AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MARCH 28, 1996

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

COMMISSION FILE NO. 0-16379

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

MASSACHUSETTS                             04-2997780
(State or other jurisdiction of       (IRS Employer Identification Number)
incorporation or organization)

325 WOOD ROAD,                                02184
BRAINTREE, MASSACHUSETTS                        (Zip Code)
(Address of principal executive
offices)

(617) 849-1800 EXT. 4454
(Registrant's telephone number):

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, 
$.01 par value

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [_]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to thisForm 10-K. [_]

On February 1, 1996, the aggregate market value of the voting stock of the
registrant held by nonaffiliates of the registrant was $17,569,599. Reference
is made to Part III of this report for the assumptions on which this
calculation is based.

On March 14, 1996, there were outstanding 9,567,547 shares of Common Stock,
$.01 par value.
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DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant's definitive proxy statement for its 1996
annual meeting of stockholders (which is expected to be filed with the
Commission not later than April 30, 1996) are incorporated by reference into
part III of this report.

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PART I

ITEM 1. BUSINESS

Clean Harbors, Inc., through its subsidiaries (collectively, the "Company"),
provides a wide range of industrial waste management services to a diversified
customer base across the United States. The Company was incorporated in
Massachusetts in 1980. The principal offices of the Company are located in
Braintree, Massachusetts.

The Company is one of the largest providers of industrial waste management
services in the Northeast and Mid-Atlantic regions of the United States, with
a growing presence in the Central, Midwest and Southern regions. The Company
seeks to be recognized by customers as the premier supplier of a broad range
of value-added industrial waste management services based upon quality,
responsiveness, customer service, variety of risk containment systems, and
cost effectiveness.

The Company currently maintains a network of service centers and sales
offices located in 24 states and Puerto Rico, and operates 12 waste management
facilities. The service centers interface with the customers, and perform a
variety of environmental remediation and hazardous waste management
activities, utilizing the waste management facilities to store, treat and
dispose of waste. The Company also provides analytical testing and engineering
services which complement its primary services and permit it to offer complete
solutions to its customers' complex environmental requirements. The Company's
principal customers are chemical, petroleum, transportation, utility and
industrial firms, other waste management companies and government agencies.

Intensified levels of federal and state environmental regulation and
enforcement have been a major factor in increasing the demand for the
Company's services. The Company believes that its success is attributable in
large part to customers' confidence in the Company's ability to comply with
these regulations and to manage effectively the risks involved in providing
these services. As part of its commitment to employee safety and quality
customer service, the Company has an extensive compliance program and a
trained environmental, health and safety staff. The Company follows a risk
management program designed to reduce potential liabilities for the Company
and its customers.

BUSINESS STRATEGY

The Company's strategy is to develop and maintain an ongoing relationship
with a diversified group of customers who have recurring needs for multiple
services in managing their environmental exposure.

In order to maintain and enhance its leading position in the industrial
waste management industry, the Company has implemented a strategy of internal
growth through the increased utilization of existing facilities, the addition
of new sales offices and service centers, and the development of new waste
management services. In addition, the Company achieves external growth through
strategic acquisitions.

Increased Utilization of Waste Management Facilities. The Company currently
has 12 waste management facilities which represent a substantial investment in
permits, plants and equipment. These facilities provide the Company with
significant operating leverage. There are opportunities to expand capacity at
these facilities by modifying the terms of the existing permits and by adding
capital equipment and new technology. Through selected permit modifications,
the Company can expand the range of treatment services which it offers to its
customers without the large capital investment necessary to acquire or build
new waste management facilities. The Company believes that permits for new
industrial waste management facilities will become increasingly difficult to
obtain, thereby placing new entrants and weaker competitors at a disadvantage.

Sales Office/Service Center Expansion. The Company opens sales offices in
attractive target markets in order to expand the Company's service areas.
Sales personnel focus on selling Transportation, Treatment, Disposal and
CleanPack services to the local market, with operational support from the
District Logistics Office located

1

closest to the "new" market area. The District Logistics Office is responsible
for delivering disposal and CleanPack services to the "new" market area by
utilizing existing capacity in the transportation fleet by utilizing backhauls
from existing routes. As demand at a particular sales office reaches a
sufficient level for Field Services, Emergency Response or Remedial work, the
sales office can be upgraded to a service center by the addition of service
personnel and equipment. The Company's sales offices and service centers
direct waste into the Company's waste management facilities. This allows the
Company to expand its service areas with low risk capital investment and to
maximize throughput with minimal incremental cost by obtaining additional
wastes to be handled by the Company's service centers and waste management
facilities.

New Waste Management Services. Industrial waste generators are demanding
alternatives to traditional waste disposal methods in order to increase
recycling and reclamation and to minimize the end disposal of hazardous waste
into the environment. The Company utilizes its technological expertise and
innovation to improve and expand the range of services which it offers to its
customers. The Company has commercialized a hazardous waste treatment system,
the Clean Extraction System ("CES"), to extract toxic compounds from
industrial wastewaters by utilizing non-toxic liquid carbon dioxide at high
pressures. CES offers for certain wastewater streams a recycling alternative
to incineration or injection into deep underground wells.

Occasionally, companies primarily operating in other industries or engaged
in research and development have sought to join with the Company to evaluate
the commercial potential of a particular technology or process for solving
environmental problems. In May 1994, the Company signed a development
agreement with Molten Metal Technology, Inc. of Waltham, Massachusetts
("MMT"), an environmental technology company developing an innovative,
proprietary processing technology known as Catalytic Extraction Processing
("CEP"). CEP utilizes a molten metal bath as a catalyst and solvent to break
down the molecular structure of various hazardous wastes into its elements.
With the addition of various other elements, industrial compounds are made
into products for reuse as a raw material by the feedstock generator or for
sale to other industrial users. Development of the CEP system pursuant to the
agreement is subject to a number of conditions, including the execution of
definitive agreements, and no assurances can be given that the proposed CEP
unit will be successfully developed.

In May 1995, the Company acquired a newly constructed hazardous waste
incinerator in Kimball, Nebraska, to incinerate liquid and solid wastes which
are not suitable for treatment in the CES. These actions to develop new waste
management services are expected to reduce the Company's dependence on outside
disposal vendors.

In November 1995, the Company entered into a Reciprocal Marketing and
Business Development Agreement with Rochem Separation Systems, Inc.
("Rochem"), the California based subsidiary of Rochem, A.G., owner of the
patented disc tube membrane module reverse osmosis system known as DTM
("DTM"). Rochem holds the exclusive U.S. rights to market and sell DTM, which
is compatible with Clean Harbors' Clean Extraction System ("CES") Technology.
Under the terms of the Agreement, Rochem and Clean Harbors will jointly
market, sell, install and support or operate DTM and CES technology to
customers throughout the United States. Clean Harbors also has the right to
negotiate an exclusive license with Rochem for new applications of DTM
technology developed during the term of the Agreement.

Capitalization on Industry Consolidation. The Company believes that its
large industrial customers will ultimately require a comprehensive range of
waste treatment capabilities, field services, industrial maintenance services
and emergency response services to be provided by a select number of service
providers. This trend will put smaller operators at a competitive disadvantage
due to their size and limited financial resources. To respond to its
customers' needs, the Company has increased the range of waste management
services it offers and has followed a strategy of acquiring companies in
existing, contiguous and new market areas. Since its formation in 1980, the
Company has completed 14 acquisitions which have significantly expanded the
Company's market share. Acquisitions within the Company's existing areas of
operation serve to capture incremental market share, while geographic
expansion creates new market opportunities. The Company continues to
investigate and discuss other potential acquisitions of permitted facilities
in order to enhance

2

service to its existing customer base and expand its customer base to include
new regional customers as well as waste generators with operations in several
regions.

ACQUISITIONS

The Company has made seven acquisitions since January 1, 1989. The Company
also recently expanded its Chicago waste management facility onto an adjoining
site formerly occupied by Chemical Waste Management, Inc., which will allow
the Company to offer new waste treatment services in the Midwest region.

DATE OF
ACQUISITION                    ACQUISITION                      PURCHASE PRICE
----------- -------------------------------------------------   --------------

1989     ChemClear Inc., a publicly-traded company in the
business of treating liquid and semi-liquid
hazardous and nonhazardous industrial wastes at
treatment plants in Baltimore, Maryland;
Cleveland, Ohio; Chicago, Illinois; and Chester,
Pennsylvania                                        $27.6 million
1989     Murphy's Waste Oil Service, Inc., the operator of
a waste oil treatment and storage facility in
Woburn, Massachusetts                               $0.2 million
1992     Connecticut Treatment Corporation, the operator
of a hazardous waste storage and treatment
facility in Bristol, Connecticut                    $2.4 million
1992     Mr. Frank, Inc., a Chicago-based transportation
and environmental services company serving
industrial companies primarily in Illinois,
Indiana and Michigan                                $2.2 million
1993     Spring Grove Resource Recovery, Inc., the
operator of a hazardous waste storage and
treatment facility in Cincinnati, Ohio              $7.0 million
1994     The assets of a hazardous and nonhazardous oil
reclamation facility located near Richmond,
Virginia                                            $0.4 million
1995     The assets of a newly constructed hazardous waste
incinerator located in Kimball, Nebraska            $5.2 million

Prior to closing any acquisition, the Company attempts to investigate
thoroughly the current and contingent liabilities of the company or assets to
be acquired, including potential liabilities arising from noncompliance with
environmental laws by prior owners for which the Company, as a successor
owner, might become responsible. The Company also seeks to minimize the impact
of potential liabilities by obtaining indemnities and warranties from the
sellers which may be supported by deferring payment of or by escrowing a
portion of the purchase price. See "Legal Proceedings" below for a description
of the indemnities which the Company has received in connection with past
acquisitions.

SERVICES PROVIDED BY THE COMPANY

SERVICES

The principal services provided by the Company fit within three categories:
treatment and disposal of industrial wastes ("Treatment and Disposal"); field
services provided at customer sites ("Field Services"); and specialized
repackaging, treatment and disposal services for laboratory chemicals and
household hazardous wastes ("CleanPacks"). The Company markets these services
on an integrated basis and, in many instances, services in one area of the
business support or lead to a project undertaken in another area.

In addition to these three principal services, the Company also provides
technical services such as analytical testing and engineering services and
personnel training. Such technical services primarily support the Company's
principal services, although technical services are also offered to a limited
extent on a stand-alone commercial basis.

The Company currently maintains a network of 12 waste management facilities,
complemented by service centers, district logistic office and sales offices in
24 states and Puerto Rico. The service centers and sales offices accommodate
sales personnel who develop and maintain contact with the Company's customers.
Customers are generally covered by "Agents of Business" (Account Managers,
CleanPack and Field Specialists, inside

3

Service Representatives) who are responsible for order taking, handling
customer inquiries and other administrative tasks. Account managers utilize
the expertise of product specialists in order to evaluate the scope of a
potential job, quote a job and ultimately detail the work order, including
personnel and equipment necessary to complete the job. The service centers and
logistic offices also serve as depots for the specialized equipment and
trained technical personnel which respond to customers' waste management
requirements. The Company utilizes a "hub and spoke" organization where
service centers, logistic offices and sales offices feed waste disposal
business into the Company's 12 waste management facilities. Waste which cannot
be treated at those facilities is sent to other final disposal sites.

As an integral part of the Company's services, industrial wastes are
collected from customers and transported by the Company to and between its
facilities for treatment or bulking for shipment to final disposal locations.
Customers typically accumulate waste in containers, such as 55-gallon drums,
or in bulk in storage tanks or 20-cubic yard roll-off boxes. In providing this
service, the Company utilizes a variety of specially designed and constructed
tank trucks and semi-trailers, as well as other third-party transporters,
including railroads. Liquid waste is frequently transported in bulk, but may
also be transported in drums. Heavier sludges or bulk solids are transported
in sealed, roll-off boxes or bulk dump trailers.

TREATMENT AND DISPOSAL

The Company transports, treats and disposes of industrial wastes for
commercial and industrial customers, health care providers, educational and
research organizations, other waste management companies and governmental
entities. The wastes handled include substances which are classified as
"hazardous" because of their corrosive, ignitable, infectious, reactive or
toxic properties, and other substances subject to federal and state
environmental regulation. Waste types processed or transferred in drums or
bulk quantities include:

.flammables, combustibles and other organics,
.acids and caustics,
.cyanides and sulfides,
.solids and sludges,
.industrial wastewaters,
.items containing PCBs, such as utility transformers and electrical light
ballasts,
.medical waste,
.other regulated wastes, and
.nonhazardous industrial waste.

The Company receives a detailed waste profile sheet prepared by the customer
to document the nature of the customer's waste. A representative sample of the
delivered waste is screened to ensure that it conforms to the customer's waste
profile record and to select an appropriate method of treatment and disposal.
Once the wastes are characterized, compatible groups are consolidated to
achieve economies in storage, handling, transportation and ultimate treatment
and disposal. At the time of acceptance of a customer's waste at the Company's
facility, a unique computer "bar code" identification character is assigned to
each container of waste, enabling the Company to use sophisticated computer
systems to track and document the status, location and disposition of the
waste.

Wastewater Treatment. The Company's treatment operations involve processing
hazardous wastes through the use of physical, chemical, thermal or other
methods. The solid waste materials produced by these wastewater processing
operations are then disposed of off-site at facilities owned and operated by
unrelated businesses.

The Company treats a broad range of industrial liquid and semi-liquid wastes
containing heavy metals, organics and suspended solids, including:

.acids and caustics,

4

.ammonias, sulfides, and cyanides,
.heavy metals, ink wastes, and plating solutions,
.landfill leachates and scrubber waters, and
.oily wastes and water soluble coolants.

Wastewater treatment can be economical as well as environmentally sound, by
combining different wastewaters in a "batching" process that reduces costs for
multiple waste stream disposal. Acidic waste from one source can be
neutralized with alkaline from a second source to produce a neutral solution.

Physical Treatment. Physical treatment methods include distillation,
separation and stabilization. These methods are used to reduce the volume or
toxicity of waste material or to make it suitable for further treatment,
reuse, or disposal. Distillation uses either heat or vacuum to purify liquids
for resale. Separation utilizes techniques such as sedimentation, filtration,
flocculation and centrifugation to remove solid materials from liquids.
Stabilization refers to a category of waste treatment processes designed to
reduce contaminant mobility or solubility and convert waste to a more
chemically stable form. Stabilization technology includes many classes of
immobilization systems and applications. Examples include low-temperature
processes such as adding a sand-like cement material, and high-temperature
processes such as vitrification. Stabilization is a frequent treatment method
for metal-bearing wastes received at several Company facilities, which treat
the waste to meet specific federal land disposal restrictions. After
treatment, the waste is tested to confirm that it has been rendered
nonhazardous. It can then be sent to a nonhazardous waste landfill, at
significantly lower cost than disposal at a hazardous waste landfill.

Thermal Treatment. Thermal treatment refers to processes that use high
temperature combustion the principal means of waste destruction. In May 1995,
the Company acquired a newly constructed, state-of-the-art hazardous waste
incinerator in Kimball, Nebraska, which uses a fluidized bed thermal oxidation
unit for maximum destruction efficiency of hazardous waste. The Company also
operates an incinerator at its Braintree facility which was previously used to
destroy medical waste. In late 1991, approvals were granted to allow the
Braintree incinerator to destroy nonhazardous wastes which were previously
sent to landfills or municipal incinerators. It also generates steam which is
used in steam distillation equipment for reclaiming solvents. Other waste
residues are incinerated in off-site facilities, such as the Nebraska
hazardous waste incinerator, and in similar facilities owned and operated by
other companies.

Resource Recovery. Resource recovery involves the treatment of wastes using
various methods which will effectively remove contaminants from the original
material to restore its fitness for its intended purpose, and to reduce the
volume of waste requiring disposal. In conjunction with recent regulatory
provisions restricting the burial of various types of hazardous wastes, the
Company substantially upgraded its existing facilities for the reclamation and
reuse of certain wastes, particularly solvent-based wastes generated by
industrial cleaning operations, metal finishing and other manufacturing
processes.

Spent solvents that can be recycled are processed through thin film
evaporators and other processing equipment and are distilled into clean,
usable products. Upon recovery of these products, the Company either returns
the recovered solvents to the original generator or sells them to third
parties.

Organic liquids and solids with sufficient heat value are blended to meet
strict specifications for use as supplemental fuels for cement kilns,
industrial furnaces and other high-efficiency boilers. The Company has
installed fuels blending equipment at its Chicago and Cincinnati plants to
prepare these supplemental fuels. The Company has established relationships
with a number of supplemental fuel users that are licensed to accept the
blended fuel material. Although the Company pays a fee to the users who accept
this product, this disposal method is substantially less costly than other
disposal methods.

Clean Extraction System. The Clean Extraction System ("CES") is a hazardous
waste treatment system commercialized by the Company which extracts organic
compounds from industrial wastewater. CES uses carbon dioxide that has been
compressed at high pressure into a liquid. Under these "supercritical"
conditions,

5

carbon dioxide acts as a powerful solvent for most commonly occurring
contaminants. CES uses supercritical carbon dioxide as a solvent to remove
organic contaminants, such as gasoline, acetone, methylene chloride,
pesticides and other chemicals, from industrial wastewater called "lean
water." Lean water is generated by oil companies, utilities, and manufacturers
of specialty chemicals and pharmaceuticals.

The CES was installed at the Company's Baltimore facility, and began
commercial operation in June 1992. The system includes specialized
pretreatment and post-treatment systems and techniques, in addition to a
central extractor unit, to maximize extraction efficiency. In the Baltimore
CES, wastewater receives chemical and physical pretreatment before entering a
central extractor unit. The wastewater is fed into the top of a 40-foot tall
pressurized chamber, and flows down through a stack of perforated plates as a
continual supply of liquefied carbon dioxide rises from the bottom of the
chamber. As the wastewater and carbon dioxide mix, organic contaminants
separate from the water and dissolve in the carbon dioxide. The liquid carbon
dioxide flows from the top of the chamber into a decompression vessel. As the
pressure decreases, the carbon dioxide vaporizes into a gas, leaving the
organic contaminants at the bottom of the vessel, where they are collected.
The concentrated organics can be recycled or burned as a supplemental fuel for
resource recovery. The cleansed water flows from the bottom of the chamber,
through a series of decompression and post-treatment tanks. After treatment,
the cleansed water is discharged to the City of Baltimore sewer treatment
works.

This process enables the Company to handle a broad range of complex,
difficult to treat organic and inorganic "lean waters" formerly sent to other
companies for disposal. CES offers the Company's industrial customers, such as
chemical or pharmaceutical companies, an attractive recycling alternative to
disposal of their "lean water" by incineration or injection into deep
underground wells. Current treatment capacity is between six and ten million
gallons per year, depending on the characteristics of the wastewater being
treated.

Disposal. After treatment of industrial wastes at the Company's facilities,
the hazardous waste residues (such as sludges) which remain after such
treatment are disposed of in facilities operated by third parties. The Company
also arranges for the disposal of its customers' hazardous wastes which cannot
be treated at Company-owned facilities. Wastes which cannot be disposed of in
the Nebraska hazardous waste incinerator, which the Company acquired in May
1995, are sent to other incinerators, landfills, and disposal facilities
operated by third parties. These arrangements are typically made before the
Company accepts waste. Although the Company's transfer facilities are licensed
to store waste, such storage is typically for a short period of time before
the waste is sent for ultimate disposal. On occasion, a service center may
also arrange to ship a customer's waste directly to another disposal company,
such as a landfill or incinerator, if the size of the waste shipment or its
characteristics are such that the waste does not need to pass through one of
the Company's own waste management facilities. As the volume of waste handled
by the Company has grown, the Company has negotiated favorable disposal
arrangements with numerous companies. The Company is not dependent on any one
disposal company, and the loss of any particular outlet for disposal of waste
would not have a material impact on the Company.

The Company's wastewater treatment operations are dependent upon access to
publicly owned treatment works and to hazardous or nonhazardous waste
landfills for the disposal of its byproduct wastes. Generally, the Company has
not experienced significant difficulty in obtaining the necessary permits from
local sewer authorities.

FIELD SERVICES

The Company provides a wide range of environmental field services to
maintain industrial facilities and process equipment, as well as clean up or
contain actual or threatened releases of hazardous materials into the
environment. These services are provided primarily to large chemical,
petroleum, transportation, utility, industrial and waste management companies,
and to governmental agencies. The Company's strategy is to identify, evaluate,
and solve its customers' environmental problems, on a planned or emergency
basis, by providing a comprehensive interdisciplinary response to the specific
requirements of each project.

6

Industrial Maintenance. Many of the Company's customers have a recurring
need to clean equipment and facilities periodically in order to continue
operations, maintain and improve operating efficiencies of their plants, and
satisfy safety requirements. Industrial maintenance involves chemical
cleaning, hydroblasting, vacuuming, and other methods to remove deposits from
process equipment, such as paint booths and plating lines, and storage
facilities for material used in the manufacturing or production process, such
as feedstocks, chemicals, fuels, paints, oils, inks, metals and many other
items. Service centers are equipped with specialty equipment, such as high
volume pumps, pressure washers, nonsparking and chemical resistant tools, and
a variety of personal protective equipment, to perform maintenance services
quickly, usually during "off periods" to minimize downtime from production.

Project Management. An increasingly important area of the Company's
operations is the management of complex environmental remediation projects.
These projects may include surface remediation, groundwater restoration, site
and facility decontamination, and emergency response. An interdisciplinary
team of managers, chemists, engineers, and compliance experts design and
implement result-oriented remedial programs, incorporating both off-site
removal and on-site treatment, as needed. The remedial projects group
functions as a single source management team, relieving the customer of the
administrative and operational burdens associated with environmental
remediation. As a full-service environmental services company, providing waste
transportation and disposal, field services, industrial maintenance and
CleanPack services, the Company eliminates the need for multiple
subcontractors.

These projects vary widely in scope, duration and revenue, and they are
typically performed under service agreements between the customer and the
Company. Environmental remediation projects may be undertaken in conjunction
with or lead to contracts for additional remediation work or for hazardous
waste management services, and typically involve the Company's analytical
laboratory and engineering group.

Surface Remediation. Surface remediation projects arise in two principal
areas: the planned cleanup of hazardous waste sites and the cleanup of
accidental spills and discharges of hazardous materials, such as those
resulting from transportation and industrial accidents. In addition, some
surface remediation projects involve the cleanup and maintenance of industrial
lagoons, ponds and other surface impoundments on a recurring basis. In all of
these cases, an extremely broad range of hazardous substances may be
encountered.

Surface remediation projects generally require considerable interaction
among engineering, project management and analytical services. Following the
selection of the preferred remedial alternative, the project team identifies
the processes and equipment for cleanup. Simultaneously, the Company's health
and safety staff develops a site safety plan for the project. Remedial
approaches usually include physical removal, mechanical dewatering,
stabilization or encapsulation.

Groundwater Restoration. The Company's groundwater restoration services
typically involve response to above-ground spills, leaking underground tanks
and lines, hazardous waste landfills and leaking surface impoundments.
Groundwater restoration efforts often require complex recovery systems,
including recovery drains or wells, air strippers, biodegradation or carbon
filtration systems, and containment barriers. These systems and technologies
can be used individually or in combination to remove a full range of floating
or dissolved organic compounds from groundwater. The Company internally
designs and fabricates most mobile or fixed site groundwater treatment
systems.

