5  Minimum Amounts of Tranches.......................................................................58
          6.6  Interest Rates and Payment Dates..................................................................58
          6.7  Computation of Interest and Fees..................................................................58
          6.8  Inability to Determine Interest Rate..............................................................59
          6.9  Pro Rata Treatment and Payments...................................................................60
          6.10  Illegality.......................................................................................62
          6.11  Requirements of Law..............................................................................63
          6.12  Taxes............................................................................................64
          6.13  Indemnity........................................................................................66
          6.14  Change of Lending Office.........................................................................67

SECTION 7.  REPRESENTATIONS AND WARRANTIES.......................................................................67
          7.1  Financial Condition...............................................................................67
          7.2  No Change.........................................................................................68
          7.3  Corporate Existence; Compliance with Law..........................................................68
          7.4  Corporate Power; Authorization; Enforceable Obligations...........................................68
          7.5  No Legal Bar......................................................................................69
          7.6  No Material Litigation............................................................................69
          7.7  No Default........................................................................................69
          7.8  Ownership of Property; Liens......................................................................70
          7.9  Intellectual Property.............................................................................70
          7.10  No Burdensome Restrictions.......................................................................70
          7.11  Taxes............................................................................................70
          7.12  Federal Regulations..............................................................................70
          7.13  ERISA............................................................................................70
          7.14  Canadian Benefit and Pension Plans...............................................................71
          7.15  Investment Company Act; Other Regulations........................................................71
          7.16  Subsidiaries.....................................................................................71
          7.17  Purpose of Loans.................................................................................71
          7.18  Environmental Matters............................................................................72
          7.19  Accuracy of Information, etc.....................................................................73
          7.20  Security Documents...............................................................................73
          7.21  Solvency.........................................................................................74
          7.22  Regulation H.....................................................................................74
          7.23  Corsan Trucking, Inc.............................................................................74


                                      -ii-
<PAGE>


SECTION 8.  CONDITIONS PRECEDENT.................................................................................75
          8.1  Conditions to Initial Extensions of Credit........................................................75
          8.2  Conditions to Extensions of Credit made on the Merger Date........................................80
          8.3  Conditions to Extension of Credit.................................................................81

SECTION 9.  AFFIRMATIVE COVENANTS................................................................................82
          9.1  Financial Statements..............................................................................82
          9.2  Certificates; Other Information...................................................................81
          9.3  Payment of Obligations............................................................................83
          9.4  Conduct of Business and Maintenance of Existence..................................................83
          9.5  Maintenance of Property; Insurance................................................................84
          9.6  Inspection of Property; Books and Records; Discussions............................................84
          9.7  Notices...........................................................................................84
          9.8  Environmental Laws................................................................................85
          9.9  Further Assurances................................................................................86
          9.10  Additional Collateral............................................................................86
          9.11  Canadian Benefit and Pension Plans...............................................................88
          9.12  Interest Rate Protection.........................................................................88
          9.13  Consummation of Merger...........................................................................88
          9.14  Pledge Agreement Supplement......................................................................88

SECTION 10.  NEGATIVE COVENANTS..................................................................................89
          10.1  Financial Condition Covenants....................................................................89
          10.2  Limitation on Indebtedness.......................................................................90
          10.3  Limitation on Liens..............................................................................91
          10.4  Limitation on Guarantee Obligations..............................................................93
          10.5  Limitation on Fundamental Changes................................................................93
          10.6  Limitation on Disposition of Assets..............................................................94
          10.7  Limitation on Dividends..........................................................................94
          10.8  Limitation on Investments, Loans and Advances....................................................95
          10.9  Limitation on Optional Payments and Modifications of Debt Instruments............................96
          10.10  Limitation on Transactions with Affiliates......................................................96
          10.11  Limitation on Sales and Leasebacks..............................................................96
          10.12  Limitation on Changes in Fiscal Year............................................................97
          10.13  Limitation on Negative Pledge Clauses...........................................................97
          10.14  Limitation on Lines of Business.................................................................97
          10.15  Canadian Benefit and Pension Plans..............................................................97
          10.16  Hedging Agreements..............................................................................97

SECTION 11.  EVENTS OF DEFAULT...................................................................................98


                                     -iii-
<PAGE>


SECTION 12.  THE ADMINISTRATIVE AGENT...........................................................................101
          12.1  Appointment.....................................................................................101
          12.2  Delegation of Duties............................................................................102
          12.3  Exculpatory Provisions..........................................................................102
          12.4  Reliance by Administrative Agents...............................................................102
          12.5  Notice of Default...............................................................................103
          12.6  Non-Reliance on Administrative Agents and Other Lenders.........................................103
          12.7  Indemnification.................................................................................104
          12.8  Agent in Its Individual Capacity................................................................104
          12.9  Successor Agent.................................................................................104
          12.10  Others.........................................................................................105

SECTION 13.  GUARANTEE..........................................................................................105
          13.1  Guarantee.......................................................................................105
          13.2  No Subrogation, Contribution, Reimbursement or Indemnity........................................106
          13.3  Amendments, etc. with respect to the Canadian Borrower Obligations..............................106
          13.4  Guarantee Absolute and Unconditional............................................................107
          13.5  Reinstatement...................................................................................108
          13.6  Payments........................................................................................108

SECTION 14.  MISCELLANEOUS......................................................................................108
          14.1  Amendments and Waivers..........................................................................108
          14.2  Notices.........................................................................................109
          14.3  No Waiver; Cumulative Remedies..................................................................110
          14.4  Survival of Representations and Warranties......................................................110
          14.5  Payment of Expenses and Taxes...................................................................110
          14.6  Successors and Assigns; Participations and Assignments..........................................111
          14.7  Adjustments; Set-off............................................................................114
          14.8  Counterparts....................................................................................115
          14.9  Severability....................................................................................115
          14.10 Integration.....................................................................................115
          14.11 GOVERNING LAW...................................................................................115
          14.12 Submission To Jurisdiction; Waivers.............................................................115
          14.13 Acknowledgments.................................................................................116
          14.14 WAIVERS OF JURY TRIAL...........................................................................116
          14.15 Judgment........................................................................................117
          14.16 Confidentiality.................................................................................117
          
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                                      -iv-
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SCHEDULES

1.1A      Commitments of U.S. Lenders
1.1B      Commitments of Canadian Lenders
1.1C      Existing Letters of Credit
1.1D      Existing Acceptances
1.1E      Specified Acceptance
1.1F      Addresses for Notices
2         Properties Covered by Existing Mortgages
3         Mortgage Recording Jurisdictions
4         Initial Canadian Collateral Documents
7.6       Litigation
7.9       Intellectual Property Matters
7.16      Subsidiaries
7.20      Canadian Collateral Perfection Procedures
8.2(g)    Safety-Kleen Outstanding Debt
10.2(f)   Existing Indebtedness
10.3(f)   Existing Liens
10.4      Existing Guarantee Obligations
10.8      Existing Loans to Officers

EXHIBITS

          A-1        Form of Draft
          A-2        Form of Request for Acceptances
          B-1        Form of Guarantee and Collateral Agreement
          B-2        Form of Acquisition Corp. Pledge Agreement
          C          Form of Revolving Credit Note
          D          Form of U.S. Term Note
          E          Form of Canadian Term Note
          F          [Reserved]
          G          Form of Acceptance Note
          H          Form of Prepayment Option Notice
          I          Form of Closing Certificate
          J          [Reserved]
          K          [Reserved]
          L          Form of Assignment and Acceptance
          M          Form of Mortgage Amendment
          N          Form of Mortgage
          O          Form of Intercreditor Agreement
          P          Form of Exchange Agent Agency Agreement




                                       -v-
<PAGE>


                  AMENDED AND RESTATED  CREDIT  AGREEMENT,  dated as of April 3,
1998,  among  LES,  INC.,  a  Delaware  corporation  (the  "COMPANY"),   LAIDLAW
ENVIRONMENTAL  SERVICES (CANADA) LTD., a Canadian corporation and a wholly owned
Subsidiary of the Company (the "CANADIAN  BORROWER";  together with the Company,
the "BORROWERS"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the  "LENDERS"),  TORONTO  DOMINION
(TEXAS),  INC., as general  administrative  agent (as hereinafter  defined,  the
"GENERAL   ADMINISTRATIVE   AGENT"),  THE  TORONTO-DOMINION  BANK,  as  Canadian
administrative  agent (as  hereinafter  defined,  the  "CANADIAN  ADMINISTRATIVE
AGENT"),  TD SECURITIES  (USA) INC., as advisor to the Borrowers and arranger of
the commitments described herein (in such capacities,  the "ARRANGER"),  and THE
BANK OF NOVA SCOTIA,  NATIONSBANK,  N.A., THE FIRST NATIONAL BANK OF CHICAGO and
WACHOVIA BANK,  N.A., as managing  agents (each,  in such capacity,  a "MANAGING
AGENT"),  THE BANK OF NOVA SCOTIA and THE FIRST  NATIONAL  BANK OF  CHICAGO,  as
co-documentation agent (each, in such capacity, a "CO-DOCUMENTATION AGENT"), and
NATIONSBANK,  N.A., as  syndication  agent (in such capacity,  the  "SYNDICATION
AGENT").


                               W I T N E S S E T H


                  WHEREAS,  the Borrowers  are parties to the Credit  Agreement,
dated as of May 9,  1997 (as  heretofore  amended  or  otherwise  modified,  the
"EXISTING  CREDIT  AGREEMENT"),  with  the  lenders  from  time to time  parties
thereto,  Toronto Dominion (Texas),  Inc., as general  administrative agent, The
Toronto-Dominion  Bank, as Canadian  administrative  agent, TD Securities  (USA)
Inc.,  as  arranger,  The Bank of Nova Scotia,  NationsBank,  N.A. and The First
National  Bank of  Chicago,  as  managing  agents,  and  NationsBank,  N.A.,  as
syndication agent;

                  WHEREAS,  pursuant  to  the  Existing  Credit  Agreement,  the
lenders  parties  thereto  have agreed to make and have made  certain  loans and
other extensions of credit to or for the account of the Borrowers;

                  WHEREAS,  Laidlaw  Environmental  Services,  Inc.,  a Delaware
corporation  and the parent of the Company  ("HOLDINGS"),  and LES  Acquisition,
Inc.,  a Delaware  corporation  and a wholly  owned  subsidiary  of the  Company
("ACQUISITION CORP."), have made an exchange offer (as amended prior to the date
hereof and as hereafter amended in accordance with this Agreement, the "EXCHANGE
OFFER") pursuant to the Offer to Exchange,  as finally amended on March 18, 1998
(such  Offer to  Exchange,  together  with  the  associated  documents  filed by
Holdings and Acquisition  Corp.  with the Securities and Exchange  Commission in
connection  with the Exchange  Offer, as amended prior to the date hereof and as
hereafter amended in accordance with this Agreement, collectively, the "EXCHANGE
OFFER DOCUMENTS");

                  WHEREAS,  pursuant  to the  Exchange  Offer,  shareholders  of
Safety-Kleen  Corp., a Wisconsin  corporation  ("SAFETY-KLEEN"),  are invited to
exchange  shares of common stock  ("TARGET  SHARES"),  together with  associated
share purchase rights ("TARGET  RIGHTS"),  for consideration  equal to $18.30 in
cash plus 2.8 shares of common stock of Holdings;


                                       1
<PAGE>


                  WHEREAS,  pursuant to the Agreement and Plan of Merger,  dated
as of March 16, 1998 (the "MERGER AGREEMENT"), among Holdings, Acquisition Corp.
and  Safety-Kleen,  as promptly as  practicable  after the  consummation  of the
Exchange Offer,  Acquisition  Corp. and Safety-Kleen  will merge (the "MERGER"),
with Safety-Kleen being the surviving  corporation of the Merger (such survivor,
the "SURVIVING CORPORATION");

                  WHEREAS,  in order to provide for  financing  of the  Exchange
Offer and the Merger and related costs and expenses,  and for the refinancing of
certain existing indebtedness of Safety-Kleen, the Borrowers have requested that
the Existing Credit Agreement be amended and restated as provided herein; and

                  WHEREAS,  the  Lenders  and the other  parties  hereto wish to
amend and restate the Existing Credit Agreement as provided herein;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual  agreements  hereinafter set forth,  the parties hereby agree that on the
Closing Date the Existing Credit  Agreement shall be amended and restated in its
entirety as follows:


                             SECTION 1. DEFINITIONS

                                                                                
                                                                                
                  1.1 DEFINED TERMS.  As used in this  Agreement,  the following
terms shall have the following meanings:

                  "ACCEPTANCE":  a Draft  drawn  by the  Canadian  Borrower  and
         accepted  by a Canadian  Lender  which is (a)  denominated  in Canadian
         Dollars,  (b) for a term of not less  than one  month nor more than six
         months and which  matures  prior to the Canadian  Facility  Termination
         Date and (c) issuable and payable only in Canada;  PROVIDED that to the
         extent the context shall require,  each Acceptance Note shall be deemed
         to be an Acceptance.

                  "ACCEPTANCE NOTE":  as defined in Section 5.7(b).

                  "ACCEPTANCE  PURCHASE PRICE": in respect of an Acceptance of a
         specified maturity,  the result (rounded to the nearest whole cent, and
         with  one-half  cent being  rounded up)  obtained by dividing  the face
         amount of such  Acceptance by the sum of (a) one and (b) the product of
         (i) the Reference  Discount Rate for  Acceptances  of the same maturity
         expressed as a decimal and (ii) a fraction,  the  numerator of which is
         the term to maturity of such Acceptance and the denominator of which is
         equal to 365.

                  "ACCEPTANCE REIMBURSEMENT OBLIGATIONS":  the obligation of the
         Canadian Borrower to the Canadian Lenders (a) to reimburse the Canadian
         Lenders  for  maturing  Acceptances  pursuant to Section 5.5 and (b) to
         make payments in respect of the Acceptance Notes in accordance with the
         terms thereof.



                                       2
<PAGE>


                  "ACCEPTANCE TRANCHES": the collective reference to Acceptances
         all of which were  created on the same date and have the same  maturity
         date.

                  "ACQUISITION  CLOSING DATE":  the closing date of the Existing
         Credit  Agreement and the Rollins  Acquisition,  which date was May 15,
         1997.

                  "ACQUISITION  CORP.":  as  defined  in the  Recitals  to  this
         Agreement.

                  "ACQUISITION CORP. PLEDGE AGREEMENT":  the Pledge Agreement to
         be executed and delivered by Acquisition  Corp.,  substantially  in the
         form of  Exhibit  B-2,  as the same  may be  amended,  supplemented  or
         otherwise modified from time to time.

                  "ADJUSTMENT DATE": as defined in the Pricing Grid.

                  "ADMINISTRATIVE  AGENTS":  the  collective  reference  to  the
         General Administrative Agent and the Canadian Administrative Agent.

                  "AFFILIATE":  as to any Person, any other Person (other than a
         Subsidiary)  which,  directly  or  indirectly,  is in  control  of,  is
         controlled  by, or is under  common  control  with,  such  Person.  For
         purposes of this  definition,  "control"  of a Person  means the power,
         directly  or  indirectly,  either  to  (a)  vote  10%  or  more  of the
         securities  having  ordinary voting power for the election of directors
         of such Person or (b) direct or cause the  direction of the  management
         and policies of such Person, whether by contract or otherwise.

                  "AGGREGATE CANADIAN TERM LOAN OUTSTANDINGS": as at any date of
         determination  with  respect  to any  Canadian  Lender,  an  amount  in
         Canadian   Dollars  equal  to  the  sum  of  the   following,   without
         duplication: (a) the aggregate unpaid principal amount of such Canadian
         Lender's   Canadian  Term  Loans  on  such  date,   (b)  the  aggregate
         undiscounted  face amount of all  outstanding  Acceptances  (other than
         Existing  Acceptances)  of such Canadian  Lender on such date, (c) such
         Lender's  Canadian  Term Loan  Commitment  Percentage  of the aggregate
         undiscounted  face amount of all  outstanding  Existing  Acceptances on
         such  date  and (d) the  aggregate  undiscounted  face  amount  of such
         Canadian Lender's Acceptance Notes on such date.

                  "AGGREGATE  COMMITMENT  PERCENTAGE":  as to  any  Lender,  the
         percentage which such Lender's  Aggregate  Exposure  constitutes of the
         Aggregate Exposure of all Lenders.

                  "AGGREGATE  EXPOSURE":  as to any  Lender,  the  sum  of  such
         Lender's  Revolving  Credit  Commitment  (or, after  termination of the
         Revolving Credit  Commitments,  such Lender's  Revolving  Extensions of
         Credit)  and U.S.  Term Loans and the U.S.  Dollar  Equivalent  of such
         Lender's Aggregate Canadian Term Loan Outstandings.

                  "AGREEMENT":  this Amended and Restated Credit  Agreement,  as
         amended, supplemented or otherwise modified from time to time.



                                       3
<PAGE>


                  "AGREEMENT CURRENCY":  as defined in Section 14.15(b).

                  "APPLICABLE  MARGIN":  (a)  on  any  day,  for  each  Type  of
         Revolving Credit Loan,  Tranche A Term Loan and Canadian Term Loan, the
         rate per annum determined pursuant to the Pricing Grid; and

                  (b) for each Type of  Tranche  B Term Loan and  Tranche C Term
         Loan,  the rate per annum set forth under the relevant  column  heading
         below:

                                      BASE RATE LOANS           LIBOR RATE LOANS
         Tranche B Term Loans         1.75%                     2.75%
         Tranche C Term Loans         2.00%                     3.00%

         ;  PROVIDED,  that in the event that the  Consolidated  Total  Leverage
         Ratio (the  determination  and effectiveness of which shall be made and
         established, respectively, on an Adjustment Date in accordance with the
         provisions  of the Pricing  Grid) is reduced to less than 3.00 to 1.00,
         the  Applicable  Margins  set forth  above for Tranche B Term Loans and
         Tranche  C Term  Loans  shall be  permanently  reduced  by 37.50  basis
         points;  PROVIDED  FURTHER that no such reduction in Applicable  Margin
         shall occur prior to the Adjustment Date occurring after  completion of
         the first four full  consecutive  fiscal quarters of the Company ending
         after the Closing Date.

                  "APPLICATION":  an  application,  in such form as the relevant
         Issuing Lender may specify from time to time,  requesting  such Issuing
         Lender to issue a Letter of Credit.

                  "APPROVED  FUND":  with  respect to any Lender  that is a fund
         that  invests in bank loans,  any other fund that invests in bank loans
         and is advised or managed by the same investment advisor as such Lender
         or by an Affiliate of such investment advisor.

                  "ARRANGER": as defined in the Preamble to this Agreement.

                  "ASSET SALE":  any  Disposition of assets or series of related
         Dispositions of assets,  excluding any Disposition of assets  permitted
         by clause (a), (c),  (d),  (e), (f) or (g) of Section  10.6;  PROVIDED,
         that asset  Dispositions  permitted  by clauses  (e) and (f) of Section
         10.6 shall not be excluded  from the  definition of "Asset Sale" to the
         extent that the Net Cash Proceeds therefrom exceed  $225,000,000 in the
         aggregate.

                  "ASSIGNEE":  as defined in Section 14.6(c).

                  "AVAILABLE REVOLVING CREDIT COMMITMENT": as to any U.S. Lender
         at any  time,  an  amount  equal  to the  excess,  if any,  of (a) such
         Lender's  Revolving Credit Commitment OVER (b) such Lender's  Revolving
         Extensions of Credit.

                  "BANK ACT  (CANADA)":  the BANK ACT (Canada),  as amended from
         time to time.



                                       4
<PAGE>


                  "BASE  RATE":  a rate  per  annum  determined  by the  General
         Administrative  Agent on a daily basis,  equal to the higher of (a) the
         Prime Rate in effect on such day and (b) the  Federal  Funds  Effective
         Rate in effect on such day plus one half of one percent (.50 of 1%) per
         annum.

                  "BASE RATE LOAN": any Loan the rate of interest  applicable to
         which is based upon the Base Rate.

                  "BOARD": the Board of Governors of the Federal Reserve System.

                  "BORROWERS": as defined in the Preamble to this Agreement.

                  "BORROWING  DATE":  any  Business  Day  specified  in a notice
         pursuant to Section 2.2, 2.5., 4.2 or 5.2 as a date on which a Borrower
         requests  the  Lenders  to  make  Loans,  create  Acceptances,  convert
         Acceptances  into  Canadian  Term Loans or convert  Canadian Term Loans
         into Acceptances, as the case may be.

                  "BUSINESS  DAY": a day other than a Saturday,  Sunday or other
         day on which  commercial  banks in New York City or Houston,  Texas are
         authorized  or  required by law to close;  PROVIDED  that (a) when such
         term is used in respect of a day on which a Loan in Canadian Dollars is
         to be made or an Acceptance  is to be created,  a payment is to be made
         in respect of such Loan or Acceptance, an Exchange Rate is to be set in
         respect of Canadian Dollars or any other dealing in Canadian Dollars is
         to be carried out  pursuant to this  Agreement,  such term shall mean a
         day other  than a  Saturday,  Sunday  or other day on which  commercial
         banks in Toronto,  Ontario are  authorized  or required by law to close
         and  (b)  when  such  term  is  used  with   respect  to  notices   and
         determinations  in connection  with,  and payments of principal of, and
         interest on,  LIBOR Loans,  any day which is a Business Day in New York
         City and which is also a day on which  trading by and between  banks in
         Dollar deposits may be carried out in the London  interbank  eurodollar
         market.

                  "CANADIAN  ADMINISTRATIVE  AGENT": The Toronto-Dominion  Bank,
         together with its affiliates,  as the Canadian Administrative Agent for
         the Canadian Lenders under this Agreement and the other Loan Documents,
         and any successor thereto pursuant to Section 12.9.

                  "CANADIAN BENEFIT PLANS":  all material employee benefit plans
         maintained or contributed  to by the Canadian  Borrower or a Subsidiary
         thereof  that  are  not  Canadian  Pension  Plans  including,   without
         limitation,  all  profit  sharing,  savings,  supplemental  retirement,
         retiring allowance,  severance, deferred compensation,  welfare, bonus,
         supplementary  unemployment benefit plans or arrangements and all life,
         health,  dental  and  disability  plans and  arrangements  in which the
         employees or former employees of the Canadian  Borrower or a Subsidiary
         thereof employed in Canada participate or are eligible to participate.

                  "CANADIAN  BORROWER":  as  defined  in the  Preamble  to  this
         Agreement.


                                       5
<PAGE>


                  "CANADIAN BORROWER  OBLIGATIONS":  the unpaid principal of and
         interest on (including, without limitation, interest accruing after the
         maturity  of the Loans and  Acceptance  Reimbursement  Obligations  and
         interest  accruing after the filing of any petition in  bankruptcy,  or
         the commencement of any insolvency,  reorganization or like proceeding,
         relating  to  the  Canadian  Borrower,  whether  or  not  a  claim  for
         post-filing or  post-petition  interest is allowed in such  proceeding)
         the  Loans  and  Acceptance  Reimbursement  Obligations  and all  other
         obligations   and   liabilities   of  the  Canadian   Borrower  to  the
         Administrative  Agents or to any Lender (or, in the case of any Hedging
         Agreements,  any affiliate of any Lender),  whether direct or indirect,
         absolute  or  contingent,  due or to become  due,  or now  existing  or
         hereafter  incurred,  which may arise under,  out of, or in  connection
         with, this Agreement,  any other Loan Document,  any Hedging  Agreement
         entered  into with any  Lender or any  affiliate  of any  Lender or any
         other  document  made,  delivered  or given in  connection  herewith or
         therewith,  whether on account of  principal,  interest,  reimbursement
         obligations,  fees,  indemnities,  costs, expenses (including,  without
         limitation,  all fees,  charges  and  disbursements  of  counsel to the
         Administrative  Agents or to any Lender that are required to be paid by
         the Canadian Borrower pursuant hereto) or otherwise.

                  "CANADIAN COLLATERAL  DOCUMENTS":  the collective reference to
         the agreements,  instruments and documents  delivered from time to time
         (both  before  and after  the date of this  Agreement)  to the  General
         Administrative Agent, the Canadian  Administrative Agent or the Lenders
         by the Canadian  Borrower or any of its Subsidiaries for the purpose of
         establishing,  perfecting,  reserving or protecting the security of the
         Lenders  in respect  hereof  and in  respect  of  amounts  owing by the
         Canadian Borrower hereunder (including, without limitation, guarantees,
         debentures, Bank Act (Canada) assignments, general security agreements,
         general assignments of receivables and share pledge agreements, each as
         amended,  restated,  supplemented  or replaced from time to time).  The
         Canadian Collateral Documents executed and delivered in connection with
         the  Acquisition  Closing Date are listed on Schedule 4. On the Closing
         Date, the parties to the Canadian  Collateral  Documents  shall execute
         and deliver one or more Affirmations of Security Agreements in form and
         substance  satisfactory  to the  General  Administrative  Agent and the
         Canadian  Administrative  Agent,  which  shall  affirm  the  continuing
         existence and validity of the Canadian Collateral Documents as security
         for the obligations of the Canadian Borrower hereunder.

                  "CANADIAN  DOLLAR PRIME  RATE":  on any day, the higher of (a)
         the rate per annum designated by the Canadian Administrative Agent from
         time to time  (and in effect  on such  day) as its  reference  rate for
         Canadian  Dollar  commercial  loans made in Canada and (b) the rate per
         annum which is .75% above the one month  acceptance  rate quoted by The
         Toronto-Dominion  Bank at 10:00 A.M., Toronto time, that appears on the
         Reuter's  Screen CDOR page on such day as its rate for  acceptances  in
         Canada. The Canadian Dollar Prime Rate is not intended to be the lowest
         rate of interest  charged by The  Toronto-Dominion  Bank in  connection
         with extensions of credit in Canadian Dollars to debtors.


                                       6
<PAGE>


                  "CANADIAN DOLLARS" and "C$": dollars in the lawful currency of
         Canada.

                  "CANADIAN FACILITY  AMORTIZATION  DATE": as defined in Section
         4.3.

                  "CANADIAN  FACILITY  COMMITMENT  PERIOD":  the period from and
         including the Closing Date to the Canadian Facility Termination Date.

                  "CANADIAN  FACILITY MAXIMUM AMOUNT":  on any date, the maximum
         Aggregate Canadian Term Loan Outstandings  permitted on such date after
         giving  effect to payments  required to be made pursuant to Section 4.3
         or reductions  required to be made pursuant to Section  6.3(g),  as the
         case may be.

                  "CANADIAN FACILITY TERMINATION DATE":  April 3, 2004.

                  "CANADIAN LENDERS":  each Lender listed on Schedule 1.1B.

                  "CANADIAN   OPERATING   FACILITY":   the  C$35,000,000  credit
         facility made available  pursuant to the letter agreement,  dated as of
         the date hereof,  between the Canadian Borrower,  as borrower,  and The
         Toronto-Dominion Bank, as lender, as the same may be amended,  modified
         or otherwise supplemented from time to time.

                  "CANADIAN  OPERATING  FACILITY LENDER":  The  Toronto-Dominion
         Bank in its capacity as lender under the Canadian Operating Facility.

                  "CANADIAN   OPERATING  FACILITY   OBLIGATIONS":   all  of  the
         obligations,  liabilities and indebtedness of the Canadian  Borrower to
         the  Canadian  Operating  Facility  Lender  from time to time,  whether
         present or future, absolute or contingent,  liquidated or unliquidated,
         as principal or as surety,  alone or with others,  of whatsoever nature
         or kind, in any currency, under or in respect of agreements or dealings
         between the  Canadian  Borrower  and the  Canadian  Operating  Facility
         Lender or agreements or dealings between the Canadian  Borrower and any
         Person by which such lender may be or become in any manner whatsoever a
         creditor of the Canadian  Borrower,  including without limitation under
         the Canadian Operating Facility  (including,  without  limitation,  all
         fees and disbursements of the Canadian Operating Facility Lender or its
         counsel or agents incurred in the enforcement of the Canadian Operating
         Facility);  the amount of the Canadian Operating  Facility  Obligations
         will  be  determined   without  regard  to  any  right  of  set-off  or
         counterclaim by the Canadian  Borrower  against the Canadian  Operating
         Facility Lender.

                  "CANADIAN  PENSION PLAN":  any plan,  program,  arrangement or
         understanding that is a pension plan for the purposes of any applicable
         pension  benefit  or tax laws of  Canada  or a  province  or  territory
         thereof  (whether  or not  registered  under  any such  laws)  which is
         maintained,  administered or contributed to by (or to which there is or
         may be an  obligation  to  contribute  by) the  Canadian  Borrower or a
         Subsidiary  thereof in respect to any person's past,  present or future
         employment  in Canada  or a  province  or  territory  thereof  with the
         Canadian  Borrower  or  a  Subsidiary  thereof,   all  related  funding
         arrangements and all


                                       7
<PAGE>


         related  agreements,  arrangements and understandings in respect of, or
         related  to,  any  benefits  to be  provided  thereunder  or the effect
         thereof on any other compensation or remuneration of any employee.

                  "CANADIAN REFERENCE LENDERS":  the collective reference to the
         Schedule  1  Canadian  Reference  Lenders  and the  Schedule 2 Canadian
         Reference Lenders.

                  "CANADIAN TERM LOAN":  as defined in Section 4.1.

                  "CANADIAN TERM LOAN  COMMITMENT":  as to any Canadian  Lender,
         the  obligation  of such Lender to make  Canadian Term Loans to, and/or
         create and discount  Acceptances on behalf of (or, in lieu thereof,  to
         make loans pursuant to the Acceptance Notes to), the Canadian Borrower,
         in an amount not to exceed the amount set forth  opposite such Canadian
         Lender's  name on Schedule 1.1B under the heading  "Canadian  Term Loan
         Commitment".  The original  aggregate  amount of the Canadian Term Loan
         Commitments  is the  equivalent  in  Canadian  Dollars  (determined  in
         accordance with Section 4.3(b)) of US$70,000,000.

                  "CANADIAN TERM LOAN COMMITMENT PERCENTAGE": as to any Canadian
         Lender  at any  time,  the  percentage  which  such  Canadian  Lender's
         Canadian  Term  Loan  Commitment  then  constitutes  of  the  aggregate
         Canadian Term Loan Commitments (or, at any time after the Closing Date,
         the  percentage  which the aggregate  amount of such Canadian  Lender's
         Aggregate Canadian Term Loan Outstandings then outstanding  constitutes
         of  the  Total   Aggregate   Canadian  Term  Loan   Outstandings   then
         outstanding).

                  "CANADIAN TERM LOAN NOTE":  as defined in Section 4.4(d).

                  "CAPITAL STOCK": any and all shares, interests, participations
         or  other  equivalents  (however  designated)  of  capital  stock  of a
         corporation,  any and all  equivalent  ownership  interests in a Person
         (other  than a  corporation)  and any and all  warrants  or  options to
         purchase any of the foregoing.

                  "CASH EQUIVALENTS": (a) securities with maturities of one year
         or less  from the date of  acquisition  issued or fully  guaranteed  or
         insured by the United  States  Government  or any agency  thereof,  (b)
         certificates of deposit and eurodollar time deposits with maturities of
         one year or less  from  the  date of  acquisition  and  overnight  bank
         deposits of any Lender or of any  commercial  bank  having  capital and
         surplus in excess of  $500,000,000,  (c) repurchase  obligations of any
         Lender or of any commercial bank satisfying the  requirements of clause
         (b) of this  definition,  having a term of not more  than 30 days  with
         respect  to  securities  issued or fully  guaranteed  or insured by the
         United States  Government,  (d) commercial  paper of a domestic  issuer
         rated at least A-2 by Standard and Poor's  Rating Group  ("S&P") or P-2
         by Moody's Investors  Service,  Inc.  ("MOODY'S"),  (e) securities with
         maturities of one year or less from the date of  acquisition  issued or
         fully guaranteed by any state,  commonwealth or territory of the United
         States, by any political


                                       8
<PAGE>


         subdivision  or taxing  authority  of any such state,  commonwealth  or
         territory or by any foreign government,  the securities of which state,
         commonwealth,  territory,  political  subdivision,  taxing authority or
         foreign  government (as the case may be) are rated at least A by S&P or
         A by Moody's,  (f) securities  with maturities of one year or less from
         the date of acquisition  backed by standby  letters of credit issued by
         any Lender or any commercial bank satisfying the requirements of clause
         (b) of this  definition or (g) shares of money market mutual or similar
         funds which invest exclusively in assets satisfying the requirements of
         clauses (a) through (f) of this definition.

                  "CHANGE OF  CONTROL":  a Change of Control  shall be deemed to
         occur  (a)  if  at  any  time  Laidlaw  shall  cease  to  be a  primary
         shareholder of Holdings, (b) if at any time when the Consolidated Total
         Leverage  Ratio is greater  than 2.50 to 1.00,  Laidlaw  shall not own,
         directly or indirectly, at least 20% of the outstanding voting stock of
         Holdings,  (c) if at any time  Holdings  shall cease to own 100% of the
         outstanding voting stock of the Company, (d) if at any time the Company
         shall cease to own 100% of the outstanding voting stock of the Canadian
         Borrower  or (e) if at any time  there  shall  cease to be at least one
         member of the Board of  Directors  of  Holdings  who is a  designee  of
         Laidlaw.

                  "CLOSING DATE": the date on which the conditions precedent set
         forth in Section 8.1 shall be satisfied,  which date shall not be later
         than April 8, 1998.

                  "CO-DOCUMENTATION  AGENT":  as defined in the Preamble to this
         Agreement.

                  "CODE":  the Internal  Revenue  Code of 1986,  as amended from
         time to time.

                  "COLLATERAL":  all  assets of the Loan  Parties,  now owned or
         hereinafter  acquired,  upon which a Lien is purported to be created by
         any Security Document.

                  "COMMITMENT":  as to any Lender, the sum of the Tranche A Term
         Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C Term
         Loan Commitment,  the Revolving Credit Commitment and the Canadian Term
         Loan Commitment of such Lender.

                  "COMMITMENT  FEE  RATE":  on  any  day,  the  rate  per  annum
         determined pursuant to the Pricing Grid.

                  "COMMONLY  CONTROLLED  ENTITY":  an  entity,  whether  or  not
         incorporated, which is under common control with the Company within the
         meaning of Section  4001 of ERISA or is part of a group which  includes
         the Company and which is treated as a single employer under Section 414
         of the Code.

                  "COMPANY": as defined in the Preamble to this Agreement.


                                       9
<PAGE>


                  "CONSOLIDATED  CAPITAL  EXPENDITURES":  for any fiscal period,
         the aggregate of all  expenditures by Holdings and its Subsidiaries for
         the acquisition or leasing  (pursuant to a Financing Lease) of fixed or
         capital  assets or  additions  to  equipment  (including  replacements,
         capitalized  repairs and improvements during such period, but excluding
         investments   made  pursuant  to  Section   10.8(c))  which  should  be
         capitalized under GAAP on a consolidated  balance sheet of Holdings and
         its  Subsidiaries;  PROVIDED that for any  calculation of  Consolidated
         Capital  Expenditures  for any fiscal period ending  November 30, 1998,
         February 28, 1999 or May 31, 1999,  Consolidated  Capital  Expenditures
         shall be deemed to be Consolidated  Capital Expenditures from September
         1,  1998 to the last  day of such  period  multiplied  by 4, 2 and 4/3,
         respectively.

                  "CONSOLIDATED  CONTINGENT  OBLIGATIONS":  at any  date (a) all
         obligations of Holdings and its  Subsidiaries in respect of performance
         bonds, letters of credit in the nature of performance bonds and similar
         obligations,  and (b) all  Guarantee  Obligations  of  Holdings  and it
         Subsidiaries  in respect of  obligations of the kind referred to in the
         foregoing clause (a).

                  "CONSOLIDATED  DEBT SERVICE":  for any fiscal period, the sum,
         for Holdings and its Subsidiaries  (determined on a consolidated  basis
         without  duplication  in  accordance  with GAAP),  of (a) all regularly
         scheduled  payments of  principal of  Indebtedness  during such period,
         including all scheduled  payments in respect of the Loans, and, without
         duplication,  all scheduled reductions in the Canadian Facility Maximum
         Amount,  during  such  period  plus  (b)  Consolidated  Projected  Cash
         Interest Expense for such period.

                  "CONSOLIDATED  FIXED CHARGES":  for any fiscal period, the sum
         for such period of (i) Consolidated  Debt Service and (ii) Consolidated
         Projected Operating Lease Expense.

                  "CONSOLIDATED  HISTORICAL  CASH  INTEREST  EXPENSE":  for  any
         fiscal  period,   the  aggregate  amount  of  interest  in  respect  of
         Consolidated  Total  Funded Debt and in respect of the Seller Note paid
         in cash during such period as  determined  on a  consolidated  basis in
         accordance with GAAP; PROVIDED that for any calculation of Consolidated
         Historical Cash Interest  Expense for any fiscal period ending November
         30, 1998,  February 28, 1999 or May 31, 1999,  Consolidated  Historical
         Cash  Interest  Expense shall be deemed to be  Consolidated  Historical
         Cash  Interest  Expense from  September 1, 1998 to the last day of such
         period multiplied by 4, 2 and 4/3, respectively.

                  "CONSOLIDATED  HISTORICAL  OPERATING LEASE  EXPENSE":  for any
         fiscal  period,  the aggregate  lease  obligations  of Holdings and its
         Subsidiaries   for  which  Holdings  or  any  of  its  Subsidiaries  is
         contractually  committed  having a  remaining  term in excess of twelve
         months  determined on a  consolidated  basis payable in respect of such
         period under  leases of real and/or  personal  property  (net of income
         from  sub-leases  thereof and  excluding  lease  payments on  operating
         leases which carry a termination  payment of less than twelve months of
         lease payments, but including taxes, insurance, maintenance and similar
         expenses  which the lessee is  obligated to pay under the terms of said
         leases), whether or


                                       10
<PAGE>


         not such  obligations  are reflected as liabilities or commitments on a
         consolidated  balance sheet of Holdings and its  Subsidiaries or in the
         notes thereto, excluding,  however, obligations under Financing Leases;
         PROVIDED that for any calculation of Consolidated  Historical Operating
         Lease Expense for any fiscal period ending November 30, 1998,  February
         28,  1999 or May 31,  1999,  Consolidated  Historical  Operating  Lease
         Expense shall be deemed to be Consolidated  Historical  Operating Lease
         Expense  from  September  1,  1998  to  the  last  day of  such  period
         multiplied by 4, 2 and 4/3, respectively.

                  "CONSOLIDATED  NET  INCOME":  of any  Person  for  any  fiscal
         period, net income of such Person and its Subsidiaries, determined on a
         consolidated  basis in  accordance  with  GAAP;  PROVIDED  that for any
         calculation  of  Consolidated  Net Income for any fiscal  period ending
         November 30, 1998, February 28, 1999 or May 31, 1999,  Consolidated Net
         Income shall be deemed to be Consolidated  Net Income from September 1,
         1998  to the  last  day of  such  period  multiplied  by 4, 2 and  4/3,
         respectively.

                  "CONSOLIDATED  OPERATING  CASH FLOW":  for any fiscal  period,
         Consolidated  Net Income of Holdings  and its  Subsidiaries  (excluding
         without  duplication,  (w) extraordinary gains and losses in accordance
         with GAAP, (x) gains and losses in connection  with asset  dispositions
         whether  or not  constituting  extraordinary  gains and  losses and (y)
         gains or losses on discontinued  operations and (z) non-cash investment
         income) for such period, plus (i) to the extent deducted in determining
         such  Consolidated  Net Income,  interest  expense and other  financing
         costs and expenses  (cash and non-cash)  for such period,  plus (ii) to
         the extent deducted in computing such Consolidated Net Income,  the sum
         of  income  taxes   (whether  or  not   deferred),   depreciation   and
         amortization,  and all other non-cash  expenses;  PROVIDED that for any
         calculation of  Consolidated  Operating Cash Flow for any fiscal period
         ending  November  30,  1998,   February  28,  1999  or  May  31,  1999,
         Consolidated  Operating  Cash Flow  shall be deemed to be  Consolidated
         Operating  Cash  Flow  from  September  1, 1998 to the last day of such
         period multiplied by 4, 2 and 4/3, respectively.

                  "CONSOLIDATED PROJECTED CASH INTEREST EXPENSE": for any fiscal
         period,  the  aggregate  amount of interest in respect of  Consolidated
         Total  Funded  Debt and in respect of the Seller Note  projected  to be
         payable in cash  during  such period as  determined  on a  consolidated
         basis in accordance with GAAP (such interest  expense being  calculated
         based upon the assumption  that interest rates in effect on the date of
         calculation will remain in effect for such future fiscal period).

                  "CONSOLIDATED  PROJECTED  OPERATING  LEASE  EXPENSE":  for any
         fiscal  period,  the aggregate  lease  obligations  of Holdings and its
         Subsidiaries   for  which  Holdings  or  any  of  its  Subsidiaries  is
         contractually  committed  having a  remaining  term in excess of twelve
         months  determined on a consolidated  basis  projected to be payable in
         respect of such period  under leases of real and/or  personal  property
         (net of income from sub-leases  thereof and excluding lease payments on
         operating leases which carry a termination  payment of less than twelve
         months of lease payments, but including taxes,  insurance,  maintenance
         and similar  expenses  which the lessee is  obligated  to pay under the
         terms of


                                       11
<PAGE>


         said  leases),  whether or not such  obligations  would be reflected as
         liabilities or commitments on a consolidated  balance sheet of Holdings
         and its  Subsidiaries  or in the  notes  thereto,  excluding,  however,
         obligations under Financing Leases.

                  "CONSOLIDATED   TOTAL   FUNDED   DEBT":   at  any  date,   all
         Indebtedness of Holdings and its Subsidiaries  outstanding on such date
         for borrowed  money or the deferred  purchase price of property and all
         Guarantee Obligations of the Company and its Subsidiaries in respect of
         Indebtedness  for  borrowed  money or the  deferred  purchase  price of
         property, in each case determined on a consolidated basis in accordance
         with GAAP,  including,  without limitation,  Indebtedness in respect of
         Financing Leases,  but excluding  Indebtedness in respect of the Seller
         Note.

                  "CONSOLIDATED   TOTAL  LEVERAGE  RATIO"  as  at  any  date  of
         determination,  the ratio of (i)  Consolidated  Total Funded Debt as at
         such date to (ii) Consolidated  Operating Cash Flow for the four fiscal
         quarters ended on or most recently prior to such date of determination.

                  "CONSOLIDATED WORKING CAPITAL": of any Person at any date, the
         excess  of (a)  the  sum of all  amounts  (other  than  cash  and  cash
         equivalents) that would, in accordance with GAAP, be set forth opposite
         the  caption  "total  current  assets"  (or  any  like  caption)  on  a
         consolidated  balance sheet of such Person and its Subsidiaries at such
         date over (b) all amounts that would,  in accordance  with GAAP, be set
         forth  opposite the caption "total  current  liabilities"  (or any like
         caption)  on a  consolidated  balance  sheet  of  such  Person  and its
         Subsidiaries on such date (excluding,  to the extent it would otherwise
         be included  under  current  liabilities,  the  current  portion of any
         Consolidated Total Funded Debt).

                  "CONTRACTUAL  OBLIGATION":  as to any Person, any provision of
         any security  issued by such Person or of any agreement,  instrument or
         other undertaking to which such Person is a party or by which it or any
         of its property is bound.

                  "CPCFA DEBT": the Indebtedness  incurred by Holdings  pursuant
         to a credit agreement,  dated as of July 1, 1997,  between Holdings and
         the California Pollution Control Financing Authority in connection with
         the issuance by such Authority of Pollution  Control Revenue Bonds, due
         July 1, 2007, in the aggregate principal amount of $19,500,000.

                  "DEFAULT":  any of the events specified in Section 11, whether
         or not any requirement for the giving of notice,  the lapse of time, or
         both, or any other condition, has been satisfied.

                  "DISPOSITION":  with  respect to any asset,  any sale,  lease,
         sale  and  leaseback,   assignment,   conveyance,   transfer  or  other
         disposition  thereof;  and the terms  "DISPOSE" and "DISPOSED OF" shall
         have correlative meanings.


                                       12
<PAGE>


                  "DOMESTIC SUBSIDIARY": any Subsidiary of the Company organized
         under the laws of any jurisdiction within the United States.

                  "DRAFT":  a draft  substantially in the form of Exhibit A-1 or
         in such other form as the Canadian  Administrative  Agent may from time
         to time reasonably request (or to the extent the context shall require,
         an Acceptance Note,  delivered in lieu of a draft),  as the same may be
         amended, supplemented or otherwise modified from time to time.

                  "ENVIRONMENTAL  LAWS":  any and all laws  (including,  without
         limitation,  all common and civil  law),  rules,  orders,  regulations,
         statutes,  ordinances,  guidelines,  codes,  decrees,  or other legally
         enforceable  requirement of any foreign government,  the United States,
         Canada,   or  any  state,   provincial,   local,   municipal  or  other
         governmental authority,  regulating,  relating to or imposing liability
         or standards of conduct concerning  protection of the environment or of
         human health,  or employee  health and safety,  as has been, is now, or
         may at any time hereafter be, in effect.

                  "ENVIRONMENTAL  PERMITS":  any  and  all  permits,   licenses,
         registrations,  approvals,  notifications,  exemptions  and  any  other
         authorization required under any Environmental Law.

                  "ERISA":  the Employee Retirement Income Security Act of 1974,
         as amended from time to time.

                  "EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
         a  LIBOR  Loan,  the  aggregate  (without  duplication)  of  the  rates
         (expressed as a decimal fraction) of reserve  requirements in effect on
         such day (including, without limitation, basic, supplemental,  marginal
         and emergency  reserves under any regulations of the Board of Governors
         of the Federal Reserve System or other  Governmental  Authority  having
         jurisdiction  with respect thereto)  dealing with reserve  requirements
         prescribed  for  eurocurrency   funding   (currently   referred  to  as
         "Eurocurrency Liabilities" in Regulation D of such Board) maintained by
         a member bank of such System.

                  "EURODOLLAR BUSINESS DAY": any day on which banks are open for
         dealings in dollar deposits in the London interbank market.

                  "EVENT OF DEFAULT": any of the events specified in Section 11,
         PROVIDED that any  requirement  for the giving of notice,  the lapse of
         time, or both, or any other condition, has been satisfied.

                  "EXCESS CASH FLOW":  with respect to any Person for any fiscal
         year,  the  excess  of  (a)  the  sum,  without  duplication,   of  (i)
         Consolidated  Net Income of such Person and its  Subsidiaries  for such
         fiscal year,  (ii) the net decrease,  if any, in  Consolidated  Working
         Capital of such Person and its  Subsidiaries  during such fiscal  year,
         (iii) to the extent deducted in computing such Consolidated Net Income,
         non-cash interest expense and


                                       13
<PAGE>


         other financing costs and expenses,  depreciation  and amortization for
         such fiscal year, (iv) extraordinary non-cash losses during such fiscal
         year subtracted in the  determination of such  Consolidated Net Income,
         (v) deferred income tax expense of such Person and its Subsidiaries for
         such  fiscal  year,  (vi)  non-cash  losses  of  such  Person  and  its
         Subsidiaries for such fiscal year in connection with asset dispositions
         whether or not constituting  extraordinary  losses,  and (vii) non-cash
         ordinary  losses of such  Person and its  Subsidiaries  for such fiscal
         year OVER (b) the sum, without duplication, of (i) the aggregate amount
         of  permitted  cash  capital  expenditures  made by such Person and its
         Subsidiaries during such fiscal year, (ii) the net increase, if any, in
         Consolidated Working Capital of such Person and its Subsidiaries during
         such fiscal year, (iii) the aggregate amount of (A) scheduled  payments
         of  principal  in respect of any  Indebtedness  of such  Person and its
         Subsidiaries  during such fiscal  year,  (B)  optional  prepayments  of
         principal  in  respect  of any  Indebtedness  of  such  Person  and its
         Subsidiaries  during  such fiscal year  (other  than,  with  respect to
         Holdings,  prepayments  in respect  of the  Revolving  Credit  Loan not
         accompanied by a reduction in Revolving Credit  Commitments),  (C) with
         respect to Holdings for fiscal year 1997 only,  repayments  of existing
         Indebtedness  required to be repaid in connection  with the Acquisition
         Closing Date,  (iv)  deferred  income tax credit of such Person and its
         Subsidiaries  for such fiscal year,  (v)  extraordinary  non-cash gains
         during such fiscal year added in the  determination of Consolidated Net
         Income of such Person and its  Subsidiaries  for such fiscal year, (vi)
         non-cash gains of such Person and its  Subsidiaries  during such fiscal
         year in connection with asset dispositions  whether or not constituting
         extraordinary  gains,  (vii) non-cash ordinary gains of such Person and
         its Subsidiaries  during such fiscal year and (viii) cash  expenditures
         of such Person and its Subsidiaries during such fiscal year on deferred
         (including the current portion  thereof) long term  liabilities (net of
         related  cash taxes),  (ix) to the extent not  deducted in  determining
         Consolidated  Net Income of such Person and its  Subsidiaries  for such
         fiscal year,  cash  expenditures  made or committed  during such fiscal
         year in respect of site closure,  related  severance  costs,  financing
         fees  and  other  costs   incurred  in  connection   with  the  Rollins
         Acquisition  and the  Safety-Kleen  Acquisition  (provided that amounts
         deducted in any fiscal year for expenditures  committed,  but not made,
         during  such  fiscal  year shall not be  deducted in the fiscal year in
         which such expenditures are actually made) and (x) non-cash  investment
         income of such Person and its Subsidiaries during such fiscal year.

                  "EXCHANGE  AGENT":  IBJ  Schroder  Bank &  Trust  Company,  as
         exchange  agent under the  Exchange  Agent  Agency  Agreement,  and any
         successor thereto pursuant to the terms of such agreement.

                  "EXCHANGE AGENT AGENCY  AGREEMENT":  the Exchange Agent Agency
         Agreement to be executed  and  delivered  by the  Exchange  Agent,  the
         General  Administrative  Agent and Acquisition Corp.,  substantially in
         the form of  Exhibit  P, as the same may be  amended,  supplemented  or
         otherwise modified from time to time.

                  "EXCHANGE   OFFER":   as  defined  in  the  Recitals  to  this
         Agreement.

                  "EXCHANGE OFFER DOCUMENTS": as defined in the Recitals to this
         Agreement.


                                       14
<PAGE>


                  "EXCHANGE RATE": with respect to Canadian Dollars on any date,
         the Bank of Canada  noon spot  rate on such  date for the  exchange  of
         Canadian Dollars into U.S. Dollars.

                  "EXISTING ACCEPTANCES":  as defined in Section 5.1(a).

                  "EXISTING ACCEPTANCE LENDERS":  as defined in Section 5.1(a).

                  "EXISTING  CREDIT  AGREEMENT":  as defined in the  Recitals to
         this Agreement.

                  "EXISTING LETTERS OF CREDIT":  as defined in Section 3.1(c).

                  "EXISTING MORTGAGES": the collective reference to (i) the Deed
         of Trust, Assignment of Rents and Leases and Security Agreement,  dated
         as of May 15, 1997, from Rollins  Environmental,  Inc., as Grantor,  to
         First  American  Title  Insurance  Company,  as trustee for the use and
         benefit of Toronto Dominion (Texas), Inc., as beneficiary, and (ii) the
         Mortgage,  dated as of May 15, 1997, from Rollins Environmental,  Inc.,
         as  mortgagor,   to  Toronto   Dominion   (Texas),   Inc.,  as  general
         administrative agent, in each case encumbering the properties described
         in  Schedule  2 and  recorded  in the  recording  office  described  in
         Schedule 3.

                  "EXTENSION OF CREDIT":  as to any Lender, the making of a Loan
         by  such  Lender,  the  issuance  (or  acquisition  of a  participating
         interest in) any Letter of Credit or the creation of an  Acceptance  or
         Acceptance Note by such Lender.  It is expressly  understood and agreed
         that the following do not constitute  Extensions of Credit for purposes
         of this Agreement:  (a) the conversions and continuations of U.S. Loans
         as or to LIBOR Loans or Base Rate Loans  pursuant to Section  6.4,  (b)
         the substitution of maturing Acceptances with new Acceptances,  (c) the
         conversion of Acceptances to Canadian Term Loans and (d) the conversion
         of Canadian Term Loans to Acceptances.

                  "FACILITY":  each of (a) the  Tranche A Term Loan  Commitments
         and the Tranche A Term Loans made  thereunder (the "TRANCHE A TERM LOAN
         FACILITY"),  (b) the Tranche B Term Loan  Commitments and the Tranche B
         Term Loans made  thereunder (the "TRANCHE B TERM LOAN  FACILITY"),  (c)
         the Tranche C Term Loan  Commitments  and the Tranche C Term Loans made
         thereunder  (the  "TRANCHE C TERM LOAN  FACILITY"),  (d) the  Revolving
         Credit  Commitments  and  the  Revolving   Extensions  of  Credit  (the
         "REVOLVING CREDIT FACILITY") and (e) the Canadian Term Loan Commitments
         and  the  Canadian  Term  Loans  made,  and  the  Acceptances   issued,
         thereunder (the "CANADIAN TERM LOAN FACILITY").

                  "FEDERAL  FUNDS  EFFECTIVE  RATE":  for any day,  the weighted
         average  of the rates on  overnight  federal  funds  transactions  with
         members of the Federal Reserve System arranged by federal funds brokers
         as published  for such day (or, if such day is not a Business  Day, for
         the next preceding Business Day) by the Federal Reserve Bank of


                                       15
<PAGE>


     New  York  or,  if such  rate is not so  published  for any day  which is a
     Business  Day,  the  average  of  the  quotations  for  such  day  on  such
     transactions  received  by the  General  Administrative  Agent  from  three
     federal funds brokers of recognized standing selected by it.

                  "FINANCING  LEASE":  any lease of property,  real or personal,
         the  obligations  of the  lessee in respect  of which are  required  in
         accordance  with  GAAP to be  capitalized  on a  balance  sheet  of the
         lessee.

                  "FIXED  CHARGE  COVERAGE  RATIO":  as at the  last  day of any
         fiscal quarter, the ratio of (i) the sum of Consolidated Operating Cash
         Flow and Consolidated  Historical  Operating Lease Expense for the four
         consecutive fiscal quarters ended on such last day to (ii) Consolidated
         fixed Charges for the next succeeding four consecutive fiscal quarters.

                  "FOREIGN CURRENCY  PROTECTION  AGREEMENTS":  as to any Person,
         all foreign  exchange  contracts,  currency  swap  agreements  or other
         similar  agreements  or  arrangements  entered  into by such  Person to
         protect such Person against fluctuations in currency values.

                  "FOREIGN SUBSIDIARY":  any Subsidiary of the Company organized
         under  the  laws of any  jurisdiction  outside  the  United  States  of
         America.

                  "GAAP": generally accepted accounting principles in the United
         States of America in effect from time to time.

                  "GENERAL ADMINISTRATIVE AGENT": Toronto Dominion (Texas) Inc.,
         together with its  affiliates,  as arranger of the  Commitments  and as
         administrative  agent for the U.S. Lenders under this Agreement and the
         other Loan  Documents,  and any successor  thereto  pursuant to Section
         12.9.

                  "GOVERNMENTAL AUTHORITY": any nation or government, any state,
         provincial  or  other  political  subdivision  thereof  and any  entity
         exercising   executive,    legislative,    judicial,    regulatory   or
         administrative functions of or pertaining to government.

                  "GUARANTEE AND COLLATERAL AGREEMENT": the Amended and Restated
         Guarantee and Collateral  Agreement to be executed and delivered by the
         Company and each Guarantor,  substantially  in the form of Exhibit B-1,
         as the same may be amended,  supplemented  or otherwise  modified  from
         time to time.

                  "GUARANTEE  OBLIGATION":  as to any Person (the  "GUARANTEEING
         PERSON"),  any obligation of (a) the guaranteeing person or (b) another
         Person  (including,  without  limitation,  any bank under any letter of
         credit) to induce the  creation of which  obligation  the  guaranteeing
         person  has  issued  a  reimbursement,   counterindemnity   or  similar
         obligation,  in either case guaranteeing or in effect  guaranteeing any
         Indebtedness, leases,


                                       16
<PAGE>


         dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other
         third Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
         indirectly,  including,  without  limitation,  any  obligation  of  the
         guaranteeing  person,  whether or not  contingent,  (i) to purchase any
         such primary obligation or any property constituting direct or indirect
         security therefor, (ii) to advance or supply funds (1) for the purchase
         or payment of any such primary  obligation  or (2) to maintain  working
         capital  or equity  capital of the  primary  obligor  or  otherwise  to
         maintain  the net worth or solvency of the  primary  obligor,  (iii) to
         purchase property,  securities or services primarily for the purpose of
         assuring the owner of any such primary obligation of the ability of the
         primary  obligor to make  payment of such  primary  obligation  or (iv)
         otherwise  to assure  or hold  harmless  the owner of any such  primary
         obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
         term Guarantee Obligation shall not include endorsements of instruments
         for deposit or  collection  in the  ordinary  course of  business.  The
         amount of any Guarantee  Obligation of any guaranteeing person shall be
         deemed  to be the  lower  of (a)  an  amount  equal  to the  stated  or
         determinable  amount of the primary obligation in respect of which such
         Guarantee  Obligation is made and (b) the maximum amount for which such
         guaranteeing  person  may  be  liable  pursuant  to  the  terms  of the
         instrument  embodying  such Guarantee  Obligation,  unless such primary
         obligation  and the maximum amount for which such  guaranteeing  person
         may be liable are not stated or determinable,  in which case the amount
         of  such  Guarantee  Obligation  shall  be such  guaranteeing  person's
         maximum  reasonably   anticipated   liability  in  respect  thereof  as
         determined  by the  Company  in good  faith.  For  avoidance  of doubt,
         Guarantee  Obligations will not include obligations of Holdings and its
         Subsidiaries  incurred in the ordinary  course of business to indemnify
         customers in connection with business  services provided by Holdings or
         its Subsidiaries.

                  "GUARANTOR":  each  party  to  the  Guarantee  and  Collateral
         Agreement other than the Company,  which shall include Holdings and all
         wholly owned Domestic Subsidiaries of the Company.

                  "HEDGING AGREEMENT": any Foreign Currency Protection Agreement
         or Interest Rate Protection Agreement.

                  "HIGH YIELD NOTES":  up to $400,000,000 of subordinated  notes
         of  the  Company   maturing  no  earlier  than  the  Revolving   Credit
         Termination  Date and having  subordination  and other terms reasonably
         acceptable to the Company and the General Administrative Agent.

                  "HIGH  YIELD  OFFERING":  the  contemplated  offering  by  the
         Company of the High Yield Notes.

                  "HOLDINGS":  as defined in the Recitals to this Agreement.

                  "INDEBTEDNESS":   of  any   Person  at  any   date,   (a)  all
         indebtedness  of such  Person for  borrowed  money or for the  deferred
         purchase  price of  property  or services  (other  than  current  trade
         liabilities incurred in the ordinary course of business and payable in


                                       17
<PAGE>


         accordance  with customary  practices),  (b) any other  indebtedness of
         such Person which is evidenced  by a note,  bond,  debenture or similar
         instrument,  (c) all obligations of such Person under Financing Leases,
         (d) all  obligations  of such Person,  contingent or  otherwise,  as an
         account party under acceptance,  letter of credit or similar facilities
         (other than obligations in respect of performance  bonds and letters of
         credit in the nature of performance bonds), (e) all obligations of such
         Person,  contingent  or  otherwise,  to  purchase,  redeem,  retire  or
         otherwise acquire for value any Capital Stock (other than common stock)
         of such Person, (f) all Guarantee Obligations of such Person in respect
         of  obligations  of the kind  referred  to in clauses  (a)  through (e)
         above,  (g) all  obligations  of the kind  referred  to in clauses  (a)
         through  (f)  above  secured  by (or  for  which  the  holder  of  such
         obligation  has an  existing  right,  contingent  or  otherwise,  to be
         secured  by)  any  Lien on  property  (including,  without  limitation,
         accounts and contract rights) owned by such Person, whether or not such
         Person has assumed or become liable for the payment of such  obligation
         and (h) for the purposes of Section 11(e) only, all obligations of such
         Person in respect of Hedging Agreements.

                  "INSOLVENCY":  with  respect to any  Multiemployer  Plan,  the
         condition  that such Plan is  insolvent  within the  meaning of Section
         4245 of ERISA.

                  "INSOLVENT":  pertaining to a condition of Insolvency.

                  "INTERCREDITOR    AGREEMENT":   the   Amended   and   Restated
         Intercreditor Agreement,  substantially in the form of Exhibit O, to be
         entered  into by the  Administrative  Agents  and The  Toronto-Dominion
         Bank, as Canadian  Operating  Facility Agent (as defined therein),  and
         NationsBank,   N.A.,  in  its  capacity  as  a  lender   providing  the
         NationsBank Line of Credit.

                  "INTEREST  COVERAGE RATIO":  for any period,  the ratio of (i)
         Consolidated Operating Cash Flow less Consolidated Capital Expenditures
         for such period to (ii)  Consolidated  Historical Cash Interest Expense
         for such period.

                  "INTEREST  DETERMINATION  DATE":  with respect to any Interest
         Period for LIBOR Loans, the date which is two Eurodollar  Business Days
         prior to the first day of such LIBOR Interest Period.

                  "INTEREST  PAYMENT DATE": (a) as to any Base Rate Loan and any
         Canadian Term Loan, the last Business Day of each February, May, August
         and November,  and, in the case of any Canadian Term Loan  converted to
         an Acceptance  pursuant to Section 5.1(b),  the Borrowing Date on which
         such  conversion  occurs,  (b) as to any LIBOR Loan  having an Interest
         Period of three months or less,  the last day of such Interest  Period,
         and (c) as to any LIBOR Loan  having an  Interest  Period  longer  than
         three  months,  each day  which is three  months,  or a whole  multiple
         thereof,  after the first day of such Interest  Period and the last day
         of such Interest Period.


                                       18
<PAGE>


                  "INTEREST PERIOD":  with respect to any LIBOR Loan:

                                 (a)  initially,  the period  commencing  on the
                  Borrowing  Date or  conversion  date, as the case may be, with
                  respect to such LIBOR Loan and ending one,  two,  three or six
                  months or (if  available  to all  Lenders  under the  relevant
                  Facility) nine or twelve months thereafter, as selected by the
                  Company in its notice of borrowing or notice of conversion, as
                  the case may be, given with respect thereto; and

                                 (b) thereafter,  each period  commencing on the
                 last day of the next preceding  Interest  Period  applicable to
                 such LIBOR Loan and ending one, two, three or six months or (if
                 available to all Lenders under the relevant  Facility)  nine or
                 twelve  months  thereafter,  as  selected  by  the  Company  by
                 irrevocable notice to the General Administrative Agent not less
                 than  three  Business  Days  prior  to the last day of the then
                 current  Interest Period with respect  thereto;  PROVIDED that,
                 all of the foregoing  provisions  relating to Interest  Periods
                 are subject to the following:

                           (1) if any Interest  Period would  otherwise end on a
                  day that is not a Business Day, such Interest  Period shall be
                  extended to the next succeeding Business Day unless the result
                  of such extension  would be to carry such Interest Period into
                  another  calendar  month in which event such  Interest  Period
                  shall end on the immediately preceding Business Day;

                           (2) any  Interest  Period  in  respect  of  Revolving
                  Credit  Loans,  Tranche A Term Loans,  Tranche B Term Loans or
                  Tranche C Term Loans, as the case may be, that would otherwise
                  extend beyond the Revolving Credit  Termination Date or beyond
                  the date final payment is due on the Tranche A Term Loans, the
                  Tranche B Term Loans or the Tranche C Term Loans,  as the case
                  may be, shall end on the Revolving Credit  Termination Date or
                  such due date, as applicable;

                           (3) any  Interest  Period  that  begins  on the  last
                  Business Day of a calendar  month (or on a day for which there
                  is no numerically  corresponding  day in the calendar month at
                  the  end of  such  Interest  Period)  shall  end  on the  last
                  Business Day of a calendar month; and

                           (4) the Company shall select  Interest  Periods so as
                  not to  require  a payment  or  prepayment  of any LIBOR  Loan
                  during an Interest Period for such Loan.

                  "INTEREST RATE PROTECTION  AGREEMENTS":  as to any Person, all
         interest rate swaps, caps or collar agreements or similar  arrangements
         entered  into  by  such  Person   providing  for   protection   against
         fluctuations  in interest  rates or the  exchange  of nominal  interest
         obligations, either generally or under specific contingencies.


                                       19
<PAGE>


                  "ISSUANCE  DATE":  any  Business  Day  specified  in a  notice
         pursuant  to  Section  3.2 as a date on  which  an  Issuing  Lender  is
         requested to issue a Letter of Credit hereunder.

                  "ISSUING  LENDER":  any of The  Toronto-Dominion  Bank  or any
         Managing Agent or any Affiliates thereof, as selected by the Company.

                  "ITA":  the  Income  Tax  Act  (Canada)  and  the  regulations
         promulgated thereunder, as amended or re-enacted from time to time.

                  "LAIDLAW":  Laidlaw Inc., a Canadian corporation.

                  "L/C COMMITMENT":  at any time, the lesser of (a) $200,000,000
         and (b) the aggregate Revolving Credit Commitments then in effect.

                  "L/C FEE PAYMENT DATE":  the last day of each  February,  May,
         August and November and the last day of the Revolving Credit Commitment
         Period.

                  "L/C OBLIGATIONS":  at any time, an amount equal to the sum of
         (a) the  aggregate  then  undrawn  and  unexpired  amount  of the  then
         outstanding  Letters of Credit and (b) the aggregate amount of drawings
         under Letters of Credit which have not then been reimbursed pursuant to
         Section 3.5.

                  "L/C PARTICIPANTS":  with respect to any Letter of Credit, the
         collective reference to all the Revolving Credit Lenders other than the
         relevant Issuing Lender.

                  "LETTERS OF CREDIT":  as defined in Section 3.1(a).

                  "LIBOR  LOAN":  any Loan the rate of  interest  applicable  to
         which is based upon the LIBOR Rate.

                  "LIBOR  RATE":  with  respect to a LIBOR Loan for the relevant
         Interest  Period,   the  rate  per  annum  determined  by  the  General
         Administrative Agent as follows:

                           (a) on the Interest  Determination  Date  relating to
                  such Interest Period, the General  Administrative  Agent shall
                  obtain the offered quotation(s) for U.S. Dollar deposits for a
                  period  comparable to such Interest  Period that appear on the
                  Reuter's Screen as of 11:00 a.m., London time. If at least two
                  such offered  quotations  appear on the Reuter's  Screen,  the
                  LIBOR Rate shall be the arithmetic  average (rounded up to the
                  nearest  1/16th  of  1%)  of  such  offered   quotations,   as
                  determined by the General Administrative Agent;


                                       20
<PAGE>


                           (b) if the  Reuter's  Screen is not  available or has
                  been discontinued,  the LIBOR Rate shall be the rate per annum
                  that the General  Administrative  Agent  determines  to be the
                  arithmetic  average  (rounded as  aforesaid)  of the per annum
                  rates of interest reported to the General Administrative Agent
                  by each LIBOR  Reference Bank (or, if any LIBOR Reference Bank
                  fails to  provide  such  quotation,  on the basis of the rates
                  reported to the General  Administrative Agent by the remaining
                  LIBOR  Reference  Banks) as the rate at which deposits in U.S.
                  Dollars  are  offered  to such  Reference  Banks in the London
                  interbank  market at 11:00 a.m.,  London time, on the Interest
                  Determination  Date in the  approximate  amount of such  LIBOR
                  Reference  Bank's  relevant  LIBOR  Loan and having a maturity
                  approximately equal to the relevant LIBOR Interest Period; and

                           (c) if the General  Administrative  Agent is not able
                  to obtain  quotations for the  determination of the LIBOR Rate
                  pursuant to subsection (a) or (b) above,  the LIBOR Rate shall
                  be the rate per annum which the General  Administrative  Agent
                  in good faith determines to be the arithmetic average (rounded
                  as  aforesaid)  of the  offered  quotations  for  U.S.  Dollar
                  deposits in an amount comparable to the General Administrative
                  Agent's  share of the relevant  amount in respect of which the
                  LIBOR Rate is being determined for a period  comparable to the
                  relevant LIBOR Interest  Period that leading banks in New York
                  City selected by the General  Administrative Agent are quoting
                  at  11:00  a.m.,   New  York  City  time,   on  the   Interest
                  Determination  Date in the New York interbank  market to major
                  international banks.

                  "LIBOR REFERENCE BANKS": The  Toronto-Dominion  Bank, The Bank
         of Nova  Scotia,  NationsBank,  N.A.  and The  First  National  Bank of
         Chicago.

                  "LIEN":  any  mortgage,  pledge,  hypothecation,   assignment,
         deposit arrangement,  encumbrance, lien (statutory or other), charge or
         other security  interest or any preference,  priority or other security
         agreement or preferential  arrangement of any kind or nature whatsoever
         (including,  without  limitation,  any conditional  sale or other title
         retention  agreement and any Financing Lease having  substantially  the
         same economic effect as any of the foregoing).

                  "LOAN":   any  loan  made  by  any  Lender  pursuant  to  this
         Agreement.

                  "LOAN DOCUMENTS":  the collective reference to this Agreement,
         any Notes, the  Applications,  the Syndication  Letter  Agreement,  the
         Drafts,  the  Acceptances,   the  Acceptance  Notes  and  the  Security
         Documents.

                  "LOAN  PARTIES":  the  collective  reference to Holdings,  the
         Borrowers and each Subsidiary of the Company which is a party to a Loan
         Document.


                                       21
<PAGE>


                  "MAJORITY FACILITY LENDERS": with respect to any Facility, the
         holders of more than 66-2/3% of the aggregate  unpaid  principal amount
         of  the  U.S.   Term  Loans  (and  related   undrawn  U.S.   Term  Loan
         Commitments), the Total Revolving Extensions of Credit or the Aggregate
         Canadian Term Loan Outstandings,  as the case may be, outstanding under
         such Facility (or, in the case of the Revolving Credit Facility,  prior
         to any termination of the Revolving Credit Commitments,  the holders of
         more than 66-2/3% of the aggregate Revolving Credit Commitments).

                  "MATERIAL  ADVERSE  EFFECT":  a material adverse effect on (a)
         the Safety-Kleen Acquisition, (b) the business,  operations,  property,
         condition  (financial or otherwise) or prospects of the Company and its
         Subsidiaries  taken as a whole or (c) the validity or enforceability of
         this or any of the other Loan  Documents  or the rights or  remedies of
         the Administrative Agents or the Lenders hereunder or thereunder.

                  "MATERIALS  OF   ENVIRONMENTAL   CONCERN":   any  gasoline  or
         petroleum  (including  crude oil or any fraction  thereof) or petroleum
         products,  polychlorinated  biphenyls,   urea-formaldehyde  insulation,
         asbestos,  pollutants,  contaminants,   radioactivity,  and  any  other
         substances or forces of any kind,  whether or not any such substance or
         force is defined as  hazardous  or toxic under any  Environmental  Law,
         that is regulated pursuant to or could give rise to liability under any
         Environmental Law.

                  "MERGER":  as defined in the Recitals to this Agreement.

                  "MERGER  AGREEMENT:   as  defined  in  the  Recitals  to  this
         Agreement.

                  "MERGER DATE":  the date on which the Merger is consummated.

                  "MORTGAGE AMENDMENT":  each Mortgage Amendment,  substantially
         in the form of  Exhibit M, to be entered  into on the  Closing  Date to
         amend each Existing Mortgage.

                  "MORTGAGES":   the   collective   reference  to  the  Existing
         Mortgages,  as amended by the Mortgage  Amendments,  and the Mortgages,
         substantially in the form of Exhibit N, to be executed and delivered in
         respect of the properties to be mortgaged  pursuant to Section 9.10(d),
         as the same may be amended,  supplemented  or otherwise  modified  from
         time to time.

                  "MULTIEMPLOYER  PLAN": a Plan which is a multiemployer plan as
         defined in Section 4001(a)(3) of ERISA.

                  "NATIONSBANK  LINE OF  CREDIT":  the  working  capital  credit
         facility in an amount not exceeding $25,000,000 made available pursuant
         to a letter  agreement,  dated March 31, 1998  between  NationsBank  of
         Texas, N.A., as lender, and the Company,  as borrower,  as the same may
         be amended, modified or otherwise supplemented from time to time.


                                       22
<PAGE>


                  "NET CASH PROCEEDS":  (a) in connection with any Asset Sale or
         any Recovery Event,  the proceeds  thereof in the form of cash and cash
         equivalents  (including  any such proceeds  received by way of deferred
         payment of principal  pursuant to a note or  installment  receivable or
         purchase price adjustment receivable or otherwise, but only as and when
         received) of such Asset Sale or Recovery Event, net of attorneys' fees,
         accountants'  fees,  investment  banking fees,  amounts  required to be
         applied to the repayment of  Indebtedness  secured by a Lien  expressly
         permitted  hereunder  on any asset  which is the  subject of such Asset
         Sale or  Recovery  Event  (other  than any Lien  pursuant to a Security
         Document) and other  customary fees and expenses  actually  incurred in
         connection  therewith and net of taxes paid or reasonably  estimated to
         be payable as a result thereof (after taking into account any available
         tax credits or deductions and any tax sharing  arrangements) and (b) in
         connection  with any  issuance  or sale of  equity  securities  or debt
         securities or instruments or the incurrence of loans, the cash proceeds
         received from such  issuance or  incurrence,  net of  attorneys'  fees,
         investment banking fees,  accountants' fees, underwriting discounts and
         commissions and other customary fees and expenses  actually incurred in
         connection therewith.

                  "NON-EXCLUDED TAXES":  as defined in Section 6.12.

                  "NOTES":  the  collective  reference to the  Revolving  Credit
         Notes, the U.S. Term Notes and the Canadian Term Notes.

                  "PARTICIPANT":  as defined in Section 14.6(b).

                  "PBGC": the Pension Benefit Guaranty  Corporation  established
         pursuant to Subtitle A of Title IV of ERISA.

                  "PERMITTED EMPLOYEE STOCK ISSUANCES": the issuance by Holdings
         of its common  stock to  employees  or  directors  of Holdings  and its
         Subsidiaries for aggregate proceeds not exceeding $5,000,000 per fiscal
         year during fiscal year 1997,  1998 and 1999 and $10,000,000 per fiscal
         year thereafter.

                  "PERSON": an individual,  partnership,  corporation,  business
         trust, joint stock company, trust,  unincorporated  association,  joint
         venture, Governmental Authority or other entity of whatever nature.

                  "PLAN":  at a particular time, any employee benefit plan which
         is covered  by ERISA and in respect of which the  Company or a Commonly
         Controlled  Entity is (or, if such plan were  terminated  at such time,
         would under  Section  4069 of ERISA be deemed to be) an  "employer"  as
         defined in Section 3(5) of ERISA.

                  "PREPAYMENT OPTION NOTICE":  as defined in Section 6.3(i).

                  "PRICING GRID":  the pricing grid attached hereto as Annex A.


                                       23
<PAGE>


                  "PRIME  RATE":  the  prime  commercial  lending  rate  of  The
         Toronto-Dominion  Bank as in effect  from time to time in New York City
         for loans in U.S.  Dollars,  such rate to be  adjusted on and as of the
         effective  date of any change in the Prime Rate. The Prime Rate is only
         one of the bases for  computing  interest on loans made by the Lenders,
         and by basing interest on the unpaid  principal  amount of the Loans on
         the Prime  Rate,  the Lenders  have not  committed  to charge,  and the
         Company has not in any way bargained for,  interest based on a lower or
         the lowest  rate at which the  Lenders  may now or in the  future  make
         loans to other borrowers.

                  "PRO FORMA BALANCE SHEET":  as defined in Section 7.1(a).

                  "PROPOSED PREPAYMENT DATE":  as defined in Section 6.3(i).

                  "RECOVERY  EVENT":  any settlement of or payment in respect of
         any property or casualty insurance claim or any condemnation proceeding
         relating to any asset of the Company or any of its Subsidiaries.

                  "REFERENCE  DISCOUNT  RATE":  on any date with respect to each
         Draft  requested  to be  accepted  by a  Canadian  Lender,  (a) if such
         Canadian Lender is a Schedule 1 Canadian Lender, the arithmetic average
         of the discount  rates  (expressed  as a percentage  calculated  on the
         basis of a year of 365 days)  quoted by the Toronto  offices of each of
         the Schedule 1 Canadian Reference Lenders, at 10:00 a.m. (Toronto time)
         on the  Borrowing  Date on which  such Draft is to be  accepted  as the
         discount rate at which each such Schedule 1 Canadian  Reference  Lender
         would,  in the normal  course of its  business,  purchase  on such date
         Acceptances  having an  aggregate  face  amount and term to maturity as
         designated by the Canadian  Borrower pursuant to Section 5.2 and (b) if
         such Canadian  Lender is a Schedule 2 Canadian  Lender,  the arithmetic
         average of the discount rates (expressed as a percentage  calculated on
         the basis of a year of 365 days) quoted by the Toronto  offices of each
         of the Schedule 2 Canadian  Reference  Lenders,  at 10:00 a.m. (Toronto
         time) on the  Borrowing  Date on which such Draft is to be  accepted as
         the  discount  rate at which each such  Schedule  2 Canadian  Reference
         Lender would,  in the normal  course of its business,  purchase on such
         date  Acceptances  having an aggregate face amount and term to maturity
         as  designated  by the Canadian  Borrower  pursuant to Section 5.2. The
         Canadian  Administrative  Agent shall advise the Canadian  Borrower and
         the  Canadian  Lenders,  either in writing or  verbally,  by 11:00 a.m.
         (Toronto  time) on each  Borrowing Date in respect of Acceptances as to
         the applicable  Reference  Discount Rate and  corresponding  Acceptance
         Purchase Price in respect of Acceptances having the maturities selected
         by the Canadian Borrower for such Borrowing Date.

                  "REGISTER":  as defined in Section 14.6(d).

                  "REGULATION  U":  Regulation  U of the Board as in effect from
         time to time.


                                       24
<PAGE>


                  "REIMBURSEMENT  OBLIGATION":  the obligation of the Company to
         reimburse the Issuing Lenders pursuant to Section 3.5 for amounts drawn
         under Letters of Credit.

                  "REINVESTMENT   DEFERRED   AMOUNT":   with   respect   to  any
         Reinvestment  Event,  the  aggregate  Net Cash  Proceeds  received by a
         Borrower or any of its  Subsidiaries in connection  therewith which are
         not applied to prepayments or reductions  pursuant to Section 6.3(c) as
         a result of the delivery of a Reinvestment Notice.

                  "REINVESTMENT  EVENT":  any  Recovery  Event or Asset  Sale in
         respect of which the  relevant  Borrower has  delivered a  Reinvestment
         Notice.

                  "REINVESTMENT   NOTICE":   a  written  notice  executed  by  a
         Responsible Officer to the General  Administrative Agent within 30 days
         of the Reinvestment  Event to which it relates stating that no Event of
         Default has occurred and is continuing  and that the relevant  Borrower
         (directly or indirectly through a Subsidiary),  in good faith,  intends
         and expects to use all or a specified  portion of the Net Cash Proceeds
         of a Recovery  Event or an Asset Sale to restore or replace  the assets
         in respect of which such  Recovery  Event or Asset Sale  occurred or to
         purchase other assets used in the existing  business of the Company and
         its Subsidiaries  within twelve months from the date of receipt of such
         Net Cash Proceeds  (provided  that if the affected  assets  constituted
         Collateral, such restored,  replacement or other purchased assets shall
         also constitute Collateral).

                  "REINVESTMENT   PREPAYMENT   AMOUNT":   with  respect  to  any
         Reinvestment  Event, the Reinvestment  Deferred Amount relating thereto
         less any amount which,  prior to the relevant  Reinvestment  Prepayment
         Date, the relevant Borrower or the relevant Subsidiary has spent or has
         agreed, pursuant to a binding written contract (under which performance
         is in progress)  to spend,  to restore or replace the assets in respect
         of which a Recovery  Event or an Asset Sale has occurred or to purchase
         other  assets used in the  existing  business of such  Borrower or such
         Subsidiary.

                  "REINVESTMENT   PREPAYMENT   DATE":   with   respect   to  any
         Reinvestment  Event, the earliest of (a) the first date occurring after
         such  Reinvestment  Event  on which an  Event  of  Default  shall  have
         occurred,  (b) the date occurring twelve months after such Reinvestment
         Event  and (c) the date on  which  the  relevant  Borrower  shall  have
         determined  not to, or shall  have  otherwise  ceased  to,  restore  or
         replace  the assets in  respect  of which a Recovery  Event or an Asset
         Sale has  occurred or to  purchase  other  assets used in the  existing
         business of such Borrower or such Subsidiary.

                  "REORGANIZATION":  with respect to any Multiemployer Plan, the
         condition  that such plan is in  reorganization  within the  meaning of
         Section 4241 of ERISA.

                  "REPORTABLE  EVENT":  any of the  events  set forth in Section
         4043(c) of ERISA,  other than those  events as to which the  thirty-day
         notice period is waived under subsections .27, .28, .29, .30, .31, .32,
         .34 or .35 of PBGC Reg. ss. 4043.
 

                                       25
<PAGE>


                  "REQUEST FOR ACCEPTANCES":  as defined in Section 5.2(a).

                  "REQUIRED  LENDERS":  the holders of more than  66-2/3% of (a)
         until the  Closing  Date,  the  Tranche A Term  Loan  Commitments,  the
         Tranche B Term Loan  Commitments,  the Tranche C Term Loan Commitments,
         the Revolving Credit  Commitments and the U.S. Dollar Equivalent of the
         Canadian Term Loan  Commitments and (b) thereafter,  the sum of (i) the
         aggregate  unpaid  principal  amount  of the U.S.  Term  Loans  and the
         aggregate  undrawn amount of the U.S. Term Loan  Commitments,  (ii) the
         U.S.  Dollar  Equivalent of the Aggregate  Canadian  Facility Term Loan
         Outstandings  of all Lenders and (iii) the aggregate  Revolving  Credit
         Commitments of all Lenders or, if the Revolving Credit Commitments have
         been terminated, the Total Revolving Extensions of Credit.

                  "REQUIREMENT  OF LAW": as to any Person,  the  Certificate  of
         Incorporation   and  By-Laws  or  other   organizational  or  governing
         documents of such Person,  and any law,  treaty,  rule or regulation or
         determination  of  an  arbitrator  or a  court  or  other  Governmental
         Authority,  in each case  applicable  to or binding upon such Person or
         any of its  property or to which such Person or any of its  property is
         subject.

                  "RESPONSIBLE  OFFICER":  the chief  executive  officer and the
         president  of the  Company or  Holdings,  as the case may be, or,  with
         respect  to  financial  matters,  the chief  financial  officer  of the
         Company or Holdings, as the case may be.

                  "REUTER'S  SCREEN":  the display  designated at page "LIBO" on
         the Reuter  Monitor  System or such other display on the Reuter Monitor
         System as may replace such page displaying the London  interbank bid or
         offered rates.

                  "REVOLVING  CREDIT  COMMITMENT":  as to any U.S.  Lender,  the
         obligation of such Lender,  if any, to make Revolving  Credit Loans and
         participate in Letters of Credit, in an aggregate principal and/or face
         amount not to exceed the amount set forth under the heading  "Revolving
         Credit Commitment" opposite such Lender's name on Schedule 1.1A, as the
         same may be changed from time to time pursuant to the terms hereof. The
         original  aggregate  amount  of the  Revolving  Credit  Commitments  is
         $450,000,000;  PROVIDED that at no time shall the  aggregate  principal
         amount of all Revolving Credit Loans exceed $300,000,000.

                  "REVOLVING  CREDIT  COMMITMENT  PERIOD":  the period  from and
         including the Closing Date to the Revolving Credit Termination Date.

                  "REVOLVING  CREDIT  LENDER":  each  U.S.  Lender  which  has a
         Revolving Credit  Commitment or which has made Revolving  Extensions of
         Credit.

                  "REVOLVING CREDIT LOANS":  as defined in Section 2.4.

                  "REVOLVING CREDIT NOTE":  as defined in Section 2.7.


                                       26
<PAGE>


                  "REVOLVING  CREDIT  PERCENTAGE":  as to any  Revolving  Credit
         Lender at any time, the percentage which such Lender's Revolving Credit
         Commitment  then   constitutes  of  the  aggregate   Revolving   Credit
         Commitments  (or, at any time after the  Revolving  Credit  Commitments
         shall have expired or terminated,  the  percentage  which the aggregate
         principal amount of such Lender's  Revolving  Extensions of Credit then
         outstanding  constitutes  of the Total  Revolving  Extensions of Credit
         then outstanding).

                  "REVOLVING CREDIT  TERMINATION DATE": the earlier of (a) April
         3, 2004 and (b) the date on which the Revolving Credit  Commitments are
         terminated pursuant to Section 11.

                  "REVOLVING  EXTENSIONS OF CREDIT":  as to any Revolving Credit
         Lender at any time,  an  amount  equal to the sum of (a) the  aggregate
         principal amount of all Revolving Credit Loans made by such Lender then
         outstanding and (b) such Lender's  Revolving  Credit  Percentage of the
         L/C Obligations then outstanding.

                  "ROLLINS  ACQUISITION":  the  acquisition  by  Holdings of the
         common stock of the Company, which was financed, in part, with proceeds
         of loans under the Existing Credit Agreement.

                  "SAFETY-KLEEN":  as defined in the Recitals to this Agreement.

                  "SAFETY-KLEEN  ACQUISITION":  the  acquisition  by Acquisition
         Corp.  of the common  stock of  Safety-Kleen  pursuant to the  Exchange
         Offer and the Merger,  financed,  in part,  with proceeds of Loans made
         hereunder.


                  "SCHEDULE 1 CANADIAN  LENDER":  each Canadian Lender listed on
         Schedule 1 to the Bank Act  (Canada).

                  "SCHEDULE  1  CANADIAN  REFERENCE  LENDERS":   initially,  The
         Toronto-Dominion  Bank;  and after  completion  of  syndication  of the
         Facilities, The Toronto-Dominion Bank and one other Schedule 1 Canadian
         Lender selected by the Canadian  Administrative  Agent and the Canadian
         Borrower.

                  "SCHEDULE 2 CANADIAN  LENDER":  each Canadian  Lender which is
         not a Schedule 1 Canadian Lender.
                  

                  "SCHEDULE  2  CANADIAN  REFERENCE  LENDERS":  two  Schedule  2
         Canadian  Lenders to be selected by the Canadian  Administrative  Agent
         and the  Canadian  Borrower  after  completion  of  syndication  of the
         Facilities.


                                       27
<PAGE>


                  "SECURITY   DOCUMENTS":   the  collective   reference  to  the
         Guarantee  and  Collateral  Agreement,  the  Acquisition  Corp.  Pledge
         Agreement,  the Mortgages,  the Canadian  Collateral  Documents and all
         other   security   documents   hereafter   delivered   to  the  General
         Administrative  Agent or the Canadian  Administrative  Agent granting a
         Lien on any  property  of any  Person to  secure  the  obligations  and
         liabilities of any Loan Party under any Loan Document.

                  SELLER NOTE":  the 5% Convertible  Subordinated  Debenture due
         2009 in a  principal  amount  of  $350,000,000  issued by  Holdings  to
         Laidlaw  Transportation,  Inc.  on the  Acquisition  Closing  Date as a
         portion of the consideration for the Rollins Acquisition.

                  "SINGLE  EMPLOYER PLAN": any Plan which is covered by Title IV
         of ERISA, but which is not a Multiemployer Plan.

                  "SOLVENT":  when used with respect to any Person,  means that,
         as of any date of  determination,  (a) the amount of the "present  fair
         saleable  value" of the assets of such  Person  will,  as of such date,
         exceed the amount of all  "liabilities  of such Person,  contingent  or
         otherwise",  as of such date,  as such quoted terms are  determined  in
         accordance   with   applicable   federal   and  state  laws   governing
         determinations  of the  insolvency  of debtors,  (b) the  present  fair
         saleable  value of the assets of such Person will,  as of such date, be
         greater  than the amount that will be required to pay the  liability of
         such Person on its debts as such debts become absolute and matured, (c)
         such  Person  will not have,  as of such date,  an  unreasonably  small
         amount of  capital  with which to conduct  its  business,  and (d) such
         Person will be able to pay its debts as they  mature.  For  purposes of
         this  definition,  (i) "debt" means  liability  on a "claim",  and (ii)
         "claim" means any (x) right to payment,  whether or not such a right is
         reduced  to  judgment,  liquidated,  unliquidated,  fixed,  contingent,
         matured, unmatured,  disputed, undisputed, legal, equitable, secured or
         unsecured or (y) right to an equitable remedy for breach of performance
         if such breach  gives rise to a right to  payment,  whether or not such
         right to an equitable remedy is reduced to judgment, fixed, contingent,
         matured or unmatured, disputed, undisputed, secured or unsecured.

                  "SPECIFIED ACCEPTANCES":  as defined in Section 5.1(a).