Site and Facility Decontamination. Site and facility decontamination
involves the cleanup and restoration of buildings, equipment and other sites
and facilities that have been contaminated by exposure to hazardous materials
during a manufacturing process, or by fires, process malfunctions, spills or
other accidents. The Company's projects have included decontamination of
electrical generating stations, electrical and electronics components,
transformer vaults and commercial, educational, industrial, laboratory,
research and manufacturing facilities.

7

Emergency Response. The Company undertakes environmental remediation
projects on both a planned and emergency basis. Emergency response actions may
develop into planned remedial action projects when soil, groundwater,
buildings, or facilities are extensively contaminated. The Company has
established specially trained emergency response teams which operate on a 24-
hour basis from service centers covering 24 states and Puerto Rico. Many of
the Company's remediation activities result from a response to an emergency
situation by one of its response teams. These incidents can result from
transportation accidents involving chemical substances, fires at chemical
facilities or hazardous waste sites, transformer fires or explosions involving
PCBs, and other unanticipated developments when the substances involved pose
an immediate threat to public health or the environment, such as possible
groundwater contamination.

Emergency response projects require trained personnel, equipped with
protective gear and specialized equipment, prepared to respond promptly
whenever these situations occur. To meet the staffing requirements for
emergency response projects, the Company relies in part upon a network of
trained personnel who are available on a contract basis for specific project
assignments. The Company's health and safety specialists and other skilled
personnel closely supervise these projects during and subsequent to the
cleanup. The steps performed by the Company include rapid response,
containment and control procedures, analytical testing and assessment,
neutralization and treatment, collection, and transportation of the substances
to an appropriate treatment or disposal facility.

CLEANPACKS

The Company provides specialized repackaging, treatment and disposal
services for laboratory chemicals and household hazardous wastes. Such
chemicals and wastes are put into CleanPacks, which are packages smaller than
a 55-gallon drum, generally less than five gallons or 50 pounds. The Company
offers generators of CleanPack quantity waste the same economical and
environmentally sound disposal services that have been offered for years to
large industrial generators. The CleanPack operation services a wide variety
of customers, including:

.engineering and research and development divisions of industrial
companies,
.college, university and high school labs,
.EPA labs and Veterans Administration facilities,
.hospitals and medical care labs,
.state and local municipalities, and
.tens of thousands of residents through household hazardous waste
collection days.

The Company provides a team of qualified personnel with science degrees and
special training to collect, label and package waste at the customer's site.
CleanPacks are then transported to one of the Company's facilities for
consolidation into full-size containers, which are then sent for further
treatment or disposal as part of the Company's treatment and disposal services
described above. As described above, disposal options include reclamation,
fuels blending, incineration, aqueous treatment, and a secure chemical
landfill.

TECHNICAL SERVICES

Technical services consist primarily of analytical testing, engineering
services and personnel training. Many of the Company's principal services as
described above involve the selection and application of various technologies.
The Company's analytical testing laboratories perform a wide range of
quantitative and qualitative analyses to determine the existence, nature,
level, and extent of contamination in various media. The Company's engineering
staff identifies, evaluates and implements the appropriate environmental
solution.

Engineering and Analytical Services. The Company provides technical support
services to complement its primary service lines. For example, if the Company
is engaged to perform an entire environmental remediation project, it will
first perform a site or situation assessment. A site assessment begins with
the determination of the existence of contamination. If present, the nature
and extent of the contamination is defined by gathering

8

samples and then analyzing them in order to establish or verify the nature and
extent of the contaminants. The Company's engineering staff then develops,
evaluates and presents alternative solutions to remedy the particular
situation. Often treatment systems are completely designed, engineered and
fabricated by the Company in house. It then implements the mitigation and
decontamination program mutually selected by the customer and the Company.

These services are also provided if a customer requires an analysis with
respect to certain material, or if a customer is searching for an appropriate
solution to an environmental problem or if an environmental assessment is
required to allow a transfer of property.

The Company operates an EPA-qualified and state-certified analytical testing
laboratory in Braintree, Massachusetts which tests samples provided by
customers to identify and quantify toxic pollutants in virtually every
component of the environment. The laboratory staff evaluates the properties of
a given material, selects appropriate analytical methods, and executes a
laboratory work plan that results in a comprehensive technical report. In
early 1996, the Company relocated the laboratory from its headquarter offices
to its waste handling facility in Braintree.

The Company also maintains laboratories at its waste management facilities
to identify and characterize waste materials prior to acceptance for treatment
and disposal, and operates mobile laboratory facilities for field use in
emergency response and remedial action situations.

Personnel Training. The Company provides comprehensive personnel training
programs for its own employees and those of its customers on a commercial
basis. Such programs are designed to promote safe work practices under
potential hazardous environmental conditions, whether or not toxic chemicals
are present, in compliance with stringent regulations promulgated under the
federal Resource Conservation and Recovery Act of 1976 ("RCRA") and the
federal Occupational Safety and Health Act ("OSHA"). The Company's Technical
Training Center at its Kingston, Massachusetts facility includes a 2,000
gallon tank for confined space entry, exit, and extraction, an air-system
demonstration maze, respirator fit testing room, leak and spill response
equipment, and a layout of a mock decontamination zone, all designed to
fulfill the requirements of OSHA Hazardous Waste and Emergency Response
Standard.

CUSTOMERS

The Company's sales efforts are directed toward establishing and maintaining
relationships with businesses which have ongoing requirements for one or more
of the Company's services. The Company's customer list includes many of the
largest United States industrial companies. In addition, the Company's
customers include most of the major utilities in the Northeast and Mid-
Atlantic regions. The Company's customers are primarily chemical, petroleum,
transportation, utility and industrial firms, other waste management companies
and government agencies. Management believes that the Company's diverse
customer base, in terms of number, industry and geographic location, as well
as its large presence in New England, provide it with a recurring stream of
revenue. The Company estimates that in excess of 80% of its revenues are
derived from previously served customers with recurring needs for the
Company's services. The Company believes the loss of any single customer would
not have a material adverse effect on the Company's financial condition or
results of operations.

The Company's customer base is diverse, and generally not concentrated in
particular industries, such as the petroleum or defense sectors, where
business activity may be cyclical. In addition to serving industrial customers
such as utilities, railroads, pipelines, pharmaceutical manufacturers, and
chemical companies, the Company serves health care and educational
institutions, federal, state and local governmental bodies, and thousands of
small quantity generators who have recurring needs for multiple services in
managing their environmental exposure.

Under applicable environmental laws and regulations, generators of hazardous
wastes retain potential legal liability for the proper treatment of such
wastes through and including their ultimate disposal. In response to

9

these potential liability concerns, many large generators of industrial wastes
and other purchasers of waste management services (such as general contractors
on major remediation projects) have increasingly sought to decrease the number
of providers of such services that they utilize. Waste management companies
which are selected as "approved vendors" by such large generators and other
purchasers are firms, such as the Company, that possess comprehensive
collection, recycling, treatment, transportation, disposal and waste tracking
capabilities and have the expertise and financial capacity necessary to comply
with applicable environmental laws and regulations. By becoming an "approved
vendor" of a large waste generator or other purchaser, the Company becomes
eligible to provide waste management services to the various plants and
projects of such generator or purchaser which are located in the Company's
service areas. However, in order to obtain such "approved vendor" status, it
may be necessary for the Company to bid against other qualified competitors in
terms of the services and pricing to be provided. Furthermore, large
generators or other purchasers of waste management services often periodically
audit the Company's facilities and operations to ensure that the Company's
waste management services to such customers are being performed in compliance
with applicable laws and regulations and with other criteria established by
the Company and by such customers.

COMPLIANCE/HEALTH & SAFETY

The Company regards compliance with applicable environmental regulations as
a critical component of its overall operations, both from the standpoint of
the health and safety of its employees and as a service to its customers. The
Company strives to maintain the highest professional standards in its
compliance activities; its internal operating requirements are in many
instances more stringent than those imposed by regulation. The Company's
compliance program has been developed for each of its operational facilities
and service centers under the direction of the Company's corporate compliance
and health and safety staff. The compliance staff is composed of approximately
45 full-time employees who are responsible for facilities permitting and
regulatory compliance, health and safety, field safety, compliance training,
transportation compliance, and related record keeping. The Company also
performs periodic audits and inspections of the disposal facilities of other
firms utilized by the Company.

The Company's treatment, storage and recovery facilities are frequently
inspected and audited by regulatory agencies, as well as by customers.
Although the Company's facilities have been cited on occasion for regulatory
violations, the Company believes that each facility is currently in
substantial compliance with applicable requirements. Major facilities and
service centers have a full-time compliance or health and safety
representative to oversee the implementation of the Company's compliance
program at the facility or service center. These highly-trained regulatory
specialists are independent from operations and report to corporate compliance
and health & safety directors, who in turn report directly to the Chief
Executive Officer.

MANAGEMENT OF RISKS

The Company follows a program of risk management policies and practices
designed to reduce potential liability, as well as to manage customers'
ongoing regulatory responsibilities. This program includes installation of
risk management systems at the facilities, such as fire suppression, employee
training, environmental auditing, and policy decisions restricting the types
of wastes handled. The Company evaluates all revenue opportunities and
declines those which it believes involve unacceptable risks. The Company
avoids handling high-hazard waste such as explosives, and frequently utilizes
specialty subcontractors to handle any such materials when discovered at a job
site.

The Company only disposes of its wastes at facilities owned and operated by
firms which the Company has approved as prudent and financially sound.
Typically, the Company applies established technologies to the treatment,
storage and recovery of hazardous wastes. The Company believes its operations
are conducted in a safe and prudent manner and in substantial compliance with
applicable laws and regulations.

10

INSURANCE

The Company's present insurance programs cover the potential risks
associated with its multifaceted operations from two primary exposures: direct
physical damage and third-party liability. The Company maintains a casualty
insurance program providing coverage for vehicles, workers' compensation,
employer's liability, and comprehensive general liability in the aggregate
amount of $30,000,000 per year, subject to a retention of $250,000 per
occurrence, except on general liability where the retention is $500,000 per
occurrence. The workers' compensation limits are established by state
statutes. Since the early 1980s, casualty insurance policies have typically
excluded liability for pollution, which is covered under a separate pollution
liability program.

The Company has pollution liability insurance policies covering the
Company's potential risk in three areas: as a contractor performing services
at customer sites; as a transporter of waste; and while it handles waste at
the Company's facilities. The Company has contractor's liability insurance of
$10,000,000 per occurrence and $10,000,000 in the aggregate, covering off-site
remedial activities and associated liabilities. Lloyds of London provides
pollution liability coverage for waste in-transit with single occurrence and
aggregate liability limits of $29,000,000. This Lloyds of London policy covers
liability in excess of $1,000,000 for pollution caused by sudden and
accidental occurrences during transportation of waste and at the Company's
facilities, from the time waste is picked up from a customer until its
delivery to the final disposal site. The Company's $30,000,000 excess
automobile liability insurance provides additional coverage for any in-transit
pollution losses from accidents over and above the Lloyds of London coverage,
so that it has a total of $59,000,000 of in-transit coverage.

Federal and state regulations require liability insurance coverage for all
facilities that treat, store, or dispose of hazardous waste. In 1989, the
Company established a captive insurance company pursuant to the Federal Risk
Retention Act of 1986. This company qualifies as a licensed insurance company
and is authorized to write professional liability and pollution liability
insurance for the Company and its operating subsidiaries. RCRA and comparable
state hazardous waste regulations typically require hazardous waste handling
facilities to maintain pollution liability insurance in the amount of
$1,000,000 per occurrence and $2,000,000 in the aggregate per year for sudden
occurrences and $3,000,000 per occurrence and $6,000,000 in the aggregate per
year for non-sudden occurrences. Currently, the Company uses its captive
insurance company to provide (i) the first $1,000,000 of insurance against
liability from sudden occurrences at its facilities, with the excess coverage
provided by Lloyds of London, and (ii) the full policy limits of insurance for
non-sudden occurrences.

Operators of hazardous waste handling facilities are also required by
federal and state regulations to provide financial assurance that certain
funds will be available for closure and post closure care of those facilities,
should the facility cease operation. For example, closure would include the
cost of removing the waste stored at a facility which ceased operating, and
sending the material to another company for disposal. The Company utilizes its
captive insurance company to provide such financial assurance for the waste
management facilities it currently owns, with the exception of the Kimball
incinerator which has closure insurance provided by a commercial insurer.

The Company's ability to continue conducting its industrial waste management
operations could be adversely affected if the Company should become unable to
obtain sufficient insurance to meet its business and regulatory requirements
in the future. The availability of insurance may also be influenced by
developments within the insurance industry, although other businesses in the
industrial waste management industry would be similarly impacted by such
developments.

Under the Company's insurance programs, coverage is obtained for
catastrophic exposures as well as those risks required to be insured by law or
contract. It is the policy of the Company to retain a significant portion of
certain expected losses related primarily to workers' compensation, physical
loss to property, and comprehensive general and vehicle liability. Provisions
for losses expected under these programs are recorded

11

based upon the Company's estimates of the aggregate liability for claims. The
Company has been successful in negotiating lower premiums recently, due in
part to its favorable historical loss experience. The cancellation terms
applicable to the Company are similar to those of other companies in other
industries.

COMPETITION

The Company competes with numerous large and small companies, each of which
is able to provide one or more of the industrial waste management services
offered by the Company and some of which have access to greater financial
resources. The Company believes it offers a more comprehensive range of
industrial waste management services than its competitors in major portions of
its service territory. The Company also believes that its ability to market
and provide its services on an integrated basis constitutes a significant
competitive advantage for the Company.

The Company's competitive position with respect to its treatment and
disposal services is enhanced by the proximity of its facilities to hazardous
waste generators and the barriers to market entry provided by capital and
licensing requirements. However, treatment, recovery and disposal operations
are conducted by a number of national and regional waste management firms. The
Company believes that physical proximity of treatment and disposal facilities,
comprehensiveness of services, safety, quality and efficiency of services, and
pricing are the most significant factors in the market for treatment and
disposal services.

In field services, the Company's competitors include major national and
regional environmental services firms which have environmental remediation
staffs. The availability of skilled technical professional personnel, quality
of performance, diversity of services and, to a certain extent, price, are the
key competitive factors.

EMPLOYEES

As of February 1, 1996, the Company employed 1,438 people on a regular
basis. None of the Company's employees is subject to a collective bargaining
agreement, and the Company believes that its relationship with its employees
is satisfactory.

ITEM 2. PROPERTIES

The properties of the Company consist primarily of its 12 waste management
facilities and 17 service centers, various environmental remediation
equipment, and a fleet of approximately 1,000 registered pieces of
transportation equipment. Most service center locations are leased, and
occasionally move to other locations as operations grow and space requirements
increase. The 12 waste management facilities are described below. All of these
facilities are owned by the Company, except (i) the Chicago hazardous waste
management facility which is leased under a lease which (with extensions)
expires September 2020, (ii) the Woburn, Massachusetts waste oil treatment and
storage facility which is leased under a lease which (with extensions) expires
February 2004, and (iii) the Virginia waste oil treatment and storage facility
which is leased under a lease which (with extensions) expires February 2002.

Hazardous Waste Management Facilities. The Company currently maintains nine
hazardous waste management facilities at which it processes, treats and
temporarily stores hazardous wastes for later resale, reuse or off-site
treatment or disposal. Every facility that treats, stores or disposes of
hazardous wastes must obtain a license from the federal EPA or an authorized
state agency and must comply with certain operating requirements. See
"Environmental Regulation-Federal Regulation of Hazardous Waste" below for a
description of licenses issued under the RCRA. All nine hazardous waste
management facilities are subject to RCRA licensing. Eight of the nine
facilities have been issued RCRA Part B licenses, one of which is under
appeal.

Two of the facilities described above are waste oil treatment and storage
facilities which are subject to RCRA licensing because some petroleum
products, such as gasoline, are considered hazardous waste under federal law
or are located in a state which regulates waste oil as a hazardous waste. In
order to handle a variety

12

of waste oil and petroleum products and support its field service activities
in the Northeast and Mid-Atlantic regions, the Company has obtained RCRA
licenses for those two facilities.

The Company has made substantial modifications and improvements to the
physical plant and treatment and process equipment at its treatment
facilities. These modifications are consistent with the Company's strategy to
upgrade the quality and efficiency of treatment services, to expand the range
of services provided and to ensure regulatory compliance and operating
efficiencies at these facilities. Major features of this program are the
addition of new treatment systems, such as the CES in Baltimore, expansion of
analytical testing laboratories, drum storage and processing facilities, and
equipment rearrangement and replacement to improve operating efficiency.

Braintree, MA. The Braintree facility is located just south of Boston. The
facility is primarily engaged in drummed waste processing and consolidation,
solvent recovery, transformer decommissioning, PCB storage and processing,
blending of waste used as supplemental fuel by industrial furnaces,
pretreatment of waste to stabilize it before it is sent to landfills, and
incineration of small quantities of nonhazardous waste. The facility continues
to operate under a state Interim Hazardous Waste Facility License issued by
the Massachusetts Department of Environmental Protection ("DEP") in 1981. The
Company acquired the facility in 1985. In June 1992, the DEP approved the
Company's application for a final Hazardous Waste Facility License, and issued
a final Part B license for a five-year term. The Town of Braintree and two
adjoining communities have appealed the DEP's decision to issue the final Part
B license, and requested an adjudicatory hearing before the DEP, which is the
normal appeal process. The appeal is an administrative proceeding before the
DEP, and the facility will continue to operate normally pursuant to its state
license and Interim Status authority under RCRA while the DEP considers the
appeal. In the fall of 1995 the two adjoining communities withdrew their
appeals. The Company is confident the review will result in confirmation of
the license as granted. The authority from the federal EPA to handle PCBs is
not impacted by the towns' appeal of the Part B license.

Natick, MA. The Natick, Massachusetts facility is located just west of
Boston. Its primary services are collecting CleanPacks and repackaging the
small quantities of laboratory and household chemicals into 55-gallon drum
quantities, consolidating wastes for shipment to other Company facilities or
third parties for further treatment or disposal, and serving as a transfer
station for the Northeast region. The facility has a state Hazardous Waste
Facility License (the state equivalent of a Part B license), which was renewed
in October 1994 for a five-year term. The facility is also authorized by the
federal EPA to handle PCBs.

Chicago, IL. The Chicago, Illinois facility is located on the south side of
Chicago, on Lake Calumet. It provides treatment of nonhazardous and hazardous
industrial wastewaters, drummed waste processing and consolidation, and
transfer and repackaging of laboratory chemicals into CleanPacks. In November
1993, the Illinois EPA issued a Part B license for a ten-year term, which
significantly expanded the waste handling and storage capacity of the
facility. In November 1995, the permit was modified to include the assets
acquired from ChemWaste Management, Inc. ("ChemWaste"). The new license
increased drum storage capacity and allows handling of material destined for
blending of waste used as supplemental fuel by industrial furnaces,
pretreatment of waste to stabilize it before it is sent to landfills, and rail
shipment of hazardous and nonhazardous waste.

As an alternative to making the needed improvements to its own site, the
Company in November 1995 acquired assets from ChemWaste on an adjoining leased
site, together with the existing improvements, in exchange for sharing the
costs of dismantling an existing hazardous waste incinerator and cleaning up
the adjoining site. The existing improvements on the ChemWaste site, and those
improvements recently constructed on the site by the Company, will allow the
Company to develop new product lines not currently handled at the Company's
existing facility. Under the sharing arrangement with ChemWaste, the Company
could over a period of 15 years be required to contribute up to a maximum of
$2,000,000 for dismantling and decontaminating the incinerator and other
equipment and up to a maximum of $7,000,000 for studies and cleanup of the
site. Any additional costs beyond those contemplated by the sharing
arrangement during this time period would be borne by ChemWaste. In addition,
the Company entered into a five year disposal services

13

agreement with Chemical Waste Management in connection with the acquisition of
the assets on the adjacent site. Pursuant to the terms of the disposal
services agreement, the Company has agreed to use best efforts to deliver
waste materials to ChemWaste facilities for disposal subject to certain
customer preferences, scheduling and other considerations.

Cleveland, OH. The Cleveland, Ohio facility is located south of downtown
Cleveland. It is a wastewater treatment facility that treats nonhazardous and
hazardous industrial wastewaters, and serves as a transfer station for various
types of containerized hazardous and nonhazardous waste. The facility is not
subject to Part B licensing requirements, since its on-site wastewater
treatment activities are regulated pursuant to the Clean Water Act, and
therefore are exempt from RCRA.

Baltimore, MD. The Baltimore, Maryland facility is located adjacent to
Interstate 95 in central Baltimore. It provides treatment of nonhazardous and
hazardous industrial aqueous wastes, drummed waste processing, pretreatment of
waste to stabilize it before it is sent to landfills, and transfer of
CleanPacks. It is the only commercial hazardous waste treatment facility in
Maryland. The facility has a state Controlled Hazardous Substances permit (the
state equivalent of a Part B license), which was issued in 1987. In 1990, the
Company received a permit modification to expand the range of waste streams
the facility can accept and to install the CES, which allows the facility to
treat a wide range of hazardous wastewaters contaminated with gasoline,
chlorinated solvents and many other organic contaminants, which were formerly
sent to other companies for incineration. In 1992, the Maryland Department of
the Environment issued a new Controlled Hazardous Substances permit for a
three-year term, which significantly expanded the waste handling and storage
capacity of the facility. The new permit also allows handling of CleanPacks
and material destined for fuels-blending, pretreatment of waste to stabilize
it before it is sent to landfills, and rail shipment of hazardous and
nonhazardous waste. In June, 1995 the Company submitted a permit renewal
application which allows operations to continue until the renewal application
is approved.

Bristol, CT. In July 1992, the Company acquired Connecticut Treatment
Corporation, located in Bristol, Connecticut, approximately 20 miles southwest
of Hartford. It provides hazardous wastewater treatment, drummed waste
processing and consolidation, and transfer of CleanPacks. This facility also
offers two specialized services: equipment "de-manufacturing," such as
dismantling outdated computers, and treatment of special categories of
hazardous wastewaters known as "listed" wastewaters resulting from industrial
processes such as electroplating.

The Bristol facility has a Part B license issued by the federal EPA and the
Connecticut Department of Environmental Protection. The license was issued in
1987 and expired in 1991. A new license was applied for and the facility
continued to operate while the EPA and DEP reviewed the renewal application.
The Company also applied for approval to expand the number of hazardous waste
codes allowed to be handled, expand container storage capacity from 1,000
drums to 3,500 drums, and add eight tanks for storage of sludge and
stabilization materials. In April 1995, the DEP issued a renewal of the
license, with the additions requested by the Company. The term of the license
is five years.

The Bristol facility also treats hazardous industrial wastewater, and has a
permit to discharge to the publicly owned sewage treatment works an average of
50,000 gallons per day of treated water. These treatment activities are
licensed by the Connecticut DEP pursuant to the Clean Water Act, and are not
subject to Part B licensing requirements. In 1990 the Company's predecessor
applied for renewal and modification of its Clean Water Act license, to allow
construction of additional tanks for wastewater treatment and installation of
new wastewater treatment technologies, such as reverse osmosis and
ultrafiltration. The discharge limit would remain at 50,000 gallons average
per day. In April 1995, a 5 year permit renewal was issued by DEP.

Cincinnati, OH. In February 1993, the Company acquired Spring Grove Resource
Recovery, Inc. ("Spring Grove"), located north of downtown Cincinnati, Ohio.
It provides hazardous wastewater treatment, drummed waste processing and
consolidation, pretreatment of waste to stabilize it before it is sent to
landfills, and transfer of CleanPacks. The facility holds a state Hazardous
Waste Facility Installation and Operation permit (RCRA

14

Part B) which was renewed in December 1993 for a five-year term. The facility
is also authorized to handle PCBs. On March 31, 1994, the Ohio EPA approved
the Company's application for a revised, comprehensive state permit that
expands the range of waste that may be received and treated at the facility
and allows installation of sophisticated equipment for handling and processing
material to be sent to boilers and industrial furnaces and used as
supplemental fuel. In May 1995, the Ohio Hazardous Waste Facility Board
approved the transfer of the facility hazardous waste permit from the former
owner of the facility to Clean Harbors.

Kimball, NE. In May 1995, the Company acquired a newly constructed hazardous
waste incinerator in Kimball, Nebraska from Ecova Corporation, an affiliate of
Amoco Oil Company. The Kimball facility includes a 45,000 ton-per-year
fluidized bed thermal oxidation unit for maximum destruction efficiency of
hazardous waste. It is a new, state-of-the-art facility staffed with a highly
trained and motivated workforce. The construction of the incinerator and its
operation have received widespread support in the local community. The
incinerator has a RCRA Part B license issued by the Nebraska Department of
Environmental Quality ("NDEQ"). In December 1994, the NDEQ approved commercial
operation at 75% of capacity. The incinerator will be authorized to operate at
100% capacity upon issuance of a final Air Operating Permit which is expected
to be issued by NDEQ in mid 1996.

The incinerator is located on a 600 acre site, which includes a landfill for
disposal of incinerator ash. If the chemical composition of the ash meets the
permit requirements, which is subject to verification before it is landfilled
on-site, the ash will be classified as "delisted", meaning it will no longer
be regulated as a hazardous waste under federal and state laws. No other
commercial incineration facility in the United States is currently permitted
to delist ash. Although the ash will be classified as nonhazardous, the
landfill has been constructed to meet RCRA Subtitle C standards, which are the
same stringent requirements as for landfills designed to handle hazardous
waste.

The acquisition of this facility responds to a developing trend within the
hazardous waste management industry: many generators of industrial waste
prefer to treat hazardous waste, rather than bury it, because of concerns
about the long-term liability associated with landfill disposal of the residue
which results from incineration of the generator's hazardous waste.
Conventional incinerators produce a "slag" which is regulated as a hazardous
waste. The residue from the Kimball treatment facility, in contrast, is ash
rather than slag. The ash meets the standards set by NDEQ for "delisting" and
is therefore deemed to be non-hazardous.

During September 1995, the Kimball treatment facility entered a new,
expanded phase of operations as a result of two actions by Federal and State
regulators. The United States Environmental Protection Agency ("EPA")
authorized the facility to begin accepting wastes generated at sites being
remediated pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA," also known as the "Superfund Act"). The
EPA authorization to begin accepting wastes generated at CERCLA sites allows
the Company to be directly involved in the safe treatment and disposal of
wastes from Federal cleanup efforts including Superfund sites, a large portion
of the incineration marketplace. Prior to obtaining CERCLA approval, the
Kimball facility was limited to accepting hazardous wastes regulated by RCRA.
RCRA waste materials are made up of the same constituents as CERCLA wastes,
but are generated from various ongoing industrial operations rather than
Federal cleanup activities at specific locations or Federal Superfund sites.
In a separate action, the NDEQ approved the use of the facility's on-site
landfill for disposal of ash residue as well as residues from the facility's
air pollution control system. The facility now has all approvals necessary to
fully use its waste disposal capacity.

The Company believes that the facility offers capabilities which will be
very attractive to its major customers. In particular, the facility is
expected to have operating costs lower than most other incinerators, given the
minimal acquisition cost to the Company and its unique ability to dispose of
delisted ash on-site, which will save on the cost of shipping ash to another
company for landfilling. The Company expects to realize significant savings by
using the Kimball facility to incinerate waste previously sent to other
incinerators. Since the incinerator is a new facility, many of the Company's
customers will visit the facility for a comprehensive audit of its operations
before they will approve the site for disposal of their hazardous waste. As a
result,

15

considerable time is needed to complete the audit and approval process before
the Company can begin shipping waste to the facility. As of December 31, 1995,
over fifty large customers had audited and approved the facility, and
approvals from another dozen customers were pending.

As part of the acquisition, the Company agreed to make royalty payments to
Ecova Corporation through 2004, based on the number of tons processed at the
facility.

Waste Oil Treatment and Storage Facilities. The Company has four waste oil
treatment and storage facilities: two in Massachusetts, one in Maine, and one
in Virginia. The Massachusetts facilities are located in Kingston and Woburn,
in the Boston area. The Kingston facility has a state recycling permit and is
able to store oil collected from various activities, ranging from routine
cleaning of oil storage terminals to oil spill cleanups. The facility is also
used for maintenance activities and for training of employees of the Company
and third-party customers. The Woburn facility is a waste oil storage and
transfer facility, and received a Part B license in October 1993 for a five-
year term.

The facility in South Portland, Maine is a petroleum reclamation facility
that handles most of the waste oil received by the Company, which comes
primarily from the Company's remediation activities. It has a municipal sewer
user permit allowing the discharge of water separated from oil. The Company
also owns another property in South Portland located on Main Street. It has a
license to store virgin oil, but it also is permitted for the temporary
storage and transfer of containerized hazardous waste.

The Virginia facility is located near Richmond, and was acquired in
September 1994. The facility is able to store oil and gasoline-contaminated
wastewaters collected from various activities, ranging from routine cleaning
of oil storage terminals to oil spill cleanups. The facility operates under
RCRA interim status pending the final submittal and review of its application
for a Part B license.

ENVIRONMENTAL REGULATION

While the Company's business has benefited substantially from increased
governmental regulation of hazardous waste transportation, storage and
disposal, the industrial waste management industry itself has become the
subject of extensive and evolving regulation by federal, state and local
authorities. The Company makes a continuing effort to anticipate regulatory,
political and legal developments that might affect its operations, but is not
always able to do so. The Company cannot predict the extent to which any
environmental legislation or regulation that may be enacted or enforced in the
future may affect its operations.

On December 21, 1995, the EPA proposed to amend its regulations in the RCRA
by establishing constituent-specific exit levels for low-risk solid wastes
that are designated as hazardous because they are listed, or have been mixed
with, derived from, or contain listed hazardous wastes. Under the proposal,
generators of listed hazardous wastes that meet the self-implementing exit
levels would no longer be subject to the hazardous waste management system
under Subtitle C of RCRA as listed hazardous wastes. The proposed rulemaking,
referred to as the Hazardous Waste Identification Rule ("HWIR"), establishes a
risk-based "floor" to hazardous waste listings that will encourage pollution
prevention, waste minimization, and the development of innovative waste
treatment technologies. If passed, the HWIR may impact the Company's
incinerator in Kimball, since many wastes which are currently required to be
managed as a hazardous waste may no longer require incineration at a RCRA
incineration unit such as Kimball.

The Company is required to obtain federal, state and local licenses or
approvals for each of its hazardous waste facilities. Such licenses are
difficult to obtain and, in many instances, extensive studies, tests, and
public hearings are required before the approvals can be issued. The Company
has acquired or is in the process of applying for all operating licenses and
approvals required for the current operation of its business and has applied
for or is in the process of applying for all licenses and approvals needed in
connection with planned expansion or modifications of its operations.

16

FEDERAL REGULATION OF HAZARDOUS WASTE

The most significant federal environmental laws affecting the Company are
RCRA, the Superfund Act and the Clean Water Act.

RCRA. RCRA is the principal federal statute governing hazardous waste
generation, treatment, transportation, storage and disposal. Pursuant to RCRA,
the EPA has established a comprehensive, "cradle-to-grave" system for the
management of a wide range of materials identified as hazardous waste. States,
such as Massachusetts, Connecticut, Illinois, Maryland, Ohio and Nebraska,
that have adopted hazardous waste management programs with standards at least
as stringent as those promulgated by the EPA, have been authorized by the EPA
to administer their facility permitting programs in lieu of the EPA's program.

Every facility that treats, stores or disposes of hazardous waste must
obtain a RCRA license from the EPA or an authorized state agency and must
comply with certain operating requirements. Under RCRA, hazardous waste
management facilities in existence on November 19, 1980 were required to
submit a preliminary license application to the EPA, the so-called Part A
Application. By virtue of this filing, a facility obtained Interim Status,
allowing it to operate until licensing proceedings are instituted pursuant to
more comprehensive and exacting regulations (the Part B licensing process).
Interim Status facilities may continue to operate pursuant to the Part A
Application until their Part B licensing process is concluded. Of the
Company's 12 waste management facilities, nine are subject to RCRA licensing;
of the nine, only the Virginia waste oil facility operates under interim
status. The other eight have been issued Part B licenses, one of which is
under appeal.

RCRA requires that Part B licenses contain provisions for required on-site
study and cleanup activities, known as "corrective action," including detailed
compliance schedules and provisions for assurance of financial responsibility.
The EPA estimates that there are approximately 4,300 facilities that treat,
store or dispose of hazardous wastes, which can be compelled to take
corrective action when necessary. Some facilities are very large and have
extensive contamination problems which rival the largest Superfund sites.
Other facilities have relatively minor environmental problems. Still others
will not need remedial action at all. It is the EPA's policy to compel
corrective action at the "worst sites first." As a result, the EPA has
developed a system for assessing the relative environmental cleanup priority
of RCRA facilities, called the National Corrective Action Prioritization
System, with a High, Medium or Low ranking for each facility. Although several
facilities of its competitors have been assessed a High cleanup priority, none
of the Company's RCRA facilities have been assessed as a High priority.

The Company has begun RCRA corrective action investigations at its Part B
licensed facilities in Braintree, Natick, Bristol, Chicago, and Woburn. The
Company is also involved in site studies at its non-RCRA facilities in
Cleveland, Ohio; Kingston, Massachusetts; and on Main Street in South
Portland, Maine. The Company spent approximately $790,000 on corrective action
at the foregoing facilities in 1995. The Company does not expect that
corrective action will be required at its Richmond, Virginia waste oil
facility.

The Company is also involved in a RCRA corrective action investigation at a
site in Chester, Pennsylvania owned by Philadelphia Electric Company ("PECO").
The site consists of approximately 30 acres which PECO has leased to various
companies over the years. In 1989, the Company acquired by merger a public
company named ChemClear Inc., which operated a hazardous waste treatment
facility on approximately eight acres of the Chester site leased from PECO.
The Company ceased operations at the Chester site, decontaminated the plant
and equipment, engaged an independent engineer to certify closure, and
obtained final approval from the Pennsylvania regulatory authorities,
certifying final closure of the facility. In 1993, the EPA ordered PECO to
perform a RCRA corrective action investigation at the Chester site. PECO asked
the Company to participate in the site studies, and in October 1994, the
Company agreed to be responsible for seventy-five percent of the cost of these
studies, which is estimated to be in the range of $1,000,000 to $2,000,000, by
performing field service work and analytical services required to complete the
site studies and providing other environmental services to PECO at discounted
rates.

17

While the final scopes of the work to be performed at these facilities have
not yet been agreed upon, the Company believes, based upon information known
to date about the nature and extent of contamination at these sites, that such
costs will not have a material effect on its results of operations or its
competitive position, and that it will be able to finance from operating
revenues any additional corrective action required at its facilities.
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate.

The Bristol, Connecticut and Cincinnati, Ohio facilities were acquired from
a subsidiary of Southdown, Inc. Southdown Inc. has agreed to indemnify the
Company against any costs incurred or liability arising from contamination on-
site, including the cost of corrective action, or waste disposed of off-site,
including any liability under the Superfund Act, at those facilities.

The Superfund Act. The Superfund Act provides for immediate response and
removal actions coordinated by the EPA to releases of hazardous substances
into the environment, and authorizes the government to respond to the release
or threatened release of hazardous substances or to order persons responsible
for any such release to perform any necessary cleanup. The statute assigns
joint and several liability for these responses and other related costs,
including the cost of damage to natural resources, to the parties involved in
the generation, transportation and disposal of such hazardous substances.
Under the statute, the Company may be deemed liable as a generator or
transporter of a hazardous substance which is released into the environment,
or as the owner or operator of a facility from which there is a release of a
hazardous substance into the environment. See also "Business--Legal
Proceedings."

Clean Water Act. This legislation prohibits discharges to the waters of the
United States without governmental authorization. The EPA has promulgated
"pretreatment" regulations under the Clean Water Act, which establish
pretreatment standards for introduction of pollutants into publicly owned
treatment works. In the course of its treatment process, the Company's
wastewater treatment facilities generate waste water which they discharge to
publicly owned treatment works pursuant to permits issued by the appropriate
governmental authority. The Clean Water Act also serves to create business
opportunities for the Company in that it may prevent industrial users from
discharging their untreated wastewaters to the sewer. If these industries
cannot meet their discharge specifications, then they may utilize the services
of an off-site pretreatment facility such as those of the Company.

Other Federal Laws. Company operations are also subject to the Toxic
Substances Control Act ("TSCA"), pursuant to which the EPA regulates over
60,000 commercially produced chemical substances, including the proper
disposal of PCBs. TSCA has established a comprehensive regulatory program for
PCBs, under the jurisdiction of the EPA, which oversees the storage, treatment
and disposal of PCBs at the Company's facilities in Braintree and Natick,
Massachusetts; Cincinnati, Ohio; and Bristol, Connecticut. Under the Clean Air
Act, the EPA also regulates emissions into the air of potentially harmful
substances. In its transportation operations, the Company is regulated by the
U.S. Department of Transportation, the Federal Railroad Administration, and
the U.S. Coast Guard, as well as by the regulatory agencies of each state in
which it operates or through which its trucks pass. Health and safety
standards under the Occupational Safety and Health Act are also applicable.

STATE AND LOCAL REGULATIONS

Pursuant to the EPA's authorization of their RCRA equivalent programs,
Massachusetts, Connecticut, Illinois, Maryland, Ohio, and Nebraska have
regulatory programs governing the operations and permitting of hazardous waste
facilities. Accordingly, the hazardous waste treatment, storage and disposal
activities of the Company's Braintree, Natick, Woburn, Bristol, Chicago,
Baltimore, Cincinnati, and Kimball facilities are regulated by the relevant
state agencies in addition to federal EPA regulation.

Some states, such as Connecticut and Massachusetts, classify as hazardous
some wastes which are not regulated under RCRA. For example, Massachusetts
considers PCBs and used oil as "hazardous wastes," while RCRA does not.
Accordingly, the Company must comply with state requirements for handling
state regulated

18

wastes, and when necessary obtain state licenses for treating, storing, and
disposing of such wastes at its facilities.

The Company believes that each of its facilities is in substantial
compliance with the applicable requirements of RCRA and state laws and
regulations. Ten of the Company's twelve waste management facilities have been
issued final licenses; the one for the Braintree facility is under appeal. The
Richmond facility operates under interim status. Final action on the South
Portland waste oil storage permit is expected in the Spring of 1996. Once
issued, such licenses have maximum fixed terms of a given number of years,
which differ from state to state, ranging from three years to ten years. The
issuing state agency may review or modify a license at any time during its
term. The Company anticipates that once a license is issued with respect to a
facility, the license will be renewed at the end of its term if the facility's
operations are in compliance with applicable requirements. However, there can
be no assurance that regulations governing future licensing will remain
static, or that the Company will be able to comply with such requirements.

The Company's wastewater treatment facilities are also subject to state and
local regulation, most significantly sewer discharge regulations adopted by
the municipalities which receive treated wastewater from the treatment
processes. The Company's continued ability to operate its liquid waste
treatment process at each such facility is dependent upon its ability to
continue these sewer discharges.

The Company's facilities are regulated pursuant to state statutes, including
those addressing clean water and clean air. Local sewer discharge and
flammable storage requirements are applicable to certain of the Company's
facilities. The Company's facilities are subject to local siting, zoning and
land use restrictions. Although the Company's facilities occasionally have
been cited for regulatory violations, the Company believes it is in
substantial compliance with all federal, state and local laws regulating its
business.

ITEM 3. LEGAL PROCEEDINGS

In April 1988, the Board of Selectmen of Braintree, Massachusetts, approved
a cease and desist order with respect to the handling of flammable materials
stored at the Company's Braintree facility. The Board concluded that, when the
Company purchased the land on which the Braintree facility is located, a
license for the storage of flammable liquids was not conveyed as an incident
of ownership. The Company petitioned the Massachusetts Land Court for a
declaratory judgment that either the Company possesses such a license by
operation of law or that the statute requiring the license is pre-empted by
the pervasive state regulation of hazardous waste facilities. In March 1994,
the Land Court issued a favorable ruling, concluding that the statute is pre-
empted by state hazardous waste laws and regulations and no local flammable
storage license is required. The town has appealed this ruling, and has asked
the Company to stipulate certain facts with respect to the other issues of the
case so that a final appealable order can be issued by the Land Court. The
Company has agreed to the stipulation but the Town has taken no further
action.

In December 1991, the Company was asked to respond to an emergency cleanup
after a motor vehicle struck a utility pole near the State University of New
York at New Paltz, causing an electrical surge to overheat transformers which
discharged toxic chemicals throughout various student dormitories and
classroom buildings. The Company was hired by the State University of New York
to perform technical supervisory and laboratory work for the cleanup. The
actual work of cleaning the buildings was performed over approximately 15
months by other contractors hired by the State of New York. In March 1993, a
group of students sued the Dormitory Authority of the State of New York
("DASNY") claiming that they were exposed to toxic chemicals when DASNY
allowed them to reoccupy the buildings after the accident and prior to a
complete removal of the toxic chemicals, causing them increased risk of future
illnesses. DASNY denied the students' claims but elected to sue the Company
along with 16 other third-party defendants claiming that if DASNY is liable to
the students, these third-party defendants should indemnify DASNY. The Company
was hired by the State University of New York to perform representative
sampling for toxic chemicals but, according to its contract, was not
responsible for decisions as to when students should reoccupy the buildings.
Nevertheless, in June 1994, the Company and the 16 other third parties were
served with a third-party complaint filed in the Ulster

19

County Superior Court by DASNY. In January 1996, the trial judge ruled that
the plaintiffs were not entitled to proceed as a class action for the medical
cost claims, but were entitled to class action status for personal property
losses. Since the personal property losses resulted directly from the
explosions and fire, and occurred prior to the Company's involvement, the
Company does not believe that it will incur any material liability as a result
of this lawsuit. The Company has not received notice that the plaintiffs will
appeal the trial judge's ruling.

Certain Company subsidiaries have transported or generated waste sent to
sites which have been designated state or federal Superfund sites. As a
result, the Company has been named as a potentially responsible party ("PRP")
in a number of lawsuits arising from the disposal of wastes at 20 state and
federal Superfund sites.

Eleven of these sites involve two subsidiaries which the Company acquired
from ChemWaste, which is a wholly-owned subsidiary of WMX Technologies, Inc.
As part of the acquisition, ChemWaste agreed to indemnify the Company with
respect to any liability of its Natick and Braintree subsidiaries for waste
disposed of before the Company acquired them. Accordingly, ChemWaste is paying
all costs of defending the Company's Natick and Braintree subsidiaries in
these cases, including legal fees and settlement costs.

The Company's subsidiary which owns the Bristol, Connecticut facility is
involved in one Superfund site. As part of the acquisition of the Bristol and
Cincinnati, Ohio facilities, the seller and its parent company, Southdown,
Inc., agreed to indemnify the Company with respect to any liability for waste
disposed of before the Company acquired the facilities, which would include
any liability arising from Superfund sites.

With respect to the other Superfund sites at which the Company believes it
may face liability, the Company has established reserves or escrows which it
believes are appropriate. Therefore, the Company believes that any future
settlement costs arising from any or all of the 20 Superfund sites will not be
material to the Company's operations or financial position. Management
routinely reviews each Superfund site in which the Company's subsidiaries are
involved, considers each subsidiary's role at each site and its relationship
to the other PRPs at the site, the quantity and content of the waste it
disposed of at the site, and the number and financial capabilities of the
other PRPs at the site. Based on reviews of the various sites and currently
available information, and management's judgment and prior experience with
similar situations, expense accruals are provided by the Company for its share
of future site cleanup costs, and existing accruals are revised as necessary.
As of December 31, 1995, the Company had accrued environmental costs of
$405,000 for cleanup of Superfund sites. Superfund legislation permits strict
joint and several liability to be imposed without regard to fault, and, as a
result, one PRP might be required to bear significantly more than its
proportional share of the cleanup costs if other PRPs do not pay their share
of such costs.

Five of the 20 sites involve former subsidiaries of ChemClear Inc. One of
the five sites is the Strasburg Landfill site in Pennsylvania. The Company and
two other parties identified as PRPs received an order from the EPA in 1989 to
perform certain emergency measures at the site. The Company responded by
installing a leachate treatment and discharge system and repairing the
landfill slope. Since early 1990, the Company has spent approximately $400,000
in complying with the EPA order. In 1992, the EPA issued its Record of
Decision for the site which proposes recapping and revegetating the landfill
and installing certain air emission and leachate treatment systems. In January
1993, the Company and eight other PRPs submitted to the EPA a Response to
Notice Letter, which recommended additional study be performed at the site by
the PRP group and that a final remedy be based on the additional data
developed during the study. In July 1995, the PRP group received a reply from
the EPA, which declined to accept the good faith offer submitted by the nine
PRPs in January 1993. The EPA advised the PRP group that it planned to utilize
Superfund monies to design and implement the remedy specified in the Record of
Decision for the site, and initiate a cost recovery action for its past costs
in the amount of approximately $6,000,000. The EPA indicated that the future
remediation costs are estimated to be $11,000,000. In their October 1995
response to the EPA, the PRPs have indicated their willingness to accept the
EPA's offer to engage in alternative dispute resolution to settle the claim
for past costs. In January 1996, the Company and 16 other PRP's signed a
standstill and tolling agreement with the EPA which allows for settlement
discussions to take place up to July 15, 1996. In February 1996, the Company
filed suit in

20

the U.S. District Court for the Eastern District of Pennsylvania against
certain PRP's in order to preserve its claims for cost recovery and
contribution against those parties. The Company believes its ultimate exposure
in this case will not have a material impact on its financial position or
results of operations.

Mr. Frank, Inc., which was acquired by the Company in July 1992, is involved
in three Superfund sites, as a transporter of waste generated by others prior
to the Company's purchase of Mr. Frank, Inc. The Company acquired Mr. Frank,
Inc. in exchange for 233,000 shares of the Company's common stock, of which
33,222 shares were deposited into an escrow account to be held as security for
the sellers' agreement to indemnify the Company against potential liabilities,
including environmental liabilities arising from prior ownership and operation
of Mr. Frank, Inc.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of the Company's security holders during
the fourth quarter of 1995.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS

The Company's common stock began trading publicly in the over-the-counter
market on November 24, 1987 and was added to the NASDAQ National Market System
effective December 15, 1987. The Company's common stock trades on The Nasdaq
Stock Market under the symbol: CLHB. The following table sets forth the high
and low sales prices of the Company's common stock for the indicated periods
as reported by NASDAQ.

1994                                                                HIGH   LOW
- ----                                                               ------ ------

First Quarter..................................................... $9.25  $6.625
Second Quarter....................................................  8.25   6.625
Third Quarter.....................................................  8.125  5.75
Fourth Quarter....................................................  7.25   3.625

1995                                                                HIGH   LOW
- ----                                                               ------ ------

First Quarter..................................................... $5.125 $3.375
Second Quarter....................................................  5.50   3.125
Third Quarter.....................................................  4.250  3.00
Fourth Quarter....................................................  3.875  2.375

On February 1, 1996 there were 920 holders of record of the Company's common
stock, excluding stockholders whose shares were held in nominee name.