                  "SUBSIDIARY": as to any Person, a corporation,  partnership or
         other  entity  of which  shares of stock or other  ownership  interests
         having  ordinary voting power (other than stock or such other ownership
         interests  having  such  power  only by  reason of the  happening  of a
         contingency)  to elect a majority  of the board of  directors  or other
         managers of such  corporation,  partnership  or other entity are at the
         time  owned,  or the  management  of  which  is  otherwise  controlled,
         directly or indirectly through one or more intermediaries,  or both, by
         such  Person.   Unless  otherwise   qualified,   all  references  to  a
         "Subsidiary"  or to  "Subsidiaries"  in this Agreement shall refer to a
         Subsidiary or Subsidiaries of the Company.


                                       28
<PAGE>


                  "SURVIVING  CORPORATION":  as defined in the  Recitals to this
         Agreement.

                  "SYNDICATION  AGENT":  as  defined  in the  Preamble  to  this
         Agreement.

                  "SYNDICATION LETTER AGREEMENT":  the Letter Agreement dated as
         of April  3,  1998  among  Holdings,  the  Borrowers  and the  Arranger
         pertaining to the completion of the syndication of the Facilities after
         the Closing Date.

                  "TARGET RIGHTS": as defined in the Recitals to this Agreement.

                  "TARGET SHARES": as defined in the Recitals to this Agreement.

                  "TAX ACT":  the INCOME TAX ACT (Canada),  as amended from time
         to time.

                  "TERM LOANS":  the collective  references to the Canadian Term
         Loans and the U.S. Term Loans.

                  "TOOELE COUNTY DEBT":  the  Indebtedness  incurred by Holdings
         pursuant  to a  credit  agreement,  dated as of July 1,  1997,  between
         Holdings and Tooele  County,  Utah, in connection  with the issuance by
         Tooele County,  Utah, of Hazardous Waste Treatment  Revenue Bonds,  due
         July 1, 2027, in the aggregate principal amount of $45,700,000.

                  "TOTAL  AGGREGATE  CANADIAN  TERM LOAN  OUTSTANDINGS":  at any
         time,  the  aggregate  amount  of  the  Aggregate  Canadian  Term  Loan
         Outstandings of the Canadian Lenders at such time.

                  "TOTAL  REVOLVING  EXTENSIONS  OF  CREDIT":  at any time,  the
         aggregate amount of the Revolving Extensions of Credit of the Revolving
         Credit Lenders at such time.

                  "TRANCHE":  the collective  reference to LIBOR Loans under the
         same Facility the then current  Interest Periods with respect to all of
         which begin on the same date and end on the same later date (whether or
         not such Loans shall originally have been made on the same day).

                  "TRANCHE A TERM LOAN":  as defined in Section 2.1.

                  "TRANCHE A TERM LOAN COMMITMENT":  as to any U.S. Lender,  the
         obligation of such Lender, if any, to make a Tranche A Term Loan to the
         Company  hereunder  in a principal  amount not to exceed the amount set
         forth under the heading "Tranche A Term Loan Commitment"  opposite such
         Lender's name on Schedule  1.1A. The original  aggregate  amount of the
         Tranche A Term Loan Commitments is $480,000,000.


                                       29
<PAGE>


                  "TRANCHE A TERM LOAN  LENDER":  each U.S.  Lender  which has a
         Tranche A Term Loan Commitment or which has made a Tranche A Term Loan.

                  "TRANCHE A TERM LOAN MATURITY DATE":  April 3, 2004.

                  "TRANCHE  A TERM LOAN  PERCENTAGE":  as to any  Tranche A Term
         Loan Lender at any time, the percentage  which such Lender's  Tranche A
         Term Loan Commitment then  constitutes of the aggregate  Tranche A Term
         Loan  Commitments  (or,  at  any  time  after  the  Closing  Date,  the
         percentage  which  the  aggregate  principal  amount  of such  Lender's
         Tranche A Term  Loans then  outstanding  constitutes  of the  aggregate
         principal amount of the Tranche A Term Loans then outstanding).

                  "TRANCHE B TERM LOAN":  as defined in Section 2.1.

                  "TRANCHE B TERM LOAN COMMITMENT":  as to any U.S. Lender,  the
         obligation of such Lender, if any, to make a Tranche B Term Loan to the
         Company  hereunder  in a principal  amount not to exceed the amount set
         forth under the heading "Tranche B Term Loan Commitment"  opposite such
         Lender's name on Schedule  1.1A. The original  aggregate  amount of the
         Tranche B Term Loan Commitments is  $550,000,000.  The Tranche B-1 Term
         Loan Commitments are a subset of the Tranche B Term Loan Commitments.

                  "TRANCHE B TERM LOAN  LENDER":  each U.S.  Lender  which has a
         Tranche B Term Loan Commitment or which has made a Tranche B Term Loan.

                  "TRANCHE B TERM LOAN MATURITY DATE":  April 3, 2005.

                  "TRANCHE  B TERM LOAN  PERCENTAGE":  as to any  Tranche B Term
         Loan Lender at any time, the percentage  which such Lender's  Tranche B
         Term Loan Commitment then  constitutes of the aggregate  Tranche B Term
         Loan  Commitments  (or,  at  any  time  after  the  Closing  Date,  the
         percentage  which  the  aggregate  principal  amount  of such  Lender's
         Tranche B Term  Loans then  outstanding  constitutes  of the  aggregate
         principal amount of the Tranche B Term Loans then outstanding).

                  "TRANCHE  B-1 TERM LOAN  COMMITMENTS":  as  defined in Section
         2.1(b).

                  "TRANCHE B-1 TERM LOANS":  as defined in Section 2.1(b).

                  "TRANCHE C TERM LOAN":  as defined in Section 2.1.


                                       30
<PAGE>


                  "TRANCHE C TERM LOAN COMMITMENT":  as to any U.S. Lender,  the
         obligation of such Lender, if any, to make a Tranche C Term Loan to the
         Company  hereunder  in a principal  amount not to exceed the amount set
         forth under the heading "Tranche C Term Loan Commitment"  opposite such
         Lender's name on Schedule  1.1A. The original  aggregate  amount of the
         Tranche C Term Loan Commitments is  $550,000,000.  The Tranche C-1 Term
         Loan Commitments are a subset of the Tranche C Term Loan Commitments.

                  "TRANCHE C TERM LOAN  LENDER":  each U.S.  Lender  which has a
         Tranche C Term Loan Commitment or which has made a Tranche C Term Loan.

                  "TRANCHE C TERM LOAN MATURITY DATE":  April 3, 2006.

                  "TRANCHE  C TERM LOAN  PERCENTAGE":  as to any  Tranche C Term
         Loan Lender at any time, the percentage  which such Lender's  Tranche C
         Term Loan Commitment then  constitutes of the aggregate  Tranche C Term
         Loan  Commitments  (or,  at  any  time  after  the  Closing  Date,  the
         percentage  which  the  aggregate  principal  amount  of such  Lender's
         Tranche C Term  Loans then  outstanding  constitutes  of the  aggregate
         principal amount of the Tranche C Term Loans then outstanding).

                  "TRANCHE  C-1 TERM LOAN  COMMITMENTS":  as  defined in Section
         2.1(b).

                  "TRANCHE C-1 TERM LOANS":  as defined in Section 2.1(b).

                  "TRANSFEREE":  as defined in Section 14.6(f).

                  "TYPE":  as to any Loan,  its  nature as a Base Rate Loan or a
         LIBOR Loan.

                  "UNIFORM  CUSTOMS":  the  Uniform  Customs  and  Practice  for
         Documentary Credits (1993 Revision),  International Chamber of Commerce
         Publication No. 500, as the same may be amended from time to time.

                  "U.S.   DOLLAR   EQUIVALENT":   with   respect  to  an  amount
         denominated in Canadian Dollars, the equivalent in U.S. Dollars of such
         amount  determined at the Exchange Rate on the Business Day immediately
         preceding the date of determination of such equivalent.

                  "U.S DOLLARS" and "$":  dollars in the lawful  currency of the
         United States of America.

                  "U.S. LENDERS": the collective reference to the U.S. Term Loan
         Lenders and the Revolving Credit Lenders.

                  "U.S. LOANS": the collective  reference to the U.S. Term Loans
         and the Revolving Credit Loans.


                                       31
<PAGE>


                  "U.S. TERM LOAN COMMITMENTS":  the collective reference to the
         Tranche A Term Loan  Commitments,  the Tranche B Term Loan  Commitments
         and the Tranche C Term Loans Commitments.

                  "U.S.  TERM  LOAN  COMMITMENT  PERIOD":  the  period  from the
         Closing Date to the Merger Date.

                  "U.S.  TERM LOAN  LENDERS":  the  collective  reference to the
         Tranche A Term Loan  Lenders,  the Tranche B Term Loan  Lenders and the
         Tranche C Term Loan Lenders.

                  "U.S. TERM LOANS":  the collective  reference to the Tranche A
         Term Loans, Tranche B Term Loans and Tranche C Term Loans.

                  "U.S. TERM NOTES":  as defined in Section 2.7.

                  "WESTINGHOUSE DEBT":  unsecured  subordinated  indebtedness of
         Holdings in the initial principal amount of $60,000,000  evidenced by a
         promissory note of Holdings,  dated May 15, 1997,  initially payable to
         Westinghouse Electric Corporation and its assignees,  and guaranteed by
         Laidlaw.


                  1.2  OTHER  DEFINITIONAL  PROVISIONS.   (a)  Unless  otherwise
specified  therein,  all terms defined in this Agreement  shall have the defined
meanings  when used in any Notes or any  certificate  or other  document made or
delivered pursuant hereto.

                  (b) As used herein and in any Notes,  and any  certificate  or
other document made or delivered  pursuant hereto,  accounting terms relating to
the Company and its Subsidiaries not defined in Section 1.1 and accounting terms
partly  defined  in Section  1.1,  to the  extent  not  defined,  shall have the
respective  meanings  given to them under GAAP;  PROVIDED  that,  if the Company
notifies the General Administrative Agent that the Company requests an amendment
to any provision  hereof to eliminate the effect of any change  occurring  after
the date hereof in GAAP or in the  application  thereof on the operation of such
provision (or if the General  Administrative Agent notifies the Company that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless  of whether any such  notice is given  before or after such change in
GAAP or in the application thereof, then, pending execution and delivery of such
an amendment,  such  provision  shall be  interpreted on the basis of GAAP as in
effect and applied  immediately  before such change shall have become  effective
until  such  notice  shall  have been  withdrawn  or such  provision  amended in
accordance herewith.

                  (c) The words "hereof",  "herein" and "hereunder" and words of
similar  import when used in this  Agreement  shall refer to this Agreement as a
whole  and not to any  particular  provision  of this  Agreement,  and  Section,
subsection,  Schedule  and  Exhibit  references  are to  this  Agreement  unless
otherwise specified.


                                       32
<PAGE>


                  (d) The  meanings  given  to  terms  defined  herein  shall be
equally applicable to both the singular and plural forms of such terms.


                 SECTION 2. AMOUNT AND TERMS OF U.S. COMMITMENTS

                  2.1 U.S. TERM LOAN  COMMITMENTS.  (a) Subject to the terms and
conditions  hereof, (i) each Tranche A Term Loan Lender severally agrees to make
term loans (each, a "TRANCHE A TERM LOAN")  denominated  in U.S.  Dollars to the
Company during the U.S. Term Loan  Commitment  Period in an aggregate  principal
amount not to exceed the amount of the  Tranche A Term Loan  Commitment  of such
Lender, (ii) each Tranche B Term Loan Lender severally agrees to make term loans
(each,  a "TRANCHE B TERM  LOAN")  denominated  in U.S.  Dollars to the  Company
during the U.S. Term Loan Commitment Period in an aggregate principal amount not
to exceed the amount of the  Tranche B Term Loan  Commitment  of such Lender and
(iii) each Tranche C Term Loan Lender severally agrees to make term loans (each,
a "TRANCHE C TERM LOAN")  denominated in U.S.  Dollars to the Company during the
U.S. Term Loan Commitment Period in an aggregate  principal amount not to exceed
the amount of the Tranche C Term Loan  Commitment of such Lender.  The U.S. Term
Loans may from time to time be LIBOR Loans or Base Rate Loans,  as determined by
the Company and notified to the General  Administrative Agent in accordance with
Sections 2.2 and 6.4; PROVIDED that the U.S. Term Loans made on the Closing Date
shall initially be made as Base Rate Loans.

                  (b) $150,000,000 of the Tranche B Term Loan Commitments  shall
be designated as the "Tranche B-1 Term Loan  Commitments",  and  $150,000,000 of
the Tranche C Term Loan Commitments shall be designated as the "Tranche C-1 Term
Loan  Commitments".  Schedule 1.1A sets forth the amount of the Tranche B-1 Term
Loan  Commitments and the Tranche C-1 Term Loan  Commitments held by each of the
U.S.  Term Loan  Lenders.  Each  borrowing of Tranche B Term Loans and Tranche C
Term Loans shall be deemed to utilize  first the portions of the U.S.  Term Loan
Commitments  other than the Tranche B-1 Term Loan Commitments or the Tranche C-1
Term Loan Commitments, as the case may be, before utilizing the Tranche B-1 Term
Loan Commitment and the Tranche C-1 Term Loan  Commitments.  The portions of the
U.S. Term Loans  attributable  to the Tranche B-1 Term Loan  Commitments and the
Tranche C-1 Term Loan  Commitments  shall be designated as the "Tranche B-1 Term
Loans" and the "Tranche C-1 Term Loans", respectively.

                  2.2  PROCEDURE FOR U.S. TERM LOAN  BORROWING.  The Company may
borrow under the U.S. Term Loan Commitments during the U.S. Term Loan Commitment
Period on any Business Day in  accordance  with this Section 2.2,  PROVIDED that
the Company  shall give the General  Administrative  Agent  irrevocable  written
notice (which notice must be received by the General  Administrative Agent prior
to 12:00  Noon,  New York  City  time,  (a)  three  Business  Days  prior to the
requested  Borrowing  Date, in the case of LIBOR Loans,  or (b) one Business Day
prior  to the  requested  Borrowing  Date,  in the  case  of Base  Rate  Loans),
specifying  (i) the amount and Type of U.S. Term Loans to be borrowed,  (ii) the
requested  Borrowing  Date and (iii) in the case of LIBOR Loans,  the respective
amounts of each such Type of Loan and the respective

<
                                       33
<PAGE>


lengths of the initial  Interest Periods  therefor.  The U.S. Term Loans made on
the Closing Date shall be in an aggregate principal amount not exceeding the sum
of (i) the cash amount  payable in  connection  with the  Exchange  Offer on the
Closing  Date,  (ii) the aggregate  principal  amount of the U.S. Term Loans and
Revolving Credit Loans outstanding under (and as defined in) the Existing Credit
Agreement  and (iii) costs and expenses  relating to the Exchange  Offer and the
financing  thereof.  After the Closing  Date and prior to the Merger  Date,  the
Company may make one  additional  borrowing  of U.S.  Term Loans in an aggregate
principal amount not exceeding the cash portion of the consideration  payable in
connection with delayed delivery of Target Shares pursuant to the Exchange Offer
or in  connection  with Target  Shares for which  payment  cannot be made on the
Closing  Date  because  of  inability  of the  Exchange  Agent to  complete  the
verification  process in respect of such Target Shares.  On the Merger Date, the
Company may make an  additional  borrowing  of U.S.  Term Loans in an  aggregate
principal amount not exceeding the cash portion of the consideration  payable in
connection with the Merger,  and costs and expenses  related  thereto,  LESS the
amount, if any, of Net Cash Proceeds received by the Company from the High Yield
Offering, if it has been consummated,  to the extent such Net Cash Proceeds have
not been  applied to prepay  the Term Loans or reduce the Term Loan  Commitments
pursuant to Section 6.3(b) and (e). In addition,  on the Merger Date the Company
may  borrow  U.S.  Term  Loans  in  an  amount   sufficient  to  repay  existing
indebtedness  of  Safety-Kleen  required  to be  repaid in  connection  with the
Merger.  Each  borrowing  under the U.S.  Term Loan  Commitments  shall be in an
amount equal to (x) in the case of Base Rate Loans,  $1,000,000 or a multiple of
$500,000 in excess  thereof and (y) in the case of LIBOR Loans,  $5,000,000 or a
whole multiple of $1,000,000 in excess thereof.  Upon receipt of any such notice
from the Company,  the General  Administrative  Agent shall promptly notify each
U.S. Term Loan Lender  thereof.  Each U.S. Term Loan Lender will make the amount
of its PRO RATA share of each borrowing available to the General  Administrative
Agent for the account of the Company at the office of the General Administrative
Agent  specified in Section 14.2 prior to 12:00 Noon, New York City time, on the
Borrowing  Date requested by the Company in funds  immediately  available to the
General  Administrative Agent. Such borrowing will then be made available to the
Company by the General Administrative Agent crediting the account of the Company
at the office of The  Toronto-Dominion  Bank at 909 Fannin  Street,  Suite 1700,
Houston,  TX 77010 with the  aggregate  of the  amounts  made  available  to the
General  Administrative Agent by the U.S. Term Loan Lenders and in like funds as
received by the General Administrative Agent.


                                       34
<PAGE>


                  2.3  REPAYMENT OF U.S.  TERM LOANS (a) The Tranche A Term Loan
of each Tranche A Lender shall mature, and the Company unconditionally  promises
to pay such  Tranche A Term  Loan to the  General  Administrative  Agent for the
account of such  Tranche A Lender,  in 24  consecutive  quarterly  installments,
commencing on August 31, 1998, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth below
opposite such installment:


                    INSTALLMENT                                 PRINCIPAL AMOUNT

                    August 31, 1998                                US$16,000,000
                    November 30, 1998                                 16,000,000
                    February 28, 1999                                 16,000,000
                    May 31, 1999                                      16,000,000
                    August 31, 1999                                   16,000,000
                    November 30, 1999                                 16,000,000
                    February 28, 2000                                 16,000,000
                    May 31, 2000                                      16,000,000
                    August 31, 2000                                   22,000,000
                    November 30, 2000                                 22,000,000
                    February 28, 2001                                 22,000,000
                    May 31, 2001                                      22,000,000
                    August 31, 2001                                   22,000,000
                    November 30, 2001                                 22,000,000
                    February 28, 2002                                 22,000,000
                    May 31, 2002                                      22,000,000
                    August 31, 2002                                   22,000,000
                    November 30, 2002                                 22,000,000
                    February 28, 2003                                 22,000,000
                    May 31, 2003                                      22,000,000
                    August 31, 2003                                   22,000,000
                    November 30, 2003                                 22,000,000
                    February 28, 2004                                 22,000,000
                    Tranche A Term
                    Loan Maturity Date                                22,000,000


                                       35
<PAGE>


                  (b) The  Tranche  B Term Loan of each  Tranche B Lender  shall
mature, and the Company unconditionally promises to pay such Tranche B Term Loan
to the General Administrative Agent for the account of such Tranche B Lender, in
28 consecutive  quarterly  installments,  commencing on August 31, 1998, each of
which  shall  be in an  amount  equal  to  such  Lender's  Tranche  B Term  Loan
Percentage multiplied by the amount set forth below opposite such installment:

                   INSTALLMENT                               PRINCIPAL AMOUNT
                   -----------                               ----------------
                   August 31, 1998                           US$1,375,000
                   November 30, 1998                            1,375,000
                   February 28, 1999                            1,375,000
                   May 31, 1999                                 1,375,000
                   August 31, 1999                              1,375,000
                   November 30, 1999                            1,375,000
                   February 28, 2000                            1,375,000
                   May 31, 2000                                 1,375,000
                   August 31, 2000                              1,375,000
                   November 30, 2000                            1,375,000
                   February 28, 2001                            1,375,000
                   May 31, 2001                                 1,375,000
                   August 31, 2001                              1,375,000
                   November 30, 2001                            1,375,000
                   February 28, 2002                            1,375,000
                   May 31, 2002                                 1,375,000
                   August 31, 2002                              1,375,000
                   November 30, 2002                            1,375,000
                   February 28, 2003                            1,375,000
                   May 31, 2003                                 1,375,000
                   August 31, 2003                              1,375,000
                   November 30, 2003                            1,375,000
                   February 28, 2004                            1,375,000
                   May 31, 2004                                 1,375,000
                   August 31, 2004                            129,250,000
                   November 30, 2004                          129,250,000
                   February 28, 2005                          129,250,000
                   Tranche B Term Loan Maturity Date          129,250,000


                                       36
<PAGE>


                  (c) The  Tranche  C Term Loan of each  Tranche C Lender  shall
mature, and the Company unconditionally promises to pay such Tranche C Term Loan
to the General Administrative Agent for the account of such Tranche C Lender, in
32 consecutive  quarterly  installments,  commencing on August 31, 1998, each of
which  shall  be in an  amount  equal  to  such  Lender's  Tranche  C Term  Loan
Percentage multiplied by the amount set forth below opposite such installment:

                         INSTALLMENT                     PRINCIPAL AMOUNT
                         August 31, 1998                     US$1,375,000
                         November 30, 1998                      1,375,000
                         February 28, 1999                      1,375,000
                         May 31, 1999                           1,375,000
                         August 31, 1999                        1,375,000
                         November 30, 1999                      1,375,000
                         February 28, 2000                      1,375,000
                         May 31, 2000                           1,375,000
                         August 31, 2000                        1,375,000
                         November 30, 2000                      1,375,000
                         February 28, 2001                      1,375,000
                         May 31, 2001                           1,375,000
                         August 31, 2001                        1,375,000
                         November 30, 2001                      1,375,000
                         February 28, 2002                      1,375,000
                         May 31, 2002                           1,375,000
                         August 31, 2002                        1,375,000
                         November 30, 2002                      1,375,000
                         February 28, 2003                      1,375,000
                         May 31, 2003                           1,375,000
                         August 31, 2003                        1,375,000
                         November 30, 2003                      1,375,000
                         February 28, 2004                      1,375,000
                         May 31, 2004                           1,375,000
                         August 31, 2004                        1,375,000
                         November 30, 2004                      1,375,000
                         February 28, 2005                      1,375,000
                         May 31, 2005                           1,375,000
                         August 31, 2005                      127,875,000
                         November 30, 2005                    127,875,000
                         February 28, 2006                    127,875,000
                         Tranche C Term
                         Loan Maturity Date                   127,875,000


                                       37
<PAGE>


                  2.4 REVOLVING CREDIT  COMMITMENTS (a) Subject to the terms and
conditions  hereof,  each  Revolving  Credit  Lender  severally  agrees  to make
revolving  credit loans  ("REVOLVING  CREDIT LOANS") to the Company from time to
time during the Revolving  Credit  Commitment  Period in an aggregate  principal
amount  such that,  after  giving  effect  thereto,  the  aggregate  outstanding
principal  amount of such  Lender's  Revolving  Credit Loans will not exceed the
lesser of (i) such  Lender's  Revolving  Credit  Commitment  less such  Lender's
Revolving Credit  Percentage of the L/C Obligations then  outstanding,  and (ii)
such Lender's Revolving Credit Percentage of $300,000,000.  During the Revolving
Credit Commitment Period the Company may use the Revolving Credit Commitments by
borrowing,  prepaying  the  Revolving  Credit  Loans in  whole  or in part,  and
reborrowing,  all in  accordance  with the  terms  and  conditions  hereof.  The
Revolving  Credit Loans may from time to time be LIBOR Loans or Base Rate Loans,
as determined by the Company and notified to the General Administrative Agent in
accordance  with Sections 2.5 and 6.4,  PROVIDED  that no Revolving  Credit Loan
shall  be made as a LIBOR  Loan  after  the day that is one  month  prior to the
Revolving Credit Termination Date.

                  (b) The Company unconditionally promises to pay to the General
Administrative  Agent  for the  account  of the  Revolving  Credit  Lenders  all
outstanding Revolving Credit Loans on the Revolving Credit Termination Date.

                  2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING.  The Company may
borrow  under the  Revolving  Credit  Commitments  during the  Revolving  Credit
Commitment  Period on any Business Day, PROVIDED that the Company shall give the
General  Administrative  Agent irrevocable  written notice (which notice must be
received by the General  Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of LIBOR Loans,  or (b) one Business Day prior to the requested  Borrowing Date,
in the case of Base Rate Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed,  (ii) the requested Borrowing Date and (iii) in the
case of LIBOR Loans,  the  respective  amounts of each such Type of Loan and the
respective  lengths of the initial  Interest  Periods  therefor.  Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans,  $1,000,000 or a multiple of $500,000 in excess thereof
(or, if the then aggregate  Available Revolving Credit Commitments are less than
$1,000,000,  such lesser amount) and (y) in the case of LIBOR Loans,  $5,000,000
or a whole  multiple of $1,000,000 in excess  thereof.  Upon receipt of any such
notice from the Company, the General  Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will make the
amount  of its  PRO  RATA  share  of each  borrowing  available  to the  General
Administrative Agent for the account of the Company at the office of the General
Administrative  Agent  specified in Section  14.2 prior to 12:00 Noon,  New York
City time, on the Borrowing Date  requested by the Company in funds  immediately
available to the General  Administrative Agent. Such borrowing will then be made
available  to the  Company by the General  Administrative  Agent  crediting  the
account of the Company at the office of The Toronto-Dominion  Bank at 909 Fannin
Street,  Suite 1700,  Houston,  TX 77010 with the  aggregate of the amounts made
available to the General  Administrative  Agent by the Revolving  Credit Lenders
and in like funds as received by the General Administrative Agent.


                                       38
<PAGE>


                  2.6 TERMINATION OR REDUCTION OF REVOLVING  CREDIT  COMMITMENT.
The  Company  shall have the  right,  upon not less than  three  Business  Days'
irrevocable written notice to the General Administrative Agent, to terminate the
Revolving Credit  Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments  without premium or penalty;  PROVIDED that no such
termination or reduction of Revolving Credit  Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Credit Loans
made on the effective  date thereof,  the Total  Revolving  Extensions of Credit
would exceed the Revolving Credit Commitments then in effect. Any such reduction
shall be in an amount equal to $5,000,000,  or a whole multiple of $1,000,000 in
excess thereof,  and shall reduce  permanently the Revolving Credit  Commitments
then in effect.

                  2.7 EVIDENCE OF DEBT.  (a) Each U.S.  Lender shall maintain in
accordance   with  its  usual   practice  an  account  or  accounts   evidencing
indebtedness of the Company to such Lender resulting from each U.S. Loan of such
Lender  from time to time,  including  the  amounts of  principal  and  interest
payable and paid to such Lender from time to time under this Agreement.

                  (b)  The  General  Administrative  Agent  shall  maintain  the
Register  pursuant to Section  14.6(d),  and a subaccount  therein for each U.S.
Lender,  in which shall be recorded (i) the amount of each Revolving Credit Loan
and U.S. Term Loan made  hereunder,  the Type thereof and each  Interest  Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Company to each U.S. Lender  hereunder and
(iii) both the amount of any sum  received by the General  Administrative  Agent
hereunder from the Company and each Lender's share thereof.

                  (c) The entries  made in the Register and the accounts of each
U.S. Lender maintained pursuant to Section 2.7(a) shall, to the extent permitted
by applicable  law, be PRIMA FACIE  evidence of the existence and amounts of the
obligations of the Company therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the General  Administrative  Agent to maintain  the Register or
any such  account,  or any error  therein,  shall not in any  manner  affect the
obligation of the Company to repay (with  applicable  interest)  the U.S.  Loans
made to the  Company by such U.S.  Lender in  accordance  with the terms of this
Agreement.

                  (d) The Company  agrees that,  upon the request to the General
Administrative Agent by any U.S. Lender, the Company will execute and deliver to
such Lender (i) a promissory note of the Company evidencing the Revolving Credit
Loans of such Lender,  substantially  in the form of Exhibit C with  appropriate
insertions as to date and principal amount (a "REVOLVING  CREDIT NOTE"),  and/or
(ii) a  promissory  note of the  Company  evidencing  the  Tranche A Term Loans,
Tranche B Term Loan or Tranche C Term Loan,  as the case may be, of such Lender,
substantially  in the form of Exhibit D with  appropriate  insertions as to date
and principal amount (a "U.S. TERM NOTE").


                                       39
<PAGE>


                          SECTION 3. LETTERS OF CREDIT

                  3.1  L/C  COMMITMENT.  (a)  Pursuant  to the  Existing  Credit
Agreement,  the  Issuing  Lenders  specified  on  Schedule  1.1C have issued the
letters of credit described on Schedule 1.1C (the "EXISTING LETTERS OF CREDIT"),
which from and after the Closing  Date shall  continue to be "Letters of Credit"
hereunder.  Subject to the terms and conditions hereof,  each Issuing Lender, in
reliance on the  agreements of the other  Revolving  Credit Lenders set forth in
Section  3.4(a),  agrees to issue letters of credit  (together with the Existing
Letters of Credit,  the  "LETTERS OF CREDIT")  for the account of the Company on
any Business Day during the Revolving Credit  Commitment  Period in such form as
may be approved from time to time by such Issuing  Lender;  PROVIDED that (i) no
Issuing  Lender shall issue any Letter of Credit if, after giving effect to such
issuance,  the L/C  Obligations  would  exceed the L/C  Commitment  or the Total
Revolving  Extensions of Credit would exceed the Revolving Credit Commitments of
all Lenders and (ii) no Issuing  Lender shall issue any Letter of Credit  unless
it shall have  received  notice from the General  Administrative  Agent that the
issuance of such Letter of Credit will not violate the  foregoing  clause (i) of
this proviso. Each Letter of Credit shall (i) be denominated in U.S. Dollars and
(ii) expire no later than the earlier of (x) the first  anniversary  of its date
of issuance and (y) the date which is five  Business Days prior to the Revolving
Credit Termination Date, PROVIDED that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date  referred to in the  foregoing  clause (y) of
this proviso).

                  (b) Each  Letter of Credit  shall be  subject  to the  Uniform
Customs and, to the extent not inconsistent therewith,  the laws of the State of
New York.

                  3.2  PROCEDURE  FOR ISSUANCE OF LETTER OF CREDIT.  The Company
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor,  completed to the satisfaction of such Issuing Lender, and
such other  certificates,  documents  and other papers and  information  as such
Issuing Lender may request. Upon receipt of any Application, each Issuing Lender
agrees to process such  Application  and the  certificates,  documents and other
papers and  information  delivered to it in  connection  therewith in accordance
with its  customary  procedures  and shall  promptly  issue the Letter of Credit
requested  thereby  (but in no event  shall such  Issuing  Lender be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application  therefor and all such other  certificates,  documents and other
papers and information  relating thereto) by issuing the original of such Letter
of Credit to the  beneficiary  thereof or as otherwise  may be agreed to by such
Issuing Lender and the Company. Each Issuing Lender shall furnish a copy of each
Letter of Credit by it hereunder to the Company promptly  following the issuance
thereof.   Each   Issuing   Lender  shall   promptly   furnish  to  the  General
Administrative  Agent,  which shall in turn  promptly  furnish to the  Revolving
Credit Lenders,  notice of the issuance of each Letter of Credit  (including the
amount thereof).


                                       40
<PAGE>


                  3.3 COMMISSIONS, FEES AND OTHER CHARGES. (a) The Company shall
pay to the General Administrative Agent, for the account of the Revolving Credit
Lenders,  a letter of credit  commission  with  respect to each Letter of Credit
outstanding  under this  Agreement for the period from the Issuance Date of such
Letter of Credit (or, in the case of the  Existing  Letters of Credit,  from the
Closing  Date) to the  expiration  or  termination  of such  Letter  of  Credit,
computed at a per annum rate equal to (i) the  Applicable  Margin then in effect
with respect to LIBOR Loans under the Revolving Credit Facility LESS (ii) 1/4 of
1% (the  fronting  fee  referred  to in  paragraph  (b)  below)  on the  average
aggregate  amount  available to be drawn under such Letter of Credit  during the
period for which such fee is calculated. Such commission shall be shared ratably
among the Revolving Credit Lenders and payable  quarterly in arrears on each L/C
Fee Payment  Date to occur after the  respective  Issuance  Date (or the Closing
Date, as the case may be) and on the Revolving Credit Termination Date and shall
be nonrefundable.

                  (b) The Company shall pay to the relevant  Issuing Lender with
respect  to each  Letter of Credit  issued by such  Issuing  Lender  under  this
Agreement,  for its own account,  a fronting fee with respect to the period from
the Issuance Date of such Letter of Credit to the expiration or termination date
of such  Letter  of  Credit,  computed  at a rate of 1/4 of 1% per  annum on the
average  aggregate  amount  available  to be drawn  under such  Letter of Credit
during the period for which such fee is  calculated.  Such fronting fee shall be
payable in arrears on each L/C Fee Payment Date to occur after the Issuance Date
(or  the  Closing  Date,  as the  case  may  be)  and on  the  Revolving  Credit
Termination Date and shall be nonrefundable.

                  (c) In addition to the  foregoing  fees and  commissions,  the
Company shall pay or reimburse each Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating,  effecting payment under,  amending or otherwise  administering any
Letter of Credit.

                  3.4 L/C PARTICIPATIONS.  (a) Effective on the Closing Date, in
respect of each Existing  Letter of Credit,  and effective on the Issuance Date,
in respect of each Letter of Credit issued after the Closing Date,  each Issuing
Lender  irrevocably  agrees to grant and hereby  grants to each L/C  Participant
(other than such Issuing  Lender),  and, to induce such Issuing  Lender to issue
Letters of Credit hereunder,  each L/C Participant  irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Issuing  Lender,  on the
terms and conditions  hereinafter stated, for such L/C Participant's own account
an  undivided  interest  equal  to  such  L/C  Participant's   Revolving  Credit
Percentage in such Issuing Lender's  obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by such Issuing Lender
thereunder.  Each L/C Participant  unconditionally  and irrevocably  agrees with
each  Issuing  Lender  that,  if a draft is paid  under any Letter of Credit for
which such Issuing Lender is not reimbursed in full by the Company in accordance
with the terms of this Agreement, such L/C Participant shall pay to such Issuing
Lender upon demand at such Issuing Lender's address for notices specified herein
an amount equal to such L/C  Participant's  Revolving  Credit  Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.


                                       41
<PAGE>


                  (b) If any amount  required to be paid by any L/C  Participant
to any Issuing Lender pursuant to Section 3.4(a) in respect of any  unreimbursed
portion of any payment  made by such  Issuing  Lender under any Letter of Credit
issued by such  Issuing  Lender is not paid  when due but is paid  within  three
Business Days after the date such payment is due, such L/C Participant shall pay
to such  Issuing  Lender on demand an amount  equal to the  product  of (i) such
amount,  times (ii) the daily average  Federal Funds  Effective  Rate during the
period from and including the date such payment is required to the date on which
such payment is  immediately  available to such  Issuing  Lender,  times (iii) a
fraction the  numerator  of which is the number of days that elapse  during such
period and the  denominator  of which is 360. If any such amount  required to be
paid by any L/C Participant  pursuant to Section 3.4(a) is not made available to
any Issuing Lender by such L/C Participant  within three Business Days after the
date such payment is due, such Issuing  Lender shall be entitled to recover from
such L/C Participant,  on demand,  such amount with interest thereon  calculated
from such due date at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility.  A certificate of any Issuing Lender submitted to any
L/C  Participant  with respect to any amounts  owing under this Section shall be
conclusive in the absence of manifest error.

                  (c)  Whenever,  at any time after any Issuing  Lender has made
payment  under any  Letter  of Credit  issued  by such  Issuing  Lender  and has
received  from  any L/C  Participant  its PRO  RATA  share  of such  payment  in
accordance with Section 3.4(a), such Issuing Lender receives any payment related
to such  Letter of Credit  (whether  directly  from the  Company  or  otherwise,
including  proceeds of collateral  applied thereto by such Issuing  Lender,  but
excluding payments from L/C Participants), or any payment of interest on account
thereof,  such Issuing Lender will  distribute to such L/C  Participant  its PRO
RATA share thereof;  PROVIDED,  HOWEVER, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such Issuing
Lender,  such L/C  Participant  shall return to such Issuing  Lender the portion
thereof previously distributed by such Issuing Lender to it.

                  3.5  REIMBURSEMENT  OBLIGATION  OF THE  COMPANY.  If any draft
shall be presented  for payment under any Letter of Credit issued by any Issuing
Lender,  such Issuing Lender shall  promptly  notify the Company of the date and
amount thereof.  If any Issuing Lender notifies the Company prior to 10:00 a.m.,
New York City time,  on any  Business  Day, of any  drawing  under any Letter of
Credit  issued by it, the  Company  shall  reimburse  such  Issuing  Lender with
respect to such  drawing on the next  succeeding  Business  Day.  If any Issuing
Lender  notifies  the  Company  after  10:00  a.m.,  New York City time,  on any
Business Day of any drawing under any Letter of Credit issued by it, the Company
shall  reimburse  such Issuing Lender with respect to such drawing on the second
succeeding  Business Day. Interest shall be payable on any and all amounts drawn
under  Letters of Credit from the date of such  drawing  until the date on which
reimbursement  of such amount is due pursuant to the two  immediately  preceding
sentences at the interest rate then applicable to Base Rate Loans made under the
Revolving  Credit  Facility.  In addition,  the Company agrees to reimburse each
Issuing Lender for any taxes,  fees, charges or other costs or expenses incurred
by such Issuing Lender in connection with any payment under any Letter of Credit
issued by such  Issuing  Lender.  Each  payment by the Company  pursuant to this
Section  3.5 shall be made to the  relevant  Issuing  Lender at its  address for
notices specified herein in U.S. Dollars and in immediately available funds.


                                       42
<PAGE>


                  3.6 OBLIGATIONS ABSOLUTE. The Company's obligations under this
Section 3 shall be absolute and  unconditional  under any and all  circumstances
and  irrespective  of any setoff,  counterclaim  or defense to payment which the
Company may have or have had against any Issuing  Lender,  any  beneficiary of a
Letter of Credit or any other Person.  The Company also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible  for, and the Company's
Reimbursement  Obligations  under  Section 3.5 shall not be affected  by,  among
other things,  the validity or genuineness  of documents or of any  endorsements
thereon,  even  though  such  documents  shall  in  fact  prove  to be  invalid,
fraudulent  or  forged,  or any  dispute  between or among the  Company  and any
beneficiary  of any Letter of Credit or any other  party to which such Letter of
Credit may be  transferred or any claims  whatsoever of the Company  against any
beneficiary of such Letter of Credit or any such  transferee.  No Issuing Lender
shall be liable for any error, omission,  interruption or delay in transmission,
dispatch  or  delivery  of  any  message  or  advice,  however  transmitted,  in
connection with any Letter of Credit,  except for errors or omissions found by a
final and  nonappealable  decision of a court of competent  jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Lender.
The Company  agrees that any action taken or omitted by any Issuing Lender under
or in connection  with any Letter of Credit or the related  drafts or documents,
if  done in the  absence  of  gross  negligence  or  willful  misconduct  and in
accordance  with the standards of care specified in the Uniform  Commercial Code
of the State of New York,  shall be binding on the  Company and shall not result
in any liability of such Issuing Lender to the Company.

                  3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for  payment  under any  Letter of Credit  issued by any  Issuing  Lender,  such
Issuing Lender shall promptly notify the Company of the date and amount thereof.
The  responsibility of each Issuing Lender to the Company in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment  obligation  expressly provided for in such Letter of Credit, be limited
to determining  that the documents  (including each draft)  delivered under such
Letter of Credit  in  connection  with such  presentment  are  substantially  in
conformity with such Letter of Credit.

                  3.8  APPLICATIONS.  To the extent  that any  provision  of any
Application  related to any Letter of Credit is inconsistent with the provisions
of this Section 3 or any other  provision of this  Agreement,  the provisions of
this Section 3 or such other provisions of this Agreement shall apply.


              SECTION 4. AMOUNT AND TERMS OF THE CANADIAN TERM LOAN
                         COMMITMENTS

                  4.1 CANADIAN TERM LOAN  COMMITMENTS.  (a) Subject to the terms
and conditions hereof,  each Canadian Lender severally agrees to make term loans
(each, a "CANADIAN TERM LOAN") in Canadian  Dollars to the Canadian  Borrower on
the Closing Date in an aggregate  principal  amount not  exceeding  the Canadian
Term Loan Commitment of such Canadian Lender; PROVIDED, that after giving effect
to such Canadian Term Loans, the Total Aggregate Canadian Term Loan Outstandings
shall not exceed the Canadian Facility Maximum Amount.


                                       43
<PAGE>


                  (b) Subject to the terms and conditions hereof,  each Canadian
Lender  severally  agrees  from  time  to  time  during  the  Canadian  Facility
Commitment  Period to convert maturing  Acceptances  created by it into Canadian
Term Loans in a principal  amount not to exceed the face amount of such maturing
Acceptances;  PROVIDED,  that no such  conversion  shall occur if,  after giving
effect thereto, the Total Aggregate Canadian Term Loan Outstandings would exceed
the Canadian Facility Maximum Amount at such time.

                  4.2 PROCEDURE FOR CANADIAN TERM LOAN  BORROWING.  The Canadian
Borrower shall give the Canadian Administrative Agent irrevocable written notice
(which  notice must be received by the  Canadian  Administrative  Agent prior to
10:00 a.m.,  Toronto  time,  at least two Business  Days prior to the  requested
Borrowing  Date)  requesting  that the Canadian  Term Loan Lenders make Canadian
Term Loans (or  convert  Acceptances  into  Canadian  Term Loans) on a specified
Borrowing  Date and  specifying  the amount to be  borrowed or  converted.  Upon
receipt of such notice, the Canadian  Administrative Agent shall promptly notify
each Canadian Lender thereof.  In the case of any Canadian Term Loans other than
Canadian Term Loans  resulting from the  conversion of  Acceptances  pursuant to
Section 4.1(b),  not later than 11:00 a.m.,  Toronto time, on the Borrowing Date
therefor,  each Canadian  Term Loan Lender shall make  available to the Canadian
Administrative  Agent at its  office  specified  in  Section  14.2 an  amount in
Canadian Dollars in immediately  available funds equal to the Canadian Term Loan
to be  made  by such  Canadian  Lender  on such  Borrowing  Date.  The  Canadian
Administrative  Agent  shall on such date  credit the  account  of the  Canadian
Borrower at the office of The  Toronto-Dominion  Bank at Toronto Dominion Centre
Branch,  55 King Street West and Bay Street,  Toronto,  Ontario M5K 1A2 with the
aggregate of the amounts made available to the Canadian  Administrative Agent by
the Canadian  Lenders in like funds as received by the  Canadian  Administrative
Agent.  In the case of any Canadian Term Loans  resulting from the conversion of
Acceptances pursuant to Section 4.1(b), the proceeds of such Canadian Term Loans
made by each  Canadian  Lender,  together  with  such  additional  funds  of the
Canadian  Borrower  as may be  necessary,  shall be  applied  by it to repay the
maturing Acceptance being converted into such Canadian Term Loans.


                                       44
<PAGE>


                  4.3 REDUCTION OF CANADIAN FACILITY; REPAYMENT OF CANADIAN TERM
LOANS.  (a)  The  amount  available  under  the  Canadian  Term  Loans  and  the
Acceptances and Acceptance Notes shall be permanently  reduced in 24 consecutive
quarterly installments, commencing on August 31, 1998, each of which shall be in
an amount equal to the equivalent in Canadian Dollars  (determined in accordance
with Section  4.3(b)) of the amount set forth below  opposite  such  installment
date (each, a "CANADIAN FACILITY AMORTIZATION DATE"):

                       INSTALLMENT                         PRINCIPAL AMOUNT
                       August 31, 1998                         US$2,750,000
                       November 30, 1998                          2,750,000
                       February 28, 1999                          2,750,000
                       May 31, 1999                               2,750,000
                       August 31, 1999                            2,750,000
                       November 30, 1999                          2,750,000
                       February 28, 2000                          2,750,000
                       May 31, 2000                               2,750,000
                       August 31, 2000                            3,000,000
                       November 30, 2000                          3,000,000
                       February 28, 2001                          3,000,000
                       May 31, 2001                               3,000,000
                       August 31, 2001                            3,000,000
                       November 30, 2001                          3,000,000
                       February 28, 2002                          3,000,000
                       May 31, 2002                               3,000,000
                       August 31, 2002                            3,000,000
                       November 30, 2002                          3,000,000
                       February 28, 2003                          3,000,000
                       May 31, 2003                               3,000,000
                       August 31, 2003                            3,000,000
                       November 30, 2003                          3,000,000
                       February 28, 2004                          3,000,000
                       Canadian Facility
                       Termination Date                           3,000,000


                                       45
<PAGE>


                  Accordingly,  on each Canadian Facility Amortization Date, the
Canadian Borrower  unconditionally agrees to pay to the Canadian  Administrative
Agent,  for the  account of each  Canadian  Lender,  a  principal  amount of the
Canadian  Term Loans of such  Canadian  Lender,  which,  together  with the face
amount of Acceptances  created by such Canadian Lender that mature and are being
repaid on such date (and not replaced with other  Acceptances  or converted into
Canadian  Term Loans),  is equal to such  Canadian  Lender's  Canadian Term Loan
Commitment  Percentage of the amount set forth  opposite such Canadian  Facility
Amortization Date above.

                  (b) Not later than three  Business  Days prior to the  Closing
Date,  the  Canadian   Administrative  Agent  and  the  Canadian  Borrower  will
determine,  based on then-prevailing  market  conditions,  the exchange rate for
conversion into Canadian  Dollars of the U.S. Dollar amount of the Canadian Term
Loan  Commitments  and the U.S.  Dollar amount of each  installment set forth in
Section  4.3(a),  which  determination  shall be  conclusive  and binding on all
parties  hereto.  The  Canadian  Administrative  Agent will advise the  Canadian
Lenders of the results of such determination, and specify the amount in Canadian
Dollars of each Canadian  Lender's  Canadian Term Loan  Commitment,  prior to or
concurrently with the notice of borrowing given to the Canadian Lenders pursuant
to Section 4.2.

                  4.4 EVIDENCE OF DEBT. (a) Each Canadian  Lender shall maintain
in  accordance  with its  usual  practice  an  account  or  accounts  evidencing
indebtedness of the Canadian Borrower to such Canadian Lender resulting from the
Canadian Term Loans of such Canadian Lender,  including the amounts of principal
and interest  payable thereon and paid to such Canadian Lender from time to time
under this Agreement.

                  (b)  The  Canadian   Administrative  Agent  (and  the  General
Administrative  Agent) shall maintain the Register  pursuant to Section 14.6(d),
and a subaccount  therein for each Canadian  Lender,  in which shall be recorded
(i) the amount of each Canadian Term Loan made hereunder, (ii) the amount of any
principal  or interest  due and  payable or to become due and  payable  from the
Canadian  Borrower to each Canadian Lender  hereunder in respect of the Canadian
Term  Loans  and  (iii)  both the  amount of any sum  received  by the  Canadian
Administrative  Agent  hereunder  from the  Canadian  Borrower in respect of the
Canadian Term Loans and each Canadian Lender's share thereof.

                  (c) The entries  made in the Register and the accounts of each
Canadian  Lender  maintained  pursuant to Section  4.4(a)  shall,  to the extent
permitted  by  applicable  law, be PRIMA FACIE  evidence  of the  existence  and
amounts of the obligations of the Canadian Borrower therein recorded;  PROVIDED,
HOWEVER, that the failure of any Canadian Lender or the Canadian  Administrative
Agent to maintain the Register or any such account, or any error therein,  shall
not in any manner affect the obligation of the Canadian  Borrower to repay (with
applicable  interest) the Canadian  Term Loans made to the Canadian  Borrower by
such Canadian Lender in accordance with the terms of this Agreement.


                                       46
<PAGE>


                  (d) The Canadian  Borrower  agrees  that,  upon request to the
Canadian  Administrative  Agent by any  Canadian  Lender,  it will  execute  and
deliver to such  Canadian  Lender a  promissory  note of the  Canadian  Borrower
evidencing the Canadian Term Loans of such Canadian Lender, substantially in the
form of Exhibit E with  appropriate  insertions as to date and principal  amount
(each, a "CANADIAN TERM LOAN NOTE").


                 SECTION 5. AMOUNT AND TERMS OF THE ACCEPTANCES

                  5.1  ACCEPTANCE  COMMITMENTS.  (a)  Pursuant  to the  Existing
Credit  Agreement,  the Canadian  Lenders (as defined under the Existing  Credit
Agreement,  the "EXISTING  ACCEPTANCE LENDERS") have created (i) the Acceptances
described on Schedule 1.1D (the  "EXISTING  ACCEPTANCES"),  which from and after
the Closing  Date shall  continue  to be  "Acceptances"  hereunder  and (ii) the
Acceptances described on Schedule 1.1E (the "SPECIFIED ACCEPTANCES"), which will
be  repaid  in  full  on  the  Closing  Date.  As of  the  Closing  Date,  The
Toronto-Dominion  Bank,  as a  Canadian  Lender,  shall  have  entered  into  an
indemnity agreement with the Existing Acceptance Lenders with respect to amounts
to be paid  to the  Existing  Acceptance  Lenders  in  respect  of the  Existing
Acceptances  and, as of the Closing  Date,  The  Toronto-Dominion  Bank shall be
deemed to have  created all of the Existing  Acceptances.  In the event that any
Acceptances  are outstanding on the date on which any Canadian Lender other than
The  Toronto-Dominion  Bank  becomes a party to this  Agreement,  such  Canadian
Lender shall enter into an indemnity  agreement with The  Toronto-Dominion  Bank
with respect to such Existing Acceptances, in form and substance satisfactory to
such Canadian Lender and The Toronto-Dominion Bank.

                  (b) Subject to the terms and conditions hereof,  each Canadian
Lender  severally  agrees  during the  Canadian  Facility  Commitment  Period to
convert  Canadian Term Loans made by such Canadian  Lender to  Acceptances in an
aggregate  face  amount not to exceed  the  aggregate  principal  amount of such
Canadian Term Loans; provided, that no such conversion shall occur if, (i) after
giving effect to such conversion and to the repayment of any portion of maturing
Acceptances  not being so  converted,  the Total  Aggregate  Canadian  Term Loan
Outstandings  would exceed the Canadian  Facility Maximum Amount at such time or
(ii) prior to the maturity of such Acceptances a Canadian Facility  Amortization
Date will  occur and,  after  giving  effect to the  reduction  in the  Canadian
Facility  Maximum  Amount on such date, the Total  Aggregate  Canadian Term Loan
Outstandings will exceed the Canadian  Facility Maximum Amount.  Notwithstanding
the foregoing,  during the period prior to completion of the  Syndication of the
Facilities,  the Canadian Borrower will consult with the Canadian Administrative
Agent with  respect to any  request for  Acceptances,  and during such period no
Acceptance  will be created  having a maturity  later than the date on which the
syndication of the Facilities is expected to be completed.

                  5.2 CREATION OF  ACCEPTANCES.  (a) The  Canadian  Borrower may
request the  creation of  Acceptances  hereunder by  submitting  to the Canadian
Administrative  Agent at its office in Canada specified in Section 14.2 prior to
11:00 a.m.,  Toronto time,  two Business  Days prior to the requested  Borrowing
Date, (i) a request for  acceptances,  substantially  in the form of Exhibit A-2
(each, a "REQUEST FOR ACCEPTANCES") completed in a manner and in form and


                                       47
<PAGE>


substance  reasonably  satisfactory  to the  Canadian  Administrative  Agent and
specifying, among other things, the Borrowing Date, term in months and amount of
the Drafts to be  accepted  and  discounted,  and (ii) such other  certificates,
documents and other papers and information as the Canadian  Administrative Agent
may reasonably  request.  Upon receipt of any such Request for Acceptances,  the
Canadian  Administrative  Agent shall  promptly  notify each Canadian  Lender of
details thereof,  including each Canadian Lender's share of the amount of Drafts
to be accepted and discounted.

                  (b) The Canadian Borrower hereby  irrevocably  authorizes each
Canadian  Lender to draw Drafts on such Canadian  Lender,  in the name of and on
behalf of the Canadian Borrower,  and to complete such Drafts in accordance with
the Requests for  Acceptances  submitted  from time to time  pursuant to Section
5.2(a). Drafts so completed and signed on behalf of the Canadian Borrower by any
Canadian Lender shall bind the Canadian  Borrower as fully and effectively as if
so performed by an  authorized  officer of the Canadian  Borrower.  Any executed
Drafts  which are held by any Canadian  Lender need only be held in  safekeeping
with the same degree of care as if they were such Canadian Lender's own property
and such  Canadian  Lender was keeping them at the place at which they are to be
held.  The  Canadian   Borrower   shall,  by  written  notice  to  the  Canadian
Administrative  Agent,  designate  the persons  authorized  to sign Requests for
Acceptance.  Neither the Canadian  Administrative  Agent nor any Canadian Lender
nor any of their respective  directors,  officers,  employees or representatives
shall be liable for any action taken or omitted to be taken by any of them under
this Section 5 except for its own gross negligence or willful misconduct.

                  (c) Each Request for  Acceptances  made by or on behalf of the
Canadian Borrower hereunder shall contain a request for Acceptances  denominated
in Canadian  Dollars and having an aggregate  undiscounted  face amount equal to
C$5,000,000  or  a  whole  multiple  of  C$1,000,000  in  excess  thereof.  Each
Acceptance  shall be dated the  Borrowing  Date  specified  in the  Request  for
Acceptances with respect thereto and shall be stated to mature on a Business Day
which is not less than one month  and not more  than six  months  after the date
thereof;  PROVIDED,  that no Acceptance shall mature after the Canadian Facility
Termination Date.

                  (d) Not later than 12:00 noon,  Toronto time, on the Borrowing
Date specified in the relevant  Request for  Acceptances,  each Canadian  Lender
will, in accordance  with such Request for  Acceptances,  (i) sign each Draft on
behalf of the Canadian  Borrower  pursuant to Section 5.3(b),  (ii) complete the
date, amount and maturity of each Draft to be accepted, (iii) accept such Drafts
and give notice to the Canadian Administrative Agent of such acceptance and (iv)
upon such acceptance,  purchase such  Acceptances to the extent  contemplated by
Section 5.3.

                  5.3 PURCHASE OF  ACCEPTANCES.  (a) Each Canadian Lender hereby
agrees,  on the terms and subject to the conditions set forth in this Agreement,
to purchase Acceptances created by it on the Borrowing Date with respect thereto
for  the  applicable  Acceptance  Purchase  Price  and to  notify  the  Canadian
Administrative  Agent that such Draft has been  accepted  and  purchased by such
accepting Canadian Lender.


                                       48
<PAGE>


                  (b)  In the  event  that  the  Canadian  Administrative  Agent
receives a Request for  Acceptances  to be created upon  conversion  of Canadian
Term Loans pursuant to Section 5.1, then the Canadian  Borrower shall pay on the
requested Borrowing Date to the Canadian  Administrative  Agent, for the account
of the Canadian Lenders,  the principal amount of the then outstanding  Canadian
Term  Loans  being so  converted,  and each  Canadian  Lender  shall  accept and
purchase  the Canadian  Borrower's  Drafts  having an aggregate  face amount not
greater than the  principal  amount of the Canadian  Term Loans of such Canadian
Lender which are then being  converted (it being  understood and agreed that for
the purposes of this Section  5.3(b),  such payment by the Canadian  Borrower of
such outstanding Canadian Term Loans may be in part from the Acceptance Purchase
Price of such Drafts);  PROVIDED  that,  following the occurrence and during the
continuance of a Default or an Event of Default, no Acceptances may be created.

                  (c)  Acceptances  purchased by any Canadian Lender may be held
by it for its own account until maturity or sold by it at any time prior thereto
in the  relevant  market  therefor  in Canada  in such  Canadian  Lender's  sole
discretion.

                  5.4 STAMPING  FEES. On the Borrowing Date with respect to each
Acceptance,  the  Canadian  Borrower  shall pay to the  Canadian  Administrative
Agent,  for  the  account  of  the  Canadian  Lenders,  a  stamping  fee  on the
undiscounted  face amount of such Acceptance,  computed at the rate per annum in
effect on such Borrowing Date  (determined in accordance  with the Pricing Grid)
for the  period  from and  including  the  Borrowing  Date with  respect to such
Acceptance to but not including the maturity of such Acceptance.  On the Closing
Date, in  consideration  of the obligations  undertaken by The  Toronto-Dominion
Bank  pursuant to the  indemnity  agreement  entered into pursuant to the second
sentence  of  Section  5.1(a),  the  Canadian  Borrower  agrees  to  pay  to The
Toronto-Dominion  Bank an amount in respect of each Existing Acceptance equal to
(i) the amount of stamping fee that would have been  payable  under this Section
in respect of such  Existing  Acceptance if such  Existing  Acceptance  had been
created on the Closing  Date with the maturity  date set forth in such  Existing
Acceptance   LESS  (ii)  the  amount   received   or  to  be   received  by  The
Toronto-Dominion Bank from the relevant Existing Acceptance Lender in respect of
such Existing Acceptance pursuant to the provisions of such indemnity agreement.
                                                                                
                  5.5  ACCEPTANCE  REIMBURSEMENT OBLIGATIONS.  (a) The  Canadian
Borrower  hereby  unconditionally  agrees to pay to the Canadian  Administrative
Agent for the account of each Canadian Lender,  on the maturity date (whether at
stated  maturity,  by acceleration or otherwise) for each Acceptance  created by
such  Canadian  Lender,  the  aggregate  undiscounted  face  amount of each such
then-maturing Acceptance.  Without limiting the generality of the foregoing, the
Canadian  Borrower  hereby   unconditionally  agrees  to  pay  to  the  Canadian
Administrative  Agent for the  account  of The  Toronto-Dominion  Bank (and each
other  Canadian  Lender which has an interest  therein  pursuant to an indemnity
agreement  entered into pursuant to the last sentence of Section  5.1(a)) on the
maturity date (whether at stated  maturity,  by  acceleration  or otherwise) for
each Existing  Acceptance,  the aggregate  undiscounted face amount of each such
then-maturing Existing Acceptance.


                                       49
<PAGE>


                  (b) The  obligation of the Canadian  Borrower to reimburse the
Canadian Lenders for then-maturing  Acceptances may be satisfied by the Canadian
Borrower by:

                      (i) paying to the Canadian  Administrative  Agent, for the
         account of the Canadian  Lenders,  an amount in Canadian Dollars and in
         immediately  available funds equal to the aggregate  undiscounted  face
         amount  of all  Acceptances  which  are then  maturing  by 12:00  noon,
         Toronto  time,  on such  maturity  date;  PROVIDED  that  the  Canadian
         Borrower shall have given not less than two Business Days' prior notice
         to the Canadian  Administrative Agent (which shall promptly notify each
         Canadian  Lender  thereof)  of its  intent to  reimburse  the  Canadian
         Lenders in the manner contemplated by this clause (i); or

                     (ii)  having  new  Drafts  accepted  and  purchased  by the
         Canadian Lenders in the manner  contemplated by Sections 5.2 and 5.3 in
         substitution for the then-maturing  Acceptances;  PROVIDED that (A) the
         Canadian  Borrower shall have delivered to the Canadian  Administrative
         Agent (which  shall  promptly  provide a copy thereof to each  Canadian
         Lender) a duly completed  Request for  Acceptances not later than 11:00
         a.m.,  Toronto time,  two Business  Days prior to such  maturity  date,
         together with the documents, instruments, certificates and other papers
         and information  contemplated by Sections  5.2(a)(ii) and  5.2(a)(iii),
         (B) each Canadian Lender shall retain the Acceptance Purchase Price for
         the Acceptance  created by it and apply such Acceptance  Purchase Price
         to the Acceptance Reimbursement Obligations of the Canadian Borrower in
         respect of the maturing Acceptance created by such Canadian Lender, (C)
         when the Acceptance  Purchase Price so retained by such Canadian Lender
         is  less  than  the  undiscounted  face  amount  of  the  then-maturing
         Acceptance,   the  Canadian   Borrower  shall  have  made  arrangements
         reasonably  satisfactory  to such  Canadian  Lender for payment of such
         deficiency,  (D) if any Default or Event of Default has occurred and is
         then  continuing,  the Request for Acceptances  shall be deemed to be a
         request to convert such  then-maturing  Acceptances  into Canadian Term
         Loans in an aggregate amount equal to the  undiscounted  face amount of
         the Acceptances requested,  (E) no such Acceptance shall be created if,
         after  giving  effect  thereto,   the  Aggregate   Canadian  Term  Loan
         Outstandings  would exceed the Canadian Facility Maximum Amount and (F)
         the Canadian  Borrower  shall request  Acceptances  in amounts and with
         maturity dates such that the Aggregate  Canadian Term Loan Outstandings
         can be reduced  to an amount not  greater  than the  Canadian  Facility
         Maximum Amount on each Canadian Facility Amortization Date; or

                    (iii) to the extent that the Canadian Borrower has not given
         to the Canadian  Administrative  Agent a notice  contemplated by clause
         (i) or (ii) above,  then the Canadian  Borrower shall be deemed to have
         requested a conversion pursuant to Section 4.1(b) of such then-maturing
         Acceptances  into Canadian Term Loans in an aggregate  principal amount
         equal  to  the   undiscounted   face   amount  of  such   then-maturing
         Acceptances.  The Borrowing Date with respect to such conversion  shall
         be the maturity  date for such  Acceptances.  Except to the extent that
         any of the events  contemplated  by clause (i) or (ii) of paragraph (f)
         of Section 11 with respect to the Canadian Borrower has


                                       50
<PAGE>


         occurred and is then  continuing  (in which case the Canadian  Borrower
         shall be obligated to pay to each Canadian Lender the undiscounted face
         amount of the  Acceptances  created by such  Canadian  Lender which are
         then maturing),  each Canadian  Lender shall convert the  then-maturing
         Acceptances  into Canadian Term Loans as  contemplated  by this Section
         5.5(b)(iii) regardless of whether the conditions precedent to borrowing
         set forth in this  Agreement  are then  satisfied.  The proceeds of any
         Canadian Term Loans made pursuant to this Section  5.5(b)(iii) shall be
         retained by the Canadian  Lenders and applied by them to the Acceptance
         Reimbursement  Obligations  of the Canadian  Borrower in respect of the
         then-maturing Acceptances.

                  (c) In no event  shall the  Canadian  Borrower  claim from any
Canadian  Lender any grace period with respect to the payment at maturity of any
Acceptances created by such Canadian Lender pursuant to this Agreement.

                  5.6  ACCEPTANCES  TO BE  ALLOCATED  IN  ORDER  TO  BE  CREATED
RATABLY.  The Canadian Borrower hereby agrees that each Request for Acceptances,
reimbursement   of  Acceptances   and  conversion  of  Canadian  Term  Loans  to
Acceptances  shall be made in a manner so that any such Request for Acceptances,
reimbursement  or  conversion  shall apply  ratably to all  Canadian  Lenders in
accordance with their respective Canadian Term Loan Commitment  Percentages.  In
the event that the aggregate  undiscounted face amount of Acceptances  requested
by the  Canadian  Borrower  to be  created  by all  Canadian  Lenders  hereunder
pursuant to any Request for  Acceptances is an amount which,  if divided ratably
among the Canadian  Lenders in accordance  with their  respective  Canadian Term
Loan Commitment Percentages,  would not result in each Canadian Lender accepting
a Draft which has an  undiscounted  face amount  equal to  C$100,000  or a whole
multiple of C$100,000 in excess thereof, then the Canadian  Administrative Agent
is  authorized  by the Canadian  Borrower  and the Canadian  Lenders to allocate
among the  Canadian  Lenders  the  Acceptances  to be issued in such  manner and
amounts as the Canadian Administrative Agent may, in its sole discretion, acting
reasonably,  consider  necessary,  rounding up or down,  so as to ensure that no
Canadian Lender is required to accept a Draft for a fraction of $100,000 and, in
such event, the Canadian Lenders' ratable share with respect to such Acceptances
shall be adjusted accordingly.

                  5.7 SPECIAL  PROVISIONS  RELATING TO ACCEPTANCE NOTES. (a) The
Canadian  Borrower and each Canadian  Lender hereby  acknowledge  and agree that
from time to time certain Canadian Lenders may not be authorized to or may, as a
matter of market  availability,  elect not to accept  Drafts,  and the  Canadian
Borrower  and each  Canadian  Lender  agree  that any such  Canadian  Lender may
purchase  Acceptance  Notes of the  Canadian  Borrower  in  accordance  with the
provisions of Section 5.7(b) in lieu of creating Acceptances for its account.

                  (b) In the event that any Canadian Lender described in Section
5.7(a) above is unable to, or elects as a matter of market  availability not to,
create Acceptances hereunder,  such Canadian Lender shall not create Acceptances
hereunder,  but rather,  if the Canadian  Borrower requests the creation of such
Acceptances,  the  Canadian  Borrower  shall  deliver  to such  Canadian  Lender
non-interest  bearing  promissory  notes  (each,  an  "ACCEPTANCE  NOTE") of the
Canadian


                                       51
<PAGE>


Borrower,  substantially  in the form of Exhibit G, having the same  maturity as
the Acceptances to be created and in an aggregate  principal amount equal to the
undiscounted face amount of such  Acceptances.  Each such Canadian Lender hereby
agrees to purchase  Acceptance  Notes from the  Canadian  Borrower at a purchase
price equal to the Acceptance Purchase Price which would have been applicable if
a Draft in the  same  aggregate  face  amount  as the  principal  amount  of its
Acceptance Notes had been accepted by it (less any stamping fee which would have
been paid pursuant to Section 5.4 if such Lender had created an Acceptance)  and
such  Acceptance  Notes shall be governed by the provisions of this Section 5 as
if they were Acceptances.


              SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS AND
                         LETTERS OF CREDIT

                  6.1 COMMITMENT FEES, ETC. (a) The Company agrees to pay to the
General  Administrative  Agent for the account of each Revolving Credit Lender a
commitment  fee for the period from and  including  the Closing Date to the last
day of the Revolving Credit  Commitment  Period,  computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender  during the period for which payment is made,  payable  quarterly in
arrears on the last day of each  February,  May,  August and November and on the
Revolving  Credit  Termination  Date,  commencing  on the first of such dates to
occur after the date hereof.

                  (b) The Company  agrees to pay to the  General  Administrative
Agent for the account of each of the U.S. Term Loan Lenders a commitment fee for
the period from and including the Closing Date to the last day of U.S. Term Loan
Commitment  Period,  computed at the  Commitment  Fee Rate on the average  daily
amount of the unutilized  U.S. Term Loan  Commitments of such Lender during such
period,  payable  quarterly  in arrears on the last day of each  February,  May,
August and November and on the last day of the U.S. Term Loan Commitment Period,
commencing on the first of such dates to occur after the date hereof.

                  (c) The Company  agrees to pay to the  General  Administrative
Agent and the  Arranger  the fees in the  amounts  and on the  dates  previously
agreed to in writing by the Company and the General Administrative Agent and the
Arranger.

                  6.2 OPTIONAL  PREPAYMENTS.  (a) Subject to the  provisions  of
Section  6.3(i),  the  Company  may at any time and from time to time prepay the
U.S. Loans, in whole or in part, without premium or penalty, upon at least three
Business  Days'  irrevocable  notice  to  the  General   Administrative   Agent,
specifying  the date and amount of prepayment  and whether the  prepayment is of
LIBOR Loans or Base Rate Loans, PROVIDED, that if a LIBOR Loan is prepaid on any
day other  than the last day of the  Interest  Period  applicable  thereto,  the
Company shall also pay any amounts owing pursuant to Section 6.13.  Upon receipt
of any such notice, the General  Administrative Agent shall promptly notify each
relevant U.S. Lender thereof.  If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein,  together
with any amounts  payable  pursuant to Section  6.13 and,  except in the case of
Revolving


                                       52
<PAGE>


Credit  Loans that are Base Rate  Loans,  accrued  interest  to such date on the
amount  prepaid.  Amounts  prepaid on account of the U.S.  Term Loans may not be
reborrowed. Partial prepayments of U.S. Loans shall be in an aggregate principal
amount of not less than  $5,000,000 and whole  multiples of $1,000,000 in excess
thereof.

                  (b)  Subject to Section  6.3(i),  the amount of each  optional
prepayment of the U.S. Term Loans under any Facility  shall be applied to reduce
the then remaining  installments of the U.S. Term Loans under such Facility, PRO
RATA based upon the then remaining number of installments thereof,  after giving
effect to all prior reductions thereto (I.E., each then remaining installment of
the Tranche A Term Loans,  Tranche B Term Loans or Tranche C Term Loans,  as the
case may be, shall be reduced by an amount equal to the  aggregate  amount to be
applied  to the  Tranche A Term  Loans,  Tranche B Term  Loans or Tranche C Term
Loans,  as the  case  may  be,  divided  by the  number  of the  then  remaining
installments  for such  Tranche A Term Loans,  Tranche B Term Loans or Tranche C
Term Loans);  PROVIDED,  that if the amount to be so applied to any  installment
would exceed the then remaining amount of such installment, then an amount equal
to such excess shall be applied to the next succeeding  installment after giving
effect to all prior  reductions  thereto  (including  the amount of  prepayments
theretofore allocated pursuant to the preceding portion of this sentence).

                  (c) The  Canadian  Borrower  may at any time and from  time to
time prepay the Canadian  Term Loans,  in whole or in part,  without  premium or
penalty,  upon at least four Business Days'  irrevocable  notice to the Canadian
Administrative Agent, specifying the date and amount of prepayment. Upon receipt
of any such notice, the Canadian  Administrative Agent shall promptly notify the
General  Administrative  Agent and each  Canadian  Lender  thereof.  If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified  therein,  together with accrued interest to such date on the
amount prepaid. Amounts prepaid on account of the Canadian Term Loans may not be
reborrowed except as provided in Section 5. Partial prepayments of Canadian Term
Loans shall be in an aggregate principal amount of not less than C$5,000,000 and
whole multiples of C$1,000,000 in excess thereof.

                  (d) The amount of each  optional  prepayment  of the  Canadian
Term Loans  shall be applied to reduce the then  remaining  installments  of the
Canadian  Term  Loans  PRO  RATA  based  upon  the  then  remaining   number  of
installments thereof, after giving effect to all prior reductions thereto (I.E.,
each then  remaining  installment of the Canadian Term Loans shall be reduced by
an amount equal to the aggregate amount to be applied to the Canadian Term Loans
divided by the number of the then remaining  installments for such Canadian Term
Loans);  PROVIDED,  that if the amount to be so applied to any installment would
exceed the then remaining  amount of such  installment,  then an amount equal to
such excess  shall be applied to the next  succeeding  installment  after giving
effect to all prior  reductions  thereto  (including  the amount of  prepayments
theretofore allocated pursuant to the preceding portion of this sentence).


                                       53
<PAGE>


                  6.3 MANDATORY  PREPAYMENTS AND COMMITMENT  REDUCTIONS.  (a) If
after the Closing  Date any Capital  Stock shall be sold or issued by  Holdings,
the Company or any of its Subsidiaries (including, without limitation, any sales
pursuant to the exercise of warrants,  but  excluding (i) any issuance of common
stock in payment of interest under the Seller Note, (ii) any Permitted  Employee
Stock  Issuances,  to the extent the proceeds of such  Permitted  Employee Stock
Issuances are  contributed  by Holdings to the Company and (iii) the issuance of
common stock of Holdings as a part of the  consideration  for the Exchange Offer
and the Merger),  an amount equal to 50% of the Net Cash Proceeds  thereof shall
be applied within three Business Days after the date of receipt of such Net Cash
Proceeds  toward  the  prepayment  of the Term  Loans  and  Acceptances  and the
reduction of the Revolving Credit Commitments as set forth in Section 6.3(e).

                  (b) If after the Closing Date any Indebtedness shall be issued
or incurred by Holdings,  the Company or any of its Subsidiaries  (excluding any
Indebtedness (other than Indebtedness evidenced by High Yield Notes) incurred in
accordance  with  Section 10.2 as in effect on the date of this  Agreement),  an
amount equal to 100% of the Net Cash Proceeds  thereof  shall be applied  within
three  Business Days after the date of such  issuance or  incurrence  toward the
prepayment  of the Term  Loans  and the  Acceptances  and the  reduction  of the
Revolving Credit  Commitments  (or, if required by Section 6.3(e),  reduction of
the Tranche B-1 Term Loan Commitments and the Tranche C-1 Term Loan Commitments)
as set forth in Section 6.3(e).

                  (c) If  after  the  Closing  Date  the  Company  or any of its
Subsidiaries (other than the Canadian Borrower or any of its Subsidiaries) shall
receive Net Cash Proceeds from any Asset Sale  (including,  without  limitation,
any Net Cash Proceeds from any Dispositions  permitted by clauses (e) and (f) of
Section 10.6 to the extent such proceeds  exceed  $225,000,000 in the aggregate)
or Recovery  Event,  an amount equal to 100% of such Net Cash Proceeds  shall be
applied  on such date  toward  the  prepayment  of the U.S.  Term  Loans and the
reduction of the Revolving Credit Commitments as set forth in Section 6.3(f). If
after the Closing Date the Canadian  Borrower or any of its  Subsidiaries  shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event, an amount equal
to 100% of such Net Cash  Proceeds  shall be  applied  on such date  toward  the
prepayment  of the  Total  Aggregate  Canadian  Term Loan  Outstandings  and the
permanent  reduction of the  Canadian  Facility  Maximum  Amount as set forth in
Section  6.3(g).  Notwithstanding  the  foregoing,  (i) no  such  prepayment  or
reduction  shall be  required  in respect of Asset  Sales for which the Net Cash
Proceeds in any fiscal year  aggregate up to (but do not exceed)  $5,000,000 (in
the  aggregate  for the Company and its  Subsidiaries,  including  the  Canadian
Borrower and its Subsidiaries) and (ii) no such prepayment or reduction shall be
required  in respect of any Asset  Sales or any  Recovery  Event if the  Company
delivers a  Reinvestment  Notice in respect of each such Asset Sale and Recovery
Event; PROVIDED,  that, on each Reinvestment Prepayment Date, an amount equal to
the  Reinvestment  Prepayment  Amount with respect to the relevant  Reinvestment
Event shall be applied toward the prepayments and reductions required by Section
6.3(f) or 6.3(g),  as applicable;  and PROVIDED,  FURTHER,  that no Reinvestment
Notice  shall be required in respect of Asset Sales for which no  prepayment  is
required pursuant to the foregoing clause (i) of this sentence.


                                       54
<PAGE>


                  (d) If, for any fiscal  year of Holdings  commencing  with the
fiscal  year  ending  August 31,  1999,  Holdings  shall have  Excess  Cash Flow
(calculated   without  taking  into  account  the  Canadian   Borrower  and  its
Subsidiaries),  the Company shall, on the relevant Excess Cash Flow  Application
Date, apply 75% of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving  Credit  Commitments  as set forth in Section
6.3(f).  If, for any fiscal year of the Canadian  Borrower  commencing  with the
fiscal year ending August 31, 1999, the Canadian Borrower shall have Excess Cash
Flow, the Canadian  Borrower shall, on the relevant Excess Cash Flow Application
Date,  apply 75% of such  Excess Cash Flow  toward the  prepayment  of the Total
Aggregate  Canadian Term Loan  Outstandings  and the permanent  reduction of the
Canadian  Facility  Maximum  Amount as set forth in  Section  6.3(g).  Each such
prepayment  and  reduction  shall  be  made  on a date  (an  "EXCESS  CASH  FLOW
APPLICATION  DATE") no later than five days after the earlier of (i) the date on
which the financial  statements of Holdings  referred to in Section 9.1(a),  for
the fiscal year with respect to which such  prepayment is made,  are required to
be  delivered  to the Lenders and (ii) the date such  financial  statements  are
actually delivered.  Notwithstanding  the foregoing,  if for any fiscal year the
Excess Cash Flow of one of the Canadian Borrower or Holdings (calculated without
taking into account the Canadian Borrower and its Subsidiaries), as the case may
be, is a negative number, and the Excess Cash Flow of the other such Person is a
positive  number,  the amount of the prepayment  and reduction  required by this
Section  6.3(d) in respect of the  Company  (if  Holdings  is the Person  having
positive Excess Cash Flow) or the Canadian Borrower (if the Canadian Borrower is
the Person  having  positive  Excess  Cash Flow) for such  fiscal  year shall be
reduced by the amount of the negative  Excess Cash Flow of the other such Person
for such fiscal year.

                  (e) Amounts to be applied in connection  with  prepayments and
Commitment  reductions  made  pursuant  to  Section  6.3(a) or  6.3(b)  shall be
applied,  FIRST,  to the  prepayment of the U.S. Term Loans and Total  Aggregate
Canadian  Term Loan  Outstandings,  ratably in accordance  with the  outstanding
amount of each Facility and, SECOND, to reduce  permanently the Revolving Credit
Commitments.   Notwithstanding  the  preceding  sentence,  any  prepayment  made
pursuant to Section 6.3(b) with the Net Cash Proceeds of the High Yield Offering
shall be  applied,  FIRST,  to prepay the Tranche B-1 Term Loans and the Tranche
C-1 Term Loans,  ratably in accordance with the outstanding amounts thereof (or,
if the High Yield Offering is consummated  prior to the Merger Date, such amount
shall be applied to permanently reduce the Tranche B-1 Term Loan Commitments and
the Tranche C-1 Term Loan  Commitments)  and,  SECOND,  in  accordance  with the
preceding sentence. Any such reduction of the Revolving Credit Commitments shall
be  accompanied  by prepayment of the Revolving  Credit Loans to the extent,  if
any,  that the Total  Revolving  Extensions  of Credit  exceed the amount of the
aggregate  Revolving  Credit  Commitments  as so reduced,  PROVIDED  that if the
aggregate  principal  amount of Revolving  Credit Loans then outstanding is less
than the amount of such excess  (because  L/C  Obligations  constitute a portion
thereof), the Company shall not be required to reduce any outstanding Letters of
Credit.  The application of any such prepayment of U.S. Term Loans shall be made
first to Base Rate Loans and second to LIBOR Loans.  The application of any such
prepayment  to Total  Aggregate  Canadian Term Loan  Outstandings  shall be made
first to Canadian  Term Loans and second (but only on the maturity date thereof)
to  Acceptances.  Each  such  prepayment  of the  Loans  (except  in the case of
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.


                                       55
<PAGE>


                  (f) Amounts to be applied in connection  with  prepayments and
reductions made pursuant to Section 6.2(c), the first sentence of Section 6.3(c)
or the  first  sentence  of  Section  6.3(d)  shall be  applied,  FIRST,  to the
prepayment of the U.S. Term Loans,  ratably in  accordance  with the  respective
outstanding  amounts of the Facilities,  and, SECOND, to reduce  permanently the
Revolving  Credit  Commitments.  Any  such  reduction  of the  Revolving  Credit
Commitments  shall be accompanied by prepayment of the Revolving Credit Loans to
the extent,  if any,  that the Total  Revolving  Extensions of Credit exceed the
amount of the aggregate  Revolving  Credit  Commitments as so reduced,  PROVIDED
that  if  the  aggregate   principal  amount  of  Revolving  Credit  Loans  then
outstanding  is less than the amount of such  excess  (because  L/C  Obligations
constitute a portion  thereof),  the Company shall not be required to reduce any
outstanding  Letters of Credit.  The  application of any such prepayment of U.S.
Term Loans  shall be made  first to Base Rate  Loans and second to LIBOR  Loans.
Each such prepayment of the Loans (except in the case of Revolving  Credit Loans
that are Base Rate Loans) shall be accompanied  by accrued  interest to the date
of such prepayment on the amount prepaid.

                  (g) Amounts to be applied in connection  with  prepayments and
reductions  made  pursuant  to Section  6.2(c),  the second  sentence of Section
6.3(c)  or the  second  sentence  of  Section  6.3(d)  shall be  applied  to the
reduction  of the  Total  Aggregate  Canadian  Term  Loan  Outstandings  and the
simultaneous and automatic reduction in an equal amount of the Canadian Facility
Maximum  Amount.  The  application  of any such  prepayment  to Total  Aggregate
Canadian Term Loan  Outstandings  shall be made first to Canadian Term Loans and
second  (but  only on the  maturity  date  thereof)  to  Acceptances.  Each such
prepayment of the Canadian Term Loans shall be accompanied  by accrued  interest
to the date of such prepayment on the amount prepaid.

                  (h) The amount of each prepayment of the Tranche A Term Loans,
Tranche B Term Loans,  Tranche C Term Loans or Canadian Term Loans,  as the case
may be,  required  pursuant  to this  Section 6.3 shall be applied to reduce the
then remaining  installments of the Term Loans under the relevant Facility,  PRO
RATA  based  upon  the  then  remaining  outstanding  principal  amount  of such
installments.

                  (i) Notwithstanding anything in Section 6.2(a), Section 6.3(e)
or Section  6.3(f) to the contrary  and  provided  that there are Tranche A Term
Loans and/or Total Aggregate  Canadian Term Loan  Outstandings then outstanding,
with  respect  to the amount of any  optional  prepayment  described  in Section
6.2(a) or mandatory prepayment described in Section 6.3 that is allocated to the
Tranche B Term Loans or  Tranche C Term  Loans  (such  amounts,  the  "TRANCHE B
PREPAYMENT  AMOUNT" and the "TRANCHE C PREPAYMENT  AMOUNT",  respectively),  the
Company  will,  in lieu of applying  such amount to the  prepayment of Tranche B
Term Loans and Tranche C Term Loans, respectively, as provided in Section 6.2(a)
or Section  6.3(e) or (f), as the case may be, on the date  specified in Section
6.2(a) or Section 6.3, as the case may be, for such prepayment, give the General
Administrative   Agent  telephonic   notice  (promptly   confirmed  in  writing)
requesting  that the General  Administrative  Agent  prepare and provide to each
Tranche B Lender  and  Tranche C Lender a notice  (each,  a  "PREPAYMENT  OPTION
NOTICE") as described  below.  As promptly as practicable  after  receiving such
notice from the Company, the General Administrative


                                       56
<PAGE>


Agent  will  send to each  Tranche  B Lender  and  Tranche  C Lender a notice (a
"PREPAYMENT OPTION NOTICE"),  which shall be in the form of Exhibit H, and shall
include  an  offer by the  Company  to  prepay  on the  date  (each a  "PROPOSED
PREPAYMENT  DATE")  that is 15 days  after  the  date of the  Prepayment  Option
Notice, the Tranche B Term Loans or Tranche C Term Loans, as the case may be, of
such Lender by an amount equal to the portion of the Tranche B Prepayment Amount
or Tranche C Prepayment  Amount  indicated in such  Lender's  Prepayment  Option
Notice as being  applicable to such  Lender's  Tranche B Term Loans or Tranche C
Term Loans, as the case may be. On the Proposed Prepayment Date, (A) the Company
shall pay to the General  Administrative Agent the aggregate amount necessary to
prepay that  portion of the  outstanding  Tranche B Term Loans or Tranche C Term
Loans,  as the case may be, in respect of which  Tranche B Lenders and Tranche C
Lenders  have  accepted  prepayment  as  described  above  (such  Lenders,   the
"ACCEPTING  LENDERS"),  and such amount shall be applied to reduce the Tranche B
Prepayment Amount and Tranche C Prepayment  Amount, as applicable,  with respect
to  each  Accepting  Lender  and  (B)  the  Company  shall  pay to  the  General
Administrative  Agent an amount  equal to 100% of the  portion of the  Tranche B
Prepayment  Amount and Tranche C Prepayment Amount not accepted by the Accepting
Lenders,  and  such  amount  shall  be  applied  (i) in  the  case  of  optional
prepayments pursuant to Section 6.2, to prepay the Tranche A Term Loans and (ii)
in the case of mandatory  prepayments,  to the other  Facilities  required to be
prepaid  pursuant  to  Section  6.3(e) or  Section  6.3(f),  as the case may be,
ratably in accordance with the outstanding amounts thereof.

                  6.4 CONVERSION AND CONTINUATION  OPTIONS.  (a) The Company may
elect from time to time to convert LIBOR Loans to Base Rate Loans, by giving the
General  Administrative  Agent at least two  Business  Days'  prior  irrevocable
notice of such  election;  PROVIDED that any such  conversion of LIBOR Loans may
only be made on the last day of an Interest  Period with  respect  thereto.  The
Company may elect from time to time to convert Base Rate Loans to LIBOR Loans by
giving the  General  Administrative  Agent at least three  Business  Days' prior
irrevocable  notice of such  election.  Any such notice of  conversion  to LIBOR
Loans  shall  specify  the length of the  initial  Interest  Period or  Interest
Periods  therefor.  Upon  receipt of any such notice the General  Administrative
Agent shall promptly  notify each affected  Lender  thereof.  All or any part of
outstanding LIBOR Loans and Base Rate Loans may be converted as provided herein,
PROVIDED that (i) no Base Rate Loan under a particular Facility may be converted
into a LIBOR Loan when any Event of Default has occurred and is  continuing  and
the General Administrative Agent has or the Majority Facility Lenders in respect
of such Facility have  determined  in its or their sole  discretion  that such a
conversion  is not  appropriate  and (ii) no Loan may be converted  into a LIBOR
Loan after the date that is one month prior to the final  maturity  date of such
Facility.

                  (b)  Any  LIBOR  Loans  may be  continued  as  such  upon  the
expiration  of the then  current  Interest  Period with  respect  thereto by the
Company giving notice to the General  Administrative  Agent,  in accordance with
the  applicable  provisions of the term  "Interest  Period" set forth in Section
1.1, of the length of the next  Interest  Period to be applicable to such Loans,
PROVIDED that no LIBOR Loan under a particular Facility may be continued as such
(i) when any Event of Default has  occurred  and is  continuing  and the General
Administrative  Agent has or the  Majority  Facility  Lenders in respect of such
Facility  have   determined  in  its  or  their  sole  discretion  that  such  a
continuation  is not  appropriate or (ii) after the date that is one month prior
to the final maturity date of such Facility and PROVIDED,  FURTHER,  that if the
Company shall fail to give such


                                       57
<PAGE>


                  notice or if such  continuation  is not  permitted  such Loans
shall be automatically converted to Base Rate Loans on the last day of such then
expiring  Interest  Period.   Upon  receipt  of  any  such  notice  the  General
Administrative Agent shall promptly notify each relevant Lender thereof.

                  6.5 MINIMUM AMOUNTS OF TRANCHES.  Notwithstanding  anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
LIBOR Loans hereunder and all selections of Interest Periods  hereunder shall be
in such amounts and be made  pursuant to such  elections  so that,  after giving
effect thereto,  the aggregate  principal  amount of the LIBOR Loans  comprising
each Tranche shall be equal to  $5,000,000 or a whole  multiple of $1,000,000 in
excess thereof.

                  6.6  INTEREST  RATES AND  PAYMENT  DATES.  (a) Each LIBOR Loan
shall bear  interest  for each day during  each  Interest  Period  with  respect
thereto at a rate per annum equal to the LIBOR Rate determined for such day plus
the Applicable Margin.

                  (b) Each Base  Rate Loan  shall  bear  interest  at a rate per
annum equal to the Base Rate plus the Applicable Margin.

                  (c) Each  Canadian Term Loan shall bear interest at a rate per
annum equal to the Canadian Dollar Prime Rate plus the Applicable Margin.

                  (d) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any Reimbursement
Obligation  or  Acceptance  Reimbursement  Obligation  or other  amount  payable
hereunder  shall  not be paid  when due  (whether  at the  stated  maturity,  by
acceleration  or  otherwise),  the  principal  of the Loans,  the  Reimbursement
Obligations  or  Acceptance   Reimbursement  Obligation  and  any  such  overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which  is (w) in the  case of  principal,  the  rate  that  would  otherwise  be
applicable thereto pursuant to the foregoing  provisions of this subsection PLUS
2% or,  if  higher,  (x) in the  case of  Reimbursement  Obligations,  the  rate
applicable to Base Rate Loans under the Revolving  Credit  Facility PLUS 2%, (y)
in the case of  Acceptance  Reimbursement  Obligations,  the rate  applicable to
Revolving  Credit  Loans that are LIBOR  Loans PLUS 2% or (z) in the case of any
such overdue  interest,  commitment  fee or other amount,  the rate described in
paragraph  (b) of this  subsection  (paragraph  (c) in the case of  interest  on
Canadian  Term  Loans)  PLUS 2%, in each case from the date of such  non-payment
until such overdue principal,  interest,  commitment fee or other amount is paid
in full (as well after as before judgment).

                  (e)  Interest  shall be payable  in  arrears on each  Interest
Payment Date,  PROVIDED that interest accruing pursuant to paragraph (d) of this
Section 6.6 shall be payable from time to time on demand.

                  6.7  COMPUTATION OF INTEREST AND FEES.  (a)  Commitment  fees,
Acceptance  stamping  fees and,  whenever it is  calculated  on the basis of the
Prime Rate or the Canadian  Dollar Prime Rate,  interest  shall be calculated on
the basis of a 365- (or 366-,  as the case may be) day year for the actual  days
elapsed; and, otherwise, interest and letter of credit commissions and


                                       58
<PAGE>


                  fronting  fees shall be  calculated  on the basis of a 360-day
year for the actual days elapsed. The General Administrative Agent shall as soon
as practicable  notify the Company and the U.S. Lenders of each determination of
a LIBOR Rate.  Any change in the interest rate on a Loan resulting from a change
in the Base Rate,  the Canadian  Dollar Prime Rate or the  Eurocurrency  Reserve
Requirements  shall become effective as of the opening of business on the day on
which such change becomes effective.  The General  Administrative Agent shall as
soon as  practicable  notify the Company and the U.S.  Lenders of the  effective
date and the amount of each such  change in the Base Rate.  For  purposes of the
Interest Act (Canada),  whenever any interest under this Agreement is calculated
using an annual rate based on a period  which is less than the actual  number of
days in a year (the  "LESSER  PERIOD"),  such rate  determined  pursuant to such
calculation,  when  expressed  as an  annual  rate,  is  equivalent  to (i)  the
applicable  rate based on such  Lesser  Period,  (ii)  multiplied  by the actual
number of days in the calendar  year in which the period for which such interest
is payable ends,  and (iii) divided by the number of days in such Lesser Period.
The rates of interest  specified  in this  Agreement  are nominal  rates and all
interest payments and computations are to be made without allowance or deduction
for deemed reinvestment of interest.