The Company has never declared nor paid any cash dividends on its common
stock. In February 1993, the Board of Directors authorized the issuance of up
to 156,416 shares designated as Series B Convertible Preferred Stock, with a
cumulative dividend of 7% during the first year and 8% thereafter, payable
either in cash or by the issuance of shares of common stock. 112,000 shares of
Series B Convertible Preferred Stock (the "Preferred Stock") were issued on
February 16, 1993 in partial payment of the purchase price for Spring Grove.
Except for payment of dividends on the Preferred Stock, the Company intends to
retain all earnings for use in the Company's business and therefore does not
anticipate paying any cash dividends on its common stock in the foreseeable
future. The Company's bank credit agreements contain financial covenants which
may effectively restrict or limit the payment of dividends other than
Preferred Stock dividends. See Note 9 to the Consolidated Financial Statements
in Item 8 of this report.

Dividends on the Company's Preferred Stock are payable on the 15th day of
January, April, July and October, at the rate of $1.00 per share, per quarter;
112,000 shares are outstanding. Under the terms of the

21

Preferred Stock, the Company can elect to pay dividends in cash or in common
stock with a market value equal to the amount of the dividend payable. The
Company elected to pay the October 15, 1995 and the January 15, 1996 dividends
in common stock. The market value of the common stock as of the October 1,
1995 and January 1, 1996 record dates of such dividends was $3.8375 and
$2.6125, respectively. Accordingly, the Company has issued 72,058 shares of
common stock to the holders of the Preferred Stock. The Company anticipates
that the Preferred Stock dividends payable through 1996 will be paid in common
stock.

ITEM 6. SELECTED FINANCIAL DATA

The following selected consolidated financial information should be reviewed
in conjunction with Item 7--Management's Discussion and Analysis of Financial
Condition and Results of Operations and Item 8--Financial Statements and
Supplementary Data of this report.

Change of Fiscal Year. In 1992, the Company elected to change its fiscal
year to coincide with the calendar year. Prior to the change, the Company's
fiscal year ended on February 28. As a result, the Company had a ten-month
transition period, from March 1, 1991 to December 31, 1991, between fiscal
years. The change in fiscal year creates a reporting period which is
consistent with various federal and state agencies which regulate the
Company's business, and allows better comparability of the Company's results
to other publicly traded environmental services companies.

Extraordinary Item. During the third quarter of 1994, the Company completed
a public offering of $50,000,000 of 12.50% Senior Notes, and used the net
proceeds to prepay substantially all of the Company's debt, in order to
refinance debt which had a 13.25% interest rate. The Company also wanted to
reduce its reliance on floating rate bank debt, by extending the average life
of its long-term debt and obtaining longer-term capital at an attractive fixed
interest rate. The refinancing resulted in approximately $2,043,000 of expense
relating to the early retirement of the outstanding debt, and an extraordinary
charge of $1,220,000 ($.13 per share), net of income tax benefit, for
redemption premiums paid to the holders of the prepaid debt and for the write-
off of deferred financing costs.

Nonrecurring Charges. During the fourth quarter of 1995, the Company
recorded a $4,247,000 nonrecurring charge in connection with the reengineering
of the Company's operations and the write-off of a non-performing asset, as
well as the anticipated losses on the sale of certain non-core properties.
Under the reengineering program, the Company has closed or downsized small,
satellite offices; reduced employment levels; downsized its laboratory staff
and relocated the laboratory to its waste handling facility in Braintree,
Massachusetts; and will be relocating its corporate headquarters to a new
location in Braintree, Massachusetts in the Spring of 1996. The components of
the nonrecurring charge are as follows:

Severance and related costs..................................... $1,097,000
Write-off of non-performing asset...............................  1,110,000
Real estate related charges.....................................  2,040,000
----------
$4,247,000

During the fourth quarter of 1994, the Company renegotiated its lease on its
corporate headquarters in Quincy, Massachusetts, such that the lease would
terminate on or before December 31, 1995. The Company relocated its corporate
headquarters to Braintree, Massachusetts in the spring of 1995. In addition,
the Company has vacated laboratory space it rents in Bedford, Massachusetts,
and is subleasing the space. As a result, the Company recorded a one-time,
noncash charge of $1,035,000 before taxes for the write-off of leasehold
improvements at the two locations.

22

TWELVE-MONTH YEAR             TEN-MONTH
ENDED DECEMBER 31,            PERIOD ENDED
------------------------------------- DECEMBER 31,
1995      1994      1993     1992       1991
--------  --------  -------- -------- ------------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

INCOME STATEMENT DATA:
Revenues....................  $209,250  $207,073  $200,114 $176,193   $127,473
Cost of revenues..........   156,779   146,132   134,525  116,473     85,921
Selling, general and
administrative expenses..    39,574    38,910    42,296   35,923     23,856
Depreciation and
amortization of
intangible assets........    10,081    10,250    10,319    8,884      6,601
Nonrecurring charges......     4,247     1,035       --       --         --
--------  --------  -------- --------   --------
Income (loss) from
operations...............    (1,431)   10,746    12,974   14,913     11,095
Interest expense (net)....     8,657     7,432     7,198    7,064      5,925
--------  --------  -------- --------   --------
Income (loss) before
provision for income
taxes and extraordinary
item.....................   (10,088)    3,314     5,776    7,849      5,170
Provision for (benefit
from) income taxes.......    (3,195)    1,619     2,645    2,774      1,567
--------  --------  -------- --------   --------
Income (loss) before
extraordinary item.......    (6,893)    1,695     3,131    5,075      3,603
Extraordinary loss related
to early retirement of
debt, net of income tax
benefit of $823..........       --      1,220       --       --         --
--------  --------  -------- --------   --------
Net income (loss).......  $(6,893)  $    475  $  3,131 $  5,075   $  3,603
========  ========  ======== ========   ========
Net income (loss) per common
and common equivalent share
before extraordinary item..  $   (.77) $    .13  $    .28 $    .52   $    .37
========  ========  ======== ========   ========
Extraordinary item..........  $    --   $   (.13)      --       --         --
========  ========  ======== ========   ========
Net income (loss) per common
and common equivalent
share......................  $   (.77) $    .00  $    .28 $    .52   $    .37
========  ========  ======== ========   ========
Weighted average number of
common and common
equivalent shares
outstanding................     9,475     9,635     9,884    9,743      9,739
========  ========  ======== ========   ========
BALANCE SHEET DATA:
Working capital.............  $ 11,697  $ 20,814  $ 18,320 $ 15,487   $ 14,529
Total assets................  $178,316  $159,875  $167,358 $153,939   $138,844
Long-term debt, less current
portion....................  $ 70,391  $ 60,465  $ 62,507 $ 64,565   $ 63,381
Stockholders' equity........  $ 60,374  $ 67,326  $ 67,371 $ 58,065   $ 50,787

23

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated certain operating
data associated with the Company's results of operations. This table and
subsequent discussions should be read in conjunction with Item 6--Selected
Financial Data and Item 8--Financial Statements and Supplementary Data of this
report.

PERCENTAGE OF TOTAL REVENUES
----------------------------------------
TWELVE-MONTH YEAR         TEN-MONTH
ENDED DECEMBER 31,        PERIOD ENDED
--------------------------  DECEMBER 31,
1995   1994   1993   1992       1991
-----  -----  -----  -----  ------------

Revenues.............................. 100.0% 100.0% 100.0% 100.0%    100.0%
Cost of revenues:
Disposal costs paid to third
parties............................  15.4   13.5   15.4   18.2      20.6
Other costs.........................  59.5   57.1   51.8   47.9      46.8
-----  -----  -----  -----     -----
Total cost of revenues............  74.9   70.6   67.2   66.1      67.4
Selling, general and administrative
expenses.............................  18.9   18.8   21.1   20.4      18.7
Depreciation and amortization of
intangible assets....................   4.9    4.9    5.2    5.0       5.2
Nonrecurring charges..................   2.0    0.5    --     --        --
-----  -----  -----  -----     -----
Income (loss) from operations.......  (0.7)   5.2    6.5    8.5       8.7
Interest expense (net)................   4.1    3.6    3.6    4.0       4.7
-----  -----  -----  -----     -----
Income (loss) before provision for
income taxes and extraordinary
item...............................  (4.8)   1.6    2.9    4.5       4.0
Provision for (benefit from) income
taxes................................  (1.5)   0.8    1.3    1.6       1.2
-----  -----  -----  -----     -----
Income (loss) before extraordinary
item.................................  (3.3)   0.8    1.6    2.9       2.8
Extraordinary loss from early
retirement of debt...................   --     0.6    --     --        --
-----  -----  -----  -----     -----
Net income (loss)................... (3.3)%   0.2%   1.6%   2.9%      2.8%
=====  =====  =====  =====     =====

GENERAL

As part of its growth strategy, the Company seeks to expand into additional
service areas by opening new service centers and sales offices, and by
acquiring additional hazardous waste management facilities. In 1992, the
Company made two acquisitions (Connecticut Treatment Corporation and Mr.
Frank, Inc.). In 1993, the Company made one acquisition (Spring Grove Resource
Recovery, Inc.) and opened two service centers in Waukegan, Illinois and
Portsmouth, New Hampshire and eight sales offices. In 1994, the Company made
one acquisition (the Richmond, Virginia oil reclamation facility), closed the
Portsmouth, New Hampshire service center to reduce overhead, and opened two
new service centers in Lake Charles, Louisiana and Charleston, South Carolina.
In 1995, the Company made one acquisition (the Kimball, Nebraska incinerator),
expanded its Chicago facility onto the adjacent site, closed its service
centers in Bangor, Maine; Shrewsbury, Massachusetts; and Waukegan, Illinois,
and opened two new service centers in Denver, Colorado and Houston, Texas.

Sales offices may become service centers as business around a sales office
develops and the Company adds staff and equipment to support the increasing
level of business. A sales office will become a service center by relocating
to larger space and adding field technicians and personnel to service
customers. As its sales territories evolve, the Company will relocate sales
personnel from one area to another, and close sales offices while opening
others in areas with growth potential. The Company currently has sales offices
and service centers in 24 states and Puerto Rico.

The Company's operations are subject to seasonal fluctuations. Typically
during the first quarter there is less demand for environmental remediation
due to the cold weather, particularly in the Northeast and Midwest

24

regions. In addition, factory closings for the year-end holidays reduce the
volume of industrial waste generated, which results in lower volumes of waste
handled by the Company during the first quarter of the following year.
Customer spending for environmental remediation services is also influenced by
budgetary cycles and constraints, and remediation projects are typically fewer
in the first quarter of the budget year, with more projects occurring in
subsequent quarters as customers seek to complete budgeted projects before the
end of the year.

The Company analyzes its results of operations based on the geographical
locations of its service centers. The Company believes this method of analysis
is appropriate because geographical areas differ in types of customers; the
scope and maturity of the Company's operations; the Company's investments in
facilities and the number of service centers and sales offices; degree of
competition; and local economic and regulatory conditions.

The following table sets forth for the periods indicated the Company's
revenues by region, based upon the locations of its service centers, as of
December 31, 1995.

NUMBER OF
SERVICE
REGION                        CENTERS      1995          1994          1993
- ------                       --------- ------------  ------------  ------------
(DOLLARS IN THOUSANDS, UNAUDITED)

Northeast...................      7    $ 82,779  39% $ 82,391  40% $ 84,906  42%
Mid-Atlantic................      9      66,318  32%   70,861  34%   63,894  32%
Central.....................      3      34,912  17%   29,847  14%   26,044  13%
Midwest.....................      3      25,241  12%   23,974  12%   25,270  13%
---    -------- ---  -------- ---  -------- ---
Total.....................     22    $209,250 100% $207,073 100% $200,114 100%
===    ======== ===  ======== ===  ======== ===

The Company continues to expand its Mid-Atlantic region as it penetrates the
southern part of the country, by expanding its network of sales offices and
service centers. With its new service centers and sales offices in the
southern states of South Carolina, Georgia, Tennessee, Louisiana, and Texas,
the Company expects its business in that region to expand in 1996. The Company
may decide to form a new southern region so it can analyze and report on its
results of operations in that developing area.

The Company also analyzes its revenues on a product line basis based upon
the type of principal services provided. The principal services provided by
the Company fit within three categories: treatment and disposal of industrial
wastes ("Treatment and Disposal"); field services provided at customer sites
("Field Services"); and specialized repackaging, treatment and disposal
services for laboratory chemicals and household hazardous wastes ("CleanPack
Services").

TYPE OF SERVICE                            1995          1994          1993
- ---------------                        ------------  ------------  ------------
(DOLLARS IN THOUSANDS; UNAUDITED)

Treatment and Disposal................ $ 92,005  44% $ 84,523  41% $ 90,181  45%
Field Services........................   87,898  42%   94,360  46%   80,940  40%
CleanPack Services....................   29,347  14%   28,190  13%   28,993  15%
-------- ---  -------- ---  -------- ---
Total............................... $209,250 100% $207,073 100% $200,114 100%
======== ===  ======== ===  ======== ===

1995 COMPARED WITH 1994

Revenues. Revenues for 1995 were $209,250,000, a new Company record. During
1994, the Company received approximately $7,000,000 of revenue from its
leading role in the cleanup of a large oil spill from a barge off the coast of
Puerto Rico. Excluding the revenue from that event last year, the Company's
base business grew approximately 5% from 1994 to 1995.

25

Treatment and disposal services revenue increased 9% from 1994 to 1995,
reversing a two year period of declining revenue in this product line. The
decline was due to a variety of secular trends impacting both price and
volume: competitive industry pricing; continuing efforts by generators of
hazardous waste to reduce the amount of hazardous waste they produce; and
shipment by generators of waste direct to the ultimate treatment or disposal
location. The Company has responded to these industry trends in several ways,
primarily by modernizing the Company's facilities to offer more
technologically advanced waste treatment alternatives, such as the Kimball
incinerator in Nebraska and the Clean Extraction System in Baltimore and by
acquiring treatment and disposal facilities that expand the Company's product
lines. For example, during 1995, the Company completed the installation of an
automated fuels blending operation at its Cincinnati waste treatment plant,
which establishes the Company in the fuels blending business for the first
time.

Field services revenue increased only slightly from 1994 to 1995, excluding
the Puerto Rico oil spill revenue. CleanPack revenue increased 4% from 1994 to
1995. While the Company has protected its market share in existing regions and
established new business relationships in the newer regions, significant price
competition has impacted revenue growth.

The Company is expanding its service capabilities in the Gulf Coast and
Southern regions of the United States. During 1995, the Company opened service
centers in Georgia and Kentucky, and expanded its new service centers in
Colorado and Texas, by adding staff and equipment to support the increasing
level of business in the newer regions. The Company expects to introduce new
waste management capabilities in the Midwest region with the significant
expansion of its Chicago facility. The Company also expects its revenues in
all four regions and all three product lines to benefit from the acquisition
of the Kimball incinerator.

Cost of Revenues. One of the largest components of cost of revenues is the
cost of sending waste to other companies for disposal. The Company has been
able to upgrade the quality and efficiency of its waste treatment services
through the development of new technology, strategic acquisitions, and
continued modifications and upgrades at its facilities. Although these actions
reduced the Company's dependence on outside disposal vendors such as landfills
and incinerators, to which the Company sends waste for ultimate disposal, the
increasingly competitive nature of the hazardous waste industry has
significantly reduced the margins earned on waste sent to outside disposal.
The Company also experienced an increase in the volume of field service work
which involved direct shipments to disposal facilities owned by third parties.
As a result, the Company's outside disposal costs increased to 15.4% of
revenue in 1995 from 13.9% of revenue in 1994 (calculated excluding revenue
from the Puerto Rico oil spill, which had no outside disposal costs). These
factors support the Company's decision to acquire the Kimball incinerator, in
order to reduce the Company's reliance on third-party disposal outlets, and
capture the gross margin being paid to vendors.

Since the Kimball incinerator is a new facility, and a recent entrant to the
incineration marketplace, volumes are growing slowly due to the time required
for customers to audit and approve the facility and begin shipping waste to
it. As a result, the incinerator experienced a loss from operations of
approximately $1,500,000 during 1995. The Company expects the volumes of waste
processed to increase during 1996, now that CERCLA approval has been obtained
and the on-site landfill is in operation.

The Company has begun cost savings plans to reduce operating costs as a
percentage of revenue during 1996. Through reengineering, a two-year long
effort which began in January 1994, the Company has significantly reduced its
cost structure while improving service quality and competitiveness in the
marketplace. The reengineering and cost control efforts have identified over
$10,000,000 in potential cost reductions which are expected to be realized in
1996. These savings will be achieved through introducing new computer systems
to strengthen the Company's business processes, exiting non-core businesses,
and reducing both the number of offices and the amount of rented space. The
Company believes that cost reductions will enable the Company to return to
profitability in 1996.

The nonrecurring charge of $4,247,000 resulted primarily from the
reengineering program, which identified more efficient methods of servicing
customers as well as certain assets and field locations which are

26

no longer integral to the Company's operations. Included in the charge are
$2,400,000 of non-cash items. The Company has reorganized and reduced its
workforce to reflect these operational changes, and reduced its rental of
corporate offices and satellite field service locations by approximately
$1,160,000 per year. In addition to the $10,000,000 in anticipated cost
reductions, the Company will realize expected net cash savings of $3,300,000,
primarily from the tax savings of the nonrecurring charge and the sale of
certain office and maintenance facilities.

Selling, General and Administrative Expenses. During 1995, the Company
established a sales presence in Alabama, California, Colorado, and Florida and
spent considerable sums of money on building marketing campaigns for the
Kimball incinerator and the expanded Chicago waste treatment facility. As a
result of the Company's strategy to expand geographically, by adding sales
offices and service centers in the southern and western parts of the United
States, and to add product lines, such as the Kimball incinerator, its sales
expenses have increased. Although there continues to be increased costs
associated with the expansion efforts, the Company has implemented cost
savings programs which have, to some extent, offset these growth related
expenditures. The Company anticipates 1996 selling, general and administrative
expenses to decline from the 1995 level.

Interest Expense. Interest expense increased during 1995 as a result of an
increase in the Company's average cost of capital, due to its decision in 1994
to reduce its reliance on floating rate bank debt through the issuance of
$50,000,000 of 12.50% Senior Notes, and an increase in total long-term debt,
due to the costs of the acquisition of the Kimball incinerator and the
expansion of the Chicago facility. No interest was capitalized during 1995.

Provision for Income Taxes. The effective income tax rate for 1995 was 32%,
as compared to 49% for 1994. The rate fluctuates depending on the amount of
income before taxes, as compared to the fixed amount of goodwill and other
non-deductible items.

1994 COMPARED WITH 1993

Revenues. Revenues for 1994 were $207,073,000, a 3.5% increase over 1993
revenues of $200,114,000. As shown in the regional revenue table above, the
Mid-Atlantic and Central regions showed continued progress in gaining market
share, as revenues in those regions grew 11% and 15%, respectively, in
contrast to the Northeast and Midwest regions, where revenues declined 3% and
5%, respectively. Industrywide pricing pressures, particularly in the
treatment and disposal and CleanPack product lines, impacted revenues.

The Northeast and Midwest regions have historically been strong markets for
handling drummed waste. Customers have changed their waste handling systems to
store and ship more waste in bulk, which allows them to ship directly to the
ultimate disposal location and bypass transfer facilities, reducing their unit
disposal costs. These changes, combined with efforts by customers to minimize
the amount of hazardous waste generated, tended to offset the Company's gains
in market share and number of jobs performed in all regions as it expands the
range of services offered and the geographic territory served. In addition,
price competition in the CleanPack business caused a decline in revenues from
that product line, particularly in the Northeast and Midwest regions.

The 3% revenue decline in the Northeast region was consistent with the
Company's expectations for the region, since the prevailing trend over the
past few years has been flat, as major industries in the region, such as
defense, aerospace, computers, and high-technology, have experienced cutbacks
in production. However, the mix of business has shifted, from treatment and
disposal to field service. During 1994, the Company completed several large
remediation projects in the Northeast region, which involved direct shipment
of waste to disposal sites.

The 5% revenue decline in the Midwest region was due to a decline of
approximately 20% in the volumes of waste handled, as the Company avoided low-
margin waste and focused on improving profitability in that

27

region. Revenue in the Mid-Atlantic region grew 11% from 1993 to 1994,
primarily due to approximately $7,000,000 of revenue from the Company's
leading role in the cleanup of a large oil spill from a barge off the coast of
Puerto Rico, which was classified as field service revenue.

Revenue in the Central region grew 15% from 1993 to 1994, as the Company
continued to gain market share in the Central region, as it has for the past
several years. For example, 1992 revenues were 53% higher than 1991 revenues,
and 1993 revenues were 17% higher than 1992 revenues.

CleanPack product line revenue declined 3% from 1993 to 1994, primarily due
to price competition, particularly in collecting hazardous waste from
households, which is competitively bid by the municipalities sponsoring the
townwide or citywide collection programs.

Cost of Revenues. The Company's outside disposal costs decreased to 13.5% of
revenue in 1994 from 18.2% of revenue in 1992. The Company's cost of revenues,
excluding disposal costs paid to third parties, increased to 57.1% of total
revenues in 1994 from 51.8% in 1993, as intense price competition and
increased costs combined to offset the benefits the Company experiences from a
competitive pricing environment among disposal facilities. While the Company
has managed to control most of its fixed costs, such as insurance costs, other
items such as rent and telephone expense have increased as the Company opens
new locations and expands its service territory. The largest increases in
operating costs were for subcontractors, rentals, and outside transportation.
The Puerto Rico oil spill cleanup was classified as a field service job. In
that cleanup, the Company was primarily responsible for overseeing the work of
local employees and subcontractors, and the waste disposal was handled by
other parties. As a result, although the Company realized over $7,000,000 of
revenue, its gross margin on the job was significantly lower than the margins
it typically realizes on its field service work.

As a result, the cost of revenues increased to 70.6% of revenues in 1994, as
compared to 67.2% of revenues in 1993, reflecting the competitive pricing
trends in the hazardous waste industry. To offset this pricing erosion, the
Company in 1993 began a reengineering effort aimed at reducing its cost
structure and streamlining its treatment and disposal services, while
maintaining a high quality of customer service. One result of this
reengineering effort was the Company's decision to relocate its headquarters
to less expensive, smaller space. With the elimination of several functions
and the centralization of others, its headquarters staff was reduced to less
than 100 people. Other goals of the reengineering effort were to increase the
ratio of billable to nonbillable personnel, improve bidding and execution of
jobs, achieve better pricing of remediation work, and decline jobs with less
than acceptable margins.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased to $38,910,000 or 18.8% of revenues in 1994,
as compared to $42,296,000 or 21.1% of revenues for 1993. One of the goals of
the reengineering program that began in 1993 was to reduce the number of
nonbillable personnel, through elimination of positions and reassigning some
people from nonbillable overhead positions to billable positions included in
gross margin, in an effort to reduce selling, general and administrative costs
to a quarterly rate of approximately $10,000,000 going into 1994. Management
of the Company set a goal of reducing selling, general and administrative
costs approximately 5% in 1994, and exceeded the goal by achieving an 8%
reduction.

Interest Expense. Interest expense for 1994 was 3.6% of revenues, the same
percentage as for 1993. Total debt at December 31, 1994 was $8,199,000 lower
than at December 31, 1993, as the Company used funds provided from operations
to reduce its bank debt. The public offering of $50,000,000 of 12.50% Senior
Notes caused an increase in the Company's average interest cost, since the
interest rate was higher than the floating rate paid on its bank debt. No
interest was capitalized during 1994 or 1993.

Provision for Income Taxes. The effective income tax rate for 1994 was 49%,
an increase over the 46% effective income tax rate for 1993. The rate for both
years was higher than the combined state and federal statutory rate due in
part to the amortization of goodwill on acquisitions made before July 1991,
which is

28

nondeductible for income tax reporting purposes. The rate fluctuates depending
on the amount of income before taxes, as compared to the fixed amount of
goodwill and other nondeductible items.

FACTORS THAT MAY AFFECT FUTURE RESULTS

From time to time, the Company and employees acting on behalf of the Company
make forward-looking statements concerning the expected revenues, results of
operations, capital expenditures, capital structure, plans and objectives of
management for future operations, and future economic performance. This report
contains forward-looking statements. There are many factors which could cause
actual results to differ materially from those projected in a forward-looking
statement, and there can be no assurance that such expectations will be
realized.

The Company's future operating results may be affected by a number of
factors, including the Company's ability to: continue to implement the
treatment and disposal reengineering program; utilize its facilities and
workforce profitably, in the face of intense price competition; successfully
increase market share in its existing service territory while expanding its
product offerings into other markets; integrate additional hazardous waste
management facilities, such as the Kimball incinerator and the expanded
Chicago facility; realize benefits from cost reduction programs; and generate
incremental volumes of waste to be handled through such facilities from
existing sales offices and service centers and others which may be opened in
the future.

The future operating results of the Kimball incinerator may be affected by
factors such as its ability to: obtain sufficient volumes of waste at prices
which produce revenue sufficient to offset the operating costs of the
facility; minimize downtime and disruptions of operations; and compete
successfully against other incinerators which have an established share of the
incineration market.

The Company's operations may be affected by the commencement and completion
of major site remediation projects; seasonal fluctuations due to weather and
budgetary cycles influencing the timing of customers' spending for remedial
activities; the timing of regulatory decisions relating to hazardous waste
management projects; changes in regulations governing the management of
hazardous waste; secular changes in the waste processing industry towards
waste minimization and the propensity for delays in the remedial market;
suspension of governmental permits; and fines and penalties for noncompliance
with the myriad of regulations governing the Company's diverse operations. As
a result of these factors, the Company's revenue and income could vary
significantly from quarter to quarter, and past financial performance should
not be considered a reliable indicator of future performance.

Typically during the first quarter of each calendar year there is less
demand for environmental remediation due to the cold weather, particularly in
the Northeast and Midwest regions. In addition, factory closings for the year-
end holidays reduce the volume of industrial waste generated, which results in
lower volumes of waste handled by the Company during the first quarter of the
following year.

The Company participates in a highly volatile industry, with multiple
competitors, many of which have taken large write-offs and asset write-downs
and undergone major restructurings during the past two years. As the industry
consolidates, other companies may undergo such restructurings and incur
special charges in an effort to reduce costs and offset the intense price
competition in a competitive marketplace. The Company's participation in a
highly dynamic industry often results in significant volatility of the
Company's common stock price, as well as that of its competitors.

The Company's business has not been significantly affected by inflation
during the periods discussed above.

ENVIRONMENTAL CONTINGENCIES

While increasing environmental regulation often presents new business
opportunities to the Company, it likewise often results in increased operating
costs as the Company expands its compliance staff to cope with

29

the myriad of federal, state and local regulations. The Company strives to
conduct its operations in compliance with applicable laws and regulations,
including environmental rules and regulations, and has as its goal 100%
compliance. This effort requires programs to promote compliance, such as
training employees and customers, purchasing health and safety equipment, and
in some cases hiring outside consultants and lawyers. Even with these
programs, management believes that in the ordinary course of doing business,
companies in the environmental services and waste disposal industry are faced
with governmental enforcement proceedings resulting in fines or other
sanctions and will likely be required to pay civil penalties or to expend
funds for remedial work on waste management facilities.

From time to time, the Company has paid fines or penalties in governmental
environmental enforcement proceedings, usually involving its waste treatment,
storage and disposal facilities. At December 31, 1995, however, there were no
pending governmental environmental enforcement proceedings where the Company
believes potential monetary sanctions will exceed $100,000. The possibility
always exists that substantial expenditures could result from governmental
proceedings, which would have a negative impact on earnings for a particular
reporting period. More importantly, federal, state and local regulators have
the power to suspend or revoke permits or licenses needed for operation of the
Company's plants, equipment, and vehicles, based on the Company's compliance
record, and customers may decide not to use a particular disposal facility or
do business with a company because of concerns about the compliance record.
Suspension or revocation of permits or licenses would impact the Company's
operations and could have a material adverse impact on financial results.

Certain Company subsidiaries have transported or generated waste sent to
sites which have been designated state or federal Superfund sites. As a
result, the Company has been named as a potentially responsible party at 20
state and federal Superfund sites. Eleven of these sites involve two
subsidiaries which the Company acquired from Chemical Waste Management, Inc.
("ChemWaste"), a wholly-owned subsidiary of WMX Technologies, Inc., and one
site involves a subsidiary which the Company acquired from Southdown, Inc., a
public company. As part of these acquisitions, ChemWaste and Southdown, Inc.
agreed to indemnify the Company with respect to any liability of such
subsidiaries for waste disposed of before the Company acquired them. With
respect to the other Superfund sites, the Company has established reserves or
escrows which it believes are appropriate, such that any future settlement
costs of lawsuits arising from any or all of the 20 Superfund sites will not
be material to the Company's operations or financial position. As of December
31, 1995, the Company had accrued or incurred environmental costs of
approximately $800,000 for cleanup of Superfund sites.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations and capital expenditures primarily
by cash flow from operations and additions to long-term debt. Cash provided by
operations, before changes in current assets and current liabilities, was
$4,516,000 in 1995, as compared to $13,121,000 in 1994.

During 1995, the Company spent $8,852,000 on additions to plant and
equipment and construction in progress, and $5,160,000 on the acquisition of
the Kimball incinerator. In addition, the Company spent $7,805,000 for the
financial assurance policies associated with the acquisition. See Note 5 to
the Consolidated Financial Statements in this report for a description of the
costs of the incinerator acquisition. Net additions to long-term debt provided
$12,121,000 in 1995. During 1994, the Company spent $5,510,000 on additions to
property, plant, and equipment and construction in progress, excluding the
cost to acquire the waste oil processing facility near Richmond, Virginia, and
reduced its long-term debt by $8,199,000.

At December 31, 1994, the Company had a $35,000,000 revolving credit
facility with three banks. In connection with the acquisition of the Kimball,
Nebraska hazardous waste incineration facility in May 1995, the Company
entered into a new $45,000,000 revolving credit and term loan agreement (the
"Loan Agreement") with another financial institution, which replaced the bank
credit facility. The Loan Agreement originally provided for a $35,000,000
revolving credit portion (the "Revolver") and a $10,000,000 term

30

promissory note (the "Term Note"). On March 20, 1996, the Loan agreement was
amended to increase the Term Loan from its amortized balance of $8,333,000 to
$15,000,000 and decrease the revolving credit portion to $30,000,000. This
change in structure of the agreement allows the Company greater availability
under the Loan Agreement. The new Term Note is payable in 60 monthly
installments, commencing April 1, 1996. Monthly principal payments are
$250,000. The Revolver allows the Company to borrow up to $30,000,000 in cash
and letters of credit. Letters of credit may not exceed $20,000,000 at any one
time. The Revolver has a three-year term with an option to renew annually.

The Loan Agreement terms include a borrowing limit which fluctuates
depending on the level of accounts receivable which collateralize the Loan
Agreement. The Loan Agreement terms allow the Company to make regularly
scheduled payments of principal and interest on its other indebtedness for
borrowed money, to pay dividends in cash on its preferred stock, to prepay
such debt or redeem such preferred stock, and to make acquisitions of other
companies, provided that on each of the sixty consecutive days prior thereto,
and after giving effect thereto, the Company shall maintain borrowing
availability in excess of $4,500,000. As a result of the Company's significant
capital expenditures during 1995, its liquidity was reduced below the
$4,500,000 level expected to be maintained under the provisions of the Loan
Agreement described above. Its lender has waived compliance with the Loan
Agreement covenant requiring $4,500,000 of excess availability through May 20,
1996.

The Company believes it has adequate liquidity, since its operations along
with the provisions of the amended Loan Agreement are expected to produce cash
flow in excess of the amounts required to finance its operations and its
capital expenditures during 1996. In addition, the Company will realize
expected net cash savings of $3,300,000, primarily from the tax savings of the
nonrecurring charge and the sale of certain office and maintenance facilities,
described above under "Results of Operations--1995 Compared With 1994". It is
expected that capital expenditures in 1996 will be approximately $6,000,000.
The Company is also obligated to provide additional collateral security under
the financial assurance policies associated with the acquisition of the
Kimball incinerator, by delivering to the insurance company a letter of credit
in the amount of $1,000,000, which will increase by $250,000 each quarter
until the balance of the letter of credit is $3,006,000.

RECENT ACCOUNTING PRONOUNCEMENTS

Statement of Position 94-6, "Disclosure of Certain Significant Risks and
Uncertainties", (SOP 94-6) prepared by the Accounting Standards Executive
Committee addresses the required disclosures about the risks and uncertainties
which may exist as of the date of the financial statements in the following
areas: nature of operations, use of estimates in the preparation of financial
statements, certain significant estimates, and current vulnerability due to
certain concentrations. Adoption of SOP 94-6 did not have a material impact of
the Company's financial condition or results of operations.

Statement of Financial Accounting Standards No. 121 "Accounting for the
Impairment of Long-Lived Assets to be disposed of" (SFAS 121), issued by the
Financial Accounting Standards Board in March 1995 establishes accounting
standards for the impairment of long-lived assets, certain identifiable
intangibles, and goodwill related to those assets to be held and used for
long-lived assets and certain identifiable intangibles to be disposed of. This
statement is effective for financial statements for fiscal years beginning
after December 15, 1995. The Company does not believe the adoption of SFAS 121
will have on material impact on the Company's financial condition or results
of operations.

Statements of Financial Accounting Standards No. 123 "Accounting for Stock
Based Compensation" (SFAS 123), issued by the Financial Accounting Standards
Board in October 1995 establishes financial accounting and reporting for stock
based employee compensation plans. This standard is effective for financial
statements for fiscal years beginning after December 15, 1995. The Company
will adopt only the disclosure provisions of SFAS 123, the measurement
criteria will not be adopted. This SFAS will not have a material impact on the
Company's financial condition or results of operations.

31

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of Clean Harbors, Inc.:

We have audited the consolidated financial statements and the financial
statement schedule of Clean Harbors, Inc. and its subsidiaries listed in Item
14(a) of this Form 10-K. These financial statements and the financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and the
financial statement schedule based on our audits.

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

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Clean
Harbors, Inc. and its subsidiaries as of December 31, 1995 and 1994, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles. In addition, in our opinion, the
financial statement schedule referred to above, when considered in relation to
the basic financial statements taken as a whole, presents fairly, in all
material respects, the information required to be included therein.

Coopers & Lybrand L.L.P.

Boston, Massachusetts
January 31, 1996 (except with 
respect to Note 9, as to which 
the date is March 20, 1996)

32

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1995        1994        1993
----------  ----------  ----------

Revenues.................................... $  209,250  $  207,073  $  200,114
Cost of revenues..........................    156,779     146,132     134,525
Selling, general and administrative
expenses.................................     39,574      38,910      42,296
Depreciation and amortization of
intangible assets........................     10,081      10,250      10,319
Nonrecurring charges......................      4,247       1,035         --
----------  ----------  ----------
Income (loss) from operations...........     (1,431)     10,746      12,974
Interest expense (net)......................      8,657       7,432       7,198
----------  ----------  ----------
Income (loss) before provision for income
taxes and extraordinary item.............    (10,088)      3,314       5,776
Provision for (benefit from) income
taxes....................................     (3,195)      1,619       2,645
----------  ----------  ----------
Income (loss) before extraordinary
item...................................     (6,893)      1,695       3,131
Extraordinary loss related to early
retirement of debt, net of income tax
benefit of $823..........................        --        1,220         --
----------  ----------  ----------
Net income (loss)....................... $   (6,893) $      475  $    3,131
==========  ==========  ==========
Net income (loss) per common and common
equivalent share before extraordinary
item....................................... $     (.77) $      .13  $      .28
==========  ==========  ==========
Extraordinary item.......................... $      --   $     (.13)        --
==========  ==========  ==========
Net income (loss) per common and common
equivalent share........................... $     (.77) $      .00  $      .28
==========  ==========  ==========
Weighted average common and common
equivalent shares outstanding..............      9,475       9,635       9,884
==========  ==========  ==========

The accompanying notes are an integral part of these 
consolidated financial statements.

33

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

ASSETS
(IN THOUSANDS)

AS OF DECEMBER 31,
-------------------
1995      1994
--------- ---------

CURRENT ASSETS:
Cash and cash equivalents................................ $     225 $   1,000
Restricted investments...................................     2,460     1,542
Accounts receivable, less reserves of $1,044 and $1,495,
respectively............................................    48,417    44,834
Prepaid expenses.........................................     2,039     1,894
Supplies inventories.....................................     2,970     2,670
Income tax receivable....................................       722       178
Deferred tax asset.......................................     2,415       --
--------- ---------
Total current assets...................................    59,248    52,118
--------- ---------
PROPERTY, PLANT AND EQUIPMENT:
Land.....................................................     8,364     8,209
Buildings and improvements...............................    39,770    31,535
Vehicles and equipment...................................    77,384    72,494
Furniture and fixtures...................................     2,155     2,129
Construction in progress.................................     1,317     3,118
--------- ---------
128,990   117,485
Less--accumulated depreciation and amortization..........    54,256    47,713
--------- ---------
74,734    69,772
--------- ---------
OTHER ASSETS:
Restricted investments...................................     5,207       --
Goodwill (net)...........................................    22,202    22,926
Permits (net)............................................    13,489    14,244
Other....................................................     3,436       815
--------- ---------
44,334    37,985
--------- ---------
Total assets........................................... $ 178,316 $ 159,875
========= =========

The accompanying notes are an integral part of these 
consolidated financial statements.

34

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS' EQUITY
(IN THOUSANDS EXCEPT FOR SHARE INFORMATION)

AS OF DECEMBER 31,
--------------------
1995       1994
---------  ---------

CURRENT LIABILITIES:
Current maturities of long-term obligations............ $   3,605  $   1,715
Accounts payable.......................................    18,614     10,686
Accrued disposal costs.................................     7,446      6,179
Other accrued expenses.................................    17,886     12,724
---------  ---------
Total current liabilities............................    47,551     31,304
---------  ---------
Long-term obligations, less current maturities...........    70,391     60,465
Deferred income taxes....................................       --         780
Commitments and contingent liabilities (Notes 4, 8, 9,
10, 13 and 14)
Stockholders' equity:
Preferred stock, $.01 par value:
Series A convertible preferred stock
Authorized--2,000,000 shares; issued and
outstanding--none....................................       --         --
Series B convertible preferred stock
Authorized--156,416 shares; issued and outstanding--
112,000 shares at December 31, 1995 and 1994
(liquidation preference of $5,600,000)...............         1          1
Common stock, $.01 par value:
Authorized--20,000,000 shares; issued and outstanding
9,524,676 shares at December 31, 1995 and 9,431,282
shares at December 31, 1994..........................        96         95
Additional paid-in capital.............................    58,871     58,590
Unrealized loss on restricted investments, net of tax..        (7)      (113)
Retained earnings......................................     1,413      8,753
---------  ---------
Total stockholders' equity...........................    60,374     67,326
---------  ---------
Total liabilities and stockholders' equity........... $ 178,316  $ 159,875
=========  =========

The accompanying notes are an integral part of these 
consolidated financial statements.

35

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)

FOR THE YEARS ENDED DECEMBER 31,
----------------------------------
1995        1994        1993
-----------  ---------- ----------

Cash flows from operating activities:
Net income (loss)........................  $    (6,893) $     475  $    3,131
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Depreciation and amortization.........       10,081     10,250      10,319
Write-off of leasehold improvements...          --       1,035         --
Non-cash charge for reengineering
program..............................        3,684        --          --
Allowance for doubtful accounts.......          381        776         709
Amortization of deferred financing
costs................................          536        357         408
Write-off of deferred financing
costs................................          --         963         --
Deferred income taxes.................       (3,286)      (929)        692
Loss on sale of fixed assets..........            9        191         145
(Gain) loss on sale of investments....            4          2          (1)
Amortization of bond premiums
(discounts)..........................          --           1          (1)
Changes in assets and liabilities, net
of effects of businesses acquired:
Accounts receivable.................       (3,962)       926      (8,454)
Income taxes receivable.............         (544)       429        (191)
Prepaid expenses....................         (268)       459         531
Supplies inventories................         (300)      (237)       (157)
Accounts payable....................        7,063      1,122      (2,898)
Accrued disposal costs..............        1,267       (545)      2,336
Other accrued expenses..............        2,206      2,260      (1,865)
Income tax payable..................          --         --          151
-----------  ---------  ----------
Net cash provided by operating
activities.............................        9,978     17,535       4,855
-----------  ---------  ----------
Cash flows from investing activities:
Payment for businesses acquired, net of
cash acquired..........................          --        (200)     (1,394)
Additions to property, plant and
equipment..............................      (12,984)    (5,270)     (7,874)
Decrease in other restricted
investments............................          --         --          203
Proceeds from sales and maturities of
restricted investments.................          202        232         248
Cost of restricted investments
purchased..............................       (6,124)      (960)       (463)
Increase in other assets................       (2,661)      (103)        (97)
Proceeds from sale of fixed assets......           36        155          34
Increase in permits.....................         (140)       --         (147)
-----------  ---------  ----------
Net cash used in investing activities...      (21,671)    (6,146)     (9,490)
-----------  ---------  ----------

The accompanying notes are an integral part of these 
consolidated financial statements.

36

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1995        1994         1993
----------  -----------  ----------

Cash flows from financing activities:
Preferred stock dividend distribution.. $     (335) $      (429) $     (251)
Issuance of long-term debt.............     10,000       50,000         --
Payments on long-term obligations......     (2,922)     (33,449)     (1,906)
Additions to deferred financing costs..       (842)      (2,364)       (293)
Net borrowings (payments) under long-
term revolver.........................      4,848      (24,991)      6,630
Proceeds from exercise of stock
options...............................         17           28         646
Proceeds from employee stock purchase
plan..................................        152          --          --
----------  -----------  ----------
Net cash provided by (used in)
financing activities..................     10,918      (11,205)      4,826
----------  -----------  ----------
(Decrease) Increase in cash and cash
equivalents.............................       (775)         184         191
Cash and cash equivalents, beginning of
year....................................      1,000          816         625
----------  -----------  ----------
Cash and cash equivalents, end of year... $      225  $     1,000  $      816
==========  ===========  ==========

FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------
1995        1994         1993
----------  -----------  ----------

Supplemental Information:
Cash payments for interest and income
taxes:
Interest............................... $    8,715  $     6,648  $    6,536
Income taxes...........................      1,410        1,585       2,117
Liabilities assumed in conjunction with
business acquisitions:
Fair value of assets acquired.......... $    5,160  $       400  $    7,834
Cash paid..............................      4,132          200       1,400
Issuance of common stock for
acquisition...........................        --           --          --
Issuance of preferred stock for
acquisition...........................        --           --        5,600
Liabilities assumed....................      1,028          200         834
Noncash investing and financing
activities:
Capital lease obligations incurred..... $      196  $       240  $      154
Note payable to seller of equipment
acquired..............................        --           --           50
Dividends declared but not paid........        --           112          99
Stock dividend on preferred stock......        112          --          --
Property, plant & equipment accrued....        865          --          --

The accompanying notes are an integral part of these 
consolidated financial statements.

37

CLEAN HARBORS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

FOR THE THREE YEARS ENDED DECEMBER 31, 1995
(IN THOUSANDS)

SERIES B
PREFERRED STOCK     COMMON STOCK
------------------  ------------
UNREALIZED
NUMBER    $.01     NUMBER $.01  ADDITIONAL   LOSS ON                 TOTAL
OF       PAR       OF    PAR   PAID-IN   RESTRICTED  RETAINED  STOCKHOLDERS'
SHARES    VALUE    SHARES VALUE  CAPITAL   INVESTMENTS EARNINGS     EQUITY
--------  --------  ------ ----- ---------- ----------- --------  -------------

Balance, at December 31,
1992...................       --   $    --   9,327   $93   $52,034      $ --     $ 5,938      $58,065
-------  --------  -----   ---   -------      -----    -------      -------
Issuance of preferred
stock for
acquisition..........       112         1    --    --      5,599        --         --         5,600
Preferred stock
dividends:
Series B, $3.50 per
share...............       --        --     --    --        --         --        (350)        (350)
Proceeds from exercise
of stock options.....       --        --      98     2       644        --         --           646
Tax benefit from
exercise of stock
options..............       --        --     --    --        279        --         --           279
Net income............       --        --     --    --        --         --       3,131        3,131
-------  --------  -----   ---   -------      -----    -------      -------
Balance, at December 31,
1993...................       112  $      1  9,425   $95   $58,556        --     $ 8,719      $67,371
-------  --------  -----   ---   -------      -----    -------      -------
Preferred stock
dividends:
Series B, $4.00 per
share...............       --        --     --    --        --         --        (441)        (441)
Proceeds from exercise
of stock options.....       --        --       6   --         28        --         --            28
Tax benefit from
exercise of stock
options..............       --        --     --    --          6        --         --             6
Unrealized loss on
restricted
investments..........       --        --     --    --        --        (113)       --          (113)
Net income............       --        --     --    --        --         --         475          475
-------  --------  -----   ---   -------      -----    -------      -------
Balance, at December 31,
1994...................       112  $      1  9,431   $95   $58,590      $(113)   $ 8,753      $67,326
-------  --------  -----   ---   -------      -----    -------      -------
Preferred stock
dividends:
Series B, $4.00 per
share...............       --        --      29   --        112        --        (447)        (335)
Proceeds from exercise
of stock options.....       --        --       6   --         17        --         --            17
Employee Stock
Purchase Plan........       --        --      59     1       152        --         --           153
Unrealized gain on
restricted
investments..........       --        --     --    --        --         106        --           106
Net loss..............       --        --     --    --        --         --      (6,893)      (6,893)
-------  --------  -----   ---   -------      -----    -------      -------
Balance, at December 31,
1995...................       112  $      1  9,525   $96   $58,871      $  (7)   $ 1,413      $60,374
=======  ========  =====   ===   =======      =====    =======      =======

The accompanying notes are an integral part of these 
consolidated financial statements.

38

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) OPERATIONS

Clean Harbors, Inc. and its wholly-owned subsidiaries (collectively, the
"Company") are engaged in the business of industrial waste management services
involving treatment and disposal of industrial wastes; field services provided
at customer sites; and specialized handling of laboratory chemicals and
household hazardous wastes. The Company provides these services to a
diversified customer base across the United States, primarily in the Northeast
and Mid-Atlantic Regions.

(2) SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements of the Company reflect
the application of certain significant accounting policies as described below:

(a) Principles of Consolidation

The accompanying consolidated statements include the accounts of Clean
Harbors, Inc. and its wholly-owned subsidiaries. All material intercompany
accounts and transactions have been eliminated in consolidation.