                  (b) Each  determination  of an  interest  rate by the  General
Administrative  Agent  or the  Canadian  Administrative  Agent  pursuant  to any
provision of this Agreement shall be conclusive and binding on the Borrowers and
the Lenders in the absence of manifest error.

                  (c) If any Canadian  Reference  Lender shall for any reason no
longer have a Canadian Loan Commitment or any Canadian Term Loans, such Canadian
Reference Lender shall thereupon cease to be a Canadian  Reference  Lender,  and
if, as a result, there shall only be one Schedule 1 Canadian Reference Lender or
Schedule  2  Canadian  Reference  Lender  (as the  case may be)  remaining,  the
Canadian Administrative Agent (after consultation with the Canadian Borrower and
the Schedule 1 Canadian Lender or the Schedule 2 Canadian Lender, as applicable)
shall, by notice to the Canadian  Borrower and the Canadian  Lenders,  designate
another Schedule 1 Canadian Lender or Schedule 2 Canadian Lender, as applicable,
as a  Schedule 1 Canadian  Reference  Lender or a Schedule 2 Canadian  Reference
Lender, as applicable, so that there shall at all times be at least two Schedule
1 Canadian Reference Lenders and two Schedule 2 Canadian Reference Lenders.

                  (d) Each Canadian  Reference Lender shall use its best efforts
to  furnish  quotations  of  rates  to  the  Canadian  Administrative  Agent  as
contemplated hereby. If any of the Canadian Reference Lenders shall be unable or
shall otherwise fail to supply such rates to the Canadian  Administrative  Agent
upon its  request,  the rate of interest  shall,  subject to the  provisions  of
Section  6.8, be  determined  on the basis of the  quotations  of the  remaining
Canadian Reference Lenders or Reference Lender.

                  6.8  INABILITY TO  DETERMINE  INTEREST  RATE.  If prior to the
first day of any Interest Period:


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<PAGE>


                  (a) the General  Administrative  Agent  shall have  determined
         (which  determination shall be conclusive and binding upon the Company)
         that,  by  reason  of  circumstances  affecting  the  relevant  market,
         adequate and reasonable  means do not exist for  ascertaining the LIBOR
         Rate for such Interest Period, or

                  (b) the  General  Administrative  Agent  shall  have  received
         notice from the  Majority  Facility  Lenders in respect of the relevant
         Facility that the LIBOR Rate  determined  or to be determined  for such
         Interest Period will not adequately and fairly reflect the cost to such
         Lenders  (as  conclusively  certified  by such  Lenders)  of  making or
         maintaining their affected Loans during such Interest Period,

the General  Administrative  Agent  shall give  telecopy  or  telephonic  notice
thereof to the  Company and the  relevant  U.S.  Lenders as soon as  practicable
thereafter.  If such  notice  is given (x) any LIBOR  Loans  under the  relevant
Facility  requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans under the relevant  Facility that were to
have been  converted  on the first day of such  Interest  Period to LIBOR  Loans
shall be continued as Base Rate Loans and (z) any outstanding  LIBOR Loans under
the relevant  Facility  shall be  converted,  on the first day of such  Interest
Period, to Base Rate Loans.  Until such notice has been withdrawn by the General
Administrative  Agent, no further LIBOR Loans under the relevant  Facility shall
be made or  continued  as such,  nor shall the Company have the right to convert
Loans under the relevant Facility to LIBOR Loans.

                  6.9 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Company  from the  Lenders  hereunder  shall be made PRO RATA  according  to the
respective  Tranche A Term Loan  Percentages,  Tranche B Term Loan  Percentages,
Tranche C Term Loan  Percentages,  Canadian Term Loan Commitment  Percentages or
Revolving  Credit  Percentages,  as the case may be,  of the  relevant  Lenders;
PROVIDED,  that, pursuant to the second sentence of Section 5.6, Acceptances may
be created in non-PRO  RATA  amounts if  required  to permit  rounding  to whole
multiples of  C$100,000.  Each  borrowing  of the U.S.  Term Loans shall be made
FIRST  under the  Tranche B Term Loan  Commitments  and the  Tranche C Term Loan
Commitments,  PRO RATA in accordance with the aggregate amounts of the Tranche B
Term Loan  Commitments  and Tranche C Term Loan  Commitments  of the  respective
Lenders (PROVIDED,  that until all Tranche B Term Loan Commitments and Tranche C
Term Loan  Commitments  other than the Tranche B-1 Term Loan Commitments and the
Tranche  C-1  Term  Loan  Commitments  have  been  fully  drawn,  such  PRO RATA
calculations  shall  be  made  without  regard  to the  Tranche  B-1  Term  Loan
Commitments and Tranche C-1 Term Loan  Commitments of the Lenders) and,  SECOND,
after the Tranche B Term Loan Commitments and the Tranche C Term Loan Commitment
have been utilized in full,  under the Tranche A Term Loan  Commitments PRO RATA
in  accordance  with the amounts of the Tranche A Term Loan  Commitments  of the
respective Lenders. Each payment by the Company on account of any commitment fee
and  letter of credit  commission  and any  reduction  of the  Revolving  Credit
Commitments shall be made PRO RATA according to the respective  Revolving Credit
Percentages of the Lenders.  Each payment (other than any prepayment pursuant to
Section  6.2 or 6.3) shall be applied to the  Facilities  ratably in  accordance
with the respective amounts due and owing under the Facilities.


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<PAGE>


                  (b) Each payment (including each prepayment) by the Company on
account of principal  of and interest on the U.S.  Term Loans under any Facility
shall be made pro rata according to the respective outstanding principal amounts
of the U.S.  Term Loans  under  such  Facility  then held by the U.S.  Term Loan
Lenders.

                  (c) Each payment  (including each  prepayment) by the Canadian
Borrower on account of  principal  of and  interest on the  Canadian  Term Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Canadian  Term Loans then held by the Canadian  Lenders.  Each payment in
respect of Acceptance Reimbursement Obligations shall be made PRO RATA according
to the respective amounts of Acceptance  Reimbursement  Obligations then due and
owing to the Canadian Lenders.

                  (d) Each payment (including each prepayment) by the Company on
account of principal of and interest on the Revolving Credit Loans shall be made
PRO RATA  according  to the  respective  outstanding  principal  amounts  of the
Revolving Credit Loans then held by the Revolving Credit Lenders.

                  (e) All  payments  (including  prepayments)  to be made by the
Company hereunder, whether on account of principal,  interest, fees or otherwise
(other  than  payments  under  Section 13 in respect  of the  Canadian  Borrower
Obligations  and the Canadian  Operating  Facility  Obligations),  shall be made
without setoff or  counterclaim  and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the General  Administrative Agent, for the
account of the Lenders, at the General  Administrative  Agent's office specified
in Section  14.2, in Dollars and in  immediately  available  funds.  The General
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as  received.  If any  payment  by the  Company  hereunder
(other than payments on the LIBOR Loans)  becomes due and payable on a day other
than a Business  Day,  such  payment  shall be extended  to the next  succeeding
Business  Day. If any  payment on a LIBOR Loan  becomes due and payable on a day
other than a Business  Day, the maturity  thereof  shall be extended to the next
succeeding  Business Day unless the result of such extension  would be to extend
such payment into another  calendar  month, in which event such payment shall be
made on the immediately  preceding Business Day. In the case of any extension of
any payment of  principal  pursuant to the  preceding  two  sentences,  interest
thereon shall be payable at the then applicable rate during such extension.

                  (f) All  payments  (including  prepayments)  to be made by the
Canadian  Borrower  hereunder  (or by the Company under Section 13 in respect of
the  Canadian  Borrower   Obligations  and  the  Canadian   Operating   Facility
Obligations),  whether on account of  principal,  interest,  fees or  otherwise,
shall be made without  setoff or  counterclaim  and shall be made prior to 12:00
Noon,  Toronto  time,  on the due date  thereof to the  Canadian  Administrative
Agent, for the account of the Lenders,  at the Canadian  Administrative  Agent's
office  specified  in Section  14.2,  in  Canadian  Dollars  and in  immediately
available  funds.  The  Canadian  Administrative  Agent  shall  distribute  such
payments to the Lenders promptly upon receipt in like funds as received. If any


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<PAGE>


payment by the  Canadian  Borrower  hereunder  becomes  due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. In the case of any extension of any payment of principal  pursuant
to the  preceding  sentence,  interest  thereon  shall  be  payable  at the then
applicable rate during such extension.

                  (g) Unless the applicable Administrative Agent shall have been
notified  in writing by any Lender  prior to a  Borrowing  Date that such Lender
will not make  available  to such  Administrative  Agent the  amount  that would
constitute  its share of the Loans or Acceptance  Purchase Price to be disbursed
to a Borrower on such Borrowing Date, such Administrative  Agent may assume that
such Lender is making such amount  available to such  Administrative  Agent, and
such Administrative Agent may, in reliance upon such assumption,  make available
to the applicable  Borrower a corresponding  amount.  If such amount is not made
available to such  Administrative  Agent by the required  time on the  Borrowing
Date therefor,  such Lender shall pay to such  Administrative  Agent, on demand,
such amount with interest  thereon at a rate equal to (i) in the case of amounts
to be made available in U.S. Dollars,  the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the  General  Administrative  Agent and (ii) in the case of  amounts  to be made
available in Canadian Dollars,  the Canadian  Administrative  Agent's reasonable
estimate  of its  average  daily cost of funds.  A  certificate  of the  General
Administrative Agent or the Canadian  Administrative  Agent, as the case may be,
submitted  to any Lender with  respect to any amounts  owing under this  Section
6.9(g) shall be  conclusive in the absence of manifest  error.  If such Lender's
share of such amount is not made available to such Administrative  Agent by such
Lender within three Business Days of such Borrowing  Date,  such  Administrative
Agent shall also be entitled to recover such amount from the  relevant  Borrower
on demand with  interest  thereon at the rate per annum  applicable to Base Rate
Loans under the relevant  Facility (in the case of amounts to be made  available
in U.S.  Dollars),  or  Canadian  Term  Loans (in the case of amounts to be made
available in Canadian Dollars).

                  6.10  ILLEGALITY.  (a)  Notwithstanding  any  other  provision
herein,  if the  adoption of or any change in any  Requirement  of Law or in the
interpretation  or application  thereof shall make it unlawful for any Lender to
make  or  maintain  LIBOR  Loans  as  contemplated  by this  Agreement,  (i) the
commitment of such U.S.  Lender  hereunder to make LIBOR Loans,  continue  LIBOR
Loans as such and  convert  Base Rate Loans to LIBOR Loans  shall  forthwith  be
cancelled and (ii) such U.S.  Lender's Loans then outstanding as LIBOR Loans, if
any, shall be converted  automatically to Base Rate Loans on the respective last
days of the then current  Interest  Periods with respect to such Loans or within
such earlier  period as required by law. If any such  conversion of a LIBOR Loan
occurs on a day which is not the last day of the then  current  Interest  Period
with respect thereto, the Company shall pay to such Lender such amounts, if any,
as may be required pursuant to Section 6.13.

                  (b)   Notwithstanding  any  other  provision  herein,  if  the
adoption of or any change in any Requirement of Law or in the  interpretation or
application  thereof shall make it unlawful for any Canadian Lender to create or
maintain  Acceptances as contemplated  by this Agreement,  (i) the commitment of
such Canadian Lender hereunder to accept Drafts, purchase Acceptances,  continue
Acceptances  as such  and  convert  Canadian  Term  Loans to  Acceptances  shall
forthwith


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<PAGE>


be cancelled until such time as it shall no longer be unlawful for such Canadian
Lender to create or maintain  Acceptances  and (ii) such Canadian  Lender's then
outstanding  Acceptances,  if any, shall be converted  automatically to Canadian
Term Loans on the respective maturities thereof or within such earlier period as
may be required by law.

                  6.11 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any  Requirement of Law or in the  interpretation  or application  thereof or
compliance  by any Lender with any request or  directive  (whether or not having
the force of law, but with which  similarly-situated  entities generally comply)
from any central bank or other  Governmental  Authority  made  subsequent to the
date hereof:

                        (i)  shall  subject  any  Lender  to any tax of any kind
         whatsoever with respect to this Agreement,  any Letter of Credit or any
         LIBOR Loan made by it, or change the basis of  taxation  of payments to
         such Lender in respect thereof (except for  Non-Excluded  Taxes covered
         by  Section  6.12 and  changes  in the rate of tax on the  overall  net
         income of such Lender);

                       (ii) shall impose, modify or hold applicable any reserve,
         special deposit,  compulsory loan or similar requirement against assets
         held  by,  deposits  or other  liabilities  in or for the  account  of,
         advances,  loans  or  other  extensions  of  credit  by,  or any  other
         acquisition  of  funds  by,  any  office  of such  Lender  which is not
         otherwise included in the determination of the LIBOR Rate; or

                      (iii) shall impose on such Lender any other condition, the
         cost of which is not  otherwise  included in the  determination  of the
         LIBOR Rate;

and the result of any of the  foregoing  is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or Acceptances or issuing or participating
in Letters of Credit,  or to reduce any amount  receivable  hereunder in respect
thereof, then, in any such case, the applicable Borrower shall promptly pay such
Lender such  additional  amount or amounts as will  compensate such Lender on an
after-tax basis for such increased cost or reduced amount receivable.

                  (b) If any Lender shall have  determined  that the adoption of
or any change in any  Requirement  of Law regarding  capital  adequacy or in the
interpretation  or  application  thereof  or  compliance  by such  Lender or any
corporation  controlling  such Lender with any  request or  directive  regarding
capital  adequacy  (whether  or not  having  the  force of law,  but with  which
similarly-situated  entities  generally comply) from any Governmental  Authority
made subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such  corporation's  capital as a consequence  of its
obligations  hereunder  to  a  level  below  that  which  such  Lender  or  such
corporation  could have  achieved but for such  adoption,  change or  compliance
(taking into  consideration  such Lender's or such  corporation's  policies with
respect to capital  adequacy) by an amount deemed by such Lender to be material,
then from time to time,  the  applicable  Borrower  shall  promptly  pay to such
Lender such  additional  amount or amounts as will  compensate such Lender on an
after-tax basis for such reduction.


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<PAGE>


                  (c) If any Lender  becomes  entitled  to claim any  additional
amounts  pursuant  to this  Section,  it shall  promptly  notify the  applicable
Borrower  (with a copy to the General  Administrative  Agent and, if applicable,
the Canadian Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section  submitted by such Lender to such  Borrower  (with a copy to the General
Administrative  Agent and, if  applicable,  the Canadian  Administrative  Agent)
shall be conclusive  in the absence of manifest  error.  The  agreements in this
Section shall survive the  termination  of this Agreement and the payment of the
Loans, the Acceptance  Reimbursement  Obligations,  the Acceptance Notes and all
other amounts payable hereunder.

                  6.12 TAXES.  (a) All payments made by the Borrowers under this
Agreement  and any Notes shall be made free and clear of, and without  deduction
or  withholding  for or on account  of, any present or future  income,  stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or  hereafter  imposed,  levied,  collected,  withheld  or  assessed  by any
Governmental Authority,  excluding net income taxes and franchise taxes (imposed
in lieu of net  income  taxes)  imposed  on either  Administrative  Agent or any
Lender as a result of a present or former connection between such Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political  subdivision  or taxing  authority  thereof or therein
(other than any such connection arising solely from such Administrative Agent or
such Lender having executed,  delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies,  imposts,  duties,  charges, fees deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to such Administrative Agent, or any Lender hereunder or under any Note,
the  amounts so payable to such  Administrative  Agent or such  Lender  shall be
increased to the extent necessary to yield to such Administrative  Agent or such
Lender  (after  payment of all  Non-Excluded  Taxes)  interest or any such other
amounts  payable  hereunder  at the rates or in the  amounts  specified  in this
Agreement, PROVIDED, HOWEVER, that the Company shall not be required to increase
any such amounts  payable to any U.S. Lender if such U.S. Lender fails to comply
with  the   requirements  of  paragraph  (b)  of  this  Section.   Whenever  any
Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter
such  Borrower  shall send to the  applicable  Administrative  Agent for its own
account or for the account of such Lender,  as the case may be, a certified copy
of an original  official  receipt  received  by such  Borrower  showing  payment
thereof.  If a  Borrower  fails to pay any  Non-Excluded  Taxes  when due to the
appropriate taxing authority or fails to remit to the applicable  Administrative
Agent  the  required  receipts  or other  required  documentary  evidence,  such
Borrower  shall  indemnify  such  Administrative  Agent and the  Lenders for any
incremental  taxes,  interest  or  penalties  that may become  payable by either
Administrative  Agent  or any  Lender  as a  result  of any  such  failure.  The
agreements in this  subsection  shall survive the  termination of this Agreement
and the payment of the Loans,  the  Acceptance  Reimbursement  Obligations,  the
Acceptance Notes and all other amounts payable hereunder.


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<PAGE>


                  (b) Each U.S. Lender that is not  incorporated  under the laws
of the United States of America or a state thereof shall:

                  (i) in the case of a Lender  other than a Lender  described in
         subsection 6.12(b)(ii);

                  (A)  deliver to the  Company  and the  General  Administrative
         Agent (A) two duly completed  copies of United States Internal  Revenue
         Service Form 1001 or 4224,  or successor  applicable  form, as the case
         may  be,  and (B) an  Internal  Revenue  Service  Form  W-8 or W-9,  or
         successor applicable form, as the case may be;

                  (B)  deliver to the  Company  and the  General  Administrative
         Agent two further copies of any such form or certification on or before
         the  date  that any  such  form or  certification  expires  or  becomes
         obsolete and after the  occurrence  of any event  requiring a change in
         the most recent form previously delivered by it to the Company; and

                  (C) obtain  such  extensions  of time for filing and  complete
         such forms or  certifications  as may  reasonably  be  requested by the
         Company or the General Administrative Agent; and

                  (D) file amendments to such forms as and when required; and

                  (ii)  in the  case of a  Lender  that  is not a  "bank"  under
Section  881(c)(3)(A)  of the Code and that is legally unable to comply with the
requirements of subsection 6.11(b)(i);

                  (A) at least five Business Days before the date of the initial
         payment to be made by the Company under this  Agreement to such Lender,
         deliver  to the  Company  and the  General  Administrative  Agent (I) a
         statement   that  such  Lender  (x)  is  not  a  "bank"  under  Section
         881(c)(3)(A)  of the Code,  is not subject to regulatory or other legal
         requirements as a bank in any jurisdiction, and has not been treated as
         a bank for  purposes  of any tax,  securities  law or other  filing  or
         submission made to any Governmental Authority,  any application made to
         a rating agency or qualification for any exemption from tax, securities
         law or other legal  requirements,  (y) is not a 10-percent  shareholder
         within the meaning of Section 881(c)(3)(B) of the Code and (z) is not a
         controlled foreign corporation receiving interest from a related person
         within  the  meaning  of  Section  881(c)(3)(C)  of the Code and (II) a
         properly  completed and duly executed Internal Revenue Service Form W-8
         or applicable successor form; and

                  (B)  deliver to the  Company  and the  General  Administrative
         Agent two further  properly  completed and duly executed copies of said
         Form W-8, or any successor  applicable form at least five Business Days
         on or  before  the date  that any such  Form  W-8  expires  or  becomes
         obsolete or after the occurrence of any event


                                       65
<PAGE>


                  requiring  a  change  in  the  most  recent  form   previously
                  delivered  by it to the  Company  or upon the  request  of the
                  Company or the General Administrative Agent; and

                  (C) obtain such  extensions of time for filing and  completing
         such forms or  certifications  as may be  reasonably  requested  by the
         Company and the General Administrative Agent; and

                  (D) file amendments to such forms as and when required;

unless in any such case an event (including,  without limitation,  any change in
treaty,  law or  regulation)  has  occurred  prior to the date on which any such
delivery would  otherwise be required which renders all such forms  inapplicable
or which would prevent such Lender from duly  completing and delivering any such
form with  respect to it and such  Lender so advises the Company and the General
Administrative  Agent.  Such Lender shall certify (i) in the case of a Form 1001
or 4224,  that it is entitled to receive  payments under this Agreement  without
deduction or  withholding  of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9,  that it is entitled to an exemption  from United
States  backup  withholding  tax.  Each Person  that shall  become a Lender or a
Participant  pursuant  to Section  14.6  shall,  upon the  effectiveness  of the
related  transfer,  be  required  to  provide  all of the forms  and  statements
required pursuant to this subsection, provided that in the case of a Participant
such  Participant  shall furnish all such required  forms and  statements to the
Lender from which the related participation shall have been purchased.

                  6.13 INDEMNITY.  Each Borrower agrees to indemnify each Lender
and to hold each Lender  harmless from any loss or expense which such Lender may
sustain or incur as a  consequence  of (a) default by such  Borrower in making a
borrowing of, conversion into or continuation of LIBOR Loans after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement,  (b)  default by such  Borrower in making any  prepayment  after such
Borrower has given a notice  thereof in accordance  with the  provisions of this
Agreement or (c) the making of a prepayment of LIBOR Loans on a day which is not
the last day of an Interest Period with respect  thereto.  Such  indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow,  convert or continue to the last day of such Interest  Period (or, in
the case of a failure to borrow,  convert or continue,  the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans  provided for herein  (excluding,  however,  the
Applicable Margin included therein, if any) OVER (ii) the amount of interest (as
reasonably  determined  by such U.S.  Lender)  which would have  accrued to such
Lender on such amount by placing such amount on deposit for a comparable  period
with leading  banks in the interbank  eurodollar  market.  This  covenant  shall
survive the  termination  of this Agreement and the payment of the Loans and all
other amounts payable hereunder.


                                       66
<PAGE>


                  6.14 CHANGE OF LENDING  OFFICE.  Each Lender agrees that if it
makes any demand for payment under  Section 6.11 or 6.12(a),  or if any adoption
or change of the type  described in Section 6.10 shall occur with respect to it,
it will use reasonable  efforts  (consistent  with its internal policy and legal
and  regulatory   restrictions  and  so  long  as  such  efforts  would  not  be
disadvantageous  to it, as  determined  in its sole  discretion)  to designate a
different  lending  office if the making of such a  designation  would reduce or
obviate  the need for the  Borrowers  to make  payments  under  Section  6.11 or
6.12(a),  or would  eliminate  or reduce  the effect of any  adoption  or change
described in Section  6.10;  PROVIDED,  that such  designation  is made on terms
that,  in the sole  judgment of such  Lender,  cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and PROVIDED,
FURTHER,  that  nothing in this Section 6.14 shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section 6.11
or 6.12(a).


                   SECTION 7. REPRESENTATIONS AND WARRANTIES.

                  To induce the  Administrative  Agents and the Lenders to enter
into this  Agreement  and to make the Loans and the other  extensions  of credit
hereunder,  each  of the  Company  and the  Canadian  Borrower  (to  the  extent
applicable  to the Canadian  Borrower)  hereby  represents  and warrants to each
Administrative Agent and each Lender that:

                  7.1 FINANCIAL CONDITION.  (a) The unaudited PRO FORMA combined
balance sheet of Holdings and its  consolidated  Subsidiaries as at November 30,
1997  (including the notes thereto) (the "PRO FORMA BALANCE  Sheet"),  copies of
which have  heretofore  been furnished to each Lender,  has been prepared giving
effect (as if such events had occurred on such date) to (i) the  consummation of
the Exchange Offer and the Merger,  (ii) the Loans to be made on or prior to the
Merger  Date and the use of  proceeds  thereof and (iii) the payment of fees and
expenses in connection with the Exchange Offer and Merger. The Pro Forma Balance
Sheet has been prepared based on the best  information  available to the Company
as of the date of delivery thereof, and presents fairly on a PRO FORMA basis the
estimated   combined   financial  position  of  Holdings  and  its  consolidated
Subsidiaries as at the Closing Date,  assuming that the events  specified in the
preceding sentence had actually occurred at such date.

                  (b) To  the  best  of the  Company's  knowledge,  the  audited
consolidated  balance  sheet of  Safety-Kleen  as of  December  31, 1996 and the
related consolidated  statements of income and of cash flows for the fiscal year
ended on such date, reported on by and accompanied by an unqualified report from
Arthur  Andersen,   present  fairly  the  consolidated  financial  condition  of
Safety-Kleen as at such date, and the consolidated results of its operations and
its  consolidated  cash flows for the fiscal year then ended. To the best of the
Company's  knowledge,  all such  financial  statements,  including  the  related
schedules and notes thereto,  have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the relevant
firm of  accountants  and  disclosed  therein).  To the  best  of the  Company's
knowledge,  the balance sheet referred to above reflects any material  Guarantee
Obligations, contingent liabilities and liabilities for taxes, and any long-term
leases and unusual forward or

 
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                  long-term  commitments,  including,  without  limitation,  any
interest  rate  or  foreign  currency  swap or  exchange  transaction  or  other
obligation  in  respect  of  derivatives,  in each  case as of the  date of such
balance  sheets.  During the period from  December 31, 1996 to and including the
date  hereof  there  has  been  no  Disposition  by  Safety-Kleen  or any of its
Subsidiaries of any material part of its business or property.

                  (c) The audited  consolidated  balance sheet of Holdings as at
August 31, 1997, and the related  consolidated  statements of income and of cash
flows for the fiscal year ended on such date,  reported on by and accompanied by
an unqualified  report from Coopers & Lybrand,  present fairly the  consolidated
financial condition of Holdings as at such date, and the consolidated results of
its operations and its  consolidated  cash flows for the respective  fiscal year
then ended. All such financial  statements,  including the related schedules and
notes thereto,  have been prepared in accordance with GAAP applied  consistently
throughout  the periods  involved  (except as approved by the  relevant  firm of
accountants and disclosed therein). The balance sheet referred to above reflects
any material Guarantee  Obligations,  contingent liabilities and liabilities for
taxes,  and any long-term  leases and unusual forward or long-term  commitments,
including,  without  limitation,  any interest rate or foreign  currency swap or
exchange transaction or other obligation in respect of derivatives, in each case
as of the date of such balance sheets. During the period from August 31, 1997 to
and including the date hereof there has been no  Disposition  by Holdings or any
of its  Subsidiaries of any material part of its business or property other than
the sale by the Company of ECDC Environmental, L.C.

                  7.2 NO  CHANGE.  Since  August  31,  1997  there  has  been no
development  or event  which has had or could  reasonably  be expected to have a
Material Adverse Effect.  Without limiting the  representation  in the preceding
sentence,  since December 31, 1996 there has been no development or event which,
to the best knowledge of the Company, has had or could reasonably be expected to
have a material adverse effect on the business, operations,  property, condition
(financial or otherwise) or prospects of Safety-Kleen and its Subsidiaries taken
as a whole.

                  7.3  CORPORATE  EXISTENCE;  COMPLIANCE  WITH LAW.  Each of the
Company and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the  jurisdiction  of its  organization,  (b) has the
corporate  power and  authority,  and the legal  right,  to own and  operate its
property,  to lease the  property  it  operates  as lessee  and to  conduct  the
business in which it is currently  engaged,  (c) is duly  qualified as a foreign
corporation and in good standing under the laws of each  jurisdiction  where its
ownership,  lease or  operation  of  property  or the  conduct  of its  business
requires such  qualification  and (d) is in compliance with all  Requirements of
Law except to the extent that the failure to comply  therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.

                  7.4 CORPORATE POWER;  AUTHORIZATION;  ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate  power and authority,  and the legal right, to
make,  deliver and perform the Loan Documents to which it is a party and, in the
case of each Borrower, to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and any Notes and to authorize the  execution,  delivery and  performance of the
Loan Documents to which it is a party.  No consent or  authorization  of, filing
with, notice to or


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                  other act by or in respect of, any  Governmental  Authority or
any other Person is required in connection with (i) the borrowings  hereunder or
with the execution,  delivery,  performance,  validity or  enforceability of the
Loan  Documents or (ii) the  consummation  of the Exchange  Offer or the Merger,
except approval of the Merger by the Safety-Kleen  shareholders.  This Agreement
has been,  and each other  Loan  Document  to which it is a party will be,  duly
executed and  delivered  on behalf of each Loan Party which is a party  thereto.
This Agreement constitutes,  and each other Loan Document to which it is a party
when  executed  and  delivered  will  constitute,  a legal,  valid  and  binding
obligation of the Loan Party which is a party thereto  enforceable  against such
Loan Party in accordance  with its terms,  subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization,  moratorium and other similar
laws relating to or affecting  creditors'  rights  generally,  general equitable
principles  (whether  considered  in a  proceeding  in  equity or at law) and an
implied covenant of good faith and fair dealing.

                  7.5 NO LEGAL BAR. The execution,  delivery and  performance of
the Loan Documents,  the issuance of Letters of Credit, the borrowings hereunder
and the use of the proceeds  thereof will not violate any  Requirement of Law or
Contractual Obligation of the Company or of any of its Subsidiaries and will not
result in, or require,  the creation or  imposition of any Lien on any of its or
their respective  properties or revenues pursuant to any such Requirement of Law
or  Contractual  Obligation  (other  than  the  Liens  created  by the  Security
Documents).

                  7.6 NO MATERIAL LITIGATION.  (a) No litigation,  investigation
or proceeding of or before any arbitrator or  Governmental  Authority is pending
or, to the knowledge of the Company, threatened by or against the Company or any
of its  Subsidiaries  or against any of its or their  respective  properties  or
revenues  (i)  with  respect  to  any  of  the  Loan  Documents  or  any  of the
transactions contemplated hereby or thereby (other than as set forth on Schedule
7.6  relating  to the  Exchange  Offer,  none of which,  individually  or in the
aggregate,  could reasonably be expected to have a Material Adverse Effect),  or
(ii) which could reasonably be expected to have a Material Adverse Effect.

                  (b) Without limiting the representation  made in paragraph (a)
of this Section 7.6, to the best  knowledge of the Company,  except as described
in the Exchange Offer Documents,  no litigation,  investigation or proceeding of
or before any  arbitrator  or  Governmental  Authority is pending or  threatened
against  Safety-Kleen or any of its  Subsidiaries or against any of its or their
respective  properties or revenues which could  reasonably be expected to have a
material  adverse  effect  on  the  business,  operations,  property,  condition
(financial or otherwise) or prospects of Safety-Kleen and its Subsidiaries taken
as a whole.

                  7.7  NO   DEFAULT.   Neither   the  Company  nor  any  of  its
Subsidiaries  is in  default  under or with  respect  to any of its  Contractual
Obligations  in any  respect  which  could have a Material  Adverse  Effect.  No
Default or Event of Default has occurred and is continuing.


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                  7.8 OWNERSHIP OF PROPERTY;  LIENS. Each of the Company and its
Subsidiaries  has good record and marketable  title in fee simple to, or a valid
leasehold  interest  in,  all its real  property,  and good title to, or a valid
leasehold  interest  in, all its other  property,  and none of such  property is
subject to any Lien except as permitted by Section 10.3.

                  7.9  INTELLECTUAL  PROPERTY.  Each  of  the  Company  and  its
Subsidiaries   owns,  or  is  licensed  to  use,  all  trademarks,   tradenames,
copyrights,  technology, know-how and processes necessary for the conduct of its
business as currently  conducted (the  "INTELLECTUAL  PROPERTY").  Except as set
forth in Schedule  7.9, no claim has been  asserted and is pending by any Person
challenging  or  questioning  the use of any such  Intellectual  Property or the
validity  or  effectiveness  of any  such  Intellectual  Property,  nor does the
Company know of any valid basis for any such claim. The use of such Intellectual
Property by the Company and its Subsidiaries  does not infringe on the rights of
any Person,  except for such claims and  infringements  that, in the  aggregate,
could not reasonably be expected to have a Material  Adverse Effect.  An adverse
determination  of any or all of the matters set forth on Schedule  7.9 could not
reasonably be expected to have a Material Adverse Effect.

                  7.10 NO  BURDENSOME  RESTRICTIONS.  No  Requirement  of Law or
Contractual  Obligation  of  the  Company  or  any  of  its  Subsidiaries  could
reasonably be expected to have a Material Adverse Effect.

                  7.11 TAXES. Each of the Company and its Subsidiaries has filed
or caused to be filed all tax returns  which,  to the  knowledge of the Company,
are  required  to be filed and has paid all taxes shown to be due and payable on
said  returns or on any  assessments  made against it or any of its property and
all other taxes,  fees or other charges  imposed on it or any of its property by
any  Governmental  Authority (other than any taxes,  fees or other charges,  the
amount or  validity  of which are  currently  being  contested  in good faith by
appropriate  proceedings  and with respect to which reserves in conformity  with
GAAP have been provided on the books of the Company or its Subsidiaries,  as the
case may be); no tax Lien has been filed,  and, to the knowledge of the Company,
no claim is being asserted, with respect to any such tax, fee or other charge.

                  7.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used in  violation  of  Regulation  U of the Board of  Governors  of the
Federal Reserve System as now and from time to time hereafter in effect.

                  7.13 ERISA.  Neither a  Reportable  Event nor an  "accumulated
funding  deficiency"  (within  the meaning of Section 412 of the Code or Section
302 of ERISA) has  occurred  during the  five-year  period  prior to the date on
which this  representation  is made or deemed made with respect to any Plan, and
each Plan has complied in all material  respects with the applicable  provisions
of ERISA and the Code. No  termination  of a Single  Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has  arisen,  during  such  five-year
period.  The present value of all accrued  benefits  under each Single  Employer
Plan  (based on those  assumptions  used to fund such  Plans) did not, as of the
last annual valuation date prior to the date


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<PAGE>


                  on which this  representation  is made or deemed made,  exceed
the value of the assets of such Plan allocable to such accrued benefits. Neither
Borrower  nor any  Commonly  Controlled  Entity  has had a  complete  or partial
withdrawal  from any  Multiemployer  Plan,  and neither of the Borrowers nor any
Commonly  Controlled Entity would become subject to any liability under ERISA if
the Borrowers or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this  representation is made or deemed made. No such Multiemployer
Plan is in  Reorganization  or Insolvent.  The present value  (determined  using
actuarial and other  assumptions which are reasonable in respect of the benefits
provided and the employees  participating) of the liability of the Borrowers and
each Commonly  Controlled Entity for post retirement  benefits to be provided to
their current and former  employees  under Plans which are welfare benefit plans
(as defined in Section  3(1) of ERISA) does not,  in the  aggregate,  exceed the
assets under all such Plans allocable to such benefits by an amount in excess of
$2,000,000.

                  7.14 CANADIAN  BENEFIT AND PENSION PLANS. The Canadian Pension
Plans  are  duly  registered  under  the  provisions  of the ITA  and any  other
Requirements  of Law and no event has  occurred  which is  reasonably  likely to
cause the loss of such  registered  status.  The Canadian  Pension Plans and the
Canadian  Benefits Plans have been  administered  in accordance with the ITA and
all other Requirements of Law. All material  obligations of each of the Canadian
Borrower or any Subsidiary thereof (including fiduciary and funding obligations)
required to be performed in connection with the Canadian Pension Plans have been
performed.  No promises of benefit improvements under the Canadian Pension Plans
or the Canadian Benefit Plans have been made except where such improvement could
not have a Material Adverse Effect.  There have been no improper  withdrawals or
applications of the assets of the Canadian Pension Plans or the Canadian Benefit
Plans.  As of the most current  evaluation  date,  each of the Canadian  Pension
Plans and the  Canadian  Benefit  Plans is fully funded and there exist no going
concern unfunded  actuarial  liabilities or solvency  deficiencies in respect of
such plans.

                  7.15 INVESTMENT COMPANY ACT; OTHER REGULATIONS.  No Loan Party
is  an  "investment  company",  or a  company  "controlled"  by  an  "investment
company",  within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to  regulation  under any  Federal or State  statute or
regulation  (other than  Regulation  X of the Board of  Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.

                  7.16 SUBSIDIARIES. Schedule 7.16 sets forth a complete list of
all the  Subsidiaries  of the Company on the Closing Date after giving effect to
the consummation of the Exchange Offer.

                  7.17  PURPOSE  OF  LOANS.   The  proceeds  of  the  Loans  and
Acceptances  shall  be  used  (i) to  finance  a  portion  of  the  Safety-Kleen
Acquisition  and the fees and expenses  associated  therewith,  (ii) to purchase
stock appreciation rights from employees and directors of Safety-Kleen  pursuant
to  Safety-Kleen's  existing  stock  option/purchase  plans in an amount  not to
exceed  $46,000,000,  (iii)  to  repay  certain  Indebtedness  of the  Borrowers
outstanding  on the Closing Date,  including all amounts  outstanding  under the
Existing  Credit  Agreement  and  (iv) on the  Merger  Date,  to  repay  certain
Indebtedness of Safety-Kleen required to be repaid in connection


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                  with the Merger.  The  proceeds  of the Loans and  Acceptances
also shall be used to finance the ongoing working capital needs of the Borrowers
and their Subsidiaries in the ordinary course of business,  capital expenditures
and acquisitions permitted by Section 10.8.

                  7.18  ENVIRONMENTAL MATTERS

         Other  than  exceptions  to  any  of  the  following  that  could  not,
individually  or in the  aggregate,  reasonably  be  expected  to give rise to a
Material Adverse Effect:
                  (a) The Company  and each of its  Subsidiaries:  (i) are,  and
         within the period of all applicable  statutes of limitation  have been,
         in compliance  with all applicable  Environmental  Laws;  (ii) hold all
         Environmental  Permits  (each  of which is in full  force  and  effect)
         required  for any of their  current or intended  operations  or for any
         property owned,  leased,  or otherwise  operated by any of them;  (iii)
         are,  and within the period of all  applicable  statutes of  limitation
         have been, in compliance with all of their Environmental  Permits;  and
         (iv) reasonably believe that: each of their Environmental  Permits will
         be timely  renewed and complied with,  without  material  expense;  any
         additional  Environmental  Permits  that may be required of any of them
         will be timely obtained and complied with,  without  material  expense;
         and  compliance  with any  Environmental  Law that is or is expected to
         become applicable to it will be timely attained and maintained, without
         material expense.

                  (b)   Materials  of   Environmental   Concern  have  not  been
         transported, disposed of, emitted, discharged, or otherwise released or
         threatened  to be released,  to or at any real property now or formerly
         owned,  leased or operated by the Company or any of its Subsidiaries or
         at any other location,  which could  reasonably be expected to (i) give
         rise to liability of the Company or any of its  Subsidiaries  under any
         applicable   Environmental  Law,  (ii)  interfere  with  the  continued
         operations of the Company or any of its  Subsidiaries,  or (iii) impair
         the fair  saleable  value of any real  property  owned or leased by the
         Company or any of its Subsidiaries.

                  (c)  There  is  no  judicial,   administrative,   or  arbitral
         proceeding  (including  any notice of violation  or alleged  violation)
         under or relating to any  Environmental Law to which the Company or any
         of its  Subsidiaries  is, or to the  knowledge of the Company or any of
         its  Subsidiaries  will be, named as a party that is pending or, to the
         knowledge of the Company or any of its Subsidiaries, threatened.

                  (d)  Neither  the  Company  nor  any of its  Subsidiaries  has
         received any written request for information,  or been notified that it
         is  a   potentially   responsible   party  under  or  relating  to  the
         Comprehensive Environmental Response,  Compensation, and Liability Act,
         42 U.S.C.  ss.ss.  9601 ET seq., or any similar  Environmental  Law, or
         with respect to any Materials of Environmental Concern.

                  (e)  Neither  the  Company  nor  any of its  Subsidiaries  has
         entered into or agreed to any consent  decree,  order, or settlement or
         other agreement,  nor is subject to any judgment,  decree,  or order or
         other agreement,  in any judicial,  administrative,  arbitral, or other
         forum, relating to compliance with or liability under any Environmental
         Law.


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<PAGE>


                  (f)  Neither  the  Company  nor  any of its  Subsidiaries  has
         assumed or retained,  by contract or operation of law, any  liabilities
         of  any  kind,  fixed  or  contingent,  known  or  unknown,  under  any
         Environmental  Law or with respect to any  Materials  of  Environmental
         Concern.

                  7.19 ACCURACY OF INFORMATION, ETC. No statement or information
contained  in this  Agreement,  any other Loan  Document or any other  document,
certificate or statement  furnished to the Administrative  Agents or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with the
transactions  contemplated  by  this  Agreement  or the  other  Loan  Documents,
contained as of the date such  statement,  information,  document or certificate
was so furnished,  any untrue statement of a material fact or omitted to state a
material  fact  necessary in order to make the  statements  contained  herein or
therein not misleading.  The  projections  and PRO FORMA  financial  information
contained in the materials  referenced above are based upon good faith estimates
and  assumptions  believed by  management of such Loan Party to be reasonable at
the  time  made,  it  being  recognized  by  the  Lenders  that  such  financial
information  as it relates to future events is not to be viewed as fact and that
actual  results  during  the  period  or  periods   covered  by  such  financial
information  may  differ  from the  projected  results  set forth  therein  by a
material amount. The Company has provided to the General  Administrative Agent a
true and complete copy of the Exchange Offer Documents and the Merger  Agreement
(including all exhibits and schedules thereto and financial  statements referred
to therein). As of the date hereof, the representations and warranties contained
in the Merger Agreement are true and correct in all material respects.  There is
no fact  known to any Loan Party that could  reasonably  be  expected  to have a
Material  Adverse Effect that has not been expressly  disclosed  herein,  in the
other Loan  Documents or in any other  documents,  certificates  and  statements
furnished  to the  Administrative  Agents and the Lenders for use in  connection
with the transactions contemplated hereby and by the other Loan Documents.

                  7.20 SECURITY  DOCUMENTS.  (a) The  Guarantee  and  Collateral
Agreement is effective to create in favor of the General  Administrative  Agent,
for the benefit of the Lenders, a legal, valid and enforceable security interest
in the Collateral  described  therein and proceeds  thereof.  In the case of the
Pledged Stock  described in the Guarantee and Collateral  Agreement,  when stock
certificates  representing  such  Pledged  Stock are  delivered  to the  General
Administrative  Agent, and in the case of the other Collateral  described in the
Guarantee and Collateral  Agreement,  when  financing  statements in appropriate
form are filed in the  offices  specified  on  Schedule 3 to the  Guarantee  and
Collateral Agreement,  the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement),  in each
case prior and  superior in right to any other Person other than as permitted by
the Guarantee and Collateral Agreement.


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<PAGE>


                  (b) The  Acquisition  Corp.  Pledge  Agreement is effective to
create in favor of the  General  Administrative  Agent,  for the  benefit of the
Lenders,  a legal,  valid and  enforceable  security  interest in the Collateral
described  therein and proceeds  thereof.  When the actions described in Section
3(a) or 3(b), as the case may be, of the Acquisition Corp. Pledge Agreement have
been taken,  the Acquisition  Corp.  Pledge  Agreement shall  constitute a fully
perfected  Lien on, and security  interest in, all right,  title and interest of
the Loan Parties in such  Collateral and the proceeds  thereof,  as security for
the Obligations (as defined in the Acquisition Corp. Pledge Agreement),  in each
case prior and  superior in right to any other Person other than as permitted by
the Acquisition Corp. Pledge Agreement.

                  (c) Each of the Canadian Collateral  Documents is effective to
create in favor of the  Canadian  Administrative  Agent,  for the benefit of the
Canadian  Lenders,  a legal,  valid and  enforceable  security  interest  in the
Collateral  described  therein and  proceeds  thereof.  Upon  completion  of the
actions set forth on Schedule  7.20,  the Canadian  Collateral  Documents  shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Canadian Borrower Obligations,  in each case prior and superior
in right to any other Person other than as permitted by the Canadian  Collateral
Documents.

                  (d) Each of the  Mortgages  is effective to create in favor of
the General Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable Lien on the mortgaged  properties described therein and proceeds
thereof,  and when the Mortgages are filed in the offices  specified on Schedule
3, each such Mortgage shall  constitute a fully  perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such mortgaged
properties and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other
Person.

                  7.21 SOLVENCY.  Each Loan Party is, and after giving effect to
the  Safety-Kleen  Acquisition  and  the  incurrence  of  all  Indebtedness  and
obligations being incurred in connection herewith and therewith will be and will
continue to be, Solvent.

                  7.22  REGULATION  H.  No  Mortgage   encumbers  improved  real
property  which is located in an area that has been  identified by the Secretary
of Housing and Urban  Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.

                  7.23  CORSAN  TRUCKING,  INC.  As of the date  hereof,  Corsan
Trucking,  Inc., a wholly  owned  Subsidiary  of the Company,  does not have any
assets and does not conduct any operations.


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<PAGE>


                         SECTION 8. CONDITIONS PRECEDENT

                  8.1 CONDITIONS TO INITIAL  EXTENSIONS OF CREDIT. The agreement
of each Lender to make the initial  Extension of Credit  requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such  Extension  of  Credit  on the  Closing  Date,  of the  following
conditions precedent:

                  (a) LOAN  DOCUMENTS.  The General  Administrative  Agent shall
         have  received (i) this  Agreement,  executed  and  delivered by a duly
         authorized  officer  of each  Borrower,  with a  counterpart  for  each
         Lender,  (ii) the  Guarantee  and  Collateral  Agreement,  executed and
         delivered by a duly authorized  officer of the parties thereto,  with a
         counterpart or a conformed copy for each Lender,  (iii) the Acquisition
         Corp.  Pledge Agreement and the Exchange Agent Agency  Agreement,  each
         executed  and  delivered  by a duly  authorized  officer of the parties
         thereto,  with a counterpart or a conformed copy for each Lender,  (iv)
         each of the Mortgage Amendments,  each executed and delivered by a duly
         authorized  officer  of the  party  thereto,  with a  counterpart  or a
         conformed copy for each Lender, (v) each Canadian  Collateral  Document
         listed on Schedule  4,  executed  and  delivered  by a duly  authorized
         officer of the parties thereto,  with a counterpart or a conformed copy
         for each  Lender and (vi) the  Intercreditor  Agreement,  executed  and
         delivered by a duly authorized officer of the parties thereto.

                  (b) PAYMENT OF INDEBTEDNESS  UNDER EXISTING  CREDIT  AGREEMENT
         AND  TERMINATION OF  COMMITMENTS.  The  Commitments  (as defined in the
         Existing Credit  Agreement)  under the Existing Credit  Agreement shall
         have been terminated and all Indebtedness of the Borrowers  thereunder,
         including all principal,  interest and fees accrued to the Closing Date
         (including,  but not  limited  to, any  prepayment  premium  payable in
         connection  with the prepayment of the Tranche B Term Loans and Tranche
         C Term Loans (each as defined in the Existing Credit  Agreement)),  but
         excluding   reimbursement   obligations  in  respect  of  the  Existing
         Acceptances and the Existing  Letter of Credit,  shall have been repaid
         in full. The indemnity  agreement  described in the second  sentence of
         Section   5.1(a)  shall  have  been   executed  and  delivered  by  The
         Toronto-Dominion   Bank  and  the  Existing  Acceptance  Lenders.   All
         reimbursement obligations in respect of the Specified Acceptances shall
         have been paid in full and the  Specified  Acceptances  shall have been
         cancelled.

                  (c) EXCHANGE OFFER,  MERGER,  ETC. The following  transactions
         shall have been consummated (and the General Administrative Agent shall
         have received a certificate of the Company to such effect,  accompanied
         by copies of any documentary  evidence thereof reasonably  requested by
         the General Administrative Agent):

                           (i) all conditions  precedent to the  consummation of
                  the Exchange Offer set forth in the Exchange  Offer  Documents
                  shall have been satisfied or waived with the Required Lenders'
                  consent and the number of Target Shares being validly tendered
                  for exchange in the Exchange Offer and not properly  withdrawn
                  prior to the expiration of the Exchange  Offer,  together with
                  the Target Shares owned by


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                           Holdings  and its  Subsidiaries,  shall  represent no
                  less than the minimum  number of Target  Shares (the  "MINIMUM
                  NUMBER OF SHARES"),  determined on a fully diluted basis after
                  giving  effect to the  exercise of any  uncancelled  warrants,
                  rights,  options,  conversion  privileges  or  similar  rights
                  (other than the Target Rights),  necessary under Wisconsin law
                  and the articles of  incorporation  and bylaws of Safety-Kleen
                  to have sufficient voting power in Safety-Kleen to approve the
                  Merger  independently  of the votes of any other  Safety-Kleen
                  shareholders;

                           (ii) since the date of this  Agreement,  the terms of
                  the  Exchange  Offer  shall not have been  amended,  waived or
                  modified as to price, consideration,  conditions,  termination
                  or expiration  or in any other  material  respect  without the
                  prior approval of the General Administrative Agent;

                           (iii)  there  shall  be no legal  impediments  to the
                  Merger  that  are  not  within  the  control  of  Holdings  to
                  overcome;

                           (iv) all  actions  shall  have been taken so that the
                  provisions  of  Section  180.1141  of the  Wisconsin  Business
                  Corporation  Law shall be  inapplicable  to the Exchange Offer
                  and the  Merger,  and no  other  "fair  price",  "moratorium",
                  "business  combination",  "control share acquisition" or other
                  form of anti-takeover statute,  regulation,  charter or by-law
                  provision,  is or shall become applicable which would cause or
                  could  reasonably  be expected to cause any  material  adverse
                  consequences to Acquisition  Corp.,  Holdings,  the Borrowers,
                  Safety-Kleen or the Exchange Offer or Merger;

                           (v)  Safety-Kleen  and its Board of  Directors  shall
                  have taken all necessary action to amend the Rights Agreement,
                  dated  as  of  November  9,  1988  (as  amended,  the  "RIGHTS
                  AGREEMENT")  to provide for the  redemption  or  annulment  or
                  inapplicability   (without  any   substantial   cost)  of  all
                  interests  outstanding  under or issued pursuant to the Rights
                  Agreement  and  to  otherwise  avoid  the  occurrence  of  any
                  material   adverse   consequences  to  Acquisition   Corp.  or
                  Safety-Kleen  as a  consequence  of the Exchange  Offer or the
                  Merger;

                           (vi) Holdings,  Acquisition  Corp.  and  Safety-Kleen
                  shall have  entered  into a definitive  Merger  Agreement  and
                  related  documentation  providing  for the  Merger in form and
                  substance satisfactory to the General Administrative Agent;

                           (vii) all regulatory  approvals  (including,  without
                  limitation,  all such  approvals  with  respect  to  antitrust
                  matters) necessary to consummate the Exchange Offer shall have
                  been  obtained,  all  applicable  waiting  periods  shall have
                  expired  and  the  General   Administrative   Agent  shall  be
                  satisfied that all material regulatory  approvals necessary to
                  consummate  the  Merger  have been  obtained  or can be timely
                  obtained;


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                           (viii)  there  shall  be  no  order,   injunction  or
                  restraining  order in  effect  or known by the  Company  to be
                  threatened  which would prevent or delay the  consummation of,
                  or impose material  adverse  conditions on, the Exchange Offer
                  or the Merger. There shall not exist any pending or threatened
                  litigation  which,  in the good faith  judgment of the General
                  Administrative  Agent,  could reasonably be expected to have a
                  Material  Adverse  Effect or a material  adverse effect on the
                  ability of Holdings or  Acquisition  Corp. to  consummate  the
                  Exchange  Offer or on the ability of  Holdings or  Acquisition
                  Corp.  to  consummate  the Merger or to perform  any  material
                  obligation  contemplated  hereby or thereby or on the  General
                  Administrative Agent's and Lenders' rights and remedies;

                           (ix) neither Safety-Kleen nor any of its subsidiaries
                  shall have  taken,  or be taking,  any action  (including  any
                  reorganization,  recapitalization,  asset sale, stock purchase
                  or distribution to its  stockholders)  that, in the good faith
                  judgment of the General Administrative Agent, could reasonably
                  be expected to have a material adverse effect on the condition
                  (financial  or  otherwise),  business,  operations,  assets or
                  prospects  of  Safety-Kleen  or  its  subsidiaries  or on  the
                  consummation of the Exchange Offer or the Merger.  In the good
                  faith  judgment  of  the  General   Administrative  Agent,  no
                  material  adverse change shall have otherwise  occurred in the
                  condition  (financial  or  otherwise),  business,  operations,
                  assets or prospects of (A) Holdings and its Subsidiaries since
                  the date of the audited financial statements of Holdings dated
                  August 31, 1997 or (B) Safety-Kleen and its Subsidiaries since
                  the date of the audited  financial  statements of Safety-Kleen
                  dated December 31, 1996; and

                           (x) the  capital  and  legal  structure  of each Loan
                  Party  after the  Safety-Kleen  Acquisition  as proposed to be
                  consummated  pursuant to the Exchange Offer  Documentation and
                  the Merger  Agreement  shall be  satisfactory in all respects;
                  and

                           (xi)  all  actions   required  under   Safety-Kleen's
                  existing  credit  facility shall have been taken such that the
                  consummation  of the  Exchange  Offer  does not  constitute  a
                  default, or an event of mandatory prepayment, thereunder.


                  (d) REGULATIONS OF BOARD; FORMS G-3 AND U-1. The Lenders shall
         be satisfied that the Exchange  Offer and the financing  thereof comply
         with  Regulation  T, U and X of  the  Board.  Each  Lender  shall  have
         received a duly  completed  and executed Form FR G-3 or Form FR U-1, as
         applicable, of the Board, demonstrating such compliance.

                  (e) PLEDGED STOCK;  STOCK POWERS.  The General  Administrative
         Agent or the  Exchange  Agent  shall  have  received  the  certificates
         representing  the Target  Shares  pledged  pursuant to the  Acquisition
         Corp. Pledge Agreement (other than such Shares constituting  Book-Entry
         Shares  (as  defined  in  the  Acquisition  Corp.  Pledge  Agreement)),
         together with an undated stock power for each such certificate executed
         in blank by a duly


                                       77
<PAGE>


                  authorized  officer of Acquisition  Corp., and with respect to
         Target  Shares  consisting  of  Book-Entry  Shares,  evidence  that all
         actions  described  in Section  3(b) of the  Acquisition  Corp.  Pledge
         Agreement  which are  necessary  to create  and  perfect  the  security
         interests  pursuant  to  the  Acquisition  Corp.  Pledge  Agreement  in
         accordance  with Article 8 of the Uniform  Commercial Code of the State
         of New York have been taken.  The shares  pledged on the  Closing  Date
         pursuant to the Acquisition Corp. Pledge Agreement shall constitute all
         Shares owned by  Acquisition  Corp. or any of its  affiliates,  whether
         acquired in the Exchange Offer or otherwise.

                  (f) EXCHANGE OFFER DOCUMENTS;  MERGER  AGREEMENT.  The General
         Administrative  Agent shall have received  certified true copies of the
         Exchange Offer Documents and the Merger  Agreement,  in each case as in
         effect on the Closing Date.

                  (g) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders
         shall have received (i) the Pro Forma Balance  Sheet,  (ii) the audited
         consolidated  financial  statements  described in Section 7.1 and (iii)
         unaudited interim consolidated financial statements of Holdings for the
         most recent fiscal quarterly period ended subsequent to the date of the
         latest applicable financial statement delivered pursuant to clause (ii)
         of this paragraph as to which such financial  statements have been made
         publicly available.

                  (h) BUSINESS  PLAN. The Lenders shall have received a business
         plan for the Company and its Subsidiaries (including  Safety-Kleen) for
         the 1998  fiscal  year  and a  written  analysis  of the  business  and
         prospects of the Company and its  Subsidiaries  for the period from the
         Closing Date through the final maturity of the Term Loans, in each case
         as set forth in the Confidential  Information Memorandum dated February
         1998.

                  (i) ENVIRONMENTAL  REPORTS.  The General  Administrative Agent
         shall have received  reports  prepared by Dames & Moore with respect to
         environmental  matters relating to Safety-Kleen,  in form and substance
         satisfactory to the Lenders.

                  (j) CLOSING CERTIFICATE.  The Administrative Agents shall have
         received,  with a counterpart  for each Lender,  a certificate  of each
         Loan  Party,  dated  the  Closing  Date,  substantially  in the form of
         Exhibit I, with appropriate insertions and attachments, satisfactory in
         form  and  substance  to the  Administrative  Agents,  executed  by the
         President or any Vice  President  and the  Secretary  or any  Assistant
         Secretary of such party.

                  (k) FEES.  The  Administrative  Agents and the Arranger  shall
         have  received the fees to be received on the Closing Date  referred to
         in Sections 3.3 and 6.1.

                  (l) LEGAL  OPINIONS.  The  Administrative  Agents  shall  have
         received,  with a counterpart for each Lender,  the following  executed
         legal opinions:

                                 (i)  the  executed  legal  opinion  of  Katten,
                  Muchin & Zavis, U.S. counsel to the Company and the other Loan
                  Parties, in form and substance reasonably  satisfactory to the
                  General Administrative Agent;


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<PAGE>


                                (ii)  the  executed  legal  opinion  of  Ivan R.
                  Cairns,  general counsel to Laidlaw, the Canadian Borrower and
                  its   Subsidiaries,   in   form   and   substance   reasonably
                  satisfactory to the General Administrative Agent;

                               (iii) the  executed  legal  opinion  of Tory Tory
                  DesLauriers & Binnington,  Canadian counsel to the Lenders, in
                  form and  substance  reasonably  satisfactory  to the  General
                  Administrative Agent; and

                                (iv)  the  executed   legal   opinion  of  South
                  Carolina counsel to the Company and the other Loan Parties, in
                  form and  substance  reasonably  satisfactory  to the  General
                  Administrative Agent.

         Each such legal opinion shall cover such other matters  incident to the
         transactions  contemplated  by  this  Agreement  as the  Administrative
         Agents may reasonably require.

                  (m)  VALIDITY  OF  LIENS.  The  Security  Documents  shall  be
         effective  to create in favor of the  General  Administrative  Agent or
         Canadian  Administrative  Agent, as the case may be, a legal, valid and
         enforceable  first  (except for prior Liens not  prohibited  by Section
         10.3) security  interest in and lien upon the  Collateral.  The General
         Administrative Agent shall have received evidence in form and substance
         satisfactory  to it that all  filings,  recordings,  registrations  and
         other  actions,  including,  without  limitation,  the  filing  of duly
         executed  financing  statements  on form  UCC-1,  necessary  or, in the
         opinion of the General  Administrative Agent,  desirable to perfect the
         Liens created by the Security Documents shall have been completed.

                  (n) TITLE INSURANCE POLICY. The General  Administrative  Agent
         shall have received in respect of each parcel  covered by each Existing
         Mortgage  a  mortgagee's  title  policy  (or  policies)  or  marked  up
         unconditional  binder for such insurance  dated the Closing Date.  Each
         such  policy  shall (i) be in an  amount  satisfactory  to the  General
         Administrative  Agent;  (ii) be issued at ordinary rates;  (iii) insure
         that the Mortgage  insured  thereby  creates a valid first Lien on such
         parcel free and clear of all defects and  encumbrances,  except such as
         may be  approved  by the General  Administrative  Agent;  (iv) name the
         General  Administrative  Agent for the  benefit  of the  Lenders as the
         insured  thereunder;  (v) be in the  form of ALTA  Loan  Policy  - 1970
         (Amended  10/17/70);  (vi) contain such  endorsements  and  affirmative
         coverage as the General  Administrative  Agent may request and (vii) be
         issued by title companies  satisfactory  to the General  Administrative
         Agent  (including  any such title  companies  acting as  co-insurers or
         reinsurers,  at the option of the General  Administrative  Agent).  The
         General  Administrative Agent shall have received evidence satisfactory
         to it that all premiums in respect of each such policy, and all charges
         for mortgage recording tax, if any, have been paid.


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<PAGE>


                  (o) COPIES OF  DOCUMENTS.  The  General  Administrative  Agent
         shall have  received a copy of all recorded  documents  referred to, or
         listed as exceptions to title in, the title policy or policies referred
         to in  Section  8.1(n)  and a copy,  certified  by such  parties as the
         General  Administrative  Agent  may  deem  appropriate,  of  all  other
         documents affecting the property covered by each Mortgage.

                  (p) LIEN SEARCHES. The General Administrative Agent shall have
         received the results of a recent search by a Person satisfactory to the
         General Administrative Agent, of the Uniform Commercial Code, judgement
         and tax lien filings which may have been filed with respect to personal
         property of the Loan  Parties,  and the results of such search shall be
         satisfactory to the General Administrative Agent.

                  (q)  INSURANCE.  The General  Administrative  Agent shall have
         received evidence in form and substance  satisfactory to it that all of
         the  requirements  of Section 9.5 of this  Agreement and Section 5.3 of
         the Guarantee and Collateral Agreement shall have been satisfied.

                  8.2  CONDITIONS  TO  EXTENSIONS  OF CREDIT  MADE ON THE MERGER
DATE.  The  agreement of each Lender to make  Extensions of Credit on the Merger
Date  requested  to be made by it is  subject to the  satisfaction,  immediately
prior to or  concurrently  with the  making of such  Extension  of Credit on the
Merger Date, of the following conditions precedent:

                           (a) MERGER AGREEMENT. (i) The terms and conditions of
                  the Merger  Agreement  shall not have been amended,  waived or
                  modified as to price, consideration,  conditions,  termination
                  or expiration  or in any other  material  respect  without the
                  prior  approval  of the General  Administrative  Agent and the
                  Required Lenders;

                                    (ii) the Merger shall have been  consummated
                  in accordance  with the Merger  Agreement and applicable  law;
                  and

                                    (iii)  all   conditions   precedent  to  the
                  consummation of the Merger shall have been satisfied or waived
                  with the Required Lenders' consent.

                           (b) SOLVENCY CERTIFICATE.  The General Administrative
                  Agent  shall  have  received  a  solvency  certificate  of the
                  Company,  in form,  scope and  substance  satisfactory  to the
                  General Administrative Agent and its legal counsel.

                           (c) COLLATERAL.  All actions required by Section 9.10
                  in respect of all  Subsidiaries  and  assets  acquired  on the
                  Merger Date (including delivery of legal opinions with respect
                  thereto as provided in Section  9.10) shall have been taken so
                  that on the Merger Date the General Administrative Agent shall
                  have a duly perfected first priority  security interest in all
                  such assets.


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<PAGE>


                           (d) LEGAL OPINIONS.  The Administrative  Agents shall
                  have  received,  with  a  counterpart  for  each  Lender,  the
                  executed legal opinion of Katten, Muchin & Zavis, U.S. counsel
                  to the  Company  and the  other  Loan  Parties,  in  form  and
                  substance    reasonably    satisfactory    to   the    General
                  Administrative  Agent.  Such legal  opinion  shall  cover such
                  other matters  incident to the  transactions  contemplated  by
                  this  Agreement as the  Administrative  Agents may  reasonably
                  require.

                           (e) LIEN SEARCHES.  The General  Administrative Agent
                  shall have received the results of a recent search by a Person
                  satisfactory  to  the  General  Administrative  Agent,  of the
                  Uniform Commercial Code,  judgement and tax lien filings which
                  may have been  filed  with  respect to  personal  property  of
                  Safety-Kleen  and its  Subsidiaries,  and the  results of such
                  search  shall be  satisfactory  to the General  Administrative
                  Agent.

                           (f) INSURANCE. The General Administrative Agent shall
                  have received  evidence in form and substance  satisfactory to
                  it  that  all of  the  requirements  of  Section  9.5 of  this
                  Agreement  and Section  5.3 of the  Guarantee  and  Collateral
                  Agreement  shall  have  been  satisfied  with  respect  to the
                  Surviving Corporation and its Subsidiaries.

                           (g) all outstanding  indebtedness of Safety-Kleen and
                  its  subsidiaries  (other than the  indebtedness  set forth on
                  Schedule  8.2(g)  hereto) shall have been repaid in full.

                  8.3  CONDITIONS TO EXTENSION OF CREDIT.  The agreement of each
Lender to make any  Extension  of Credit  requested to be made by it on any date
(including,  without limitation,  its initial Extension of Credit) is subject to
the satisfaction of the following conditions precedent:

                  (a)    REPRESENTATIONS    AND   WARRANTIES.    Each   of   the
         representations and warranties made by any Loan Party in or pursuant to
         the Loan Documents  shall be true and correct in all material  respects
         on and as of such date as if made on and as of such date.

                  (b) NO  DEFAULT.  No Default  or Event of  Default  shall have
         occurred and be  continuing  on such date or after giving effect to the
         extensions of credit requested to be made on such date.

                  (c) ADDITIONAL  MATTERS.  All corporate and other proceedings,
         and all  documents,  instruments  and other legal matters in connection
         with the  transactions  contemplated by this Agreement,  the other Loan
         Documents and the Merger  Agreement  shall be  satisfactory in form and
         substance  to  the  General   Administrative  Agent,  and  the  General
         Administrative Agent shall have received such other documents and legal
         opinions in respect of any aspect or  consequence  of the  transactions
         contemplated hereby or thereby as it shall reasonably request.


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<PAGE>


                  Each  request  by  a  Borrower  for  an  Extension  of  Credit
hereunder shall constitute a representation  and warranty by each Borrower as of
the date thereof that the  conditions  contained  in this  subsection  have been
satisfied.


                        SECTION 9. AFFIRMATIVE COVENANTS

                  The Company  hereby  agrees that,  so long as the  Commitments
remain in effect, any Loan, Reimbursement  Obligation,  Acceptance Reimbursement
Obligation,  Acceptance  Note or  Letter of Credit  remains  outstanding  or any
amount is owing to any Lender, the General  Administrative Agent or the Canadian
Administrative  Agent  hereunder or under any other Loan  Document,  the Company
shall and (except in the case of delivery of financial information,  reports and
notices) shall cause each of its Subsidiaries to:

                  9.1   FINANCIAL    STATEMENTS.    Furnish   to   the   General
Administrative Agent, the Canadian Administrative Agent and each Lender:

                  (a) as soon as  available,  but in any  event  within  90 days
         after  the  end  of  each  fiscal  year  of  Holdings,  a  copy  of the
         consolidated  and  consolidating  balance  sheets of  Holdings  and its
         consolidated  Subsidiaries  as at the end of such year and the  related
         consolidated  and  consolidating  statements  of  income  and  retained
         earnings and of cash flows for such year, setting forth in each case in
         comparative form the figures for the previous year, reported on (in the
         case of such  consolidated  statements  and  balance  sheet)  without a
         "going concern" or like  qualification  or exception,  or qualification
         arising  out of the scope of the  audit,  by Coopers & Lybrand or other
         independent  certified  public  accountants  of  nationally  recognized
         standing,  and certified (in the case of such consolidating  statements
         and balance  sheet) by a Responsible  Officer as being fairly stated in
         all material respects; and

                  (b) as soon as  available,  but in any event not later than 45
         days after the end of each of the first three quarterly periods of each
         fiscal year of Holdings,  the unaudited  consolidated and consolidating
         balance sheets of Holdings and its consolidated  Subsidiaries as at the
         end  of  such  quarter  and  the  related  unaudited  consolidated  and
         consolidating  statements  of income and retained  earnings and of cash
         flows of Holdings and its  consolidated  Subsidiaries  for such quarter
         and the  portion of the fiscal year  through  the end of such  quarter,
         setting  forth in each case in  comparative  form the  figures  for the
         previous  year,  certified  by a  Responsible  Officer as being  fairly
         stated in all  material  respects  (subject  to normal  year-end  audit
         adjustments);

all such  financial  statements  shall be complete  and correct in all  material
respects and shall be prepared in reasonable  detail and in accordance with GAAP
applied  consistently  throughout the periods  reflected  therein and with prior
periods (except as approved by such accountants or officer,  as the case may be,
and disclosed therein).


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<PAGE>


                  9.2  CERTIFICATES; OTHER INFORMATION.  Furnish to each Lender:

                  (a) concurrently with the delivery of the financial statements
         referred  to in  Section  9.1(a),  a  certificate  of  the  independent
         certified  public  accountants  reporting on such financial  statements
         stating that in making the examination  necessary therefor no knowledge
         was obtained of any Default or Event of Default, except as specified in
         such certificate;

                  (b) concurrently with the delivery of the financial statements
         referred  to  in  Sections  9.1(a)  and  (b),  (i) a  certificate  of a
         Responsible  Officer  stating  that,  to the  best of such  Responsible
         Officer's  knowledge,  during such  period the Company has  observed or
         performed  all of its  covenants  and other  agreements,  and satisfied
         every  condition,  contained  in  this  Agreement  and the  other  Loan
         Documents to be  observed,  performed or satisfied by it, and that such
         Responsible  Officer has  obtained no knowledge of any Default or Event
         of  Default  except  as  specified  in  such  certificate  and  (ii)  a
         compliance   certificate  of  a  Responsible   Officer  containing  all
         information   necessary,   or  reasonably   requested  by  the  General
         Administrative Agent, for determining compliance by the Company and its
         Subsidiaries  with the provisions of Section 10 of this Agreement as of
         the last day of the fiscal  quarter or fiscal year of the  Company,  as
         the case may be;

                  (c) prior to the end of each  fiscal  year of the  Company,  a
         copy of the projections by the Company of the operating budget and cash
         flow  budget of the  Company and its  Subsidiaries  for the  succeeding
         fiscal year,  such  projections to be accompanied by a certificate of a
         Responsible  Officer  to the  effect  that such  projections  have been
         prepared on the basis of sound  financial  planning  practice  and that
         such Responsible Officer has no reason to believe they are incorrect or
         misleading in any material respect;

                  (d) within  five days  after the same are sent,  copies of all
         financial statements and reports which the Company or Holdings sends to
         its stockholders, and within five days after the same are filed, copies
         of all financial  statements  and reports which the Company or Holdings
         may make to, or file with, the  Securities  and Exchange  Commission or
         any successor or analogous Governmental  Authority (including,  but not
         limited to, each Exchange Offer Document); and

                  (e) promptly,  such additional financial and other information
         as any Lender may from time to time reasonably request.

                  9.3  PAYMENT  OF  OBLIGATIONS.  Pay,  discharge  or  otherwise
satisfy at or before maturity or before they become delinquent,  as the case may
be, all its obligations of whatever nature,  except where the amount or validity
thereof is currently  being  contested in good faith by appropriate  proceedings
and reserves in conformity  with GAAP with respect thereto have been provided on
the books of the Company or its Subsidiaries, as the case may be.


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<PAGE>


                  9.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue
to  engage in  business  of the same  general  type as now  conducted  by it and
preserve,  renew and keep in full force and effect its  corporate  existence and
take all  reasonable  action to maintain all rights,  privileges  and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 10.5; comply with all Contractual  Obligations and
Requirements of Law except to the extent that failure to comply  therewith could
not, in the aggregate, have a Material Adverse Effect.

                  9.5  MAINTENANCE  OF  PROPERTY;  INSURANCE.  Keep all property
useful and  necessary  in its  business  in good  working  order and  condition;
maintain with financially sound and reputable  insurance  companies insurance on
all its property in at least such amounts and against at least such risks as are
usually  insured  against in the same general  area by companies  engaged in the
same or a similar  business  (including,  but not limited to, general  liability
insurance in an amount of at least  $100,000,000  and a  deductible  of not more
than $5,000,000 per occurrence).

                  9.6  INSPECTION OF PROPERTY;  BOOKS AND RECORDS;  DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in  conformity  with  GAAP  and all  Requirements  of Law  shall  be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the  Administrative  Agents (or, with the coordination of the
Administrative  Agents,  the Lenders) to visit and inspect any of its properties
and  examine  and  make  abstracts  from any of its  books  and  records  at any
reasonable  time and as often as may  reasonably  be desired  and to discuss the
business,  operations,  properties  and  financial  and other  condition  of the
Company and its Subsidiaries  with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants.

                  9.7 NOTICES. Promptly give notice to the Administrative Agents
and each Lender of:

                  (a)  the occurrence of any Default or Event of Default;

                  (b) any (i) default or event of default under any  Contractual
         Obligation  of  the  Company  or  any  of  its   Subsidiaries  or  (ii)
         litigation,  investigation  or  proceeding  which may exist at any time
         between the  Company or any of its  Subsidiaries  and any  Governmental
         Authority,  which  in  either  case,  if  not  cured  or  if  adversely
         determined, as the case may be, could have a Material Adverse Effect;

                  (c) any litigation or proceeding  affecting the Company or any
         of its  Subsidiaries in which the amount involved is $5,000,000 or more
         and not covered by insurance or in which  injunctive or similar  relief
         is sought;

                  (d) the following events, as soon as possible and in any event
         within 30 days after the Company  knows or has reason to know  thereof:
         (i) the occurrence or expected  occurrence of any Reportable Event with
         respect to any Plan, a failure to make any required  contribution  to a
         Plan, the creation of any Lien in favor of the PBGC or a Plan or


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<PAGE>


                  any withdrawal  from, or the  termination,  Reorganization  or
         Insolvency  of,  any  Multiemployer  Plan or (ii)  the  institution  of
         proceedings  or the  taking  of any  other  action  by the  PBGC or the
         Company or any Commonly  Controlled  Entity or any  Multiemployer  Plan
         with respect to the withdrawal from, or the terminating, Reorganization
         or Insolvency of, any Plan;

                  (e) the occurrence or expected occurrence of any event that is
         reasonably  likely to result in the Company or any of its  Subsidiaries
         being unable to obtain,  renew, or comply with any Environmental Permit
         the absence of which  could have a Material  Adverse  Effect,  or being
         unable to comply with any Environmental Law in a manner that could have
         a Material Adverse Effect; and

                  (f) any material  adverse change in the business,  operations,
         property,  condition  (financial  or  otherwise)  or  prospects  of the
         Company and its Subsidiaries taken as a whole.

Each notice  pursuant to this Section shall be  accompanied  by a statement of a
Responsible  Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.

                  9.8 ENVIRONMENTAL  LAWS. (a) (i) Comply with all Environmental
Laws  applicable  to it,  and  obtain,  comply  with  and  maintain  any and all
Environmental  Permits necessary for its operations as conducted and as planned;
and  (ii)  take all  reasonable  efforts  to  ensure  that  all of its  tenants,
subtenants,   contractors,   subcontractors,   and  invitees   comply  with  all
Environmental   Laws,  and  obtain,   comply  with  and  maintain  any  and  all
Environmental  Permits,  applicable  to any of them insofar as any failure to so
comply,  obtain or maintain reasonably could adversely affect the Company or any
Subsidiary.  For purposes of this Section 9.8(a),  noncompliance  by the Company
and  any  of  its  Subsidiaries   with  any  applicable   Environmental  Law  or
Environmental  Permit  shall  be  deemed  not to  constitute  a  breach  of this
covenant; provided that, upon learning of any actual or suspected noncompliance,
the Company and its Subsidiaries shall promptly undertake all reasonable efforts
to  achieve   compliance;   and  provided   further  that,  in  any  case,  such
non-compliance,   and  any  other  noncompliance  with  any  Environmental  Law,
individually or in the aggregate,  could not reasonably be expected to give rise
to a Material Adverse Effect.

                  (b)  Promptly  comply  with all orders and  directives  of all
Governmental  Authorities  regarding  Environmental Laws, other than such orders
and  directives as to which an appeal has been timely and properly taken in good
faith and  provided  that the pendency of any and all such appeals does not give
rise to a Material Adverse Effect.

                  (c) Prior to acquiring any ownership or leasehold  interest in
real  property for which a permit would be required for operation as a hazardous
waste  facility,  or any  other  real  property  or other  interest  in any real
property that could reasonably be expected to give rise to the Company or any of
its  Subsidiaries  being found to be subject to  potential  liability  under any
Environmental  Law:  (i) obtain a written  report by a  reputable  environmental
consultant  of the  environmental  consultant's  assessment  of the  presence or
potential  presence of  significant  levels of any  Materials  of  Environmental
Concern on, under, in, or about the property, or of other


                                       85
<PAGE>


                                                                        
conditions  or  operations  that  could  give  rise to  potentially  significant
liability under or violations of Environmental Law relating to such acquisition;
and (ii) inform the General  Administrative  Agent of its plans to acquire  such
interest in real property and, upon the General  Administrative Agent's request,
afford the General  Administrative Agent a reasonable  opportunity to review and
discuss  the  contents  of such report  with the  environmental  consultant  who
prepared it and a knowledgeable representative of the Company.

                  (d) Promptly upon the General  Administrative  Agent's request
if there has been an Event of Default which has not been fully and timely cured,
permit an environmental  consultant whom the General Administrative Agent in its
discretion designates to perform an environmental assessment (including, without
limitation:   reviewing  documents;   interviewing  knowledgeable  persons;  and
sampling  and  analyzing  soil,  air,  surface  water,   groundwater,   building
materials,  and/or  other media or  substances)  in or about  property  owned or
leased by the Company or any of its Subsidiaries,  or on which operations of the
Company or any of its  Subsidiaries  otherwise  take place.  Such  environmental
assessment shall be in form,  scope,  and substance  satisfactory to the General
Administrative  Agent. The Company and its Subsidiaries shall cooperate fully in
the conduct of such  environmental  assessment,  and shall pay the costs of such
environmental   assessment  immediately  upon  written  demand  by  the  General
Administrative   Agent.   Pursuant   to  this   Section   9.8(d),   the  General
Administrative  Agent  shall  have the  right,  but shall not have any duty,  to
request and/or obtain any such environmental assessment.

                  9.9  FURTHER  ASSURANCE.  Upon  the  request  of  the  General
Administrative Agent, promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all  documents  (including,  without
limitation,  financing statements and continuation  statements) for filing under
the provisions of the Uniform  Commercial  Code or any other  Requirement of Law
which  are   necessary  or  advisable  to  maintain  in  favor  of  the  General
Administrative Agent or the Canadian  Administrative  Agent, as the case may be,
for the benefit of the Lenders,  Liens on the Collateral that are duly perfected
in accordance with all applicable Requirements of Law.

                  9.10  ADDITIONAL  COLLATERAL.  (a) With  respect to any assets
acquired after the Closing Date by the Company or any of its Subsidiaries (other
than each of ECDC East,  L.C., ECDC Services,  L.C.,  Osco Treatment  Systems of
Mississippi,  Inc.,  USPCI of Mississippi,  Inc., so long as such entity is not,
directly or  indirectly,  a  wholly-owned  subsidiary  of the Company)  that are
intended to be subject to the Lien created by any of the Security  Documents but
which are not so subject  (other than any assets  described in paragraph  (b) or
(c) of this  Section),  promptly  (and in any  event  within  30 days  after the
acquisition  thereof):  (i) execute  and  deliver to the General  Administrative
Agent or the Canadian  Administrative Agent, as the case may be, such amendments
to the  relevant  Security  Documents  or such other  documents  as the  General
Administrative  Agent shall deem  necessary or advisable to grant to the General
Administrative Agent or the Canadian  Administrative  Agent, as the case may be,
for the benefit of the  Lenders,  a Lien on such  assets,  (ii) take all actions
necessary  or advisable  to cause such Lien to be duly  perfected in  accordance
with all applicable  Requirements of Law,  including,  without  limitation,  the
filing of financing  statements in such jurisdictions as may be requested by the
General  Administrative Agent or the Canadian  Administrative Agent, as the case
may be, and (iii) if


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<PAGE>


requested  by  the  General   Administrative   Agent,  deliver  to  the  General
Administrative Agent legal opinions relating to the matters described in clauses
(i) and  (ii)  immediately  preceding,  which  opinions  shall  be in  form  and
substance,   and  from   counsel,   reasonably   satisfactory   to  the  General
Administrative Agent.

                  (b) With respect to any Person (other than a Subsidiary of the
Canadian  Borrower) that,  subsequent to the Closing Date, becomes a Subsidiary,
including,   without  limitation  on  the  Merger  Date,  Safety-Kleen  and  its
Subsidiaries, promptly upon the request of the General Administrative Agent: (i)
execute and deliver to the General  Administrative Agent, for the benefit of the
Lenders,  a new  pledge  agreement  or  such  amendments  to the  Guarantee  and
Collateral Agreement as the General Administrative Agent shall deem necessary or
advisable to grant to the General  Administrative  Agent, for the benefit of the
Lenders,  a Lien on the Capital Stock of such  Subsidiary  which is owned by the
Company or any of its Subsidiaries,  (ii) deliver to the General  Administrative
Agent the certificates  representing  such Capital Stock,  together with undated
stock powers executed and delivered in blank by a duly authorized officer of the
Company or such Subsidiary,  as the case may be, (iii) cause such new Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement, and (B) to take
all actions  necessary or  advisable to cause the Lien created by the  Guarantee
and Collateral  Agreement to be duly perfected in accordance with all applicable
Requirements  of Law,  including,  without  limitation,  the filing of financing
statements   in  such   jurisdictions   as  may  be  requested  by  the  General
Administrative Agent and (iv) if requested by the General  Administrative Agent,
deliver to the  General  Administrative  Agent  legal  opinions  relating to the
matters  described in clauses (i), (ii) and (iii) immediately  preceding,  which
opinions  shall  be  in  form  and  substance,  and  from  counsel,   reasonably
satisfactory to the General Administrative Agent.

                  (c) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary of the Canadian  Borrower,  promptly upon the request
of the General  Administrative  Agent:  (i) execute and deliver to the  Canadian
Administrative  Agent a new pledge  agreement or such amendments to the Canadian
Collateral Documents as the General Administrative Agent shall deem necessary or
advisable to grant to the Canadian  Administrative Agent, for the benefit of the
Canadian Lenders,  a Lien on the Capital Stock of such Subsidiary which is owned
by  the  Canadian  Borrower  or any of its  Subsidiaries,  (ii)  deliver  to the
Canadian Administrative Agent any certificates  representing such Capital Stock,
together  with undated  stock powers  executed and  delivered in blank by a duly
authorized officer of the Canadian Borrower or such Subsidiary,  as the case may
be,  and take or cause to be taken all such other  actions  under the law of the
jurisdiction of organization of such Subsidiary as may be necessary or advisable
to perfect  such Lien on such  Capital  Stock,  (iii) cause such  Subsidiary  to
become a guarantor under the Canadian Collateral Documents and to grant security
interests in its personal  property  assets and (iv) if requested by the General
Administrative Agent, deliver to the General Administrative Agent legal opinions
relating to the matters  described  in clauses (i),  (ii) and (iii)  immediately
preceding,  which  opinions  shall be in form and  substance,  and from counsel,
reasonably satisfactory to the General Administrative Agent.


                                       87
<PAGE>


                  (d) With respect to any parcel of real property  having a book
value in excess of $1,000,000 acquired by the Company or any of its Subsidiaries
after the Closing Date  (including  any such real  property  owned by any Person
when it becomes a Subsidiary), if requested by the General Administrative Agent,
promptly  provide  to the  General  Administrative  Agent  a  mortgage  on  such
property,  together  with  such  title  insurance  policies,  surveys  and legal
opinions  related  thereto  as  shall be  reasonably  requested  by the  General
Administrative Agent.

                  9.11 CANADIAN BENEFIT AND PENSION PLANS. (a) For each existing
Canadian  Pension  Plan and Canadian  Benefit Plan and for any Canadian  Pension
Plan or Canadian Benefit Plan hereafter  adopted,  the Canadian Borrower and its
Subsidiaries  shall in a  timely  fashion  perform  all  obligations  (including
fiduciary,  funding,  investment and administration  obligations) required to be
performed  in  connection  with  such plan and the  funding  media  therefor  in
accordance with the terms of such plan and all Requirements of Law.


                  (b) Each of the Canadian  Borrower and its Subsidiaries  shall
deliver to the General  Administrative  Agent (A) if  requested  by the Canadian
Administrative  Agent,  acting reasonably,  promptly after the filing thereof by
the  Canadian  Borrower  or such  Subsidiary  with any  applicable  Governmental
Authority,  copies of each annual and other  return,  report or  valuation  with
respect to each  Canadian  Pension  Plan,  copies of any  actuarial  report with
respect  to  each  Canadian  Pension  Plan  (whether  or  not  required  by  any
Governmental  Authority) and (B) promptly after receipt  thereof,  a copy of any
direction,  notice  or other  communication  (i) in  respect  of any  breach  of
Applicable  Law,  (ii) which  would have the effect of  increasing  the  funding
obligation  in respect of each such plan,  or (iii)  which  could  result in the
imposition  of any  Lien on any of the  properties  or  assets  of the  Canadian
Borrower or such Subsidiary,  and any order or ruling that the Canadian Borrower
or such Subsidiary may receive from any applicable  Governmental  Authority with
respect to any Canadian Pension Plan.

                  9.12  INTEREST  RATE  PROTECTION.  Within  90 days  after  the
Closing Date,  obtain  interest rate  protection  for a period through March 31,
2000 for a notional  amount at least equal to 40% of  Consolidated  Total Funded
Debt that bears interest at a floating rate on terms and conditions satisfactory
to the General Administrative Agent.

                  9.13 CONSUMMATION OF MERGER.  As promptly as practicable,  but
in any event  within 60 days after the Closing  Date,  consummate  the Merger in
accordance with the terms of the Merger Agreement.

                  9.14 PLEDGE  AGREEMENT  SUPPLEMENT.  The  Company  shall cause
Acquisition Corp. to deliver to the General  Administrative Agent on the date of
purchase an executed Pledge Agreement  Supplement,  substantially in the form of
Exhibit  A to the  Acquisition  Corp.  Pledge  Agreement  (a  "PLEDGE  AGREEMENT
SUPPLEMENT"),   covering  any  Additional  Pledged  Stock  (as  defined  in  the
Acquisition  Corp. Pledge Agreement)  purchased by Acquisition  Corp.,  together
with the stock  certificates  representing  such  Additional  Pledged  Stock and
appropriate  undated  stock  powers  duly  executed in blank for each such stock
certificate.


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<PAGE>


                         SECTION 10. NEGATIVE COVENANTS

                  The Company  hereby  agrees that,  so long as the  Commitments
remain in effect, any Loan, Reimbursement  Obligation,  Acceptance Reimbursement
Obligation,  Acceptance  Note or  Letter of Credit  remains  outstanding  or any
amount is owing to any Lender or either  Administrative Agent hereunder or under
any other Loan Document,  the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:

                  10.1  FINANCIAL CONDITION COVENANTS.

                  (a) CONSOLIDATED TOTAL LEVERAGE RATIO. Permit the Consolidated
Total  Leverage  Ratio as at the last day of any fiscal  quarter of the  Company
ending  during  any  fiscal  year set forth  below,  commencing  with the fiscal
quarter  ending  November 30, 1998, to exceed the ratio set forth below opposite
such fiscal year:

                                                       Consolidated Total
                      FISCAL YEAR                        LEVERAGE RATIO
                      -----------                      ------------------
                         1999                               4.50:1.00
                         2000                               3.75:1.00
                         2001                               3.25:1.00
                         2002                               2.75:1.00
                         2003                               2.50:1.00
                         2004 and thereafter                2.00:1.00

                  (b) FIXED  CHARGE  COVERAGE  RATIO.  Permit  the Fixed  Charge
Coverage Ratio as at the last day of any fiscal quarter ending during any fiscal
year set forth below,  commencing  with the fiscal quarter  ending  November 30,
1998, to be less than the ratio set forth below opposite such fiscal year:

                                                             Fixed
                      FISCAL YEAR                    CHARGE COVERAGE RATIO
                      -----------                    ---------------------
                         1999                               1.25:1.00
                         2000                               1.25:1.00
                         2001 and thereafter                1.50:1.00


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<PAGE>


                  (c) INTEREST  COVERAGE  RATIO.  Permit the  Interest  Coverage
Ratio for any period of four consecutive  fiscal quarters of the Company (or, if
less, the number of full fiscal quarters ending  subsequent to the Closing Date)
ending with any fiscal  quarter  ending  during any fiscal year set forth below,
commencing with the fiscal quarter ending November 30, 1998, to be less than the
ratio set forth below opposite such fiscal year:

                                                            Interest
                      FISCAL YEAR                        COVERAGE RATIO 
                      -----------                        --------------
                         1999                               2.00:1.00
                         2000                               2.25:1.00
                         2001                               2.50:1.00
                         2002                               2.75:1.00
                         2003 and thereafter                3.00:1.00


                  (d) MAXIMUM RATIO OF CONTINGENT  OBLIGATIONS TO OPERATING CASH
FLOW.  Permit the ratio of (i) Consolidated  Contingent  Obligations on the last
day of any fiscal  quarter  ending during any fiscal year,  commencing  with the
fiscal quarter  ending  November 30, 1998, to (ii)  Consolidated  Operating Cash
Flow for the period of four consecutive  fiscal quarters ending on such last day
to be greater than 1.00 to 1.00.

For purposes of calculating the foregoing covenants of this Section 10.1 for any
period of four full fiscal quarters,  the applicable  income statement items for
any Person acquired by the Company or its Subsidiaries  during such period shall
be included  on a PRO FORMA  basis for such period of four full fiscal  quarters
(assuming  the  consummation  of each such  acquisition  and the  incurrence  or
assumption of any Indebtedness in connection therewith occurred on the first day
of such  period  of four  full  fiscal  quarters  and  assuming  only  such cost
reductions as are related to such acquisition and are immediately  realizable as
of the date of such  acquisition) if (i) the consolidated  balance sheet of such
acquired  Person and its  consolidated  Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and  stockholders'  equity and of cash flows for such period have been
reported on without a qualification arising out of the scope of the audit (other
than a "going  concern"  or like  qualification  or  exception)  by  independent
certified  public  accountants of nationally  recognized  standing and (ii) such
audited  consolidated  financial statements have been previously provided to the
General Administrative Agent and the Lenders.