(b) Revenue Recognition

The Company recognizes revenues and accrues the related cost of treatment
and disposal upon the receipt of waste materials, except for incineration when
revenue is recognized as waste is burned. Other revenues are recognized as the
related costs are incurred.

(c) Income Taxes

Under the Statement of Financial Accounting Standards No. 109, "Accounting
for Income Taxes" (SFAS 109), deferred tax assets and liabilities are
determined based upon the difference between the financial statement and tax
bases of assets and liabilities as measured by the enacted tax rates which
will be in effect when these differences reverse. Deferred tax expense or
benefit is the result of changes in deferred tax assets and liabilities. The
principal types of differences between assets and liabilities for financial
statement and tax return purposes are accumulated depreciation, business
combinations accounted for by the purchase method, and provisions for doubtful
accounts.

(d) Net Income Per Common and Common Equivalent Share

Net income per common and common equivalent share is based on net income
less preferred dividend requirements divided by the weighted average number of
common and common equivalent shares outstanding during each of the respective
years. Fully diluted net income per common share has not been presented as the
amount would not differ significantly from that presented.

(e) Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with original
maturities of less than three months to be cash equivalents.

(f) Restricted Investments

The Company adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities" (SFAS 115),
in 1994. Under this statement, some of the Company's debt securities are
classified as "available for sale" and are recorded at current market value
with an offsetting valuation adjustment, net of tax, in stockholders' equity.
The remaining securities are classified as "held to

39

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
maturity" and are recorded at amortized cost. In accordance with SFAS 115,
financial statements from prior years have not been restated to reflect the
change in accounting method. There was no cumulative effect as a result of
adopting SFAS 115 in 1994.

(g) Supplies Inventory

Supplies inventory, stated at the lower of cost or market, is charged to
operations on a first-in, first-out basis.

(h) Property, Plant and Equipment

Property, plant and equipment are stated at cost. The Company depreciates
and amortizes the cost of these assets, less the estimated salvage value,
using the straight-line method as follows:

ESTIMATED
ASSET CLASSIFICATION                                              USEFUL LIFE
--------------------                                              -----------

Buildings and improvements....................................... 5-30 years
Vehicles and equipment........................................... 3-15 years
Furniture and fixtures...........................................  5-8 years

Leaseholds are amortized over the shorter of the life of the lease or the
asset. Upon retirement or other disposition, the cost and related accumulated
depreciation of the assets are removed from the accounts and the resulting
gain or loss is reflected in income. Site preparation and improvement costs
are included in land.

(i) Goodwill and Permits

Goodwill and permits, as further discussed in Notes 5 and 6, are stated at
cost and are being amortized using the straight-line method over 20 years for
permits and periods ranging from 20 to 40 years for goodwill.

(j) Letters of Credit

The Company utilizes letters of credit to provide collateral assurance to
issuers of performance bonds for certain contracts; to assure regulatory
authorities that certain funds will be available for corrective action
activities at its hazardous waste management facilities, as described in Note
8(b) below; and to provide financial assurance to regulators of its captive
insurance company. As of December 31, 1995 and 1994, the Company had
outstanding letters of credit amounting to $7,535,000 and $7,492,000,
respectively.

As of December 31, 1995, the Company had no significant concentrations of
credit risk.

(k) Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
dates of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from these
estimates.

(3) FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of cash and cash equivalents, restricted investments,
and long-term obligations approximate fair value. The Company believes similar
terms for long-term obligations would be attainable. The fair value of
restricted investments and senior notes is based on quoted market prices for
these securities. At

40

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
December 31, 1995, the estimated fair values of the Company's financial
instruments are as follows (in thousands):

CARRYING  FAIR
AMOUNT   VALUE
-------- -------

Cash and cash equivalents.................................. $   225  $   225
Restricted investments.....................................   7,667    8,143
Long-term obligations......................................  26,398   26,398
Senior notes...............................................  50,000   25,063

(4) RESTRICTED INVESTMENTS

Federal and state regulations require liability insurance coverage for all
facilities that treat, store, or dispose of hazardous waste, and financial
assurance that certain funds will be available for closure of those
facilities, should a facility cease operation. In 1989, the Company
established a wholly-owned captive insurance company pursuant to the Federal
Risk Retention Act of 1986. This company qualifies as a licensed insurance
company and is authorized to write closure, professional liability, and
pollution liability insurance for the Company and its operating subsidiaries.
Investments are held by the captive insurance company as collateral for its
insurance policies and are restricted for future payment of insurance claims.
At December 31, 1995, the amortized cost of these securities was $2,451,000. A
valuation allowance of $22,000 was recorded to reflect the market value of
$2,429,000, and a realized gain of $4,000 was reflected in net income for the
year. The amortized cost of these securities held at December 31, 1994 was
$1,731,000. A valuation allowance of $220,000 was recorded to reflect the
market value of $1,511,000, and a realized loss of $1,000 was reflected in net
income for the year. Investments held consist of fixed maturity and mortgage-
backed securities. Fixed maturity securities, other than mortgage-backed
securities, have contractual maturity dates after five years through ten years
from December 31, 1995. Expected maturities will differ from contractual
maturities as borrowers may have the right to call or prepay obligations
without penalties.

In addition, the Company deposited $5,000,000 with a commercial insurance
company to provide for closure costs of the incinerator (see Note 5 below).
These government debt securities, which mature in ten years, are classified as
held-to-maturity and are reported at amortized cost due to the intent and
ability of the Company to hold these securities to maturity. At December 31,
1995 the amortized cost of these securities was $5,207,000, while the market
value was $5,683,000.

(5) BUSINESS ACQUISITIONS

On May 12, 1995, the Company acquired a newly constructed hazardous waste
incinerator in Kimball, Nebraska from Ecova Corporation, a wholly-owned
affiliate of Amoco Oil Company. The incinerator is subject to the final permit
requirements under the federal Resource Conservation and Recovery Act of 1976,
as amended ("RCRA"), and has a RCRA "Part B" license issued by the Nebraska
Department of Environmental Quality ("NDEQ"). The incinerator is located on a
600 acre site, which includes a landfill for disposal of the ash from the
incinerator. The Company acquired the Kimball facility for $5,160,000.

Under RCRA, an owner or operator of a "Part B" licensed facility must
provide financial assurance that funds will be available for closure of the
facility, should the facility cease operation. An owner or operator may
satisfy the requirements for financial assurance by using one of several
mechanisms allowed under RCRA: a trust fund, surety bond, letter of credit,
insurance, financial test, or corporate guarantee. The mechanism chosen by the
Company was insurance which has been approved by NDEQ. The Company has
obtained two insurance policies: one covers closure of the incinerator, and
the other covers closure of the landfill and the post-closure costs of caring
for the site after the landfill is closed. Each insurance policy has a 30 year
term.

41

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The NDEQ requires that the policy premiums through the year 2025 be prepaid by
the Company to eliminate the risk that the policy might be canceled for
failure to pay premiums some time in the future. The Company has also
deposited funds into an escrow account as collateral for the insurance
policies, which is restricted for future payment of insurance claims. Funds in
the escrow account remain the property of the Company and are invested in
long-term, fixed-rate interest bearing securities held as restricted
investments.

As of December 31, 1995, the Company had paid $1,805,000 for the premium on
the insurance policy for the incinerator, and had deposited $5,000,000 into
the escrow account. The premium on the insurance policy for the landfill is
$2,000,000, payable in two installments of $1,000,000 each, and the Company
was required to deposit $650,000 into the escrow account. During the fourth
quarter of 1995, the Company paid the first $1,000,000 premium installment;
the second installment is payable in September 1996. The Company made the
$650,000 deposit into the escrow account in the first quarter of 1996. The
Company is also obligated to deliver to the insurance company a letter of
credit in the amount of $1,000,000, which will increase by $250,000 each
quarter until the balance of the letter of credit is $3,006,000, to provide
additional collateral under the two insurance policies.

On September 30, 1994, the Company acquired the assets of a hazardous and
nonhazardous oil reclamation facility located near Richmond, Virginia from
Chemical Waste Management, Inc. ("ChemWaste") for $200,000 in cash and
$200,000 in credits for future Company services. As of December 31, 1995 all
credits had been used by ChemWaste.

On February 16, 1993, the Company acquired all of the outstanding shares of
Spring Grove Resource Recovery, Inc. ("Spring Grove"), a hazardous waste
treatment, storage and disposal facility located in Cincinnati, Ohio, from
Southdown Environmental Treatment Systems, Inc. ("SETS") in exchange for
$1,400,000 in cash and 112,000 shares of newly issued Series B Convertible
Preferred Stock with a stated value of $5,600,000.

The results of operations of the Kimball incinerator, Spring Grove and the
Richmond facility are included in the consolidated financial statements
subsequent to the dates of acquisition by the Company. Pro forma information
has not been included concerning these acquisitions since the assets and
operations acquired were not material to those of the Company.

(6) INTANGIBLE ASSETS

Below is a summary of intangible assets at December 31, 1995 and 1994 (in
thousands):

1995    1994
------- -------

Permits..................................................... $17,676 $17,536
Goodwill....................................................  27,529  27,529
------- -------
45,205  45,065
Less--accumulated amortization..............................   9,514   7,895
------- -------
$35,691 $37,170
======= =======

Amortization expense approximated $1,619,000, $1,619,000, and $1,433,000 for
the years 1995, 1994, and 1993, respectively. The Company continually
reevaluates the propriety of the carrying amount of permits and goodwill as
well as the amortization period to determine whether current events and
circumstances warrant adjustments to the carrying value and estimates of
useful lives. At this time, the Company believes that no significant
impairment of goodwill or permits has occurred and that no reduction of the
book value or estimated useful lives is warranted.

42

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(7) OTHER ACCRUED EXPENSES

Other accrued expenses consist of the following (in thousands):

1995    1994
------- -------

Insurance.................................................... $ 6,089 $ 3,985
Other items..................................................  11,797   8,739
------- -------
$17,886 $12,724
======= =======

(8) LEGAL MATTERS AND OTHER CONTINGENCIES AND COMMITMENTS

(a) Legal Matters

In April, 1988, the Board of Selectman of Braintree, Massachusetts, approved
a cease and desist order with respect to the handling of flammable materials
stored at the Company's Braintree facility. The Board concluded that, when the
Company purchased the land on which the Braintree facility is located, a
license for the storage of flammable liquids was not conveyed as an incident
of ownership. The Company petitioned the Massachusetts Land Court for a
declaratory judgment that either the Company possesses such a license by
operation of law or that the statute requiring the license is pre-empted by
the pervasive state regulation of hazardous waste facilities. In March, 1994,
the Land Court issued a favorable ruling, concluding that the statute is pre-
empted by state hazardous waste laws and regulations and no local flammable
storage license is required. The town has appealed this ruling, and has asked
the Company to stipulate certain facts with respect to the other issues of the
case so that a final appealable order can be issued by the Land Court. The
Company has agreed to the stipulation but the Town has taken no further
action.

In December, 1991, the Company was asked to respond to an emergency cleanup
after a motor vehicle struck a utility pole near the State University of New
York at New Paltz, causing an electrical surge to overheat transformers which
discharged toxic chemicals throughout various student dormitories and
classroom buildings. The Company was hired by the State University of New York
to perform technical supervisory and laboratory work for the cleanup. The
actual work of cleaning the buildings was performed over approximately 15
months by other contractors hired by the State of New York. In March 1993, a
group of students sued the Dormitory Authority of the State of New York
("DASNY") claiming that they were exposed to toxic chemicals when DASNY
allowed them to reoccupy the buildings after the accident and prior to
complete removal of the toxic chemicals, causing them increased risk of future
illnesses. DASNY denied the students' claims but elected to sue the Company
along with 16 other third-party defendants claiming that if DASNY is liable to
the students, these third-party defendants should indemnify DASNY. The Company
was hired by the State University of New York to perform representative
sampling for toxic chemicals but, according to its contract, was not
responsible for decisions as to when students should reoccupy the buildings.
Nevertheless, in June 1994, the Company and the 16 other third parties were
served with a third-party complaint filed in the Ulster County Superior Court
by DASNY. In January 1996, the trial judge ruled that the plaintiffs were not
entitled to proceed as a class action for the medical cost claims, but were
entitled class action status for personal property losses. Since the personal
property losses resulted directly from the explosions and fire, and occurred
prior to the Company's involvement, the Company does not believe that it will
incur any material liability as a result of this lawsuit. The Company has not
received notice that the plaintiffs will appeal the trial judge's ruling.

In the ordinary course of conducting its business, the Company becomes
involved in environmentally related lawsuits and administrative proceedings.
Some of these proceedings may result in fines, penalties or judgments against
the Company. The Company does not believe that these proceedings, individually
or in the aggregate, are material to its business.

43

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
As of December 31, 1995, the Company has been named in a number of lawsuits
arising from the disposal of wastes by certain Company subsidiaries at 20
state and federal Superfund sites. Eleven of these cases involve two
subsidiaries which the Company acquired from Chemical Waste Management, Inc.
("ChemWaste"). As part of the acquisition, ChemWaste agreed to indemnify the
Company with respect to any liability of its Braintree and Natick subsidiaries
for waste disposed of before the Company acquired them. Accordingly, ChemWaste
is paying all costs of defending the Natick and Braintree subsidiaries in
these 11 cases, including legal fees and settlement costs. Three cases involve
Mr. Frank, Inc. and one case involves Connecticut Treatment Center ("CTC").
Southdown, Inc., from which the Company bought CTC, has agreed to indemnify
the Company with respect to any liability for waste disposed of by CTC before
the Company acquired CTC, and the sellers of Mr. Frank, Inc. agreed to a
limited indemnity against certain environmental liabilities arising from prior
ownership of Mr. Frank, Inc.

The remaining five pending cases involve subsidiaries which the Company
acquired in January 1989, when it purchased all of the outstanding shares of
ChemClear Inc., a publicly traded company ("ChemClear"). The Company is unable
to predict accurately its potential liability with respect to these cases, but
believes that any future settlement costs will not be material to the
Company's operations or financial position.

Management routinely reviews each Superfund site in which the Company's
subsidiaries are involved, considers each subsidiary's role at each site and
its relationship to the other potentially responsible parties ("PRPs") at the
site, the quantity and content of the waste it disposed of at the site, and
the number and financial capabilities of the other PRPs at the site. Based on
reviews of the various sites and currently available information, and
management's judgment and prior experience with similar situations, expense
accruals are provided by the Company for its share of future site cleanup
costs, and existing accruals are revised as necessary. As of December 31,
1995, the Company had accrued environmental costs of $405,000 for cleanup of
Superfund sites. Superfund legislation permits strict joint and several
liability to be imposed without regard to fault and, as a result, one PRP
might be required to bear significantly more than its proportional share of
the cleanup costs if other PRPs do not pay their share of such costs.

(b) Environmental Matters

Under the RCRA, every facility that treats, stores or disposes of hazardous
waste must obtain a RCRA permit from EPA or an authorized state agency and
must comply with certain operating requirements. Of the Company's 12 waste
management facilities, nine are subject to RCRA licensing. RCRA requires that
permits contain a schedule of required on-site study and cleanup activities,
known as "corrective action", including detailed compliance schedules and
provisions for assurance of financial responsibility.

The EPA or applicable state agency have begun RCRA corrective action
investigations at the Company's RCRA licensed facilities in Bristol,
Connecticut; Maryland; Chicago, Illinois; Braintree, Massachusetts; Natick,
Massachusetts, and Woburn, Massachusetts. The Company is also involved in site
studies at its non-RCRA facilities in Cleveland, Ohio; Kingston,
Massachusetts; and South Portland, Maine. The Company spent approximately
$790,000 in 1995 and $471,000 in 1994 on corrective action at the foregoing
facilities. Two RCRA facilities in Bristol, Connecticut and Cincinnati, Ohio
were acquired from a subsidiary of Southdown, Inc. Southdown has agreed to
indemnify the Company against any costs incurred or liability arising from
contamination on-site arising from prior ownership, including the cost of
corrective action.

While the final scope of the work to be done at these facilities has not yet
been agreed upon, the Company believes, based upon information known to date
about the nature and extent of contamination at these sites, that such costs
will not have a material effect on its results of operations or its financial
position, and that it will be able to finance from operating revenues any
additional corrective action required at its facilities.

44

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Environmental expenditures that relate to current operations are expensed or
capitalized as appropriate. Costs incurred to obtain or renew required permits
are capitalized to the related permit account as incurred and are amortized
over the permit's remaining life. Costs incurred to remediate properties owned
by the Company are capitalized in property, plant and equipment only if the
costs extend the life, increase the capacity or improve the safety or
efficiency of the property or the costs mitigate or prevent environmental
contamination that has yet to occur and that otherwise may result from future
operations or activities. Remediation costs incurred in excess of the fair
market value of the property being remediated are expensed as incurred.

(c) Other Contingencies

The Company is subject to various regulatory requirements, including the
procurement of requisite licenses and permits at its facilities. These
licenses and permits are subject to periodic renewal without which the
Company's operations would be adversely affected. The Company anticipates
that, once a license or permit is issued with respect to a facility, the
license or permit will be renewed at the end of its term if the facility's
operations are in compliance with the applicable regulatory requirements.

Under the Company's insurance programs, coverage is obtained for
catastrophic exposures, as well as those risks required to be insured by law
or contract. It is the policy of the Company to retain a significant portion
of certain expected losses related primarily to workers' compensation,
physical loss to property, and comprehensive general and vehicle liability.
Provisions for losses expected under these programs are recorded based upon
the Company's estimates of the aggregate liability for claims.

(d) Other Commitments

In January 1995, the Company entered into a definitive agreement with
ChemWaste to lease a site previously leased by ChemWaste which adjoins the
Company's Chicago facility. During November 1995, the Company acquired their
existing improvements in exchange for agreeing to share the costs of
dismantling an existing hazardous waste incinerator and cleaning up the site.
The improvements on the ChemWaste site will allow the Company to develop new
product lines not currently handled at the Company's existing Chicago
facility. Under the sharing arrangement with ChemWaste, the Company will
manage the RCRA corrective action investigation at the site and could over a
period of 15 years be required to contribute up to a maximum of $2,000,000 for
dismantling and decontaminating the incinerator and other equipment and up to
a maximum of $7,000,000 for studies and cleanup of the site. Any additional
costs beyond those contemplated by the sharing arrangement during this time
period would be borne by ChemWaste. In addition, ChemWaste is entitled to a
maximum of $700,000 in credits for future Company services, the credits are to
be utilized over a 5 year period.

(9) FINANCING ARRANGEMENTS

On May 25, 1989, the Company issued $30,000,000 of 13.25% Senior
Subordinated Notes due May 15, 1997 and warrants to purchase 100,000 shares of
common stock for aggregate proceeds, before issuance costs, of $30,300,000.
The notes matured at the rate of $7,500,000 per year commencing on May 15,
1994.

On August 4, 1994, the Company issued $50,000,000 of 12.50% Senior Notes due
May 15, 2001 (the "Senior Notes"). The Company used the net proceeds to prepay
the $22,500,000 outstanding principal amount of the 13.25% Senior Subordinated
Notes, at par plus a prepayment premium of 4.417%; to prepay the $1,800,000
outstanding principal amount of a subordinated note to a financial
institution; to prepay the $489,000 outstanding principal amount of two junior
subordinated notes to the former owners of Mr. Frank, Inc.; and to reduce the
balance under its $55,000,000 Revolving Credit Agreement with three banks (the
"Revolver") by approximately $21,800,000.

45

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Senior Notes are not collateralized. The Senior Note indenture does not
provide for the maintenance of certain financial covenants, although it does
limit, among other things, the issuance of additional debt by the Company or
its subsidiaries and the payment of dividends on, and redemption of, capital
stock of the Company and its subsidiaries. Interest is paid twice each year on
the Senior Notes.

In connection with the sale of the Senior Notes, the Company amended the
terms of two 8% subordinated convertible notes, in the amounts of $3,500,000
and $1,500,000, respectively. The two notes were collateralized by liens on
certain Company assets, and are convertible into common stock at $15 and $10
per share, respectively. The holder of these two notes agreed to exchange such
notes for new 10% Senior Convertible Notes, with less restrictive covenants
than the prior notes. The new notes rank pari passu with the Senior Notes and
have covenants identical to the Senior Note covenants. Principal of the two
Senior Convertible Notes is payable in five equal installments of $1,000,000,
which began on October 31, 1995 and end on October 31, 1999. The Company has
the option to convert such notes into common stock at $25 per share.

On June 30, 1992, the Company acquired all of the outstanding shares of
Connecticut Treatment Corporation ("CTC"), a hazardous waste treatment,
storage and disposal facility located in Bristol, Connecticut, from SETS in
exchange for $500,000 in cash and a promissory note in the amount of
$1,883,000. The first principal installment on the note was $376,600, which
was paid on June 30, 1993, with installments of $94,150 due at the end of each
quarter thereafter, until the remaining balance is paid in full. The note
bears interest at the corporate base rate announced by The First National Bank
of Boston (the "Bank") (8.5% at December 31, 1995) plus 2%.

At December 31, 1994, the Company had a $35,000,000 revolving credit
facility with three banks. In connection with the acquisition of the Kimball,
Nebraska hazardous waste incineration facility in May 1995, the Company
entered into a new $45,000,000 revolving credit and term loan agreement (the
"Loan Agreement") with another financial institution, which replaced the bank
credit facility. The Loan Agreement originally provided for a $35,000,000
revolving credit portion (the "Revolver") and a $10,000,000 term promissory
note (the "Term Note"). On March 20, 1996, the Loan Agreement was amended to
increase the Term Loan from its amortized balance of $8,333,000 to $15,000,000
and decrease the revolving credit portion to $30,000,000. This change in
structure allows for greater availability under the Loan Agreement. The new
Term Note is payable in 60 monthly installments, commencing April 1, 1996.
Monthly principal payments are $250,000. The Revolver allows the Company to
borrow up to $30,000,000 in cash and letters of credit. Letters of credit may
not exceed $20,000,000 at any one time. The Revolver requires the Company to
pay a line fee of one half of one percent on the unused portion of the line.
The Revolver has a three-year term with an option to renew annually.

At December 31, 1995, the balance of the Term Note was $8,833,000, the
Revolver balance was $12,553,000, and the letters of credit outstanding were
$7,535,000.

The Loan Agreement allows for up to 80% of the outstanding balance of the
combined Revolver and Term Note to bear interest at the Eurodollar rate plus
three percent; the remaining balance bears interest at a rate equal to the
"prime" rate plus one and one-half percent. The Loan Agreement is
collateralized by substantially all of the Company's assets. The Loan
Agreement provides for certain covenants including, among others, limitations
on working capital and minimum adjusted net worth. The Company must also
maintain borrowing availability of not less than $4,500,000 for sixty
consecutive days prior to paying principal and interest on its other
indebtedness and dividends in cash on its preferred stock. At December 31,
1995, the Company did not have the level of borrowing availability required in
order to make principal and interest payments due within sixty days thereof,
and it has obtained a waiver needed in order to make such payments.

46

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following table is a summary of the Company's long-term debt obligations
reflecting the transactions discussed above.