                  10.2  LIMITATION ON  INDEBTEDNESS.  Create,  incur,  assume or
suffer to exist any Indebtedness,
                        
except:

                  (a)  Indebtedness of the Borrowers under this Agreement;

                  (b)  Indebtedness of the Company to any Subsidiary and, to the
         extent  permitted by Section 10.8, of any  Subsidiary to the Company or
         any other Subsidiary;


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<PAGE>


                  (c)  Indebtedness  of the Company and any of its  Subsidiaries
         incurred to finance the acquisition of fixed or capital assets (whether
         pursuant to a loan,  a Financing  Lease or  otherwise)  in an aggregate
         principal  amount not exceeding as to the Company and its  Subsidiaries
         $40,000,000 at any one time outstanding;

                  (d)  Indebtedness of the Canadian  Borrower under the Canadian
         Operating   Facility  incurred  for  working  capital  purposes  in  an
         aggregate  principal amount not exceeding  C$35,000,000 at any one time
         outstanding;

                  (e)  Indebtedness of the Company under the NationsBank Line of
         Credit incurred for working capital purposes in an aggregate  principal
         amount not exceeding $25,000,000 at any one time outstanding;

                  (f) Indebtedness  outstanding on the date hereof and listed on
         Schedule  10.2(f)  and  any  refinancings,   refundings,   renewals  or
         extensions  thereof  (excluding any Indebtedness  required to be repaid
         pursuant to Section 8.2(g));

                  (g)  Indebtedness of a corporation  which becomes a Subsidiary
         after the date hereof,  PROVIDED that (i) such indebtedness  existed at
         the time such  corporation  became a Subsidiary  and was not created in
         anticipation  thereof and (ii)  immediately  after giving effect to the
         acquisition  of such  corporation by the Company no Default or Event of
         Default shall have occurred and be continuing;

                  (h)  Indebtedness of the Company of up to  $400,000,000  under
         the High Yield  Notes,  PROVIDED  that the  Borrowers  and the  General
         Administrative  Agent shall have entered into a written  supplement  to
         this Agreement whereby the Company agrees to maintain a senior leverage
         ratio of not greater  than  certain  levels to be agreed by the Company
         and the General Administrative Agent;

                  (i)   Indebtedness  in  the  form  of  Guarantee   Obligations
permitted by Section 10.4; and

                  (j)  additional  Indebtedness  of the  Company  not  exceeding
         $50,000,000 in aggregate principal amount at any one time outstanding.

                  10.3 LIMITATION ON LIENS.  Create,  incur, assume or suffer to
exist any Lien upon any of its property,  assets or revenues,  whether now owned
or hereafter acquired, except for:

                  (a) Liens  for taxes not yet due or which are being  contested
         in good  faith  by  appropriate  proceedings,  PROVIDED  that  adequate
         reserves  with  respect  thereto  are  maintained  on the  books of the
         Company or its  Subsidiaries,  as the case may be, in  conformity  with
         GAAP;


                                       91
<PAGE>


                  (b)  carriers',  warehousemen's,   mechanics',  materialmen's,
         repairmen's  or other like  Liens  arising  in the  ordinary  course of
         business  which  are not  overdue  for a period of more than 60 days or
         which are being contested in good faith by appropriate proceedings;

                  (c)   pledges  or  deposits  in   connection   with   workers'
         compensation,   unemployment   insurance  and  other  social   security
         legislation and deposits securing liability to insurance carriers under
         insurance or self-insurance arrangements;

                  (d)  deposits  to  secure  the  performance  of  bids,   trade
         contracts   (other  than  for  borrowed   money),   leases,   statutory
         obligations,  surety  and  appeal  bonds,  performance  bonds and other
         obligations  of a like  nature  incurred  in  the  ordinary  course  of
         business;

                  (e) easements,  rights-of-way,  restrictions and other similar
         encumbrances  incurred in the ordinary course of business which, in the
         aggregate,  are not  substantial in amount and which do not in any case
         materially  detract from the value of the property  subject  thereto or
         materially  interfere with the ordinary  conduct of the business of the
         Company or such Subsidiary;

                  (f) Liens in existence  on the date hereof  listed on Schedule
         10.3(f),  securing Indebtedness permitted by Section 10.2(f),  PROVIDED
         that no such Lien is spread to cover any additional  property after the
         Closing Date and that the amount of Indebtedness secured thereby is not
         increased;

                  (g)  Liens  securing  Indebtedness  of  the  Company  and  its
         Subsidiaries  permitted  by Section  10.2(c)  incurred  to finance  the
         acquisition  of fixed or capital  assets,  PROVIDED that (i) such Liens
         shall be created  substantially  simultaneously with the acquisition of
         such  fixed  or  capital  assets,  (ii)  such  Liens do not at any time
         encumber  any  property  other  than  the  property  financed  by  such
         Indebtedness,  (iii) the amount of Indebtedness  secured thereby is not
         increased and (iv) the principal amount of Indebtedness  secured by any
         such Lien shall at no time exceed 90% of the original purchase price of
         such property at the time it was acquired;

                  (h)  Liens  on  assets  of  any  Foreign  Subsidiary  securing
         Indebtedness of such Foreign Subsidiary permitted by Section 10.2(f);

                  (i) Liens on the  property  or assets of a  corporation  which
         becomes  a  Subsidiary  after  the date  hereof  securing  Indebtedness
         permitted by Section  10.2(g),  PROVIDED that (i) such Liens existed at
         the time such  corporation  became a Subsidiary and were not created in
         anticipation  thereof,  (ii) any such  Lien is not  spread to cover any
         property or assets of such corporation  after the time such corporation
         becomes a  Subsidiary,  and (iii) the  amount of  Indebtedness  secured
         thereby is not increased;


                                       92
<PAGE>


                  (j) Liens (not  otherwise  permitted  hereunder)  which secure
         obligations  not  exceeding  (as to the Company  and all  Subsidiaries)
         $5,000,000 in aggregate amount at any time outstanding; and

                  (k) Liens created pursuant to the Security Documents.

                  10.4  LIMITATION  ON  GUARANTEE  OBLIGATIONS.  Create,  incur,
assume or suffer to exist any Guarantee Obligation except:  

                  (a) Guarantee  Obligations in existence on the date hereof and
         listed on Schedule 10.4;

                  (b)  Guarantee  Obligations  of  the  Company  or  any  of its
         Subsidiaries  in  respect  of  Indebtedness  and other  obligations  of
         Subsidiaries  which are  permitted to be incurred by such  Subsidiaries
         hereunder,  PROVIDED that such  Guarantee  Obligations  shall be deemed
         "investments" and must be permitted under Section 10.8;

                  (c) Guarantee  Obligations in respect of, or in the nature of,
         performance   bonds  or  performance   letters  of  credit  or  similar
         obligations incurred in the ordinary course of business;

                  (d) Guarantee Obligations incurred after the date hereof in an
         aggregate  amount  not  to  exceed  (i)  $75,000,000  at any  one  time
         outstanding  for the Company  and its  Domestic  Subsidiaries  and (ii)
         $25,000,000  at any one  time  outstanding  for the  Company's  Foreign
         Subsidiaries;

                  (e) the Guarantee  Obligations of  Subsidiaries  in respect of
         the High Yield Notes,  PROVIDED  that such  Guarantee  Obligations  are
         subordinated  to the  obligations  of the  Subsidiaries  under the Loan
         Documents  to the same extent as the  Company's  obligations  under the
         High Yield Notes are  subordinated to the Company's  obligations  under
         the Loan Documents; and

                  (f) the  Guarantee  Obligations  under this  Agreement  or any
                  Security  Document.  
 
                  10.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation  or  amalgamation,  or liquidate,  wind up or dissolve  itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially  all of its property,  business or
assets,  or make  any  material  change  in its  present  method  of  conducting
business, except:

                  (a) any  Subsidiary  of the Company  (other than the  Canadian
         Borrower)  may be  merged  or  consolidated  with or into  the  Company
         (PROVIDED  that  the  Company  shall  be the  continuing  or  surviving
         corporation) or with or into any one or more wholly owned  Subsidiaries
         of  the  Company   (PROVIDED  that  the  wholly  owned   Subsidiary  or
         Subsidiaries shall be the continuing or surviving corporation);


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<PAGE>


                  (b) any  wholly  owned  Subsidiary  (other  than the  Canadian
         Borrower) may sell, lease,  transfer or otherwise dispose of any or all
         of its assets (upon voluntary  liquidation or otherwise) to the Company
         or any other wholly owned Subsidiary of the Company;

                  (c) the Merger may be consummated in accordance with the terms
         of the Merger Agreement; and

                  (d) the dissolution of Corsan Trucking, Inc.

                  10.6  LIMITATION ON DISPOSITION  OF ASSETS.  Dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests),  whether now owned or hereafter acquired,  or, in the case
of any Subsidiary,  issue or sell any shares of such Subsidiary's  Capital Stock
to any Person other than the Company or any wholly owned Subsidiary, except:

                  (a) the  sale or other  Disposition  of  obsolete  or worn out
         property in the ordinary course of business;

                  (b) the sale or other  Disposition of any property (other than
         inventory),  PROVIDED  that the  aggregate  book value of all assets so
         sold or disposed of in any period of twelve  consecutive  months  shall
         not  exceed 5% of  consolidated  total  assets of the  Company  and its
         Subsidiaries as at the beginning of such twelve-month period;

                  (c)  the sale of inventory in the ordinary course of business;

                  (d)  the  sale  or  discount   without  recourse  of  accounts
         receivable  arising in the  ordinary  course of business in  connection
         with the compromise or collection thereof;

                  (e)  after  the  consummation  of  the  Merger,  the  sale  of
         Safety-Kleen's European operations for fair market value;

                  (f)  after  the  consummation  of  the  Merger,  the  sale  of
         Safety-Kleen's  oil recovery  services  business for fair market value;
         and

                  (g) as permitted by Section 10.5(b).

                  10.7  LIMITATION  ON  DIVIDENDS.  Declare or pay any  dividend
(other than  dividends  payable solely in common stock of the Person making such
dividend)  on, or make any  payment  on  account  of, or set apart  assets for a
sinking or other  analogous  fund for,  the  purchase,  redemption,  defeasance,
retirement or other  acquisition of, any shares of any class of Capital Stock of
the Company or any of its  Subsidiaries  or any  warrants or options to purchase
any  such  Stock,  whether  now or  hereafter  outstanding,  or make  any  other
distribution in respect thereof, either directly or indirectly,  whether in cash
or property or in obligations of the Company or any


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<PAGE>


                  Subsidiary  (such  declarations,   payments,   setting  apart,
purchases, redemptions, defeasances, retirements, acquisitions and distributions
being herein called "RESTRICTED PAYMENTS"),  except that any Subsidiary may make
Restricted Payments to the Company or any wholly owned Subsidiary of the Company
and so long as, on the date of such  Restricted  Payment,  both before and after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing (a) the Company may make  Restricted  Payments to Holdings to service
the Seller Note,  the  Westinghouse  Debt,  the CPCFA Debt and the Tooele County
Debt,  PROVIDED that (i) each such Restricted  Payment shall be made on the date
on which a cash  payment of interest  under the Seller Note or of  principal  or
interest under the Westinghouse  Debt, the CPCFA Debt or the Tooele County Debt,
as the case may be, is due and shall be in an amount not greater than the amount
of such cash  payment,  and such cash  payment in  respect of such  Indebtedness
shall be made by Holdings  on such date and (b) the Company may make  Restricted
Payments to Holdings to provide for payment in the  ordinary  course of business
of taxes,  directors' fees, stock exchange fees, and other costs and expenses of
its  operations as a public  company  permitted by the Guarantee and  Collateral
Agreement.

                  10.8 LIMITATION ON INVESTMENTS,  LOANS AND ADVANCES.  Make any
advance,  loan,  extension of credit or capital contribution to, or purchase any
stock,  bonds,   notes,   debentures  or  other  securities  of  or  any  assets
constituting  a business unit of, or make any other  investment  in, any Person,
except :

                  (a)  extensions  of trade  credit  in the  ordinary  course of
         business;

                  (b)  investments in Cash Equivalents;

                  (c)  acquisitions  of  interests  in any  Persons  (other than
         Safety-Kleen)  engaged in the hazardous and industrial waste management
         services  industry,  provided  that (i) the  aggregate  amount  of cash
         expended  and   Indebtedness   assumed  in  connection  with  all  such
         investments  does not exceed  $100,000,000 in the aggregate  during the
         twelve month period  following the Closing Date or  $200,000,000 in the
         aggregate  during the term of this  Agreement and (ii) after giving PRO
         FORMA  effect to any such  investment,  no  Default or Event of Default
         shall have occurred and be continuing  (including,  without limitation,
         pursuant to Section  10.1,  with  compliance  with  Section  10.1 being
         determined on a PRO FORMA basis as  determined in the manner  described
         in the last paragraph of Section 10.1);

                  (d) loans to officers of the Company  listed on Schedule  10.8
         in aggregate principal amounts outstanding not to exceed the respective
         amounts set forth for such officers on said Schedule;

                  (e) loans and  advances  to  employees  of the  Company or its
         Subsidiaries for travel,  entertainment and relocation  expenses in the
         ordinary course of business in an aggregate  amount for the Company and
         its Subsidiaries not to exceed $1,000,000 at any one time outstanding;


                                       95
<PAGE>


                  (f)  investments  by the Company and its  Subsidiaries  in the
         Subsidiaries  of the  Company  that are  parties to the  Guarantee  and
         Collateral Agreement;

                  (g)  investments by the Company and its Domestic  Subsidiaries
         in the  Canadian  Borrower,  the  proceeds  of which are used solely to
         repay the Canadian Borrower Obligations,  and additional investments by
         the Company and its Domestic  Subsidiaries in the Canadian  Borrower in
         an amount not exceeding $15,000,000 in the aggregate during the term of
         this Agreement;

                  (h)  investments  by  the  Canadian  Borrower  in  any  of its
         Subsidiaries that have guaranteed the Canadian Borrower Obligations;

                  (i) loans by the Company to its employees in  connection  with
         management  incentive  plans  in an  aggregate  amount  not  to  exceed
         $1,000,000;

                  (j) acquisitions of interests in Safety-Kleen  pursuant to the
         Exchange Offer and the Merger; and

                  (k) the  loan  made  by the  Company  on the  date  hereof  to
         Safety-Kleen in the principal amount of $46,000,000.

                  10.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OTHER  INSTRUMENTS.  (a) Make any optional payment or prepayment
on or redemption or purchase of any Indebtedness  (other than Indebtedness under
this  Agreement),  (b)  amend,  modify or  change,  or  consent  or agree to any
amendment, modification or change to any of the terms relating to the payment or
prepayment or principal of or interest on any such Indebtedness  (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest  thereon),  (c) amend the  subordination
provisions  of the Seller  Note or the High Yield  Notes,  if any, or (d) amend,
modify or change in any material  respect the terms of the Exchange Offer or the
Merger Agreement.

                  10.10 LIMITATION ON TRANSACTIONS  WITH AFFILIATES.  Enter into
any transaction,  including,  without limitation,  any purchase,  sale, lease or
exchange of property or the rendering of any service,  with any Affiliate unless
such  transaction is (a) otherwise  permitted under this  Agreement,  (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length  transaction with
a Person which is not an Affiliate.

                  10.11  LIMITATION  ON SALES  AND  LEASEBACKS.  Enter  into any
arrangement  with any Person  providing  for the  leasing by the  Company or any
Subsidiary  of real or  personal  property  which  has  been or is to be sold or
transferred  by the  Company or such  Subsidiary  to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the


                                       96
<PAGE>


                  security of such property or rental obligations of the Company
or such  Subsidiary,  except for any such  arrangements  with respect to real or
personal  property  with  respect to which the  aggregate  sales price shall not
exceed $25,000,000.

                  10.12 LIMITATION ON CHANGES IN FISCAL YEAR.  Permit the fiscal
year of the  Company to end on a day other than  August 31,  unless the  Company
shall have provided to the General Administrative Agent evidence satisfactory to
it that such change will have no effect on the  calculation of, or compliance by
the Company with,  the covenants set forth in Section 10.1; or permit the fiscal
years of the Company and Holdings to end on different days.

                  10.13  LIMITATION ON NEGATIVE PLEDGE CLAUSES.  Enter into with
any Person any  agreement,  other than (a) this Agreement and (b) any industrial
revenue bonds,  purchase money mortgages or Financing  Leases  permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed  thereby),  which prohibits or limits the ability of
the Company or any of its  Subsidiaries  to create,  incur,  assume or suffer to
exist any Lien upon any of its property,  assets or revenues,  whether now owned
or hereafter acquired.

                  10.14  LIMITATION  ON  LINES  OF  BUSINESS.   Enter  into  any
business, either directly or through any Subsidiary, except for those businesses
in  which  the  Company  and  its   Subsidiaries,   and   Safety-Kleen  and  its
Subsidiaries,  are engaged on the date of this  Agreement  or which are directly
related thereto.

                  10.15 CANADIAN BENEFIT AND PENSION PLANS.  Permit the Canadian
Borrower or any of its Subsidiaries to directly, or indirectly, (a) terminate or
cause to  terminate,  in whole or in part,  or initiate the  termination  of, in
whole or in part, any Canadian  Pension Plan so as to result in any liability to
any of them which could have a Material Adverse Effect,  (b) permit to exist any
event or condition in respect of any  Canadian  Pension Plan which  presents the
risk of  liability  of the Canadian  Borrower or any of its  Subsidiaries  which
could have a Material  Adverse Effect,  (c) enter into any new Canadian  Pension
Plan or  Canadian  Benefit  Plan or  modify  any  such  existing  plans so as to
increase its obligations  thereunder  which could result in any liability to any
of them and which could have a Material  Adverse Effect;  (d) permit the greater
of the  going  concern  unfunded  liability  or the  solvency  deficiency  under
Canadian  Pension  Plans,  but only to the extent they are  permitted  to remain
unfunded under  Requirements  of Law, to exceed (in the  aggregate,  taking into
account  all  Canadian   Pension   Plans  of  the  Canadian   Borrower  and  its
Subsidiaries)  C$5,000,000,  (e) fail to make minimum required  contributions to
amortize any funding  deficiencies under a Canadian Pension Plan within the time
period  set  out in any  Requirements  of  Law,  (f)  fail  to  make a  required
contribution  under any  Canadian  Pension  Plan or Canadian  Benefit Plan which
could result in the  imposition of a Lien upon the assets of any of the Canadian
Borrower or any of its  Subsidiaries  within 30 days after the date such payment
becomes due, unless such payment is being contested pursuant to Section 9.3; (g)
make any improper  withdrawals or applications  of assets of a Canadian  Pension
Plan or  Canadian  Benefit  Plan or (h) accept  payment  of any amount  from any
Canadian Pension Plan.

                  10.16  HEDGING  AGREEMENTS.  Enter into any Hedging  Agreement
outside the ordinary course of business or for speculative purposes.


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<PAGE>


                          SECTION 11. EVENTS OF DEFAULT

                  If any of the following events shall occur and be continuing:

                  (a) Either  Borrower  shall fail to pay any  principal  of any
         Loan when due in accordance with the terms thereof or hereof; or either
         Borrower  shall  fail to pay any  interest  on any  Loan,  or any other
         amount payable  hereunder,  within five days after any such interest or
         other  amount  becomes  due in  accordance  with the terms  thereof  or
         hereof; or

                  (b) Any  representation  or  warranty  made or deemed  made by
         either  Borrower  or any other Loan  Party  herein or in any other Loan
         Document  or  which  is  contained  in  any  certificate,  document  or
         financial  or other  statement  furnished by it at any time under or in
         connection  with this  Agreement or any such other Loan Document  shall
         prove to have been  incorrect in any  material  respect on or as of the
         date made or deemed made; or

                  (c) The Company or any other Loan Party  shall  default in the
         observance or performance  of any agreement  contained in Section 10 of
         this Agreement or Section 5 of the Guarantee and Collateral  Agreement,
         or Acquisition  Corp. shall default in the observance or performance of
         any agreement contained in the Acquisition Corp. Pledge Agreement; or

                  (d) The Company or any other Loan Party  shall  default in the
         observance  or  performance  of any other  agreement  contained in this
         Agreement  or any  other  Loan  Document  (other  than as  provided  in
         paragraphs  (a) through (c) of this  Section),  and such default  shall
         continue unremedied for a period of 30 days; or

                  (e) Holdings, the Company or any of its Subsidiaries shall (i)
         default in any payment of principal of or interest of any  Indebtedness
         (other than the Loans) or in the payment of any  Guarantee  Obligation,
         beyond the period of grace (not to exceed 30 days), if any, provided in
         the instrument or agreement under which such  Indebtedness or Guarantee
         Obligation   was  created;   or  (ii)  default  in  the  observance  or
         performance  of any other  agreement or condition  relating to any such
         Indebtedness or Guarantee  Obligation or contained in any instrument or
         agreement evidencing,  securing or relating thereto, or any other event
         shall occur or condition  exist,  the effect of which  default or other
         event or condition  is to cause,  or to permit the holder or holders of
         such  Indebtedness  or beneficiary or  beneficiaries  of such Guarantee
         Obligation  (or a trustee or agent on behalf of such  holder or holders
         or beneficiary or beneficiaries) to cause, with the giving of notice if
         required,  such Indebtedness to become due prior to its stated maturity
         or such Guarantee Obligation to become payable; PROVIDED, however, that
         no Default or Event of Default shall exist under this paragraph  unless
         the aggregate amount of Indebtedness  and/or  Guarantee  Obligations in
         respect of which any default or other event or condition referred to in
         this  paragraph  shall  have  occurred  shall  be  equal  to  at  least
         $15,000,000; or


                                       98
<PAGE>


                  (f) (i) Holdings, the Company or any of its Subsidiaries shall
         commence any case, proceeding or other action (A) under any existing or
         future  law of any  jurisdiction,  domestic  or  foreign,  relating  to
         bankruptcy, insolvency, reorganization or relief of debtors, seeking to
         have an order for  relief  entered  with  respect  to it, or seeking to
         adjudicate  it a bankrupt  or  insolvent,  or  seeking  reorganization,
         arrangement,   adjustment,   winding-up,   liquidation,    dissolution,
         composition  or other  relief with  respect to it or its debts,  or (B)
         seeking appointment of a receiver, trustee,  custodian,  conservator or
         other similar official for it or for all or any substantial part of its
         assets, or Holdings,  the Company or any of its Subsidiaries shall make
         a general  assignment for the benefit of its  creditors;  or (ii) there
         shall  be  commenced  against  Holdings,  the  Company  or  any  of its
         Subsidiaries any case,  proceeding or other action of a nature referred
         to in clause (i) above  which (A)  results in the entry of an order for
         relief  or  any  such   adjudication  or  appointment  or  (B)  remains
         undismissed, undischarged or unbonded for a period of 60 days; or (iii)
         there shall be commenced  against  Holdings,  the Company or any of its
         Subsidiaries any case, proceeding or other action seeking issuance of a
         warrant of attachment,  execution, distraint or similar process against
         all or any substantial part of its assets which results in the entry of
         an order  for any such  relief  which  shall  not  have  been  vacated,
         discharged,  or stayed or bonded pending appeal within 60 days from the
         entry thereof; or (iv) Holdings, the Company or any of its Subsidiaries
         shall take any action in furtherance  of, or indicating its consent to,
         approval  of, or  acquiescence  in, any of the acts set forth in clause
         (i), (ii), or (iii) above;  or (v) Holdings,  the Company or any of its
         Subsidiaries shall generally not, or shall be unable to, or shall admit
         in writing its inability to, pay its debts as they become due; or

                  (g)  (i)  Any   Person   shall   engage  in  any   "prohibited
         transaction" (as defined in Section 406 of ERISA or Section 4975 of the
         Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
         defined in Section 302 of ERISA),  whether or not  waived,  shall exist
         with  respect  to any  Plan or any  Lien in favor of the PBGC or a Plan
         shall  arise on the assets of the  Company or any  Commonly  Controlled
         Entity,  (iii) a  Reportable  Event  shall  occur with  respect  to, or
         proceedings  shall commence to have a trustee  appointed,  or a trustee
         shall be appointed, to administer or to terminate,  any Single Employer
         Plan,   which  Reportable  Event  or  commencement  of  proceedings  or
         appointment of a trustee is, in the reasonable  opinion of the Required
         Lenders,  likely to result in the termination of such Plan for purposes
         of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
         purposes  of  Title  IV of  ERISA,  (v)  the  Company  or any  Commonly
         Controlled  Entity shall, or in the reasonable  opinion of the Required
         Lenders  is  likely  to,  incur  any  liability  in  connection  with a
         withdrawal   from,   or  the   Insolvency  or   Reorganization   of,  a
         Multiemployer  Plan or (vi) any other event or condition shall occur or
         exist with  respect to a Plan;  and in each case in clauses (i) through
         (vi)  above,  such  event or  condition,  together  with all other such
         events or conditions, if any, could have a Material Adverse Effect; or


                                       99
<PAGE>


                  (h) One or more judgments or decrees shall be entered  against
         the Company or any of its  Subsidiaries  involving  in the  aggregate a
         liability  (not paid or fully covered by insurance) of  $15,000,000  or
         more,  and all such  judgments or decrees  shall not have been vacated,
         discharged,  stayed or bonded  pending  appeal  within 60 days from the
         entry thereof; or

                  (i) (i) Any of the Security  Documents  shall  cease,  for any
         reason, to be in full force and effect, or either Borrower or any other
         Loan Party which is a party to any of the Security  Documents  shall so
         assert or (ii) the Lien created by any of the Security  Documents shall
         cease to be enforceable  and of the same effect and priority  purported
         to be created thereby; or

                  (j) The Guarantee and Collateral  Agreement  shall cease,  for
         any reason,  to be in full force and effect or any  Guarantor  shall so
         assert; or

                  (k)  A Change of Control shall occur;

then, and in any such event, (A) if such event is an Event of Default  specified
in clause  (i) or (ii) of  paragraph  (f) of this  Section  with  respect to the
Company  or  the  Canadian   Borrower,   automatically   the  Commitments  shall
immediately  terminate and the Loans hereunder (with accrued  interest  thereon)
and all other amounts owing under this Agreement (including, without limitation,
all  Acceptance  Reimbursement  Obligations,  regardless  of whether or not such
Acceptance  Reimbursement  Obligations  are then due and  payable) and the other
Loan Documents (including,  without limitation,  all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents  required  thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the  following  actions may be taken:  (i) with the  consent of the  Majority
Facility Lenders under the Revolving Credit Facility, the General Administrative
Agent  may,  or upon the  request of the  Majority  Facility  Lenders  under the
Revolving Credit Facility,  the General Administrative Agent shall, by notice to
the Company declare the Revolving Credit Commitments to be terminated forthwith,
whereupon  such  commitments  shall  immediately  terminate;  and (ii)  with the
consent of the Required Lenders,  the General  Administrative Agent may, or upon
the request of the Required Lenders, the General  Administrative Agent shall, by
notice to the  Borrowers,  declare the Loans  hereunder  (with accrued  interest
thereon) and all other amounts owing under this  Agreement  (including,  without
limitation, all amounts of L/C Obligations,  whether or not the beneficiaries of
the then  outstanding  Letters of Credit  shall  have  presented  the  documents
required thereunder, and all Acceptance Reimbursement Obligations, regardless of
whether  or not  such  Acceptance  Reimbursement  Obligations  are  then due and
payable) and the other Loan Documents to be due and payable forthwith, whereupon
the same shall immediately become due and payable.


                                      100
<PAGE>


                  With  respect to all Letters of Credit  with  respect to which
presentment  for honor shall not have  occurred  at the time of an  acceleration
pursuant to the preceding paragraph, the Company shall at such time deposit in a
cash  collateral  account opened by the General  Administrative  Agent an amount
equal to the  aggregate  then  undrawn and  unexpired  amount of such Letters of
Credit.  Amounts held in such cash  collateral  account  shall be applied by the
General  Administrative  Agent to the payment of drafts drawn under such Letters
of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon,  if any,  shall be applied to repay other
obligations of the Company  hereunder and under the other Loan Documents.  After
all such  Letters of Credit  shall have  expired or been fully drawn  upon,  all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Company hereunder and under the other Loan Documents shall have been paid in
full, the balance,  if any, in such cash collateral account shall be returned to
the Company (or such other Person as may be lawfully entitled thereto).

                  With  respect  to  all  outstanding  Acceptance  Reimbursement
Obligations in respect of  Acceptances  which have not matured at the time of an
acceleration  pursuant to the paragraph  above,  the Canadian  Borrower shall at
such time deposit in a cash  collateral  account opened by and maintained by the
Canadian Administrative Agent an amount equal to the aggregate undiscounted face
amount of all such unmatured  Acceptances.  Amounts held in such cash collateral
account shall be applied by the Canadian  Administrative Agent to the payment of
maturing Acceptances,  and any balance in such account shall be applied to repay
other obligations of the Canadian Borrower  hereunder and under any Notes. After
all Acceptance Reimbursement Obligations shall have been satisfied and all other
obligations  of the Canadian  Borrower  hereunder and under any Notes shall have
been paid in full, the balance, if any, in such cash collateral account shall be
returned to the Canadian Borrower.

                  Except as otherwise  expressly  provided above in this Section
11, the  Borrowers  waive  presentment,  demand,  protest or other notice of any
kind.


                  SECTION 12. THE ADMINISTRATIVE AGENTS; OTHERS

                  12.1 APPOINTMENT.  Each Lender hereby  irrevocably  designates
and appoints Toronto Dominion (Texas), Inc. as the General  Administrative Agent
and The  Toronto-Dominion  Bank as the  Canadian  Administrative  Agent  of such
Lender under this Agreement and the other Loan  Documents,  and each such Lender
irrevocably  authorizes  the  General  Administrative  Agent  and  the  Canadian
Administrative  Agent to take such action on its behalf under the  provisions of
this  Agreement  and the other Loan  Documents  and to exercise  such powers and
perform such duties as are  expressly  delegated  to the General  Administrative
Agent and the Canadian Administrative Agent, respectively,  by the terms of this
Agreement and the other Loan  Documents,  together with such other powers as are
reasonably  incidental  thereto.  Notwithstanding  any provision to the contrary
elsewhere in this Agreement, the Administrative Agents shall not have any duties
or responsibilities, except those expressly set forth herein, or any


                                      101
<PAGE>


fiduciary  relationship with any Lender,  and no implied  covenants,  functions,
responsibilities,  duties,  obligations or  liabilities  shall be read into this
Agreement  or  any  other  Loan  Document  or  otherwise  exist  against  either
Administrative Agent.

                  Each  Issuing  Lender  shall act on behalf of the Lenders with
respect to Letters of Credit issued by it under this Agreement and the documents
associated  therewith.  It is understood and agreed that each Issuing Lender (a)
shall have all of the benefits and immunities (i) provided to an  Administrative
Agent in this  Section 12 with  respect to acts taken or  omissions  suffered by
such Issuing Lender in connection with Letters of Credit issued by it under this
Agreement  and the  documents  associated  therewith  as  fully  as if the  term
"General   Administrative   Agent",    "Canadian    Administrative   Agent"   or
"Administrative Agent", as used in this Section 12, included such Issuing Lender
with respect to such acts or omissions and (ii) as additionally provided in this
Agreement  and (b) shall have all of the benefits of the  provisions  of Section
12.7  as  fully  as  if  the  term  "General  Administrative  Agent",  "Canadian
Administrative  Agent"  or  "Administrative  Agent",  as used in  Section  12.7,
included such Issuing Lender.

                  Each Lender authorizes and directs the  Administrative  Agents
to execute and deliver the Intercreditor Agreement.

                  12.2  DELEGATION  OF  DUTIES.  Each  Administrative  Agent may
execute any of its duties under this  Agreement and the other Loan  Documents by
or  through  agents  or  attorneys-in-fact  and shall be  entitled  to advice of
counsel concerning all matters pertaining to such duties. Neither Administrative
Agent shall be  responsible  for the  negligence  or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.

                  12.3 EXCULPATORY PROVISIONS.  Neither Administrative Agent nor
any of its respective officers, directors, employees, agents,  attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person  under or in  connection  with this  Agreement or any
other Loan  Document  (except for its or such  Person's own gross  negligence or
willful  misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by such  Administrative  Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity,  effectiveness,
genuineness,  enforceability  or sufficiency of this Agreement or any other Loan
Document or for any failure of the Company to perform its obligations  hereunder
or thereunder. Neither Administrative Agent shall be under any obligation to any
Lender to ascertain or to inquire as to the  observance or performance of any of
the agreements  contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of either Borrower.

                  12.4 RELIANCE BY ADMINISTRATIVE  AGENTS.  Each  Administrative
Agent shall be entitled to rely, and shall be fully  protected in relying,  upon
any Note, writing, resolution, notice, consent, certificate,  affidavit, letter,
telecopy,  telex or  teletype  message,  statement,  order or other  document or
conversation  believed by it to be genuine and correct and to have been  signed,
sent


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<PAGE>


or made by the proper Person or Persons and upon advice and  statements of legal
counsel (including, without limitation,  counsel to the Borrowers),  independent
accountants  and other  experts  selected  by such  Administrative  Agent.  Each
Administrative  Agent  may deem and  treat  the  payee of any Note as the  owner
thereof for all purposes  unless a written notice of assignment,  negotiation or
transfer  thereof  shall have been filed with such  Administrative  Agent.  Each
Administrative Agent shall be fully justified in failing or refusing to take any
action  under this  Agreement or any other Loan  Document  unless it shall first
receive such advice or concurrence of the Required Lenders or Majority  Facility
Lenders, as applicable, as it deems appropriate or it shall first be indemnified
to its  satisfaction  by the Lenders  against any and all  liability and expense
which may be incurred by it by reason of taking or  continuing  to take any such
action.  Each  Administrative  Agent  shall in all cases be fully  protected  in
acting,  or in refraining  from acting,  under this Agreement and the other Loan
Documents in accordance with a request of the Required  Lenders (or, in any case
where this Agreement  specifically requires the consent of the Majority Facility
Lenders under any Facility,  such Majority Facility  Lenders),  and such request
and any action  taken or failure to act pursuant  thereto  shall be binding upon
all the Lenders and all future holders of the Loans.

                  12.5 NOTICE OF DEFAULT.  Neither Administrative Agent shall be
deemed to have  knowledge or notice of the occurrence of any Default or Event of
Default  hereunder unless such  Administrative  Agent has received notice from a
Lender or the Company  referring to this  Agreement,  describing such Default or
Event of Default and stating that such notice is a "notice of  default".  In the
event that an Administrative  Agent receives such a notice,  such Administrative
Agent shall give notice thereof to the Lenders.  Each Administrative Agent shall
take such  action with  respect to such  Default or Event of Default as shall be
reasonably  directed by the Required Lenders or Majority  Facility  Lenders,  as
applicable;  PROVIDED that unless and until the Administrative Agents shall have
received  such  directions,  the  Administrative  Agents  may (but  shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such  Default  or Event of Default  as it shall  deem  advisable  in the best
interests of the Lenders.

                  12.6 NON-RELIANCE ON ADMINISTRATIVE  AGENTS AND OTHER LENDERS.
(a) Each Lender expressly acknowledges that neither Administrative Agent nor any
of its respective officers, directors,  employees, agents,  attorneys-in-fact or
Affiliates has made any  representations  or warranties to it and that no act by
either  Administrative  Agent  hereinafter  taken,  including  any review of the
affairs of the Company or the Canadian  Borrower,  shall be deemed to constitute
any representation or warranty by such Administrative  Agent to any Lender. Each
Lender represents to each  Administrative  Agent that it has,  independently and
without reliance upon such  Administrative  Agent or any other Lender, and based
on such  documents and  information as it has deemed  appropriate,  made its own
appraisal  of  and  investigation  into  the  business,  operations,   property,
financial and other condition and  creditworthiness  of the Company and made its
own decision to make its Loans  hereunder  and enter into this  Agreement.  Each
Lender also represents  that it will,  independently  and without  reliance upon
either Administrative Agent or any other Lender, and based on such documents and
information as it shall deem  appropriate at the time,  continue to make its own
credit  analysis,  appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents,  and to make such  investigation as
it deems  necessary to inform itself as to the business,  operations,  property,
financial and other condition


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<PAGE>


and  creditworthiness  of the  Company.  Except for  notices,  reports and other
documents   expressly   required  to  be   furnished  to  the  Lenders  by  such
Administrative  Agent hereunder,  each  Administrative  Agent shall not have any
duty  or  responsibility  to  provide  any  Lender  with  any  credit  or  other
information concerning the business, operations,  property, condition (financial
or  otherwise),  prospects  or  creditworthiness  of the Company or the Canadian
Borrower which may come into the possession of such Administrative  Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.

                  (b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Lender that has executed this Agreement  shall be
deemed to have consented to,  approved or accepted or to be satisfied with, each
document  or other  matter  either  sent by either  Administrative  Agent or the
Company to such Lender prior to the Closing Date,  or required  thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.

                  12.7  INDEMNIFICATION.  The Lenders  agree to  indemnify  each
Administrative  Agent in its capacity as such (to the extent not  reimbursed  by
the  Borrowers and without  limiting the  obligation of the Borrowers to do so),
ratably according to their respective Aggregate Commitment Percentages in effect
on the date on which  indemnification  is sought,  from and  against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or  disbursements  of any kind whatsoever which may at any time
(including,  without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Administrative  Agent in any
way relating to or arising out of, the Commitments,  this Agreement,  any of the
other Loan Documents or any documents  contemplated  by or referred to herein or
therein or the transactions  contemplated  hereby or thereby or any action taken
or omitted by such  Administrative  Agent under or in connection with any of the
foregoing;  PROVIDED  that no Lender  shall be  liable  for the  payment  of any
portion of such liabilities,  obligations,  losses, damages, penalties, actions,
judgments,  suits, costs,  expenses or disbursements  resulting solely from such
Administrative Agent's gross negligence or willful misconduct. The agreements in
this  Section  shall  survive  the  payment  of the Loans and all other  amounts
payable hereunder.

                  12.8 AGENT IN ITS  INDIVIDUAL  CAPACITY.  Each  Administrative
Agent and its respective  Affiliates may make loans to, accept deposits from and
generally  engage in any kind of  business  with the  Borrowers  as though  such
Administrative  Agent were not an  Administrative  Agent hereunder and under the
other Loan  Documents.  With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, each Administrative  Agent
shall have the same rights and powers  under this  Agreement  and the other Loan
Documents  as any  Lender  and may  exercise  the same as  though it were not an
Administrative  Agent,  and the terms "Lender" and "Lenders"  shall include such
Administrative Agent in its individual capacity.

                  12.9 SUCCESSOR AGENT. Either  Administrative  Agent may resign
as  Administrative  Agent  upon  10  days'  notice  to the  Lenders.  If  either
Administrative  Agent shall resign as Administrative  Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor  agent for the Lenders,  which successor agent (provided
that it shall have been approved by the Company), shall succeed to the rights,


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powers and duties of such  Administrative  Agent hereunder.  Effective upon such
appointment and approval,  the term "General  Administrative Agent" or "Canadian
Administrative  Agent", as the case may be, shall mean such successor agent, and
such  former  Administrative  Agent's  rights,  powers  and  duties  as  General
Administrative Agent or Canadian Administrative Agent, as the case may be, shall
be  terminated,  without  any other or  further  act or deed on the part of such
former  Administrative  Agent or any of the  parties  to this  Agreement  or any
holders of the Loans. After any retiring  Administrative  Agent's resignation as
an  Administrative  Agent,  the provisions of this Section 12 shall inure to its
benefit  as to any  actions  taken  or  omitted  to be  taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

                  12.10 OTHERS.  Neither the Arranger, the Syndication Agent nor
any Managing  Agent,  in such  respective  capacities,  shall have any duties or
responsibilities,  or incur any  liabilities,  under this Agreement or the other
Loan Documents.


                              SECTION 13. GUARANTEE

                  13.1 GUARANTEE.  In order to induce the Administrative  Agents
and the Lenders to execute and deliver  this  Agreement  and to make or maintain
Extensions  of Credit to the  Canadian  Borrower  hereunder,  and to induce  the
Canadian Operating Facility Lender to enter into the Canadian Operating Facility
and to make loans to the  Canadian  Borrower  thereunder,  and in  consideration
thereof,  the Company hereby  unconditionally and irrevocably  guarantees to the
Administrative  Agents, for the ratable benefit of the Lenders to which Canadian
Borrower Obligations are owed and to the Canadian Operating Facility Lender, the
prompt and complete  payment and  performance by the Canadian  Borrower when due
(whether at stated  maturity,  by  acceleration  or  otherwise)  of the Canadian
Borrower   Obligations  and  the  Canadian   Operating   Facility   Obligations,
respectively,  and the  Company  further  agrees  to pay  any  and all  expenses
(including,  without limitation,  all reasonable fees, charges and disbursements
of counsel) which may be paid or incurred by either  Administrative  Agent,  the
Lenders or the Canadian  Operating  Facility  Lender in enforcing,  or obtaining
advice of  counsel  in  respect  of,  any of their  rights  under the  guarantee
contained  in this  Section  13. The  guarantee  contained  in this  Section 13,
subject  to  Section  13.5,  shall  remain in full  force and  effect  until the
Canadian Borrower  Obligations and the Canadian Operating  Facility  Obligations
are paid in full, the Commitments  are  terminated,  no Extensions of Credit are
outstanding and the Canadian Operating  Facility is terminated,  notwithstanding
that from time to time prior thereto the Canadian  Borrower may be free from any
obligations  or  liabilities  under this  Agreement  or the  Canadian  Operating
Facility.

                  The Company agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative  Agents, any Lender or the
Canadian  Operating  Facility  Lender on  account  of its  liability  under this
Section 13, it will notify the Administrative  Agents and such lender in writing
that such payment is made under the  guarantee  contained in this Section 13 for
such purpose.  No payment or payments made by the Canadian Borrower or any other
Person or received or collected by either  Administrative  Agent,  any Lender or
the Canadian  Operating  Facility Lender from the Canadian Borrower or any other
Person by virtue of any action or proceeding or any setoff or  appropriation  or
application, at any time or from time to


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<PAGE>


time, in reduction of or in payment of the Canadian Borrower  Obligations or the
Canadian  Operating  Facility  Obligations  shall be deemed to  modify,  reduce,
release or otherwise  affect the  liability of the Company under this Section 13
which, notwithstanding any such payment or payments, shall remain liable for the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations, as
the  case  may be,  until,  subject  to  Section  13.5,  the  Canadian  Borrower
Obligations are paid in full, the Canadian Term Loan  Commitments are terminated
and no  Letters of Credit  are  outstanding,  the  Canadian  Operating  Facility
Obligations are paid in full and the Canadian Operating Facility is terminated.


                  13.2 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding  anything to the contrary in this Section 13, the Company hereby
irrevocably  waives  all rights  which may have  arisen in  connection  with the
guarantee  contained  in this Section 13 to be  subrogated  to any of the rights
(whether contractual, under the United States Bankruptcy Code (or similar action
under any  successor law or under any  comparable  law),  including  Section 509
thereof, under common law or otherwise) of the Administrative Agents, any Lender
or the Canadian  Operating  Facility  Lender  against the  Canadian  Borrower or
against  either  Administrative  Agent or any such lender for the payment of the
Canadian Borrower  Obligations or the Canadian Operating  Facility  Obligations,
until all the Canadian  Borrower  Obligations  and Canadian  Operating  Facility
Obligations  shall  have  been paid in full and each of the  Canadian  Term Loan
Commitments and the Canadian Operating Facility shall have been terminated.  The
Company hereby further irrevocably waives all contractual, common law, statutory
and other rights of  reimbursement,  contribution,  exoneration or indemnity (or
any similar  right) from or against the  Canadian  Borrower or any other  Person
which may have arisen in connection with the guarantee contained in this Section
13, until the Canadian Borrower  Obligations and the Canadian Operating Facility
Obligations  shall have been paid in full and the Canadian Term Loan Commitments
and the Canadian Operating  Facility shall have been terminated.  So long as the
Canadian Borrower  Obligations or the Canadian  Operating  Facility  Obligations
remain outstanding,  if any amount shall be paid by or on behalf of the Canadian
Borrower to the Company on account of any of the rights  waived in this  Section
13.2,  such amount shall be held by the Company in trust,  segregated from other
funds of the Company,  and shall,  forthwith  upon  receipt by the  Company,  be
turned over to the Canadian  Administrative  Agent in the exact form received by
the Company (duly indorsed by the Company to the Canadian  Administrative Agent,
if required),  to be applied against the Canadian  Borrower  Obligations and the
Canadian Operating Facility Obligations,  whether matured or unmatured,  in such
order as the Canadian Administrative Agent may determine. The provisions of this
Section 13.2 shall survive the term of the  guarantee  contained in this Section
13 and the payment in full of the Canadian Borrower Obligations and the Canadian
Operating  Facility  Obligations  and the  termination of the Canadian Term Loan
Commitments and the Canadian Operating Facility.

                  13.3  AMENDMENTS,  ETC. WITH RESPECT TO THE CANADIAN  BORROWER
OBLIGATIONS.   The  Company  shall  remain   obligated  under  this  Section  13
notwithstanding that, without any reservation of rights against the Company, and
without notice to or further assent by the Company, any demand for payment of or
reduction in the principal amount of any of the Canadian Borrower Obligations or
the Canadian Operating Facility Obligations made by either


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<PAGE>


Administrative  Agent, any Lender or the Canadian  Operating Facility Lender may
be  rescinded  by  such  Administrative  Agent  or such  lender,  and any of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations, as
the  case  may be,  continued,  and the  Canadian  Borrower  Obligations  or the
Canadian Operating Facility Obligations, as the case may be, or the liability of
any other  party upon or for any part  thereof,  or any  collateral  security or
guarantee  therefor or right of offset with respect  thereto,  may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised,  waived,  surrendered or released by such Administrative Agent, any
Lender or the Canadian Operating Facility Lender, and this Agreement,  any other
Loan  Document,  and any other  documents  executed and  delivered in connection
therewith may be amended,  modified,  supplemented or terminated, in whole or in
part,  as the Lenders  (or the  Required  Lenders,  as the case may be) may deem
advisable (or in the case of the Canadian Operating Facility Obligations, as the
Canadian  Operating  Facility  Lender may deem advisable) from time to time, and
any collateral security, guarantee or right of offset at any time held by either
Administrative  Agent,  any Lender or the  Canadian  Operating  Facility for the
payment of the Canadian Borrower  Obligations or the Canadian Operating Facility
may be sold, exchanged,  waived, surrendered or released. Neither Administrative
Agents nor any Lender or the Canadian  Operating  Facility Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security  for the  Canadian  Borrower  Obligations,  the  Canadian  Operating
Facility  Obligations  or for the guarantee  contained in this Section 13 or any
property subject thereto.

                  13.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL.  The Company waives
any and all notice of the creation,  renewal, extension or accrual of any of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations and
notice of or proof of reliance by either Administrative Agent, any Lender or the
Canadian Operating Facility Lender upon the guarantee  contained in this Section
13 or  acceptance  of the  guarantee  contained in this Section 13; the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or  renewed,  extended,  amended  or  waived,  in  reliance  upon the  guarantee
contained in this Section 13; and all dealings between the Canadian  Borrower or
the  Company,  on the one hand,  and either  Administrative  Agent,  the Lenders
and/or the Canadian  Operating  Facility Lender, on the other, shall likewise be
conclusively  presumed  to have been had or  consummated  in  reliance  upon the
guarantee   contained  in  this  Section  13.  The  Company  waives   diligence,
presentment,  protest, demand for payment and notice of default or nonpayment to
or upon the  Canadian  Borrower  or the  Company  with  respect to the  Canadian
Borrower  Obligations  and the  Canadian  Operating  Facility  Obligations.  The
guarantee  contained  in this  Section 13 shall be  construed  as a  continuing,
absolute  and  unconditional  guarantee  of  payment  without  regard to (a) the
validity or  enforceability  of this Agreement or any other Loan Document or the
Canadian  Operating  Facility,  any of the Canadian Borrower  Obligations or the
Canadian Operating Facility  Obligations or any collateral  security therefor or
guarantee  or right of offset with  respect  thereto at any time or from time to
time held by either  Administrative  Agent, any Lender or the Canadian Operating
Facility Lender, (b) any defense,  setoff or counterclaim  (other than a defense
of payment or performance)  which may at any time be available to or be asserted
by the Borrowers against either Administrative Agent, any Lender or the Canadian
Operating  Facility Lender,  or (c) any other  circumstance  whatsoever (with or
without notice to or knowledge of the Canadian Borrower or


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<PAGE>


the  Company)  which  constitutes,  or  might be  construed  to  constitute,  an
equitable or legal discharge of the Canadian  Borrower for the Canadian Borrower
Obligations or the Canadian  Operating Facility  Obligations,  or of the Company
under the guarantee  contained in this Section 13, in bankruptcy or in any other
instance. When either Administrative Agent, any Lender or the Canadian Operating
Facility  Lender is  pursuing  its rights  and  remedies  under this  Section 13
against the Company, such Administrative Agent or any such lender may, but shall
be under no  obligation  to,  pursue  such  rights and  remedies  as it may have
against  the  Canadian  Borrower or any other  Person or against any  collateral
security or guarantee  for the  Canadian  Borrower  Obligations  or the Canadian
Operating Facility  Obligations or any right of offset with respect thereto, and
any failure by such Administrative Agent or any such lender to pursue such other
rights or remedies or to collect any payments from the Canadian  Borrower or any
such other Person or to realize upon any such  collateral  security or guarantee
or to exercise any such right of offset, or any release of the Canadian Borrower
or any such other Person or of any such collateral security,  guarantee or right
of offset, shall not relieve the Company of any liability under this Section 13,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the  Administrative  Agents, the Lenders and
the Canadian Operating Facility Lender against the Company.

                  13.5 REINSTATEMENT. The guarantee contained in this Section 13
shall continue to be effective, or be reinstated,  as the case may be, if at any
time payment, or any part thereof,  of any of the Canadian Borrower  Obligations
or the Canadian Operating Facility Obligations is rescinded or must otherwise be
restored or returned by either  Administrative Agent, any Lender or the Canadian
Operating  Facility  Lender  upon  the  insolvency,   bankruptcy,   dissolution,
liquidation or reorganization of the Canadian Borrower or upon or as a result of
the  appointment  of a receiver,  intervenor  or  conservator  of, or trustee or
similar  officer  for,  the  Canadian  Borrower or any  substantial  part of its
property, or otherwise, all as though such payments had not been made.

                  13.6 PAYMENTS.  The Company hereby agrees that any payments in
respect of the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations   pursuant  to  this  Section  13  will  be  paid  to  the  Canadian
Administrative  Agent without setoff or counterclaim in Canadian Dollars, at the
office of the Canadian Administrative Agent specified in Section 14.2.


                            SECTION 14. MISCELLANEOUS

                  14.1  AMENDMENTS  AND  WAIVERS.  Neither this  Agreement,  the
Intercreditor  Agreement  nor any other Loan  Document,  nor any terms hereof or
thereof may be amended,  supplemented or modified except as set forth in Section
10.2(h) or in  accordance  with the  provisions  of this  Section.  The Required
Lenders  may,  or,  with  the  written  consent  of the  Required  Lenders,  the
Administrative  Agents may, from time to time, (a) enter into with the Borrowers
written  amendments,  supplements or modifications  hereto and to the other Loan
Documents  or  the  Intercreditor  Agreement  for  the  purpose  of  adding  any
provisions  to this  Agreement,  the other Loan  Documents or the  Intercreditor
Agreement  or  changing  in any  manner  the  rights  of the  Lenders  or of the
Borrowers hereunder or thereunder or (b) waive, on such terms


                                      108
<PAGE>


and conditions as the Required Lenders or the Administrative Agents, as the case
may  be,  may  specify  in  such  instrument,  any of the  requirements  of this
Agreement  or the other Loan  Documents  or the  Intercreditor  Agreement or any
Default or Event of Default and its  consequences;  PROVIDED,  HOWEVER,  that no
such waiver and no such amendment,  supplement or modification  shall (i) reduce
the  amount or  extend  the  scheduled  date of  maturity  of any Loan or of any
installment  thereof,  or reduce the stated rate of any  interest or fee payable
hereunder or extend the  scheduled  date of any payment  thereof or increase the
amount or extend the expiration  date of any Lender's  Commitments or extend the
expiry  date of any  Letter of Credit  beyond  the date  referred  to in Section
3.1(a),  or modify the  provisions  of Section  6.9,  in each case  without  the
consent of each Lender  affected  thereby,  or (ii)  amend,  modify or waive any
provision of this Section or reduce the  percentage  specified in the definition
of Required Lenders or Majority Facility  Lenders,  or consent to the assignment
or transfer by either Borrower of any of its rights and  obligations  under this
Agreement and the other Loan  Documents or release all or  substantially  all of
the Collateral or release all or substantially  all of the Guarantors from their
obligations under the Guarantee and Collateral  Agreement,  in each case without
the  written  consent  of all the  Lenders,  (iii)  amend,  modify  or waive any
provision of Section 4 or 5 without the consent of the Majority Facility Lenders
under the Canadian Term Loan Facility, (iv) amend, modify or waive any provision
of Section 12 without  the written  consent of the  Administrative  Agents,  (v)
amend, modify or waive any provision of Section 3 without the written consent of
each Issuing  Lender,  (vi) amend,  modify or waive any  provision of Section 13
without the consent of all the Canadian Lenders or (vii) amend,  modify or waive
any  provision  of Section  6.3 without  the  consent of the  Majority  Facility
Lenders under each Facility. Any such waiver and any such amendment,  supplement
or modification  shall apply equally to each of the Lenders and shall be binding
upon the Borrowers, the Lenders, the Agents and all future holders of the Loans.
In the case of any waiver,  the  Borrowers,  the Lenders and the Agents shall be
restored to their former positions and rights hereunder and under the other Loan
Documents,  and any  Default  or Event of Default  waived  shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.

                  14.2 NOTICES. All notices, requests and demands to or upon the
respective  parties  hereto to be effective  shall be in writing  (including  by
facsimile  transmission) and, unless otherwise expressly provided herein,  shall
be deemed to have been duly given or made (a) in the case of  delivery  by hand,
when  delivered,  (b) in the case of  delivery  by mail,  three days after being
deposited  in the mails,  postage  prepaid,  or (c) in the case of  delivery  by
facsimile transmission,  when sent and receipt has been confirmed,  addressed as
follows in the case of the Borrowers,  the General  Administrative Agent and the
Canadian  Administrative Agent, and as set forth in Schedule 1.1F in the case of
the other parties hereto, or to such other address as may be hereafter  notified
by the respective parties hereto:

                       The Company:       LES, Inc.
                                          1301 Gervais Street, 3rd Floor
                                          Columbia, South Carolina  29201
                                          Attention: Paul Humphreys
                                          Fax: (803) 933-4346


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<PAGE>


             The Canadian Borrower:       Laidlaw Environmental (Canada) Ltd.
                                          c/o LES, Inc.
                                          1301 Gervais Street, 3rd Floor
                                          Columbia, South Carolina  29201
                                          Attention: Paul Humphreys
                                          Fax: (803) 933-4346

   The General Administrative Agent:      Toronto Dominion (Texas), Inc.
                                          909 Fannin Street, Suite 1700
                                          Houston, Texas 77010
                                          Attention:  Jano Mott
                                          Fax: (713) 951-9921

   The Canadian Administrative Agent      The Toronto-Dominion Bank
                                          9th Floor, Toronto Dominion Bank Tower
                                          Toronto Dominion Centre
                                          55 King Street West
                                          Toronto, Ontario M5K 1A2
                                          Attention: Manager Agency
                                          Fax: (416) 982-5535

PROVIDED   that  any   notice,   request  or  demand  to  or  upon  the  General
Administrative Agent, the Canadian  Administrative Agent or the Lenders pursuant
to Section 2.2, 2.4, 2.6, 4.2, 5.2, 5.5, 6.2, 6.3 and 6.4 shall not be effective
until received.

                  14.3 NO WAIVER;  CUMULATIVE  REMEDIES.  No failure to exercise
and no delay in exercising,  on the part of either  Administrative  Agent or any
Lender, any right,  remedy, power or privilege hereunder or under the other Loan
Documents  shall  operate as a waiver  thereof;  nor shall any single or partial
exercise of any right,  remedy,  power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights,  remedies,  powers and  privileges  herein  provided are
cumulative  and not  exclusive of any rights,  remedies,  powers and  privileges
provided by law.

                  14.4  SURVIVAL  OF   REPRESENTATIONS   AND   WARRANTIES.   All
representations  and warranties made hereunder,  in the other Loan Documents and
in any  document,  certificate  or  statement  delivered  pursuant  hereto or in
connection  herewith  shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.

                  14.5 PAYMENT OF EXPENSES AND TAXES.  The Company agrees (a) to
pay or reimburse each  Administrative  Agent for all its out-of-pocket costs and
expenses incurred in connection with the development,  preparation and execution
of, and any  amendment,  supplement or  modification  to, this Agreement and the
other Loan Documents and any other documents prepared in connection  herewith or
therewith,   and  the  consummation  and   administration  of  the  transactions
contemplated hereby and thereby,  including,  without limitation, the reasonable
fees and  disbursements  of counsel to such  Administrative  Agent (b) to pay or
reimburse each Lender,


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<PAGE>


the General  Administrative Agent and the Canadian  Administrative Agent for all
its  costs  and  expenses   incurred  in  connection  with  the  enforcement  or
preservation  of any rights under this  Agreement,  the other Loan Documents and
any  such  other  documents,   including,   without  limitation,  the  fees  and
disbursements  of counsel to each  Lender and of counsel to such  Administrative
Agent, (c) to pay, indemnify, and hold each Lender and each Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying,  stamp, excise and other
taxes,  if any,  which may be payable or  determined to be payable in connection
with the execution and delivery of, or consummation or  administration of any of
the transactions  contemplated by, or any amendment,  supplement or modification
of, or any waiver or consent under or in respect of, this  Agreement,  the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and each Administrative  Agent harmless from and against any and all
other liabilities,  obligations, losses, damages, penalties, actions, judgments,
suits,  costs,  expenses or disbursements of any kind or nature  whatsoever with
respect to the execution, delivery, enforcement,  performance and administration
of this  Agreement,  the other  Loan  Documents  and any such  other  documents,
including,  without  limitation,  any of the foregoing relating to the violation
of,  noncompliance  with or liability under, any Environmental Law applicable to
the  operations  of  the  Company  or  any  of  its  Subsidiaries  or any of the
facilities or properties owned,  leased or operated by the Company or any of its
Subsidiaries  (all  the  foregoing  in  this  clause  (d),   collectively,   the
"indemnified liabilities"), PROVIDED that the Borrowers shall have no obligation
hereunder to any person  seeking  indemnification  with  respect to  indemnified
liabilities  arising from the gross  negligence  or willful  misconduct  of such
person.  Without  limiting  the  foregoing,  and  to  the  extent  permitted  by
applicable law, the Company agrees,  and shall cause each of its Subsidiaries to
agree,  not to  assert,  and  hereby  waives  and  agrees  to cause  each of its
Subsidiaries  to waive,  all  rights  for  contribution  or any other  rights of
recovery  with  respect  to  all  liabilities,   obligations,  losses,  damages,
penalties,  actions,  judgments,  suits,  costs,  expenses or  disbursements  of
whatever kind or nature whatsoever, under or related to Environmental Laws, that
any of them  might have by statute or  otherwise  against  each  Lender and each
Administrative  Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.

                  14.6 SUCCESSORS AND ASSIGNS;  PARTICIPATIONS  AND ASSIGNMENTS.
(a)  This  Agreement  shall be  binding  upon and  inure to the  benefit  of the
Borrowers,  the Lenders,  the  Administrative  Agents, all future holders of the
Loans,   the   Reimbursement   Obligations  and  the  Acceptance   Reimbursement
Obligations and their respective successors and assigns, except that no Borrower
may assign or transfer  any of its rights or  obligations  under this  Agreement
without the prior written consent of each Lender.

                  (b) Any Lender may, in the ordinary  course of its  commercial
banking or  institutional  financial  business and in accordance with applicable
law,  at any time sell to one or more banks or other  entities  ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other  interest of such Lender  hereunder and under the other Loan
Documents;  PROVIDED  that, in the case of  participations  in any Canadian Term
Loan granted by a Canadian Lender, such Participant must be a resident of Canada
for  purposes of the Tax Act unless such  participation  is granted  pursuant to
Section 14.7. In the


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<PAGE>


event of any such sale by a Lender of a participating interest to a Participant,
such  Lender's  obligations  under this  Agreement to the other  parties to this
Agreement shall remain  unchanged,  such Lender shall remain solely  responsible
for the  performance  thereof,  such Lender  shall remain the holder of any such
Loan or other  interest for all purposes under this Agreement and the other Loan
Documents,  and the Borrowers and the  Administrative  Agents shall  continue to
deal solely and  directly  with such  Lender in  connection  with such  Lender's
rights and  obligations  under this Agreement and the other Loan  Documents.  No
Lender  shall  be  entitled  to  create  in  favor  of any  Participant,  in the
participation  agreement  pursuant  to which  such  Participant's  participating
interest  shall be created  or  otherwise,  any right to vote on,  consent to or
approve any matter  relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to Section 14.1. Each
of the Borrowers agrees that if amounts outstanding under this Agreement are due
or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default,  each  Participant  shall, to the maximum
extent  permitted  by  applicable  law, be deemed to have the right of setoff in
respect of its  participating  interest in amounts owing under this Agreement to
the same  extent  as if the  amount of its  participating  interest  were  owing
directly to it as a Lender under this  Agreement,  PROVIDED  that, in purchasing
such participating  interest, such Participant shall be deemed to have agreed to
share with the Lenders the  proceeds  thereof as provided in Section  14.7(a) as
fully as if it were a Lender  hereunder.  Each of the Borrowers also agrees that
each  Participant  shall be entitled to the benefits of Sections 6.11,  6.12 and
6.13 with  respect to its  participation  in the  Commitments  and the Loans and
other  amounts  outstanding  from time to time as if it was a  Lender;  PROVIDED
that, in the case of Section 6.12, such Participant shall have complied with the
requirements of said Section and PROVIDED, FURTHER, that no Participant shall be
entitled to receive any greater  amount  pursuant to any such  Section  than the
transferor  Lender would have been  entitled to receive in respect of the amount
of the  participation  transferred by such transferor Lender to such Participant
had no such transfer occurred.

                  (c) Any Lender may, in the ordinary  course of its  commercial
banking or  institutional  financial  business and in accordance with applicable
law, at any time and from time to time assign to any Lender, an Approved Fund of
any Lender, or any affiliate thereof or, with the consent of the Company and the
General  Administrative  Agent  (which  in each case  shall not be  unreasonably
withheld or delayed),  to an additional bank, financial  institution or fund (an
"ASSIGNEE") all or any part of its rights and  obligations  under this Agreement
and  the  other  Loan  Documents  pursuant  to  an  Assignment  and  Acceptance,
substantially  in the  form  of  Exhibit  L,  executed  by such  Assignee,  such
assigning Lender (and, in the case of an Assignee that is not then a Lender,  an
Approved  Fund of any Lender,  or an affiliate  thereof,  by the Company and the
General  Administrative  Agent) and delivered to the appropriate  Administrative
Agent for its  acceptance  and recording in the Register,  PROVIDED that no such
assignment  to an  Assignee  (other than any Lender,  any  Approved  Fund of any
Lender, or any affiliate  thereof) shall be in an aggregate  principal amount of
less  than  $5,000,000  (other  than in the  case of an  assignment  of all of a
Lender's interests under this Agreement), unless otherwise agreed by the Company
and the General Administrative Agent. Any such assignment need not be ratable as
among the Facilities. Upon such execution,  delivery,  acceptance and recording,
from and after the effective  date  determined  pursuant to such  Assignment and
Acceptance,  (x) the  Assignee  thereunder  shall be a party  hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and


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<PAGE>


obligations of a Lender  hereunder  with a Commitment as set forth therein,  and
(y) the  assigning  Lender  thereunder  shall,  to the extent  provided  in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance  covering all or the remaining
portion of an assigning  Lender's rights and  obligations  under this Agreement,
such  assigning  Lender shall cease to be a party hereto).  Notwithstanding  any
provision of this  paragraph (c) and paragraph (e) of this Section,  the consent
of the Company  shall not be  required,  and,  unless  requested by the Assignee
and/or the assigning Lender,  new Notes shall not be required to be executed and
delivered by any Borrower,  for any assignment which occurs at any time when any
Event of Default shall have occurred and be continuing.

                  (d)  The  General  Administrative  Agent,  on  behalf  of  the
Borrowers,  shall  maintain at the address of the General  Administrative  Agent
referred to in Section 14.2 a copy of each  Assignment and Acceptance  delivered
to it and a  register  (the  "REGISTER")  for the  recordation  of the names and
addresses of the Lenders and the  Commitments  of, and principal  amounts of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be  conclusive,  in the  absence  of  manifest  error,  and the  Borrowers,  the
Administrative Agents and the Lenders may (and, in the case of any Loan or other
obligation  hereunder  not  evidenced by a Note,  shall) treat each Person whose
name is  recorded  in the  Register  as the owner of a Loan or other  obligation
hereunder as the owner thereof for all purposes of this  Agreement and the other
Loan Documents,  notwithstanding  any notice to the contrary.  Any assignment of
any  Loan or  other  obligation  hereunder  not  evidenced  by a Note  shall  be
effective only upon  appropriate  entries with respect thereto being made in the
Register.

                  (e) Upon its receipt of an Assignment and Acceptance  executed
by an assigning  Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender, an Approved Fund of any Lender, or an affiliate  thereof,  by
the Company and the General  Administrative  Agent) together with payment to the
General  Administrative  Agent (or, in the case of an Assignment of a portion of
the  Canadian  Term  Loans  only,  to the  Canadian  Administrative  Agent) of a
registration and processing fee of $3,500, the General  Administrative Agent (or
the Canadian  Administrative  Agent, as  appropriate)  shall (i) promptly accept
such  Assignment  and  Acceptance  and  (ii) on the  effective  date  determined
pursuant  thereto record the information  contained  therein in the Register and
give notice of such  acceptance and  recordation to the Lenders and the relevant
Borrower.

                  (f) Each  Borrower  authorizes  each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE")  and any prospective  Transferee,
subject to the provisions of Section 14.16, any and all financial information in
such Lender's possession concerning the Borrowers and their Affiliates which has
been delivered to such Lender by or on behalf of the Borrowers  pursuant to this
Agreement  or which  has been  delivered  to such  Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.


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<PAGE>


                  (g) For  avoidance  of doubt,  the  parties to this  Agreement
acknowledge  that the provisions of this  subsection  concerning  assignments of
Loans and Notes relate only to absolute  assignments and that such provisions do
not  prohibit  assignments  creating  security  interests,   including,  without
limitation,  any  pledge  or  assignment  by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

                  14.7  ADJUSTMENTS;  SET-OFF.  (a) If any Lender (a  "BENEFITED
LENDER")  (i) shall at any time prior to any date on which the  Commitments  are
terminated  and the Loans  become  due and  payable  pursuant  to Section 11 (an
"ACCELERATION")  receive any payment of all or part of its  Extensions of Credit
made by it to any Borrower,  or interest  thereon,  or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off or otherwise),
in a greater  proportion than any such payment to or collateral  received by any
other  Lender,  if any, in respect of such other  Lender's  Extensions of Credit
made by it to such  Borrower,  or  interest  thereon (in each case except to the
extent that this Agreement  provides for payments to be allocated to the Lenders
under a  particular  Facility)  or (ii) shall at any time after an  Acceleration
receive any payment of all or part of the aggregate  amount of the Extensions of
Credit made by such benefited Lender to all Borrowers,  or interest thereon,  or
receive any  collateral in respect  thereof  (whether  voluntarily,  by set-off,
pursuant to events or proceedings of the nature referred to in Section 11(f), or
otherwise), in a greater proportion than any such payment or collateral received
by any  other  Lender,  if  any,  in  respect  by the  aggregate  amount  of the
Extensions of Credit made by such Lender to all Borrowers,  or interest thereon,
then,  in each case  described  in the  foregoing  clauses  (i) and  (ii),  such
benefited  Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other  Lender's  Extensions of Credit,  or
shall  provide such other Lenders with the benefits of any such  collateral,  or
the proceeds  thereof,  as shall be necessary to cause such benefited  Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders (to the extent required by the foregoing clause (i) or (ii),
as  applicable);  PROVIDED,  HOWEVER,  that if all or any portion of such excess
payment or benefits is thereafter  recovered  from such benefited  Lender,  such
purchase shall be rescinded,  and the purchase price and benefits  returned,  to
the extent of such recovery, but without interest.

                  (b) In  addition  to any rights and  remedies  of the  Lenders
provided by law,  each Lender shall have the right,  without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted  by  applicable  law,  upon any amount  becoming  due and payable by a
Borrower  hereunder  (whether  at  the  stated  maturity,   by  acceleration  or
otherwise) to set-off and  appropriate and apply against such amount any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured,  at any time held or owing by such  Lender or any  branch,  agency or
Affiliate  thereof to or for the credit or the  account  of the  Borrower.  Each
Lender agrees  promptly to notify the Borrowers  and the  Administrative  Agents
after any such set-off and  application  made by such Lender,  PROVIDED that the
failure to give such notice  shall not affect the  validity of such  set-off and
application.


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<PAGE>


                  (c) Notwithstanding  the foregoing,  no Lender shall institute
or commence any  proceeding to collect any amounts owed to it hereunder or shall
otherwise  exercise any remedies  (including setoff) with respect to the amounts
owed to it unless such Lender  shall  provide at least five  Business  Days' (or
such shorter period as may be consented to by the General  Administrative Agent)
prior written notice thereof to the General Administrative Agent.

                  14.8  COUNTERPARTS.  This  Agreement may be executed by one or
more of the parties to this  Agreement  on any number of  separate  counterparts
(including  by  facsimile  transmission),  and  all of said  counterparts  taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this  Agreement  signed by all the  parties  shall be lodged  with the
Company and each Administrative Agent.

                  14.9  SEVERABILITY.  Any provision of this Agreement  which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

                  14.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrowers,  the  Administrative  Agents,  and the
Lenders with respect to the subject  matter  hereof,  and there are no promises,
undertakings,  representations or warranties by the Administrative Agents or any
Lender  relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.

                  14.11  GOVERNING  LAW.  THIS  AGREEMENT  AND  THE  RIGHTS  AND
OBLIGATIONS  OF THE PARTIES  HEREUNDER  SHALL BE GOVERNED BY, AND  CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                  14.12 SUBMISSION TO JURISDICTION;  WAIVERS.  (a) Each Borrower
hereby irrevocably and unconditionally:

                        (i)  submits  for itself and its  property  in any legal
         action or  proceeding  relating  to this  Agreement  and the other Loan
         Documents to which it is a party, or for recognition and enforcement of
         any  judgment  in  respect  thereof,   to  the  non-exclusive   general
         jurisdiction  of the courts of the State of New York, the courts of the
         United  States of America for the  Southern  District of New York,  and
         appellate courts from any thereof;

                       (ii) consents  that any such action or proceeding  may be
         brought in such  courts and  waives  any  objection  that it may now or
         hereafter  have to the venue of any such  action or  proceeding  in any
         such  court  or that  such  action  or  proceeding  was  brought  in an
         inconvenient court and agrees not to plead or claim the same;


                                      115
<PAGE>


                      (iii) agrees that service of process in any such action or
         proceeding  may be effected by mailing a copy thereof by  registered or
         certified  mail (or any  substantially  similar form of mail),  postage
         prepaid,  to such  Borrower at its address set forth in Section 14.2 or
         at such other  address of which each  Administrative  Agent  shall have
         been notified pursuant thereto;

                       (iv) agrees that nothing herein shall affect the right to
         effect service of process in any other manner permitted by law or shall
         limit the right to sue in any other jurisdiction; and

                        (v) waives, to the maximum extent not prohibited by law,
         any  right it may  have to claim or  recover  in any  legal  action  or
         proceeding  referred  to in this  subsection  any  special,  exemplary,
         punitive or consequential damages.

                  (b) The  Canadian  Borrower  hereby  irrevocably  appoints the
Company as its agent for  service of process in any  proceeding  referred  to in
Section 14.2(a) and agrees that service of process in any such proceeding may be
made by mailing or  delivering  a copy  thereof to it care of the Company at its
address for notice set forth in Section 14.2(a).

                  14.13 ACKNOWLEDGMENTS. Each Borrower hereby acknowledges that:

                  (a)  it has  been  advised  by  counsel  in  the  negotiation,
         execution and delivery of this Agreement and the other Loan Documents;

                  (b)  neither  Administrative  Agent  nor  any  Lender  has any
         fiduciary  relationship with or duty to such Borrower arising out of or
         in connection  with this Agreement or any of the other Loan  Documents,
         and the relationship between  Administrative Agents and Lenders, on one
         hand, and such Borrower,  on the other hand, in connection  herewith or
         therewith is solely that of debtor and creditor; and

                  (c) no joint  venture is  created  hereby or by the other Loan
         Documents   or   otherwise   exists  by  virtue  of  the   transactions
         contemplated  hereby  among the Lenders or among such  Borrower and the
         Lenders.

                  14.14  WAIVERS  OF  JURY  TRIAL.  EACH OF THE  BORROWERS,  THE
ADMINISTRATIVE  AGENTS AND THE LENDERS HEREBY  IRREVOCABLY  AND  UNCONDITIONALLY
WAIVES  TRIAL  BY  JURY IN ANY  LEGAL  ACTION  OR  PROCEEDING  RELATING  TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.


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<PAGE>


                  14.15 JUDGMENT.  (a) If for the purpose of obtaining  judgment
in any court it is necessary to convert a sum due hereunder in one currency into
another currency,  the parties hereto agree, to the fullest extent that they may
effectively  do so,  that the rate of  exchange  used  shall be that at which in
accordance with normal banking procedures the General Administrative Agent could
purchase  the first  currency  with such other  currency in the city in which it
normally  conducts its foreign exchange  operation for the first currency on the
Business Day preceding the day on which final judgment is given.

                  (b) The  obligation of each Borrower in respect of any sum due
from  it to any  Lender  hereunder  shall,  notwithstanding  any  judgment  in a
currency  (the  "JUDGMENT  CURRENCY")  other  than  that in  which  such  sum is
denominated in accordance with the applicable  provisions of this Agreement (the
"AGREEMENT CURRENCY"), be discharged only to the extent that on the Business Day
following  receipt  by  such  Lender  of any  sum  adjudged  to be so due in the
Judgment  Currency such Lender may in accordance with normal banking  procedures
purchase the  Agreement  Currency with the Judgment  Currency;  if the amount of
Agreement  Currency so  purchased  is less than the sum  originally  due to such
Lender in the Agreement Currency,  such Borrower agrees notwithstanding any such
judgment to indemnify  such Lender  against such loss,  and if the amount of the
Agreement  Currency so purchased  exceeds the sum  originally due to any Lender,
such Lender agrees to remit to such Borrower such excess.

                  14.16 CONFIDENTIALITY. Each Lender agrees to keep confidential
all  non-public  information  provided  to it by the  Company  pursuant  to this
Agreement that is designated by the Company in writing as confidential; PROVIDED
that  nothing  herein  shall  prevent  any  Lender  from   disclosing  any  such
information  (i) to its  affiliates,  the  Administrative  Agents  or any  other
Lender,  (ii) to any  Transferee  which agrees to comply with the  provisions of
this  subsection,   (iii)  to  its  employees,   directors,  agents,  attorneys,
accountants  and  other  professional   advisors,   or  to  direct  or  indirect
contractual counterparts in swap agreements relating to swaps with a Borrower or
such contractual  counterparties'  professional  advisors provided that any such
contractual  counterparty or its professional  advisors shall agree to keep such
confidential  information  confidential,  (iv) upon the request or demand of any
Governmental  Authority having jurisdiction over such Lender, (v) in response to
any order of any court or other  Governmental  Authority or as may  otherwise be
required  pursuant  to any  Requirement  of Law,  (vi)  which has been  publicly
disclosed  other  than in breach of this  Agreement,  or is  currently  publicly
available or is in the possession of a Lender on a  nonconfidential  basis or is
disclosed to a Lender on a nonconfidential basis by a person who in so doing has
not  violated  a duty of  confidentiality  owing  to the  Company  (vii)  to the
National  Association of Insurance  Commissioners or any similar organization or
any  nationally  recognized  rating agency that requires  access to  information
about a Lender's  investment  portfolio in connection  with ratings  issued with
respect to such Lender or (viii) in  connection  with the exercise of any remedy
hereunder.

                  14.17  EFFECT OF  AMENDMENT  AND  RESTATEMENT.  On the Closing
Date, the Existing Credit  Agreement and the Guarantee and Collateral  Agreement
(as defined in the Existing  Credit  Agreement)  shall be amended,  restated and
superseded  in  their  entirety,  and  the  Mortgages  and  Canadian  Collateral
Documents (as such terms are defined in the Existing Credit Agreement) are


                                      117
<PAGE>


being amended and/or affirmed as provided herein. The parties hereto acknowledge
and agree that (a) this Agreement and the other Loan Documents, whether executed
and delivered in connection herewith or otherwise,  do not constitute a novation
or  termination  of the  obligations  of the Loan  Parties  (as  defined  in the
Existing  Credit  Agreement)  under the Existing  Credit  Agreement as in effect
prior to the Closing Date; (b) such  obligations are in all respects  continuing
(as amended and restated  hereby) with only the terms thereof being  modified as
provided in this Agreement;  (c) the Liens, guarantees and security interests as
granted  under the Security  Documents (as defined in this  Agreement)  securing
payment of such obligations are in all respects continuing and in full force and
effect and secure the payment of the  obligations of the Loan Parties under (and
as defined) in this Agreement; and (d) upon the effectiveness of this Agreement,
all loans outstanding under the Existing Credit Agreement immediately before the
effectiveness  of this Agreement will be continued as Loans hereunder or will be
repaid in accordance with the Existing Credit  Agreement on the Closing Date and
reborrowed  hereunder as provided  herein,  and,  except as provided herein with
respect to the  Specified  Acceptances,  all  outstanding  letters of credit and
bankers'  acceptances  under the Existing Credit  Agreement will be continued as
Letters of Credit and Acceptances,  respectively, hereunder, in each case on the
terms and conditions set forth in this Agreement.


                                      118
<PAGE>


                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be duly executed and delivered by their proper and duly  authorized
officers as of the day and year first above written.

                                    LES, INC.


                                    By:
                                       ------------------------------------
                                       Title:


                                    LAIDLAW ENVIRONMENTAL SERVICES
                                     (CANADA) LTD.


                                    By:
                                       ------------------------------------ 
                                       Title:


                                    TORONTO DOMINION (TEXAS), INC.,
                                     as General Administrative Agent and Lender


                                    By:
                                       ------------------------------------
                                       Title:


                                    THE TORONTO-DOMINION BANK,
                                     as Canadian Administrative Agent


                                    By:
                                       ------------------------------------
                                       Title:


                                    TD SECURITIES (USA) INC.,
                                     as Arranger


                                    By:
                                       ------------------------------------    
                                       Title:


                                      119
<PAGE>


                                    THE TORONTO-DOMINION BANK,
                                     as a Lender


                                    By:
                                       ------------------------------------ 
                                       Title:


                                    By:
                                       ------------------------------------
                                       Title:


                                    THE BANK OF NOVA SCOTIA,
                                     as Managing Agent, Co-Documentation Agent
                                      and Lender


                                    By:
                                       ------------------------------------
                                       Title:


                                    THE FIRST NATIONAL BANK OF CHICAGO,
                                     as Managing Agent, Co-Documentation Agent
                                      and Lender


                                    By:
                                       ------------------------------------     
                                       Title:


                                    NATIONSBANK, N.A.,
                                     as Syndication Agent, Managing Agent and
                                     Lender


                                     By:
                                       ------------------------------------
                                       Title:


                                    WACHOVIA BANK, N.A.,
                                     as Managing Agent and Lender


                                    By:
                                       ------------------------------------
                                       Title:


                                      120
<PAGE>


                                    VAN KAMPEN MERRITT AMERICAN
                                     CAPITAL PRIME RATE INCOME TRUST


                                    By:
                                       ------------------------------------
                                       Title:


                                    OAK HILL SECURITIES FUND, L.P.


                                    By: OAK HILL SECURITIES GENPAR, L.P., its
                                        General Partner


                                    By: OAK HILL SECURITIES MGP, INC., its
                                        General Partner

                                        By:
                                           --------------------------------
                                           Title: Vice President


                                    PILGRIM AMERICA PRIME RATE TRUST


                                   By:
                                       ------------------------------------
                                       Title:


                                    KZH HOLDING CORPORATION III


                                    By:
                                       ------------------------------------
                                       Title:


                                      121
<PAGE>


                                    JACKSON NATIONAL LIFE INSURANCE
                                     COMPANY


                                   By: PPM AMERICA, INC., as attorney in fact,
                                       on behalf of Jackson National Life 
                                       Insurance Company
 

                                     By:
                                       ------------------------------------
                                       Title:


                                    AMERICAN GENERAL ANNUITY
                                     INSURANCE COMPANY


                                   By:
                                       -----------------------------------
                                       Title:


                                    METROPOLITAN LIFE INSURANCE
                                     COMPANY


                                    By:
                                       ------------------------------------
                                       Title:


                                    KZH-CRESCENT CORPORATION


                                     By:
                                       ------------------------------------
                                       Title:


                                    KZH-CRESCENT 2 CORPORATION


                                     By:
                                       ------------------------------------
                                       Title:


                                      122
<PAGE>


                                    CRESCENT/MACH I PARTNERS, L.P.


                                     By: TCW ASSET MANAGEMENT COMPANY,
                                       as its Investment Manager

                                       By:
                                          ---------------------------------
                                          Title:


                                    ARCHIMEDES FUNDING LLC


                                     By: ING CAPITAL ADVISORS, INC., as
                                        Collateral Manager

                                        By:
                                           --------------------------------
                                           Title:


                                    CYPRESSTREE INVESTMENT
                                     MANAGEMENT COMPANY, INC.

                                    AS: Attorney-in-Fact and on behalf of FIRST
                                       ALLMERICA FINANCIAL LIFE
                                       INSURANCE COMPANY as Portfolio

                                       By:
                                          ---------------------------------
                                          Title:


                                    ING HIGH INCOME PRINCIPAL
                                     PRESERVATION FUND HOLDINGS, LDC


                                    By: ING CAPITAL ADVISORS, INC., as
                                        Investment Advisor

                                        By:
                                           --------------------------------
                                          Title:  Vice President &
                                                    Portfolio Manager


                                      123
<PAGE>


                                    KZH-ING-1-CORPORATION


                                     By:
                                       ------------------------------------
                                       Title:


                                    INDOSUEZ CAPITAL FUNDING III, LIMITED


                                     By: INDOSUEZ CAPITAL LUXEMBOURG, as
                                       Collateral Manager

                                        By:
                                          ---------------------------------
                                          Title:


                                    KZH-ING-2-CORPORATION


                                     By:
                                       ------------------------------------
                                       Title:


                                    KZH SOLEIL CORPORATION


                                    By:
                                       ------------------------------------
                                       Title:


                                    DELANO COMPANY


                                     By: PACIFIC INVESTMENT MANAGEMENT
                                        COMPANY, as its Investment Advisor

                                        By:           
                                           --------------------------------
                                          Title:


                                      124
<PAGE>


                                    CONTINENTAL ASSURANCE COMPANY
                                    SEPARATE ACCOUNT (E)


                                    By: TCW ASSET MANAGEMENT COMPANY,
                                       as Attorney-in-Fact

                                       By:
                                          ---------------------------------
                                         Title:
 

                                    ROYALTON COMPANY


                                    By: PACIFIC INVESTMENT MANAGMENT
                                        COMPANY, as its Investment Advisor


                                        By:
                                           --------------------------------
                                          Title:


                                    DEEPROCK & COMPANY


                                     By: EATON VANCE MANAGEMENT, as
                                       Investment Advisor

                                       By:   
                                          ---------------------------------
                                         Title:


                                      125
<PAGE>


<TABLE>
<CAPTION>
                                                                                                            ANNEX A
                                                                                                            -------                 



<S>                                                   <C>              <C>              <C>              <C>     

                                  PRICING GRID

===================================================================================================================
                                                      Applicable
                                                      Margin                            Applicable
                                                      for LIBOR        Applicable       Margin for
                                                      Loans/           Margin for       Canadian
Consolidated Total Leverage Ratio                     Stamping         Base Rate        Term             Commitment
                                                      Fee Rate         Loans            Loans            Fee Rate
===================================================================================================================

Greater than or equal to 4:00:1.00                    2.375%           1.375%           1.375%           0.500%
-------------------------------------------------------------------------------------------------------------------
Greater  than or  equal to  3.50:1.00,  but less      2.250%           1.250%           1.250%           0.500%
than 4.00:1.00
-------------------------------------------------------------------------------------------------------------------
Greater than or equal  3.25:1.00,  but less than      2.000%           1.000%           1.000%           0.375%
3.50:1.00
-------------------------------------------------------------------------------------------------------------------
Greater  than or  equal to  3.00:1.00,  but less      1.875%           0.875%           0.875%           0.375%
than 3.25:1.00
-------------------------------------------------------------------------------------------------------------------
Greater  than or  equal to  2.50:1.00,  but less      1.500%           0.500%           0.500%           0.375%
than 3.00:1.00
-------------------------------------------------------------------------------------------------------------------
Greater  than or  equal to  2.00:1.00,  but less      1.125%           0.125%           0.125%           0.250%
than 2.50:1.00
-------------------------------------------------------------------------------------------------------------------
Greater  than or  equal to  1.50:1.00,  but less      0.875%           0%               0%               0.250%
than 2.00:1.00
-------------------------------------------------------------------------------------------------------------------
Less than 1.50:1.00                                   0.625%           0%               0%               0.150%
===================================================================================================================
</TABLE>

Changes in the  Applicable  Margin or in the  Commitment Fee Rate resulting from
changes in the  Consolidated  Total Leverage Ratio shall become effective on the
date (the "ADJUSTMENT  DATE") on which financial  statements are received by the
General  Administrative Agent and the Canadian  Administrative Agent pursuant to
Section 9.1(a) or 9.1(b) (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal  year,  as the case may be) and shall remain in
effect until the next change to be effected  pursuant to this paragraph.  If any
financial statements referred to above are not delivered within the time periods
specified  above,  then,  until such financial  statements  are  delivered,  the
Consolidated  Total Leverage Ratio as at the end of the fiscal period that would
have been covered thereby shall for the purposes of this definition be deemed to
be greater  than 4.00 to 1.00.  Each  determination  of the  Consolidated  Total
Leverage  Ratio  pursuant to this  definition  shall be made with respect to the
period of four  consecutive  fiscal quarters of the Company ending at the end of
the period covered by the relevant financial statements.

Notwithstanding  the  foregoing,  until  the  first  Adjustment  Date  occurring
following  the end of the first two full fiscal  quarters to be completed  after
the Closing Date, the Applicable  Margins and Commitment Fee Rate will be as set
forth above opposite  Consolidated Total Leverage Ratio greater than or equal to
4.00 to 1:00.