DECEMBER 31,
---------------
1995    1994
------- -------
(IN THOUSANDS)

Long-term obligations consist of the following:
Revolving credit agreement with three banks, collateralized
by substantially all assets.................................     --  $ 7,706
Revolving credit agreement with a finance company, bearing
interest at the Eurodollar Rate (5.75% at December 31, 1995)
plus 3.0%, or the "prime" rate (8.75% at December 31, 1995)
plus 1.50%, collateralized by substantially all assets...... $12,553     --
Term note payable, bearing interest at the Eurodollar rate
(5.75% at December 31, 1995) plus 3.0%......................   8,833     --
Senior notes payable, bearing interest at 12.50%.............  50,000  50,000
Senior convertible notes bearing interest at 10%.............   4,000   5,000
Junior subordinated note payable to Southdown Environmental
Treatment Systems, Inc. bearing interest at the Bank's base
rate plus 2%................................................     565     942
Junior subordinated notes to the former owners of Mr. Frank,
Inc. bearing interest at the Bank's base rate plus 1%.......      48      75
Obligations under capital leases.............................     399     542
Other long-term obligations..................................     --       12
------- -------
76,398  64,277
Less--current maturities.....................................   3,605   1,715
Less--unamortized financing costs............................   2,402   2,097
------- -------
Long-term obligations.......................................... $70,391 $60,465
======= =======

Below is a summary of minimum payments due under the Company's long-term
obligations (in thousands), exclusive of obligations under capital leases
discussed in Note 10:

YEAR                                                                 AMOUNT
----                                                                --------

1996............................................................... $  3,404
1997...............................................................    3,209
1998...............................................................   15,553
1999...............................................................    3,000
2000...............................................................      833
Thereafter.........................................................   50,000
--------
Total minimum payments due under long-term
obligations including current maturities.......................... $ 75,999
========

(10) LEASES

(a) Capital Leases

The Company possesses certain equipment under capital leases. The
capitalized cost of this equipment was $7,040,000 and $6,844,000 with related
accumulated amortization of $6,180,186 and $5,387,000 at

47

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
December 31, 1995 and 1994, respectively. The obligations of the Company under
such leases are collateralized by the leased equipment.

Future minimum lease payments under capital leases are as follows (in
thousands):

YEAR                                                                   AMOUNT
----                                                                   ------

1996.................................................................. $ 225
1997..................................................................   171
1998..................................................................    38
1999..................................................................   --
2000..................................................................   --
Thereafter............................................................   --
-----
Total minimum lease payments........................................ $ 434
Less--amounts representing interest...................................    35
-----
Present value of minimum lease payments............................. $ 399
=====

(b) Operating Leases

The Company leases facilities and personal property under certain operating
leases in excess of one year. Some of these lease agreements contain an
escalation clause for increased taxes and operating expenses and are renewable
at the option of the Company. Future minimum lease payments under operating
leases are as follows (in thousands):

YEAR                                                                  AMOUNT
----                                                                  -------

1996................................................................. $ 2,467
1997.................................................................   1,889
1998.................................................................   1,545
1999.................................................................   1,322
2000.................................................................   1,154
Thereafter...........................................................   3,690
-------
$12,067
=======

During the years 1995, 1994 and 1993 rent expense was approximately
$14,120,000, $14,182,000, and $9,796,000, respectively. The Company has
entered into an agreement to sublease its Bedford, Massachusetts facility. See
Note 17 below.

(11) FEDERAL AND STATE INCOME TAXES

The provision for income taxes consists of the following (in thousands):

1995     1994     1993
-------  -------  -------

Federal: Current..................................... $   --   $ 1,941  $   958
Deferred.........................................  (3,057)    (699)   1,222
State:Current........................................     --       721      995
Deferred.........................................    (138)    (344)    (530)
-------  -------  -------
Net provision for (benefit from) income taxes........ $(3,195) $ 1,619  $ 2,645
=======  =======  =======

SFAS 109 requires recognition of deferred tax liabilities and assets for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method,

48

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
deferred tax liabilities and assets are determined based on the difference
between the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are expected
to reverse.

The sources of significant timing differences which gave rise to deferred
taxes were as follows (in thousands):

1995     1994    1993
-------  -------  -----

Accelerated depreciation............................... $   --   $  (508) $ 501
Provision for doubtful accounts........................    (181)     (54)    88
Vacation accrual.......................................     --        67     88
Rent holiday...........................................     --      (107)   (28)
Insurance reserves.....................................    (302)    (163)  (127)
Litigation.............................................     228       57     98
Tax attributes, net of valuation allowance.............   2,582     (271)   639
Permits................................................     224     (242)   --
Other..................................................     644      178   (567)
-------  -------  -----
Total deferred tax provision (benefit)................. $ 3,195  $(1,043) $ 692
=======  =======  =====

The effective income tax rate varies from the amount computed using the
statutory federal income tax rate as follows:

1995   1994  1993
------  ----  ----

Statutory rate.............................................. (34.0)% 34.0% 34.0%
Increase (decrease) in taxes resulting from:
State income taxes, net of federal benefit................   (0.9)  7.0   5.0
Goodwill amortization.....................................    2.0   7.4   4.7
Other permanent differences...............................    1.2    .5   3.9
Valuation allowance adjustment............................    --    --   (1.8)
------  ----  ----
Net provision for (benefit from) income taxes............... (31.7)% 48.9% 45.8%
======  ====  ====

The components of the total deferred tax asset at December 31, 1995 and 1994
were as follows (in thousands):

1995     1994
-------  -------

Current:
Provision for doubtful accounts............................. $   418  $   598
Litigation accruals.........................................     655      437
Miscellaneous...............................................     922      371
Deferred:
Accrued rent holiday........................................     --       223
Insurance reserve...........................................     471    1,328
Other.......................................................     175      255
Various tax attributes......................................   8,681    5,496
Valuation allowance.........................................    (779)    (763)
-------  -------
Total deferred tax asset.................................... $10,543  $ 7,945
=======  =======

49

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The components of the total deferred tax liability at December 31, 1995 and
1994 were as follows (in thousands):

1995     1994
-------  ------

Deferred:
Permits...................................................... $ 2,438  $2,883
Property, plant and equipment................................   5,690   5,842
-------  ------
Total deferred tax liability.................................   8,128   8,725
-------  ------
Net deferred tax (asset) liability............................. $(2,415) $  780
=======  ======

Realization of the deferred tax assets is dependent on generating sufficient
taxable income to offset the assets in the foreseeable future. Although
realization is not assured, management believes it is more likely than not
that a majority of the deferred tax assets will be realized. The amount of the
deferred tax asset considered realizable, however, could be reduced in the
near term if estimates of future taxable income are reduced.

For federal income tax purposes at December 31, 1995, as a result of the
acquisition of ChemClear, the Company has regular tax net operating loss
carryforwards of $3,333,000 and alternative minimum tax net operating loss
carryforwards of $2,712,000, which may be used to offset future taxable
income, if any, of the former ChemClear entities, subject to certain
limitations. These net operating loss carryforwards expire commencing in 2002.

(12) STOCKHOLDERS' EQUITY

(a) Stock Option Plans

In 1987, the Company adopted a nonqualified stock option plan (the "1987
Plan"). In 1992, the Company adopted a nonqualified equity incentive plan
which provides for a variety of incentive awards, including stock options (the
"1992 Plan"). As of December 31, 1995, all awards under the 1992 Plan were in
the form of nonqualified stock options. These options generally become
exercisable after a period of one to five years from the date of grant,
subject to certain employment requirements, and terminate ten years from the
date of grant. At December 31, 1995, the Company had reserved 955,600 and
800,000 shares of common stock for issuance under the 1987 and 1992 Plans,
respectively.

Under the terms of the 1987 and 1992 Plans, as amended, options may be
granted to purchase shares of common stock at an exercise price less than the
fair market value on the date of grant. The difference between the exercise
price and fair market value at the date of grant is charged to operations
ratably over the option vesting period. No options were granted during 1995,
1994 and 1993 with exercise prices lower than the fair market value of the
common stock at the date of grant.

On October 10, 1994, the Board of Directors approved a plan whereby all
employees (excluding senior management) who previously were awarded stock
options at prices of $6.50 to $15.00 per share be given the opportunity to
surrender those options in exchange for new options awarded at fair market
value ($6.00 per share) with the same vesting period commencing upon the date
of the award of their original option agreement.

On May 12, 1995, the Company's stockholders approved an Employee Stock
Purchase Plan (the "ESPP"), which is a qualified employee stock purchase plan
under Section 423 of the Internal Revenue Code of 1986, as amended, through
which employees of the Company are given the opportunity to purchase shares of
common stock. According to the ESPP, a total of one million shares of common
stock has been reserved for offering to

50

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
employees over a period of five years, in quarterly offerings of 50,000 shares
each plus any shares not issued in any previous quarter, commencing on July 1,
1995 and on the first day of each quarter thereafter through April 1, 2000.
Employees who elect to participate in an offering may utilize up to 10% of
their payroll for the purchase of common stock at 85% of the closing price of
the stock on the first day of such quarterly offering or, if lower, 85% of the
closing price on the last day of the offering. As of December 31, 1995, 59,000
shares of common stock had been purchased under the ESPP.

Below is a summary of the stock option activity under the 1987 and 1992
Plans through December 31, 1995:

NUMBER OF  EXERCISE PRICE
SHARES      PER SHARE
---------  --------------

Outstanding at December 31, 1992...................... 1,060,495    $2.70-15.00
---------    -----------
Exercisable at December 31, 1992......................   475,563    $2.70-10.00
---------    -----------
Granted.............................................   445,750     7.00-15.00
Exercised...........................................   (98,457)    2.70- 8.25
Forfeited...........................................  (517,867)    6.50-15.00
---------    -----------
Outstanding at December 31, 1993......................   889,921    $2.70-15.00
---------    -----------
Exercisable at December 31, 1993......................   398,969    $2.70-10.00
---------    -----------
Granted.............................................   462,138    $6.00- 8.25
Exercised...........................................    (5,453)    2.70- 7.65
Forfeited...........................................  (284,729)    6.00-12.00
---------    -----------
Outstanding at December 31, 1994...................... 1,061,877    $2.70-13.50
---------    -----------
Exercisable at December 31, 1994......................   337,941    $2.70-13.50
---------    -----------
Granted.............................................   362,120    $3.00- 3.94
Exercised...........................................    (5,556)    2.70- 2.70
Forfeited...........................................  (131,450)    6.00- 9.25
---------    -----------
Outstanding at December 31, 1995...................... 1,286,991    $2.70-13.50
=========    ===========
Exercisable at December 31, 1995......................   468,458    $2.70-13.50
=========    ===========

(b) Warrants

In connection with the issuance of senior subordinated notes payable in May
1989, the Company issued warrants to purchase 100,000 shares of common stock
at $20.75 per share in exchange for $300,000. In April 1990, the exercise
price of the warrants was reduced to $9 per share. In February 1991, in
connection with the refinancing of the Company's short-term debt, the exercise
price was further reduced to fair market value ($5 per share). These warrants
are exercisable at any time until February 1, 2001.

In connection with the refinancing of the Company's short-term debt in
February 1991, the Company issued warrants to purchase 425,000 shares of
common stock at fair market value ($5 per share) to the three banks which
provided the Revolver. These warrants are exercisable at any time until
February 6, 2001.

(c) Preferred Stock

On February 16, 1993 the Company issued 112,000 shares of Series B
Convertible Preferred Stock, $.01 par value ("Preferred Stock"), for the
acquisition of Spring Grove. The liquidation value of each preferred share

51

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
is the liquidation preference of $50 plus unpaid dividends. Preferred Stock
may be converted by the holder into Common Stock at a conversion rate of
$18.63. The Company has the option to redeem such Preferred Stock at
liquidation value plus a redemption premium of 6%, if the redemption occurs on
or before August 16, 1996; thereafter, the redemption premium declines 1% each
year. Each preferred share entitles its holder to receive a cumulative annual
cash dividend, which was $3.50 per share from February 16, 1993 to February
16, 1994 and $4.00 per share thereafter, or at the election of the Company, a
common stock dividend of equivalent value.

Dividends on the Preferred Stock are payable on the 15th day of January,
April, July and October, at the rate of $1.00 per share, per quarter. The
Company elected to pay the October 15, 1995 dividend in common stock with a
market value equal to the amount of the dividend payable. The market value of
the common stock as of the October 1, 1995 record date of such dividend was
$3.8375. Accordingly, on October 12, 1995 the Company issued 29,187 shares of
common stock to the holders of the Preferred Stock. The Company anticipates
that the Preferred Stock dividends payable through 1996 will be paid in common
stock.

(13) EMPLOYEE BENEFIT PLAN

The Company has a profit-sharing plan under Section 401(k) of the Internal
Revenue Code covering substantially all employees. The plan allows employees
to make contributions up to a specified percentage of their compensation, a
portion of which is matched by the Company. During the years 1995, 1994 and
1993, the Company's nonelective contributions aggregated approximately
$834,000, $825,000, and $743,000, respectively.

(14) RELATED PARTY TRANSACTIONS

The Company leases certain facilities from a partnership of which the
Company's principal stockholder is a limited partner. Under the terms of the
lease, the Company agreed to make aggregate lease payments of $5,633,000 from
the inception of the lease through June 1, 1996. In addition, the Company has
an option to renew the lease for a five-year period. Total rent expense
charged to operations was $703,000 during each of the years in the three-year
period ended December 31, 1995. See Note 10 for further discussion of lease
commitments. The Company has subleased a portion of these facilities to an
unrelated third party.

52

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)

(15) QUARTERLY DATA (UNAUDITED)

FIRST     SECOND     THIRD     FOURTH
QUARTER    QUARTER   QUARTER    QUARTER
---------  --------- ---------  ---------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

1995
Revenue..........................   $47,150    $54,899   $54,398    $52,803
Income (loss) from operations....       815      2,549       311     (5,106)(a)
Net income (loss) before
extraordinary item..............      (590)       203    (1,200)    (5,306)
Net income (loss)................      (590)       203    (1,200)    (5,306)
Net income (loss) per common and
common equivalent share.........      (.07)       .01      (.14)      (.57)
1994
Revenue..........................   $51,285    $49,683   $53,258    $52,847
Income (loss) from operations....     2,925      4,083     3,855       (117)(b)
Net income (loss) before
extraordinary item..............       597      1,251     1,082     (1,235)
Net income (loss)................       597      1,251      (138)    (1,235)
Net income (loss) per common and
common equivalent share before
extraordinary item..............       .05        .12       .10       (.14)
Extraordinary item...............       --         --       (.13)       --
Net income (loss) per common and
common equivalent share.........   $   .05    $   .12   $  (.03)   $  (.14)

- --------
(a) Reflects a one-time, charge of $4,247,000 in connection with the re-
engineering of the Company's operations and the write-down of
nonperforming assets as well as the sale of certain non-core properties.
(b) Reflects a one-time, noncash charge of $1,035,000 for the write-off of
leasehold improvements and machinery.

The above information reflects all adjustments that are necessary to fairly
state the results of the interim periods presented. Any adjustments required
are of a normal recurring nature.

(16) EXTRAORDINARY ITEM

As described in Note 9 above, during the third quarter of 1994, the Company
completed a public offering of $50,000,000 of Senior Notes, and used the net
proceeds to prepay substantially all of the Company's debt. The refinancing
resulted in approximately $2,043,000 of expense relating to the early
retirement of outstanding debt, and an extraordinary charge of $1,220,000
($.13 per share), net of income tax benefit, for redemption premiums paid to
the holders of the prepaid debt and for the write-off of deferred financing
costs.

(17) NONRECURRING CHARGES

During the fourth quarter of 1995, the Company recorded a $4,247,000
nonrecurring charge in connection with the reengineering of the Company's
operations and the write-off of a non-performing asset, as well as the
anticipated losses on the sale of certain non-core properties. Under the
reengineering program, the Company has closed or downsized small, satellite
offices; reduced employment levels; downsized and relocated the laboratory to
its waste handling facility in Braintree, Massachusetts; and will be
relocating its corporate headquarters to a new location in Braintree,
Massachusetts in the Spring of 1996. The components of the nonrecurring charge
are as follows:

Severence and related costs.................................. $ 1,097,000
Write-off of non-performing asset............................   1,110,000
Real estate related charges..................................   2,040,000
-----------
$ 4,247,000

53

CLEAN HARBORS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONCLUDED)

During the fourth quarter of 1994, the Company renegotiated its lease on its
corporate headquarters in Quincy, Massachusetts, such that the lease would
terminate on or before December 31, 1995. The Company relocated its corporate
headquarters to Braintree, Massachusetts in the spring of 1995. In addition,
the Company has vacated laboratory space it rents in Bedford, Massachusetts,
and is subleasing the space. As a result, the Company recorded a one-time,
noncash charge of $1,035,000 before taxes for the write-off of leasehold
improvements at the two locations.

54

SCHEDULE II

CLEAN HARBORS, INC. AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS

FOR THE THREE YEARS ENDED DECEMBER 31, 1995
(IN THOUSANDS)

ADDITIONS
BALANCE  CHARGED TO DEDUCTIONS  BALANCE
BEGINNING OPERATING     FROM     END OF
ALLOWANCE FOR DOUBTFUL ACCOUNTS          OF PERIOD  EXPENSE   RESERVES(A) PERIOD
- -------------------------------          --------- ---------- ----------- -------

1993..................................  $1,592      $709       $929     $1,372
1994..................................   1,372       776        653      1,495
1995..................................   1,495       380        831      1,044

- --------
(a) Amounts deemed uncollectible, net of recoveries.

55

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES

None.

PART III

The information called for by Item 10 (Directors and Executive Officers of
the Registrant), Item 11 (Executive Compensation), Item 12 (Security Ownership
of Certain Beneficial Owners and Management) and Item 13 (Certain
Relationships and Related Transactions) is incorporated herein by reference to
the registrant's definitive proxy statement for its 1996 Annual Meeting of
Stockholders, which definitive proxy statement is expected to be filed with
the Commission not later than April 30, 1996.

For the purpose of calculating the aggregate market value of the voting
stock of the registrant held by nonaffiliates as shown on the cover page of
this report, it has been assumed that the directors and executive officers of
the registrant, as set forth in the Company's definitive proxy statement for
its 1996 Annual Meeting of Stockholders, are the only affiliates of the
registrant. However, this should not be deemed to constitute an admission that
all of such persons are, in fact, affiliates or that there are not other
persons who may be deemed affiliates of the registrant.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) Documents Filed as a Part of this Report

PAGE
-----

1.Financial Statements:
Report of Independent Accountants.......................................  32
Consolidated Statements of Income for the Three Years Ended December 31,
1995...................................................................  33
Consolidated Balance Sheets, December 31, 1995 and 1994................. 34-35
Consolidated Statements of Cash Flows for the Three Years Ended December
31, 1995............................................................... 36-37
Consolidated Statements of Stockholders' Equity for the Three Years
Ended December 31, 1995................................................  38
Notes to Consolidated Financial Statements.............................. 39-54
2.Financial Statement Schedules:
Schedule II--Valuation and Qualifying Accounts..........................  55

All other schedules are omitted because they are not applicable, not
required, or because the required information is included in the financial
statements or notes thereto.

3. Exhibits:

Exhibits to the Form 10-K have been included only with the copies of the
Form 10-K filed with the Commission. Upon request to the Company and payment
of a reasonable fee, copies of the individual exhibits will be furnished. The
Company undertakes to furnish to the Commission upon request copies of
instruments (in addition to the exhibits listed below) relating to the
Company's long-term debt.

56

LOCATION
ITEM NO.                      DESCRIPTION                         SEE NOTE:
--------                      -----------                         ---------

3.1     Restated Articles of Organization of Clean Harbors,
Inc. and amendments thereto.........................        (1)
3.2     Certificate of Vote of Directors Establishing a
Series of a Class of Stock
(Series B Convertible Preferred Stock)..............        (2)
3.4A    Amended and Restated By-laws of Clean Harbors,              (3)
Inc. ...............................................
4.1     Senior Note Indenture dated as of August 4, 1994,
between Clean Harbors, Inc., the Guarantor
Subsidiaries of the Company, and Shawmut Bank, N.A.,
as trustee for the holders of the Company's 12.50%
Senior Notes due May 15, 2001.......................        (4)
4.2     Loan and Security Agreement dated May 8, 1995 by and
between Congress Financial Corporation (New England)
and the Company's Subsidiaries as Borrowers.........        (5)
4.3     Term Promissory Note dated May 8, 1995 from the
Company's Subsidiaries as Debtors to Congress
Financial Corporation (New England) in the amount of
$10,000,000.........................................        (5)
4.4     Guarantee dated May 8, 1995 by Clean Harbors, Inc.
to Congress Financial Corporation (New England) of
the obligations of the Company's Subsidiaries under
the Financing Agreements............................        (5)
4.5     General Security Agreement dated May 8, 1995 by
Clean Harbors, Inc. in favor of Congress Financial
Corporation (New England)...........................        (5)
4.6     Letter Agreement dated November 21, 1995 by and
between Congress Financial Corporation (New England)
and the Company's Subsidiaries as Borrowers.........   Filed herewith
4.7     Second Amendment to Financing Agreements dated March
20, 1996 by and between Congress Financial
Corporation (New England), the Company's
Subsidiaries as Borrowers and Clean Harbors, Inc. as
guarantor...........................................   Filed herewith
4.8     Amended and Restated Term Promissory Note dated
March 20, 1996 from the Company's Subsidiaries as
Debtors to Congress Financial Corporation
(New England) in the amount of $15,000,000..........   Filed herewith
10.35    Stock Purchase Agreement among Clean Harbors, Inc.,
Southdown Environmental Treatment Systems, Inc. and
Southdown, Inc. dated as of June 23, 1992...........        (2)
10.36    Stock Purchase Agreement among Clean Harbors, Inc.,
Southdown Environmental Treatment Systems, Inc. and
Southdown, Inc. dated as of February 16, 1993.......        (2)
10.37    Clean Harbors, Inc. 1987 Stock Option Plan..........        (6)
10.38    Clean Harbors, Inc. 1992 Equity Incentive Plan......        (6)
10.39    Asset Purchase Agreement among Clean Harbors of
Chicago, Inc., Clean Harbors, Inc., CWM Chemical
Services, Inc. and Chemical Waste Management, Inc.
dated as of January 30, 1995........................        (7)
10.40    Asset Purchase Agreement among Clean Harbors
Technology Corporation, Clean Harbors Inc. and Ecova
Corporation dated as of March 31, 1995..............        (5)

57

ITEM NO.                       DESCRIPTION                           LOCATION
--------                       -----------                           --------

10.41   Disposal Services Agreement by and between Chemical
Waste Management, Inc. and its subsidiary and
affiliated companies and Clean Harbors Environmental
Services, Inc. and its affiliated companies dated as
of
October 31, 1995......................................   Filed herewith
11      Statement re computation of Net Income (Loss) per        Filed herewith
Share.................................................
21      Subsidiaries..........................................   Filed herewith
23      Consent of Independent Accountants....................   Filed herewith
24      Power of Attorney for Christy W. Bell, John F. Kaslow,
Daniel J. McCarthy, John J. Preston, and Lorne R.
Waxlax................................................   Filed herewith
27      Financial Data Schedule...............................   Filed herewith

- --------
(1) Incorporated by reference to Exhibit 3.1 to the Company's Form S-1
Registration Statement (No. 33-17565).

(2) Incorporated by reference to the similarly numbered exhibit to the
Company's Form 10-K Annual Report for the Year 1992.

(3) Incorporated by reference to Exhibit 3.4A to the Company's Form 10-K
Annual Report for the Fiscal Year Ended February 28, 1991.

(4) Incorporated by reference to Exhibit 4.1 to the Company's Form S-2
Registration Statement (No. 33-54191).