                                      1

<PAGE>

                                                                     

                                                                SCHEDULE 1.1A to
                                                                CREDIT AGREEMENT
                                                                ----------------

<TABLE>                          
<CAPTION>
                           U.S. LENDER COMMITMENTS  /1/
                           --------------------------
    

                                             Tranche A Term         Tranche B Term        Tranche C Term            Revolving
U.S. Lender                                  Loan Commitment        Loan Commitment       Loan Commitment       Credit Commitment
-----------                                  ---------------        ---------------       ---------------       -----------------
<S>                                            <C>                      <C>               <C>                  <C>
Toronto Dominion (Texas), Inc.......       US $170,322,580.64       US $281,500,000       US $281,500,000      US $159,677,419.36
The Bank of Nova Scotia.............            77,419,354.84                                                       72,580,645.16
The First National Bank of Chicago..
                                                77,419,354.84             7,500,000             7,500,000           72,580,645.16
NationsBank, N.A....................            77,419,354.84            15,000,000            15,000,000           72,580,645.16
Wachovia Bank of South Carolina, N.A.
                                                77,419,354.84                                                       72,580,645.16
Van Kampen Merritt American Capital
    Prime Rate Income Trust.......
                                                                         60,000,000            60,000,000
Oak Hill Securities Fund, LP........                                     37,500,000            37,500,000
Pilgrim America Prime Rate Trust....                                     20,000,000            20,000,000
KZH Holding Corporation III.........                                     15,000,000            15,000,000
Jackson National Life Insurance
    Company.........................                                     12,500,000            12,500,000
 American General Annuity Life
    Insurance Company...............                                     10,000,000            10,000,000
 Metropolitan Life Insurance Company
                                                                         10,000,000            10,000,000
 KZH-Crescent Corporation...........                                      9,375,000             9,375,000
 KZH-Crescent 2 Corporation.........                                      9,375,000             9,375,000
 Crescent/Mach I Partners, L.P......                                      9,125,000             9,125,000
 Archimedes Funding LLC.............                                      7,500,000             7,500,000
 First Allmerica Financial Life                                           7,500,000             7,500,000
    Insurance Company...............
 ING High Income Principal                                                7,500,000             7,500,000
    Preservation Fund Holding LDC...
 KZH-ING-1-Corp.....................                                      7,500,000             7,500,000
 Indosuez Capital Funding, III                                            5,000,000             5,000,000
    Limited.........................
 KZH-ING-2-Corp.....................                                      5,000,000             5,000,000
 KZH Soleil Corp....................                                      5,000,000             5,000,000
 Delano Company.....................                                      3,000,000             3,000,000
 Continental Assurance Company......                                      2,125,000             2,125,000
 Royalton Company...................                                      2,000,000             2,000,000
 Deeprock & Company.................                                      1,000,000             1,000,000   
                                              ---------------          ---------------       ---------------      ---------------
                                              $480,000,000.00          $550,000,000.00       $550,000,000.00      $450,000,000.00
                                              ===============          ===============       ===============      ===============

/1/ Each Tranch B Term Loan Lender and Tranche C Term Loan Lender holds a pro rata share of  the
    Tranche B-1 Term Loan Commitment and the Tranche C-1 Term Loan Commitment, respectively

</TABLE>

<PAGE>



                                                               SCHEDULE 1.1B to
                                                               CREDIT AGREEMENT
                                                               ----------------


                          CANADIAN LENDER COMMITMENTS
                          ---------------------------


                  Canadian Lender                                Commitment
                  ---------------                                ----------
                 The Toronto-Dominion Bank                   US  $70,000,000.00
                                                                  70,000,000.00
                                                                ---------------
                                                             US $140,000,000.00
                                                                ===============

<PAGE>


<TABLE>
                                                                                                                      SCHEDULE 1.1C
                                                                                                                      -------------
                                                      EXISTING LETTERS OF CREDIT
                                                      --------------------------
<CAPTION>
                                                                   
Applicant                              Date Issued  Expiry Date  L/C Number  Beneficiary                                 L/C Amount
---------                              -----------  -----------  ---------  -----------                                 ----------
<S>                                       <C>          <C>         <C>     <C>                                         <C>
Laidlaw Environmental Services for        
Chemwaste                               16-Jan-98    26-Jul-98     1474     Barnett Bank of Lee County, NA             $3,000,000.00

LES, Inc.                               06-Nov-97    30-Nov-98     1452     Frontier Insurance Company                $28,500,000.00

LES, Inc.                               01-Feb-98    01-Feb-99     1477     CNA Risk Management                        $4,250,000.00

LES, Inc. for Laidlaw Environmental                                         Trustees under the Re-Solve Site Trust
North East                              03-Jul-97    05-Aug-98     1433     Fund                                         $651,597.00

LES, Inc. for Laidlaw Environmental                                         Utah Dept. of Environmental Quality/
(Aragonite)                             03-Jul-97    03-Jul-98     1435     Division of Solid                         $10,023,576.00

LES, Inc. for Laidlaw Chem-Waste Inc.   21-May-97    21-May-98     1424     Bank One as Trustee of Bayour-Sorrell 
                                                                            Trust Fund                                   $278,201.94

LES, Inc. for Laidlaw Environmental
(Bartow)                                02-Mar-98    02-Mar-99     1491     Regional Administrator - EPA - Atlanta        $53,041.00

LES, Inc. for Laidlaw Environmental
Services, Inc.                          10-Dec-97    10-Dec-98     1461     Reliance Insurance Company of Illinois     $2,500,000.00

LES, Inc. for Laidlaw Environmental
                                        10-Dec-97    10-Dec-98     1459     Reliance Insurance Company of Illinois    $10,000,000.00
Services, Inc.

LES,   Inc. for Laidlaw Environmental
Services, Inc.                          10-Dec-97    10-Dec-98     1460     Reliance Insurance Company of Illinois      2,500,000.00

LES, Inc. for Laidlaw Environmental                                         Pennsylvania Dept. of Environmental
(TG), Inc.                              20-Oct-97    19-Oct-98     1451     Protection                                    $10,000.00

LES,   Inc. to TES                      30-Sep-97    30-Sep-98     1446     Regional Administrator, EPA - Dallas         $480,282.00

                                                                            TOTAL:                                    $62,246,697.94

</TABLE>


<PAGE>

<TABLE>
                                                                                       SCHEDULE 1.1D
                             "EXISTING ACCEPTANCES"
                             ----------------------

<CAPTION>
                                                                                          Total
  Maturity Date:                                                                         Amount:
  --------------                                                                         -------
<S>                     <C>                                    <C>  <C>              <C> <C>
  April 9, 1998         The Toronto-Dominion Bank              Cdn  $3,100,000       Cdn $11,400,000
                        The Bank of Nova Scotia                Cdn  $1,900,000
                        First Chicago NBD Bank, Canada         Cdn  $2,600,000
                        Credit Lyonnais Canada                 Cdn  $2,400,000
                        Sanwa Bank Canada                      Cdn  $1,300,000
                        The Sumitomo Bank of Canada            Cdn    $100,000

  April 16, 1998        The Toronto-Dominion Bank              Cdn  $2,100,000       Cdn  $8,800,000
                        The Bank of Nova Scotia                Cdn  $1,700,000
                        First Chicago NBD Bank, Canada         Cdn  $2,100,000
                        Credit Lyonnais Canada                 Cdn  $1,800,000
                        Sanwa Bank Canada                      Cdn    $800,000
                        The Sumitomo Bank of Canada            Cdn    $300,000

  April 20, 1998        The Toronto-Dominion Bank              Cdn  $2,100,000       Cdn  $8,800,000
                        The Bank of Nova Scotia                Cdn  $1,700,000
                        First Chicago NBD Bank, Canada         Cdn  $2,100,000
                        Credit Lyonnais Canada                 Cdn  $1,800,000
                        Sanwa Bank Canada                      Cdn    $800,000
                        The Sumitomo Bank of Canada            Cdn    $300,000

  April 23, 1998        The Toronto-Dominion Bank              Cdn  $2,000,000       Cdn  $8,900,000
                        The Bank of Nova Scotia                Cdn  $1,700,000
                        First Chicago NBD Bank, Canada         Cdn  $2,100,000
                        Credit Lyonnais Canada                 Cdn  $2,000,000
                        Sanwa Bank Canada                      Cdn    $800,000
                        The Sumitomo Bank of Canada            Cdn    $300,000

  April 27, 1998        The Toronto-Dominion Bank              Cdn  $2,000,000       Cdn  $8,800,000
                        The Bank of Nova Scotia                Cdn  $1,700,000
                        First Chicago NBD Bank, Canada         Cdn  $2,100,000
                        Credit Lyonnais Canada                 Cdn  $1,900,000
                        Sanwa Bank Canada                      Cdn    $800,000
                        The Sumitomo Bank of Canada            Cdn    $300,000

  April 30, 1998        The Toronto-Dominion Bank              Cdn  $2,000,000       Cdn  $8,800,000
                        The Bank of Nova Scotia                Cdn  $1,700,000
                        First Chicago NBD Bank, Canada         Cdn  $2,100,000
                        Credit Lyonnais Canada                 Cdn  $1,900,000
                        Sanwa Bank Canada                      Cdn    $800,000
                        The Sumitomo Bank of Canada            Cdn    $300,000

                             TOTAL:                                                  Cdn $55,500,000

</TABLE>



<PAGE>


                                                                   SCHEDULE 1.lE
                                                                   -------------
                             "SPECIFIED ACCEPTANCES"
                             -----------------------

 Maturity Date:                                                     Amount:
 --------------                                                     -------

 April 9, 1998        The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,500,000

 April 16, 1998       The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,200,000

 April 20, 1998       The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,200,000

 April 23, 1998       The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,100,000

 April 27, 1998       The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,200,000

 April 30, 1998       The Bank of Tokyo-Mitsubishi (Canada)      Cdn  $1,200,000

                      TOTAL:                                     Cdn  $7,400,000


<PAGE>




                                                                SCHEDULE 1.1F to
                                                                CREDIT AGREEMENT
                                                                ----------------

ADDRESSES FOR NOTICES

TORONTO DOMINION (TEXAS), INC.
909 Fannin, Suite 1700
Houston, Texas  77010
Attention:  Jano Mott
Telephone:  713-653-8231
Facsimile:  713-951-9921

THE TORONTO-DOMINION BANK
TD Tower
Toronto Dominion Centre
9th Floor
Toronto, Ontario  M5K 1A2
Attention:  David Pankhurst
Telephone:  416-982-2375
Facsimile:  416-982-4468

TD SECURITIES (USA) INC.
31 West 52nd Street
New York, New York  10019
Attention:  Bill Evenson
Telephone:  212-927-7593
Facsimile:  212-262-1926

THE BANK OF NOVA SCOTIA
600 Peachtree St., N.E.
Suite 2700
Atlanta, GA 30308

Attn: Willam Zarrett
Tel:  404-877-1504
Fax:  404-888-8998

Attn: Carmen Malizia
Tel:  404-877-1521
Fax:  404-888-8998


                                       1
<PAGE>


with a copy to:

         THE BANK OF NOVA SCOTIA
         Corporate Credit East
         44 King St. W.
         Toronto, Ontario M5H 1H1
         Canada
         Attn: Stephen Eisen
         Tel:  416-866-4766

         Attn:  Jean Hopkins
         Tel:  416-866-7094
         Fax:  416-866-2009

THE FIRST NATIONAL BANK OF CHICAGO
1 First National Plaza
Mail Suite 0167, 1-10
Chicago, IL 60670
Attn: Courtenay Wood
Tel:  312-732-1563
Fax:  312-732-5435

NATIONSBANK, N.A.
100 North Tyron St.
Charlotte, NC 28255

Attn: David Sachsenmaier
         NC1-007-12-04
Tel:  704-386-3160
Fax:  704-388-9215

Attn:  Grant Harbrecht
         NC1-007-20-01
Tel:  704-386-0507
Fax:  704-388-6453

WACHOVIA BANK
1401 Main Street
Suite 705
Columbia, SC 29226

Attn: Gene Sellers
Tel:  803-765-3130
Fax:  803-765-3232


                                       2
<PAGE>


with a copy to:

         WACHOVIA BANK
         400 South Tryon Street
         31st Floor
         Charlotte, NC 28202-1915
         Attn: Paul Grube
         Tel:  704-378-5078
         Fax:  704-378-5035

         and:

         WACHOVIA BANK
         191 Peachtree
         26th Floor
         Atlanta, GA  30303
         Attn: Mark Abraham
         Tel:  404-332-1253
         Fax:  404-332-4005

         and:

         WOMBLE, CARLYLE
         3300 One First Union Center
         301 South College Street
         Charlotte, NC 28202-6025
         Attn: Bill McMillin
         Tel:  910-331-4972
         Fax:  910-331-4955

VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attn: Jeff Maillet
Tel:  630-684-6438
Fax:  630-684-6741

with a copy to:

         HOPKINS & SUTTER
         3 First National Plaza
         43rd Floor
         Chicago, IL 60602
         Attn: John Powers, Esq.
         Fax:  312-558-6538


                                       3
<PAGE>


OAK HILL SECURITIES FUND, LP
65 East 55th Street
32nd Floor
New York, NY 10022
Attn: Scott Krase
Tel:  212-326-1551
Fax:  212-593-3956

PILGRIM AMERICA PRIME RATE TRUST
2 Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004-4424
Attn: Dan Norman
Tel:  602-417-8112
Fax:  602-417-8301

KZH HOLDING III CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311

JACKSON NATIONAL LIFE INSURANCE COMPANY
c/o PPM America, Inc.
225 W. Wacker Drive
Suite 1200
Chicago, IL 60606
Attn: Michael DiRe
Tel:  312-634-2509
Fax:  312-634-0054


                                       4
<PAGE>


AMERICAL GENERAL ANNUITY INSURANCE COMPANY
2929 Allen Parkway, A37-01
Houston, TX  77019
Attn:  Victoria Chin
Tel:  713-831-1261
Fax:  713-831-1366

METROPOLITAN LIFE INSURANCE COMPANY
1 Madison Avenue
Area 7H
New York, NY 10010
Attn: Jennifer Kalb
Tel:  212-578-8716
Fax:  212-578-3916

with a copy to:

         METROPOLITAN LIFE INSURANCE COMPANY
         334 Madison Avenue
         Convent Station, NJ 07961
         Attn: Frank MonFalcone
         Tel:  973-254-3228
               973-254-3204
         Fax:  973-254-3050

KZH-CRESCENT CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311


                                       5
<PAGE>


KZH-CRESCENT 2 CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311

CRESCENT/MACH I PARTNERS, L.P.
c/o TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY  10166-0228
Attn:  Mark L. Gold/Justin Driscoll
Tel:  212-297-4000
Fax:  212-297-4159

         with a copy to:

         CRESCENT/MACH I PARTNERS, L.P.
         c/o State Street Bank & Trust Co.
         Two International Place
         Boston, MA  02110
         Attn:  Howie Gortman
         Tel:  617-664-5282
         Fax:  617-664-5367

ARCHIMEDES FUNDING, L.L.C.
c/o ING Capital Advisors
333 S. Grand Avenue, Suite 4250
Los Angeles, CA  90071
Attn:  Michael Hatley
Tel: 213-346-3972
Fax: 213-346-3995


                                       6
<PAGE>


FIRST ALLMERICA FINANCIAL LIFE
  INSURANCE COMPANY
c/o CypressTree Investment Managment Company, Inc.
125 High Street, 14th Floor
Boston, MA  02110
Attn:  Peter Merrill
Tel:  617-946-0600
Fax:  617-946-5681

ING HIGH INCOME PRINCIPAL PRESERVATION
  FUND HOLDINGS, LDC
c/o ING Capital Advisors
333 S. Grand Avenue, Suite 4250
Los Angeles, CA  90071
Attn:  Michael Hatley
Tel: 213-346-3972
Fax: 213-346-3995

KZH-ING-1-CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311

INDOSUEZ CAPITAL FUNDING III, LIMITED
1211 Avenue of the Americas
7th Floor
New York, NY 10036
Attn: Francois Berthelot
Tel:  212-278-2213
Fax:  212-278-2254


                                       7
<PAGE>


         with a copy to:

         INDOSUEZ CAPITAL FUNDING III, LIMITED
         c/o Queensgate Bank & Trust Company Limited
         P.O. Box 30464 SMB/South Church Street
         Ugland House, 5th Floor
         George Town
         Grand Cayman, Cayman Islands
         British West Indies

KZH-ING-2-CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311

KZH SOLEIL CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY  10011
Attn:  Virginia Conway
Tel:  212-946-7575
Fax:  212-946-7776

         with a copy to:

         GIBSON, DUNN & CRUTCHER
         200 Park Avenue
         New York, NY 10166
         Attn: Lee Ann Duffy
         Tel:  212-351-3809
         Fax:  212-351-5311


                                       8
<PAGE>


DELANO COMPANY
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92660
Attn: Melissa Fedjasz
Tel:  714-717-5169
Fax:  714-718-2623

CONTINENTAL ASSURANCE COMPANY
c/o TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY  10166-0228
Attn:  Mark L. Gold/Justin Driscoll
Tel:  212-297-4000
Fax:  212-297-4159

ROYALTON COMPANY
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92660
Attn: Melissa Fedjasz
Tel:  714-717-5169
Fax:  714-718-2623

DEEPROCK & COMPANY
c/o Eaton Vance Management
24 Federal Street
6th Floor
Boston, MA 02110
Attn: Payson Swaffield
Tel:  617-654-8486
Fax:  617-695-9594

with a copy to:

         MAYER BROWN & PLATT
         1675 Broadway
         New York, NY 10019
         Attn: Andrew Mattei
         Tel:  212-506-2572
         Fax:  212-262-1910


                                       9
<PAGE>


                                                                   SCHEDULE 2 to
                                                                CREDIT AGREEMENT
                                                                ----------------


                              Properties Mortgaged
                              --------------------

1.   Lot 18,  Research  Park,  as  recorded in Liber 15 of Plats,  pages  56-57,
     Washtenaw  County Records,  commonly known as 3985 Research Park Drive, Ann
     Arbor, Michigan.

2.   Lot 15,  Research  Park,  as  recorded in Liber 15 of Plats,  pages  56-57,
     Washtenaw  County Records,  commonly known as 3985 Research Park Drive, Ann
     Arbor, Michigan.

3.   Approximately 3,685 Acres in 11 parcels of land located seven miles east of
     Mojave in Kern County, California.


<PAGE>




                                                                   SCHEDULE 3 to
                                                                CREDIT AGREEMENT
                                                                ----------------


                        Mortgage Recording Jurisdictions
                        --------------------------------


1.   Mortgage to be recorded in Washtenaw County, Michigan.

2.   Deed of Trust to be recorded in Kern County, California.


<PAGE>



                                                              
                                                                   SCHEDULE 4 to
                                                                CREDIT AGREEMENT
                                                                ----------------


                      INITIAL CANADIAN COLLATERAL DOCUMENTS

DOCUMENTS RELATING TO THE CANADIAN BORROWER
-------------------------------------------

1.   Share  Pledge  Agreement  of the U.S.  Borrower in respect of 35% of shares
     held in the Canadian Borrower.

2.   General Security Agreement of the Canadian Borrower.

3.   Share Pledge  Agreement  of the Canadian  Borrower in respect of all shares
     held in Laidlaw Environmental Services Ltd.


DOCUMENTS RELATING TO THE CANADIAN SUBSIDIARIES
-----------------------------------------------

4.   Guarantees of each of the following Canadian Subsidiaries:

     (a)  Laidlaw Environmental Services Ltd.

     (b)  Laidlaw Environmental Services (B.C.) Ltd.

     (c)  [I.W.M. Disposal Inc./1/]

     (d)  Laidlaw Environmental Services (Sarnia) Ltd.

     (e)  1197296 Ontario Inc.

     (f)  Laidlaw Environmental Services (Ryley) Ltd.

     (g) Laidlaw Environmental Services (Atlantic) Ltd.

     (h)  Laidlaw Environmental  Services (Guelph),  Inc. (formerly known as PPM
          Canada Inc.;

5.   Limited   Guarantees   of  each  of  the   Quebec   incorporated   Canadian
     Subsidiaries:

     (a)  Laidlaw Environmental Services (Quebec) Ltd.

     (b)  Les Enterprises D'Incineration Industrielle Tricil Inc.

     (c)  Laidlaw Environmental Services (Mercier) Ltd.;
-------

/1/ Prior to the Closing Date, this subsidiary was dissolved.
/2/ Prior to the Closing Date, this subsidiary was dissolved.


                                       1
<PAGE>


6.   General Security Agreement of each of the following Canadian Subsidiaries:

     (a)  Laidlaw Environmental Services Ltd.

     (b)  Laidlaw Environmental Services (B.C.) Ltd.

     (c)  [I.W.M. Disposal Inc.(2)]

     (d)  Laidlaw Environmental Services (Sarnia) Ltd.

     (e)  1197296 Ontario Inc.

     (f)  Laidlaw Environmental Services (Ryley) Ltd.

     (g)  Laidlaw Environmental Services (Atlantic) Ltd.

     (h)  Laidlaw Environmental  Services (Guelph),  Inc. (formerly known as PPM
          Canada Inc.;

7.   Hypothec of each of the Quebec incorporated Canadian Subsidiaries:

     (a)  Laidlaw Environmental Services (Quebec) Ltd.

     (b)  Les Enterprises D'Incineration Industrielle Tricil Inc.

     (c)  Laidlaw Environmental Services (Mercier) Ltd.

8.   Fixed and Floating  Charge  Debentures  of each of the  following  Canadian
     Subsidiaries:

     (a)  Laidlaw Environmental Services Ltd.

     (b)  Laidlaw Environmental Services (Atlantic) Ltd.

     (c)  Laidlaw Environmental  Services (Guelph),  Inc. (formerly known as PPM
          Canada Inc.;

9.   General  Assignments  of  Receivables  of  each of the  following  Canadian
     Subsidiaries:

     (a)  Laidlaw Environmental Services Ltd.

     (b)  Laidlaw Environmental Services (Atlantic) Ltd.

     (c)  Laidlaw Environmental  Services (Guelph),  Inc. (formerly known as PPM
          Canada Inc.;


                                       2
<PAGE>


10.  Share Pledge  Agreement of each of the following  Canadian  Subsidiaries in
     respect of all shares held in other Canadian Subsidiaries:

     (a)  Laidlaw Environmental Services Ltd.

     (b)  Laidlaw Environmental Services (B.C.) Ltd.

     (c)  Laidlaw Environmental Services (Sarnia) Ltd.

     (d)  Laidlaw Environmental Services (Quebec) Ltd.




                                       3
<PAGE>


                                                                    Schedule 7.9
                                                                    ------------




1.      Lawsuit  styled  Douglas K. Dieter v. The Regents of The  University  of
        California, et al. (including Solvent Services, Inc. "SSI") filed in the
        United  States  District  Court for The Eastern  District of  California
        (Case  No.:  CIV-S-95-686  DFL GGH)  relative  to  patent  rights  in an
        in-situ,   steam  injection,   remedial  technology  patent  claimed  by
        Plaintiff, a former employee of SSI while a student at the University of
        California at Berkeley.

2.      Lawsuit styled Frank Manchak, Jr. v. Chemical Waste Management,  Inc. et
        al.  (including  Laidlaw  Environmental   Services,   Inc.  and  Rollins
        Environmental  Services (TX) Inc.) filed in the U.S.  District Court for
        the District of Delaware  (Case No.:  95-709)  relative to patent rights
        claimed  by the  Plaintiff  in a  stabilization  process  involving  the
        combination of sludge and a calcium oxide containing  material through a
        mixer.

3.      Letter to USPCI dated  2/14/97 from Harding,  Earley,  Follmer & Frailey
        representing  Nittany Tarp, owner of US Patent No.  4,948,193,  claiming
        that USPCI is infringing upon the patent,  offering opportunity to enter
        into  licensing  agreement.  Responded  that  letter  was  routed to our
        supplier. Supplier's attorney, Laubscher & Laubscher responded by letter
        dated 3/26/97 denying infringement,  declining offer for license, stated
        that matter considered closed.

4.      Letter to Laidlaw Environmental  Services, Inc. ("LESI") dated April 12,
        1996  from  McBride  Baker &  Coles,  representing  Software  Publishers
        Association ("SPA") claiming that LESI is utilizing unlicensed copies of
        software  on  personal  computers.  Various  correspondence  has ensued.
        Latest  correspondence from LESI dated 10/9/96 offering to settle claims
        on a reasonable basis. No response from SPA attorney.

5.      Letter to LESI dated May 1, 1996 from Donahue,  Gallagher,  Woods & Wood
        representing  Business  Software  Alliance,  alleging that LESI may have
        installed  more copies of software  programs on its  personal  computers
        than it is authorized to use. Various correspondence has ensued. LESI is
        considering settlement offer presented by BSA.


<PAGE>

                                                                Schedule 7.16 to
                                                                Credit Agreement
                                                                ----------------

<TABLE>
<CAPTION>
   
        -------------------------------------------------------------------------
        The following list sets forth the  subsidiaries of LES, Inc. as of April
        3, 1998.  Parent  subsidiary  relations are  indicated by  indentations.
        Unless  otherwise  indicated,  100%  of the  voting  securities  of each
        subsidiary is owned by the indicated parent of such subsidiary.
       --------------------------------------------------------------------------
 =============================================================================================================
     <S>                                                                                     <C>
                                                                                                 State of
                                                                                               Incorporation
-------------------------------------------------------------------------------------------- ----------------
     Laidlaw Environmental Services (US), Inc.                                                  Delaware
---- -----------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Lone and Grassy Mountain), Inc.                       Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Tulsa), Inc.                                     Oklahoma
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (San Antonio), Inc.                          Texas
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (Wichita), Inc.                              Kansas
---- ---- ---- ----  -------------------------------------------------------------------------  --- ----------
               USPCI of Mississippi, Inc. (50%)                                                 Mississippi
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services of Delaware, Inc.                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    ECDC East, L.C. (80%)                                                       Utah
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    ECDC Services, L.C. (80%)                                                   Utah
---- ---- --------- --------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Rosemount), Inc.                                      Minnesota
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Sawyer), Inc.                                         Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Tucker), Inc.                                         Georgia
---- ---- ------------------------------------------------------------------------------------  --------------
               Ninth Street Properties, Inc.                                                    Missouri
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (San Jose), Inc.                                       California
---- ---- ------------------------------------------------------------------------------------  --------------
          Chemclear, Inc. of Los Angeles                                                        Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          USPCI, Inc. of Georgia                                                                Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          LES Holding=s, Inc.                                                                   Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          East Carbon Development Financial Partners, Inc.                                      Utah
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Imperial Valley), Inc. (50%)                          California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Lokern), Inc. (23%)                                   California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (North East), Inc.                                     New Hampshire
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Recovery), Inc.                                       Louisiana
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TES), Inc.                                            Texas
---- ---- ------------------------------------------------------------------------------------  --------------
               Corsan Trucking, Inc. (25%)                                                      Louisiana
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TG), Inc.                                             Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TOC), Inc.                                            South Carolina
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TS), Inc.                                             Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Thermal Treatment), Inc.                              Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Corsan Trucking, Inc. (75%)                                                           Louisiana
---- ---- ------------------------------------------------------------------------------------  --------------
          GSX Chemical Services of Ohio, Inc.                                                   Ohio
---- ---- ------------------------------------------------------------------------------------  --------------
          LEMC, Inc.                                                                            Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Chemical Services, Inc.                                                       Massachusetts
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Altair), Inc.                                         Texas
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (FS), Inc. (13%)                                  Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (BDT), Inc.                                            New York
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (FS), Inc. (86%)                                       Delaware
---- ---- ------------------------------------------------------------------------------------  --------------


                                      1
<PAGE>


--------------------------------------------------------------------------------------------------------------
          Laidlaw Environmental Services (GS), Inc.                                             Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Clive), Inc.                                          Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (WT), Inc.                                             Ohio
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw OSCO Holdings, Inc.                                                           Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services of Nashville, Inc.                                Tennessee
---- ---- ---- -------------------------------------------------------------------------------  --------------
               OSCO Treatment Systems of Mississippi, Inc. (50%)                                Tennessee
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Bartow, Inc.                                        Florida
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of California, Inc.                                    California
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Lokern), Inc. (77%)                              California
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Imperial Valley), Inc. (50%                      California
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Chattanooga, Inc.                                   Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Illinois, Inc.                                      Illinois
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of South Carolina, Inc.                                South Carolina
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of White Castle, Inc.                                  Colorado
---- ---- ------------------------------------------------------------------------------------  --------------
               LES Merger, Inc.                                                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Puerto Rico), Inc.                                    Puerto Rico
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Bridgeport), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Deer Park), Inc.                                      Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Baton Rouge), Inc.                                    Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Plaquemine), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Custom Transport), Inc.                               Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Los Angeles), Inc.                                    California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Tipton), Inc.                                         Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Gloucester), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Deer Trail), Inc.                                     Colorado
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Mt. Pleasant), Inc.                                   Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Minneapolis), Inc.                                    Minnesota
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Aragonite), Inc.                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Sussex), Inc.                                         Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental, Inc.                                                           Delaware

==============================================================================================================
          LES Acquisition, Inc.                                                                 Delaware
==== ==== ====================================================================================  ==============
          SAFETY-KLEEN CORP.(1)                                                                 Wisconsin
==== ==== ====================================================================================  ==============
               Curbside, Inc. (49%)                                                             California
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Dirt Magnet, Inc.                                                                Colorado
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    The Midway Gas & Oil Company                                                Colorado
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Safety-Kleen Canada, Inc.                                                        Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Environnement Services et Machineries, Inc.                                 Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Elgint Corp.                                                                     Nevada
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Ilium B.V.                                                                       Dutch
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Espana S.A. (50%)                                              Spain
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Safety-Kleen Espana S.A. (50%)                                                   Spain
---- ---- ---- -------------------------------------------------------------------------------  --------------
--------
<FN>

     1    On the Merger Date Safety-Kleen  Corp. will merge with LES Acqusition,
          Inc. with the surviving corporation being Safety-Kleen Corp.
</FN>


                                       2
<PAGE>


--------------------------------------------------------------------------------------------------------------
               Membrex, Inc. (6%)                                                               Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Nucer, Inc.                                                                      Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Envirosystems Company                                          California
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                         Safety-Kleen Envirosystems Company of Puerto Rico, Inc.                Indiana
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
               Petrocon, Inc.                                                                   Delaware
---- ---- ---- ------------------------------------------------------------------------------  --------------
               Phillips Acqusition Corp.                                                        Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Aviation, Inc.                                                      Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               SK Insurance Company                                                             Vermont
---- ---- ---- -------------------------------------------------------------------------------  --------------
               SK Real Estate, Inc.                                                             Illinois
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Belgium, S.A.                                                       Belgium
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Beteiligungs - GmbH                                                 Germany
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Grundbesitz GmbH                                               Germany
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Safety-Kleen Deutschland GmbH                                               Germany
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                         Orm-Bergold Chemie GmbH & Co. KG (50%)                                 German Ptnsp.
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
                         Orm-Chemie GmbH                                                        Germany
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
                              Orm-Bergold Chemie GmbH & Co. KG  (50%)                           German Ptnsp.
---- ---- ---- ---- ---- ---- ----------------------------------------------------------------  --------------
               Safety-Kleen (France) S.A.                                                       French
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen International, Inc.                                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen U.K. Limited                                                        UK
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Ireland Limited                                                Ireland
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Safety-Kleen Italia S.p.A.                                                       Italy
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Oil Recovery Co.                                                    Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Oil Services, Inc.                                                  Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               The Solvents Recovery Service of New Jersey, Inc.                                New Jersey
---- ---- ---- -------------------------------------------------------------------------------  --------------
               3E Company Environmental, Ecological and Engineering (80%)                       California
---- ---- ---- -------------------------------------------------------------------------------  --------------
----------------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Canada) Ltd.                                          Canada
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services Ltd.                                              Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (B.C.) Ltd.                                  Canada
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Sarnia) Ltd.                                     Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    1197296 Ontario Inc.                                                        Ontario
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Quebec) Ltd.                                     Quebec
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (Mercier) Ltd.                               Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Les Entreprises D'Incineration Industrielle Tricil Inc.                     Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Ryley) Ltd.                                      Alberta
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Atlantic) Limited                                Nova Scotia
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Guelph), Inc.                                    Ontario

==============================================================================================================

</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
                                                                   
                                                                         SCHEDULE 7.20 to
                                                                         the Credit Agreement
                                                                         --------------------

---------------------------------------------------------------------------------------------

Jurisdiction               Document(s) Filed        Act(s) Document        Filing Authority
------------               -----------------        Filed Under            ----------------
                                                    ---------------           
<S>                      <C>                    <C>                      <C>    

-----------------------  ---------------------  -----------------------  --------------------
Northwest Territories    Debenture and          COMPANIES ACT            Companies Registry 
                         Affidavits of Bona     (Northwest               and Documents
                         Fides and Execution    Territories)and          Registry
                                                CORPORATION           
                                                SECURITIES
                                                REGISTRATION ACT 
                                                 
                                                (Northwest 
                                                Territories)

                         General Assignment     ASSIGNMENT OF BOOK 
                         of Accounts            DEBTS ACT 
                         Receivables and        (Northwest 
                         Affidavit of Bona      Territories)
                         Fides                      
-----------------------  ---------------------  -----------------------  --------------------
Newfoundland             Debenture and          REGISTRATION OF          Registry of Deeds 
                         Affidavit of           DEEDS ACT                and Registry of 
                         Execution              (Newfoundland)           Assignment of Book 
                                                                         Debts
                         General Assignment     ASSIGNMENT OF BOOK 
                         of Accounts            DEBTS ACT 
                         Receivables and        (Newfoundland)
                         Affidavit of 
                         Execution
-----------------------  ---------------------  -----------------------  --------------------
Prince Edward Island     Debenture and          CORPORATIONS             Registry office,
                         Affidavits of Bona     SECURITIES ACT (PEI)     Charlottetown
                         Fides and Execution

                         General Assignment     ASSIGNMENT OF BOOK 
                         of Accounts            DEBTS ACT (PEI)
                         Receivables and
                         Affidavit of Bona 
                         Fide
-----------------------  ---------------------  -----------------------  --------------------
Nova Scotia              Debenture and          CORPORATIONS             Registry office,
                         Affidavits of Bona     SECURITIES ACT (Nova     Halifax
                         Fides and Execution    Scotia)

                         General Assignment     ASSIGNMENT OF BOOK 
                         of Accounts            DEBTS ACT (Nova
                         Receivables and        Scotia)
                         Affidavit of Bona 
                         Fides
---------------------------------------------------------------------------------------------

                                      1
<PAGE>


---------------------------------------------------------------------------------------------

Jurisdiction                Document(s) Filed       Act(s) Document        Filing Authority
------------                -----------------       Filed Under            ----------------
                                                    ---------------           
-----------------------  ---------------------  -----------------------  --------------------
New Brunswick            Financing Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT (New        Registry
                                                Brunswick)
-----------------------  ---------------------  -----------------------  --------------------
Quebec                   Hypothec               CIVIL CODE OF QUEBEC     Register of Personal 
                                                                         and Movable Real 
                                                                         Rights
-----------------------  ---------------------  -----------------------  --------------------
Ontario                  Financing Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT             Registry
                                                (Ontario)
-----------------------  ---------------------  -----------------------  --------------------  
Manitoba                 Financial Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT             Registry
                                                (Manitoba)
-----------------------  ---------------------  -----------------------  --------------------
Saskatchewan             Financing Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT             Registry
                                                (Saskatchewan)
-----------------------  ---------------------  -----------------------  --------------------
Alberta                  Financing Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT             Registry
                                                (Alberta)
-----------------------  ---------------------  -----------------------  --------------------
British Columbia         Financing Statement    PERSONAL PROPERTY        Personal Property 
                                                SECURITY ACT             Registry
                                                (Columbia)
--------------------------------------------------- -----------------------------------------
                                       2
</TABLE>

<PAGE>


                                                              SCHEDULE 8.2(g) to
                                                                CREDIT AGREEMENT
                                                              ------------------


                          Safety-Kleen Outstanding Debt
                          -----------------------------

1.   9.25% Notes due September 15, 1999 in the aggregate  principal amount of up
     to $100,000,000.

2.   Miscellaneous  mortgages in the United  Stated in the  aggregate  principal
     amount of $593,000.

3.   Loans made  under a working  capital  line of credit  with  Deutsche  Bank,
     Bochum, Germany, in the aggregate principal amount of $151,000.

4.   $46,000,000 Demand Note payable to LES, Inc.


<PAGE>


3


                                                                Schedule 10.2(f)
                                                                ----------------
                              Existing Indebtedness


Tax Exempt Bonds:

Hazardous Waste Disposal Revenue Bonds                                 0,000,000
Tooele County, Utah
Due August 1, 2010

Industrial Development Revenue Refunding and Improvement Bonds        15,700,000
The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County (Tennessee)
Due May 1, 2003

Pollution Control Revenue Bonds                                       19,500,000
California Pollution Control Financing Authority
Due July 1, 2007

Hazardous Waste Treatment Revenue Bonds                               45,700,000
Tooele County, Utah
Due July 1, 2027

County of Lexington, South Carolina                                    2,700,000
Industrial Revenue Bonds
Due December 1, 2009

City of Denton, Texas Industrial Development Authority                 2,430,000
Industrial Revenue Bonds
Due December 1, 2009

Total                                                                 96,030,000

Amounts held in Trust relating to the above tax exempt bonds:

Hazardous Waste Disposal Revenue Bonds                                 1,349,317
Tooele County, Utah
Due August 1, 2010

Industrial Development Revenue Refunding and Improvement Bonds         8,659,230
The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County (Tennessee)
Due May 1, 2003                                                        _________

                                                                      10,008,547
                                                                      ==========

Net Amount of Tax Exempt Bonds:                                       86,021,453
                                                                      ==========
                                                                   



                                       1
<PAGE>


Capital Leases:

GE Capital                                                               484,842
Xerox                                                                     19,156

                                                                         503,998
Notes:

Bryson (Davis)                                                           146,745
Grassy Mountain (Semnani)                                                158,436
Miscellaneous Mortgages                                                  593,000
Deutsche Bank, Bochum                                                    151,000


Safety-Kleen Corporation Senior Debenture 9.25%                      100,000,000
Due September 15, 1999
                                                                     -----------
                                                                     101,049,181
                                                                     ===========


                                       2
<PAGE>


                                                                Schedule 10.3(f)
                                                                ----------------
                                 EXISTING LIENS


1)        The Industrial  Development  Board of the  Metropolitan  Government of
          Nashville and Davidson County has a lien on all machinery,  equipment,
          furniture and similar  property of Laidlaw  Environmental  Services of
          Nashville, Inc. by agreement dated May 1, 1993.

2)        The limited  liability  company  interests of ECDC East,  L.C. held by
          Laidlaw  Environmental  Services  of  Delaware,  Inc.  are  encumbered
          pursuant to the limited  liability  company  agreement between Laidlaw
          Environmental  Services of Delaware,  Inc.  and the minority  interest
          holder.

3)        The limited liability company interests of ECDC Services, L.C. held by
          Laidlaw Environmental Services Delaware,  Inc. are encumbered pursuant
          to  the  limited   liability   company   agreement   between   Laidlaw
          Environmental  Services of Delaware,  Inc.  and the minority  interest
          holder.

4)        The equity of USPCI of Mississippi, Inc. held by Laidlaw Environmental
          Services (Lone and Grassy Mountain), Inc. is encumbered pursuant to an
          agreement  between  Laidlaw  Environmental  Services  (Lone and Grassy
          Mountain), Inc. and the minority equity holder.




<PAGE>




                                                                   Schedule 10.4
                                                                   -------------
                         EXISTING GUARANTEE OBLIGATIONS
                         ------------------------------


Guaranty by Laidlaw Environmental Services, Inc. guaranteeing performance of JTM
Industries,  Inc.  obligations  pursuant to Master  Equipment Lease with Cargill
Leasing  Corporation;  Lease is dated 9/18/93;  Guaranty  dated 1/19/96.  Second
Lease dated April 22, 1997; Guaranty dated April 22, 1997.

Guaranty  dated  March 2, 1992 by  USPCI,  Inc.  to Union  Camp  Corporation  to
guaranty  JTM's  obligations  under  a  contract  for  the  purpose  of  sale of
Marketable By-Products generated by Union Camp Corporation.

LES,  Inc.  has a letter  of credit in favor of  Barnett  Bank in the  amount of
$3,000,000  which may be drawn on in the event  ViroGroup,  Inc.  (50%  owned by
Laidlaw Osco  Holdings,  Inc.) does not pay its  obligations  to Barnett Bank by
June 26, 1998. The letter of credit will expire July 26, 1998.

Guaranty  of Laidlaw  Environmental  Services,  Inc.  (LESI) and  certain of its
subsidiaries to General Motors  Corporation  dated on or about November 30, 1997
guaranteeing performance by Allied Waste Systems of certain waste management and
disposal   obligations  of  LESI  and  certain  of  its  present  and/or  former
subsidiaries  under  a  contract  with  General  Motors  Corporation  designated
Contract Number 4070 as amended.


<PAGE>


                                                                SCHEDULE 10.8 to
                                                                CREDIT AGREEMENT
                                                                ----------------



                           EXISTING LOANS TO OFFICERS



                                    None 


                                       
<PAGE>


<TABLE>
<CAPTION>
                                                                     EXHIBIT A-1

                                  FORM OF DRAFT

---------------------------------------------------------------------- -------------------------------------------------------------
<S>             <C>                                       <C>                                                <C>        
                 BANKER'S ACCEPTANCE                                                                          No. 
                                                                                                                   --------------
TO:                                                        Due                                                           19
          ---------------------------------------------         ----------------------       ----------------------------   -----
                                                  Bank
                                                                                              days after the date (without grace)
                                                                ----------------------
      -------------------------------------------------
                                               Address
                                                                For value received pay to the order of the undersigned drawer the
                         ACCEPTED                               sum of $
                                                                         --------------------------------------------------------

      -------------------------------------------------
                    Payable at

      ------------- --------------- -------------------
                                                                    Value Received, and Charge to the Account of:
      ------------- --------------- -------------------
For
      -------------------------------------------------
                                                                    -------------------------------------------------------------

                                                                    -------------------------------------------------------------
-------------------------------------------------------
                                   Authorized Signature     Per:
-------------------------------------------------------             -------------------------------------------------------------
                                  Authorized Signature     Per:
                                                                                                                        Form 8411
                                                                                                                           (7-88)
---------------------------------------------------------------------------------------------------------------------------------




                    --------------------------------------

                       --------------------------------

                       Per:  --------------------------

                       Per: -----------      ----------




















                    --------------------------------------

                                       
</TABLE>

<PAGE>

                                                                     EXHIBIT A-2

                         FORM OF REQUEST FOR ACCEPTANCES

                                            Date:___________________

The Toronto-Dominion Bank,
as Canadian Administrative Agent
9th Floor, Toronto Dominion Bank Tower
55 West King Street
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attn:  Manager Agency

Dear Sirs:

         We refer to the  Amended and  Restated  Credit  Agreement,  dated as of
April 3, 1998 (as amended, modified, extended or restated from time to time, the
"CREDIT AGREEMENT"),  among LES, Inc., Laidlaw  Environmental  Services (Canada)
Ltd., the Lenders from time to time parties  thereto,  Toronto  Dominion (Texas)
Inc., as General  Administrative  Agent, The Toronto-Dominion  Bank, as Canadian
Administrative  Agent, TD Securities  (USA) Inc., as Arranger,  The Bank of Nova
Scotia,  NationsBank,  N.A.,  The First  National Bank of Chicago,  and Wachovia
Bank, N.A., as Managing  Agents,  The Bank of Nova Scotia and The First National
Bank  of  Chicago,  as  Co-Documentation  Agents,  and  NationsBank,   N.A.,  as
Syndication  Agent.  Capitalized  terms used  herein and not  otherwise  defined
herein shall have the meanings assigned to such terms in the Credit Agreement.

         We request the creation and purchase of the following Acceptances:

                  Total Face Value: _____________________________

                  Date of Issue:.________________________________

                  Term in Months:  _______________________________

         Please debit our account at The Toronto-Dominion Bank, Toronto Dominion
Centre Branch,  Toronto  #______________ for the difference between (i) the face
amount of maturing  Acceptances/the  Canadian Term Loan balance (as  applicable)
and (ii) the Acceptance  Purchase Price LESS the stamping fee on the Acceptances
to be created.

                                    Very truly yours,

                                    LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.

                                    By:___________________________________
                                    Title:

                                       
<PAGE>

                                                                   EXHIBIT B-1

--------------------------------------------------------------------------------






                              AMENDED AND RESTATED

                       GUARANTEE AND COLLATERAL AGREEMENT

                                     made by

                                    LES, INC.

                      LAIDLAW ENVIRONMENTAL SERVICES, INC.

                         and certain of its Subsidiaries

                                   in favor of

                         TORONTO DOMINION (TEXAS), INC.

                         as General Administrative Agent






--------------------------------------------------------------------------------



<PAGE>


                                                        

                                TABLE OF CONTENTS

                                                                            PAGE

SECTION 1. DEFINED TERMS.......................................................2

     1.1  Definitions..........................................................2
     1.2  Other Definifional Provisions........................................7

SECTION 2. GUARANTEE...........................................................7

     2.1  Guarantee............................................................7
     2.2  Right of Contribution................................................8
     2.3  No Subrogation.......................................................8
     2.4  Amendments, etc. with respect to the Borrower Obligations............9
     2.5  Guarantee Absolute and Unconditional.................................9
     2.6  Reinstatement.......................................................10
     2.7  Payments............................................................10

SECTION 3. GRANT OF SECURITY INTEREST.........................................11

SECTION 4. REPRESENTATIONS AND WARRANTEES.....................................12

     4.1  Representations in Credit Agreement; Holdings Representations.......13
     4.2  Title; No Other Liens...............................................13
     4.3  Perfected First Priority Liens......................................13
     4.4  Chief Execufive Office..............................................13
     4.5  Inventory and Equipment.............................................13
     4.6  Farm Products.......................................................14
     4.7  Pledged Securities..................................................14
     4.8  Receivables.........................................................14
     4.9  Contracts...........................................................15
     4.10 Intellectual Property...............................................16

SECTION 5. COVENANTS..........................................................16

     5.1  Covenants in Credit Agreement.......................................16
     5.2  Delivery of Instruments and Chattel Paper...........................16
     5.3  Maintenance of Insurance............................................16
     5.4  Payment of Obligations..............................................17
     5.5  Maintenance of Perfected Security Interest; Further Documentation...17
     5.6  Changes in Locations, Name, etc.....................................17
     5.7  Notices.............................................................18
     5.8  Pledged Securities..................................................18
     5.9  Receivables.........................................................19
     5.10 Contracts...........................................................20
     5.11 Intellectual Property...............................................20

                                        i
<PAGE>


                                                                            PAGE

     5.12 Special Covenants of Holdings.......................................22

SECTION 6. REMEDIAL PROVISIONS................................................23

     6.1  Certain Matters Relating to Receivables.............................23
     6.2  Communications with Obligors; Grantors Remain Liable................23
     6.3  Pledged Stock.......................................................24
     6.4  Proceeds to be Turned Over To General Administrative Agent..........25
     6.5  Application of Proceeds.............................................25
     6.6  Code and Other Remedies.............................................26
     6.7  Registration Rights.................................................27
     6.8  Waiver; Deficiency..................................................28

SECTION 7. THE GENERAL ADMINISTRATIVE AGENT...................................28

     7.1  General Administrative Agent's Appointment as 
          Attomey-in-Fact, etc................................................28
     7.2  Duty of General Administrative Agent................................30
     7.3  Execution of Financing Statements...................................30
     7.4  Authority of General Administrative Agent...........................30

SECTION 8. MISCELLANEOUS......................................................31

     8.1  Amendments in Writing...............................................31
     8.2  Notices ............................................................31
     8.3  No Waiver by Course of Conduct; Cumulative Remedies.................31
     8.4  Enforcement Expenses; Indemnification...............................31
     8.5  Successors and Assigns..............................................32
     8.6  Set-Off.............................................................32
     8.7  Counterparts........................................................32
     8.8  Severability........................................................33
     8.9  Section Headings....................................................33
     8.10 Integration.........................................................33
     8.11 GOVERNING LAW.......................................................33
     8.12 Submission To Jurisdiction; Waivers.................................33
     8.13 Acknowledgements....................................................34
     8.14 WAIVER OF JURY TRIAL................................................34
     8.15 Additional Grantors ................................................34
     8.16 Releases............................................................34


                                       ii
<PAGE>



SCHEDULES

Schedule 1   Notice Addresses of Guarantors
Schedule 2   Description of Pledged Securities

Schedule 3   Filings and Other Actions Required to Perfect Security Interests
Schedule 4   Location of Jurisdiction of Organization and Chief Executive Office
Schedule 5   Location of Inventory and Equipment
Schedule 6   Intellectual Property
Schedule 7   Contracts
Schedule 8   Existing Prior Liens

ANNEXES

Annex I      Assumption Agreement


                                      iii
<PAGE>


                                                       

                              AMENDED AND RESTATED
                       GUARANTEE AND COLLATERAL AGREEMENT

          AMENDED AND RESTATED GUARANTEE AND COLLATERAL  AGREEMENT,  dated as of
April 3, 1998  (amending and restating the Guarantee and  Collateral  Agreement,
dated as of May 15, 1997), made by each of the signatories hereto (together with
any  other  entity  that may  become a party  hereto  as  provided  herein,  the
"GRANTORS"),   in  favor  of  TORONTO   DOMINION   (TEXAS),   INC.,  as  General
Administrative Agent (in such capacity, the "GENERAL  ADMINISTRATIVE AGENT") for
the banks and other financial institutions or entities (the "Lenders") from time
to time parties to the Amended and Restated Credit Agreement,  dated as of April
3, 1998 (as amended,  supplemented or otherwise  modified from time to time, the
"CREDIT  AGREEMENT"),  among LES, INC., a Delaware  corporation (the "COMPANY"),
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD. (the "CANADIAN BORROWER";  together
with the Company,  the  "BORROWERS"),  the Lenders,  the General  Administrative
Agent,  The  Toronto-Dominion   Bank,  as  Canadian   Administrative  Agent,  TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank,  N.A.,
The First National Bank of Chicago and Wachovia Bank,  N.A., as Managing Agents,
The  Bank  of  Nova  Scotia  and  The  First   National  Bank  of  Chicago,   as
Co-Documentation Agents, and NationsBank, N.A., as Syndication Agent.

                              W I T N E S S E T H:
                              --------------------

          WHEREAS, the Borrowers entered into the Credit Agreement,  dated as of
May 15, 1997 (the "EXISTING CREDIT AGREEMENT"),  with the General Administrative
Agent, the Canadian  Administrative  Agent, the Manger,  certain of the Managing
Agents,  the Syndication  Agent and the banks and other  financial  institutions
from time to time parties thereto;

          WHEREAS,  in  connection  with  the  Existing  Credit  Agreement,  the
Borrowers have executed the Guarantee and Collateral Agreement,  dated as of May
15,  1997  (the  "EXISTING  COLLATERAL  AGREEMENT"),  in  favor  of the  General
Administrative  Agent for the ratable  benefit of the lenders under the Existing
Credit Agreement, as the same may be amended, supplemented or otherwise modified
from time to time;

          WHEREAS.  the  Borrowers,  the Agent and the Lenders have entered into
the Credit Agreement to amend and restate the Existing Credit Agreement;

          WHEREAS,  the  proceeds of the  extensions  of credit under the Credit
Agreement  will be used in part to enable the Borrowers to provide for financing
of the Exchange  Offer and the Merger (each as defined in the Credit  Agreement)
and related  costs and expenses,  and for the  refinancing  of certain  existing
indebtedness of Safety-Kleen Corp.;

          WHEREAS, the Borrowers are members of an affiliated group of companies
that includes each other Grantor;


                                       1
<PAGE>



          WHEREAS,  the Borrowers and the other  Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the  extensions  of credit  under the Credit  Agreement,  the
Exchange Offer and the Merger; and

          WHEREAS, it is a condition precedent to the obligations of the Lenders
to make their respective  Extensions of Credit to the Borrowers under the Credit
Agreement,  for the parties hereto to amend and restate the Existing  Collateral
Agreement  in order to confirm and  continue  the  provision  of the  collateral
security  to  secure  the due and  prompt  payment  and  performance  of all the
Borrowers'  obligations  now or  hereafter  arising  under or referred to in the
Credit Agreement;

          NOW,  THEREFORE,  in  consideration  of the premises and to induce the
General  Administrative Agent and the Lenders to enter into the Credit Agreement
and the Working Capital Lender to enter into the Working Capital Facility and to
induce the  Lenders  and the  Working  Capital  Lender to make their  respective
extensions of credit to the Borrowers thereunder,  the parties hereto agree that
the Existing Collateral Agreement is hereby amended and restated in its entirety
as follows:

                            SECTION 1. DEFINED TERMS

          1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined in
     the Credit  Agreement and used herein shall have the meanings given to them
     in the Credit  Agreement,  and the following terms which are defined in the
     Uniform  Commercial  Code in  effect  in the  State of New York on the date
     hereof are used herein as so defined:  Accounts,  Chattel Paper, Documents,
     Equipment, Farm Products, Instruments and Inventory.

          (b) The following terms shall have the following meanings:

          "AGREEMENT":  this  Amended  and  Restated  Guarantee  and  Collateral
     Agreement,  as the same may be amended,  supplemented or otherwise modified
     from time to time.

          "BORROWER  OBLIGATIONS":   the  collective  reference  to  the  unpaid
     principal  of  and  interest  on  the  Loans,   Reimbursement  Obligations,
     Acceptance  Reimbursement  Obligations and Acceptance  Notes, the Company's
     guarantee  obligations  under  Section 13 of the Credit  Agreement  and all
     other  obligations  and  liabilities of the Borrowers  (including,  without
     limitation,  interest  accruing at the then applicable rate provided in the
     Credit   Agreement   after  the   maturity  of  the  Loans,   Reimbursement
     Obligations,  Acceptance Reimbursement Obligations and Acceptance Notes and
     interest  accruing  at the then  applicable  rate  provided  in the  Credit
     Agreement  after  the  filing  of  any  petition  in  bankruptcy,   or  the
     commencement of any insolvency, reorganization or like proceeding, relating
     to any Borrower,  whether or not a claim for  post-filing or  post-petition
     interest is allowed in such proceeding) to the General Administrative Agent


                                       2
<PAGE>


     or any Lender (or, in the case of any Hedging Agreement  referred to below,
     any  Affiliate of any  Lender),  whether  direct or  indirect,  absolute or
     contingent,  due or to become due, or now existing or  hereafter  incurred,
     which may arise under, out of, or in connection with, the Credit Agreement,
     this  Agreement,  the other  Loan  Documents,  any  Letter of Credit or any
     Hedging  Agreement  entered into by any Borrower with any Person which,  at
     the time such  Hedging  Agreement  is  entered  into,  is a Lender  (or any
     Affiliate of any Lender) or any other document made,  delivered or given in
     connection  therewith,  in each  case  whether  on  account  of  principal,
     interest,   reimbursement   obligations,   guarantee   obligations,   fees,
     indemnities,  costs, expenses or otherwise (including,  without limitation,
     all fees and disbursements of counsel to the General  Administrative  Agent
     or to the Lenders that are required to be paid by any Borrower  pursuant to
     the terms of any of the foregoing agreements).

          "CALIFORNIA  BONDS": the 6.70% California  Pollution Control Financing
Authority  Pollution  Control  Refunding Revenue Bonds 1997 Series A due July 1,
2007 in the aggregate principal amount of $19,500,000.

          "COLLATERAL": as defined in Section 3.

          "COLLATERAL  ACCOUNT":  any  collateral  account  established  by  the
General Administrative Agent as provided in Section 6.1 or 6.4.

          "CONTRACTS": the contracts and agreements listed in Schedule 7, as the
same may be  amended,  supplemented  or  otherwise  modified  from time to time,
including,  without limitation,  (i) all rights of any Grantor to receive moneys
due and to become due to it  thereunder  or in  connection  therewith,  (ii) all
rights of any Grantor to damages arising  thereunder and (iii) all rights of any
Grantor to perform and to exercise all remedies thereunder.

          "COPYRIGHTS":  (i) all copyrights arising under the laws of the United
States,  any  other  country  or  any  political  subdivision  thereof,  whether
registered or  unregistered  and whether  published or  unpublished  (including,
without  limitation,   those  listed  in  Schedule  6),  all  registrations  and
recordings  thereof,  and all applications in connection  therewith,  including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.

          "COPYRIGHT  LICENSES":  any  written  agreement  naming any Grantor as
licensor or licensee  (including,  without limitation,  those listed in SCHEDULE
6), granting any right under any Copyright,  including,  without limitation, the
grant of rights to manufacture,  distribute,  exploit and sell materials derived
from any Copyright.

          "GENERAL  INTANGIBLES":  all  "general  intangibles"  as such  term is
defined in Section 9106 of the Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event,  including,  without  limitation,
with  respect  to  any  Grantor,  all  contracts,  agreements,  instruments  and
indentures in any form, and portions  thereof,  to which such Grantor is a party
or under which such  Grantor  has any right,  title or interest or to which such
Grantor or any property


                                       3
<PAGE>


of such  Grantor  is  subject,  as the same may  from  time to time be  amended,
supplemented  or otherwise  modified,  including,  without  limitation,  (i) all
rights of such Grantor to receive  moneys due and to become due to it thereunder
or in connection  therewith,  (ii) all rights of such Grantor to damages arising
thereunder  and (iii) all rights of such  Grantor to perform and to exercise all
remedies  thereunder,  in each case to the extent the grant by such Grantor of a
security interest pursuant to this Agreement in its right, title and interest in
such  contract,  agreement,  instrument  or indenture is not  prohibited by such
contract,  agreement,  instrument or indenture  without the consent of any other
party  thereto,  would not give any  other  party to such  contract,  agreement,
instrument or indenture the right to terminate its obligations thereunder, or is
permitted  with  consent if all  necessary  consents to such grant of a security
interest have been obtained from the other parties thereto (it being  understood
that the  foregoing  shall not be deemed to obligate such Grantor to obtain such
consents);  PROVIDED,  that the  foregoing  limitation  shall not affect,  limit
restrict or impair the grant by such Grantor of a security  interest pursuant to
this  Agreement in any Receivable or any money or other amounts due or to become
due under any such contract, agreement, instrument or indenture.

          "GUARANTOR OBLIGATIONS": with respect to any Guarantor; the collective
reference to (i) the Borrower Obligations,  (ii) the Working Capital Obligations
and (iii) all  obligations  and  liabilities of such  Guarantor  which may arise
under or in connection  with this  Agreement or any other Loan Document to which
such  Guarantor  is a party,  in each  case  whether  on  account  of  guarantee
obligations,  reimbursement obligations,  fees, indemnities,  costs, expenses or
otherwise (including,  without limitation, all fees and disbursements of counsel
to the General  Administrative  Agent or to the Lenders  that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).

          "GUARANTORS":  the collective reference to each Grantor other than the
Company.

          "HOLDINGS":  Laidlaw Environmental  Services,  Inc. (formerly known as
Rollins Environmental Services, Inc.), a Delaware corporation.

         "INTELLECTUAL  PROPERTY":  the  collective  reference  to  all  rights,
priorities and privileges  relating to  intellectual  property,  whether arising
under United  States,  multinational  or foreign laws or  otherwise,  including,
without limitation,  the Copyrights,  the Copyright Licenses,  the Patents,  the
Patent Licenses,  the Trademarks and the Trademark  Licenses,  and all rights to
sue at law or in  equity  for any  infringement  or  other  impairment  thereof,
including the right to receive all proceeds and damages therefrom.

          "INTERCOMPANY  NOTE": any promissory note evidencing loans MADE by any
Grantor to Holdings or any of its Subsidiaries.

         "INVESTMENT PROPERTY":  the collective reference to (i) all "investment
property"  as such term is defined  in Section  9-115 of the New York UCC on the
date hereof and (ii)  whether or not  constituting  "investment  property" as so
defined, all Pledged Securities.

          "ISSUERS":  the  collective  reference  to each  issuer  of a  Pledged
Security.

 
                                      4
<PAGE>


          "LENDERS":   as  defined  in  the  preambles  to  this  Agreement  and
including,  unless the context otherwise requires,  each Affiliate of any Lender
that has entered into any Hedging Agreement with either Borrower.

          "NEW YORK UCC":  the Uniform  Commercial  Code as from time to time in
effect in the State of New York.

          "OBLIGATIONS":   (i)  in  the  case  of  the  Company,   the  Borrower
Obligations  and the Working Capital  Obligations,  and (ii) in the case of each
Guarantor, its Guarantor Obligations.

         "PATENTS":  (i) all  letters  patent of the  United  States,  any other
country or any  political  subdivision  thereof,  all  reissues  and  extensions
thereof,  including,  without  limitation,  any of the foregoing  referred to in
SCHEDULE 6, (ii) all applications for letters patent of the United States or any
other  country  and  all  divisions,   continuations  and  continuations-in-part
thereof,  including,  without  limitation,  any of the foregoing  referred to in
SCHEDULE 6 and (iii) all  rights to obtain any  reissues  or  extensions  of the
foregoing.

          "PATENT LICENSE":  all agreements,  whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture,  use or sell any
invention  covered  in  whole  or  in  part  by  a  Patent,  including,  without
limitation, any of the foregoing referred to in Schedule 6.

          "PLEDGED  NOTES":  all  promissory  notes  listed on  SCHEDULE  2, all
Intercompany  Notes at any time issued to any  Grantor and all other  promissory
notes issued to or held by any Grantor  (other than  promissory  notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).

          "PLEDGED  SECURITIES":  the collective  reference to the Pledged Notes
and the Pledged Stock.

          "PLEDGED  STOCK":  the shares of Capital  Stock  listed on SCHEDULE 2,
together with any other  shares,  stock  certificates,  options or rights of any
nature whatsoever in respect of the Capital Stock of any Person (other than each
of ECDC East, L.C., ECDC Services,  L.C., OSCO Treatment Systems of Mississippi,
Inc.,  USPCI of  Mississippi,  Inc., so long as such entity is not,  directly or
indirectly,  a  wholly-owned  subsidiary of Holdings or the Company) that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect.

          "PROCEEDS": all "proceeds" as such term is defined in Section 9-306(l)
of the  Uniform  Commercial  Code in effect in the State of New York on the date
hereof and, in any event,  shall include  without  limitation,  all dividends or
other income from the Pledged  Securities,  collections thereon or distributions
or payments with respect thereto.

          "RECEIVABLE":  any right to  payment  for goods  sold or leased or for
services  rendered,  whether or not such right is evidenced by an  Instrument or
Chattel Paper and whether or not it has been earned by  performance  (including,
without limitation, any Account).


                                       5
<PAGE>



          "SECURITIES ACT": the Securities Act of 1933, as amended.

          "SUBSIDIARY GUARANTOR": each of the Guarantors other than Holdings.

          "TRADEMARKS":  (i)  all  trademarks,  trade  names,  corporate  names,
company names, business names,  fictitious business names, trade styles, service
marks,  logos  and  other  source  or  business  identifiers,  and all  goodwill
associated  therewith,  now  existing  or  hereafter  adopted or  acquired,  all
registrations  and  recordings  thereof,  and  all  applications  in  connection
therewith,  whether in the United States  Patent and Trademark  Office or in any
similar  office or agency of the United  States,  any State thereof or any other
country or any political  subdivision thereof, or otherwise,  and all common-law
rights related  thereto,  including,  without  limitation,  any of the foregoing
referred to in SCHEDULE 6, and (ii) the right to obtain all renewals thereof.

          "TRADEMARK LICENSE": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in SCHEDULE 6.

          "UTAH  BONDS":  the  7.55%  Tooele  County,  Utah,  Pollution  Control
Refunding  Revenue  Bonds  1997  Series  A due  July 1,  2007  in the  aggregate
principal amount of $45,700,000.

          "WESTINGHOUSE  DEBT  AGREEMENT":  the collective to (i) the Promissory
Note,  dated May 15, 1997 made by Hold' o Westinghouse  Electric  Corporation in
the  initial  principal  amount  of  $60,000,000  and  (ii) the  Stock  Purchase
Agreement,  dated  as of  March  7,  1990,  as  amended,  between  Holdings  and
Westinghouse Electric Corporation.

          "WORKING  CAPITAL  FACILITY":  the  working  capital  credit  facility
evidenced  by  the  letter  agreement,  dated  as of  March  31,  1998,  between
NationsBank of Texas, N.A., as lender, and the Company, as borrower, as the same
may be amended, modified, supplemented, restated or replaced (but not increased)
from time to time;  PROVIDED that,  after giving effect to each such  amendment,
modification,  supplement,  restatement  or  replacement,  such working  capital
credit facility shall be permitted under the Credit Agreement.

          "WORKING CAPITAL LENDER": NationsBank of Texas, N.A., as lender, under
the Working Capital  Facility,  and any Person that is a Lender under the Credit
Agreement  and  that  replaces  NationsBank,  N.A.  under  the  Working  Capital
Facility.

          "WORKING CAPITAL OBLIGATIONS": all of the obligations, liabilities and
indebtedness of the Company (including, without limitation, interest accruing at
the then  applicable  rate provided in the Working  Capital  Facility  after the
maturity of the  extensions of credit  thereunder  and interest  accruing at the
then applicable  rate provided in the Working Capital  Facility after the filing
of  any  petition  in  bankruptcy,   or  the  commencement  of  any  insolvency,
reorganization  or like  proceeding,  relating to the Company,  whether or not a
claim for post-filing or post-petition interest is allowed in


                                       6
<PAGE>


such  proceeding)  to the Working  Capital  Lender  whether  direct or indirect,
absolute  or  contingent,  due or to become due,  or now  existing or  hereafter
incurred,  which may arise under,  out of, or in  connection  with,  the Working
Capital  Facility or any other document  made,  delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations,  guarantee  obligations,  fees,  indemnities,  costs,  expenses  or
otherwise (including,  without limitation, all fees and disbursements of counsel
to the  Working  Capital  Lender that are  required  to be paid by any  Borrower
pursuant to the terms of any of the foregoing agreements). 

          1.2 Other DEFINIFIONAL PROVISIONS.  (a) The words "hereof',  "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular  provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.

          (b) The  meanings  given  to terms  defined  herein  shall be  equally
applicable to both the singular and plural forms of such terms.

          (c) Where the context  requires,  terms  relating to the Collateral or
any part  thereof,  when used in  relation  to a  Grantor,  shall  refer to such
Grantor's Collateral or the relevant part thereof.

                              SECTION 2. GUARANTEE

          2.1  GUARANTEE.  (a)  Each  of  the  Guarantors  hereby,  jointly  and
severally,   unconditionally   and   irrevocably,   guarantees  to  the  General
Administrative  Agent,  for the  ratable  benefit of the Lenders and the Working
Capital  Lender and their  respective  successors,  indorsees,  transferees  and
assigns,  the prompt and complete  payment and performance by the Borrowers when
due  (whether at the stated  maturity,  by  acceleration  or  otherwise)  of the
Borrower Obligations and the Working Capital Obligations.

             (b) Anything  herein or in any other Loan  Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such  Guarantor  under  applicable  federal  and state laws  relating  to the
insolvency  of  debtors  (after  giving  effect  to the  right  of  contribution
established in Section 2.2).

             (c) Each  Guarantor  agrees that the  Borrower  Obligations  or the
Working  Capital  Obligations  may at any time and from time to time  exceed the
amount of the  liability  of such  Guarantor  hereunder  without  impairing  the
guarantee  contained in this  Section 2 or affecting  the rights and remedies of
the General Administrative Agent or any Lender hereunder.


                                       7
<PAGE>



             (d) The guarantee  contained in this Section 2 shall remain in full
force and effect  until all the  Borrower  Obligations  and the Working  Capital
Obligations and the obligations of each Guarantor under the guarantee  contained
in this  Section 2 shall have been  satisfied  by payment in full,  no Letter of
Credit  shall  be  outstanding   and  the   Commitments   shall  be  terminated,
notwithstanding  that from time to time during the term of the Credit  Agreement
the Borrowers may be free from any Borrower  Obligations or the Working  Capital
Obligations.

             (e) No payment made by either  Borrower," or any of the Guarantors,
any other  guarantor or any other Person or received or collected by the General
Administrative Agent or any Lender from either Borrower,  any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or  appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower  Obligations  or the Working  Capital
Obligations shall be deemed to modify,  reduce,  release or otherwise affect the
liability  of any  Guarantor  hereunder  which shall,  notwithstanding  any such
payment  (other  than any  payment  made by such  Guarantor  in  respect  of the
Borrower  Obligations or the Working Capital Obligations or any payment received
or collected from such Guarantor in respect of the Borrower  Obligations and the
Working Capital Obligations), remain liable for the Borrower Obligations and the
Working  Capital  Obligations  up to the  maximum  liability  of such  Guarantor
hereunder until the Borrower Obligations and the Working Capital Obligations are
paid in full, no Letter of Credit shall be outstanding  and the  Commitments are
terminated.

          2.2 RIGHT OF  CONTRIBUTION.  Each Subsidiary  Guarantor  hereby agrees
that to the extent  that a  Subsidiary  Guarantor  shall have paid more than its
proportionate  share of any payment made hereunder,  such  Subsidiary  Guarantor
shall be entitled to seek and  receive  contribution  from and against any other
Subsidiary  Guarantor  hereunder which has not paid its  proportionate  share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and  conditions of Section 2.3. The  provisions of this Section 2.2
shall in no respect limit the  obligations  and  liabilities  of any  Subsidiary
Guarantor to the General Administrative Agent and the Lenders, and

each  Subsidiary  Guarantor  shall remain  liable to the General  Administrative
Agent  and the  Lenders  for  the  full  amount  guaranteed  by such  Subsidiary
Guarantor hereunder.

          2.3 NO SUBROGATION,  Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the General
Administrative  Agent  or any  Lender,  no  Guarantor  shall be  entitled  to be
subrogated  to any of the  rights  of the  General  Administrative  Agent or any
Lender against either Borrower or any other Guarantor or any collateral security
or guarantee or right of offset held by the General  Administrative Agent or any
Lender for the  payment  of the  Borrower  Obligations  or the  Working  Capital
Obligations,   nor  shall  any  Guarantor  seek  or  be  entitled  to  seek  any
contribution  or  reimbursement  from either  Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the General  Administrative Agent and the Lenders by the Borrowers on account of
the Borrower  Obligations and the Working Capital  Obligations are paid in full,


                                       8
<PAGE>


no Letter of Credit shall be outstanding and the Commitments are terminated.  If
any amount shall be paid to any Guarantor on account of such subrogation  rights
at any  time  when  all of the  Borrower  Obligations  and the  Working  Capital
Obligations  shall not have been paid in full, such amount shall be held by such
Guarantor  in  trust  for the  General  Administrative  Agent  and the  Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such  Guarantor,  be turned over to the General  Administrative  Agent in the
exact form received by such  Guarantor  (duly  indorsed by such Guarantor to the
General  Administrative Agent, if required),  to be applied against the Borrower
Obligations and the Working Capital  Obligations,  whether matured or unmatured,
in such order as the General Administrative Agent may determine.

          2.4 AMENDMENTS,  ETC. WITH RESPECT TO THE BORROWER  OBLIGATIONS.  Each
Guarantor shall remain obligated  hereunder  notwithstanding  that,  without any
reservation  of rights  against any Guarantor  and without  notice to or further
assent  by any  Guarantor,  any  demand  for  payment  of  any  of the  Borrower
Obligations   or  the   Working   Capital   Obligations   made  by  the  General
Administrative   Agent  or  any  Lender  may  be   rescinded   by  the   General
Administrative  Agent or such Lender and any of the Borrower  Obligations or the
Working  Capital  Obligations  continued,  and the Borrower  Obligations  or the
Working  Capital  Obligations,  or the liability of any other Person upon or for
any part thereof,  or any collateral  security or guarantee therefor or right of
offset with respect  thereto,  may,  from time to time,  in whole or in part, be
renewed,  extended,  amended,  modified,   accelerated,   compromised,   waived,
surrendered or released by the General  Administrative  Agent or any Lender, and
the  Credit  Agreement  and the other  Loan  Documents  and any other  documents
executed  and  delivered  in  connection  therewith  may be  amended,  modified,
supplemented or terminated,  in whole or in part, as the General  Administrative
Agent (or the  Required  Lenders  or all  Lenders,  as the case may be) may deem
advisable from time to time, and any collateral security,  guarantee or right of
offset at any time held by the  General  Administrative  Agent or any Lender for
the payment of the Borrower  Obligations or the Working Capital  Obligations may
be sold,  exchanged,  waived,  surrendered  or  released.  Neither  the  General
Administrative  Agent nor any  Lender  shall  have any  obligation  to  protect,
secure,  perfect or insure any Lien at any time held by it as  security  for the
Borrower  Obligations  or the Working  Capital  Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.

         2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations  or the  Working  Capital  Obligations  and  notice  of or  proof of
reliance by the General  Administrative  Agent or any Lender upon the  guarantee
contained in this Section 2 or  acceptance  of the  guarantee  contained in this
Section 2; the Borrower Obligations and the Working Capital Obligations, and any
of them,  shall  conclusively  be  deemed to have been  created,  contracted  or
incurred,  or  renewed,  extended,  amended  or  waived,  in  reliance  upon the
guarantee  contained in this Section 2; and all dealings between either Borrower
and any of the Guarantors, on the one hand, and the General Administrative Agent
and the Lenders, on the other hand,  likewise shall be conclusively  presumed to
have been had or consummated in reliance upon the guarantee contained in this
          

                                       9
<PAGE>


Section 2. Each Guarantor waives  diligence,  presentment,  protest,  demand for
payment and notice of default or nonpayment to or upon either Borrower or any of
the Guarantors  with respect to the Borrower  Obligations or the Working Capital
Obligations.  Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document,  any of the Borrower Obligations or
the Working Capital  Obligations or any other  collateral  security  therefor or
guarantee  or right of offset with  respect  thereto at any time or from time to
time held by the General  Administrative  Agent or any Lender,  (b) any defense,
set-off or counterclaim  (other than a defense of payment or performance)  which
may at any time be available  to or be asserted by either  Borrower or any other
Person against the General  Administrative Agent or any Lender, or (c) any other
circumstance  whatsoever  (with or  without  notice  to or  knowledge  of either
Borrower  or such  Guarantor)  which  constitutes,  or  might  be  construed  to
constitute,  an equitable or legal discharge of either Borrower for the Borrower
Obligations or the Working Capital  Obligations,  or of such Guarantor under the
guarantee  contained in this Section 2, in bankruptcy or in any other  instance.
When making any demand  hereunder or otherwise  pursuing its rights and remedies
hereunder against any Guarantor,  the General Administrative Agent or any Lender
may, but shall be under no obligation  to, make a similar demand on or otherwise
pursue such rights and  remedies as it may have  against  either  Borrower,  any
other  Guarantor  or any other  Person or against  any  collateral  security  or
guarantee for the Borrower Obligations or the Working Capital Obligations or any
right  of  offset  with  respect  thereto,   and  any  failure  by  the  General
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments  from either  Borrower,  any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee  or to  exercise  any such right of offset,  or any  release of either
Borrower,  any  other  Guarantor  or any  other  Person  or any such  collateral
security,  guarantee or right of offset,  shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies,  whether  express,  implied or  available  as a matter of law,  of the
General  Administrative  Agent or any  Lender  against  any  Guarantor.  For the
purposes hereof "demand" shall include the  commencement  and continuance of any
legal proceedings.

          2.6  REINSTATEMENT.  The  guarantee  contained in this Section 2 shall
continue to be effective,  or be reinstated,  as the case may be, if at any time
payment, or any part thereof, of any of the Borrower  Obligations or the Working
Capital  Obligations  is rescinded or must  otherwise be restored or returned by
the General Administrative Agent or any Lender upon the insolvency,  bankruptcy,
dissolution,  liquidation or reorganization of either Borrower or any Guarantor,
or  upon  or as a  result  of  the  appointment  of a  receiver,  intervenor  or
conservator  of, or trustee or  similar  officer  for,  either  Borrower  or any
Guarantor or any substantial part of its property,  or otherwise,  all as though
such payments had not been made.


                                       10
<PAGE>



          2.7 PAYMENTS. Each Guarantor hereby guarantees that payments hereunder
will be paid to the General Administrative Agent without set-off or counterclaim
in U.S. Dollars at the office of the General Administrative Agent referred to in
Section 14.2 of the Credit Agreement.

                      SECTION 3. GRANT OF SECURITY INTEREST

          Each   Grantor   hereby   assignes   and   transfers  to  the  General
Administrative Agent, and hereby grants to the General Administrative Agent, for
the ratable benefit of the Lenders and the Working  Capital  Lender,  a security
interest in, all of the  following  property now owned or at any time  hereafter
acquired by such  Grantor or in which such Grantor now has or at any time in the
future  may  acquire   any  right,   title  or   interest   (collectively,   the
"COLLATERAL"),  as collateral  security for the prompt and complete  payment and
performance  when due  (whether  at the  stated  maturity,  by  acceleration  or
otherwise) of such Grantor's Obligations:

                  (a)    all Accounts;

                  (b)    all Chattel Paper;

                  (c)    all Contracts;

                  (d)    all Documents;

                  (e)    all Equipment;

                  (f)    all General Intangibles;

                  (g)    all Instruments;

                  (h)    all Intellectual Property;

                  (i)    all Inventory;

                  0)     all Pledged Securities;

                  (k)    all Investment Property;

                  (l)    all books and records pertaining to the Collateral; and

                  (m)    to the extent not otherwise  included, all Proceeds and
          products of any and all of the foregoing and all  collateral  security
          and  guarantees  given  by  any  Person  with  respect  to  any of the
          foregoing.


                                       11
<PAGE>



                    SECTION 4. REPRESENTATIONS AND WARRANTIES

          To induce the  General  Administrative  Agent and the Lenders to enter
into the Credit  Agreement  and to induce the  Lenders to make their  respective
extensions of credit to the Borrowers thereunder, each Grantor hereby represents
and warrants to the General Administrative Agent and each Lender that:

         4.1 REPRESENTATIONS IN CREDIT AGREEMENT, HOLDINGS REPRESENTATIONS.  (a)
In the case of each Guarantor,  the  representations and warranties set forth in
Section 7 of the Credit  Agreement  as they relate to such  Guarantor  or to the
Loan  Documents  to which  such  Guarantor  is a party,  each of which is hereby
incorporated  herein  by  reference,  are  true  and  correct,  and the  General
Administrative  Agent and each Lender  shall be entitled to rely on each of them
as if they were fully set forth  herein,  PROVIDED  that each  reference in each
such  representation  and  warranty to a  Borrower's  knowledge  shall,  for the
purposes  of  this  Section  4. 1 (a),  be  deemed  to be a  reference  to  such
Guarantor's knowledge.

          (b) In the case of Holdings:

          (i)  Holdings  (w) is duly  organized,  validly  existing  and in good
standing  under the laws of the State of Delaware,  (x) has the corporate  power
and authority,  and the legal right,  to own and operate its property,  to lease
the  property it  operates as lessee and to conduct the  business in which it is
currently  engaged,  (y) is duly qualified as a foreign  corporation and in good
standing  under  the laws of each  jurisdiction  where its  ownership,  lease or
operation of property or the conduct of its business requires such qualification
and (z) is in compliance with all  Requirements of Law except to the extent that
the failure to comply  therewith  could not,  in the  aggregate,  reasonably  be
expected to have a Material Adverse Effect.

          (ii) Holdings has the  corporate  power and  authority,  and the legal
right,  to make,  deliver and perform the Loan  Documents to which it is a party
and has  taken  all  necessary  corporate  action to  authorize  the  execution,
delivery  and  performance  of the Loan  Documents  to  which it is a party.  No
consent  or  authorization  of,  filing  with,  notice  to or other act by or in
respect  of, any  Governmental  Authority  or any other  Person is  required  in
connection with the execution, delivery, performance, validity or enforceability
of the Loan Documents to which Holdings is a party. This Agreement has been, and
each  other Loan  Document  to which it is a party will be,  duly  executed  and
delivered on behalf of Holdings. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will  constitute,  a
legal, valid and binding obligation of Holdings  enforceable against Holdings in
accordance  with its terms,  subject to the effects of  bankruptcy,  insolvency,
fraudulent  conveyance,  reorganization,   moratorium  and  other  similar  laws
relating  to  or  affecting  creditors'  rights  generally,   general  equitable
principles  (whether  considered  in a  proceeding  in  equity or at law) and an
implied covenant of good faith and fair dealing.


                                       12
<PAGE>



          (iii) The execution, delivery and performance of the Loan Documents to
which Holdings is a party will not violate any Requirement of Law or Contractual
Obligation of Holdings or of any of its  Subsidiaries and will not result in, or
require,  the  creation  or  imposition  of any  Lien  on  any  of its or  their
respective  properties or revenues  pursuant to any such  Requirement  of Law or
Contractual Obligation (other than pursuant to this Agreement).

          (iv) No  litigation,  investigation  or  proceeding  of or before  any
arbitrator  or  Governmental  Authority  is  pending  or,  to the  knowledge  of
Holdings,  threatened  by or  against  Holdings  or any of its  Subsidiaries  or
against any of its or their  respective  properties or revenues (x) with respect
to any of the Loan Documents or any of the transactions  contemplated  hereby or
thereby,  or (y) which could  reasonably be expected to have a Material  Adverse
Effect.

          (v)  Holdings  has no  material  assets  other  than the  stock of the
Company.

          4.2 TITLE; NO OTHER LIENS. Except for the security interest granted to
the General Administrative Agent for the ratable benefit of the Lenders pursuant
to this  Agreement and the other Liens  permitted to exist on the  Collateral by
the Credit  Agreement,  such Grantor owns each item of the  Collateral  free and
clear of any and all Liens or claims of others. No financing  statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any  public  office,  except  such as have been  filed in favor of the
General  Administrative Agent, for the ratable benefit of the Lenders,  pursuant
to this Agreement or as are permitted by the Credit Agreement.

          4.3 PERFECTED FIRST PRIORITY  LIENS.  The security  interests  granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which,  in the case of all filings and other  documents
referred to on said Schedule,  have been delivered to the General Administrative
Agent in completed  and duly  executed  form) will  constitute  valid  perfected
security   interests  in  all  of  the   Collateral  in  favor  of  the  General
Administrative  Agent,  for the ratable  benefit of the Lenders,  as  collateral
security for such  Grantor's  Obligations,  enforceable  in accordance  with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any  Collateral  from such Grantor and (b) are prior to all other Liens
on the  Collateral  in  existence on the date hereof  except for (i)  unrecorded
Liens  permitted by the Credit  Agreement  which have priority over the Liens on
the Collateral by operation of law and (ii) Liens described on Schedule 8.

          4.4  CHIEF  EXECUTIVE  Office.  On the  date  hereof,  such  Grantor's
jurisdiction of organization  and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.

          4.5 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on SCHEDULE
5

          4.6  Farm  Products.  None of the  Collateral  constitutes,  or is the
Proceeds of, Farm Products.


                                       13
<PAGE>


          4.7 PLEDGED  SECURITIES.  (a) The shares of Pledged  Stock  pledged by
such Grantor hereunder  constitute all the issued and outstanding  shares of all
classes of the Capital  Stock of each Issuer  owned by such  Grantor (or, in the
case of any Issuer that is a Foreign Subsidiary,  if less, 65% of the issued and
outstanding shares of Capital Stock of such Issuer).

          (b) All the shares of the  Pledged  Stock  have been duly and  validly
issued and are fully paid and nonassessable.

          (c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect  thereto,  enforceable in accordance with
its  terms,  subject  to  the  effects  of  bankruptcy,  insolvency,  fraudulent
conveyance,  reorganization,  moratorium  and other  similar laws relating to or
affecting  creditors' rights generally,  general equitable  principles  (whether
considered in a proceeding in equity or at law) and an implied  covenant of good
faith and fair dealing.

          (d) Such Grantor is the record and  beneficial  owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.

          4.8  RECEIVABLES.  (a) No amount  payable to such Grantor  under or in
connection  with any  Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the General Administrative Agent.

          (b) The amounts  represented  by such Grantor to the Lenders from time
to time as owing to such  Grantor  in respect  of the  Receivables  will at such
times be accurate.

          4.9  CONTRACTS.  (a) No consent of any party (other than such Grantor)
to any Contract is required,  or purports to be required, in connection with the
execution, delivery and performance of this Agreement.

          (b) Each Contract is in full force and effect and  constitutes a valid
and  legally  enforceable  obligation  of the  parties  thereto,  subject to the
effects  of  bankruptcy,  insolvency,  fraudulent  conveyance,   reorganization,
moratorium  and other  similar laws relating to or affecting  creditors'  rights
generally,  general equitable  principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.

          (c) No consent or authorization  of, filing with or other act by or in
respect  of any  Governmental  Authority  is  required  in  connection  with the
execution,  delivery,  performance,  validity  or  enforceability  of any of the
Contracts by any party thereto  other than those which have been duly  obtained,
made or performed,  are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.


                                       14
<PAGE>



          (d) Neither such Grantor nor (to the best of such Grantor's knowledge)
any of the other  parties to the Contracts is in default in the  performance  or
observance  of any of the terms  thereof in any manner that,  in the  aggregate,
could reasonably be expected to have a Material Adverse Effect.

          (e) The right, title and interest of such Grantor in, to and under the
Contracts  are not subject to any  defenses,  offsets,  counterclaims  or claims
that, in the aggregate,  could reasonably be expected to have a Material Adverse
Effect.

          (f) Such Grantor has delivered to the Administrative  Agent a complete
and correct copy of each Contract,  including all  amendments,  supplements  and
other modifications thereto.

          (g) No amount payable to such Grantor under or in connection  with any
Contract is  evidenced  by any  Instrument  or Chattel  Paper which has not been
delivered to the Administrative Agent.

          (h) None of the parties to any Contract is a Governmental Authority.

          4.10  INTELLECTUAL  PROPERTY.  (a)  SCHEDULE 6 LISTS all  Intellectual
Property owned by such Grantor in its own name on the date hereof.

          (b) On the date hereof, all material  Intellectual  Property is valid,
subsisting,  unexpired  and  enforceable,  has not been  abandoned  and does not
infringe the intellectual property rights of any other Person.

          (c) Except as set forth in SCHEDULE 6, on the date hereof, none of the
Intellectual  Property is the subject of any  licensing or  franchise  agreement
pursuant to which such Grantor is the licensor or franchisor.

          (d)  No  holding,  decision  or  judgment  has  been  rendered  by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's  rights in, any  Intellectual  Property in any respect that could
reasonably be expected to have a Material Adverse Effect.

          (e) No action or proceeding  is pending,  or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual  Property or such Grantor's  ownership interest
therein, or (ii) which, if adversely  determined,  would have a material adverse
effect on the value of any Intellectual Property.


                                       15
<PAGE>



                              SECTION 5. COVENANTS

          Each  Grantor  covenants  and agrees with the  General  Administrative
Agent and the Lenders that,  from and after the date of this Agreement until the
Obligations  shall  have  been  paid in  full,  no  Letter  of  Credit  shall be
outstanding and the Commitments shall have terminated:

          5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor, such
Guarantor  shall take,  or shall  refrain from taking,  as the case may be, each
action that is necessary  to be taken or not taken,  as the case may be, so that
no Default or Event of Default is caused by the  failure to take such  action or
to refrain from taking such action by such Guarantor or any of its Subsidiaries.

          5.2 DELIVERY OF INSTRUMENTS  AND CHATTEL PAPER.  If any amount payable
under or in connection with any of the Collateral  shall be or become  evidenced
by any  Instrument or Chattel Paper,  such  Instrument or Chattel Paper shall be
immediately  delivered to the General  Administrative  Agent, duly indorsed in a
manner  satisfactory  to  the  General  Administrative  Agent,  to  be  held  as
Collateral pursuant to this Agreement.

          5.3  MAINTENANCE OF INSURANCE.  (a) Such Grantor will  maintain,  with
financially sound and reputable  companies,  insurance policies (i) insuring the
Inventory and Equipment  against loss by fire,  explosion,  theft and such other
casualties as may be reasonably satisfactory to the General Administrative Agent
and (ii) insuring such Grantor, the General Administrative Agent and the Lenders
against  liability  for  personal  injury and property  damage  relating to such
Inventory and Equipment, such policies to be in such form and amounts and having
such coverage as may be reasonably  satisfactory  to the General  Administrative
Agent and the Lenders.

          (b) All  such  insurance  shall  (i)  provide  that  no  cancellation,
material  reduction in amount or material  change in coverage  thereof  shall be
effective  until at least 30 days after  receipt by the  General  Administrative
Agent of written notice thereof,  (ii) name the General  Administrative Agent as
insured party or joint loss payee, (iii) if reasonably  requested by the General
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the General Administrative Agent.

          (c) The Company shall deliver to the General  Administrative Agent and
the  Lenders a report of a  reputable  insurance  broker  with  respect  to such
insurance during the month of April in each calendar year and such  supplemental
reports with respect thereto as the General  Administrative  Agent may from time
to time reasonably request.

          5.4 PAYMENT OF  OBLIGATIONS.  Such Grantor  will pay and  discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes,  assessments and governmental  charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including,  without limitation,  claims for labor, materials
and supplies) against or with respect to the Collateral, except that no


                                       16
<PAGE>


such charge need be paid if the amount or validity  thereof is  currently  being
contested in good faith by appropriate proceedings,  reserves in conformity with
GAAP with respect  thereto  have been  provided on the books of such Grantor and
such  proceedings  could  not  reasonably  be  expected  to  result in the sale,
forfeiture  or loss of any material  portion of the  Collateral  or any interest
therein.

          5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.
(a) Such Grantor shall maintain the security  interest created by this Agreement
as a perfected  security  interest  having at least the  priority  described  in
Section  4.3 and shall  defend  such  security  interest  against the claims and
demands of all Persons whomsoever.

          (b) Such Grantor will furnish to the General  Administrative Agent and
the Lenders from time to time statements and schedules  further  identifying and
describing  the  Collateral  and  such  other  reports  in  connection  with the
Collateral as the General  Administrative  Agent may reasonably request,  all in
reasonable detail.

          (c) At any time and from time to time, upon the written request of the
General  Administrative  Agent,  and at the sole expense of such  Grantor,  such
Grantor will  promptly and duly execute and  deliver,  and have  recorded,  such
further  instruments  and documents and take such further actions as the General
Administrative  Agent may  reasonably  request for the purpose of  obtaining  or
preserving  the full  benefits  of this  Agreement  and of the rights and powers
herein granted,  including,  without limitation,  the filing of any financing or
continuation  statements  under the Uniform  Commercial  Code (or other  similar
laws) in effect in any  Jurisdiction  with  respect  to the  security  interests
created hereby.

          5.6 CHANGES IN LOCATIONS,  NAME,  etc.  Such Grantor will not,  except
upon 15 days'  prior  written  notice to the  General  Administrative  Agent and
delivery  to the General  Administrative  Agent of (a) all  additional  executed
financing  statements and other  documents  reasonably  requested by the General
Administrative  Agent to maintain the validity,  perfection  and priority of the
security  interests  provided  for  herein  and  (b) if  applicable,  a  written
supplement to SCHEDULE 5 showing any additional  location at which  Inventory or
Equipment shall be kept:

            (i)  permit  any of the  Inventory  or  Equipment  to be  kept  at a
location other than those listed on .SCHEDULE 5;

            (ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or

            (iii) change its name,  identity or  corporate  structure to such an
extent that any financing statement filed by the General Administrative Agent in
connection with this Agreement would become misleading.


                                       17
<PAGE>



          5.7 NOTICES. Such Grantor will advise the General Administrative Agent
and the Lenders promptly, in reasonable detail, of-

                (a) any Lien (other than security  interests  created  hereby or
        Liens  permitted  under the Credit  Agreement) on any of the  Collateral
        which would adversely  affect the ability of the General  Administrative
        Agent to exercise any of its remedies hereunder; and

                (b) of the occurrence of any other event which could  reasonably
        be expected to have a material  adverse effect on the aggregate value of
        the Collateral or on the security interests created hereby.

          5.8 PLEDGED  SECURITIES.  (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate  (including,  without limitation,
any  certificate  representing a stock dividend or a distribution  in connection
with any  reclassification,  increase or reduction of capital or any certificate
issued. in connection with any  reorganization),  option or rights in respect of
the Capital Stock of any Issuer,  whether in addition to, in substitution of, as
a  conversion  of, or in  exchange  for,  any shares of the  Pledged  Stock,  or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the General Administrative Agent and the Lenders, hold the same in trust for the
General  Administrative  Agent and the Lenders and deliver the same forthwith to
the General  Administrative  Agent in the exact form received,  duly indorsed by
such Grantor to the General Administrative Agent, if required,  together with an
undated  stork power  covering such  certificate  duly executed in blank by such
Grantor and with,  if the General  Administrative  Agent so requests,  signature
guaranteed, to be held by the General Administrative Agent, subject to the terms
hereof,  as additional  collateral  security for the Obligations.  Any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of any Issuer shall be paid over to the General  Administrative Agent to be held
by it hereunder as additional  collateral  security for the Obligations,  and in
case any  distribution  of capital shall be made on or in respect of the Pledged
Securities  or any  property  shall be  distributed  upon or with respect to the
Pledged Securities  pursuant to the  recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall,  unless otherwise subject to a perfected security interest in
favor  of  the  General  Administrative  Agent,  be  delivered  to  the  General
Administrative  Agent  to be  held  by it  hereunder  as  additional  collateral
security  for the  Obligations.  If any  sums of money  or  property  so paid or
distributed  in respect of the  Pledged  Securities  shall be  received  by such
Grantor,  such Grantor shall,  until such money or property is paid or delivered
to the General  Administrative  Agent,  hold such money or property in trust for
the  Lenders,  segregated  from  other  funds  of such  Grantor,  as  additional
collateral  security  for  the  Obligations.  Notwithstanding  anything  to  the
contrary  contained  herein, in no event shall any Grantor be required to pledge
more than 65% of the outstanding Capital Stock of any Foreign Subsidiary.


                                       18
<PAGE>



          (b) Without the prior  written  consent of the General  Administrative
Agent,  such  Grantor  will not (i) vote to enable,  or take any other action to
permit,  any Issuer to issue any stock or other equity  securities of any nature
or to issue any  other  securities  convertible  into or  granting  the right to
purchase or exchange for any stock or other equity  securities  of any nature of
any Issuer, (ii) sell, assign,  transfer,  exchange, or otherwise dispose of, or
grant any option with  respect to, the Pledged  Securities  or Proceeds  thereof
(except pursuant to a transaction expressly permitted by the

          (iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with  respect to, any of the  Pledged  Securities  or
Proceeds  thereof,  or any interest therein,  except for the security  interests
created  by this  Agreement  or (iv)  enter into any  agreement  or  undertaking
restricting  the right or ability of such Grantor or the General  Administrative
Agent to sell,  assign or  transfer  any of the Pledged  Securities  or Proceeds
thereof.

          (c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities  issued by it and will comply  with such terms  insofar as such terms
are  applicable  to it,  (ii) it will notify the  General  Administrative  Agent
promptly in writing of the occurrence of any of the events  described in Section
5.8(a) with respect to the Pledged  Securities  issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, MUTATIS MUTANDIS,  with respect to
all actions  that may be  required of it pursuant to Section  6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.

          5.9  RECEIVABLES.  (a) Other than in the  ordinary  course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the  time of  payment  of any  Receivable,  (ii)  compromise  or  settle  any
Receivable  for less than the full  amount  thereof,  (iii)  release,  wholly or
partially,  any Person liable for the payment of any Receivable,  (iv) allow any
credit or discount  whatsoever  on any  Receivable  or (v) amend,  supplement or
modify any  Receivable  in any  manner  that  could  adversely  affect the value
thereof.

          (b) Such Grantor will  deliver to the General  Administrative  Agent a
copy of each material demand,  notice or document  received by it that questions
or calls  into  doubt  the  validity  or  enforceability  of more than 5% of the
aggregate amount of the then outstanding Receivables.

          (c) If at any time the  aggregate  amount owing on all Accounts of all
Grantors  as to which a  Governmental  Authority  is an  obligor  (collectively,
"Total Government Accounts"), exceeds 10% (or, if an Event of Default shall have
occurred and be continuing, 5%) of the aggregate amount owing on all Accounts of
all Grantors (collectively,  "Total Accounts"), such Grantor shall, if requested
by the General  Administrative  Agent,  at such Grantor's sole cost and expense,
from and  after the date on which  such  aggregate  amount  first  exceeds  such
percentage  (regardless  of  whether  the  aggregate  amount  owing on the Total
Government Accounts shall equal less than 10% (or 5%, as the case may be) of the
aggregate amount owing on the Total Accounts at any subsequent time), deliver to
the General Administrative Agent such


                                       19
<PAGE>


assignments,  notices of assignment and other  documents or information as shall
be  necessary  or otherwise  requested  by the General  Administrative  Agent to
permit the  assignment  hereunder  of all  Accounts  as to which a  Governmental
Authority  is  an  obligor  pursuant  to  all  applicable  Requirements  of  Law
(including,  without  limitation,  the  Assignment  of  Claims  Act of 1940,  as
amended).

          5.10  CONTRACTS.  (a) Such  Grantor  will  perform  and  comply in all
material respects with all its obligations under the Contracts.

          (b) Such  Grantor  will not  amend,  modify,  terminate  or waive  any
provision of any Contract in any manner  which could  reasonably  be expected to
materially adversely affect the value of such Contract as Collateral.

          (c) Such Grantor will exercise  promptly and diligently each and every
material  right which it may have under each  Contract  (other than any right of
termination).

          (d) Such Grantor will  deliver to the  Administrative  Agent a copy of
each material demand,  notice or document  received by it relating in any way to
any Contract that questions the validity or enforceability of such Contract.

          5.11 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or through
licensees)  will (i) continue to use each  material  Trademark on each and every
trademark  class of goods  applicable  to its current  line as  reflected in its
current catalogs,  brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment  for non-use,  (ii) maintain as
in the past the quality of products and services  offered under such  Trademark,
(iii) use such Trademark with the  appropriate  notice of  registration  and all
other notices and legends  required by applicable  Requirements of Law, (iv) not
adopt or use any mark which is confusingly  similar or a colorable  imitation of
such Trademark unless the General  Administrative Agent, for the ratable benefit
of the Lenders, shall obtain a perfected security interest in such mark pursuant
to this  Agreement,  and (v) not (and not permit  any  licensee  or  sublicensee
thereof to) do any act or knowingly  omit to do any act whereby  such  Trademark
may become invalidated or impaired in any way.

          (b) Such Grantor (either itself or through  licensees) will not do any
act, or omit to do any act,  whereby any material  Patent may become  forfeited,
abandoned or dedicated to the public.

          (c) Such Grantor (either itself or through  licensees) (i) will employ
each  material  Copyright and (ii) will not (and will not permit any licensee or
sublicensee  thereof to) do any act or knowingly  omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either  itself or through  licensees)  do any act whereby
any material portion of the Copyrights may fall into the public domain.


                                       20
<PAGE>


          (d) Such Grantor (either itself or through  licensees) will not do any
act that  knowingly  uses any  material  Intellectual  Property to infringe  the
intellectual property rights of any other Person.

          (e) Such Grantor will notify the General  Administrative Agent and the
Lenders  immediately if it knows, or has reason to know, that any application or
registration   relating  to  any  material   Intellectual  Property  may  become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including,  without limitation,  the institution of, or any such
determination  or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country)  regarding  such  Grantor's  ownership  of, or the validity of, any
material  Intellectual  Property or such Grantor's right to register the same or
to own and maintain the same.

          (f)  Whenever  such  Grantor,  either by itself or through  any agent,
employee,  licensee or designee,  shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States  Copyright Office or any similar office or agency in any other
country or any  political  subdivision  thereof,  such Grantor shall report such
filing to the General  Administrative  Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs.  Upon request of the
General  Administrative  Agent, such Grantor shall execute and deliver, and have
recorded,  any and all  agreements,  instruments,  documents,  and papers as the
General  Administrative Agent may request to evidence the General Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles  of such Grantor  relating  thereto, or
represented thereby.

          (g)  Such  Grantor  will  take all  reasonable  and  necessary  steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark  Office,  the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each  application  (and to obtain the relevant  registration)  and to
maintain each  registration of the material  Intellectual  Property,  including,
without  limitation,  filing of applications for renewal,  affidavits of use and
affidavits of incontestability.

          (h) In the event that any material Intellectual Property is infringed,
misappropriated  or diluted by a third party,  such Grantor  shall (i) take such
actions  as  such  Grantor  shall   reasonably   deem   appropriate   under  the
circumstances   to  protect  such   Intellectual   Property  and  (ii)  if  such
Intellectual Property is of material economic value, promptly notify the General
Administrative   Agent  after  it  learns  thereof  and  sue  for  infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.


                                       21
<PAGE>


          5.12 SPECIAL  COVENANTS OF HOLDINGS.  Holdings  hereby  covenants  and
agrees that:

                  (a) The terms of each of subsections  9.3, 9.4, 9.5, 9.6, 9.7,
         9.8,  9.9 and 9. 1 0 of the Credit  Agreement  shall apply to Holdings,
         MUTATIS MUTANDIS, to the same extent as if the references to a Borrower
         therein  were  references  to Holdings,  and Holdings  will perform and
         satisfy all such covenants as so applied to it.

                  (b) Holdings shall take, or shall refrain from taking,  as the
         case may be, all actions that are necessary to be taken or not taken so
         that no violation of any provision,  covenant or agreement contained in
         Section 9 or 10 of the  Credit  Agreement,  and so that no  Default  or
         Event of Default,  is caused by any act or failure to act of  Holdings.
         
                  (c)  Holdings  shall not incur any  Indebtedness  or Guarantee
         Obligations,  or make any  investments  in, or loans or advances to any
         Person, or merge or consolidate with any Person,  or conduct,  transact
         or  otherwise  engage,  or commit to  transact,  conduct  or  otherwise
         engage,  in any business or operations  other than (i) the ownership of
         the  capital  stock of the  Company  and the  exercise  of  rights  and
         performance  of  obligations  in connection  therewith,  (ii) the entry
         into, and exercise of rights and  performance of obligations in respect
         of, this Agreement,  the Seller Note, the California Bonds, Utah Bonds,
         the Westinghouse Debt Agreement,  the Stock Purchase Agreement,  equity
         subscription  agreements,  registration  rights agreements,  voting and
         other  stockholder   agreements,   engagement   letters,   underwriting
         agreements and other agreements in respect of its equity  securities or
         any offering,  issuance or sale thereof,  (iii) the offering,  issuance
         and sale of its equity securities to the extent such offering, issuance
         or sale does not  constitute  a Change of Control or would be otherwise
         inconsistent  with the  provisions  of the Credit  Agreement,  (iv) the
         entry into,  and exercise of rights and  performance  of obligations in
         respect of, indentures,  engagement  letters,  underwriting  agreements
         and. other agreements in respect of Indebtedness permitted under clause
         (iii)  above  or any  offering,  issuance  or  sale  thereof,  and  the
         offering,  issuance and sale of its debt securities  representing  such
         Indebtedness,  (v)  the  incurrence  of  Guarantee  Obligations  in the
         ordinary  course of  business  in  respect  of the  obligations  of the
         Company  and  its  Subsidiaries  incurred  in the  ordinary  course  of
         business,  (vi) the filing of registration  statements,  and compliance
         with applicable reporting and other obligations,  under federal,  state
         or other securities  laws,  (vii) the listing of its equity  securities
         and  compliance  with  applicable  reporting and other  obligations  in
         connection therewith,  (viii) the retention of transfer agents, private
         placement agents, underwriters, counsel, accountants and other advisors
         and  consultants,  (ix) the  performance  of  obligations  under and in
         compliance with its  certificate of  incorporation  and bylaws,  or any
         applicable law, ordinance, regulation, rule, order, judgment, decree or
         permit, including,  without limitation, as a result of or in connection
         with the  activities of the Company,  (x) the incurrence and payment of
         any taxes for which it may be liable and (xi) other activities directly
         related to the foregoing.


                                       22
<PAGE>

                  (d) Holdings shall not (i) amend the subordination  provisions
         of the Seller Note or the Westinghouse  Debt Agreement or (ii) pay cash
         interest  on the Seller  Note prior to the  second  anniversary  of the
         Closing Date.

                         SECTION 6. REMEDIAL PROVISIONS

          6.1  CERTAIN  MATTERS   RELATING  TO  RECEIVABLES.   (a)  The  General
Administrative  Agent  shall  have the right to make test  verifications  of the
Receivables  in any manner and through any medium that it  reasonably  considers
advisable, and each Grantor shall furnish all such assistance and information as
the  General  Administrative  Agent may  require  in  connection  with such test
verifications.   At  any  time  and  from  time  to  time,   upon  the   General
Administrative  Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
General  Administrative  Agent to furnish to the  General  Administrative  Agent
reports  showing  reconciliations,  aging and test  verifications  of, and trial
balances for, the Receivables.

          (b) The General Administrative Agent hereby authorizes each Grantor to
collect  such  Grantor's  Receivables,  subject  to the  General  Administrative
Agent's direction and control, and the General  Administrative Agent may curtail
or  terminate  said  authority at any time after the  occurrence  and during the
continuance  of an Event of Default.  If required by the General  Administrative
Agent at any time after the occurrence and during the continuance of an Event of
Default,  any payments of Receivables,  when collected by any Grantor, (i) shall
be forthwith  (and, in any event,  within two Business  Days)  deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the General
Administrative  Agent if required,  in a Collateral Account maintained under the
sole  dominion  and  control of the  General  Administrative  Agent,  subject to
withdrawal  by the General  Administrative  Agent for the account of the Lenders
only as provided in Section 6.5, and (ii) until so turned over, shall be held by
such  Grantor in trust for the  General  Administrative  Agent and the  Lenders,
segregated  from other funds of such  Grantor.  Each such deposit of Proceeds of
Receivables  shall be accompanied by a report  identifying in reasonable  detail
the nature and source of the payments included in the deposit.

          (c) At the General  Administrative Agent's request, each Grantor shall
deliver to the General  Administrative  Agent all original  and other  documents
evidencing,  and relating to, the agreements and transactions which gave rise to
the Receivables,  including,  without limitation,  all original orders, invoices
and shipping receipts.

          6.2  COMMUNICATIONS  WITH OBLIGORS;  GRANTORS  REMAIN LIABLE.  (a) The
General Administrative Agent in its own name or in the name of others may at any
time after the  occurrence  and during  the  continuance  of an Event of Default
communicate  with obligors under the Receivables and parties to the Contracts to
verify  with  them  to  the  General  Administrative  Agent's  satisfaction  the
existence, amount and terms of any Receivables or Contracts.


                                       23
<PAGE>


          (b) Upon the request of the General  Administrative  Agent at any time
after the  occurrence and during the  continuance  of an Event of Default,  each
Grantor shall notify  obligors on the  Receivables  and parties to the Contracts
that the  Receivables  and the  Contracts  have  been  assigned  to the  General
Administrative Agent for the ratable benefit of the Lenders and that payments in
respect thereof shall be made directly to the General Administrative Agent.

          (c)  Anything  herein to the  contrary  notwithstanding,  each Grantor
shall remain liable under each of the  Receivables  and the Contracts to observe
and perform all the conditions  and  obligations to be observed and performed by
it  thereunder,  all in accordance  with the terms of any Agreement  giving rise
thereto.  Neither the General Administrative Agent nor any Lender shall have any
obligation  or liability  under any  Receivable  (or any  agreement  giving rise
thereto)  or  Contract  by reason of or  arising  out of this  Agreement  or the
receipt  by the  General  Administrative  Agent  or any  Lender  of any  payment
relating thereto,  nor shall the General  Administrative  Agent or any Lender be
obligated in any manner to perform any of the  obligations  of any Grantor under
or  pursuant  to any  Receivable  (or any  agreement  giving  rise  thereto)  or
Contract,  to make any  payment,  to make any  inquiry  as to the  nature or the
sufficiency  of  any  payment  received  by it or as to the  sufficiency  of any
performance by any party  thereunder,  to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have  been  assigned  to it or to which  it may be  entitled  at any time or
times.

          6.3 PLEDGED STOCK.  (a) Unless an Event of Default shall have occurred
and be continuing and the General  Administrative  Agent shall have given notice
to the relevant Grantor of the General Administrative Agent's intent to exercise
its  corresponding  rights  pursuant to Section  6.3(b),  each Grantor  shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock and
all  payments  made in respect of the  Pledged  Notes,  in each case paid in the
normal  course of  business  of the  relevant  Issuer and  consistent  with past
practice,  to the extent permitted in the Credit Agreement,  and to exercise all
voting and corporate  rights with respect to the Pledged  Securities;  PROVIDED,
however that no vote shall be cast or corporate  right exercised or other action
taken which, in the General  Administrative  Agent's reasonable judgment,  would
impair  the  Collateral  or which  would be  inconsistent  with or result in any
violation of any provision of the Credit Agreement,  this Agreement or any other
Loan Document.

          (b) If an Event of  Default  shall  occur  and be  continuing  and the
General  Administrative  Agent shall give notice of its intent to exercise  such
rights to the relevant Grantor or Grantors, (i) the General Administrative Agent
shall have the right to receive any and all cash  dividends,  payment's or other
Proceeds paid in respect of the Pledged Securities and make application  thereof
to the  Obligations  in such  order  as the  General  Administrative  Agent  may
determine,  and (ii) any or all of the Pledged Securities shall be registered in
the name of the General  Administrative  Agent or its  nominee,  and the General
Administrative  Agent or its nominee  may  thereafter  exercise  (x) all voting,
corporate and other rights pertaining to such Pledged  Securities at any meeting
of  shareholders  of the relevant Issuer or Issuers or otherwise and (y) any and
all  rights of  conversion,  exchange  and  subscription  and any other  rights,
privileges or options  pertaining  to such Pledged  Securities as if it were the
absolute owner


                                       24
<PAGE>


thereof (including,  without limitation, the right to exchange at its discretion
any  and  all  of  the  Pledged  Securities  upon  the  merger,   consolidation,
reorganization,  recapitalization  or other fundamental  change in the corporate
structure  of any  Issuer,  or upon the  exercise  by any Grantor or the General
Administrative  Agent of any  right,  privilege  or  option  pertaining  to such
Pledged  Securities,  and in  connection  therewith,  the right to  deposit  and
deliver any and all of the Pledged  Securities  with any committee,  depositary,
transfer  agent,  registrar  or other  designated  agency  upon  such  terms and
conditions  as the  General  Administrative  Agent may  determine),  all without
liability  except to  account  for  property  actually  received  by it, but the
General  Administrative  Agent shall have no duty to any Grantor to exercise any
such right,  privilege or option and shall not be responsible for any failure to
do so or delay in so doing.

          (c) Each Grantor  hereby  authorizes  and instructs each Issuer of any
Pledged  Securities  pledged by such  Grantor  hereunder  to (i) comply with any
instruction received by it from the General Administrative Agent in writing that
(x) states that an Event of Default has  occurred and is  continuing  and (y) is
otherwise in accordance with the terms of this  Agreement,  without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying,  and (ii) unless  otherwise  expressly
permitted  hereby,  pay any  dividends  or other  payments  with  respect to the
Pledged Securities directly to the General Administrative Agent.

          6.4  PROCEEDS TO BE TURNED OVER TO GENERAL  ADMINISTRATIVE  AGENT.  In
addition  to the  rights of the  General  Administrative  Agent and the  Lenders
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default  shall occur and be  continuing,  all  Proceeds  received by any Grantor
consisting  of cash,  checks  and other  near-cash  items  shall be held by such
Grantor  in  trust  for  the  General  Administrative  Agent  and  the  Lenders,
segregated from other funds of such Grantor,  and shall,  forthwith upon receipt
by such Grantor, be turned over to the General Administrative Agent in the exact
form  received by such  Grantor  (duly  indorsed by such  Grantor to the General
Administrative  Agent,  if  required).  All  Proceeds  received  by the  General
Administrative Agent hereunder shall be held by the General Administrative Agent
in a Collateral  Account  maintained  under its sole  dominion and control.  All
Proceeds while held by the General  Administrative Agent in a Collateral Account
(or by such  Grantor  in trust  for the  General  Administrative  Agent  and the
Lenders)  shall  continue  to  be  held  as  collateral  security  for  all  the
Obligations  and shall not constitute  payment thereof until applied as provided
in Section 6.5.

          6.5  APPLICATION OF PROCEEDS.  At such intervals as may be agreed upon
by the Company and the General  Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the General Administrative
Agent's election,  the General Administrative Agent may apply all or any part of
Proceeds held in any  Collateral  Account in payment of the  Obligations in such
order as the General  Administrative Agent may elect, and any part of such funds
which the  General  Administrative  Agent  elects  not so to apply and deems not
required as collateral security for the Obligations shall be paid over from time
to time by the General  Administrative Agent to the Company or to whomsoever may
be lawfully entitled to receive the same. Any balance of such Proceeds remaining
after the Obligations shall have been


                                       25
<PAGE>


paid in full, no Letters of Credit or Acceptance  Notes shall be outstanding and
the Commitments  shall have  terminated  shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.

          6.6 CODE AND OTHER REMEDIES. If an Event of Default shall occur and be
continuing,  the General  Administrative  Agent,  on behalf of the Lenders,  may
exercise,  in addition to all other rights and remedies  granted to them in this
Agreement  and in any other  instrument  or agreement  securing,  evidencing  or
relating to the  Obligations,  all rights and remedies of a secured  party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing,  the General  Administrative Agent, without demand of performance
or other  demand,  presentment,  protest,  advertisement  or  notice of any kind
(except any notice  required by law referred to below) to or upon any Grantor or
any other Person (all and each of which demands,  defenses,  advertisements  and
notices  are  hereby  waived),  may in  such  circumstances  forthwith  collect,
receive,  appropriate  and realize  upon the  Collateral,  or any part  thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange,  broker's board or office of the General  Administrative
Agent or any Lender or elsewhere  upon such terms and  conditions as it may deem
advisable  and at such prices as it may deem best,  for cash or on credit or for
future   delivery   without   assumption   of  any  credit  risk.   The  General
Administrative  Agent or any Lender  shall  have the right upon any such  public
sale or sales,  and, to the extent  permitted by law, upon any such private sale
or sales,  to purchase the whole or any part of the Collateral so sold,  free of
any right or equity  of  redemption  in any  Grantor,  which  right or equity is
hereby  waived  and  released.  Each  Grantor  further  agrees,  at the  General
Administrative Agent's request, to assemble the Collateral and make it available
to the General  Administrative Agent at places which the General  Administrative
Agent shall reasonably select,  whether at such Grantor's premises or elsewhere.
The General  Administrative  Agent  shall  apply the net  proceeds of any action
taken by it pursuant to this Section 6.6, after  deducting all reasonable  costs
and expenses of every kind incurred in connection therewith or incidental to the
care or  safekeeping  of any of the  Collateral  or in any way  relating  to the
Collateral  or the rights of the  General  Administrative  Agent and the Lenders
hereunder,  including,  without  limitation,   reasonable  attorneys'  fees  and
disbursements,  to the payment in whole or in part of the  Obligations,  in such
order as the  General  Administrative  Agent  may  elect,  and only  after  such
application  and after the  payment by the General  Administrative  Agent of any
other amount required by any provision of law,  including,  without  limitation,
Section 9-504(l)(c) of the New York UCC, need the General  Administrative  Agent
account for the  surplus,  if any, to any  Grantor.  To the extent  permitted by
applicable  law,  each  Grantor  waives all  claims,  damages and demands it may
acquire  against the General  Administrative  Agent or any Lender arising out of
the exercise by them of any rights  hereunder.  If any notice of a proposed sale
or other  disposition of Collateral  shall be required by law, such notice shall
be deemed  reasonable  and proper if given at least 10 days  before such sale or
other disposition.


                                       26
<PAGE>


          6.7 REGISTRATION RIGHts. (a) If the General Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the General  Administrative Agent it is
necessary or advisable to have the Pledged Stock,  or that portion thereof to be
sold,  registered  under the  provisions  of the  Securities  Act,  the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver,  and cause the
directors  and  officers  of such  Issuer  to  execute  and  deliver,  all  such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the General  Administrative Agent,  necessary or advisable
to register the Pledged  Stock,  or that portion  thereof to be sold,  under the
provisions  of the  Securities  Act,  (ii) use its  best  efforts  to cause  the
registration  statement  relating  thereto  to  become  effective  and to remain
effective for a period of one year from the date of the first public offering of
the  Pledged  Stock,  or that  portion  thereof  to be sold,  and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
General Administrative Agent, are necessary or advisable, all in conformity with
the  requirements  of the  Securities  Act and the rules and  regulations of the
Securities and Exchange Commission  applicable  thereto.  Each Grantor agrees to
cause such Issuer to comply with the  provisions of the securities or "Blue Sky"
laws of any and all Jurisdictions which the General  Administrative  Agent shall
designate and to make available to its security holders, as soon as practicable,
an  earnings  statement  (which  need not be  audited)  which will  satisfy  the
provisions of Section II (a) of the Securities Act.

          (b) Each Grantor recognizes that the General  Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock,  by reason of
certain  prohibitions  contained  in the  Securities  Act and  applicable  state
securities  laws or  otherwise,  and may be  compelled  to resort to one or more
private sales thereof to a restricted  group of purchasers which will be obliged
to agree,  among other things,  to acquire such securities for their own account
for investment and not with a view to the  distribution or resale thereof.  Each
Grantor  acknowledges and agrees that any such private sale may result in prices
and  other  terms  less  favorable  than if such  sale  were a public  sale and,
notwithstanding  such circumstances,  agrees that any such private sale shall be
deemed  to have been  made in a  commercially  reasonable  manner.  The  General
Administrative  Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time  necessary to permit the Issuer  thereof to
register  such  securities  for public sale under the  Securities  Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

          (c) Each  Grantor  agrees to use its best efforts to do or cause to be
done all such other acts as may be  necessary  to make such sale or sales of all
or any  portion of the  Pledged  Stock  pursuant  to this  Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor  further agrees that a breach of any of the covenants  contained in
this  Section 6.7 will cause  irreparable  injury to the General  Administrative
Agent and the  Lenders,  that the General  Administrative  Agent and the Lenders
have no adequate  remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such


                                       27
<PAGE>


Grantor,  and such Grantor  hereby  waives and agrees not to assert any defenses
against  an action  for  specific  performance  of such  covenants  except for a
defense that no Event of Default has occurred under the Credit Agreement.

          6.8 WAIVER;  DEFICIENCY.  Each Grantor waives and agrees not to assert
any rights or  privileges  which it may acquire  under  Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other  disposition  of the Collateral  are  insufficient  to pay its
Obligations  and the fees and  disbursements  of any  attorneys  employed by the
General Administrative Agent or any Lender to collect such deficiency.

                   SECTION 7. THE GENERAL ADMINISTRATIVE AGENT

          7.1 GENERAL  ADMINISTRATIVE  AGENT'S APPOINTMENT AS  ATTORNEY-IN-FACT,
ETC. (a) Each Grantor hereby  irrevocably  constitutes  and appoints the General
Administrative  Agent and any  officer  or agent  thereof,  with  full  power of
substitution,  as its true and  lawful  attorney-in-fact  with full  irrevocable
power and  authority  in the place and stead of such  Grantor and in the name of
such  Grantor or in its own name,  for the purpose of carrying  out the terms of
this Agreement,  to take any and all  appropriate  action and to execute any and
all documents and instruments  which may be necessary or desirable to accomplish
the purposes of this  Agreement,  and,  without  limiting the  generality of the
foregoing,  each Grantor hereby gives the General Administrative Agent the power
and  right,  on  behalf  of such  Grantor,  without  notice to or assent by such
Grantor, to do any or all of the following:

          (i) in the name of such Grantor or its own name,  or  otherwise,  take
possession of and indorse and collect any checks, drafts, notes,  acceptances or
other instruments for the payment of moneys due under any Receivable or Contract
or with  respect  to any other  Collateral  and file any claim or take any other
action  or  proceeding  in any  court  of  law or  equity  or  otherwise  deemed
appropriate  by the General  Administrative  Agent for the purpose of collecting
any and all such moneys due under any  Receivable or Contract or with respect to
any other Collateral whenever payable;

          (ii) in the case of any  Intellectual  Property,  execute and deliver,
and have recorded, any and all agreements,  instruments, documents and papers as
the  General   Administrative   Agent  may  request  to  evidence   the  General
Administrative  Agent's and the Lenders'  security interest in such Intellectual
Property  and the  goodwill and general  intangibles  of such  Grantor  relating
thereto or represented thereby;

          (iii)  pay or  discharge  taxes  and  Liens  levied  or  placed  on or
threatened  against the Collateral,  effect any repairs or any insurance  called
for by the  terms  of this  Agreement  and pay all or any  part of the  premiums
therefor and the costs thereof,

          (iv) execute,  in connection with any sale provided for in Section 6.6
or 6.7, any  endorsements,  assignments  or other  instruments  of conveyance or
transfer with respect to the Collateral; and


                                       28
<PAGE>


          (v) (1)  direct  any party  liable  for any  payment  under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the General  Administrative  Agent or as the General  Administrative
Agent shall direct;  (2) ask or demand for, collect,  and receive payment of and
receipt for, any and all moneys,  claims and other  amounts due or to become due
at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices,  freight or express bills,  bills of lading,  storage or warehouse
receipts, drafts against debtors, assignments,  verifications, notices and other
documents in connection with any of the  Collateral;  (4) commence and prosecute
any suits,  actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other  right in  respect  of any  Collateral;  (5)  defend  any suit,  action or
proceeding  brought  against such Grantor  with respect to any  Collateral;  (6)
settle,  compromise  or adjust  any such  suit,  action or  proceeding  and,  in
connection   therewith,   give  such  discharges  or  releases  as  the  General
Administrative Agent may deem appropriate;  (7) assign any Copyright,  Patent or
Trademark  (along with the goodwill of the business to which any such Copyright,
Patent or Trademark  pertains),  throughout the world for such term or terms, on
such conditions,  and in such manner, as the General  Administrative Agent shall
in its sole discretion determine; and (8) generally,  sell, transfer, pledge and
make any agreement  with respect to or otherwise deal with any of the Collateral
as fully and  completely  as though the  General  Administrative  Agent were the
absolute owner thereof for all purposes,  and do, at the General  Administrative
Agent's  option and such Grantor's  expense,  at any time, or from time to time,
all acts and things which the General  Administrative  Agent deems  necessary to
protect,  preserve or realize upon the Collateral and the General Administrative
Agent's and the Lenders' security  interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.

          Anything in this Section 7.1(a) to the contrary  notwithstanding,  the
General  Administrative  Agent agrees that it will not exercise any rights under
the power of attorney  provided  for in this Section  7.1(a)  unless an Event of
Default shall have occurred and be continuing.

          (b)  If any  Grantor  fails  to  perform  or  comply  with  any of its
agreements  contained herein, the General  Administrative  Agent, at its option,
but without any obligation so to do, may perform or comply,  or otherwise  cause
performance or compliance, with such agreement.

          (c) The  expenses  of the  General  Administrative  Agent  incurred in
connection  with actions  undertaken  as provided in this Section 7.1,  together
with  interest  thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving  Credit Loans that are Base
Rate Loans under the Credit  Agreement,  from the date of payment by the General
Administrative  Agent to the date reimbursed by the relevant  Grantor,  shall be
payable by such Grantor to the General Administrative Agent on demand.


                                       29


<PAGE>


          (d) Each  Grantor  hereby  ratifies  all  that  said  attorneys  shall
lawfully do or cause to be done by virtue hereof All powers,  authorizations and
agencies  contained  in this  Agreement  are coupled  with an  interest  and are
irrevocable  until this  Agreement  is  terminated  and the  security  interests
created hereby are released.

          7.2 DUTY OF GENERAL  ADMINISTRATIVE AGENT. The General  Administrative
Agent's  sole  duty  with  respect  to the  custody,  safekeeping  and  physical
preservation of the Collateral in its possession, under Section 9-207 of the New
York UCC or  otherwise,  shall  b- to deal  with it in the  same  manner  as the
General  Administrative  Agent deals with similar  property for its own account.
Neither the General Administrative Agent, any Lender nor any of their respective
officers, directors,  employees or agents shall be liable for failure to demand,
collect or realize  upon any of the  Collateral  or for any delay in doing so or
shall be under any  obligation  to sell or otherwise  dispose of any  Collateral
upon the request of any Grantor or any other  Person or to take any other action
whatsoever  with  regard  to the  Collateral  or any part  thereof.  The  powers
conferred  on the General  Administrative  Agent and the Lenders  hereunder  are
solely to protect the General  Administrative Agent's and the Lenders' interests
in the Collateral and shall not impose any duty upon the General  Administrative
Agent or any Lender to exercise  any such  powers.  The  General  Administrative
Agent and the Lenders shall be  accountable  only for amounts that they actually
receive as a result of the exercise of such powers,  and neither they nor any of
their  officers,  directors,  employees  or agents shall be  responsible  to any
Grantor  for any act or  failure  to act  hereunder,  except for their own gross
negligence or willful misconduct.

          7.3  EXECUTION OF FINANCING  STATEMENTS.  Pursuant to Section 9-402 of
the New York UCC and any other  applicable  law,  each  Grantor  authorizes  the
General  Administrative  Agent to file or record financing  statements and other
filing or recording  documents  or  instruments  with respect to the  Collateral
without the  signature  of such  Grantor in such form and in such offices as the
General  Administrative Agent reasonably  determines  appropriate to perfect the
security interests of the General  Administrative Agent under this Agreement.  A
photographic  or other  reproduction  of this Agreement shall be sufficient as a
financing  statement  or other filing or recording  document or  instrument  for
filing or recording in any jurisdiction.

          7.4   AUTHORITY  OF  GENERAL   ADMINISTRATIVE   A2ENT.   Each  Grantor
acknowledges that the rights and responsibilities of the General  Administrative
Agent  under this  Agreement  with  respect to any action  taken by the  General
Administrative   Agent  or  the   exercise  or   non-exercise   by  the  General
Administrative  Agent of any option,  voting right,  request,  judgment or other
right or  remedy  provided  for  herein  or  resulting  or  arising  out of this
Agreement shall, as between the General Administrative Agent and the Lenders, be
governed  by the Credit  Agreement  and by such other  agreements  with  respect
thereto as may exist from time to time among  them,  but, as between the General
Administrative Agent and the Grantors, the General Administrative Agent shall be
conclusively  presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from  acting,  and no Grantor  shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.


                                       30
<PAGE>



                            SECTION 8. MISCELLANEOUS

          8.1  AMENDMENTS  IN WRITING.  None of the terms or  provisions of this
Agreement may be waived,  amended,  supplemented or otherwise modified except in
accordance with Section 14.1 of the Credit Agreement.

          8.2 Notices. All notices,  requests and demands to or upon the General
Administrative  Agent or any Grantor  hereunder  shall be effected in the manner
provided for in Section  14.2 of the Credit  Agreement;  PROVIDED  that any such
notice,  request or demand to or upon any  Guarantor  shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.

          8.3 NO WAIVER BY COURSE OF CONDUCT;  CUMULATIVE REMEDIES.  Neither the
General  Administrative  Agent  nor any  Lender  shall by any act  (except  by a
written  instrument  pursuant to Section 8.1),  delay,  indulgence,  omission or
otherwise  be deemed to have  waived  any right or remedy  hereunder  or to have
acquiesced in any Default or Event of Default.  No failure to exercise,  nor any
delay in  exercising,  on the part of the  General  Administrative  Agent or any
Lender,  any  right,  power or  privilege  hereunder  shall  operate as a waiver
thereof.  No  single  or  partial  exercise  of any  right,  power or  privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right, power or privilege.  A waiver by the General  Administrative
Agent or any Lender of any right or remedy  hereunder on any one occasion  shall
not  be   construed  as  a  bar  to  any  right  or  remedy  which  the  General
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative,  may be exercised singly
or concurrently  and are not exclusive of any other rights or remedies  provided
by law.

          8.4 ENFORCEMENT EXPENSES-,  INDEMNIFICATION. (a) Each Guarantor agrees
to pay or reimburse each Lender and the General Administrative Agent for all its
costs and  expenses  incurred in  collecting  against such  Guarantor  under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this  Agreement and the other Loan  Documents to which such Guarantor is a
party,  including,  without  litnitation,  the fees and disbursements of counsel
(including the allocated  fees and expenses of in-house  counsel) to each Lender
and of counsel to the General Administrative Agent.

          (b)  Each   Guarantor   agrees  to  pay,   and  to  save  the  General
Administrative Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting  from any delay in paying,  any and all stamp,  excise,
sales or other  taxes  which may be payable  or  determined  to be payable  with
respect to any of the Collateral or in connection  with any of the  transactions
contemplated by this Agreement.


                                       31
<PAGE>


          (c)  Each   Guarantor   agrees  to  pay,   and  to  save  the  General
Administrative  Agent and the Lenders  harmless from,  any and all  liabilities,
obligations,  losses,  damages,  penalties,  actions,  judgments,  suits, costs,
expenses or disbursements  of any kind or nature  whatsoever with respect to the
execution,  delivery,  enforcement,   performance  and  administration  of  this
agreement  to the extent the  Company  would be  required  to do so  pursuant to
subsection 14.5 of the Credit Agreement.

          (d) The agreements in this Section 8.4 shall survive  repayment of the
Obligations  and all other amounts  payable  under the Credit  Agreement and the
other Loan Documents.

          8.5 SUCCESSORS AND ASSIGNS.  This Agreement  shall be binding upon the
successors  and  assigns of each  Grantor  and shall inure to the benefit of the
General  Administrative  Agent and the Lenders and their successors and assigns;
PROVIDED  that no Grantor may assign,  transfer or delegate any of its rights or
obligations  under  this  Agreement  without  the prior  written  consent of the
General Administrative Agent.

          8.6 Set Off. Each Grantor  hereby  irrevocably  authorizes the General
Administrative  Agent and each Lender at any time and from time to time, without
notice to such Grantor or any other  Grantor,  any such notice  being  expressly
waived  by each  Grantor,  to  set-off  and  appropriate  and  apply any and all
deposits  (general or special,  time or demand,  provisional  or final),  in any
currency,  and any other credits,  indebtedness or claims,  in any currency,  in
each case  whether  direct or  indirect,  absolute  or  contingent,  matured  or
unmatured, at any time held or owing by the General Administrative Agent or such
Lender to or for the credit or the account of such Grantor,  or any part thereof
in such  amounts as the General  Administrative  Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Grantor to the
General Administrative Agent or such Lender hereunder and claims of every nature
and description of the General  Administrative Agent or such Lender against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or  otherwise,  as the General  Administrative  Agent or
such Lender may elect,  whether or not the General  Administrative  Agent or any
Lender  has  made  any  demand  for  payment  and  although  such   obligations,
liabilities   and  claims  may  be   contingent   or   unmatured.   The  General
Administrative  Agent and each Lender shall notify such Grantor  promptly of any
such set-off and the  application  made by the General  Administrative  Agent or
such  Lender of the  proceeds  thereof,  PROVIDED  that the failure to give such
notice shall not affect the validity of such setoff and application.  The rights
of the General  Administrative  Agent and each Lender under this Section 8.6 are
in addition to other rights and remedies (including,  without limitation,  other
rights of -set-off)  which the General  Administrative  Agent or such Lender may
have.

          8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate  counterparts  (including by
telecopy),  and all of said  counterparts  taken  together  shall be  deemed  to
constitute one and the same instrument.


                                       32
<PAGE>


          8.8 SEVERABILITY,. Any provision of this Agreement which is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

          8.9 SECTION HEADINGS.  The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction  hereof
or be taken into consideration in the interpretation hereof.

          8.10  INTEGRATION.   This  Agreement  and  the  other  Loan  Documents
represent the agreement of the Grantors,  the General  Administrative  Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no  promises,  undertakings,   representations  or  warranties  by  the  General
Administrative Agent or any Lender relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents.

          8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          8.12  SUBMISSION  TO  JURISDICTION;   Waivers.   Each  Grantor  hereby
irrevocably and unconditionally:

          (a)  submits  for  itself  and its  property  in any  legal  action or
proceeding  relating to this  Agreement and the other Loan Documents to which it
is a party,  or for  recognition  and  enforcement  of any  judgment  in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York,  the courts of the United States of America for the Southern  District
of New York, and appellate courts from any thereof-,

          (b) consents that any such action or proceeding may be brought in such
courts and waives any objection  that it may now or hereafter  have to the venue
of any such  action  or  proceeding  in any such  court or that  such  action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

          (c) agrees that  service of process in any such  action or  proceeding
may be effected by mailing a copy thereof by  registered  or certified  mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the General
Administrative Agent shall have been notified pursuant thereto;

          (d)  agrees  that  nothing  herein  shall  affect  the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and


                                       33
<PAGE>


          (e) waives,  to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal  action or  proceeding  referred to in
this Section any special, exemplary, punitive or consequential damages.

          8.13 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:

          (a) it has been advised by counsel in the  negotiation,  execution and
delivery of this Agreement and the other Loan Documents to which it is a party;

          (b) neither the  General  Administrative  Agent nor any Lender has any
fiduciary  relationship  with  or  duty  to  any  Grantor  arising  out of or in
connection  with this  Agreement  or any of the other  Loan  Documents,  and the
relationship   between  the  Grantors,   on  the  one  hand,   and  the  General
Administrative  Agent and Lenders,  on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

          (c) no joint venture is created  hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions  contemplated hereby among the
Lenders or among the Grantors and the Lenders.

          8.14  WAIVER  OF JURY  TRIAL.  EACH  GRANTOR  HEREBY  IRREVOCABLY  AND
UNCONDITIONALLY  WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY  COUNTERCLAIM  THEREIN.

          8.15  ADDITIONAL  Grantors.  Each  Subsidiary  of the Company  that is
required to become a party to this Agreement pursuant to subsection 9. 1 0(b) of
the Credit  Agreement  shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.

          8.16  RELEASES.  (a) At such  time  as the  Loans,  the  Reimbursement
Obligations,  the Acceptance Reimbursement Obligations and the other Obligations
shall  have been paid in full,  the  Commitments  have  been  terminated  and no
Letters of Credit or Acceptance Notes shall be outstanding, the Collateral shall
be  released  from  the  Liens  created  hereby,  and  this  Agreement  and  all
obligations  (other than those expressly stated to survive such  termination) of
the General Administrative Agent and each Grantor hereunder shall terminate, all
without  delivery of any instrument or performance of any act by any party,  and
all rights to the  Collateral  shall revert to the Grantors.  At the request and
sole  expense  of any  Grantor  following  any  such  termination,  the  General
Administrative  Agent shall deliver to such Grantor any  Collateral  held by the
General Administrative Agent hereunder,  and execute and deliver to such Grantor
such  documents  as such  Grantor  shall  reasonably  request to  evidence  such
termination.

          (b) If any of the Collateral  shall be sold,  transferred or otherwise
disposed of by any Grantor in a transaction  permitted by the Credit  Agreement,
then the General  Administrative  Agent, at the request and sole expense of such
Grantor, shall execute and deliver


                                       34
<PAGE>


to such  Grantor  all  releases  or  other  documents  reasonably  necessary  or
desirable for the release of the Liens created hereby on such Collateral. At the
request  and sole  expense  of the  Company,  a  Subsidiary  Guarantor  shall be
released from its obligations  hereunder in the event that all the Capital Stock
of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of
in a transaction  permitted by the Credit  Agreement;  PROVIDED that the Company
shall have delivered to the General  Administrative Agent, at least ten Business
Days prior to the date of the proposed  release,  a written  request for release
identifying the relevant Subsidiary Guarantor and the terms of the sale or other
disposition in reasonable  detail,  including the price thereof and any expenses
in connection  therewith,  together with a certification  by the Company stating
that such  transaction is in compliance with the Credit  Agreement and the other
Loan Documents.

          IN WITNESS WHEREOF,  each of the undersigned has caused this Guarantee
and Collateral  Agreement to be duly executed and delivered as of the date first
above written.

                                           LES, INC.

                                           LAIDLAW ENVIRONMENTAL SERVICES, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (US),
                                              INC.
                                           LES MERGER, INC.
                                           LES ACQUISITION, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF 
                                              ILLINOIS, INC.
                                           GSX CHEMICAL SERVICES OF OHIO, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (BDT),
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (FS), 
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (GS), 
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF 
                                               CHATTANOOGA, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF
                                               WHITE CASTLE, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES
                                               (RECOVERY), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (TS), 
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (IMPERIAL VALLEY), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (LOKERN), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF
                                               CALIFORNIA, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF 
                                               SOUTH CAROLINA, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (
                                               NORTH EAST), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (TES),
                                               INC.
                                           LAIDLAW CHEMICAL SERVICES, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (TOC),
                                               INC.


                                       35
<PAGE>



                                           LAIDLAW ENVIRONMENTAL SERVICES (TG), 
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES
                                               (ALTAIR), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (WT), 
                                               INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES OF 
                                               BARTOW, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (THERMAL TREATMENT), INC.
                                           LEMC, INC.
                                           LAIDLAW OSCO HOLDINGS, INC.

                                           LAIDLAW ENVIRONMENTAL SERVICES OF 
                                               NASHVILLE, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (CLIVE), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (LONE 
                                               AND GRASSY MOUNTAIN), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (TULSA), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (SAN ANTONIO), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (WICHITA), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               OF DELAWARE, INC.
                                           CORSAN TRUCKING, INC.
                                           USPCI, INC.  OF GEORGIA
                                           LAIDLAW ENVIRONMENTAL SERVICES (SAN 
                                               JOSE), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (SAWYER), INC.
                                           CHEMCLEAR, INC.  OF LOS ANGELES
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (ROSEMOUNT), INC.
                                           LES HOLDING'S, INC.
                                           EAST CARBON DEVELOPMENT FINANCIAL 
                                               PARTNERS, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (TUCKER), INC.
                                           NINTH STREET PROPERTIES, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (MT. 
                                               PLEASANT), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (DEER
                                               TRAIL), INC.


                                       36
<PAGE>


                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (MINNEAPOLIS), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES
                                               (LOS ANGELES), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (BATON ROUGE), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (PLAQUEMINE), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (BRIDGEPORT), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES (DEER 
                                               PARK), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (TIPTON), INC.
                                           LAIDLAW ENVIRONMENTAL, INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (SUSSEX), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (GLOUCESTER), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (CUSTOM TRANSPORT), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES 
                                               (ARAGONITE), INC.
                                           LAIDLAW ENVIRONMENTAL SERVICES DE 
                                               MEXICO, S.A. DE C.V.
                                            LAIDLAW ENVIRONMEN.-AL SERVICES 
                                               (PUERTO RICO), INC.

Acknowledged and Agreed to as 
of the date hereof by:

TORONTO DOMINION (TEXAS), INC.,

as General Administrative Agent

By:  ________________________________
     Name:
     Title:


                                       37
<PAGE>



                                                                      SCHEDULE I
                                                                      ----------

                         NOTICE ADDRESSES OF GUARANTORS

The notice address for each of the Guarantors is:

                         1301 Gervais Street, Suite 300
                         Columbia, South Carolina 29201


                                       
<PAGE>


<TABLE>
<CAPTION>


                                                                                                      Schedule 2 to
                                                                                GUARANTEE AND COLLATERAL AGREEMENT
                                                                                ----------------------------------

                        DESCRIPTION OF PLEDGED SECURITIES

Pledged Stock:
<S>                                     <C>             <C>            <C>        <C>    
                                                                      No. of 
                                        Class of         Stock        Shares     
Issuer                                   Stock          Cert. No.     Issued     Shareholder
------                                   -----          ---------     ------     -----------

LES, Inc. (fka Laidlaw Chem-            Common            6 & 7        212        Laidlaw Environmental
Waste, Inc.)                                                                      Services, Inc. (fka Rollins
                                                                                  Environmental Services, Inc.)

WHOLLY-OWNED SUBSIDIARIES

LES Acquisition, Inc.                   Common            001          1          LES, Inc.

Laidlaw Environmental                   Common            3 & 4        205        LES, Inc.
Services (US), Inc. /1/

LES Merger, Inc.                        Common            1            1000       Laidlaw Environmental
                                                                                  Services (US), Inc.

Laidlaw Environmental                   Common            2            500        Laidlaw Environmental
Services of Illinois, Inc.                                                        Services (US), Inc.

GSX Chemical Services of                Common            4            500        Laidlaw Environmental
Ohio, Inc.                                                                        Services (US), Inc.

Laidlaw Environmental                   Common            12           7,510      Laidlaw Environmental 
Services (BDT), Inc.                                                              Services (US), Inc.


                                       1
<PAGE>


Laidlaw Environmental                   Common            2            6,500      6,500 common shares (87%) 
(FS), Inc.                                                                        Services issued to Laidlaw
                                                                                  Environmental Services
                                                                                  (US), Inc.

                                                          2            1,000      1,000 common shares (13%)
                                                                                  issued to Laidlaw
                                                                                  Environmental Services
                                                                                  (Altair), Inc.

Laidlaw Environmental                   Common            12           10         Laidlaw Environmental 
Services (GS), Inc.                                                               Services (US), Inc.

Laidlaw Environmental                   Common            2            100        Laidlaw Environmental
Services of Chattanooga, Inc.                                                     Services (US), Inc.

Laidlaw Environmental                   Common            1            17,280     Laidlaw Environmental
Services of White Castle, Inc.                                                    Services (US), Inc.

Laidlaw Environmental                   Common            2            105        Laidlaw Environmental
Services (Recovery), Inc.                                                         Services (US), Inc.

Laidlaw Environmental                   Common            2            100        Laidlaw Environmental
Services (TS), Inc.                                                               Services (US), Inc.

Laidlaw Environmental                   Common            1            20         10 common shares (50%)
Services (Imperial Valley), Inc.                                                  issued to Laidlaw Environmental
                                                                                  Services of California, Inc.

                                                          2            10         10 common shares (50%)
                                                                                  issued to Laidlaw Environmental
                                                                                  Services (US), Inc

Laidlaw Environmental                   Common            2            13         3 common shares (23%)
Services (Lokern), Inc.                                                           issued to Laidlaw Environmental
                                                                                  Services (US), Inc.

                                        Common            1                       10 common shares (77%)
                                                                                  issued to Laidlaw Environmental
                                                                                  Services of California, Inc.

Laidlaw Environmental                   Common            3            100        Laidlaw Environmental Services
Services of California, Inc.  /2/                                                 (US), Inc.


                                        2
<PAGE>


Laidlaw Environmental                   Common            222          1          Laidlaw Environmental Services 
Services of South Carolina, Inc.                                                  (US), Inc.

Laidlaw Environmental                   Common            5            100        Laidlaw Environmental Services 
Services (North East), Inc.                                                       (US), Inc.

Corsan Trucking, Inc.                   Common            4            1000       750 common shares (75%)
                                                                                  issued to Laidlaw
                                                                                  Environmental Services
                                                                                  (US), Inc.

                                                                                 
                                                                                  250 common shares (25%)
                                                                                  issued to Laidlaw
                                                                                  Environmental Services
                                                                                  (US), Inc.
                                                                                  
Laidlaw Environmental Services          Common            7            10,000     Laidlaw Environmental Services
                                                                                  (US), Inc.

Laidlaw Chemical Services,              Common            7            3,000      Laidlaw Environmental Services
Inc.                                                                              (US), Inc.

Laidlaw Environmental                   Common            3            100        Laidlaw Environmental Services
Services (TOC), Inc.                                                              (US), Inc.

Laidlaw Environmental                   Common           3            1,000      Laidlaw Environmental Services
Services (TG), Inc.                                                               (US), Inc.

Laidlaw Environmental                   Common            3            1,000      Laidlaw Environmental Services
Services (Altair), Inc.                                                           (US), Inc.

Laidlaw Environmental                   Common            C-1          201,000    Laidlaw Environmental Services
Services (WT), Inc.                                                               (US), Inc.

Laidlaw Environmental                   Common            2            1,000      Laidlaw Environmental Services
Services of Bartow, Inc.                                                          (US), Inc.

Laidlaw Environmental                  Common            1            100        Laidlaw Environmental Services
Services (Thermal Treatment),                                                     (US), Inc.
Inc.

LEMC, Inc.                              Common            1            10         Laidlaw Environmental Services
                                                                                  (US), Inc.

                                        3


<PAGE>

Laidlaw Osco Holdings, Inc. /3/         Common            1            100        Laidlaw Environmental Services
                                                                                  (US), Inc.

Laidlaw Environmental                   Common            2            1,000      Laidlaw Osco Holdings, Inc.
Services of Nashville, Inc.

Laidlaw Environmental                   Common            11           1,000      Laidlaw Environmental Services
Services (Clive), Inc. fka                                                        (US), Inc.
USPCI Clive Incineration
Facility, Inc.

Laidlaw Environmental                   Common            9        3,076,872      Laidlaw Environmental Services
Services (Lone and Grassy                                                         (US), Inc.
Mountain), Inc. fka United
States Pollution Control, Inc.

Laidlaw Environmental                   Common            C-1          10,000     Laidlaw Environmental Services
Services (Tulsa), Inc. fka                                                        (US), Inc.
Hydrocarbon Recyclers, Inc.

Laidlaw Environmental                   Common            2            3,402      Laidlaw Environmental Services
Services (San Antonio), Inc.                                                      (US), Inc.
fka Hydrocarbon Recyclers, Inc.
of San Antonio

Laidlaw Environmental                   Common            2            100        Laidlaw Environmental Services
Services (Wichita), Inc.                                                          (US), Inc.
fka Hydrocarbon Recyclers, Inc.
of Wichita

Laidlaw Environmental                   Common            1            1,000      Laidlaw Environmental Services
Services of Delaware, Inc.                                                        (US), Inc.
fka Northeastern Remedial
Corporation

USPCI, Inc. of Georgia                  Common            1            100        Laidlaw Environmental Services
                                                                                  (US), Inc.

Laidlaw Environmental                   Common            C-1          100        Laidlaw Environmental Services
Services (San Jose), Inc. fka                                                     (US), Inc.
Solvent Service Co., Inc.


                                        4


<PAGE>


Laidlaw Environmental                   Common            C-1          100        Laidlaw Environmental Services
Services (Sawyer), Inc. fka                                                       (US), Inc.
Municipal Services Corporation

Chemclear, Inc. of Los                  Common            1            1,000      Laidlaw Environmental Services
Angeles, Inc.                                                                     (US), Inc.

Laidlaw Environmental                   Common            1            5,000      Laidlaw Environmental Services
Services (Rosemount), Inc.                                                        (US), Inc.
fka Minnesota Industrial
Containment Facility, Inc. 

/4/

LES Holdings, Inc. fka                  Common            1            1,000      Laidlaw Environmental Services
McDuffie County                                                                   (US), Inc.
Environmental Facility, Inc.

East Carbon Development                 Common            1            1,000      Laidlaw Environmental Services
Financial Partners, Inc.                                                          (US), Inc.

Laidlaw Environmental                   Common            1            100        Laidlaw Environmental Services
Services (Tucker), Inc. fka                                                       (US), Inc.
PPM, Inc. of Georgia

Ninth Street Properties, Inc.           Common            1            1,000      Laidlaw Environmental Services
                                                                                  (Tucker), Inc.

Laidlaw Environmental                   Common            2            1,000      LES, Inc.
Services (Mt. Pleasant), Inc.
fka Allworth of Tennessee, Inc.

Laidlaw Environmental                   Common            5            500        LES, Inc.
Services (Deer Trail), Inc. fka
Highway 36 Land
Development Co.

Laidlaw Environmental                   Common            11           3,000      LES, Inc.
Services (Minneapolis), Inc.
fka National Electric, Inc.
(Parent of Laidlaw
Environmental Services
(Aragonite), Inc.)


                                        5
<PAGE>


Laidlaw Environmental                   Common           4            1,000      LES, Inc.
Services (Los Angeles), Inc.
fka Rollins O.P.C. Inc.

Laidlaw Environmental                   Common            2            1,000      LES, Inc.
Services (Baton Rouge), Inc.
fka Rollins Environmental
Services (LA) Inc.

Laidlaw Environmental                   Common            2            1,000      LES, Inc.
Services (Plaquemine), Inc.
fka Rollins Environmental
Services of Louisiana, Inc.

Laidlaw Environmental                   Common            7            1,000      LES, Inc.
Services (Bridgeport), Inc. fka
Rollins Environmental
Services (NJ) Inc.

Laidlaw Environmental                   Common            2            1,000      LES, Inc.
Services (Deer Park), Inc. fka
Rollins Environmental
Services (TX) Inc.

Laidlaw Environmental                   Common            3            1,000      LES, Inc.
Services (Tipton), Inc. fka
Tipton Environmental
Technology, Inc.

Laidlaw Environmental, Inc.             Common            2            1,000      LES, Inc.
fka Rollins Environmental, Inc.

Laidlaw Environmental                   Common            2            500        LES, Inc.
Services Sussex), Inc. fka
Sussex Contractors, Inc.

Laidlaw Environmental                   Common            3            1,000      LES, Inc.
Services (Gloucester), Inc. fka
Gloucester County
Construction Co.

Laidlaw Environmental                   Common            2            1,000      LES, Inc.
Services (Custom Transport),
Inc. fka Custom Environmental
Transport, Inc.

Laidlaw Environmental                   Common            3            1,000      Laidlaw Environmental Services
Services (Aragonite), Inc. fka                                                    (Minneapolis), Inc.
Aptus, Inc.


                                        6
<PAGE>


OTHER U.S. SUBSIDIARIES AND
INVESTMENTS

/5/
/6/
/7/

Safety-Kleen Corp.                      Common            97086                   600100 issued to LES, Inc.
                                                          95677                   1000 issued to LES, Inc..

ViroGroup, Inc.                         Common                         795,214    397,607 common shares (50%)
                                                                                  issued to Laidlaw Osco
                                                                                  Holdings, Inc.


FOREIGN SUBSIDIARIES:

/8/

Laidlaw Environmental                   Common            4            1          issued to Laidlaw Chem-Waste
Services (Puerto Rico), Inc.                                                      Inc. now known as LES, Inc.

Laidlaw Environmental                   Class A           3            1600       1040 Class A shares issued to
Services (Canada) Ltd.                                                            LES, Inc.

                                        Class B           B-2          7300       4745 Class B shares issued to
                                                                                  LES, Inc.



                                       7
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

PLEDGED NOTES:


         ISSUER                     PAYEE                                       PRINCIPAL AMOUNT
         ------                     -----                                       ----------------
<S>                                 <C>                                         <C>
Safety-Kleen Corp.                  LES, Inc.                                   46,000,000

ViroGroup, Inc.   LES, Inc.         3,000,000

LES Acquisition, Inc.               Laidlaw Environmental Services, Inc.        575,325,906,409  /9/
                                    
LES Acquisition, Inc.               LES, Inc.                                   911,557,469.55

Sutton Street Realty Trust          Dizzy Bridge Realty Trust                   546,893.82 (as of January 1998)

</TABLE>

                                       8


<PAGE>


/1/  UPC Holding Corp. was merged into Laidlaw Environmental Services (US), Inc.
     on May 23, 1997.  UPC Holding Corp.  formerly had 100 common shares issued
     to Laidlaw  Environmental  Services  (US),  Inc. on  certificate  number 3.
     USPCI, Inc. was also merged in Laidlaw  Environmental  Services (US), Inc.
     on May 23, 1997. USPCI, Inc. formerly had 1000 common shares issued to UPC
     Holding Corp. on stock  certificate A. Redox,  Inc. was merged into Laidlaw
     Environmental  Services (US), Inc. on August 22, 1997. Redox, Inc. formerly
     had 100 common shares issued to Laidlaw Environmental Services (US), Inc.
     on stock certificate number 3.

/2/  Greenfield  Services  Corporation was  merged  into  Laidlaw  Environmental
     Services  of  California,  Inc.  on  July  30,  1997,  Greenfield  Services
     Corporation  formerly had 100,000  shares of common stock issued to Laidlaw
     Environmental  Services (US),  Inc.. on  certificate  number 2. Master Wash
     Products,  Inc..  formerly had  5,100,000  shares of common stock issued to
     Laidlaw Environmental Services (US) on certificate number C101.

/3/  Osco  Environmental  Services,  Inc. was merged into Laidlaw Osco Holdings,
     Inc. on August 21, 1997, Osco Environmental Services, Inc. formerly had 100
     shares of common stock issued to Laidlaw Osco Holdings, Inc. on certificate
     number 2.

/4/  USPCI of Pennsylvania, Inc. was dissolved on August 15, 1997.

/5/  USPCI of Mississippi,  Inc. has 2,000 common shares, certificate number 1R,
     previously pledged to John L. Maxey II as Escrow Agent under terms of First
     Amendment of Shareholder  Agreement  pursuant to Merger governing the USPCI
     of Mississippi, Inc. stock dated January 5, 1996.

/6/  Osco  Treatment  Systems of  Mississippi,  Inc.  has 1,000  common  shares,
     certificate  number 13, previously  pledged on 1/5/96 to Jon L. Maxey II as
     Escrow  Agent  under  the terms of  Shareholder  Agreement  governing  OSCO
     Treatment Systems of Mississippi, Inc., stock made 1/5/96.

/7/  ECDC  Environmental,  L.C.  was sold to Allied  Waste  Industries,  Inc. on
     November 30, 1997.

/8/  Laidlaw Environmental Services of Mexico, S.A. de C.V. was removed since it
     is not now and was not  previously  a subsidiary  of Laidlaw  Environmental
     Services,  Inc. Shares of this corporation are owned by Laidlaw Investments
     Ltd., a subsidiary of Laidlaw Inc.

/9/  A portion of the  indebtedness  evidenced by these promissory notes will be
     contributed  by the Company,  at the time of the Merger,  to the capital of
     Safety-Kleen (as surviving corporation of the Merger);  accordingly, on the
     Merger  Date,  these  promissory  notes  will be  released  by the  General
     administrative Agent and replaced by promissory notes in a lesser principal
     amount.


                                        9
<PAGE>

                                                                      Schedule 3

                            UCC FILING JURISDICTIONS
                      LAIDLAW ENVIRONMENTAL SERVICES, INC.


COMPANY NAME                                                        JURISDICTION
------------                                                        ------------

Chemclear, Inc. of Los Angeles                       Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Corsan Trucking, Inc.                                Louisiana*
                                                         East Baton Rouge Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

East Carbon Development Financial Partners, Inc.     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Utah*
                                                         Secretary of State

GSX Chemical Services of Ohio, Inc.                  Ohio*
                                                         Secretary of State
                                                         Cuyahoga County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Chemical Services, Inc.                      Massachusetts*
                                                         Secretary of State
                                                         Essex County
                                                         South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental, Inc.                          Delaware*
                                                         Secretary of State
                                                     Michigan
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                     Richland County

Laidlaw Environmental Services (Altair), Inc.        South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Texas*
                                                         Secretary of State

Laidlaw Environmental Services (Aragonite), Inc.     Delaware*
                                                         Secretary of State
                                                     Kansas
                                                         Secretary of State


                                        1
<PAGE>


                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

                                                     Utah
                                                         Secretary of State

Laidlaw Environmental Services (Baton Rouge), Inc.   Delaware*
                                                         Secretary of State
                                                     Louisiana
                                                         East Baton Rouge Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (BDT), Inc.           New York*
                                                         Secretary of State
                                                         Erie County
                                                     South Carolina
                                                         Secretary of State 
                                                         Richland County

Laidlaw Environmental Services (Bridgeport), Inc.    Delaware*
                                                         Secretary of State
                                                     New Jersey
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Clive)               Oklahoma*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Utah
                                                         Secretary of State

Laidlaw Environmental Services (Custom              Delaware*
Transport), Inc.                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Deer Park), Inc.     Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County


                                       2
<PAGE>


                                                     Texas
                                                         Secretary of State


Laidlaw Environmental Services (Deer Trail), Inc.    Colorado*
                                                         Secretary of State
                                                         Arapahoe County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (FS), Inc.            Delaware*
                                                         Secretary of State
                                                     Indiana
                                                         Secretary of State
                                                         Madison County
                                                     Louisiana
                                                         Calcasieu Parish
                                                         East Baton Rouge Parish
                                                         Iberville Parish
                                                         St. Charles Parish
                                                     Michigan
                                                         Secretary of State
                                                     South Carolina
                                                Secretary of State
                                                         Richland County
                                                     Texas
                                                         Secretary of State

Laidlaw Environmental Services (Gloucester), Inc.    Delaware*
                                                         Secretary of State
                                                     Louisiana
                                                         East Baton Rouge Parish
                                                     New Jersey
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Texas
                                                         Secretary of State

Laidlaw Environmental Services (GS), Inc.            Alaska
                                                         Secretary of State
                                                         Anchorage County
                                                         Fairbanks North County
                                                     California
                                                         Secretary of State


                                       3
<PAGE>


                                                         Alameda County
                                                         Orange County
                                                         Sacramento County
                                                         San Diego County
                                                         Santa Barbara County
                                                         Santa Clara County
                                                     Colorado
                                                         Secretary of State
                                                     Georgia
                                                         Bibb County
                                                     Kansas
                                                         Secretary of State
                                                     Oklahoma
                                                         Oklahoma County
                                                     Pennsylvania
                                                         Secretary of State
                                                         Dauphin County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Tennessee*
                                                         Secretary of State
                                                     Utah
                                                         Secretary of State

Laidlaw Environmental Services (Imperial             California*
Valley), Inc.                                            Secretary of State
                                                         Imperial County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Lokern), Inc.        California*
                                                         Secretary of State
                                                         Kern County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Lone and Grassy      Colorado
Mountain), Inc.                                          Secretary of State
                                                     Oklahoma*
                                                         Secretary of State
                                                         Woods County
                                                     South Carolina
                                                         Secretary of State


                                       4
<PAGE>


                                                         Richland County
                                                     Utah
                                                         Secretary of State

Laidlaw Environmental Services (Los Angeles), Inc.   California*
                                                         Secretary of State
                                                         Los Angeles County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Minneapolis), Inc.   Minnesota*
                                                         Secretary of State
                                                         Dakota County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Mt. Pleasant), Inc.  South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Tennessee*
                                                         Secretary of State

Laidlaw Environmental Services (North East), Inc.    Connecticut
                                                         Secretary of State
                                                         New Haven County
                                                     Massachusetts
                                                         Secretary of State
                                                         Essex County
                                                     New Hampshire*
                                                         Secretary of State
                                                         Rockingham County
                                                     New York
                                                         Secretary of State
                                                         Onondaga County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Plaquemine), Inc.    Delaware*
                                                         Secretary of State
                                                     Louisiana
                                                         Iberville Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County


                                       5
<PAGE>


Laidlaw Environmental Services (Recovery), Inc.      Louisiana*
                                                         Acadia Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Rosemount), Inc.     Minnesota*
                                                         Secretary of State
                                                         Dakota County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (San Antonio), Inc.   South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Texas*
                                                         Secretary of State

Laidlaw Environmental Services (San Jose), Inc.      California*
                                                         Secretary of State
                                                         Santa Clara County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Sawyer), Inc.        North Dakota
                                                         Secretary of State
                                                         Ward County
                                                     Oklahoma*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Sussex), Inc.        Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (TES), Inc.           Louisiana
                                                         East Baton Rouge Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Texas*
                                                         Secretary of State


                                       6
<PAGE>


Laidlaw Environmental Services (TG), Inc.            Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Lexington County
                                                         Richland County
                                                         Spartanburg County

Laidlaw Environmental Services (Thermal              Delaware*
Treatment), Inc.                                         Secretary of State
                                                     Louisiana
                                                         Grant Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Tipton), Inc.        Delaware*
                                                         Secretary of State
                                                     Missouri
                                                         Secretary of State
                                                         Moniteau County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (TOC), Inc.           South Carolina*
                                                         Secretary of State
                                                         Richland County
                                                         Spartanburg County

Laidlaw Environmental Services (TS), Inc.            Alabama
                                                         Secretary of State
                                                     Delaware*
                                                         Secretary of State
                                                     Florida
                                                         Secretary of State
                                                         Duval County
                                                         Pinellas County
                                                     Georgia
                                                         Dekalb County
                                                     Maryland
                                                         Secretary of State
                                                     Missouri
                                                         Secretary of State
                                                         St. Louis County


                                       7
<PAGE>


                                                     New Jersey
                                                         Secretary of State
                                                     North Carolina
                                                         Secretary of State
                                                         Rockingham County
                                                     Ohio
                                                         Secretary of State
                                                         Montgomery County
                                                     Pennsylvania
                                                         Secretary of State
                                                         Delaware County
                                                     South Carolina
                                                         Lexington County
                                                         Richland County
                                                     Tennessee
                                                         Secretary of State
                                                     Virginia
                                                         Secretary of State
                                                         Montgomery County
                                                     West Virginia
                                                         Secretary of State
                                                         Ohio County

Laidlaw Environmental Services (Tucker), Inc.        Georgia*
                                                         De Kalb County
                                                     Kansas
                                                         Secretary of State
                                                     Missouri
                                                         Secretary of State
                                                         Jackson County
                                                     Ohio
                                                         Secretary of State
                                                         Ashtabula County
                                                         Summit County
                                                     Pennsylvania
                                                         Secretary of State
                                                         Philadelphia County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (Tulsa), Inc.         Oklahoma*
                                                         Secretary of State
                                                         Tulsa County


                                       8
<PAGE>


                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (US), Inc.            Delaware*
                                                         Secretary of State
                                                     Massachusetts
                                                         Secretary of State
                                                         Essex County
                                                     Oklahoma
                                                         Oklahoma County
                                                         Tulsa County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Texas
                                                         Secretary of State
                                                     Utah
                                                         Secretary of State

Laidlaw Environmental Services (Wichita), Inc.           Colorado
                                                         Denver County
                                                     Kansas*
                                                         Secretary of State
                                                         Sedgwick County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services (WT), Inc.            Ohio*
                                                         Secretary of State
                                                         Franklin County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Tennessee
                                                         Secretary of State

Laidlaw Environmental Services, Inc.                 Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services of Bartow, Inc.       Florida*
                                                         Secretary of State
                                                         Polk County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County


                                       9
<PAGE>


Laidlaw Environmental Services of California, Inc.   Arizona
                                                         Secretary of State
                                                         Maricopa County
                                                     California*
                                                         Secretary of State
                                                         Contra Costa County
                                                         San Diego County
                                                         Santa Clara County
                                                     Nevada
                                                         Secretary of State
                                                         Washoe County
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services of Chattanooga, Inc.  South Carolina
                                                         Secretary of State
                                                         Richland County
                                                     Tennessee*
                                                         Secretary of State

Laidlaw Environmental Services of Delaware, Inc.     Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw Environmental Services of Illinois, Inc.     Illinois*
                                                         Secretary of State
                                                         Winnebago County
                                                     Michigan
                                                         Secretary of State
                                                     Minnesota
                                                         Secretary of State
                                                         Dakota County
                                                     South Carolina
                                                     Secretary of State
                                                         Richland County

Laidlaw Environmental Services of Nashville, Inc.    South Carolina
                                                         Secretary of State
                                                         Richland County

                                                     Tennessee*
                                                         Secretary of State


                                       10
<PAGE>


Laidlaw Environmental Services of South              South Carolina*
Carolina, Inc.                                           Secretary of State
                                                         Richland County
                                                         Sumter County

Laidlaw Environmental Services of White  Colorado*
Castle, Inc.                                             Secretary of State
                                                     Louisiana
                                                         Iberville Parish
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

LEMC, Inc.                                           Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

Laidlaw OSCO Holdings, Inc.                          Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

LES Acquisition, Inc.                                Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

LES Holding's, Inc.                                  Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

LES, Inc.                                            Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

LES Merger, Inc.                                     Delaware*
                                                         Secretary of State


                                                     South Carolina
                                                         Secretary of State
                                                         Richland County


                                       11
<PAGE>


Ninth Street Properties, Inc.                        Missouri*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

USPCI, Inc. of Georgia                               Delaware*
                                                         Secretary of State
                                                     South Carolina
                                                         Secretary of State
                                                         Richland County

* Denotes State of Incorporation


                                       12
<PAGE>


<TABLE>
<CAPTION>

                          FIXTURE FILING JURISDICTION

COMPANY NAME                                                       JURISDICTION
------------                                                       ------------
<S>                                                                <C>    

GSX Chemical Services of Ohio, Inc.                                Cuyahoga County, OH
Laidlaw Chemical Services, Inc.                                    Essex County, MA
Laidlaw Environmental Services (Altair), Inc.                      Colorado County, TX
Laidlaw Environmental Services (Aragonite), Inc.                   Montgomery County, KS
                                                                   Dakota County, MN
                                                                   Tooele County, UT
Laidlaw Environmental Services (Baton Rouge), Inc.                 East Baton Rouge Parish, LA
Laidlaw Environmental Services (BDT), Inc.                         Erie County, NY
Laidlaw Environmental Services (Bridgeport), Inc.                  Gloucester County, NJ
Laidlaw Environmental Services (Clive)                             Tooele County, UT
Laidlaw Environmental Services (Deer Park), Inc.                   Harris County, TX
Laidlaw Environmental Services (Deer Trail), Inc.                  Adams County, CO
Laidlaw Environmental Services (FS), Inc.                          Iberville Parish, LA
                                                                   Webster Parish, LA
                                                                   Genesee County, MI
                                                                   Harris County, TX
                                                                   Jefferson County, TX
Laidlaw Environmental Services (GS), Inc.                          Shelby County, TN
                                                                   Ozaukee County, WI
Laidlaw Environmental Services (Imperial Valley), Inc.             Imperial County, CA
Laidlaw Environmental Services (Lokern), Inc.                      Kern County, CA
Laidlaw Environmental Services (Lone and Grassy Mountain), Inc.    Tooele County, UT
                                                                   Major County, OK
Laidlaw Environmental Services (Los Angeles), Inc.                 Los Angeles County, CA
Laidlaw Environmental Services (Mt. Pleasant), Inc.                Maury County, TN
Laidlaw Environmental Services (North East), Inc.                  Essex County, MA
                                                                   Hartford County, CT
Laidlaw Environmental Services (Plaquemine), Inc.                  Iberville Parish, LA
Laidlaw Environmental Services (Recovery), Inc.                    Acadia Parish, LA
Laidlaw Environmental Services (Rosemount), Inc.                   Dakota County, MN
Laidlaw Environmental Services (Sawyer), Inc.                      Ward County, ND
Laidlaw Environmental Services (TES), Inc.                         Dallas County, TX
                                                                   Harris County, TX
Laidlaw Environmental Services (Thermal Treatment), Inc.           Parish of Grant, LA
Laidlaw Environmental Services (TOC), Inc.                         Spartanburg County, SC
Laidlaw Environmental Services (TS), Inc.                          Pinellas County, FL
                                                                   Prince Georges County, MD
                                                                   Essex County, NJ
                                                                   Rockingham County, NC
                                                                   Montgomery County, OH
                                                                   Robertson County, TN
                                                                   Montgomery County, VA
                                                                   Ohio County, WV


                                       13
<PAGE>


Laidlaw Environmental Services (Tucker), Inc.                      De Kalb County, GA
                                                                   Jackson County, MO
                                                                   Ashtabula County. OH
                                                                   Summit County, OH
                                                                   Philadelphia County, PA
                                                                   Johnson County, KS
Laidlaw Environmental Services (Tulsa), Inc.                       Tulsa County, OK
Laidlaw Environmental Services (WT), Inc.                          Franklin County, OH
                                                                   Davidson County, TN
Laidlaw Environmental Services of Bartow, Inc.                     Polk County, FL
Laidlaw Environmental Services of California, Inc.                 Maricopa County, AZ
                                                                   Contra Costa County, CA
                                                                   Los Angeles County, CA
                                                                   Sacramento County, CA
                                                                   San Bernadino County, CA
                                                                   San Diego County, CA
                                                                   Santa Clara County, CA
                                                                   Washoe County, NV
Laidlaw Environmental Services of Chattanooga, Inc.                Hamilton County, TN
Laidlaw Environmental Services of Illinois, Inc.                   Winnebago County, IL
Laidlaw Environmental Services of Nashville, Inc.                  Davidson County, TN
Laidlaw Environmental Services of South Carolina, Inc.             Sumter County, SC
Laidlaw Environmental Services of White Castle, Inc.               Iberville Parish, LA
Laidlaw Environmental Services (San Antonio), Inc.                 Bexar County, TX
                                                                   El Paso County, TX
Laidlaw Environmental Services (Wichita), Inc.                     Sedgwick County, KS


                                       14
</TABLE>

<PAGE>
                                                                   Schedule 4 to
                                              Guarantee and Collateral Agreement
                                              ----------------------------------
<TABLE>
<CAPTION>
   
                      LAIDLAW ENVIRONMENTAL SERVICES, INC.
                       CORPORATE ORGANIZATIONAL STRUCTURE
                       ----------------------------------
       -------------------------------------------------------------------------
       The following list sets forth the  subsidiaries of  Laidlaw Environmental
       Services, Inc.  as of APRIL 3, 1998.    Parent  subsidiary  relations are
       indicated by  indentations.  Unless  otherwise  indicated,  100%  of  the
       voting  securities of each subsidiary is owned by the indicated parent of
       such subsidiary.
       -------------------------------------------------------------------------
The Chief Executive Office for each company is 1301 Gervais Street, Suite 300, Columbia, South Carolina 29201
 =============================================================================================================
                                                                                               State of
                                                                                             Incorporation
     <S>                                                                                      <C>
-------------------------------------------------------------------------------------------- ----------------
     Laidlaw Environmental Services (US), Inc.                                                  Delaware
---- -----------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Lone and Grassy Mountain), Inc.                       Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Tulsa), Inc.                                     Oklahoma
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (San Antonio), Inc.                          Texas
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (Wichita), Inc.                              Kansas
---- ---- ---- ----  -------------------------------------------------------------------------  --- ----------
               USPCI of Mississippi, Inc. (50%)                                                 Mississippi
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services of Delaware, Inc.                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    ECDC East, L.C. (80%)                                                       Utah
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    ECDC Services, L.C. (80%)                                                   Utah
---- ---- --------- --------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Rosemount), Inc.                                      Minnesota
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Sawyer), Inc.                                         Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Tucker), Inc.                                         Georgia
---- ---- ------------------------------------------------------------------------------------  --------------
               Ninth Street Properties, Inc.                                                    Missouri
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (San Jose), Inc.                                       California
---- ---- ------------------------------------------------------------------------------------  --------------
          Chemclear, Inc. of Los Angeles                                                        Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          USPCI, Inc. of Georgia                                                                Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          LES Holdings, Inc.                                                                   Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          East Carbon Development Financial Partners, Inc.                                      Utah
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Imperial Valley), Inc. (50%)                          California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Lokern), Inc. (23%)                                   California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (North East), Inc.                                     New Hampshire
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Recovery), Inc.                                       Louisiana
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TES), Inc.                                            Texas
---- ---- ------------------------------------------------------------------------------------  --------------
               Corsan Trucking, Inc. (25%)                                                      Louisiana
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TG), Inc.                                             Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TOC), Inc.                                            South Carolina
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (TS), Inc.                                             Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Thermal Treatment), Inc.                              Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Corsan Trucking, Inc. (75%)                                                           Louisiana
---- ---- ------------------------------------------------------------------------------------  --------------
          GSX Chemical Services of Ohio, Inc.                                                   Ohio
---- ---- ------------------------------------------------------------------------------------  --------------
          LEMC, Inc.                                                                            Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Chemical Services, Inc.                                                       Massachusetts
---- ---- ------------------------------------------------------------------------------------  --------------

                                       1
<PAGE>

---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Altair), Inc.                                         Texas
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (FS), Inc. (13%)                                  Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (BDT), Inc.                                            New York
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (FS), Inc. (86%)                                       Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (GS), Inc.                                             Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Clive), Inc.                                          Oklahoma
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (WT), Inc.                                             Ohio
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw OSCO Holdings, Inc.                                                           Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services of Nashville, Inc.                                Tennessee
---- ---- ---- -------------------------------------------------------------------------------  --------------
               OSCO Treatment Systems of Mississippi, Inc. (50%)                                Tennessee
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Bartow, Inc.                                        Florida
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of California, Inc.                                    California
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Lokern), Inc. (77%)                              California
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Imperial Valley), Inc. (50%                      California
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Chattanooga, Inc.                                   Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of Illinois, Inc.                                      Illinois
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of South Carolina, Inc.                                South Carolina
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services of White Castle, Inc.                                  Colorado
---- ---- ------------------------------------------------------------------------------------  --------------
               LES Merger, Inc.                                                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Puerto Rico), Inc.                                    Puerto Rico
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Bridgeport), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Deer Park), Inc.                                      Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Baton Rouge), Inc.                                    Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Plaquemine), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Custom Transport), Inc.                               Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Los Angeles), Inc.                                    California
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Tipton), Inc.                                         Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Gloucester), Inc.                                     Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Deer Trail), Inc.                                     Colorado
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Mt. Pleasant), Inc.                                   Tennessee
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Minneapolis), Inc.                                    Minnesota
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Aragonite), Inc.                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Sussex), Inc.                                         Delaware
---- ---- ------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental, Inc.                                                           Delaware

==============================================================================================================
          LES Acquisition, Inc.                                                                 Delaware
==== ==== ====================================================================================  ==============
          SAFETY-KLEEN CORP. /1/                                                                 Wisconsin
==== ==== ====================================================================================  ==============
               Curbside, Inc. (49%)                                                             California
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Dirt Magnet, Inc.                                                                Colorado
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    The Midway Gas & Oil Company                                                Colorado
---- ---- ---- ---- --------------------------------------------------------------------------  --------------

/1/  On the Merger Date Safety-Kleen Corp. will merge with LES Acquisition, Inc. with the 
     surviving corporation being Safety-Kleen Corp.