(5) Incorporated by reference to the similarly numbered exhibit to the
Company's Form 10-Q Quarterly Report for the Quarterly Period Ended June
30, 1995.

(6) Incorporated by reference to the similarly numbered exhibit to the
Company's Form 10-K Annual Report for the Year 1993.

(7) Incorporated by reference to the similarly numbered exhibit to the
Company's Form 10-K Annual Report for the Year 1994.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the fourth quarter of 1995.

58

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, ON MARCH 28, 1996.

CLEAN HARBORS, INC.

By:       /s/ Alan S. McKim 
---------------------------------
ALAN S. MCKIM 
CHIEF EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.

SIGNATURE                         TITLE                DATE

/s/ Alan S. McKim             Chairman of the         March 28, 1996
- -------------------------------------    Board of Directors,
ALAN S. MCKIM                President and Chief
Executive Officer

/s/ Stephen H. Moynihan          Vice President and      March 28, 1996
- -------------------------------------    Treasurer
STEPHEN H. MOYNIHAN             (principal financial 
and accounting 
officer)

*                     Director                March 28, 1996
- -------------------------------------
CHRISTY W. BELL

*                     Director                March 28, 1996
- -------------------------------------
JOHN F. KASLOW

*                     Director                March 28, 1996
- -------------------------------------
DANIEL J. MCCARTHY

*                     Director                March 28, 1996
- -------------------------------------
JOHN T. PRESTON

*                     Director                March 28, 1996
- -------------------------------------
LORNE R. WAXLAX

*By:    /s/ Alan S. McKim
--------------------------------- 
ALAN S. MCKIM
ATTORNEY-IN-FACT

59

EXHIBIT 4.6

November 21, 1995

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.
CLEAN HARBORS TECHNOLOGY
CORPORATION
CLEAN HARBORS KINGSTON FACILITY
CORPORATION
CLEAN HARBORS OF BRAINTREE, INC.
CLEAN HARBORS OF CHICAGO, INC.
CLEAN HARBORS OF NATICK, INC.
CLEAN HARBORS OF CONNECTICUT, INC.
MURPHY'S WASTE OIL SERVICE, INC.
CLEAN HARBORS OF CLEVELAND, INC.
MR. FRANK, INC.
SPRING GROVE RESOURCE RECOVERY, INC.

Re:  Additional Revolving Loans and Cash Collateral
---------------------------------------------- 

Gentlemen:

Reference is made to the Loan and Security Agreement dated May 8,
1995, as amended, between you and the undersigned (the "Loan Agreement").  We
have received $2,000,000 in cash collateral (the "Cash Collateral") from Alan
McKim (the "Pledgor") pursuant to a Cash Collateral Agreement of even date.  All
capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Loan Agreement.

The Lender agrees with the Borrowers as follows:

(1) Subject to the provisions of Section 4.2 of the Loan Agreement, we
agree to make additional Revolving Loans to Borrowers on a dollar for dollar
basis with the Cash Collateral provided that such Cash Collateral is at all
times fully available to Lender as collateral security for the Obligations
pursuant to the Cash Collateral Agreement.

(2) The Lender agrees to make additional Revolving Loans to Borrowers
in excess of the limits set forth in section 2 of the Loan Agreement and in
paragraph (1) of this letter agreement, in an aggregate amount not exceeding
$2,000,000 (the "Overadvance Limit") at any time, with such Overadvance Limit to
be reduced each week by $200,000 and the amount of Revolving Loans in excess of
the Overadvance Limit, as so reduced, repaid to such level commencing on
November 27, 1995 and on the Monday of each calendar week thereafter, with the
full amount of the Revolving Loans 

1

made under this paragraph (2) plus accrued and unpaid interest thereon to be due
and payable on January 29, 1996.

(3) For the period ending 90 days from the date hereof, Lender waives
the limitation set forth on Schedule 9.11 to the Loan Agreement requiring that
the Borrowers maintain Excess Availability of not less than $4,500,000 before
making any distributions to Parent but solely with respect to distributions to
Parent that pay obligations described in clauses (a) and (e) of Schedule 9.11.

(4) The Borrowers shall pay the Lender an overadvance fee of $30,000,
which overadvance fee shall be fully earned and payable upon Borrowers'
execution of this letter agreement.

This letter agreement shall be deemed to be a Financing Agreement and
incorporates by reference all the terms of the Loan Agreement.  All Revolving
Loans made hereunder shall be deemed to be Obligations incurred under and
subject to the benefits of the Financing Agreements including, without
limitation, that such loans shall be secured by a first priority lien on all the
Collateral.

If you accept and agree to the foregoing please sign and return the
enclosed copy of this letter. Thank you.

Very truly yours,

CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)

By: /s/ Marc E. Swartz
---------------------------
Name: Marc E. Swartz 
----------------------
Title: Vice President
---------------------

AGREED:
- ------ 

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.

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

2

CLEAN HARBORS TECHNOLOGY
CORPORATION

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

CLEAN HARBORS KINGSTON FACILITY
CORPORATION

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

CLEAN HARBORS OF BRAINTREE, INC.

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

CLEAN HARBORS OF CHICAGO, INC.

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

CLEAN HARBORS OF NATICK, INC.

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

CLEAN HARBORS OF CONNECTICUT, INC.

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

3

MURPHY'S WASTE OIL SERVICE, INC.

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

CLEAN HARBORS OF CLEVELAND, INC.

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

MR. FRANK, INC.

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

SPRING GROVE RESOURCE RECOVERY, INC.

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

4

EXHIBIT 4.7

March 20, 1996

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.
CLEAN HARBORS TECHNOLOGY
CORPORATION
CLEAN HARBORS KINGSTON FACILITY
CORPORATION
CLEAN HARBORS OF BRAINTREE, INC.
CLEAN HARBORS OF CHICAGO, INC.
CLEAN HARBORS OF NATICK, INC.
CLEAN HARBORS OF CONNECTICUT, INC.
MURPHY'S WASTE OIL SERVICE, INC.
CLEAN HARBORS OF CLEVELAND, INC.
MR. FRANK, INC.
SPRING GROVE RESOURCE RECOVERY, INC.

Re:  Second Amendment to Financing Agreements - Term Loan Refunding
--------------------------------------------------------------
("Second Amendment")
--------------------

Gentlemen:

Reference is made to the Loan and Security Agreement dated May 8,
1995, as amended, between you and the undersigned (the "Loan Agreement").  All
capitalized terms not otherwise defined herein shall have the meanings given
such terms in the Loan Agreement.

Borrowers have requested that the principal amount of the Term Loan be
increased to $15,000,000.00 and that the difference between the outstanding
principal amount of the original Term Loan ($8,333,333.33) and $15,000,000 be
funded to the Borrowers and used to repay outstanding Revolving Loans.  Subject
to the terms and conditions hereof, the Lender agrees with the Borrowers as
follows:

(1) Section 1.48 of the Loan Agreement is deleted in its entirety and
replaced with the following:

"1.48 "Revolving Credit Limit" shall mean the amount of
$30,000,000.00."

(2) Section 2.3 of the Loan Agreement is deleted in its entirety and
replaced with the following:

1

"2.3  Term Loan.  Effective upon the date of the Second Amendment,
---------                                                   
Lender is making a Term Loan to Borrowers in the original principal amount of
$15,000,000.00.  The outstanding principal amount on the $10,000,000 Term Loan
made as of May 8, 1995 shall be converted into the Term Loan made under the
Second Amendment and the balance shall be applied to repay outstanding Revolving
Loans.  The Term Loan is (a) evidenced by an Amended and Restated Term
Promissory Note in the original principal amount of $15,000,000.00 duly executed
and delivered by the Borrowers to Lender; (b) to be repaid, together with
interest and other amounts, in accordance with this Agreement, the Amended and
Restated Term Promissory Note, and the other Financing Agreements and (c)
secured by all the Collateral."

(3) The Lender agrees to make the Term Loan to Borrowers upon the
satisfaction of the conditions set forth in Section 4.2 of the Loan Agreement
and the following additional conditions:

(a) all requisite corporate action and proceedings of the
Borrowers in connection with this Second Amendment and the Amended and Restated
Term Promissory Note shall be satisfactory in form and substance to Lender and
Lender shall receive certified copies of such corporate action and proceedings
as Lender may request;

(b) Lender shall have received in form and substance satisfactory
to Lender, an opinion of counsel to Borrowers with respect to this Second
Amendment and the Amended and Restated Secured Promissory Term Note;

(c) no material adverse change shall have occurred in the assets,
business or prospects of any Borrower since the date of the most recent
financial statements furnished to Lender pursuant to the Loan Agreement and no
change or event shall have occurred which would impair the ability of any
Borrower or any Obligor to perform its obligations under the Loan Agreement or
any of the other Financing Agreements or of Lender to enforce the Obligations or
to realize upon the Collateral; and

(d) Borrowers shall pay to Lender, and directs Lender to debit its
loan account for, an additional facility fee equal to $33,333.33, which fee
shall be fully earned and non-refundable on the date hereof.

(4) For the period ending 60 days from the date hereof, Lender waives
the limitation set forth on Schedule 9.11 to the Loan Agreement requiring that
the Borrowers maintain Excess Availability of not less than $4,500,000 before
making any distributions to Parent but solely with respect to distributions to
Parent that pay obligations described in clauses (a) and (e) of Schedule 9.11.

(5) Section 12.9 is amended by adding the following sentence to the
end thereof:  "For purposes hereof, the Proportionate Share of a Borrower shall
mean the actual amount of Loans made to such Borrower and Letter of Credit
Accommodations 

2

issued for the account of such Borrower, based upon the lending formula and
other provisions of Section 2 hereof."

(6) Each Borrower confirms and agrees that (a) all representations and
warranties contained in the Loan Agreement and in the other Financing Agreements
are on the date hereof true and correct in all material respects (except for
changes that have occurred as permitted by the covenants in Section 9 of the
Loan Agreement), and (b) it is unconditionally and jointly and severally liable
for the punctual and full payment of all Obligations, including, without
limitation, all charges, fees, expenses and costs (including attorneys' fees and
expenses) under the Financing Agreements, and that no Borrower has any defenses,
counterclaims or setoffs with respect to full, complete and timely payment of
all Obligations.

(7) Each Guarantor, for value received, hereby assents to the
Borrowers' execution and delivery of this Amendment, and to the performance by
the Borrowers of their respective agreements and obligations hereunder.  This
Amendment and the performance or consummation of any transaction or matter
contemplated under this Amendment, shall not limit, restrict, extinguish or
otherwise impair any of the Guarantor's liability to Lender with respect to the
payment and other performance obligations of the Guarantors pursuant to the
Guarantees, dated May 8, 1995 executed for the benefit of Lender.  Each
Guarantor acknowledges that it is unconditionally liable to Lender for the full
and complete payment of all Obligations including, without limitation, all
charges, fees, expenses and costs (including attorney's fees and expenses) under
the Financing Agreements and that such Guarantor has no defenses, counterclaims
or setoffs with respect to full, complete and timely payment of any and all
Obligations.

(8) Borrowers hereby agree to pay to Lender all reasonable attorney's
fees and costs which have been incurred or may in the future be incurred by
Lender in connection with the negotiation and preparation of this Amendment and
any other documents and agreements prepared in connection with this Amendment.
The undersigned confirm that the Financing Agreements remain in full force and
effect without amendment or modification of any kind, except for the amendments
explicitly set forth herein. The undersigned further confirm that no Event of
Default or events which with notice or the passage of time or both would
constitute an Event of Default have occurred and are continuing. The execution
and delivery of this Amendment by Lender shall not be construed as a waiver by
Lender of any Event of Default under the Financing Agreements. This Amendment
shall be deemed to be a Financing Agreement and, together with the other
Financing Agreements, constitute the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior dealings,
correspondence, conversations or communications between the parties with respect
to the subject matter hereof.

3

If you accept and agree to the foregoing please sign and return the enclosed
copy of this letter.  Thank you.

Very truly yours,

CONGRESS FINANCIAL CORPORATION
(NEW ENGLAND)

By: /s/ Marc E. Swartz
-------------------------------
Name: Marc E. Swartz
-------------------------
Title: Vice President
------------------------

4

AGREED:
- ------ 

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.

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

CLEAN HARBORS TECHNOLOGY
CORPORATION

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

CLEAN HARBORS KINGSTON FACILITY
CORPORATION

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

CLEAN HARBORS OF BRAINTREE, INC.

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

CLEAN HARBORS OF CHICAGO, INC.

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

CLEAN HARBORS OF NATICK, INC.

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

5

CLEAN HARBORS OF CONNECTICUT, INC.

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

MURPHY'S WASTE OIL SERVICE, INC.

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

CLEAN HARBORS OF CLEVELAND, INC.

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

MR. FRANK, INC.

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

SPRING GROVE RESOURCE RECOVERY, INC.

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

CLEAN HARBORS, INC.

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

6

CLEAN HARBORS OF BALTIMORE, INC.

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

7

AMENDED AND RESTATED
TERM PROMISSORY NOTE
--------------------

$15,000,000.00                                       Boston, Massachusetts
March 20, 1996

FOR VALUE RECEIVED, Clean Harbors Environmental Services, Inc., a
Massachusetts corporation, Clean Harbors Technology Corporation, a Massachusetts
corporation, Clean Harbors Kingston Facility Corporation, a Massachusetts
corporation, Clean Harbors of Braintree, Inc., a Massachusetts corporation,
Clean Harbors of Chicago, Inc., a Massachusetts corporation, Clean Harbors of
Natick, Inc., a Massachusetts corporation, Clean Harbors of Connecticut, Inc., a
Connecticut corporation, Clean Harbors of Cleveland, Inc., a Massachusetts
corporation, Murphy's Waste Oil Service, Inc., a Massachusetts corporation, Mr.
Frank, Inc., an Illinois corporation and Spring Grove Resource Recovery, Inc., a
Delaware corporation (each a "Debtor" and, collectively the "Debtors"), jointly
and severally, hereby unconditionally promise to pay to the order of CONGRESS
FINANCIAL CORPORATION (NEW ENGLAND), a Massachusetts corporation (the "Payee"),
at the offices of Payee at One Post Office Square, Boston, MA 02109, or at such
other place as the Payee or any holder hereof may from time to time designate,
the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000) in lawful money of
the United States of America and in immediately available funds, in sixty (60)
consecutive monthly installments (or earlier as hereinafter provided) on the
first day of each month commencing April 1, 1996 of which the first fifty-nine
(59) installments shall each be in the amount of TWO HUNDRED FIFTY THOUSAND
DOLLARS ($250,000), and the last installment shall be in the amount of the
entire unpaid balance of this Note.

Debtors, jointly and severally, hereby further promise to pay interest to
the order of Payee on the unpaid principal balance hereof at the Interest Rate.
Such interest shall be paid in like money at said office or place from the date
hereof, commencing April 1, 1996 and on the first day of each month thereafter
until the indebtedness evidenced by this Note is paid in full.  Interest payable
upon and after an Event of Default or termination or non-renewal of the Loan
Agreement shall be payable upon demand.

For purposes hereof, (a) the term "Interest Rate" shall mean, as to Prime
Rate Loans, a rate of one and one-half (1.5%) percent per annum in excess of the
Prime Rate, and as to Eurodollar Rate Loans, a rate of three (3.0%) percent per
annum in excess of the Adjusted Eurodollar Rate; provided, that, at Payee's
option, the Interest Rate shall mean a rate of four (4.0%) percent per annum in
excess of the Prime Rate as to Prime Rate Loans and a rate of five and one-half
(5.5%) percent per annum in excess of the Adjusted Eurodollar Rate as to
Eurodollar Rate Loans upon and after an Event of Default or termination or non-
renewal of the Loan Agreement, (b) the term "Prime Rate" shall mean the rate
from time to time publicly announced by CoreStates Bank, N.A., or its
successors, at its office in Philadelphia, Pennsylvania, as its prime rate,
whether or not such announced rate is the best rate available at such bank, (c)
the term "Event of Default" shall mean an Event of Default as such term is
defined in the Loan Agreement, and (d) the term "Loan Agreement" shall mean the
Loan and Security Agreement, dated May 8, 1996, as amended, between Debtors and
Payee, as the same now exists or may hereafter be amended, 

-1-

modified, supplemented, extended, renewed, restated or replaced. Unless
otherwise defined herein, all capitalized terms used herein shall have the
meaning assigned thereto in the Loan Agreement.

The Interest Rate applicable to Prime Rate Loans payable hereunder shall
increase or decrease by an amount equal to each increase or decrease,
respectively, in the Prime Rate, effective on the first day of the month after
any change in the Prime Rate, based on the Prime Rate in effect on the last day
of the month in which any such change occurs.  Interest shall be calculated on
the basis of a three hundred sixty (360) day year and actual days elapsed.  In
no event shall the interest charged hereunder exceed the maximum permitted under
the laws of the Commonwealth of Massachusetts or other applicable law.

This Note is issued pursuant to the terms and provisions of the Loan
Agreement to evidence the Term Loan by Payee to Debtors.  This Note is secured
by the Collateral described in the Loan Agreement and all notes, guarantees,
security agreements and other agreements, documents and instrument now or at any
time hereafter executed and/or delivered by any Debtor or any other party in
connection therewith (all of the foregoing, together with the Loan Agreement, as
the same now exist or may hereafter be amended, modified, supplemented, renewed,
extended, restated or replaced, being collectively referred to herein as the
"Financing Agreements"), and is entitled to all of the benefits and rights
thereof and of the other Financing Agreements.  At the time any payment is due
hereunder, at its option, Payee may charge the amount thereof to any account of
any Debtor maintained by Payee.

If any payment of principal or interest is not made when due hereunder, or
if any other Event of Default shall occur for any reason, or if the Loan
Agreement shall be terminated or not renewed for any reason whatsoever, then and
in any such event, in addition to all rights and remedies of Payee under the
Financing Agreements, applicable law or otherwise, all such rights and remedies
being cumulative, not exclusive and enforceable alternatively, successively and
concurrently, Payee may, at its option, declare any or all of Debtor's
obligations, liabilities and indebtedness owing to Payee under the Loan
Agreement and the other Financing Agreements (the "Obligations"), including,
without limitation, all amounts owing under this Note, to be due and payable,
whereupon the then unpaid balance hereof, together with all interest accrued
thereon, shall forthwith become due and payable, together with interest accruing
thereafter at the then applicable Interest Rate stated above until the
indebtedness evidenced by this Note is paid in full, plus the costs and expenses
of collection hereof, including, but not limited to, attorneys' fees and legal
expenses.

Each Debtor (i) waives diligence, demand, presentment, protest and notice of
any kind, (ii) agrees that it will not be necessary for Payee to first institute
suit in order to enforce  payment of this Note and (iii) consents to any one or
more extensions or postponements of time of payment, release, surrender or
substitution of collateral security, or forbearance or other indulgence, without
notice or consent.  The pleading of any statute of limitations as a defense to
any demand against any Debtor is expressly hereby waived by each Debtor.  Upon
any Event of Default or termination or non-renewal of the Loan Agreement, Payee
shall have the right, but not the obligation to setoff against this Note all
money owed by Payee to any Debtor.

-2-

Payee shall not be required to resort to any Collateral for payment, but may
proceed against any Debtor and any guarantors or endorsers hereof in such order
and manner as Payee may choose.  None of the rights of Payee shall be waived or
diminished by any failure or delay in the exercise thereof.

The validity, interpretation and enforcement of this Note and the other
Financing Agreements and any dispute arising in connection herewith or therewith
shall be governed by the internal laws of the Commonwealth of Massachusetts
(without giving effect to principles of conflicts of law).

Each Debtor irrevocably consents and submits to the non-exclusive
jurisdiction of the courts of the Commonwealth of Massachusetts and the United
States District Court for the  District of Massachusetts and waives any
objection based on venue or forum non conveniens with respect to any action
instituted therein arising under this Note or any of the other Financing
Agreements or in any way connection with or related or incidental to the
dealings of any Debtor and Payee in respect of this Note or any of the other
Financing Agreements or the transactions related hereto or thereto, in each case
whether now existing or hereafter arising, and whether in contract, tort, equity
or otherwise, and agrees that any dispute arising out of the relationship
between any Debtor and Payee or the conduct of such persons in connection with
this Note or otherwise shall be heard only in the courts described above (except
that Payee shall have the right to bring any action or proceeding against such
Debtor or its property in the courts of any other jurisdiction which Payee deems
necessary or appropriate in order to realize on the Collateral or to otherwise
enforce its rights against such Debtor or its property).

Each Debtor hereby waives personal service of any and all process upon it
and consents that all such service of process may be made by certified mail
(return receipt requested) directed as specified in the Loan Agreement and
service so made shall be deemed to be completed five (5) days after the same
shall have been so deposited in the U.S. mails, or, at Payee's option, by
service upon Debtors in any other manner provided under the rules of any such
courts.  Within thirty (30) days after such service, Debtors shall appear in
answer to such process, failing which Debtors shall be deemed in default and
judgment may be entered by Payee against Debtors for the amount of the claim and
other relief requested.

EACH DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS NOTE OR  (ii) IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS BETWEEN DEBTOR AND PAYEE
IN RESPECT OF THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE
TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE.  DEBTOR
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY.

-3-

The execution and delivery of this Note has been authorized by the Board of
Directors and by any necessary vote or consent of the stockholders of each
Debtor.  Each Debtor hereby authorizes Payee to complete this Note in any
particulars according to the terms of the loan evidenced hereby.

This Note shall be binding upon the successors and assigns of each Debtor
and inure to the benefit of Payee and its successors, endorsees and assigns.
Whenever used herein, the term "Debtor" shall be deemed to include its
successors and assigns and the term "Payee" shall be deemed to include its
successors, endorsees and assigns.  If any term or provision of this Note shall
be held invalid, illegal or unenforceable, the validity of all other terms and
provisions hereof shall in no way be affected thereby.

This Note amends and restates that certain Term Promissory Note, dated May
8, 1995 of the Debtors in the original principal amount of $10,000,000.00.

ATTEST:                                BORROWERS:

CLEAN HARBORS TECHNOLOGY
CORPORATION

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

CLEAN HARBORS KINGSTON
FACILITY CORPORATION

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

-4-

CLEAN HARBORS OF BRAINTREE, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

CLEAN HARBORS OF CHICAGO, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

CLEAN HARBORS OF NATICK, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

CLEAN HARBORS OF CONNECTICUT, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Secretary                       Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

MURPHY'S WASTE OIL SERVICE, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

-5-

CLEAN HARBORS OF CLEVELAND, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynigan            
- ---------------------------               ----------------------------------
Assistant Clerk                           Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

MR. FRANK, INC. 

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Secretary                       Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President

SPRING GROVE RESOURCE RECOVERY, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Secretary                       Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.

/s/ J.T. Black                         By: /s/ Stephen Moynihan            
- ---------------------------               ----------------------------------
Assistant Secretary                       Name:  Stephen Moynihan          
[Corporate Seal]                          Title:  Vice President            

-6-

EXHIBIT 10.41

DISPOSAL SERVICES AGREEMENT
---------------------------

This Disposal Services Agreement (the "Agreement") is made
and entered into as of this 31st day of October, 1995, by and
between Chemical Waste Management, Inc., a Delaware corporation,
and its subsidiary and affiliated companies ("Chemical Waste
Management") and Clean Harbors Environmental Services, Inc., a
Massachusetts corporation, and its affiliated companies ("Clean
Harbors").

WHEREAS, the parties hereto are also among the parties to an
Asset Purchase Agreement dated as of January 30, 1