                                        2
<PAGE>

               Safety-Kleen Canada, Inc.                                                        Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Environment Services et Machineries, Inc.                                 Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Elgint Corp.                                                                     Nevada
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Ilium B.V.                                                                       Dutch
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Espana S.A. (50%)                                              Spain
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Safety-Kleen Espana S.A. (50%)                                                   Spain
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Membrex, Inc. (6%)                                                               Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Nucer, Inc.                                                                      Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Envirosystems Company                                          California
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                         Safety-Kleen Envirosystems Company of Puerto Rico, Inc.                Indiana
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
               Petrocon, Inc.                                                                   Delaware
---- ---- ---- ------------------------------------------------------------------------------  --------------
               Phillips Acqusition Corp.                                                        Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Aviation, Inc.                                                      Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               SK Insurance Company                                                             Vermont
---- ---- ---- -------------------------------------------------------------------------------  --------------
               SK Real Estate, Inc.                                                             Illinois
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Belgium, S.A.                                                       Belgium
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Beteiligungs - GmbH                                                 Germany
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Grundbesitz GmbH                                               Germany
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Safety-Kleen Deutschland GmbH                                               Germany
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                         Orm-Bergold Chemie GmbH & Co. KG (50%)                                 German Ptnsp.
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
                         Orm-Chemie GmbH                                                        Germany
---- ---- ---- ---- ---- ---------------------------------------------------------------------  --------------
                              Orm-Bergold Chemie GmbH & Co. KG  (50%)                           German Ptnsp.
---- ---- ---- ---- ---- ---- ----------------------------------------------------------------  --------------
               Safety-Kleen (France) S.A.                                                       French
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen International, Inc.                                                 Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen U.K. Limited                                                        UK
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Safety-Kleen Ireland Limited                                                Ireland
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Safety-Kleen Italia S.p.A.                                                       Italy
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Oil Recovery Co.                                                    Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Safety-Kleen Oil Services, Inc.                                                  Delaware
---- ---- ---- -------------------------------------------------------------------------------  --------------
               The Solvents Recovery Service of New Jersey, Inc.                                New Jersey
---- ---- ---- -------------------------------------------------------------------------------  --------------
               3E Company Environmental, Ecological and Engineering (80%)                       California
---- ---- ---- -------------------------------------------------------------------------------  --------------
----------------------------------------------------------------------------------------------  --------------
          Laidlaw Environmental Services (Canada) Ltd.                                          Canada
---- ---- ------------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services Ltd.                                              Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (B.C.) Ltd.                                  Canada
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Sarnia) Ltd.                                     Ontario
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    1197296 Ontario Inc.                                                        Ontario
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Quebec) Ltd.                                     Quebec
---- ---- ---- -------------------------------------------------------------------------------  --------------
                    Laidlaw Environmental Services (Mercier) Ltd.                               Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
                    Les Entreprises D'Incineration Industrielle Tricil Inc.                     Quebec
---- ---- ---- ---- --------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Ryley) Ltd.                                      Alberta
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Atlantic) Limited                                Nova Scotia
---- ---- ---- -------------------------------------------------------------------------------  --------------
               Laidlaw Environmental Services (Guelph), Inc.                                    Ontario

==============================================================================================================
</TABLE>
                                       3
<PAGE>



<TABLE>
<CAPTION>

SCHEDULE 5  LOCATION OF INVENTORY AND EQUIPMENT

========================================================== ============================================================== ==========
                     NAME OF GRANTOR                        LOCATION OF INVENTORY AND EQUIPMENT    OTHER LOCATIONS
                                                                                                      (ADDRESS)
<S>                                                         <C>                                    <C>    

----------------------------------------------------------- -------------------------------------- ---------------------------------
GSX Chemical Services of Ohio, Inc.                         7415 Bessemer Avenue                   2516 Train Ave.
                                                            Cleveland, OH 44127                    Cleveland OH 44113
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tulsa), Inc.                5324 W 46th Str South                  None
                                                            Tulsa, OK 74107
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (San Antonio), Inc.          4303 Profit Drive                      4403 Dividend  Ste 101
                                                            San Antonio, TX 78219                  San Antonio TX 78219
                                                                                                   ---------------------------------
                                                                                                   11520 Confederate Drive
                                                                                                   El Paso TX 79936
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Wichita), Inc.              2549 N New York Street                 4770 Forest Street, Suite E
                                                            Wichita, KS 67219                      Denver, CO 80216
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Chemical Services, Inc.                             221 Sutton Street                      300 Canal Street
                                                            North Andover, MA 01845                Lawrence, MA 01845
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Altair), Inc.               P.O. Box 226                           None
                                                            Altair, TX 77412
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Atlantic ) Limited          P.O. Box 188                           10 Thornhill Drive Unit #2
                                                            640 McElmon Rd                         Dartmouth, Nova Scotia B3B 1F1
                           Debert, Nova Scotia B0M 1G0
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (B.C.) Ltd.                  7483 Progress Way                      7842 Progress Way
                                                            Delta, British Columbia V4G 1A3        Delta, BC   V4G 1A4
                                                                                                   ---------------------------------
                                                                                                   9842 Milwaukee Way
                                                                                                   Prince George, BC  V2I 2C2
                                                                                                   ---------------------------------
                                                                                                   2789 Highway 97N
                                                                                                   Kelowna, BC V1X 4J8
                                                                                                   ---------------------------------
                                                                                                   7783 Progress Way
                                                                                                   Delta, BC V4G 1A3
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (BDT), Inc.                  4255 Research Parkway                  None
                                                            Clarence, NY 14031

<PAGE>
                                                                               2



----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services de Mexico, S.A. de C.V.      Blbd. Miguel de la Madrid, S/N         None
                                                            Jardines del Aeropuerto
                          Cuidad Juarez, Chih., Mexico
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (FS), Inc.                   2202 Genoa Red Bluff Road              4475 Dort Highway
                                                            Houston, TX 77034                      Burton MI 48529
                                                                                                   ---------------------------------
                                                                                                   * 12501 Strang Road
                                                                                                   La Porte, TX 77571
                                                                                                   ---------------------------------
                                                                                                   *Hwy 225
                                                                                                   Deer Park, TX
                                                                                                   ---------------------------------
                                                                                                   *Hwy 35 South & FM 524
                                                                                                   Sweeny, TX 77480
                                                                                                   ---------------------------------
                                                                                                   *Tidal Road
                                                                                                   Deer Park, TX
                                                                                                   ---------------------------------
                                                                                                   *Hwy 3142
                                                                                                   Taft, LA 70057
                                                                                                   ---------------------------------
                                                                                                   2027 Battleground Road
                                                                                                   La Porte, TX 77571
                                                                                                   ---------------------------------
                                                                                                   13351 Scenic Hwy
                                                                                                   Baton Rouge, LA 70807-1021
                                                                                                   ---------------------------------
                                                                                                   518 Andover Road
                                                                                                   Anderson IN 46013
                                                                                                   ---------------------------------
                                                                                                   130 Production Drive
                                                                                                   Sulphur, LA 70663
                                                                                                   ---------------------------------
                                                                                                   52735 Clark Road
                                                                                                   White Castle LA 70788
                                                                                                  ----------------------------------
<PAGE>
                                                                               3
                                                                                                   
                                                                                                   P. O. Box 5618 (77640-0618)
                                                                                                   Highway #73
                                                                                                   Port Arthur TX 77640
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (GS), Inc.                   902 South Main Street                  76 Cobb Street
                                                            Saukville, WI 53080                    Atoka, TN 38004
                                                                                                   ---------------------------------
                                                                                                   3528 Industrial Way
                                                                                                   Fairbanks AK 99701
                                                                                                   ---------------------------------
                                                                                                   6414 South Eastern Ave.
                                                                                                   Oklahoma City, OK 73149-5134
                                                                                                   ---------------------------------
                                                                                                   Contractor Trailer Yard
                                                                                                   Corner of Dean and Kilzer
                                                                                                   McClellan AFB
                                                                                                   North Highlands, CA 95652
                                                                                                   ---------------------------------
                                                                                                   3536 Fite Road
                                                                                                   Millington, TN 38053
                                                                                                   ---------------------------------
                                                                                                   11770 E. Warner Ave. Suite 226
                                                                                                   Fountain Valley, CA 92708
                                                                                                   ---------------------------------
                                                                                                   2381 Mariner Square Dr. Suite 175
                                                                                                   Alameda CA 94501
                                                                                                   ---------------------------------
                                                                                                   155 West 1st Avenue
                                                                                                   Anchorage AK 99501
                                                                                                   ---------------------------------
                                                                                                   2732 South 3600 West Suite H
                                                                                                   West Valley City UT 84119
                                                                                                   ---------------------------------
                                                                                                   Stark Road Bldg. 6672/CHWSF
                                                                                                   Dugway, UT 84022
                                                                                                   ---------------------------------
                                                                                                   3902 Northside Dr. Suite B-5
                                                                                                   Macon GA 31210
                                                                                                   ---------------------------------
                                                                                                   1031 Bay Blvd. Suite K
                                                                                                   Chula Vista, CA 91911
                                                                                                   ---------------------------------
<PAGE>
                                                                               4
                                                                                                   
                                                                                                   Golden Sands Building #8, Suite 4
                                                                                                   Dubai, UAE
                                                                                                   ---------------------------------
                                                                                                   NASA Ames Research
                                                                                                   Mail Stop 19-21
                                                                                                   Moffett Field CA 94035-1000
                                                                                                   ---------------------------------
                                                                                                   8th Floor SISMO Bldg.
                                                                                                   P.O. Box 1082
                                                                                                   Damman, Saudi Arabia 31431
                                                                                                   ---------------------------------
                                                                                                   8437 Quivira Road
                                                                                                   Lenexa, KS 66215
                                                                                                   ---------------------------------
                                                                                                   270 Storke Road, Suite 6
                                                                                                   Goleta, CA 93117
                                                                                                   ---------------------------------
                                                                                                   6130 Old Jonestown Rd, Suite A
                                                                                                   Harrisburg, PA 17112
                                                                                                   ---------------------------------
                                                                                                  
                                                                                                   72nd & Quebec Street Bldg 785
                                                                                                   Commerce City, CO 80022          
                                                                                                   ---------------------------------
                                                                                                   401 Ponce de Leon Ave.
                                                                                                   Puerta de la Tierra
                                                                                                   San Juan, PR 00906
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Imperial Valley), Inc.      5295 South Garvey Rd                   None
                                                            Westmorland, CA 92281
                                                                                                   ---------------------------------

----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Lokern), Inc.               2500 West Lokern Rd                    None
                                                            Buttonwillow, CA 93206
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services Ltd.                         7483 Progress Way                      7842 Progress Way
                                                            Delta, British Columbia V4G 1A3        Delta, BC   V4G 1A4
                                                                                                   ---------------------------------
                                                                                                   1790 Ironstone Drive
                                                                                                   Burlington, Ontario L7L 5V3
                                                                                                   ---------------------------------
<PAGE>
                                                                               5
                                                                                                   4090 Telfer Rd RR#1
                                                                                                   Corunna, Ontario N0N 1G0
                                                                                                   ---------------------------------
                                                                                                   2128 River Road
                                                                                                   London, Ontario N6A 4C3
                                                                                                   ---------------------------------
                                                                                                   551 Avonhead Road
                                                                                                   Mississauga, Ontario L5J 4B1
                                                                                                   ---------------------------------
                                                                                                   1831 Allanport Road
                                                                                                   Thorold, Ontario L2V 3Y9
                                                                                                   ---------------------------------
                                                                                                   1829 Allanport Road
                                                                                                   Thorold, Ontario L2V 3Y9
                                                                                                   ---------------------------------
                                                                                                   5369 Maingate Drive
                                                                                                   Mississauga, Ontario L4W 1G6
                                                                                                   ---------------------------------
                                                                                                   12851 No. 5 Road
                                                                                                   Richmond, BC V7A 4E9
                                                                                                   ---------------------------------
                                                                                                   265 North Front Street Ste 502
                                                                                                   Sarnia, Ontario N7T 7X1
                                                                                                   ---------------------------------
                                                                                                   331 Andover Park East
                                                                                                   Tukwilla, WA 98188
                                                                                                   ---------------------------------
                                                                                                   1147 Henry Avenue
                                                                                                   Winnipeg, Manitoba R3E 1V6
                                                                                                   ---------------------------------
                                                                                                   333 McPhillips
                                                                                                   Winnipeg, Manitoba R3E 2K9
                                                                                                   ---------------------------------
                                                                                                   935B Henry Avenue
                                                                                                   Winnipeg, Manitoba R3E 3L3
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Mercier) Ltd./Services      1294 boul. Ste-Marguerite              None
Environnementaux Laidlaw (Mercier) Ltee                     Ville Mercier, Quebec J6R 2L1
----------------------------------------------------------- -------------------------------------- ---------------------------------
<PAGE>
                                                                               6

Laidlaw Environmental Services (North East), Inc.           221 Sutton Street                      69 Eastern Steel Road
                                                            North Andover, MA 01845                Milfort, CT 06460
                                                                                                   ---------------------------------
                                                                                                   360 Merrimack Street
                                                                                                   Lawrence MA 01843
                                                                                                   ---------------------------------
                                                                                                   8E Industrial Way
                                                                                                   Salem NH 03079
                                                                                                   ---------------------------------
                                                                                                   300 Canal Street
                                                                                                   Lawrence, MA 01843
                                                                                                   ---------------------------------
                                                                                                   18 Corporate Circle
                                                                                                   E. Syracuse, NY 13057
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Bartow, Inc.              170 Bartow Municipal Airport           None
                                                            Bartow, FL 33830
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of California, Inc.          1040 Commercial Street, Ste 101        4501 Pacheco Blvd.
                                                            San Jose, CA 95112                     Martinez, CA 94553
                                                                                                   ---------------------------------
                                                                                                   750 Design Court Suite 105
                                                                                                   Chula Vista, CA 91911
                                                                                                   ---------------------------------
                                                                                                   1340 West Lincoln Street
                                                                                                   Phoenix, AZ 85007
                                                                                                   ---------------------------------
                                                                                                   1335 W. Lincoln Street
                                                                                                   Phoenix, AZ 85007
                                                                                                   ---------------------------------
                                                                                                   1343 W. Lincoln Street
                                                                                                   Phoenix, AZ 85007
                                                                                                   ---------------------------------
                                                                                                   1200 Marietta Way
                                                                                                   Sparks, NV 89431
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Chattanooga, Inc.         3300 Cummings Rd                       None
                                                            Chattanooga, TN 37419
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Illinois, Inc.            6125 N. Pecatonica Rd                  12333 Belden Court
                                                            Pecatonica, IL 61063                   Livonia, MI 48150
                                                                                                   ---------------------------------
<PAGE>
                                                                               7

                                                                                                   21750 Cedar Avenue
                                                                                                   Lakeville, Minnesota 55044
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Nashville, Inc.           7140 Centennial Place                  7230 Centennial Place
                                                            Nashville, TN 37209                    Nashville, TN 37209
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of South Carolina, Inc.      Rte 1 Box 255                          None
                                                            Pinewood, SC 29125
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of White Castle, Inc.        52735 Clark Road                       None
                                                            White Castle, LA 70788
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Puerto Rico), Inc.          401 Ponce de Leon Avenue               None
                                                            San Juan, PR 00906-6561
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Quebec) Ltd./ Services      7305 boul. Marie Victorin Bureau 20    6785 Route 132
Environnementaux Laidlaw (Quebec) Ltee                      Brossard, Quebec  J4W 1A6              Ste. Catherine, Quebec J0L 1E0
                                                                                                   ---------------------------------
                                                                                                   400 rue Gallipeau, Rang 5
                                                                                                   Thurso, Quebec J0X 3B0
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Recovery), Inc.             2029 Bayou Plaquemine Rd               None
                                                            Rayne, LA 70578
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Ryley), Inc.                PO Box 390, 1 mile north of            None
Hwy 14 on SR-854                                                             
Ryley, Alberta T0B 4A0
----------------------------------------------------------- -------------------------------------- ------------------
Laidlaw Environmental Services (TES), Inc.                  500 Battleground Rd                    8004 Chancellor Row
                                                            LaPorte, TX 77571                      Dallas, TX 75247
                                                                                                   ---------------------------------
                                                                                                   13351 Scenic Highway
                                                                                                   Baton Rouge, LA 70807
----------------------------------------------------------- -------------------------------------- -----------------
Laidlaw Environmental Services (TG), Inc.                   350 Railroad Street                    Route 1, Box 256
                                                            Roebuck, SC 29376                      Pinewood, SC 29376
                                                                                                   ---------------------------------
<PAGE>
                                                                               8

                                                                                                   411 Burton Road
                                                                                                   Lexington, SC 29072
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Thermal Treatment), Inc.    3763 Highway 471                       None
                                                            Colfax, LA 71417
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (TOC), Inc.                  301 Railroad Street                    None
                                                            Roebuck, SC 29376
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (TS), Inc.                   208 Watlington Industrial Dr.          3527 Whiskey Bottom Rd
                                                            Reidsville, NC 27320                   Laurel, MD 20724
                                                                                                   ---------------------------------
                                                                                                   1875 Forge Street
                                                                                                   Tucker, GA 30084
                                                                                                   ---------------------------------
                                                                                                   411 Burton Road
                                                                                                   Lexington, SC 29072
                                                                                                   ---------------------------------
                                                                                                   2903 Commerce Street, Suite C
                                                                                                   Blacksburg, VA 24060
                                                                                                   ---------------------------------
                                                                                                   5303 126th Avenue North
                                                                                                   Clearwater, FL 34620
                                                                                                   ---------------------------------
                                                                                                   4296 Rider Rail North
                                                                                                   Bldg. E
                                                                                                   Earth City, Missouri 63045
                                                                                                   ---------------------------------
                                                                                                   1608 13th Avenue South Suite 312
                                                                                                   Birmingham, AL 35205
                                                                                                   ---------------------------------
                                                                                                   175 Route 46 West  Unit D
                                                                                                   Fairfield, NJ 07004
                                                                                                   ---------------------------------
                                                                                                   2815 Old Greenbrier Pike
                                                                                                   Greenbrier, TN 37073-4514
                                                                                                   ---------------------------------
                                                                                                   7755 Paragon Rd  Ste 108
                                                                                                   Dayton, OH 45459
                                                                                                   ---------------------------------
<PAGE>
                                                                               9

                                                                                                   5150 West 12th Street
                                                                                                   Jacksonville, FL 32254
                                                                                                   ---------------------------------
                                                                                                   Dutton's Mill Business Park
                                                                                                   385 Turner Way
                                                                                                   Aston, PA 19014
                                                                                                   ---------------------------------
                                                                                                   99 Murray Hill Parkway
                                                                                                   East Rutherford, NJ 07073
                                                                                                   ---------------------------------
                                                                                                   Route 1, Box 137
                                                                                                   Valley Grove, WV 26060
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (WT), Inc.                   3670 Lacon Road                        1640 Antioch Pike
                                                            Hilliard, OH 43026-1221                Antioch, TN 37013-2799
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Rosemount), Inc.            13425 Courthouse Blvd.                 None
                                                            Rosemount, MN 55068
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Sawyer), Inc.               PO Box 1568                            None
                                                            Sawyer, ND 58781
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Guelph), Inc.               520 Southgate Drive                    145 Henderson Drive
                                                            Guelph, Ontario N1G 4P5                Regina, Saskatchewan S4N 5W4
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tucker), Inc.               806 Genessee                           4105 Whitaker Ave.
                                                            Kansas City, MO 64101                  Philadelphia, PA 19124
                                                                                                   ---------------------------------
                                                                                                   1302 West 38th Street &  
                                                                                                   1312 West 38th Street
                                                                                                   Ashtabula, OH 44004
                                                                                                   ---------------------------------
                                                                                                   1875 Forge Street
                                                                                                   Tucker, GA 30084
                                                                                                   ---------------------------------
                                                                                                   4720-B Stone Drive
                                                                                                   Tucker, GA 30084
                                                                                                   ---------------------------------
                                                                                                   1672 E. Highland Rd
                                                                                                   Twinsburg, OH 44087
                                                                                                   ---------------------------------
<PAGE>
                                                                              10

                                                                                                   19930 West 157th Street
                                                                                                   Olathe, KS 66062
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (San Jose), Inc.             1040 Commercial Str, Ste 109           660 Lenfest Road
                                                            San Jose, CA 95112                     San Jose, CA 95133
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Lone and Grassy             5665 Flatiron Parkway                  Rte 2, Box 170
Mountain), Inc.                                             Boulder, CO 80301                      Waynoka, OK 73860-9622
                                                                                                   ---------------------------------
                                                                                                   PO Box 22750
                                                                                                   Salt Lake City, UT 84122
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Clive), Inc.                PO Box 22285                           None
                                                            Clive, UT 84122-0285
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (US), Inc.                   1301 Gervais Street                    1301 South Broadway  Suite 201
                                                            Columbia, SC 29201                     Edmond, OK 73034-3953
                                                                                                   ---------------------------------
                                                                                                   8960 North Highway 40
                                                                                                   Lake Point, UT 84074
                                                                                                   ---------------------------------
                                                                                                   4322 South 49th West Ave.
                                                                                                   Tulsa, OK 74107
                                                                                                   ---------------------------------
                                                                                                   515 West Greens Rd Suite 600
                                                                                                   Houston TX 77067
                                                                                                   ---------------------------------
                                                                                                   127 South 500 East, Suite 675
                                                                                                   Salt Lake City UT 84102
                                                                                                   ---------------------------------
                                                                                                   221 Sutton Street
                                                                                                   North Andover MA 01845
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Deer Park), Inc.            2027 Battleground Road                 Leacon - Sun Belt
                                                            Deer Park, TX 77536                    9231 Lambright Road
                                                                                                   Houston, TX 77075
----------------------------------------------------------- -------------------------------------- ---------------------------------
<PAGE>
                                       11


Laidlaw Environmental Services (Baton Rouge), Inc.          13351 Scenic Highway                   None
                                                            Baton Rouge, LA 70807
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Plaquemine), Inc.           32655 Gracie Lane                      None
                                                            Plaquemine, LA 70764
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Los Angeles), Inc.          5756 Alba Street                       1820 48th Place
                                                            Los Angeles, CA 90058                  Los Angeles, CA 90058
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tipton), Inc.               1 mile East Hwy 50 Box 849             None
                                                            Tipton, MO 65081
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Deer Trail), Inc.           10855 East Highway 36                  None
                                                            Deer Trail, CO 80105
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Mt. Pleasant), Inc.         101 South Park Drive                   None
                                                            Mt. Pleasant, TN 38474
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Aragonite), Inc.            11600 North Aptus Road                 Hwy 169 North
                                                            Aragonite, UT 84029                    Coffeyville Industrial Park
                                                                                                   Coffeyville, KS 67337
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Minneapolis), Inc.          21750 Cedar Ave. South                 None
                                                            Lakeville, MN 55044
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Bridgeport), Inc.           Route 322 & I-295                      None
                                                            Bridgeport, NJ 08014
----------------------------------------------------------- -------------------------------------- ---------------------------------
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental, Inc.                                 3985 Research Park Drive               3965 Research Park Drive
                                                            Ann Arbor, MI 48108                    Ann Arbor, MI 48108
----------------------------------------------------------- -------------------------------------- ---------------------------------
----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Gloucester), Inc.           Route 322 & I-295                      2027 Battleground Road
                                                            Bridgeport, NJ 08014                   Deer Park, TX 88537
                                                                                                   ---------------------------------
                                                                                                   ---------------------------------
                                                                                                   13351 Scenic Highway
                                                                                                   Baton Rouge, LA 70807-1021
                                                                                                   ---------------------------------
                                                                                                   ---------------------------------
Corsan Trucking, Inc.                                       1301 Gervais Street
                                                            Columbia, SC 29201
                                                                                                   ---------------------------------
</TABLE>



*  Customer owned facility.  Laidlaw  Environmental  operating under a long term
   contract (over 1 year).



<PAGE>

<TABLE>
<CAPTION>

                                                                                                                  Schedule 6
                        PATENTS, COPYRIGHTS & TRADEMARKS
* = ABANDONED
----------------------------------------------------------------------------------------------------------------------------
Item Number        Country   Issued      Title                                           Assignee                Managed By 
----------------------------------------------------------------------------------------------------------------------------
<S>                <C>     <C>           <C>                                             <C>                     <C>    

a.                 Canada  applied for   "ENCORE" Trademark                              Laidlaw Inc.
b.                 US                    "Accupak" Service Mark                          USPCI?
c.                 US                    "HRI" Service Marks                             USPCI?
d.                 US                    "MUST" Service Mark                             USPCI?
e.                 US                    "SAFEWASTE" Service Mark                        USPCI?
f.                 US                    "TRANSCORE"Service Mark                         USPCI?
g.                 US                    "PPM"Trademark                                  USPCI?
h.                 US                    "The Generator's Journal" Trademark             USPCI?
i.                 US                    "Trans-End" Copyright                           PPM, Inc. of Georgia
j.   491,058       EPO       6/24/92     Improvements In Vapor Solvent Decontam PCB      PPM, Inc. of Georgia               
                                         Transformer C  
k.   1,520,147     US        01/10/89    "RES" and Design Trademark/Service Mark         RESI                    Inhouse    
l.   1.561,373     US        10/17/89    "APTUS" Trademark/Service Mark                  Aptus. Inc.             Inhouse    
m.   1,628,656     US        12/18/90    "Trans-End" Service Mark                        PPM. Inc. of Georgia?
n.   1,700,864     US         7/14/92    "TES" Service Mark                              TES?                               
o.   1,894,484     US         5/16/95    "Earth Academy" Name Trademark/Service  Mark    LESI                    Inhouse    
p.   1,908,234     US        08/01/95    "Earth Academy" Logo Trademark/ServiceMark      LESI                    Inhouse    
q.   2,052,342     US        04/15/97    "Rollins Environmental Services" Trademark/     RESI                    Inhouse    
                                         Service Mark
r.   2,092,741     Canada    05/14/92    Improvements In Vapor Solvent Decontam PCB      PPM, Inc. of Georgia
                                         Transformer C  
s.   4,186,605     Japan     07/03/96    Improvements in Vapor Solvent Decontam PCB      PPM. Inc. of Georgia
                                         Transformer C  
t.   4,373,958     US                    Road Base Stabilization Method Using Lime 
                                         Kiln Dust
u.   4,464,081     US        08/07/84    Process and Structure for Storing and           RESI                    Finnegan,
                                         Isolating hazardous                                                     Henderson
v.   4,530,292     US                    Treatment of Acidic Organic and Alkaline 
                                         Inorganic Wastes
w.   4,637,928     US                    Method and Apparatus for Neutralizing           BDT?
                                         Reactive Materials Suc 
x.   4,943,165     US        7/24/90*    Improved Sludge Stabilizing Method and          U.S. Poll Contr         Biebel & French
                                         Apparatus  
y.   4.983,222     US        1/8/91      Improvements in Vapor Solvent Decontam PCB      PPM. Inc. of Georgia                   
                                         Transformer C
z.   5,009,266     US        4/23/91     Method for In Silu Contaminant  Extraction      Solvent Services        Inhouse        
                                         From Soil
aa.  5,040,900     US        8/20/91     Sludge Stabilizing Method and Apparatus         U.S. Poll Contr         Biebel & French
bb.  5,040,973     US        08/20/91    Rotary Reactor and Lifter Assembly              RES (TX)                Thompson, Hine
                                                                                                                 & Flory
cc.  5,091,157     US        2/25/92     Recycle Conduit Insulation Assembly             RES (TX)                Thompson, Hine
                                                                                                                 & Flory
dd.  5,190,406     US        3/2/93      Callonic Treatment Landfill                     Municipal Service       Biebel & French
ee.  5,196,620     US        6/13/91     Fixation and Utilization of Ash Residue         Municipal Service       Biebel & French
                                         from the Incineration
ff.  5,228,398     US        07/20/93    Kiln Control for Incinerating Waste             RESI                    Inhouse        
gg.  5,238,401     US        08/24/93    Stagging Rotary Kiln                            Aptus, Inc.             Inhouse        
hh.  5,264,078     US        11/23/93    Apparatus and Method for Spray  Drying          Aptus, Inc.             Inhouse        
                                         Solids-Laden High 
ii.  5,301,621     US        04/12/94    Slag Viscosity Control by Image Analysis of     RESI                    Inhouse        
                                         Dripping Slag w/ 
jj.  5,353,722     US        10/11/94    Preventive Slag Viscosity Control by            RESI                    Inhouse        
                                         Detection of Alkali Meta
kk.  5,360,511     US        11/01/94    Apparatus and Method for Spray Drying           Aptus. Inc.             Inhouse        
                                         Solids-Laden High
ll.  5,388,931     US        02/14/95    Cutoff Wall System to Isolate Contaminated      RESI                    Inhouse        
                                         Soil
mm.  5,427,037     US        06/27/95    Methods and Apparatus Using Relative Power      RESI                    Inhouse        
                                         Factor In lncl
nn.  5,549,472     US        08/27/96    Control of Protective Layer Thickness in        RESI                    Inhouse        
                                         Kilns by Utilizing Tw
oo.  5,566,626     US        10/22/96    Incineration Kiln Devices and Methods  of       RESI                    Inhouse        
                                         Protecting the Sa
pp.  0130773       EPO       06/25/84    Installation and Method for Containing          RESI                    Finnegan,    
                                         Hazardous Waste                                                         Henderson
qq.  4-244310      Japan     8/20/92     Fixation and Utilization of Ash Residuefrom     LES (Sawyer)            Biebel & French
                                         the Incineration
rr.  2,062,818-9   Canada    01/22/93    Recycle Conduit Insulation Assembly             RES (TX)                Thompson. Hine 
                                                                                                                 & Flory
ss.  2,063,387-5   Canada    1/22/93     Rotary Reactor and Lifer Assembly               RES(TX)                 Thompson, Hine 
                                                                                                                 & Flory
tt.  2,071,139-6   Canada    6/12/92     Fixation and Utilization of Ash Residue         LES (Sawyer)            Biebel & French
                                         from the Incineration


----------------------------------------------------------------------------------------
Item Current         Next Maintenance                               Notes                                
     Reg Exp                                                                                             
----------------------------------------------------------------------------------------
a.                                                                                                       
b.                                                                                                       
c.                                                                                                       
d.                                                                                                       
e.                                                                                                       
f.                                                                                                       
g.                                                                                                       
h.                                                                                                       
i.                                                                                                       
j.                                                           related to US #4,983,222                    
k.   1/10/09     File 10 Year Renewal B/4 Expiration Date    Has 20 year license - uncontestable         
l.   10/17/99    File 10 Year Renewal B4 Expiration Date                                                 
m.                                                                                                       
n.   7/14/02     File affidavit of use betw 7/14/98 - 99                                                 
o.   5/16/05     File Use Affidavit betw 5/16/00 - 2001                                                  
p.   8/16/05     File Use Affidavit between 8/1/00 - 2001                       
q.   4/15/07     File Use Affidavit between 4/16/02 - 2003                       
r.                                                           related to US #4,983,222                                            
s.                                                           related to US #4,983,222                                            
t.                                                                                                       
u.   8/7/0l                                                  17 year expiration 8/01                     
v.                                                                                                       
w.                                                                                                       
x.   Jan-98      DROPPED 10/31/97per Dschwieg                -- no longer needed                         
y.                                                           see related EPO,  Canada & Japanese patents 
z.               Pay 7-1/2 Yr Maintenance Fee 4/98           (prov Note: See Dieter litigation file)     


                                        1
<PAGE>

aa.  2/2O/99     Pay 7-1/2 Yr Maintenance Fee 2/99                                                       
bb.  2/2O/99     Pay 7-1/2 Yr Maintenance Fee 8/98           also see 2,063,387-5 Canada                 
cc.  2/28/97     Pay 7-1/2-Yr Maintenance Fee 8/97           also see 2,062,818-9 Canada                 
dd.  9/2/00      Pay 7-1/2 Yr Maintenance Fee 9/00                                                       
ee.  9/23/00     Pay 7-1/2 Yr MaintenanceFee 9/00            also see 2,071,139-6 Canada & 4-244310 Japan
ff.  1/20/01     Pay 7-1/2 Yr Maintenance Fee 7/00                                                       
gg.  2/24/01     Pay 7-1/2 Yr Maintenance Fee 8/00                                                       
hh.  5/23/01     Pay 7-1/2 Yr Maintenance Fee 11/00*                                                     
ii.  10/12/01    Pay 7-1/2 Yr Maintenance Fee 4/01                                                       
jj.  4/11/02     Pay 7-1/2 Yr Maintenance Fee 10/01                                                      
kk.  5/1/98      Pay 3-1/2 Yr Maintenance Fee 11/97                                                      
ll.  8/14/98     Pay 3-1/2 Yr Maintenance Fee 2/98                                                       
mm.  12/27/98    Pay 3-1/2 Yr Maintenance Fee 6/98                                                       
nn.  8/27/00     Pay 3-1/2 Yr Maintenance Fee 2/00                                                       
oo.  10/22/00    Pay 3-1/2 Yr Maintenance Fee 4/00                                                       
pp.  6/25/04     Pay Annual Renewal Fr/Gr/uK 6-25-99         (98 paid 2/98   $2,075)                     
qq.  8/20/99                                                 related to US #5,196,620                                         
rr.   4/28/98    Request Examination by 4/98                 filed in related to US# 5,091,157           
ss.  4/28/98     Request Examination by 4/98                 filed in related to US# 5,040,973           
tt.  6/20/99     Pay An Tax 6/98, Request Exam 6/99          related to US #5,196,620
                 

Note:   "INSITE" Servicemafk Application abandoned       
                                                         
TM was previously registered & application was contested 
                                                         
R:IFILESIPATENT (I.  E@cel (oittiat)                     
                                                         
UPDATED:  3110198SA                                      

                                        2
<PAGE>

</TABLE>

<PAGE>

                                                                      SCHEDULE 7
                                                                      ----------

                                    CONTRACTS


Stock Purchase  Agreement,  dated February 6, 1997, among Rollins  Environmental
Services, Inc., Laidlaw Inc. and Laidlaw Transportation, Inc.

Agreement  and Plan of  Merger,  dated  as of  March  16,  1998,  among  Laidlaw
Environmental Services, Inc., LES Acquisition Inc. and Safety-Kleen Corp.


                                      
<PAGE>
                                                                               1

                                                                      SCHEDULE 8
                                                                      ----------

                                 EXISTING LIENS


1.   The  Industrial  Development  Board  of  the  Metropolitan   Government  of
     Nashville  and  Davidson  County  has a Hen  on all  machinery,  equipment,
     furniture  and  similar  property  of  Laidlaw  Environmental  Services  of
     Nashville, Inc., by agreement dated May 1, 1993.

2.   Various  liens on  vehicles  and  office  equipment  (computers,  printers,
     servers,  photocopiers,  etc.) from various leasing companies for operating
     leases.


                                       
<PAGE>


                                                           
                                                                      Annex I to
                                              GUARANTEE AND COLLATERAL AGREEMENT
                                              ----------------------------------


          ASSUMPTION  AGREEMENT,  dated  as  of  ___________________.   made  by
________________________________,   a   __________________ a  corporation   (the
"ADDITIONAL  Grantor"),  in favor of TORONTO  DOMINION  (TEXAS) INC., as general
administrative agent (in such capacity, the "GENERAL  ADMINISTRATIVE AGENT") for
the banks and other  financial  institutions,  (the  "Lenders")  parties  to the
Credit  Agreement  referred to below.  All capitalized  terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.

                              W I T N E S S E T H:
                              --------------------

          WHEREAS,  LES, Inc. (the "COMPANY"),  Laidlaw  Environmental  Services
(Canada)  Ltd.  (the  "CANADIAN  BORROWER";   together  with  the  Company,  the
"BORROWERS"),    the   Lenders,   the   General    Administrative   Agent,   The
Toronto-Dominion  Bank,  as Canadian  Administrative  Agent,  and certain  other
Agents named therein have entered into a Amended and Restated Credit  Agreement,
dated as of April 3, 1998 (as amended,  supplemented or otherwise  modified from
time to time, the "CREDIT AGREEMENT");

          WHEREAS,  in  connection  with the Credit  Agreement,  the Company and
certain of its Affiliates (other than the Additional  Grantor) have entered into
the Amended and Restated Guarantee and Collateral  Agreement,  dated as of April
3, 1998 (as amended,  supplemented or otherwise  modified from time to time, the
"GUARANTEE  AND COLLATERAL  AGREEMENT")  in favor of the General  Administrative
Agent for the benefit of the Lenders;

          WHEREAS,  the Credit  Agreement  requires  the  Additional  Grantor to
become a party to the Guarantee and Collateral Agreement; and

          WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption  Agreement in order to become a party to the Guarantee and Collateral
Agreement;

          NOW, THEREFORE, IT IS AGREED:

          1.  GUARANTEE AND  COLLATERAL  AGREEMENT.  By executing and delivering
this Assumption  Agreement,  the Additional Grantor, as provided in Section 8.15
of the  Guarantee  and  Collateral  Agreement,  hereby  becomes  a party  to the
Guarantee and Collateral  Agreement as a Grantor  thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality  of  the foregoing, hereby  expressly  assumes all  obligations   and
liabilities  of a Grantor  thereunder.  The  information  set forth in Annex 1-A
hereto is hereby


                                       1
<PAGE>


added to the information set forth in Schedules  ___________**  to the Guarantee
and Collateral Agreement.  The Additional Grantor hereby represents and warrants
that each of the  representations  and warranties  contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption  Agreement) as if made on and as of such
date.

          2. GOVERNING LAW. THIS ASSUMPTION  AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          IN  WITNESS  WHEREOF,  the  undersigned  has  caused  this  Assumption
Agreement to be duly executed and delivered as of the date first above written.

                                              [ADDITIONAL GRANTOR]

                                              By:  _____________________________
                                                    Name:
                                                    Title:

** Refer to each Schedule which needs to be supplemented.


                                       2
<PAGE>



                           ACKNOWLEDGEMENT AND CONSENT

          The undersigned hereby  acknowledges  receipt of a copy of the Amended
and Restated  Guarantee and Collateral  Agreement dated as of April 3, 1998 (the
"AGREEMENT"),  made by the Grantors  parties  thereto for the benefit of Toronto
Dominion (Texas),  Inc., as General Administrative Agent. The undersigned agrees
for the benefit of the General Administrative Agent and the Lenders as follows:

          1. The  undersigned  will be bound by the terms of the  Agreement  and
will  comply  with  such  terms  insofar  as such  terms are  applicable  to the
undersigned.

          2. The  undersigned  will  notify the  General  Administrative  Agent
promptly in writing of the occurrence of any of the events  described in Section
5.8(a) of the Agreement.

          3. The terms of Sections  6.3(a) and 6.7 of the Agreement  shall apply
to it, MUTATIS MUTANDIS,  with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.

                                              LAIDLAW ENVIRONMENTAL SERVICES
                                              (CANADA), INC.

                                              By     ___________________________

                                              Title  ___________________________

                                              Address for Notices:

                                              1301 Gervais Street, Suite 300
                                              Columbia, South Carolina 29201
                                              Attention: Paul Humphreys

                                              Fax: 803-933-4346


                                       
<PAGE>


                           ACKNOWLEDGMENT AND CONSENT

The  undersigned  hereby  acknowledges  receipt  of a copy  of the  Amended  and
Restated  Guarantee  and  Collateral  Agreement  dated as of April 3,  1998 (the
"Agreement"),  made by the Grantors  parties  thereto for the benefit of Toronto
Dominion (Texas),  Inc., as General Administrative Agent. The undersigned agrees
for the benefit of the General Administrative Agent and the Lenders as follows:

         1.  The  undersigned  will  notify  the  General  Administrative  Agent
         promptly in writing of the occurrence of any of the events described in
         Section 5.8(a) of the Agreement.

                                            VIROGROUP, INC.

                                            By:    _____________________________

                                            Title:  ____________________________

                                            ADDRESS FOR NOTICES:

                                            5217 Linbar Drive, Suite 309
                                            Nashville, Tennessee 37211
                                            Fax:  615-832-2549


                                       
<PAGE>


                       GUARANTEE AND COLLATERAL SUPPLEMENT

          This Guarantee and Collateral  Supplement,  dated as of April 9, 1998,
is delivered  pursuant to the Guarantee  and  Collateral  Agreement  referred to
below..  The  undersigned  hereby  agree  that  this  Guarantee  and  Collateral
Supplement may be attached to the Guarantee and Collateral Agreement dated as of
April 3, 1998 among Laidlaw  Environmental  Services,  Inc., LES, Inc.,  certain
subsidiaries  of LES,  Inc.  and  Toronto  Dominion  (Texas),  Inc.,  as General
Administrative  Agent (the  "Guarantee  and Collateral  Agreement",  capitalized
terms defined therein being used herein as therein defined) and that the Pledged
Notes listed on Annex I to this  Guarantee and  Collateral  Supplement  shall be
deemed  to be part of  the Pledged Notes and shall become part of the Collateral
and shall  secure  all  Obligations.  LES,  Inc.  hereby  grants to the  General
Administrative  Agent,  for the  ratable  benefit  of the  Lenders,  a  security
interest in the Pledged Notes listed on Annex I hereto.

                                    LES, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (US), INC.
                                    LES MERGER, INC.
                                    LES ACQUISITION, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF ILLINOIS, 
                                        INC.
                                    GSX CHEMICAL SERVICES OF OHIO, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (BDT), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (FS), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (GS), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF 
                                        CHATTANOOGA, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF WHITE     
                                        CASTLE, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (RECOVERY), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (TS), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (IMPERIAL 
                                        VALLEY), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (LOKERN), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF 
                                        CALIFORNIA, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF SOUTH 
                                        CAROLINA, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (NORTH EAST),
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (TES), INC.
                                    LAIDLAW CHEMICAL SERVICES, INC.  
                                    LAIDLAW ENVIRONMENTAL SERVICES (TOC), INC.

                                    LAIDLAW ENVIRONMENTAL SERVICES (TG), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (ALTAIR), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (WT), INC.


                                        1
<PAGE>


                                    LAIDLAW ENVIRONMENTAL SERVICES OF BARTOW, 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (THERMAL 
                                        TREATMENT), INC.  
                                    LEMC, INC.
                                    LAIDLAW OSCO HOLDINGS, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF NASHVILLE,
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (CLIVE), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (LONE AND 
                                        GRASSY MOUNTAIN), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (TULSA), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (SAN 
                                        ANTONIO), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (WICHITA), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES OF DELAWARE, 
                                        INC.
                                    CORSAN TRUCKING, INC.
                                    USPCI, INC.  OF GEORGIA
                                    LAIDLAW ENVIRONMENTAL SERVICES (SAN JOSE), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (SAWYER), 
                                        INC.
                                    CHEMCLEAR, INC.  OF LOS ANGELES
                                    LAIDLAW ENVIRONMENTAL SERVICES (ROSEMOUNT), 
                                        INC.
                                    LES HOLDING'S, INC.
                                    EAST CARBON DEVELOPMENT FINANCIAL PARTNERS, 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (TUCKER), 
                                        INC.
                                    NINTH STREET PROPERTIES, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (MT. 
                                        PLEASANT), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (DEER TRAIL),
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (
                                        MINNEAPOLIS), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (LOS 
                                        ANGELES), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (BATON 
                                        ROUGE), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (PLAQUEMINE),
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (BRIDGEPORT),
                                        INC.



                                       2
<PAGE>

                                    LAIDLAW ENVIRONMENTAL SERVICES (DEER PARK),
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (TIPTON), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL, INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (SUSSEX), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (GLOUCESTER),
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (CUSTOM 
                                        TRANSPORT), INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (ARAGONITE), 
                                        INC.
                                    LAIDLAW ENVIRONMENTAL SERVICES (PUERTO 
                                        RICO), INC.

                                    By:    __________________________________

                                      Name:

                                      Title:

Acknowledged and Agreed to as 
of the date hereof by:

  TORONTO DOMINION (TEXAS), INC.,
    as General Administrative Agent

By:    _____________________________________
       Name:
       Title:


                                       3
<PAGE>




                                                                      Annex I to
                                                        Guarantee and Collateral
                                                                      Supplement
                                                                      ----------

Pledged Notes:

   ISSUER                         PAYEE                         PRINCIPAL AMOUNT
   ------                         -----                         ----------------

   LES Acquisition, Inc.         Laidlaw Environmental            $68,603,931.00
                                 Services, Inc. and duly
                                 indorsed to LES, Inc.

   LES Acquisition, Inc.         LES, Inc.                       $108,702,075.00
   Safety-Kleen Corp.            LES, Inc.                        $14,000,000.00
   Safety-Kleen Corp.            LES, Inc.                         $6,000,000.00



                                      
<PAGE>





                                                                     EXHIBIT B-2
                                                                     -----------

                       ACQUISITION CORP. PLEDGE AGREEMENT

          ACQUISITION CORP. PLEDGE AGREEMENT, dated as of April 1998, made
by LES ACQUISITION,  INC., a Delaware  corporation (the "PLEDGOR"),  in favor of
TORONTO  DOMINION  (TEXAS),  INC.,  as  general  administrative  agent  (in such
capacity,  the "GENERAL  ADMINISTRATIVE  AGENT') for the Lenders  parties to the
Credit Agreement referred to below.

                              W I T N E S S E T H:
                              - - - - - - - - - - 

          WHEREAS, LES Inc., a Delaware corporation (the "COMPANY"), and Laidlaw
Environmental  Services  (Canada)  Ltd., a Canadian  corporation  (the "CANADIAN
BORROWER";  together  with the  Company,  the  "BORROWERS")  are  parties to the
Amended and Restated  Credit  Agreement,  dated as of April 3, 1998 (as amended,
supplemented or otherwise  modified from time to time, the "CREDIT  AGREEMENT"),
with the  several  banks  and  other  financial  institutions  from time to time
parties  thereto  (the  "LENDERS"),   the  General   Administrative  Agent,  The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  and  the  Managing  Agents,  Co-Documentation  Agents  and
Syndication Agents named therein;

          WHEREAS, pursuant to the Credit Agreement and the other Loan Documents
(as  defined in the Credit  Agreement),  the  Lenders  have agreed to make their
respective extensions of credit to the Borrowers;

          WHEREAS, the Pledgor, is a wholly owned subsidiary of the Company;

          WHEREAS, the proceeds of the extensions of credit to the Company under
the Credit  Agreement  will be used in part to enable the Pledgor to  CONSUMMATE
the Exchange Offer and the Merger;

          WHEREAS,   the  Pledgor  and  the  Borrower  are  engaged  in  related
businesses,  and the Pledgor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement;

          WHEREAS,  it is a condition precedent to the obligation of the Lenders
to make their  respective  extensions of credit under the Credit  Agreement that
the Pledgor  shall have  executed  and  delivered  this Pledge  Agreement to the
General  Administrative  Agent for the  ratable  benefit  of the  Agents and the
Lenders;


                                      1
<PAGE>


          WHEREAS,  pursuant to the  Exchange  Offer,  on the  Closing  Date the
Pledgor  is  acquiring  shares  of  common  stock,  with  par  value  $0.10,  of
Safety-Kleen   Corp.,  a  Wisconsin   corporation   ("SAFETY-KLEEN"),   as  more
particularly  described on Schedule I hereto (all such shares of stock, together
with all stock certificates, options or rights of any nature whatsoever that may
be granted by  Safety-Kleen  to the  Pledgor in respect of such  shares of stock
being hereinafter called the "INITIALLY PLEDGED STOCK");

          WHEREAS,  pursuant to the Credit Agreement, on the date of this Pledge
Agreement,  the Pledgor is pledging to the General Administrative Agent, for the
ratable benefit of the Lenders,  the Initially Pledged Stock to provide security
for the Obligations; and

          WHEREAS,  pursuant  to the  Credit  Agreement,  on each date after the
Closing Date on which the Pledgor  purchases  additional shares of capital stock
of  Safety-Kleen,  the Pledgor  shall  execute  and  deliver a Pledge  Agreement
Supplement  in the form of  Exhibit  A hereto,  pledging  the  capital  stock of
Safety-Kleen being purchased on such date by the Pledgor (such additional shares
of stock together with all stock  certificates,  options or rights of any nature
whatsoever  that may be granted by the Issuer to the  Pledgor in respect of such
shares of stock being  hereinafter  called the  "ADDITIONAL  PLEDGED STOCK," and
together with the Initially Pledged Stock, the "PLEDGED STOCK");

          NOW, THEREFORE,  in consideration of the premises contained herein and
to induce the Agents and the Lenders to enter into the Credit  Agreement  and to
induce the  Lenders to make the Loans  under the Credit  Agreement,  the Pledgor
hereby agrees with the General  Administrative Agent, for the ratable benefit of
the Agents and the Lenders, as follows:

          1. DEFINED Terms. (a) Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

          (b) The following terms shall have the following meanings: 

          "BORROWERS" has the meaning given such term in the recitals hereto.

          "CLEARING CORPORATION" means a clearing corporation within the meaning
     of Section 8-102(5) of the Code at which the General  Administrative Agent,
     or a designee or nominee on its behalf, maintains a securities account.

          "CODE" means the Uniform  Commercial  Code from time to time in effect
     in the State of New York.

          "COLLATERAL" has the meaning given such term in Section 2 hereof

          "CREDIT  AGREEMENT"  has the meaning  given such term in the  recitals
     hereto.


                                       2
<PAGE>


                  "EXCHANGE  AGENT" means IBJ Schroder Bank & Trust Company,  as
         Exchange Agent in respect of the Exchange Offer.

                  "EXCHANGE  AGENT AGENCY  AGREEMENT"  means the Exchange  Agent
         Agency  Agreement,  dated as of the date  hereof,  among  the  Exchange
         Agent, the General Administrative Agent and the Pledgor.

          "GENERAL  ADMINISTRATIVE AGENT" has the meaning given such term in the
     preamble.

          "LENDERS" has the meaning given such term in the preamble hereto.

          "OBLIGATIONS"  means the  Obligations  of the  Pledgor  under  (and as
     defined in) the Guarantee and Collateral Agreement.

          "PLEDGE  AGREEMENT" means this Acquisition Corp. Pledge Agreement,  as
     amended, supplemented or otherwise modified from time to time.

          "PLEDGED  STOCK".  has the  meaning  given  such term in the  preamble
     hereto.

          "PLEDGOR" has the meaning given such term in the preamble hereto.

          "PROCEEDS"  means all  "proceeds"  as such term is  defined in Section
     9-306(l)  of the Code in effect in the State of New York on the date hereof
     and, in any event,  shall  include,  without  limitation,  all dividends or
     other income from the Pledged Stock,  collections thereon and distributions
     with respect thereto.

          "SAFETY-KLEEN" has the meaning given such term in the preamble hereto.

          (c) The words "hereof,"  "herein" and "hereunder" and words of similar
import when used in this Pledge  Agreement shall refer to this Pledge  Agreement
as a whole and not to any  particular  provision of this Pledge  Agreement,  and
Section,  paragraph and Schedule  references are to this Pledge Agreement unless
otherwise specified.

          (d) The  meanings  given  to terms  defined  herein  shall be  equally
applicable to both the singular and plural forms of such terms.

          2. PLEDGE; GRANT OF SECURITY INTEREST.  The Pledgor hereby delivers to
the General  Administrative  Agent, for the ratable benefit of the Lenders,  all
the Pledged Stock and hereby  grants to General  Administrative  Agent,  for the
ratable  benefit  of the  Agents  and the  Lenders,  a first  priority  security
interest  in  the  following  (collectively,  the  "COLLATERAL")  as  collateral
security for the prompt and complete  payment and performance  when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations:


                                       3
<PAGE>


          (a) all of the Initially Pledged Stock,  including without limitation,
     the  shares of  capital  stock of  Safety-Kleen  delivered  to the  General
     Administrative  Agent  or its  agent  by the  Exchange  Agent  pursuant  to
     instructions  of  the  Pledgor  contained  in  the  Exchange  Agent  Agency
     Agreement and all Book-Entry Shares (as hereinafter defined);

          (b) all  Additional  Pledged  Stock from time to time  acquired by the
     Pledgor in any manner,  including,  without  limitation,  by the book-entry
     delivery thereof;

          (c) the  certificates  representing  the shares referred to in clauses
     (a) and (b) above; and

          (d) all rights  and  privileges  of the  Pledgor  with  respect to the
     Pledged Stock,  all Proceeds of the Pledged  Stock,  all income and profits
     therefrom and all property  received in addition  thereto or in exchange or
     substitution therefor.

          3. STOCK POWERS,  BOOK-ENTRY TRANSFER.  (a) The Pledgor shall promptly
deliver or cause to be  delivered  to the  General  Administrative  Agent or the
Exchange Agent all stock certificates  representing the Pledged Stock,  together
with duly  executed  blank undated  stock  powers.  The Pledgor  shall  promptly
deliver to the General  Administrative  Agent, or cause  Safety-Kleen to deliver
directly  to the  General  Administrative  Agent,  share  certificates  or other
documents,  representing  any Collateral  acquired or received after the date of
this Pledge Agreement duly endorsed or with appropriate  transfer documents duly
executed  in blank by the  Pledgor.  If at any time the  General  Administrative
Agent  notifies  the Pledgor  that  additional  stock  powers or other  transfer
documents  endorsed in blank with respect to the Collateral  held by the General
Administrative  Agent are required,  the Pledgor shall promptly execute the same
in blank and  deliver  such  stock  powers or other  transfer  documents  as the
General Administrative Agent may request.

          (b) In the event that a financial institution that is a participant in
The Depositary Trust Company (the "BOOK-ENTRY TRANSFER FACILITY"), in accordance
with  the  procedures  set  forth  in the  Exchange  Offer  Documents,  makes  a
book-entry  delivery of any shares of common stock of Safety-Kleen  tendered for
exchange in the Exchange  Offer by causing the Book-Entry  Transfer  Facility to
transfer  such shares into the account of the Exchange  Agent at the  Book-Entry
Transfer  Facility  (each such share being a  "BOOK-ENTRY  SHARE"),  the Pledgor
hereby  authorizes the Exchange Agent to, and shall cause the Exchange Agent to,
hold such shares as securities intermediary for the General Administrative Agent
in accordance with the Exchange Agent Agency Agreement.

          4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
that:

          (a)  the  shares  of  Pledged  Stock  constitute  all the  issued  and
     outstanding  shares of all  classes of the  capital  stock of  Safety-Kleen
     owned by the Pledgor or any of its Affiliates;


                                       4
<PAGE>


          (b) to the  best  knowledge  of the  Pledgor,  all the  shares  of the
     Pledged  Stock  have been duly and  validly  issued  and are fully paid and
     nonassessable;

          (c) the  Pledgor is the record and  beneficial  owner of, and has good
     and marketable  title to, the Pledged  Stock,  free of any and all Liens or
     options  in favor of, or claims  of,  any  other  Person,  except  the Lien
     created by this Pledge Agreement; and

          (d) upon  compliance  with the  provisions  of  Sections  3(a) and (b)
     hereof,  all actions required to create and perfect the security  interest
     of the General Administrative Agent in the Collateral will have been taken,
     and the delivery to the General Administrative Agent or the Exchange Agent,
     as the case may be,  of the  Collateral  is  effective  to  create a valid,
     perfected  first priority  security  interest in the Collateral in favor of
     the General Administrative Agent.

                  5.  COVENANTS.  The  Pledgor  covenants  and  agrees  with the
General  Administrative  Agent and the Lenders that,  from and after the date of
this  Pledge  Agreement  until  the  Obligations  have been paid in full and the
Commitments have been terminated:

               (a) If the Pledgor  shall,  as a result of its  ownership  of the
          Pledged Stock,  become  entitled to receive or shall receive any stock
          certificate   (including,    without   limitation,   any   certificate
          representing a stock dividend or a distribution in connection with any
          reclassification,  increase or reduction of capital or any certificate
          issued in  connection  with any  reorganization),  option  or  rights,
          whether in addition to, in substitution  of, as a conversion of, or in
          exchange for any shares of the Pledged Stock,  or otherwise in respect
          thereof, the Pledgor shall accept the same as the agent of the General
          Administrative  Agent and the Lenders,  hold the same in trust for the
          General  Administrative  Agent and the  Lenders  and  deliver the same
          forthwith  to the  General  Administrative  Agent  in the  exact  form
          received,  duly indorsed by the Pledgor to the General  Administrative
          Agent, if required, together with an undated stock power covering such
          certificate  duly  executed in blank by the  Pledgor and with,  if the
          General Administrative Agent so requests,  signature guaranteed, to be
          held by the General Administrative Agent, subject to the terms hereof,
          as additional  collateral security for the Obligations.  Any sums paid
          upon or in  respect  of the  Pledged  Stock  upon the  liquidation  or
          dissolution  of  Safety-Kleen  shall unless consent to the contrary is
          obtained from the General Administrative Agent within ten days of such
          payment be paid over to the General Administrative Agent to be held by
          it hereunder as additional  collateral  security for the  Obligations,
          and in case any distribution of capital shall be made on or in respect
          of the Pledged Stock or any property shall be distributed upon or with
          respect to the  Pledged  Stock  pursuant  to the  recapitalization  or
          reclassification  of the  capital of  Safety-Kleen  or pursuant to the
          reorganization  thereof,  the  property so  distributed  shall  unless
          consent  to the  contrary  is  otherwise  obtained  from  the  General
          Administrative Agent be delivered to the General  Administrative Agent
          within  ten  days  of such  payment  to be  held  by it  hereunder  as
          additional  collateral  security for the  Obligations.  If any sums of
          money or  property  so paid or  distributed  in respect of the Pledged
          Stock shall be received by the Pledgor,  the Pledgor shall, until such
          money or property is paid or delivered  to the General  Administrative
          Agent, hold such money or


                                       5
<PAGE>


          property  in  trust  for  the  General  Administrative  Agent  and the
          Lenders,  segregated  from other funds of the Pledgor,  as  additional
          collateral security for the Obligations.

               (b)   Without   the  prior   written   consent  of  the   General
          Administrative Agent, the Pledgor will not (i) vote to enable, or take
          any other action to permit,  Safety-Kleen  to issue any stock or other
          equity  securities  of any  nature or to issue  any  other  securities
          convertible into or granting the right to purchase or exchange for any
          stock or other equity  securities of any nature of Safety-Kleen,  (ii)
          sell, assign,  transfer,  exchange,  or otherwise dispose of, or grant
          any option with respect to, the  Collateral or (iii) create,  incur or
          permit  to exist  any Lien or  option in favor of, or any claim of any
          Person  with  respect  to,  any of  the  Collateral,  or any  interest
          therein,  except for the Lien  provided for by this Pledge  Agreement.
          Notwithstanding the foregoing, the Merger may be consummated; PROVIDED
          that  simultaneously  with  the  Merger  the  stock  of the  surviving
          corporation   of  the  Merger   shall  be   pledged  to  the   General
          Administrative  Agent in a manner satisfactory to it. The Pledgor will
          defend the right,  title and  interest of the  General  Administrative
          Agent and the Lenders in and to the Collateral  against the claims and
          demands of all Persons whomsoever.

               (c) At any time and from time to time,  upon the written  request
          of the General  Administrative  Agent,  and at the sole expense of the
          Pledgor,  the Pledgor will  promptly and duly execute and deliver such
          further instruments and documents and take such further actions as the
          General  Administrative  Agent may reasonably request for the purposes
          of obtaining or preserving the full benefits of this Pledge  Agreement
          and of the rights and powers  herein  granted.  If any amount  payable
          under or in connection  with any of the Collateral  shall be or become
          evidenced by any promissory  note,  other instrument or chattel paper,
          such note,  instrument  or chattel  paper shall be promptly  delivered
          (unless  the prior  consent  of the  General  Administrative  Agent is
          obtained)  to the General  Administrative  Agent,  duly  endorsed in a
          manner satisfactory to the General Administrative Agent, to be held as
          Collateral pursuant to this Pledge Agreement.

               (d)  The  Pledgor   agrees  to  pay,  and  to  save  the  General
          ADMINISTRATIVE  Agent  and  the  Lenders  harmless  from,  any and all
          liabilities  with respect to, or  resulting  from any delay in paying,
          any and all stamp,  excise,  sales or other taxes which may be payable
          or determined  to be payable with respect to any of the  Collateral or
          in connection with any of the transactions contemplated by this Pledge
          Agreement.

               (e) Pursuant to Section 9.13 of the Credit Agreement, the Pledgor
          hereby  agrees  that on each  date it  acquires  additional  shares of
          capital  stock of  Safety-Kleen,  the  Pledgor  will  execute a Pledge
          Agreement  Supplement  and  deliver  or cause to be  delivered  to the
          General Administrative Agent the share certificates  representing such
          capital  stock being  purchased by the Pledgor on such date,  together
          with the  appropriate  undated  stock powers duly executed in blank by
          the Pledgor.


                                       6
<PAGE>


          6. CASH  DIVIDENDS;  VOTING  RIGHTS.  Unless an Event of Default shall
have occurred and be continuing and the General  Administrative Agent shall have
given  notice to the Pledgor of the  General  Administrative  Agent's  intent to
exercise its corresponding rights pursuant to Section 7 below, the Pledgor shall
be permitted to receive all cash dividends paid in the normal course of business
of Safety-Kleen,  to the extent permitted in the Credit Agreement, in respect of
the Pledged Stock and to exercise all voting and  corporate  rights with respect
to the Pledged Stock; PROVIDED,  HOWEVER, that no vote shall be cast which would
result in any  violation of any  provision of the Credit  Agreement or any other
Loan Document.

          7. RIGHTS OF THE LENDERS AND THE GENERAL  ADMINISTRATIVE AGENT. (a) If
an Event of Default shall occur and be continuing and the General Administrative
Agent shall give notice to the  Pledgor of the  General  Administrative  Agent's
intent to exercise such rights (i) the General  Administrative  Agent shall have
the right to receive any and all cash  dividends  paid in respect of the Pledged
Stock and make  application  thereof  to the  Obligations  in such  order as the
General  Administrative  Agent may  determine and (ii) all shares of the Pledged
Stock shall be registered in the name of the General Administrative Agent or its
nominee,  and the General  Administrative  Agent or its  nominee may  thereafter
exercise (A) all voting, corporate and other rights pertaining to such shares of
the Pledged Stock at any meeting of  shareholders  of  Safety-Kleen or otherwise
and (B) any and all rights of conversion,  exchange,  subscription and any other
rights,  privileges or options pertaining to such shares of the Pledged Stock as
if it were the absolute owner thereof (including,  without limitation, the right
to exchange at its  discretion any and all of the Pledged Stock upon the merger,
consolidation,  reorganization,  recapitalization or other fundamental change in
the corporate structure of Safety-Kleen,  or upon the exercise by the Pledgor or
the General Administrative Agent of any right, privilege or option pertaining to
such shares of the Pledged  Stock,  and in  connection  therewith,  the right to
deposit  and  deliver  any and all of the  Pledged  Stock  with  any  committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine), all without liability except to account for
property  actually  received by it, but the General  Administrative  Agent shall
have no duty to the Pledgor to exercise any such right,  privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

          (b) The rights of the  General  Administrative  Agent and the  Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the General
Administrative  Agent or any  Lender of any right or  remedy  against  any other
Person  which  may be or  become  liable  in  respect  of all or any part of the
Obligations or against any collateral  security therefor,  guarantee therefor or
right of offset with respect thereto.  Neither the General  Administrative Agent
nor any  Lender  shall be liable for any  failure to demand,  collect or realize
upon all or any part of the  Collateral  or for any delay in doing so, nor shall
the General  Administrative  Agent be under any  obligation to sell or otherwise
dispose of any Collateral upon the request of the Pledgor or any other Person or
to take any other action  whatsoever  with regard to the  Collateral or any part
thereof.


                                       7
<PAGE>


          8. REMEDIES. If an Event of Default shall occur and be continuing, the
General  Administrative  Agent,  on  behalf of the  Lenders,  may  exercise,  in
addition to all other rights and remedies  granted in this Pledge  Agreement and
in any other  instrument  or agreement  securing,  evidencing or relating to the
Obligations,  all rights and remedies of a secured party under the Code. Without
limiting the  generality of the  foregoing,  the General  Administrative  Agent,
without   demand  of  performance   or  other  demand,   presentment,   protest,
advertisement  or notice of any kind (except any notice required by law referred
to below or by the Credit Agreement) to or upon the Pledgor, Safety-Kleen or any
other  Person  (all and  each of which  demands,  defenses,  advertisements  and
notices  are  hereby  waived),  may in  such  circumstances  forthwith  collect,
receive,  appropriate  and realize  upon the  Collateral,  or any part  thereof,
and/or may  forthwith  sell,  assign,  give an option or options to  purchase or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales,  in the over the counter  market,  at any  exchange or broker's  board or
office of the General  Administrative Agent or any Lender or elsewhere upon such
terms and  conditions as it may deem advisable and at such prices as it may deem
best,  for cash or on credit or for future  delivery  without  assumption of any
credit risk. The General Administrative Agent or any Lender shall have the right
upon any such public sale or sales,  and, to the extent  permitted by law,  upon
any  such  private  sale or  sales,  to  purchase  the  whole or any part of the
Collateral  so sold,  free of any right or equity of  redemption in the Pledgor,
which right or equity is hereby waived or released.  The General  Administrative
Agent shall apply any Proceeds from time to time held by it and the net proceeds
of any such collection,  recovery, receipt, appropriation,  realization or sale,
after  deducting  all  reasonable  costs and expenses of every kind  incurred in
respect  thereof  or  incidental  to  the  care  or  safekeeping  of  any of the
Collateral or in any way relating to the Collateral or the rights of the General
Administrative Agent and the Lenders hereunder,  including,  without limitation,
attorneys'  fees and  disbursements  of  counsel to the  General  Administrative
Agent, to the payment in whole or in part of the  Obligations,  in such order as
the General  Administrative Agent may elect, and only after such application and
after the  payment  by the  General  Administrative  Agent of any  other  amount
required  by any  provision  of  law,  including,  without  limitation,  Section
9-504(l)(c) of the Code, need the General  Administrative  Agent account for the
surplus,  if any, to the Pledgor. To the extent permitted by applicable law, the
Pledgor  waives all  claims,  damages  and  demands it may  acquire  against the
General  Administrative  Agent or any Lender arising out of the exercise by them
of any rights  hereunder.  If any notice of a proposed sale or other disposition
of Collateral  shall be required by law, such notice shall be deemed  reasonable
and proper if given at least ten days before such sale or other disposition. The
Pledgor  shall remain  liable for any  deficiency if the proceeds of any sale or
other  disposition of Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys  employed by the General  Administrative
Agent or any Lender to collect such  deficiency.  Nothing herein shall be deemed
to authorize the General  Administrative  Agent or the Lenders to take action in
violation of applicable law.


                                       8
<PAGE>


          9.   REGISTRATION   RIGHTS;   PRIVATE   SALES.   (a)  If  the  General
Administrative Agent shall determine to exercise its right to sell any or all of
the Pledged Stock pursuant to Section 8 hereof, and if in the reasonable opinion
of the General  Administrative  Agent it is necessary or reasonably advisable to
have the Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "SECURITIES ACT'), the
Pledgor  will cause  Safety-Kleen  to (i)  execute  and  deliver,  and cause the
directors  and  officers  of  Safety-Kleen  to  execute  and  deliver,  all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the General  Administrative Agent,  necessary or advisable
to register  the Pledged  Stock,  or that  portion  thereof to be sold under the
provisions  of the  Securities  Act,  (ii) use its  best  efforts  to cause  the
registration  statement  relating  thereto  to  become  effective  and to remain
effective for a period of one year from the date of the first public offering of
the  Pledged  Stock,  or that  portion  thereof  to be sold and  (iii)  make all
amendments thereto and/or to the related prospectus which, in the opinion of the
General Administrative Agent, are necessary or advisable, all in conformity with
the  requirements of the Securities Act and the rules and regulations of the SEC
applicable thereto.  The Pledgor agrees to cause Safety-Kleen to comply with the
provisions  of the  securities  or "Blue Sky" laws of any and all  jurisdictions
which the General  Administrative Agent shall designate and to make available to
its security holders, as soon as practicable,  an earnings statement (which need
not be  audited)  which will  satisfy the  provisions  of Section I 1 (a) of the
Securities Act.

          (b) The Pledgor recognizes that the General  Administrative  Agent may
be unable to effect a public sale of any or all the Pledged Stock,  by reason of
certain  prohibitions  contained  in the  Securities  Act and  applicable  state
securities  laws or  otherwise,  and may be  compelled  to resort to one or more
private sales thereof to a restricted  group of purchasers which will be obliged
to agree,  among other things,  to acquire such securities for their own account
for investment and not with a view to the  distribution or resale  thereof.  The
Pledgor  acknowledges and agrees that any such private sale may result in prices
and  other  terms  less  favorable  than if such  sale  were a public  sale and,
notwithstanding  such circumstances,  agrees that any such private sale shall be
deemed  to have been  made in a  commercially  reasonable  manner.  The  General
Administrative  Agent shall be under no obligation to delay a sale of any of the
Pledged  Stock  for the  period of time  necessary  to  permit  Safety-Kleen  to
register  such  securities  for public sale under the  Securities  Act, or under
applicable state securities laws, even if Safety-Kleen would agree to do so.

          (c) The Pledgor  further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the  Pledged  Stock  pursuant to this  Section 9 valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor  further  agrees that a breach of any of the covenants  contained in
this Section 9 will cause irreparable injury to the General Administrative Agent
and the Lenders,  that the General  Administrative Agent and the Lenders have no
adequate  remedy at law in respect of such breach and,  as a  consequence,  that
each and  every  covenant  contained  in this  Section  9 shall be  specifically
enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants
except for a defense  that no Event of  Default  has  occurred  under the Credit
Agreement.


                                       9
<PAGE>


          10. IRREVOCABLE  AUTHORIZATION AND INSTRUCTION TO ISSUERS. The Pledgor
hereby  authorizes  and instructs  Safety-Kleen  to comply with any  instruction
received by it from the General  Administrative Agent in writing that (a) states
that an Event of Default has occurred and is continuing  and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that Safety-Kleen shall be
fully protected in so complying.

          11. GENERAL  ADMINISTRATIVE  AGENT'S APPOINTMENT AS  ATTORNEY-IN-FACT.
(a)  The  Pledgor  hereby  irrevocably  constitutes  and  appoints  the  General
Administrative  Agent and any  officer  or agent of the  General  Administrative
Agent, with fall power of substitution,  as its true and lawful attorney-in-fact
with full irrevocable  power and authority in the place and stead of the Pledgor
and in the name of the  Pledgor or in the  General  Administrative  Agent's  own
name, from time to time in the General  Administrative  Agent's discretion,  for
the purpose of  carrying  out the terms of this  Agreement,  to take any and all
appropriate  action and to execute any and all documents and  instruments  which
may be  necessary  or  desirable  to  accomplish  the  purposes  of this  Pledge
Agreement,    including,   without   limitation,   any   financing   statements,
endorsements,   assignments  or  other  instruments  of  transfer.  The  General
Administrative Agent agrees that it will not exercise any rights under the power
of  attorney  provided  for in this  Section I l (a)  unless an Event of Default
shall  have  occurred  and be  continuing,  and the  power of  attorney  will be
executed  in a manner  intended  to give  effect to the  intent  of this  Pledge
Agreement and the other Loan Documents and in accordance with applicable law.

          (b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney  granted in Section I l
(a). All powers,  authorizations  and agencies  contained in this  Agreement are
coupled with an interest and are irrevocable  until this Agreement is terminated
and the security interests created hereby are released.

          12.   LIMITATION   ON  DUTIES   REGARDING   Collateral.   The  General
Administrative  Agent's sole duty with respect to the custody,  safekeeping  and
physical  preservation of the Collateral in its possession,  under Section 9-207
of the Code or  otherwise,  shall be to deal  with it in the same  manner as the
General  Administrative Agent deals with similar securities and property for its
own account.  Neither the General  Administrative  Agent,  any Lender nor any of
their respective  directors,  officers,  employees or agents shall be liable for
failure to demand,  collect or  realize  upon any of the  Collateral  or for any
delay in doing so or shall be under any obligation to sell or otherwise  dispose
of any collateral upon the request of the Pledgor or otherwise.

          13.  EXECUTION OF FINANCING  STATEMENTS.  Pursuant to Section 9-402 of
the Code,  the  Pledgor  authorizes  the  General  Administrative  Agent to file
financing statements with respect to the Collateral without the signature of the
Pledgor in such form and in such filing  offices as the  General  Administrative
Agent reasonably determines appropriate to perfect the security interests of the
General Administrative Agent under this Pledge Agreement. A carbon, photographic
or  other  reproduction  of this  Pledge  Agreement  shall  be  sufficient  as a
financing statement for filing in any jurisdiction.


                                      10
<PAGE>


          14.   AUTHORITY   OF  GENERAL   ADMINISTRATIVE   AGENT.   The  Pledgor
acknowledges that the rights and responsibilities of the General  Administrative
Agent  under this  Pledge  Agreement  with  respect  to any action  taken by the
General  Administrative  Agent or the  exercise or  non-exercise  by the General
Administrative  Agent of any option,  voting right,  request,  judgment or other
right or remedy  provided  for herein or resulting or arising out of this Pledge
Agreement shall, as between the General Administrative Agent and the Lenders, be
governed  by the Credit  Agreement  and by such other  agreements  with  respect
thereto as may exist from time to time among  them,  but, as between the General
Administrative Agent and the Pledgor, the General  Administrative Agent shall be
conclusively  presumed to be acting as agent for the Lenders with full and valid
authority  so to act or  refrain  from  acting,  and  neither  the  Pledgor  nor
Safety-Kleen shall be under any obligation, or entitlement,  to make any inquiry
respecting such authority.

          15. NOTICES. All notices,  requests and demands to or upon the General
Administrative  Agent,  any Lender or the  Pledgor to be  effective  shall be in
writing (or by telegraph  or telecopy  confirmed in writing) and shall be deemed
to have been duly  given or made (a) when  delivered  by hand or (b) if given by
mail,  five days after being  deposited in the mails by certified  mail,  return
receipt  requested  or (c) if by  telecopy,  when  sent  and  receipt  has  been
confirmed,  addressed at its address or transmission  number for notices, in the
case of the Lenders,  provided in Section 10.2 of the Credit  Agreement  and, in
the case of the Pledgor and the General Administrative Agent, at its address set
forth below:

                     Pledgor:                     LES Acquisition, Inc.
                                                  c/o LES, Inc.
                                                  1301 Gervais Street, 3rd Floor
                                                  Columbia, South Carolina 29201
                                                    
                                                  Attention: Paul Humphreys
                                                  Fax: (803) 933-4346

                     General Administrative

                       Agent:                     Toronto Dominion (Texas), Inc.
                                                  909 Fannin Street, Suite 1700
                                                  Houston, Texas 77010
                                                  Attention: Jano Mott
                                                  Fax: (416) 982-5535

The  General  Administrative  Agent,  each Lender and the Pledgor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section or in the Credit Agreement.

          16.  SEVERABILITY,  Any  provision of this Pledge  Agreement  which is
prohibited or unenforceable in any jurisdiction  shall, as to such jurisdiction,
be ineffective to the extent of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.


                                       11
<PAGE>


          17.  SECTION  HEADINGS.  The  Section  headings  used in  this  Pledge
Agreement  are for  convenience  of  reference  only and are not to  affect  the
construction hereof or be taken into consideration in the interpretation hereof.

          18. AMENDMENTS IN WRITING; NO WAIVER; PLEDGE CUMULATIVE REMEDIES.  (a)
None of the terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise  modified except by a written  instrument  executed by
the Pledgor and the General Administrative Agent in accordance with Section 14.1
of the Credit  Agreement,  PROVIDED that any provision of this Pledge  Agreement
may be waived by the General Administrative Agent and the Lenders in a letter or
agreement executed by the General  Administrative  Agent or by telecopy from the
General Administrative Agent.

          (b) Neither the General  Administrative  Agent nor any Lender shall by
any act  (except by a written  instrument  pursuant  to Section  18(a)  hereof),
delay,  indulgence,  omission or otherwise be deemed to have waived any right or
remedy  hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and  conditions  hereof.  No failure to exercise,
nor any delay in exercising,  on the part of the General Administrative Agent or
any Lender,  any right,  power or privilege  hereunder shall operate as a waiver
thereof No single or partial exercise of any right, power or privilege hereunder
shall  preclude  any other or further  exercise  thereof or the  exercise of any
other right, power or privilege. A waiver by the General Administrative Agent or
any Lender of any right or remedy  hereunder  on any one  occasion  shall not be
construed as a bar to any right or remedy which the General Administrative Agent
or such Lender would otherwise have on any future occasion.

          (c) The rights and remedies  herein  provided are  cumulative,  may be
exercised  singly or  concurrently  and are not exclusive of any other rights or
remedies provided by law.

          19.  SUCCESSORS AND ASSIGNS.  This Pledge  Agreement  shall be binding
upon the successors and assigns of the Pledgor and shall inure to the benefit of
the  General  Administrative  Agent and the  Lenders  and their  successors  and
assigns.

          20.  GOVERNING  LAW. THIS PLEDGE  AGREEMENT  SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK

          21. Release. At such time as the Loans and the other Obligations shall
have been paid in full and the Commitments have been terminated,  the Collateral
shall be released  from the Liens  created  hereby,  and this  Agreement and all
obligations  (other than those expressly stated to survive such  termination) of
the General Administrative Agent and the Pledgor hereunder shall terminate,  all
without  delivery of any instrument or performance of any act by any party,  and
all rights to the  Collateral  shall revert to the  Pledgor.  At the request and
sole expense of the. Pledgor following any such termination,  the Administration
Agent  shall  deliver  to  the  Pledgor  any  Collateral  held  by  the  General
Administrative Agent hereunder,  and promptly execute and deliver to the Pledgor
such  documents  as the  Pledgor  shall  reasonably  request  to  evidence  such
termination.


                                       12
<PAGE>


          22.  EFFECTIVENESS.  All provisions of this Agreement  relating to the
Collateral  will become  effective upon the earliest  delivery of any Collateral
hereunder.  All  Pledged  Stock  pledged  hereunder  shall  be  described  on  a
supplement  to  Schedule  I  delivered  at  such  time.   This  Agreement  shall
automatically be deemed to be supplemented  upon delivery of such supplement to,
and  acceptance  by,  the  General  Administrative  Agent.  All such  Collateral
described on any such  supplement to Schedule I shall be deemed to be Collateral
under this Agreement.

          IN WITNESS  WHEREOF,  the undersigned has caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.

                                        LES ACQUISITION, INC.

                                        By:_________________________________
                                             Title:


                                       13
<PAGE>


                           ACKNOWLEDGEMENT AND CONSENT

                The undersigned Safety-Kleen Corp. whose common stock is pledged
pursuant to the Acquisition Corp.  Pledge  Agreement,  dated as of April 3, 1998
(the "Pledge Agreement"),  made by LES Acquisition, Inc. in favor of the General
Administrative  Agent, hereby acknowledges  receipt of a copy thereof and agrees
to be bound thereby and to comply with the terms  thereof  insofar as such terms
are   applicable   to  it.  The   undersigned   agrees  to  notify  the  General
Administrative  Agent promptly in writing of the occurrence of any of the events
described in paragraph 5(a) of the Pledge  Agreement.  The  undersigned  further
agrees that the terms of paragraph 9(c) of the Pledge  Agreement  shall apply to
it,  MUTATIS  MUTANDIS,  with  respect to all actions that may be required of it
under or pursuant to or arising out of Section 10 of the Pledge Agreement.

                                        SAFETY-KLEEN CORP.

                                        By:_________________________________
                                             Title:


<PAGE>


                                                                      Schedule I
                                                                      To Pledge
                                                                      Agreement
                                                                      ----------

                          DESCRIPTION OF PLEDGED STOCK

                Common Stock,  with par value $0.10,  of  Safety-Kleen  Corp., a
Wisconsin corporation, either (i) represented by stock certificates as follows:

         Certificate          Certificate              No. of
            No.                   Date                 Shares
         -----------          -----------              ------
           97089             March 31, 1998            268,425
           97075             March 31, 1998         49,543,416




or  (ii) _______ shares of which have been  transferred  by book-entry  delivery
thereof to an account of [ ] for the benefit of the General Administrative Agent
with  __________________ - [a Clearing  Corporation] pursuant to Section 3(b) of
the Pledge Agreement.


<PAGE>

                                                                       EXHIBIT A
                                                                       ---------

                                     FORM OF
                           PLEDGE AGREEMENT SUPPLEMENT

                  PLEDGE AGREEMENT  SUPPLEMENT,  dated as of ____________,  1998
(this "SUPPLEMENT"),  made by LES ACQUISITION, INC. (the "PLEDGOR"), in favor of
TORONTO-DOMINION  (TEXAS),  INC., as General  Administrative Agent (the "GENERAL
ADMINISTRATIVE  AGENT"), under the Amended and Restated Credit Agreement,  dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time,  the  "CREDIT  AGREEMENT"),  with LES Inc.,  a Delaware  corporation  (the
"COMPANY"),  and  Laidlaw  Environmental  Services  (Canada)  Ltd.,  a  Canadian
corporation   (the  "CANADIAN   BORROWER";   together  with  the  Company,   the
"BORROWERS"),  the several banks and other financial  institutions  from time to
time parties thereto (the  "LENDERS"),  the General  Administrative  Agent,  The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  and  the  Managing  Agents,  Co-Documentation  Agents  and
Syndication Agents identified therein.

                  1. This  Supplement is executed and delivered  pursuant to the
terms of that certain  Acquisition  Pledge Agreement,  dated as of April 3, 1998
(as  supplemented  by this Supplement and as the same has been and may hereafter
be  supplemented  by any  other  Pledge  Agreement  Supplement,  amended  by any
amendment or otherwise modified, the "PLEDGE AGREEMENT"), made by the Pledgor in
favor of the General Administrative Agent.

Terms defined in the Pledge Agreement and used herein are so used as so defined.

                  2. The Pledgor confirms and reaffirms the security interest in
the Pledged Stock granted to the General  Administrative  Agent under the Pledge
Agreement  and, as  additional  collateral  security for the prompt and complete
payment and performance  when due of all the Pledgor's  Obligations and in order
to induce the Lenders to make  additional  Loans to the  Borrowers in accordance
with the terms of the  Credit  Agreement,  the  Pledgor  hereby  pledges  to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the  General  Administrative  Agent,  for the  ratable  benefit of the
Lenders, a first priority hen on, and security interest in, all of the Pledgor's
right,  title and interest in the Additional  Pledged Stock listed on Schedule I
annexed hereto and all proceeds thereof.

                  3.  The  Pledgor  hereby  represents  and  warrants  that  the
representations  and warranties  contained in Section 4 of the Pledge  Agreement
are true and correct on the date of this Supplement  with references  therein to
"Pledged  Stock" to include the  Additional  Pledged  Stock listed on Schedule I
hereto.

                  4. This Supplement is  supplemental  to the Pledge  Agreement,
forms a part  thereof  and is subject to all the terms  thereof.  Pledged  Stock
does,  and shall be deemed to, include each item listed on Schedule I hereto and
each  such  item  shall  be and is  included  within  the  meaning  of the  term
"Additional Pledged Stock" as such term is used in the Pledge Agreement.


                                       1
<PAGE>


                                                         

                  IN WITNESS WHEREOF,  the Pledgor has caused this Supplement to
be duly executed and delivered by its duly authorized  officer on the date first
set forth above.

                                              LES ACQUISITION, INC.

                                              By:___________________________
                                                   Title:

                                       2

<PAGE>


                                                                      Schedule I
                                                                       To Pledge
                                                            Agreement Supplement
                                                            --------------------


                     DESCRIPTION OF ADDITIONAL PLEDGED STOCK

                  COMMON Stock,  with par value $0.10, of Safety-Kleen  Corp., a
Wisconsin corporation, either (i) represented by stock certificates as follows:

         Certificate            Certificate             No. of
              No.                  Date                 Shares
         -----------            -----------             ------











or (ii)_________  shares of which have been  transferred by book-entry  delivery
thereof to an account of [ ] for the benefit of the General Administrative Agent
with  _________________________-  [a Clearing  Corporation]  pursuant to Section
3(b) of the Pledge Agreement.


                                       3
<PAGE>


                           ACKNOWLEDGEMENT AND CONSENT

                The undersigned Safety-Kleen Corp. whose common stock is pledged
pursuant to the Acquisition Corp.  Pledge  Agreement,  dated as of April 3, 1998
(the "Pledge Agreement"),  made by LES Acquisition, Inc. in favor of the General
Administrative  Agent,  hereby  acknowledges  receipt  of a  copy  thereof.  The
undersigned  agrees to notify  the  General  Administrative  Agent  promptly  in
writing of the  occurrence of any of the events  described in paragraph  5(a) of
the Pledge Agreement. The undersigned further agrees that the terms of paragraph
9(c) of the Pledge Agreement shall apply to it, MUTATIS  MUTANDIS,  with respect
to all actions that may be required of it under or pursuant to or arising out of
Section 10 of the Pledge Agreement.


                                       SAFETY-KLEEN CORP.


                                       By: _________________________
                                            Title: Assistant General Counsel and
                                                   Secretary


<PAGE>



                           PLEDGE AGREEMENT SUPPLEMENT

          PLEDGE  AGREEMENT  SUPPLEMENT,   dated  as  of  April  7,  1998  (this
"SUPPLEMENT"),  made by LES  ACQUISITION,  INC.  (the  "PLEDGOR"),  in  favor of
TORONTODOMINION  (TEXAS),  INC., as General  Administrative  Agent (the "GENERAL
ADMINISTRATIVE  AGENT"), under the Amended and Restated Credit Agreement,  dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time,  the  "CREDIT  AGREEMENT"),  with LES Inc.,  a Delaware  corporation  (the
"COMPANY"),  and  Laidlaw  Environmental  Services  (Canada)  Ltd.,  a  Canadian
corporation   (the  "CANADIAN   BORROWER";   together  with  the  Company,   the
"BORROWERS"),  the several banks and other financial  institutions  from time to
time parties thereto (the  "Lenders"),  the General  Administrative  Agent,  The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  and  the  Managing  Agents,  Co-Documentation  Agents  and
Syndication Agents identified therein.

          1. This Supplement is executed and delivered  pursuant to the terms of
that  certain  Acquisition  Pledge  Agreement,  dated as of  April  3,  1998 (as
supplemented  by this  Supplement  and as the same has been and may hereafter be
supplemented by any other Pledge Agreement Supplement,  amended by any amendment
or otherwise modified, the "PLEDGE AGREEMENT"),  made by the Pledgor in favor of
the General Administrative Agent. Terms defined in the Pledge Agreement and used
herein are so used as so defined.

          2. The Pledgor  confirms and  reaffirms  the security  interest in the
Pledged  Stock  granted to the  General  ADMINISTRATIVE  Agent  under the Pledge
Agreement  and, as  additional  collateral  security for the prompt and complete
payment and performance  when due of all the Pledgor's  Obligations and in order
to induce the Lenders to make  additional  Loans to the  Borrowers in accordance
with the terms of the  Credit  Agreement,  the  Pledgor  hereby  pledges  to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the  General  Administrative  Agent,  for the  ratable  benefit of the
Lenders,  a first  priority  lien  on,  and  security  interest  in,  all of the
Pledgor's  right,  title and interest in the Additional  Pledged Stock listed on
Schedule I annexed hereto and all proceeds thereof.

          3. The Pledgor hereby represents and warrants that the representations
and  warranties  contained  in  Section 4 of the Pledge  Agreement  are true and
correct on the date of this  Supplement  with  references  therein  to  "Pledged
Stock" to include the Additional Pledged Stock listed on Schedule I hereto.

          4. This Supplement is supplemental  to the Pledge  Agreement,  forms a
part thereof and is subject to all the terms  thereof.  Pledged Stock does,  and
shall be deemed to,  include each item listed on Schedule I hereto and each such
item shall be and is included within the meaning of the term "Additional Pledged
Stock" as such term is used in the Pledge Agreement.


                                       1
<PAGE>


                                                         

          IN WITNESS WHEREOF,  the Pledgor has caused this Supplement to be duly
executed  and  delivered  by its duly  authorized  officer on the date first set
forth above.

                                                  LES ACQUISITION, INC.

                                            

                                                  By:________________________
                                                       Title: Secretary


                                       2
<PAGE>


                                                                      Schedule I
                                                                       To Pledge
                                                            Agreement Supplement
                                                            --------------------


                     DESCRIPTION OF ADDITIONAL PLEDGED STOCK

         Common Stock, with par value $0.10, of Safety-Kleen  Corp., a Wisconsin
corporation, represented by stock certificates as follows:

               Certificate             Certificate            No. of
                   No.                    Date                Shares
               -----------             -----------            ------

                 97103                April 7, 1998         5,923,652
                 97104                April 7, 1998            15,830


                                       3
<PAGE>



                           PLEDGE AGREEMENT SUPPLEMENT

          PLEDGE  AGREEMENT  SUPPLEMENT,  dated as of  April  10,  1998  (this
"SUPPLEMENT"),  made by LES  ACQUISITION,  INC.  (the  "PLEDGOR"),  in  favor of
TORONTODOMINION  (TEXAS),  INC., as General  Administrative  Agent (the "GENERAL
ADMINISTRATIVE  AGENT"), under the Amended and Restated Credit Agreement,  dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time,  the  "CREDIT  AGREEMENT"),  with LES Inc.,  a Delaware  corporation  (the
"COMPANY"),  and  Laidlaw  Environmental  Services  (Canada)  Ltd.,  a  Canadian
corporation   (the  "CANADIAN   BORROWER";   together  with  the  Company,   the
"BORROWERS"),  the several banks and other financial  institutions  from time to
time parties thereto (the  "Lenders"),  the General  Administrative  Agent,  The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  and  the  Managing  Agents,  Co-Documentation  Agents  and
Syndication Agents identified therein.

          1. This Supplement is executed and delivered  pursuant to the terms of
that  certain  Acquisition  Pledge  Agreement,  dated as of  April 3,  1998 (as
supplemented  by this  Supplement  and as the same has been and may hereafter be
supplemented by any other Pledge Agreement Supplement,  amended by any amendment
or otherwise modified, the "PLEDGE AGREEMENT"),  made by the Pledgor in favor of
the General Administrative Agent. Terms defined in the Pledge Agreement and used
herein are so used as so defined.

          2. The Pledgor  confirms and  reaffirms  the security  interest in the
Pledged  Stock  granted to the  General  Administrative  Agent  under the Pledge
Agreement  and, as  additional  collateral  security for the prompt and complete
payment and performance  when due of all the Pledgor's  Obligations and in order
to induce the Lenders to make  additional  Loans to the  Borrowers in accordance
with the terms of the  Credit  Agreement,  the  Pledgor  hereby  pledges  to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the  General  Administrative  Agent,  for the  ratable  benefit of the
Lenders,  a first  priority  lien  on,  and  security  interest  in,  all of the
Pledgor's  right title and interest in the  Additional  Pledged  Stock listed on
Schedule I annexed hereto and all proceeds thereof.

          3. The Pledgor hereby represents and warrants that the representations
and  warranties  contained  in  Section 4 of the Pledge  Agreement  are true and
correct on the date of this  Supplement  with  references  therein  to  "Pledged
Stock" to include the Additional Pledged Stock listed on Schedule I hereto.

          4. This Supplement is supplemental  to the Pledge  Agreement,  forms a
part thereof and is subject to all the terms  thereof.  Pledged Stock does,  and
shall be deemed to,  include each item listed on Schedule I hereto and each such
item shall be and is included within the meaning of the term "Additional Pledged
Stock" as such term is used in the Pledge Agreement.


                                       1
<PAGE>


                                                      

          IN WITNESS WHEREOF,  the Pledgor has caused this Supplement to be duly
executed  and  delivered by its DAILY  authorized  officer on the date first set
forth above.

                                       LES ACQUISITION, INC.


                                       By:___________________________
                                           Title: Secretary


                                       2
<PAGE>


                                                                      Schedule I
                                                                       To Pledge
                                                            Agreement Supplement
                                                            --------------------


                     DESCRIPTION OF ADDITIONAL PLEDGED STOCK

          COMMON Stock, with par value $0.10, of Safety-Kleen Corp., a Wisconsin
corporation, represented by stock certificates as follows:

               Certificate          Certificate           No. of
                   No.                 Date               Shares
                 97115             April 3, 1998              3
                 97106             April 3, 1998            256


                                       3


<PAGE>


                                                                       EXHIBIT C
                                                                       ---------

                                     FORM OF
                              REVOLVING CREDIT NOTE

U.S.$                                                         New York, New York
      -----------------
                                                                  April __, 1998

         FOR VALUE RECEIVED, the undersigned,  LES, INC., a Delaware corporation
(the  "COMPANY"),  hereby  unconditionally  promises to pay to the order of (the
"LENDER") at the office of _______________, located at ____________________, New
York, New York ________,  in lawful money of the United States of America and in
immediately  available  funds,  on the  Revolving  Credit  Termination  Date (as
defined in the Credit  Agreement  referred to below) the principal amount of (a)
UNITED STATES DOLLARS (U.S.$ ), or, if less, (b) the aggregate  unpaid principal
amount of all Revolving  Credit Loans made by the Lender to the Company pursuant
to Section  2.4 of such Credit  Agreement.  The  Company  further  agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time  outstanding at the rates and on the dates specified in Section 6.6
of such Credit Agreement.

         The  holder of this  Note is  authorized  to  record  on the  schedules
annexed hereto and made a part hereof or on a  continuation  thereof which shall
be  attached  hereto and made a part  hereof  the date,  Type and amount of each
Revolving  Credit Loan made by the Lender pursuant to such Credit  Agreement and
the date and amount of each payment or  prepayment  of principal  thereof,  each
continuation  thereof,  each  conversion of all or a portion  thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period and the
applicable  LIBOR  Rate  with  respect  thereto.  Each  such  recordation  shall
constitute  PRIMA FACIE evidence of the accuracy of the information so recorded,
PROVIDED that the failure to make any such  recordation or any error in any such
recordation  shall not affect the  obligations  of the Company under such Credit
Agreement or this Note.

         This Note (a) is one of the Revolving  Credit Notes  referred to in the
Amended and Restated  Credit  Agreement,  dated as of April 3, 1998 (as amended,
supplemented or otherwise  modified from time to time, the "CREDIT  AGREEMENT"),
among the Company, Laidlaw Environmental Services (Canada) Ltd., the Lender, the
other banks and  financial  institutions  or entities  from time to time parties
thereto,  Toronto Dominion (Texas),  Inc., as General  Administrative Agent, The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  The Bank of Nova  Scotia,  NationsBank,  N.A.,  The  First
National Bank of Chicago and Wachovia Bank, N.A., as Managing  Agents,  The Bank
of Nova  Scotia and The First  National  Bank of  Chicago,  as  Co-Documentation
Agents,  and  NationsBank,  N.A., as  Syndication  Agent,  (b) is subject to the
provisions of the Credit  Agreement and (c) is subject to optional and mandatory
prepayment  in  whole  or in part as  provided  in the  Credit  Agreement.  This
Revolving  Credit  Note is  secured  and  guaranteed  as  provided  in the  Loan


                                      1
<PAGE>


Documents.  Reference is hereby made to the Loan  Documents for a description of
the  properties  and assets in which a security  interest has been granted,  the
nature and extent of the security and the  guarantees,  the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.

         This  Note and the other  Revolving  Credit  Notes  issued of even date
herewith  have  been  issued as  replacements  and in  exchange  for (but not in
payment or satisfaction of) the Revolving Credit Notes dated May 15, 1997 in the
aggregate principal amount of $275,000,000.

         Upon the  occurrence of any one or more Events of Default  specified in
the Credit  Agreement,  all  amounts  then  remaining  unpaid on this Note shall
become, or may be declared to be,  immediately due and payable,  all as provided
in the Credit Agreement.

         All parties now and hereafter liable with respect to this Note, whether
maker,  principal,  surety,  guarantor,  endorser  or  otherwise,  hereby  waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein,  terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

         THIS NOTE  SHALL BE  GOVERNED  BY, AND  CONSTRUED  AND  INTERPRETED  IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

                                                     LES, INC.

                                                     By: ______________________
                                                         Title:

                                       2
<PAGE>
<TABLE>
<CAPTION>


                                                                                                                          Schedule A
                                                                                                            To Revolving Credit Note
                                                                                                            ------------------------

         BASE RATE LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

------------------------------------------------------------------------------------------------------------------------------------
  <S>        <C>                <C>                <C>                    <C>                   <C>                <C>
                                    Amount         Amount of Principal    Amount of Base Rate   Unpaid Principal
                Amount of        Converted to      of Base Rate Loans     Loans Converted to       Balance of
   Date      Base Rate Loans    Base Rate Loans         Repaid                LIBOR Loans       Base Rate Loans    Notation Made By
                                                                                                            
---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

====================================================================================================================================
</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                                                                                                                          Schedule B
                                                                                                            To Revolving Credit Note
                                                                                                            ------------------------

         LIBOR LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS

------------------------------------------------------------------------------------------------------------------------------------
  <S>      <C>          <C>           <C>                  <C>                    <C>                 <C>                 <C>
                        Amount        Interest Period      Amount of Principal    Amount of LIBOR     Unpaid Principal    
           Amount of    Converted to  and LIBOR Rate       of LIBOR Loans Repaid  Loans Converted     Balance of LIBOR    Notation
   Date    LIBOR Loans  LIBOR Loans   with Respect Thereto                         to Base Rate Loans  Loans               Made By
                                                                                                            
---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

====================================================================================================================================
</TABLE>


<PAGE>



                                                                       EXHIBIT D
                                                                       ---------

                                     FORM OF
                                 U.S. TERM NOTE

U.S.$______________________                                   New York, New York

                                                                  April __, 1998

          FOR VALUE RECEIVED, the undersigned, LES, INC., a Delaware corporation
(the  "COMPANY"),  hereby,  unconditionally  promises  to pay to  the  order  of
________________________  (the  "LENDER"),  at the  office  of  _______________,
located at  _______________________,  New York, New York ______, in lawful money
of the  United  States  of  America  and in  immediately  available  funds,  the
principal amount of _____________ UNITED STATES DOLLARS (U.S.$________),  or, if
less,  the unpaid  principal  amount of the Tranche [A] [B] [C] Term Loan of the
Lender made to the Company  pursuant to Section 2.1 of the Credit  Agreement (as
hereinafter defined).  The principal amount of this Note shall be payable in the
amounts and on the dates specified in Section 2.3[(a)] [(b)] [(c)] of the Credit
Agreement.  The  Company  further  agrees to pay  interest in like money at such
office on the unpaid  principal  amount hereof from time to time  outstanding at
the rates and on the dates specified in Section 6.6 of the Credit Agreement.

         The  holder of this  Note is  authorized  to  record  on the  schedules
annexed hereto and made a part hereof or on a  continuation  thereof which shall
be  attached  hereto  and made a part  hereof  the date,  Type and amount of the
Tranche  [A] [B] [C] Term  Loan of the  Lender  and the date and  amount of each
payment or prepayment of principal with respect thereto,  each conversion of all
or a portion  thereof to another  Type,  each  continuation  of all or a portion
thereof  as the same Type and,  in the case of LIBOR  Loans,  the length of each
Interest Period with respect  thereto.  Each such  recordation  shall constitute
PRIMA FACIE evidence of the accuracy of the information so recorded. The failure
to make any such  recordation  (or any  error  therein)  shall  not  affect  the
obligations of the Company in respect of the Credit Agreement or this Note.

         This Note (a) is one of the U.S. Term Notes  referred to in the Amended
and  Restated  Credit  Agreement,  dated  as  of  April  3,  1998  (as  amended,
supplemented or otherwise  modified from time to time, the "CREDIT  AGREEMENT"),
among the Company, Laidlaw Environmental Services (Canada) Ltd., the Lender, the
several  other banks and  financial  institutions  or entities from time to time
parties  thereto,  Toronto  Dominion  (Texas),  Inc., as General  Administrative
Agent,  The  Toronto-Dominion   Bank,  as  Canadian   Administrative  Agent,  TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank,  N.A.,
The First National Bank of Chicago and Wachovia Bank,  N.A., as Managing Agents,
The  Bank  of  Nova  Scotia  and  The  First   National  Bank  of  Chicago,   as
Co-Documentation  Agents,  and NationsBank,  N.A., as Syndication  Agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to


                                      1
<PAGE>


optional and mandatory  prepayment in whole or in part as provided in the Credit
Agreement.  This  Note  is  secured  and  guaranteed  as  provided  in the  Loan
Documents.  Reference is hereby made to the Loan  Documents for a description of
the  properties  and assets in which a security  interest has been granted,  the
nature and extent of the security and the  guarantees,  the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.

         This Note and the other  Tranche [A] [B] [C] Term Notes  issued of even
date herewith have been issued as  replacements  and in exchange for (but not in
payment or  satisfaction  of) the  Tranche  [A] [B] [C] Term Notes dated May 15,
1997 in the aggregate principal amount of $______________.

         Upon the  occurrence  of any one or more of the Events of Default,  all
amounts then remaining  unpaid on this Note shall become,  or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

         All parties now and hereafter liable with respect to this Note, whether
maker,  principal,  surety,  guarantor,  endorser  or  otherwise,  hereby  waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein,  terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

    THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND  INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

                                                     LES, INC.


                                                     By:                        
                                                        -----------------------
                                                        Title:

                                       2
<PAGE>

<TABLE>
<CAPTION>


                                                                                                                          Schedule A
                                                                                                                    To U.S.Term Note
                                                                                                                    ----------------

         LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS

------------------------------------------------------------------------------------------------------------------------------------
  <S>        <C>                <C>                <C>                    <C>                   <C>                <C>
                                    Amount         Amount of Principal    Amount of Base Rate   Unpaid Principal
                Amount of        Converted to      of Base Rate Loans     Loans Converted to       Balance of
   Date      Base Rate Loans    Base Rate Loans         Repaid                LIBOR Loans       Base Rate Loans    Notation Made By
                                                                                                            
---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------

====================================================================================================================================
</TABLE>


<PAGE>


<TABLE>
<CAPTION>


                                                                                                                          Schedule B
                                                                                                                    To U.S.Term Note
                                                                                                                    ----------------

         LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS

------------------------------------------------------------------------------------------------------------------------------------
  <S>      <C>          <C>           <C>                  <C>                    <C>                 <C>                 <C>
                        Amount        Interest Period      Amount of Principal    Amount of LIBOR     Unpaid Principal    
           Amount of    Converted to  and LIBOR Rate       of LIBOR Loans Repaid  Loans Converted     Balance of LIBOR    Notation
   Date    LIBOR Loans  LIBOR Loans   with Respect Thereto                        to Base Rate Loans  Loans               Made By
                                                                                                            
---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------

====================================================================================================================================
</TABLE>


<PAGE>



                                                                       EXHIBIT E
                                                                       ---------

                                     FORM OF
                               CANADIAN TERM NOTE

C$______________________                                      New York, New York

                                                                   April__, 1998


         FOR VALUE RECEIVED,  the undersigned,  LAIDLAW  ENVIRONMENTAL  SERVICES
(CANADA)  LTD.,  a  Canadian  corporation  (the  "CANADIAN  BORROWER"),  hereby,
unconditionally      promises      to     pay     to      the      order      of
____________________________________   (the   "Lender"),   at  the   office   of
_____________________  located at ________________________,  in the lawful money
of  Canada  and  in  immediately   available  funds,  the  principal  amount  of
_____________  CANADIAN DOLLARS (C$________),  or, if less, the unpaid principal
amount of the  Canadian  Term Loan of the Lender made to the  Canadian  Borrower
pursuant to Section 4.1 of the Credit  Agreement (as hereinafter  defined).  The
principal  amount of this Note shall be payable in the  amounts and on the dates
specified in Section 4.3 of the Credit Agreement.  The Canadian Borrower further
agrees to pay  interest  in like money at such  office on the  unpaid  principal
amount  hereof  from  time to time  outstanding  at the  rates  and on the dates
specified in Section 6.6 of the Credit Agreement.

         The holder of this Note is authorized to record on the schedule annexed
hereto  and made a part  hereof  or on a  continuation  thereof  which  shall be
attached  hereto and made a part hereof the date and amount of the Canadian Term
Loan of the  Lender and the date and amount of each  payment  or  prepayment  of
principal  thereof.  Each such recordation shall constitute prima FACIE evidence
of the  accuracy  of the  information  endorsed.  The  failure  to make any such
recordation  (or any error  therein)  shall not  affect the  obligations  of the
Canadian Borrower under the Credit Agreement or this Note.

         This Note (a) is one of the  Canadian  Term  Notes  referred  to in the
Amended and Restated  Credit  Agreement,  dated as of April 3, 1998 (as amended,
supplemented or otherwise  modified from time to time, the "CREDIT  AGREEMENT"),
among LES, Inc., the Canadian Borrower,  the Lender, the several other banks and
financial  institutions or entities from time to time parties  thereto,  Toronto
Dominion (Texas),  Inc., as General  Administrative  Agent, The Toronto-Dominion
Bank, as Canadian  Administrative  Agent, TD Securities (USA) Inc., as Arranger,
The Bank of Nova Scotia,  NationsBank,  N.A., The First National Bank of Chicago
and Wachovia  Bank,  N.A., as Managing  Agents,  The Bank of Nova Scotia and The
First National Bank of Chicago,  as  Co-Documentation  Agents,  and NationsBank,
N.A.,  as  Syndication  Agent,  (b) is subject to the  provisions  of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan  Documents.  Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security  interest has


                                       1
<PAGE>


been  granted,  the nature and extent of the  security and the  guarantees,  the
terms and conditions  upon which the security  interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.

         Upon the  occurrence  of any one or more of the Events of Default,  all
amounts then remaining  unpaid on this Note shall become,  or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.

         All parties now and hereafter liable with respect to this Note, whether
maker,  principal,  surety,  guarantor,  endorser  or  otherwise,  hereby  waive
presentment, demand, protest and all other notices of any kind.

         Unless otherwise defined herein,  terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.

    THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND  INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

                                         LAIDLAW ENVIRONMENTAL SERVICES
                                         (CANADA) LTD.


                                         By: 
                                             -------------------------
                                             Title:

                                       2
<PAGE>


                                                                      Schedule A
                                                           To Canadian Term Note
                                                           ---------------------

            CANADIAN TERM LOANS AND REPAYMENTS OF CANADIAN TERM LOANS

--------------------------------------------------------------------------------

                                
              Amount of     Amount of Principal   Unpaid Principal
            Canadian Term    of Canadian Term       of Balance of       Notation
   Date         Loans          Loans Repaid      Canadian Term Loans    Made By
                                                                                
----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------


----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------

----------- -------------- --------------------- -------------------- ----------
================================================================================


<PAGE>

                                                                       EXHIBIT G
                                                                       ---------


                                     FORM OF
                                 ACCEPTANCE NOTE

C$                                                              Toronto, Ontario
  -----
                                                                 ---------, --- 
                                        

          FOR VALUE RECEIVED,  the undersigned,  LAIDLAW ENVIRONMENTAL  SERVICES
(CANADA) LTD., a corporation incorporated, organized and existing under the laws
of  the  Province  of  [Ontario],  Canada  (the  "CANADIAN  BORROWER"),   hereby
unconditionally  promises  to pay to the order of [INSERT  NAME OF LENDER]  (the
"LENDER")   at  the   office   of  The   Toronto-Dominion   Bank,   located   at
_______________________,  in lawful money of Canada and in immediately available
funds,  the  principal  amount of [ ] CANADIAN  DOLLARS (C$ ). The  undiscounted
principal  amount hereof shall be repaid on ___________  ___, ____. The Canadian
Borrower further agrees that interest shall be paid herein,  in advance,  by the
Lender  discounting  the  face  amount  of this  Acceptance  Note in the  manner
described  in  Sections  5.3 and 5.7 of the  Credit  Agreement  described  below
(capitalized  terms used herein  without  definition  being defined as set forth
therein).

          This Acceptance Note (a) is one of the Acceptance Notes referred to in
the  Amended  and  Restated  Credit  Agreement,  dated as of  April 3,  1998 (as
amended,  supplemented  or  otherwise  modified  from time to time,  the "CREDIT
Agreement"),  among LES, Inc., the Canadian  Borrower,  the Lender,  the several
other banks and  financial  institutions  or entities  from time to time parties
thereto,  Toronto Dominion (Texas),  Inc., as General  Administrative Agent, The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  The Bank of Nova  Scotia,  NationsBank,  N.A.,  The  First
National Bank of Chicago and Wachovia Bank, N.A., as Managing  Agents,  The Bank
of Nova  Scotia and The First  National  Bank of  Chicago,  as  Co-Documentation
Agents,  and NationsBank,  N.A., as Syndication Agent, and (b) is subject to the
provisions of the Credit Agreement.

          This Acceptance Note is secured and guaranteed as provided in the Loan
Documents.  Reference is hereby made to the Loan  Documents for a description of
the  properties  and assets in which a security  interest has been granted,  the
nature and extent of the security and the  guarantees,  the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.

Upon the  occurrence  of any one or more of the Events of  Default,  all amounts
then  remaining  unpaid on this Note shall  become,  or may be  declared  to be,
immediately due and payable,  all as provided in the Credit Agreement. 


     / Insert maturity date for Acceptances created simultaneously herewith.
                                      

                                       1
<PAGE>


          All  parties  now and  hereafter  liable  with  respect  to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.

          THIS NOTE SHALL BE  GOVERNED  BY, AND  CONSTRUED  AND  INTERPRETED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

                                   LAIDLAW ENVIRONMENTAL SERVICES 
                                   (CANADA) LTD.

                                   By:
                                       Name:
                                       Title:

                                       2
<PAGE>


                                                                       EXHIBIT H
                                                                       ---------

                                     FORM OF
                            PREPAYMENT OPTION NOTICE

Attention of [            ]
Telecopy No. [            ]

                                                                          [Date]

Ladies and Gentlemen:

         The   undersigned,   Toronto   Dominion   (Texas),   Inc.,  as  general
administrative agent (in such capacity, the "GENERAL  ADMINISTRATIVE AGENT") for
the Lenders,  refers to the Amended and Restated Credit  Agreement,  dated as of
April 3, 1998 (as amended, modified, extended or restated from time to time, the
"CREDIT AGREEMENT"),  among LES, Inc., Laidlaw  Environmental  Services (Canada)
Ltd., the Lenders from time to time parties thereto, the General  Administrative
Agent,  The  Toronto-Dominion   Bank,  as  Canadian   Administrative  Agent,  TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank,  N.A.,
The First National Bank of Chicago and Wachovia Bank,  N.A., as Managing Agents,
The  Bank  of  Nova  Scotia  and  The  First   National  Bank  of  Chicago,   as
Co-Documentation   Agents,   and  NationsBank,   N.A.,  as  Syndication   Agent.
Capitalized  terms used herein and not otherwise  defined  herein shall have the
meanings  assigned  to  such  terms  in  the  Credit   Agreement.   The  General
Administrative  Agent hereby gives notice of an offer of prepayment  made by the
Company  pursuant to Section  6.3(i) of the Credit  Agreement of the Tranche [B]
[C] Prepayment Amount.  Amounts applied to prepay the Tranche [B] [C] Term Loans
shall be  applied  pro rata to the  Tranche  [B] [C] Term Loan held by you.  The
portion of the  prepayment  amount to be  allocated  to the Tranche [B] [C] Term
Loan  held by you and the  date on  which  such  prepayment  will be made to you
(should you elect to receive such prepayment) are set forth below:


(A)  Total Tranche [B] [C] Term Loan Prepayment
     Amount                                               ----------

(B)  Portion of Tranche  [B] [C] Term Loan
     Prepayment  Amount to be received by you             ----------

(C)  Mandatory  Prepayment  Date  (10  Business  Days
     after  the  date  of this Prepayment Option Notice)  ----------


                                     1
<PAGE>


          If you wish to receive  the  portion of the  Tranche [B] [C] Term Loan
Prepayment  Amount  to be  allocated  to you on the  Mandatory  Prepayment  Date
indicated in paragraph (B) above,  please sign this notice in the space provided
below as evidence of your acceptance and return it via telecopy to the attention
of  [___________________]  at  Toronto  Dominion  (Texas),  Inc.,  NO LATER THAN
[10:00] A.M., NEW YORK CITY TIME, on the Mandatory  Prepayment Date, at Telecopy
No. [________________].

                                      TORONTO DOMINION (TEXAS), INC., as General
                                      Administrative Agent

                                      By:                                       
                                          -----------------------------------
                                         Name:
                                         Title:

                                     [Lender]

                                      By:                                       
                                          -----------------------------------
                                         Name:
                                         Title:


                                       2
<PAGE>




                                                                       EXHIBIT I
                                                                       ---------

                                     FORM OF
                               CLOSING CERTIFICATE

         Pursuant to Section 8.1(i)of the Amended and Restated Credit Agreement,
dated as of April 3, 1998 (the "CREDIT AGREEMENT"),  among LES, Inc., a Delaware
corporation,   Laidlaw   Environmental   Services   (Canada)  Ltd.,  a  Canadian
corporation, the several banks and other financial institutions or entities from
time to time parties thereto (the "LENDERS"), Toronto Dominion (Texas), Inc., as
General   Administrative   Agent,  The  Toronto-Dominion   Bank  ,  as  Canadian
Administrative  Agent, TD Securities  (USA) Inc., as Arranger,  The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank,
N.A., as Managing Agents, The Bank of Nova Scotia and The First National Bank of
Chicago,  as  Co-Documentation  Agents,  and  NationsBank,  N.A., as Syndication
Agent,  the undersigned,  ____________________  of [Loan Party] (the "COMPANY"),
hereby certifies as follows:

          1. The  representations and warranties of the Company set forth in the
     Credit  Agreement  and each of the other  Loan  Documents  to which it is a
     party or which are contained in any  certificate,  document or financial or
     other  statement  furnished  pursuant to or in  connection  with the Credit
     Agreement  or any Loan  Document are true and correct on and as of the date
     hereof  with the same  effect  as if made on the date  hereof,  except  for
     representations  and  warranties  expressly  stated to relate to a specific
     earlier date, in which case such  representations  and  warranties are true
     and correct as of such earlier date;

          2. No Default or Event of Default has occurred and is continuing as of
     the date  hereof or will  occur  after  giving  effect to the making of the
     Loans and the issuance of the Letters of Credit requested to be made and/or
     issued on the date hereof or the  consummation of each of the  transactions
     contemplated by the Loan Documents; and

          3. _________________ is and at all times since ________________, 199_,
     has  been the duly  elected  and  qualified  [Assistant]  Secretary  of the
     Company the  signature  set forth on the  signature  line for such  officer
     below is such officer's true and genuine signature;

and the  undersigned  [Assistant]  Secretary of the Company hereby  certifies as
follows:

          4. There are no liquidation or dissolution  proceedings  pending or to
     the  knowledge  of the  [Assistant]  Secretary  of the  Company  threatened
     against  the  Company or any of its  Subsidiaries,  nor has any other event
     occurred affecting or threatening the corporate existence of the Company or
     any of its Subsidiaries;

          5. The Company is a _________________ duly organized, validly existing
     and in good standing under the laws of _________________;
                                           


                                   1
<PAGE>


          6. (a)  Attached  hereto as EXHIBIT A is a true and  complete  copy of
     resolutions  duly  adopted  by the Board of  Directors  of the  Company  on
     __________  __, 1998;  such  resolutions  have not in any way been amended,
     modified, revoked or rescinded and have been in full force and effect since
     their  adoption to and  including the date hereof and are now in full force
     and effect;  such  resolutions  are the only  corporate  proceedings of the
     Company now in force  relating  to or  affecting  the  matters  referred to
     therein;

          (b) attached  hereto as EXHIBIT B is a true and  complete  copy of the
     By-laws of the Company as in effect at all times since __________ __, 19__,
     to and including the date hereof; and

          (c) attached  hereto as EXHIBIT C is a true and  complete  copy of the
     Certificate of Incorporation of the Company as in effect at all times since
     __________ __, 19__, to and including the date hereof; and

          7. The following  persons are now duly elected and qualified  officers
     of the  Company,  holding the offices  indicated  next to their  respective
     names below,  and such  officers have held such offices with the Company at
     all times since __________ __, 19__, to and including the date hereof,  and
     the signatures appearing opposite their respective names below are the true
     and genuine signatures of such officers,  and each of such officers is duly
     authorized  to  execute  and  deliver  on behalf of the  Company,  the Loan
     Documents to which it is a party and any  certificate  or other document to
     be delivered by the Company pursuant to any such Loan Document:

              NAME                    OFFICE                SIGNATURE

            -----------            -----------           ---------------

            -----------            -----------           ---------------

         Unless otherwise defined herein, capitalized terms which are defined in
the Credit Agreement and used herein are so used as so defined.

         IN WITNESS WHEREOF, the undersigned have hereunto set our names.

[NAME OF COMPANY]                       [NAME OF COMPANY]

By:____________________________                  By:____________________________
Name:                                               Name:
Title:                                              Title:

Date:  _____________, 1998

                                       2
<PAGE>




                                                                       EXHIBIT L
                                                                       ---------

                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE

         Reference is made to the Amended and Restated Credit  Agreement,  dated
as of April 3, 1998 (as  amended,  modified,  extended or restated  from time to
time, the "CREDIT AGREEMENT"),  among LES, Inc., Laidlaw Environmental  Services
(Canada) Ltd., the Lenders from time to time parties  thereto,  Toronto Dominion
(Texas) Inc., as the General Administrative Agent, The Toronto-Dominion Bank, as
Canadian  Administrative Agent, TD Securities (USA) Inc., as Arranger,  The Bank
of Nova Scotia,  NationsBank,  N.A.,  The First  National  Bank of Chicago,  and
Wachovia Bank, N.A., as Managing  Agents,  The Bank of Nova Scotia and The First
National Bank of Chicago, as Co-Documentation Agents, and NationsBank,  N.A., as
Syndication Agent. Unless otherwise defined herein,  terms defined in the Credit
Agreement  and used herein shall have the  meanings  given to them in the Credit
Agreement.

         The Assignor  identified on Schedule 1 hereto (the  "ASSIGNOR") and the
Assignee identified on Schedule 1 hereto (the "ASSIGNEE") agree as follows:

         1. The Assignor  hereby  irrevocably  sells and assigns to the Assignee
without recourse to the Assignor,  and the Assignee hereby irrevocably purchases
and  assumes  from the  Assignor  without  recourse to the  Assignor,  as of the
Effective Date (as defined  below),  the interest set forth on Schedule 1 hereto
(the "ASSIGNED  INTEREST") in and to the Assignor's rights and obligations under
the Credit  Agreement with respect to those credit  facilities  contained in the
Credit  Agreement  as are set  forth  on  Schedule  1 hereto  (individually,  an
"ASSIGNED FACILITY";  collectively,  the "ASSIGNED FACILITIES"),  in a principal
amount  and/or  commitment  amount for each  Assigned  Facility  as set forth on
Schedule 1 hereto.

         2. The Assignor (a) makes no  representation or warranty and assumes no
responsibility  with respect to any  statements,  warranties or  representations
made in or in  connection  with the  Credit  Agreement  or with  respect  to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit  Agreement,  any other Loan  Document or any other  instrument  or
document  furnished  pursuant  thereto,  other  than that the  Assignor  has not
created any adverse claim upon the interest  being  assigned by it hereunder and
that such  interest is free and clear of any such  adverse  claim;  (b) makes no
representation  or warranty  and assumes no  responsibility  with respect to the
financial condition of the Borrowers, any of their respective Subsidiaries,  any
other Loan Party or any other  obligor or the  performance  or observance by the
Borrowers,  any of their  respective  Subsidiaries,  any other Loan Party or any
other obligor of any of their respective  obligations under the Credit Agreement
or any  other  Loan  Document  or any other  instrument  or  document  furnished
pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the
Assigned  Facilities  and (i)  requests  that the  Administrative  Agents,  upon
request by the  Assignee,  exchange any  attached  Notes for a new Note or 


                                      1
<PAGE>


Notes payable to the Assignee and (ii) if the Assignor has retained any interest
in the Assigned Facility,  requests that the Administrative  Agents exchange any
attached Notes for a new Note or Notes payable to the Assignor,  in each case in
amounts which reflect the assignment  being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date).

         3.  The  Assignee  (a)  represents  and  warrants  that  it is  legally
authorized to enter into this  Assignment and  Acceptance;  (b) confirms that it
has  received  a copy of the  Credit  Agreement,  together  with  copies  of the
financial  statements  delivered pursuant to Section 9.1 thereof, the other Loan
Documents and such other documents and information as it has deemed  appropriate
to make its own credit  analysis and decision to enter into this  Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor,  the  Administrative  Agents  or any  other  Lender  and based on such
documents and information as it shall deem appropriate at the time,  continue to
make its own credit  decisions  in taking or not taking  action under the Credit
Agreement,  the  other  Loan  Documents  or any  other  instrument  or  document
furnished   pursuant  hereto  or  thereto;   (d)  appoints  and  authorizes  the
Administrative Agents to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement,  the other Loan Documents
or any other instrument or document  furnished pursuant hereto or thereto as are
delegated to the Administrative Agents by the terms thereof,  together with such
powers as are  incidental  thereto;  and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations  which by the terms of the Credit  Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction  outside  the United  States,  its  obligation  pursuant to Section
6.12(b) of the Credit Agreement.

         4. The effective date of this  Assignment  and Acceptance  shall be the
date set forth on  Schedule  1 hereto  (the  "EFFECTIVE  DATE").  Following  the
execution  of this  Assignment  and  Acceptance,  it will  be  delivered  to the
[General  Administrative  Agent]  for  acceptance  by it  and  recording  by the
Administrative  Agents  pursuant to the Credit  Agreement,  effective  as of the
Effective   Date  (which  shall  not,   unless   otherwise   agreed  to  by  the
Administrative Agents, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agents).

         5. Upon such  acceptance  and  recording,  from and after the Effective
Date,  the  Administrative  Agents  shall  make all  payments  in respect of the
Assigned Interest  (including  payments of principal,  interest,  fees and other
amounts)  to the  Assignee  whether  such  amounts  have  accrued  prior  to the
Effective Date or accrue  subsequent to the Effective Date. The Assignor and the
Assignee   shall  make  all   appropriate   adjustments   in   payments  by  the
Administrative Agents for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.


                                    2
<PAGE>


         6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit  Agreement  and,  to the extent  provided in this  Assignment  and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan  Documents and shall be bound by the  provisions  thereof and (b) the
Assignor  shall,  to the extent  provided  in this  Assignment  and  Acceptance,
relinquish  its rights and be  released  from its  obligations  under the Credit
Agreement.

         7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.

         IN WITNESS WHEREOF,  the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.


                                       3
<PAGE>





                                   SCHEDULE 1
-----------------------------------------------------------------
     Name of Assignor:

     Name of Assignee:

        Notices Address:

        Payment Instructions:

     Effective Date of Assignment:

             Credit             Principal/Commitment       Commitment Percentage
        Facility Assigned         Amount Assigned                 Assigned
     ---------------------------------------------------------------------------
                                        $                                 %
                                          ---------              ---------



     [NAME OF ASSIGNEE]                     [NAME OF ASSIGNOR]

     By:                                     By:
         ----------------------------            ----------------------------
     Title:                                  Title:


    Accepted:                                     Consented To:

     [TORONTO DOMINION (TEXAS) INC.,              LES, INC.
     as General Administrative Agent]

     [THE TORONTO-DOMINION BANK,
     as Canadian Administrative Agent]

     By:                                         By:                           
         -----------------------------               ------------------------
     Title:                                      Title:


--------
 /   Calculate the Commitment Percentage that is assigned to at least 15 decimal
     places and show as a percentage of the
     aggregate commitments of all Lenders.

/    The  Company's  consent is required in the event that the Assignee is not a
     Lender or an Affiliate of a Lender prior to effectiveness hereof.



                                       
<PAGE>

                                                                  
                                                                       EXHIBIT M
                                                                       ---------
                                                                      [MICHIGAN]




                              AMENDMENT TO MORTGAGE


                           LAIDLAW ENVIRONMENTAL, INC.
           (formerly known as Rollins Environmental, Inc.), Mortgagor

                                       to

                    TORONTO DOMINION (TEXAS), INC., Mortgagee







                       This Instrument was prepared by and
                     after recording should be returned to:

                           Simpson Thacher & Bartlett
                              425 Lexington Avenue
                            New York, New York 10017

                        Attention: Erin L. Rothfuss, Esq.



<PAGE>


                              AMENDMENT TO MORTGAGE


           THIS  AMENDMENT  TO  MORTGAGE,  ASSIGNMENT  OF RENTS AND  LEASES  AND
    SECURITY AGREEMENT (the  "AMENDMENT"),  dated as of April 3, 1998 is made by
    Laidlaw Environmental, Inc. (formerly known as Rollins Environmental, Inc.),
    a Delaware corporation ("MORTGAGOR"),  whose address is 1301 Gervais Street,
    Suite 300,  Columbia,  South Carolina  29201, to Toronto  Dominion  (Texas),
    Inc.,  a  Delaware  corporation,  as  general  administrative  agent for the
    Lenders referred to below (in such capacity,  "MORTGAGEE"), whose address is
    909 Fannin  Street,  Suite 1700,  Houston,  Texas 77010.  References to this
    "Amendment"   shall  mean  this   instrument   and  any  and  all  renewals,
    modifications,    amendments,   supplements,   extensions,   consolidations,
    substitutions,   spreaders  and  replacements  of  this  instrument.  Unless
    otherwise defined herein, capitalized terms shall have the meanings ascribed
    to them in the Credit Agreement (as defined below).


                                   BACKGROUND

           WHEREAS,  immediately prior to the date hereof,  LES, Inc.  (formerly
    known as Laidlaw Chem-Waste,  Inc.), Laidlaw Environmental Services (Canada)
    Ltd., the several banks and other  financial  institutions  or entities from
    time to  time  parties  thereto  (the  "PRIOR  LENDERS"),  Toronto  Dominion
    (Texas),  Inc., as general  administrative agent, The Toronto-Dominion Bank,
    as Canadian  administrative  agent, TD Securities  (USA) Inc., as advisor to
    the Borrowers and arranger of the commitments described herein, and The Bank
    of Nova Scotia, NationsBank, N.A. and The First National Bank of Chicago, as
    managing agents and NationsBank,  N.A., as syndication agent were parties to
    the Credit  Agreement  dated as of May 9, 1997 (as amended,  supplemented or
    otherwise  modified  from time to time prior to the date hereof,  the "PRIOR
    CREDIT  AGREEMENT")  pursuant to which certain loans and other extensions of
    credit were outstanding;

           WHEREAS,  LES, Inc., a Delaware corporation (the "COMPANY"),  Laidlaw
    Environmental  Services  (Canada) Ltd., a Canadian  corporation and a wholly
    owned Subsidiary of the Company (the "CANADIAN BORROWER",  together with the
    Company,   the   "BORROWERS"),   the  several  banks  and  other   financial
    institutions or entities from time to time parties thereto (the  "LENDERS"),
    Toronto  Dominion  (Texas),   Inc.,  as  general  administrative  agent  (as
    hereinafter    defined,   the   "GENERAL    ADMINISTRATIVE    AGENT"),   The
    Toronto-Dominion  Bank,  as Canadian  administrative  agent (as  hereinafter
    defined, the "CANADIAN  ADMINISTRATIVE AGENT"), TD Securities (USA) Inc., as
    advisor  to  the  Borrowers  and  arranger  of  the   commitments  (in  such
    capacities, the "ARRANGER"), and The Bank of Nova Scotia, NationsBank, N.A.,
    The First  National  Bank of Chicago and Wachovia  Bank,  N.A.,  as managing
    agents (each, in such capacity, a "MANAGING AGENT"), The Bank of Nova Scotia
    and The First National Bank of Chicago, as co-documentation  agent (each, in
    such  capacity,  a  "CO-DOCUMENTATION  AGENT"),  and  NationsBank,  N.A., as
    syndication agent (in such capacity, the "SYNDICATION AGENT") have

 
                                      1
<PAGE>


amended and restated  the Prior  Credit  Agreement to (a) increase the amount of
the credit  available  thereunder and (b) otherwise  amend and restate the Prior
Credit  Agreement  in its  entirety  as  more  FULLY  set  forth  in the  Credit
Agreement;

        WHEREAS,  by reason of the  amendment  and  restatement  effects  of the
Credit  Agreement,  the Lenders have succeeded to the Prior Lenders'  rights and
obligations  under the Prior Credit  Agreement on the terms and  conditions  set
forth in the Credit  Agreement  and after having given effect to such  amendment
and restatement, the Commitments of and the amount of the Loans owing to each of
the  Lenders  are as set  forth  on  Schedule  1.  1A  and 1.  1B of the  Credit
Agreement;

        WHEREAS, a certain Mortgage as more particularly described on Schedule B
attached hereto (the "MORTGAGE") given by Mortgagor to Mortgagee  encumbers real
property  owned in fee by  Mortgagor,  together  with the  improvements  located
thereon (the  "IMPROVEMENTS")  and is more particularly  described on Schedule A
attached hereto (the "REAL ESTATE"); and

        WHEREAS,  Mortgagee,  the Canadian Administrative Agent, the Syndication
Agent, the  Co-Documentation  Agents, the Arranger,  the Managing Agents and the
Lenders have entered into the Credit  Agreement on the condition  (among others)
that Mortgagor execute this Amendment;

         NOW THEREFORE,  in consideration of the premises and for the sum of Ten
Dollars ($10.00),  the receipt and sufficiency of which is hereby  acknowledged,
Mortgagor hereby agrees as follows:

         1. The  "Background"  section of the Mortgage is hereby  deleted in its
entirety and amended by substituting the following therewith:

                                   BACKGROUND

        A.  Mortgagor is the owner of the parcels of real property  described on
Schedule A attached  (such real  property,  together with all of the  buildings,
improvements,  structures and fixtures now or subsequently  located thereon (the
"IMPROVEMENTS"), being collectively referred to as the "REAL ESTATE").

        B.  Mortgagor  is a  subsidiary  of LES,  Inc.,  a Delaware  corporation
("BORROWER").  Borrower (formerly known as Laidlaw Chem-Waste,  Inc.) is a party
to that certain Credit Agreement (the "PRIOR CREDIT  AGREEMENT") dated as of May
9, 1997 with Laidlaw  Environmental  Services  (Canada) Ltd.,  Mortgagee and the
financial  institutions  described  and  defined  therein,  which  Prior  Credit
Agreement  has been amended and  restated by that  certain  Amended and Restated
Credit  Agreement  dated  as of April  3,  1998  (as the  same  may be  amended,
supplemented,  modified,  extended,  restated or replaced from time to time, the
"CREDIT  AGREEMENT")  among  Borrower,  the  several  banks and other  financial
institutions  from time to time  parties  thereto  (the  "LENDERS"),  Mortgagee,
Laidlaw  Environmental  Services  (Canada) Ltd. (the "CANADIAN  BORROWER"),  The
Toronto-Dominion  Bank, as Canadian  administrative  agent, TD Securities  (USA)
Inc., as arranger, NationsBank, N.A., as syndication agent, and The Bank of

                                       2


<PAGE>


        Nova Scotia,  NationsBank,  N.A., The First National Bank of Chicago and
Wachovia Bank, N.A., as managing agents.  All defined terms used and not defined
herein shall have the meanings assigned thereto in the Credit Agreement.

         C.  Pursuant to the Credit  Agreement,  (i) certain of the Lenders have
agreed  to make  revolving  credit  loans to  Borrower  (the  "REVOLVING  CREDIT
LOANS");  (ii) Certain of the Lenders have agreed to make term loans to Borrower
(the "TERM LOANS"; together with the Revolving Credit Loans, the "LOANS"); (iii)
the  Issuing  Lender  has agreed to issue  letters of credit for the  account of
Borrower and (iv) pursuant to the Credit Agreement, Borrower has guaranteed term
loans to be made by certain of the Lenders to the  Canadian  Borrower  under the
Credit Agreement and certain loans by The Toronto-Dominion  Bank to the Canadian
Borrower pursuant to a separate loan agreement (the "CANADIAN OPERATING FACILITY
LOANS") (the  collective  obligations  of Borrower  thereunder,  the  "GUARANTOR
OBLIGATIONS").  The maximum  aggregate  principal  amount of the Loans,  the L/C
Obligations  and the Canadian  Operating  Facility Loans  outstanding at any one
time shall not exceed $2,100,000,000.

         D.  Pursuant  to a  letter  agreement  dated  as  of  March  31,  1998,
NationsBank  of Texas,  N.A. has agreed to make loans to Borrower  (the "WORKING
CAPITAL LOANS").

         E. The Loans may be  evidenced  by  promissory  notes of Borrower  made
payable  to the  order of the  relevant  Lender  (as the  same  may be  amended,
supplemented,  modified,  extended,  restated or replaced from time to time, the
"NOTES").  Each Loan bears interest at the rate stated in the Credit  Agreement;
references in this Mortgage to the "Default  Rate" shall mean, at any time,  the
interest rate applicable to overdue  principal  amounts of the Loans as provided
in the Credit  Agreement.  The  obligation  of Borrower to reimburse the Issuing
Lender  for  amounts   drawn  under   Letters  of  Credit  (the   "REIMBURSEMENT
OBLIGATIONS")  is  governed  by the  section  of the Credit  Agreement  entitled
"Letters of Credit."

         F.  Mortgagee  is the  general  administrative  agent  for the  Lenders
pursuant to the Credit Agreement and the Guarantee and Collateral  Agreement (as
defined in the Credit  Agreement).  Mortgagor  will benefit,  as a subsidiary of
Borrower,  from Borrower entering into the Credit  Agreement.  In recognition of
the benefits  conferred on  Mortgagor,  Mortgagor has executed the Guarantee and
Collateral  Agreement (the  "GUARANTEE"),  under which  Mortgagor  guarantees to
Mortgagee,  as  general  administrative  agent for the  Lenders,  the prompt and
complete   payment  and  performance  by  Borrower  when  due  of  the  Borrower
Obligations  and  the  Working  Capital  Obligations  (each  as  defined  in the
Guarantee).

         G. It is a condition precedent to the obligation of the Lenders to make
their  respective  Loans to Borrower and the Canadian  Borrower,  of the Issuing
Lender to issue the  Letters  of  Credit  for the  account  of  Borrower  and of
NationsBank,  N.A. to make the Working  Capital Loans to Borrower that Mortgagor
shall have executed and delivered  this Mortgage to Mortgagee for the benefit of
Mortgagee  and the other  Lenders,  and  Mortgagor  is willing to so execute and
deliver  this  Mortgage  in order to obtain the  benefits  available  to it from
Borrower entering into the Credit Agreement.

                                       3


<PAGE>


         NOW,  THEREFORE,  in  consideration  of  the  premises  and  to  induce
Mortgagee and the other Lenders to make their  respective Loans to LES, Inc. and
the Canadian  Borrower and the Issuing Lender to issue the Letters of Credit for
the  account of LES,  Inc.,  Mortgagor  hereby  agrees with  Mortgagee,  for the
benefit of Mortgagee and the other Lenders as follows:

               i.   All  references  in the  Mortgage to the "Credit  Agreement"
                    shall  be  deemed  to mean the  Prior  Credit  Agreement  as
                    amended and restated by the Credit Agreement,  and as it may
                    be further  amended,  restated,  supplemented  or  otherwise
                    modified from time to time.

               ii.  All  references  in the Mortgage to the  "Lenders"  shall be
                    deemed to mean the Lenders under the Credit Agreement.

               iii. All  references  in the  Mortgage  to the  "Notes"  shall be
                    deemed to mean the Notes as defined in the Credit Agreement.

         5. The Mortgage, as amended hereby, secures up to the maximum principal
amount of  $2,100,000,000.  Such  future  obligations  and  advances  (i) may be
obligatory or may be made at the option of Mortgagee  and the Lenders,  and (ii)
may be made after a reduction to zero or any other balance or otherwise,  to the
same extent as if the future  obligations  and advances were made on the date of
this Amendment.

                  iv.      The Mortgage,  as amended hereby,  is hereby ratified
                           and  confirmed  and is and shall remain in full force
                           and effect.

                                       4


<PAGE>


        This  Amendment  has been duly executed by Mortgagor and Mortgagee as of
the date first above written.

                                 LAIDLAW ENVIRONMENTAL, INC.
                                 (formerly known as Rollins Environmental, Inc.)


                                 By:________________________________________
                                      Name:
                                      Title:


In the Presence of:

----------------------------
Name:

----------------------------
Name:

                                 TORONTO DOMINION (TEXAS), INC.

                                 By:________________________________________
                                     Name:
                                     Title:


In the Presence of:

----------------------------
Name:

----------------------------
Name:


                                       5
<PAGE>


STATE OF NEW YORK  )
                   :   ss.:
COUNTY OF NEW YORK )


          The foregoing  instrument was acknowledged  before me this ____ day of
April   1998,   by______________________,   the  [  ]   President   of   LAIDLAW
ENVIRONMENTAL, INC. (formerly known as Rollins Environmental,  Inc.), a Delaware
corporation, on behalf of the corporation.


                           ----------------------------
                                  Notary Public

                              My Commission Expires

                                     [seal]

                                       


<PAGE>


STATE OF NEW YORK  )
                   :   ss.:
COUNTY OF NEW YORK )


The foregoing instrument was acknowledged before me this ____ day of April 1998,
by______________________, the [ ] President of TORONTO DOMINION (TEXAS), INC., a
Delaware corporation, on behalf of the corporation.



                           ----------------------------
                                  Notary Public

                              My Commission Expires

                                     [seal]



                                       


<PAGE>


                                   Schedule A
                                   ----------

                           Description of the Premises


Land in the City of Ann Arbor, Washtenaw County, Michigan described as:

Lots 15 and 18,  RESEARCH  PARK,  according  to the plat  thereof as recorded in
Liber 15 of Plats, Pages 56 and 57, Washtenaw County Records.

Tax Code No. 12-09-301-005 (Lot 18)
Tax Code No. 12-09-302-003 (Lot 15)


                                       
<PAGE>
                                                                     EXHIBIT N
                                                                     ---------
                                                                   [CALIFORNIA]





                           AMENDMENT TO DEED OF TRUST


                           LAIDLAW ENVIRONMENTAL, INC.
            (formerly known as Rollins Environmental, Inc.), Grantor

                                       to

                 FIRST AMERICAN TITLE INSURANCE COMPANY, Trustee

                           for the use and benefit of

                   TORONTO DOMINION (TEXAS), INC., Beneficiary









                       This Instrument was prepared by and
                     after recording should be returned to:

                           Simpson Thacher & Bartlett
                              425 Lexington Avenue
                            New York, New York 10017

                        Attention: Erin L. Rothfuss, Esq.


<PAGE>


                           AMENDMENT TO DEED OF TRUST


          THIS  AMENDMENT TO DEED OF TRUST,  ASSIGNMENT  OF RENTS AND LEASES AND
SECURITY  AGREEMENT  (the  "AMENDMENT"),  dated as of April ___, 1998 is made by
Laidlaw Environmental,  Inc. (formerly known as Rollins Environmental,  Inc.), a
Delaware  corporation  ("GRANTOR"),  whose address is 1301 Gervais Street, Suite
300, Columbia,  South Carolina 29201, to First American Title Insurance Company,
a California corporation  ("TRUSTEE"),  whose address is 4540 California Avenue,
Suite 100,  Bakersfield,  California  93309,  for the use and benefit of Toronto
Dominion (Texas), Inc., a Delaware corporation,  as general administrative agent
for the  Lenders  referred  to below (in such  capacity,  "BENEFICIARY"),  whose
address is 909 Fannin Street,  Suite 1700, Houston,  Texas 77010.  References to
this  "Amendment"   shall  mean  this  instrument  and  any  and  all  renewals,
modifications,     amendments,    supplements,    extensions,    consolidations,
substitutions,  spreaders and replacements of this instrument.  Unless otherwise
defined herein,  capitalized  terms shall have the meanings  ascribed to them in
the Credit Agreement (as defined below).


                                   BACKGROUND

          WHEREAS,  immediately  prior to the date hereof,  LES, Inc.  (formerly
known as Laidlaw  Chem-Waste,  Inc.),  Laidlaw  Environmental  Services (Canada)
Ltd., the several banks and other  financial  institutions or entities from time
to time  parties to thereto (the "PRIOR  LENDERS"),  Toronto  Dominion  (Texas),
Inc., as general  administrative  agent, The Toronto-Dominion  Bank, as Canadian
administrative  agent, TD Securities (USA) Inc., as advisor to the Borrowers and
arranger  of the  commitments  described  herein,  and The Bank of Nova  Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as managing agents and
NationsBank,  N.A., as  syndication  agent were parties to the Credit  Agreement
dated as of May 9, 1997 (as amended,  supplemented  or otherwise  modified  from
time to time prior to the date hereof, the "PRIOR CREDIT AGREEMENT") pursuant to
which certain loans and other extensions of credit were outstanding;

          WHEREAS,  LES, Inc., a Delaware  corporation (the "COMPANY"),  Laidlaw
Environmental  Services (Canada) Ltd., a Canadian corporation and a wholly owned
Subsidiary of the Company (the "CANADIAN  BORROWER";  together with the Company,
the "BORROWERS"), the several banks and other financial institutions or entities
from time to time parties thereto (the  "LENDERS"),  Toronto  Dominion  (Texas),
Inc., as general  administrative  agent (as  hereinafter  defined,  the "GENERAL
ADMINISTRATIVE  AGENT"), The Toronto-Dominion  Bank, as Canadian  administrative
agent  (as  hereinafter  defined,  the  "CANADIAN   ADMINISTRATIVE  AGENT"),  TD
Securities  (USA)  Inc.,  as  advisor  to  the  Borrowers  and  arranger  of the
commitments (in such capacities,  the "ARRANGER"),  and The Bank of Nova Scotia,
NationsBank,  N.A., The First National Bank of Chicago and Wachovia Bank,  N.A.,
as managing agents (each,  in such capacity,  a "MANAGING  AGENT"),  The Bank of
Nova Scotia and The First National Bank of Chicago,  as  co-documentation  agent
(each, in such capacity, a "CO-DOCUMENTATION AGENT"), and NationsBank,  N.A., as
syndication agent (in such capacity,  the "SYNDICATION  AGENT") have


                                       1
<PAGE>


amended and restated  the Prior  Credit  Agreement to (a) increase the amount of
the credit  available  thereunder and (b) otherwise  amend and restate the Prior
Credit  Agreement  in its  entirety  as  more  fully  set  forth  in the  Credit
Agreement;

          WHEREAS,  by reason of the  amendment and  restatement  effects of the
Credit  Agreement,  the Lenders have succeeded to the Prior Lenders'  rights and
obligations  under the Prior Credit  Agreement on the terms and  conditions  set
forth in the Credit  Agreement  and after having given effect to such  amendment
and restatement, the Commitments of and the amount of the Loans owing to each of
the Lenders are as set forth on Schedule 1.1A and 1.1B of the Credit Agreement;

          WHEREAS,  a certain  Deed of Trust as more  particularly  described on
Schedule B attached hereto (the "DEED OF TRUST") given by Grantor to Beneficiary
encumbers real property owned in fee by Grantor,  together with the improvements
located  thereon  (the  "IMPROVEMENTS")  and is more  particularly  described on
Schedule A attached hereto (the "REAL ESTATE"); and

          WHEREAS,   Beneficiary,   the  Canadian   Administrative   Agent,  the
Syndication  Agent,  the  Co-Documentation  Agents,  the Arranger,  the Managing
Agents and the Lenders have entered into the Credit  Agreement on the  condition
(among others) that Grantor execute this Amendment;

          NOW THEREFORE, in consideration of the premises and for the sum of Ten
Dollars ($10.00),  the receipt and sufficiency of which is hereby  acknowledged,
Grantor hereby agrees as follows:

          1. The "Background"  section of the Deed of Trust is hereby deleted in
its entirety and amended by substituting the following therewith:

                                   BACKGROUND

          A. Grantor is the owner of the parcels of real  property  described on
Schedule A attached  (such real  property,  together with all of the  buildings,
improvements,  structures and fixtures now or subsequently  located thereon (the
"IMPROVEMENTS"), being collectively referred to as the "REAL ESTATE").

          B.  Grantor is a  subsidiary  of LES,  Inc.,  a  Delaware  corporation
("BORROWER").  Borrower (formerly known as Laidlaw Chem-Waste,  Inc.) is a party
to that certain Credit Agreement (the "PRIOR CREDIT  AGREEMENT") dated as of May
9, 1997  with  Laidlaw  Environmental  Services  (Canada) Ltd., Beneficiary  and
the financial  institutions  described and defined  therein,  which Prior Credit
Agreement  has been amended and  restated by that  certain  Amended and Restated
Credit  Agreement  dated  as of April __,  1998  (as the  same  may be  amended,
supplemented,  modified,  extended,  restated or replaced from time to time, the
"CREDIT  AGREEMENT")  among  Borrower,  the  several  banks and other  financial
institutions from  time to time parties  thereto  (the "LENDERS"),  Beneficiary,
Laidlaw  Environmental  Services  (Canada) Ltd. (the "CANADIAN  BORROWER"),  The
Toronto-Dominion  Bank, as Canadian  administrative  agent, TD 


                                       2
<PAGE>

Securities (USA) Inc., as arranger, NationsBank, N.A., as syndication agent, and
The Bank of Nova Scotia,  NationsBank,  N.A., The First National Bank of Chicago
and Wachovia  Bank,  N.A.,  as managing  agents.  All defined terms used and not
defined herein shall have the meanings assigned thereto in the Credit Agreement.

          C. Pursuant to the Credit  Agreement,  (i) certain of the Lenders have
agreed  to make  revolving  credit  loans to  Borrower  (the  "REVOLVING  CREDIT
LOANS");  (ii) Certain of the Lenders have agreed to make term loans to Borrower
(the "TERM LOANS"; together with the Revolving Credit Loans, the "LOANS"); (iii)
the  Issuing  Lender  has agreed to issue  letters of credit for the  account of
Borrower and (iv) pursuant to the Credit Agreement, Borrower has guaranteed term
loans to be made by certain of the Lenders to the  Canadian  Borrower  under the
Credit Agreement and certain loans by The Toronto-Dominion  Bank to the Canadian
Borrower pursuant to a separate loan agreement (the "CANADIAN OPERATING FACILITY
LOANS") (the  collective  obligations  of Borrower  thereunder,  the  "GUARANTOR
OBLIGATIONS").  The maximum  aggregate  principal  amount of the Loans,  the L/C
Obligations  and the Canadian  Operating  Facility Loans  outstanding at any one
time shall not exceed $2,100,000,000.

          D.  Pursuant  to a  letter  agreement  dated  as of  March  31,  1998,
NationsBank  of Texas,  N.A. has agreed to make loans to Borrower  (the "WORKING
CAPITAL LOANS").

          E. The Loans may be evidenced  by  promissory  notes of Borrower  made
payable  to the  order of the  relevant  Lender  (as the  same  may be  amended,
supplemented,  modified,  extended,  restated or replaced from time to time, the
"NOTES").  Each Loan bears interest at the rate stated in the Credit  Agreement;
references in this Deed of Trust to the "Default  Rate" shall mean, at any time,
the  interest  rate  applicable  to  overdue  principal  amounts of the Loans as
provided in the Credit  Agreement.  The  obligation of Borrower to reimburse the
Issuing  Lender for amounts  drawn under  Letters of Credit (the  "REIMBURSEMENT
OBLIGATIONS")  is  governed  by the  section  of the Credit  Agreement  entitled
"Letters of Credit."

          F.  Beneficiary  is the general  administrative  agent for the Lenders
pursuant to the Credit Agreement and the Guarantee and Collateral  Agreement (as
defined in the Credit  Agreement).  Grantor will  benefit,  as a  subsidiary  of
Borrower,  from Borrower entering into the Credit  Agreement.  In recognition of
the benefits  conferred  on Grantor,  Grantor has  executed  the  Guarantee  and
Collateral  Agreement  (the  "GUARANTEE"),  under which  Grantor  guarantees  to
Beneficiary,  as general  administrative  agent for the Lenders,  the prompt and
complete   payment  and  performance  by  Borrower  when  due  of  the  Borrower
Obligations  and  the  Working  Capital  Obligations  (each  as  defined  in the
Guarantee).


                                       3
<PAGE>


          G. It is a condition  precedent  to the  obligation  of the Lenders to
make their  respective  Loans to  Borrower  and the  Canadian  Borrower,  of the
Issuing Lender to issue the Letters of Credit for the account of Borrower and of
NationsBank,  N.A. to make the Working  Capital  Loans to Borrower  that Grantor
shall have  executed and  delivered  this Deed of Trust to  Beneficiary  for the
benefit  of  Beneficiary  and the other  Lenders,  and  Grantor is willing to so
execute and deliver this Deed of Trust in order to obtain the benefits available
to it from Borrower entering into the Credit Agreement.

          NOW,  THEREFORE,  in  consideration  of the  premises  and  to  induce
Beneficiary  and the other Lenders to make their  respective  Loans to LES, Inc.
and the Canadian  Borrower and the Issuing Lender to issue the Letters of Credit
for the  account of LES,  Inc.,  Grantor  hereby  agrees with  Trustee,  for the
benefit of Beneficiary and the other Lenders as follows:

          2. All references in the Deed of Trust to the "Credit Agreement" shall
be deemed to mean the Prior  Credit  Agreement  as amended  and  restated by the
Credit Agreement,  and as it may be further amended,  restated,  supplemented or
otherwise modified from time to time.

          3. All  references  in the Deed of  Trust  to the  "Lenders"  shall be
deemed to mean the Lenders under the Credit Agreement.

          4. All  references in the Deed of Trust to the "Notes" shall be deemed
to mean the Notes as defined in the Credit Agreement.

          5. The Deed of Trust,  as amended  hereby,  secures up to the  maximum
principal amount of $2,100,000,000. Such future obligations and advances (i) may
be obligatory or may be made at the option of Beneficiary  and the Lenders,  and
(ii) may be made after a reduction to zero or any other balance or otherwise, to
the same extent as if the future  obligations and advances were made on the date
of this Amendment.

          6. The Deed of  Trust,  as  amended  hereby,  is hereby  ratified  and
confirmed and is and shall remain in full force and effect.

          This Amendment has been duly executed by Grantor and Beneficiary as
of the date first above written.

                                 LAIDLAW ENVIRONMENTAL, INC.
                                 (formerly known as Rollins Environmental, Inc.)


                                 By:________________________________________
                                      Name:
                                      Title:


                                 TORONTO DOMINION (TEXAS), INC.

                                 By:________________________________________
                                     Name:
                                     Title:


                                       4
<PAGE>


                                                                       EXHIBIT 0


                              AMENDED AND RESTATED
                             INTERCREDITOR AGREEMENT


         AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of April 3, 1998
(amended and restating the Intercreditor  Agreement,  dated as of May 15, 1997),
among  TORONTO  DOMINION  (TEXAS)  INC.,  as  General  Administrative  Agent (as
hereinafter  defined),  THE  TORONTO-DOMINION  BANK, as Canadian  Administrative
Agent (as hereinafter defined), THE TORONTO-DOMINION BANK, as Canadian Operating
Facility Agent (as  hereinafter  defined),  and  NATIONSBANK OF TEXAS,  N.A., as
Working Capital Lender (as hereinafter defined).

                              W I T N E S S E T H:
                              - - - - - - - - - - 


         WHEREAS,  LES, Inc.  (formerly  known as Laidlaw  Chem-Waste,  Inc.), a
Delaware corporation  (together with its successors and assigns, the "COMPANY"),
and  Laidlaw  Environmental  Services  (Canada)  Ltd.,  a  Canadian  corporation
(together  with its successors and assigns,  the "CANADIAN  BORROWER";  together
with the Company, the "BORROWERS"),  are parties to the Credit Agreement,  dated
as of May 9, 1997 (as heretofore  amended,  supplemented or otherwise  modified,
the  "EXISTING  CREDIT  AGREEMENT"),  with the lenders from time to time parties
thereto,  Toronto Dominion (Texas),  Inc., as general  administrative agent, The
Toronto-Dominion  Bank, as Canadian  administrative  agent, TD Securities  (USA)
Inc.,  as  arranger,  The Bank of Nova Scotia,  NationsBank,  N.A. and The First
National  Bank of  Chicago,  as  managing  agents,  and  NationsBank,  N.A.,  as
syndication agent;

         WHEREAS,  the  Borrowers  have  entered  into the Amended and  Restated
Credit  Agreement,  dated  as of April  3,  1998  (as the  same may be  amended,
supplemented or otherwise  modified from time to time, the "CREDIT  AGREEMENT"),
among the  Borrowers,  the several  banks and other  financial  institutions  or
entities from time to time parties  thereto (the  "Lenders"),  Toronto  Dominion
(Texas),  Inc., as general  administrative agent (in such capacity, the "General
ADMINISTRATIVE  AGENT"), The Toronto-Dominion  Bank, as Canadian  administrative
agent (in such capacity,  the "CANADIAN  ADMINISTRATIVE  AGENT"),  TD Securities
(USA)  Inc.,  as  advisor  to the  Borrowers  and  arranger  of the  commitments
described herein (in such capacities, the "ARRANGER"), the Managing Agents named
therein,  the  Co-Documentation  agents named therein and the Syndication  Agent
named therein,  which (i) amends and restates the Existing Credit  Agreement and
(ii) provides that the Borrower  Obligations (as  hereinafter  defined) shall be
secured and supported  pursuant to the U.S.  Security  Documents (as hereinafter
defined);

         WHEREAS,   included  in  the  Borrower  Obligations  is  the  Company's
guarantee,  pursuant  to  Section 13 of the Credit  Agreement,  of the  Canadian
Borrower  Obligations  (as  hereinafter  defined)  and  the  Canadian  Operating
Facility Obligations (as hereinafter defined);

                                       1


<PAGE>


         WHEREAS,  the Loan Parties,  the Lenders and the Administrative  Agents
have  agreed  that the  Security  Documents  shall,  in  addition  to  providing
collateral  security and credit  support for the Borrower  Obligations,  provide
collateral  security and credit support for the Working Capital  Obligations (as
hereinafter defined);

         WHEREAS,  the  obligations  of the Canadian  Borrower in respect of the
Canadian Borrower  Obligations and the Canadian Operating  Facility  Obligations
are secured  and  supported  pursuant to the  Canadian  Security  Documents  (as
hereinafter defined);

         WHEREAS,  the Canadian  Administrative Agent has entered into an agency
agreement, dated as of May 15, 1997 (as the same may be amended, supplemented or
otherwise modified from time to time, the "AGENCY AGREEMENT"),  with The Toronto
Dominion  Bank,  in its  capacity  as  Canadian  Operating  Facility  Lender (as
hereinafter  defined),  pursuant to which the Canadian  Administrative Agent has
agreed that,  in addition to acting as Canadian  Administrative  Agent under the
Canadian  Security  Documents,  it will act as collateral agent for the Canadian
Operating  Facility  Lender  under  the  Canadian  Security  Documents  (in such
capacity,   the  "CANADIAN   OPERATING   FACILITY  AGENT";   together  with  the
Administrative Agents, the "AGENTS");

         WHEREAS, in connection with the Existing Credit Agreement,  the Agents,
the lenders under the Existing Credit Agreement, the Canadian Operating Facility
Lender and NationsBank,  N.A. entered into the Intercreditor Agreement, dated as
of May 15, 1997 (the "EXISTING INTERCREDITOR  AGREEMENT"),  the purpose of which
was to establish the procedure for the disbursement of the proceeds of, or other
monies  received by any of the Agents,  such  lenders,  the  Canadian  Operating
Facility Lender and the Working Capital Lender in connection  with, the Security
Documents; and

         WHEREAS,  it is a condition precedent to the Lenders' agreement to make
Extensions of Credit under the Credit Agreement that the parties to the Existing
Intercreditor  Agreement amend and restate the Existing Intercreditor  Agreement
in order to confirm and  continue  the  procedure  for the  disbursement  of the
proceeds of, or other  monies  received by any of the Agents,  the Lenders,  the
Canadian  Operating Facility Lender and the Working Capital Lender in connection
with the Amended and Restated Credit Agreement and the Security Documents;

         NOW THEREFORE,  in consideration of the premises and for other good and
valuable consideration receipt of which is hereby acknowledged,  the Agents, the
Working Capital Lender and the Borrowers hereby agree as follows:

         1. DEFINITIONS.  (a) Unless otherwise defined herein,  terms defined in
the Credit  Agreement  and used herein shall have the meanings  given to them in
the Credit Agreement.

           (b) The following terms shall have the following meanings:

           "AGREEMENT":  this Amended and Restated Intercreditor  Agreement,  as
the same may be amended, modified or otherwise supplemented from time to time.

                                       2


<PAGE>


           "BORROWER  OBLIGATIONS":  as defined in the Guarantee and  Collateral
Agreement.  "CANADIAN BORROWER OBLIGATIONS": as defined in the Credit Agreement.
"CANADIAN OPERATING FACILITY": as defined in the Credit Agreement.

           "CANADIAN OPERATING FACILITY LENDER":  The  Toronto-Dominion  Bank in
its capacity as lender under the Canadian Operating Facility.

           "CANADIAN OPERATING FACILITY  OBLIGATIONS":  as defined in the Credit
Agreement.

           "CANADIAN SECURITY DOCUMENTS":  the "Canadian  Collateral  Documents"
described in the Credit Agreement.

           "GUARANTEE  AND  COLLATERAL  AGREEMENT":  as  defined  in the  Credit
Agreement.

           "SECURED CANADIAN  OBLIGATIONS":  the collective reference to (a) the
Canadian  Borrower   Obligations,   and  (b)  the  Canadian  Operating  Facility
Obligations,   including  in  each  case,  without  duplication,  the  Company's
guarantee of such obligations pursuant to Section 13 of the Credit Agreement.

           "SECURED  OBLIGATIONS":  the collective reference to (a) Secured U.S.
Obligations, and (b) Secured Canadian Obligations.

           "SECURED  U.S.  OBLIGATIONS":  the  collective  reference  to (a) the
Borrower Obligations, and (b) the Working Capital Obligations.

           "U.S. SECURITY  DOCUMENTS":  the collective reference to all Security
Documents other than the Canadian Security Documents.

           "WORKING  CAPITAL   FACILITY":   as  defined  in  the  Guarantee  and
Collateral Agreement.

           "WORKING CAPITAL LENDER":  as defined in the Guarantee and Collateral
Agreement.

           "WORKING  CAPITAL  OBLIGATIONS":  as  defined  in the  Guarantee  and
Collateral Agreement.

           (c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement  shall refer to this Agreement as a whole and
not to any  particular  provision of this  Agreement,  and section and paragraph
references are to this Agreement unless otherwise specified.

           (d) The  meanings  given to terms  defined  herein  shall be  equally
applicable to both the singular and plural forms of such terms.


                                       3
<PAGE>


         2.  DISTRIBUTION  OF Proceeds.  (a) Any money,  property or  securities
realized upon the sale, disposition or other realization upon all or any part of
the Canadian Security Documents shall be applied in the following order:

            (1) FIRST,  the amount equal to all costs and  expenses  (including,
        without limitation,  attorneys' fees and disbursements) paid or incurred
        by the  Canadian  Administrative  Agent in  connection  with such  sale,
        disposition  or other  realization  or the  protection of its rights and
        interests therein,  shall be distributed to the Canadian  Administrative
        Agent;

            (2) SECOND, from any surplus then remaining,  an amount equal to the
        unpaid Secured Canadian Obligations  consisting of principal and accrued
        interest  in the  nature of  Indebtedness  for  borrowed  money and fees
        thereon and unpaid reimbursement  obligations in respect of Acceptances,
        whether  matured  or  unmatured,   contingent  or  otherwise,  shall  be
        distributed to the respective  Persons to whom such amounts are owed (or
        their respective agents),  with such distribution to be made pro rata in
        accordance  with the aggregate  unpaid amounts of such Secured  Canadian
        Obligations and without priority of any one over any other;

            (3) THIRD,  from any surplus then remaining,  an amount equal to the
        other unpaid Secured  Canadian  Obligations  then  outstanding,  whether
        matured or unmatured,  contingent or otherwise,  shall be distributed to
        the  respective  Persons  to  whom  such  amounts  are  owed  (or  their
        respective  agents),  with  such  distribution  to be made  PRO  RATA in
        accordance with the unpaid amounts  thereof and without  priority of any
        one over any other; and

            (4) FOURTH,  from any surplus then remaining shall be distributed to
        the applicable  Loan Party or as otherwise may be required by applicable
        law.

            (c) The  Agents  shall  consult  in any sale,  disposition  or other
realization of or upon any Security Documents,  and with respect to the order of
the  application  of  proceeds  thereof,  with a view to causing all such sales,
dispositions  or other  realizations  to result in the  repayment of the maximum
possible  amount of Secured  Obligations.  In furtherance of the foregoing,  the
Agents may apply all proceeds of the Canadian  Security  Documents in accordance
with  paragraph  (a) above before  applying  any  proceeds of the U.S.  Security
Documents  to  the  Canadian  Borrower  Obligations  or the  Canadian  Operating
Facility Obligations.

         3. AMOUNTS OF SECURED OBLIGATIONS.  Whenever a distribution pursuant to
the  provisions  of Section 2 hereof is to be made,  the  Agents  will make such
distribution on the basis of the unpaid amounts thereof based upon the amount of
Secured U.S.  Obligations or Secured Canadian  Obligations,  as the case may be,
determined as provided in Section 5 hereof;  PROVIDED,  however, that during the
pendency of a bankruptcy  proceeding  with respect to any Loan Party at the time
of such  distribution,  the unpaid  amounts of Secured  Obligations of such Loan
Party shall mean all amounts allowed by the bankruptcy  court in respect of such
Secured Obligations as a basis for distributions  (including  estimated amounts,
if any,  allowed in respect of  contingent  claims)  but only to the extent that
prior  distributions  have not been  made in  respect  thereof.


                                       4
<PAGE>


Notwithstanding  anything to the contrary  contained herein, the Agents shall be
under no  obligation  to determine if any Secured  Obligations  are allowed in a
bankruptcy proceeding.

         4. TIME AND MANNER OF MAKING  PAYMENTS.  All  payments  of such  monies
under Section 2 shall be made at such time as the relevant Agent may in its sole
discretion determine.

         5.  DETERMINATION  OF AMOUNTS OF SECURED  OBLIGATIONS.  (a) Whenever an
Agent is required to  determine  the  existence  or amount  (including,  without
limitation,  the  principal  amount) of any of the Secured  Obligations  for any
purpose of this  Agreement,  it shall (unless  otherwise  directed by a court of
competent  jurisdiction)  be entitled  (but not  obligated)  to  determine  such
amounts on the basis of a certification  to it of such amounts by the Borrowers;
PROVIDED, however, that if, upon the request of any Agent, a Borrower shall fail
to  provide  the  certification  as to the  existence  or amount of any  Secured
Obligation as contemplated  above within a reasonable period of time, such Agent
shall be entitled to determine  such  existence or amount by such method as such
Agent may, in its sole discretion, determine.

             (b) The Agents may rely conclusively,  and shall be fully protected
in relying, on any determination made by it in accordance with the provisions of
Section  5(a)  hereof  (or  as  otherwise  directed  by  a  court  of  competent
jurisdiction)  and shall  have no  liability  to the  Borrowers,  any other Loan
Party,  any holder of any Secured  Obligation or any other Person as a result of
such determination.

             (c) Upon any request of any Agent from time to time,  the Borrowers
will furnish a  certificate  to such Agent as to the  existence or amount of any
Secured  Obligation and, if so requested,  such certificate  shall set forth all
the Secured  Obligations.  Any certificate by a Borrower under this Section 5(c)
shall be in form and substance reasonably satisfactory to the relevant Agent.

             (d) Upon any request of any Agent from time to time, each holder of
Secured Obligations will furnish a certificate to such Agent as to the existence
or  amount of any  Secured  Obligation  held by it and,  if so  requested,  such
certificate  shall  set  forth  all the  Secured  Obligations  held  by it.  Any
certificate by such holder of Secured  Obligations under this Section 5 shall be
in form and substance reasonably satisfactory to the relevant Agent.

             (e) If when  calculating  the amount of Secured  Obligations  it is
necessary  to convert  Canadian  Dollar  amounts  outstanding  into U.S.  Dollar
amounts,  such amounts shall be converted at the rate of exchange  quoted by the
General  Administrative Agent as its spot rate of exchange for the conversion of
Canadian Dollars to U.S.  Dollars at approximately  noon (New York time) on such
day.

         6. No  REPRESENTATION  BY AGENT.  No Agent shall be  responsible in any
manner   whatsoever   for  the   correctness   of  any   recitals,   statements,
representations  or warranties  contained herein or in any of the other Security
Documents,  all of which are made  solely by the  Borrowers  or other Loan Party
thereto,  as the case may be. No Agent makes any representations as to the value
of any  collateral  held by it or any  part  thereof  or as to the  title of the
Borrowers or any other Loan Party thereto, or as to the security afforded by the
Security  Documents or this


                                       5
<PAGE>


Agreement  or  as  to  the  validity,  execution  (except  its  own  execution),
enforceability,  legality or  sufficiency  of this Agreement or any of the other
Security  Documents or of the  sufficiency  of the Secured  Obligations,  and no
Agent  shall  incur any  liability  or  responsibility  in  respect  of any such
matters.

         7. POWERS  COUPLED WITH AN  INTEREST.  All powers,  authorizations  and
agencies  contained  in this  Agreement  are coupled  with an  interest  and are
irrevocable  until the Secured  Obligations are paid in full and the Commitments
under the Credit Agreement are terminated.

         8. Notices. All notices,  requests and demands to or upon the Agents or
the Borrowers to be effective  shall be in writing (or by telex,  fax or similar
electronic  transfer confirmed in writing) and shall be deemed to have been duly
given  or made  (i)  when  delivered  by hand or (ii) if  given  by  mail,  when
deposited in the mails by certified mail, return receipt requested,  or (iii) if
by telex,  fax or similar  electronic  transfer,  when sent and receipt has been
confirmed, addressed as follows:

If to the General Administrative Agent:         Toronto Dominion (Texas) Inc.
                                                909 Fannin Street, Suite 1700
                                                Houston, Texas 77010
                                                Attention: Jano Mott
                                                Fax:   (713) 951-9921

If to the Canadian Administrative Agent or
  the Canadian Operating Facility Agent:        The Toronto-Dominion Bank
                                                9th Floor, Toronto Dominion Bank
                                                TowerToronto Dominion Centre
                                                55 King Street West Toronto, 
                                                Ontario M5K IA2
                                                Attention: Manager Agency
                                                Fax:(416) 982-5535

If to the Working Capital Lender                c/o NationsBank, N.A.
                                                100 North Tryon Street 
                                                NCI-007-12-04
                                                Charlotte, North Carolina 28255
                                                Attention: David Sachsenmaier
                                                Fax:(704) 388-9215

If to either Borrower,  at the addresses  provided in Section 14.2 of the Credit
Agreement.  The  parties  hereto may change  their  addresses  and  transmission
numbers for notices by notice in the manner provided in this Section.

         9.  COUNTERPARTS.  This Agreement may be executed by one or more of the
parties on any number of  separate  counterparts,  and all of said  counterparts
taken together shall be deemed to constitute one and the same instrument.  A set
of the  counterparts of this Agreement signed by all the parties shall be lodged
with each Agent.


                                       6
<PAGE>


         10. SEVERABILITY.  Any  provision of this Agreement which is prohibited
or  unenforceable  in  any  jurisdiction  shall,  as to  such  jurisdiction,  be
ineffective  to the  extent  of such  prohibition  or  unenforceability  without
invalidating  the  remaining  provisions  hereof,  and any such  prohibition  or
unenforceability   in  any   jurisdiction   shall  not   invalidate   or  render
unenforceable such provision in any other jurisdiction.

         11. INTEGRATION. This Agreement represents the agreement of the parties
hereto with  respect to the subject  matter  hereof and there are no promises or
representations  by the Agents or any such lender relative to the subject matter
hereof not reflected herein.

         12. AMENDMENTS IN WRITING; NO WAIVER;  CUMULATIVE REMEDIES. (a) None of
the terms or provisions of this Agreement may be waived,  amended,  supplemented
or otherwise  modified  except by a written  instrument  executed by the parties
hereto.

             (b) No failure to  exercise,  nor any delay in  exercising,  on the
part of any Agent,  any right,  power or privilege  hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right,  power or privilege
hereunder shall preclude any other or further  exercise  thereof or the exercise
of any other right, power or privilege.

             (c) The rights and remedies herein provided are cumulative,  may be
exercised  singly or  concurrently  and are not exclusive of any other rights or
remedies provided by law.

         13. SECTION  HEADINGS.  The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction  hereof
or be taken into consideration in the interpretation hereof.

         14. BINDING  EFFECT.  This Agreement shall be binding upon and inure to
the benefit of the Borrowers,  each other Loan Party, the Agents and each holder
of Secured Obligations and their respective  successors and assigns, and nothing
herein is intended  or shall be  construed  to give any other  Person any right,
remedy or claim under, to or in respect of this Agreement.

         15.  GOVERNING LAW. This Agreement  shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.


                                       7
<PAGE>


         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.

                                          TORONTO-DOMINION BANK, as Canadian
                                          Administrative Agent


                                          By: _________________________________

                                          Title:_______________________________


                                          TORONTO-DOMINION BANK, as Canadian
                                          Operating Facility Agent


                                          By: _________________________________

                                          Title:_______________________________


                                          TORONTO DOMINION (TEXAS) INC., as
                                          General Administrative Agent


                                          By: _________________________________

                                          Title:_______________________________


                                          NATIONSBANK OF TEXAS, N.A., as Working
                                          Capital Lender


                                          By: _________________________________

                                          Title:_______________________________

Consented and Agreed:

LES, INC.


By: ____________________________________

Title:__________________________________


LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.


By: ____________________________________

Title:__________________________________


                                       8
<PAGE>

                                                                      EXHIBIT P
                                                                      ---------


                         EXCHANGE AGENT AGENCY AGREEMENT


          EXCHANGE AGENT AGENCY AGREEMENT,  dated as of April 3, 1998, among IBJ
SCHRODER BANK & TRUST  COMPANY,  as exchange  agent (in its capacity as exchange
agent,  the  "EXCHANGE  AGENT"),  TORONTO  DOMINION  (TEXAS)  INC.,  as  general
administrative  agent  under the  Credit  Agreement  referred  to below (in such
capacity the  "GENERAL  ADMINISTRATIVE  AGENT"),  and LES  ACQUISITION,  INC., a
Delaware corporation (the "Pledgor").


                                   W I T N E S S E T H:
                                   - - - - - - - - - - 

          WHEREAS, LES Inc., a Delaware corporation (the "Company"), and Laidlaw
Environmental  Services  (Canada)  Ltd., a Canadian  corporation  (the "Canadian
Borrower";  together  with the  Company,  the  "Borrowers")  are  parties to the
Amended and Restated  Credit  Agreement,  dated as of April 3, 1998 (as amended,
supplemented or otherwise  modified from time to time, the "Credit  Agreement"),
with the  several  banks  and  other  financial  institutions  from time to time
parties  thereto  (the  "Lenders"),   the  General   Administrative  Agent,  The
Toronto-Dominion  Bank, as Canadian  Administrative  Agent, TD Securities  (USA)
Inc.,  as  Arranger,  and  the  Managing  Agents,  Co-Documentation  Agents  and
Syndication Agents named therein;

          WHEREAS, the Pledgor is a wholly owned subsidiary of the Company;

          WHEREAS,  the Pledgor has executed and delivered the Acquisition Corp.
Pledge  Agreement,  dated as of the date  hereof (as  amended,  supplemented  or
otherwise modified from time to time, the "Pledge  Agreement"),  in favor of the
General  Administrative  Agent (unless  otherwise  defined herein or the context
otherwise  requires,  all capitalized  terms used herein shall have the meanings
assigned  thereto in the Credit Agreement or the Pledge  Agreement,  as the case
may be);

          WHEREAS,  the  Exchange  Agent has received  (and hereby  acknowledges
receipt of) a copy of the Credit Agreement and the Pledge Agreement;

         WHEREAS,  pursuant  to the  Depositary  Agency  Agreement,  dated as of
February 1998 (the "Depositary Agency  Agreement"),  between the Pledgor and the
Exchange  Agent,  the Exchange  Agent will be receiving  common stock,  with par
value $0. 10 (the  "Shares"),  of  Safety-Kleen  Corp., a Wisconsin  corporation
("Safety-Kleen"),  tendered by the holders  thereof for  exchange in an exchange
offer  (the  "Exchange  Offer")  made  pursuant  to and in  accordance  with the
Exchange Offer Documents;


                                       1
<PAGE>


          WHEREAS,  the Lenders are willing to make Loans to finance in part the
acquisition  of Shares in the  Exchange  Offer  (all  Shares so  acquired  being
"Purchased  Shares") upon  simultaneous  satisfaction  of the  condition,  among
others, that the General  Administrative Agent obtain a perfected first priority
security interest (the "Security  Interest") in the Purchased Shares pursuant to
the Pledge Agreement; and

          WHEREAS,  pursuant to the requirement set forth in Section 8. 1 (a) of
the Credit  Agreement,  it is a condition  precedent  to the making of the Loans
under the Credit  Agreement that this Exchange Agent Agency Agreement shall have
been duly executed and delivered by the parties hereto;

          NOW, THEREFORE, the parties hereto hereby agree as follows:

          1.  Pursuant  to the  Depositary  Agency  Agreement,  the  Pledgor has
appointed the Exchange Agent to accept  delivery of Shares tendered for exchange
in the Exchange  Offer.  The Pledgor  hereby  designates  the Exchange  Agent to
receive, on behalf of the Pledgor, delivery (within the meaning of Section 8-301
of the Uniform  Commercial  Code as in effect in the State of New York (the "New
York  UCC")) of  security  certificates  representing  the Shares by the holders
thereof  simultaneously  with the  payment  for the  Purchased  Shares,  and the
Exchange Agent hereby accepts such designation.

          2. The Pledgor  hereby  instructs the Exchange Agent to deliver to the
General  Administrative  Agent on behalf of the Pledgor and  pursuant to Section
3(a) of the Pledge  Agreement  stock  certificates  representing  the  Purchased
Shares  that are held from time to time by the  Exchange  Agent on behalf of the
Pledgor.   While  the  Exchange  Agent  is  in  possession  of  any  such  stock
certificates, the Exchange Agent agrees that it holds such stock certificates as
agent, and not as securities  intermediary  (within the meaning of Section 8-102
of the New York UCC),  for the  General  Administrative  Agent for  purposes  of
delivery (within the meaning of Section 8-301 of the New York UCC) of such stock
certificates to the General Administrative Agent.

          3. The Pledgor hereby instructs the Exchange Agent as follows:  on the
Closing Date,  with respect to any  Purchased  Shares which are not evidenced by
stock  certificates in the possession of the Exchange Agent on such date and are
held in the account of the Exchange Agent at The Depositary  Trust Company,  the
Exchange  Agent  shall hold such  Purchased  Shares as  securities  intermediary
(within  the  meaning  of  Section  8-102  of the New York  UCC) of the  General
Administrative  Agent and shall,  if at any time so  instructed  by the  General
Administrative  Agent,  cause such shares to be  transferred by book-entry to an
account  maintained  in the  name of the  General  Administrative  Agent  or its
securities  intermediary  with  The  Depositary  Trust  Company  or  a  Clearing
Corporation  as  specified  by the General  Administrative  Agent;  pending such
transfer the Exchange Agent hereby agrees that it holds such Purchased Shares as
securities  intermediary for the account of the General  Administrative Agent as
entitlement holder (within the meaning of Section 8-102 of the New York UCC).


                                       2
<PAGE>


          4. The General  Administrative  Agent hereby  designates  the Exchange
Agent as its agent to, and the Exchange Agent shall use  reasonable  efforts to,
as   expeditiously   as  possible   (a)   exchange  on  behalf  of  the  General
Administrative  Agent  all  certificates   representing   Purchased  Shares  for
certificates   registered  in  the  name  of  the  Pledgor  by  delivering  such
certificates  to The First  National  Bank of Chicago,  as  transfer  agent (the
"Transfer  Agency"),  and (b) request from the Transfer Agent  possession of the
certificates representing the Purchased Shares which have been registered in the
name of the Pledgor within the period  specified in Section  9-304(5) of the New
York UCC (such period  currently being 21 days) for  transferring a security for
the sole purpose of exchange or registration of transfer;  PROVIDED,  that prior
to delivering  any Purchased  Shares to the Transfer  Agent,  the Exchange Agent
shall have  received  from the  Transfer  Agent a duly  executed  agreement,  in
substantially the form of Annex I hereto, with respect to such Purchased Shares.

          5.  The  Exchange  Agent  shall   promptly   deliver  to  the  General
Administrative  Agent,  upon  receipt  thereof  from  the  Transfer  Agent,  all
certificates  representing  Purchased  Shares  registered  in  the  name  of the
Pledgor.  The Pledgor  shall,  upon the  request of the  General  Administrative
Agent,  promptly  deliver to the General  Administrative  Agent an undated stock
power for each such certificate executed in blank.

          6. The Exchange Agent agrees to be the General  Administrative Agent's
designated agent pursuant to the Pledge Agreement for purposes of perfecting the
General  Administrative  Agent's  security  interest  in  the  Purchased  Shares
represented by security  certificates  with respect to any such shares which are
not, for any reason,  delivered to the General  Administrative Agent pursuant to
paragraph 2 hereof.

          Further,  the  Exchange  Agent  (i)  agrees  to act as the  securities
intermediary  of the  General  Administrative  Agent in respect  of any  further
shares  transferred  to the  Exchange  Agent  by  book-entry  and  any  security
entitlement  (within  the  meaning of Section  8-102 of the New York UCC) of the
Pledgor  relating to financial assets pledged under the Pledge  Agreement,  (ii)
agrees  that  upon  payment  for  such  Purchased  Shares  it will  comply  with
entitlement  orders  (within the  meaning of Section  8-102 of the New York UCC)
from the General  Administrative Agent with respect to all such Purchased Shares
without further  consent by the Pledgor;  and (iii) agrees that it will transfer
such Purchased Shares as provided in Section 3 above.

          7. The  Exchange  Agent  waives  all  rights of offset  and bank liens
afforded  it by law,  agreement  or  otherwise  against  any funds  and  amounts
deposited by the Pledgor with it for the purpose of purchasing  Purchased Shares
but which at any time shall not have then been paid to the former  holder(s)  or
any other authorized payee(s) of Purchased Shares.

          8. (a) The  Exchange  Agent  represents  and  warrants  to the General
Administrative Agent, each Lender and the Pledgor that (i) it has full power and
authority to enter into this  Exchange  Agent Agency  Agreement  and perform its
obligations  hereunder;  (ii) the  execution,  delivery and  performance of this
Exchange Agent Agency  Agreement by the Exchange Agent has been duly  authorized
by all necessary corporate action; and (iii) this Exchange Agent


                                       3
<PAGE>


Agency  Agreement  is the legal,  valid and binding  obligation  of the Exchange
Agent,  enforceable  against the Exchange  Agent in  accordance  with its terms,
provided,  however,  that the Exchange Agent makes no representation or warranty
as to the validity,  priority or effectiveness of any security interest or as to
title to any property.

          (b) The Pledgor represents and warrants to the General  Administrative
Agent,  each  Lender  and the  Exchange  Agent  that (i) it has full  power  and
authority to enter into this  Exchange  Agent Agency  Agreement  and perform its
obligations  hereunder;  (ii) the  execution,  delivery and  performance of this
Exchange Agent Agency  Agreement by the Pledgor has been duly  authorized by all
necessary  corporate  action;  and (iii) this Exchange Agent Agency Agreement is
the legal, valid and binding obligation of the Pledgor,  enforceable against the
Pledgor in accordance with its terms.

          9. By its execution  hereof in the space provided  below,  the Pledgor
hereby (a) agrees to and  authorizes the  applicable  provisions  hereof and (b)
agrees to indemnify and hold free and harmless each of the Exchange  Agent,  the
Transfer Agent and the General Administrative Agent from and against any and all
actions,  losses,  costs,  liabilities and damages in connection with or arising
out of or relating to, with respect to the Exchange  Agent,  this Exchange Agent
Agency Agreement,  the Pledge Agreement, the Credit Agreement and the Depositary
Agency  Agreement,  and,  with  respect to the  Transfer  Agent and the  General
Administrative Agent, the Transfer Agent's or the General Administrative Agent's
obligations  hereunder or performance  hereof,  in each case, other than arising
out of the gross negligence or willful misconduct of the indemnified person. The
indemnification obligation set forth in this paragraph shall survive termination
of this Exchange Agent Agency Agreement,  the Depositary  Agency Agreement,  the
Credit Agreement and the Pledge Agreement.

          10. (a) The duties and  obligations  of the Exchange  Agent  hereunder
shall be determined  solely by the express  provisions  of this  Exchange  Agent
Agency  Agreement,  and the  Exchange  Agent shall not be liable  except for the
performance of such duties and obligations as are specifically set forth in this
Exchange Agent Agency  Agreement,  and no implied covenants or obligations shall
be read into this Exchange Agent Agency Agreement against the Exchange Agent. If
the Credit  Agreement or the Pledge Agreement as in effect on the date hereof is
amended, supplemented or otherwise modified in a manner which affects the rights
and obligations of the Exchange Agent hereunder, the Exchange Agent's rights and
obligations  hereunder  shall not be so affected  without the  Exchange  Agent's
prior consent.

          (b) The Exchange Agent assumes no  responsibility or liability for and
makes no  representations  as to the validity or  sufficiency  of this  Exchange
Agent Agency  Agreement  (other than as  specified  in  paragraph 8 above),  the
Credit  Agreement  or  the  Pledge  Agreement,  including  with  respect  to the
sufficiency of such agreements to perfect the Security Interest.

                                                                                
          11. The Pledgor shall pay the  reasonable  out-of-pocket  expenses and
reasonable  administrative  fees of the Exchange  Agent in  connection  with the
Exchange Agent's  obligations  pursuant to this Exchange Agent Agency Agreement,
including the reasonable fees and disbursements of counsel.


                                       4
<PAGE>


          12. The Exchange  Agent and the Pledgor agree that the  "jurisdiction"
(within the  meaning of Section  8-110(b) of the New York UCC) of the  Exchange
Agent, in its capacity as securities intermediary for the General Administrative
Agent, is the State of New York.

          13. This Exchange Agent Agency  Agreement may be amended,  modified or
supplemented only pursuant to a written instrument executed by all parties. THIS
EXCHANGE  AGENT  AGENCY  AGREEMENT  SHALL BE  GOVERNED  BY,  AND  CONSTRUED  AND
INTERPRETED IN ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW YORK,  INCLUDING,
WITHOUT LIMITATION, FOR THE PURPOSES OF SECTION 8-110 OF THE NEW YORK UCC.

          IN WITNESS  WHEREOF,  each of the undersigned has caused this Exchange
Agent Agency  Agreement to be duly  executed and  delivered as of the date first
written above.

                                       IBJ SCHRODER BANK & TRUST
                                       COMPANY, as Exchange Agent


                                       By: ___________________________________

                                       Title:_________________________________

                                       TORONTO DOMINION (TEXAS) INC.,
                                       as General Administrative Agent

                                       By:  __________________________________

                                       Title: ________________________________


                                       LES ACQUISITION, INC.

                                       By:____________________________________

                                       Title: ________________________________


                                       5
<PAGE>


                                                                         Annex I

                                                               April  ___, 1998


Toronto Dominion (Texas) Inc.,
 as General Administrative Agent

Attention:

Ladies and Gentlemen:

          The First National Bank of Chicago ("Transfer Agent") is acting as the
transfer agent for Safety-Kleen Corp., a Wisconsin corporation ("Safety-Kleen"),
with .respect to shares of common stock, with par value $0. 1 0, of Safety-Kleen
("Shares").  The Transfer Agent has been informed that LES Acquisition,  Inc., a
Delaware  corporation  (the "Pledgor") has made an exchange offer (the "Exchange
Offer") for Shares pursuant to an Offer to Exchange, dated January 26, 1998, and
that IBJ Bank & Trust Company is acting as exchange agent (in such capacity, the
"Exchange Agent") in connection with the Exchange Offer.

          The Pledgor has requested  that the Transfer Agent execute and deliver
this letter and has agreed to indemnify the Transfer Agent in the Exchange Agent
Agency  Agreement  for any claims which might  result from the Transfer  Agent's
signing of or any action taken pursuant to this letter.

          The  Transfer   Agent  hereby   confirms  that  with  respect  to  all
certificates  which the Exchange Agent has advised the Transfer Agent  represent
Shares  purchased by the Pledgor (the  "Purchased  Shares") and are delivered to
the  Transfer  Agent  for  transfer,  properly  completed  and in good  form for
transfer,  or for which the Transfer  Agent has been  instructed by the Exchange
Agent to transfer without regard to the  appropriateness  of the request and for
which the Transfer Agent shall have been  indemnified by the Exchange Agent, the
Transfer  Agent shall promptly  transfer such Purchased  Shares into the name of
the Pledgor and return all newly issued certificates representing such Purchased
Shares to the Exchange  Agent.  The Exchange  Agent shall have no  obligation to
instruct the Transfer Agent to transfer  Purchased  Shares without regard to the
appropriateness  of the request and to indemnify the Transfer Agent,  unless the
Exchange Agent has been itself indemnified to the Exchange Agent's  satisfaction
by the Pledgor.

                                             Very truly yours,

                                             THE FIRST NATIONAL BANK OF CHICAGO
                                             as Transfer Agent



                                             By:_______________________________
                                                Title: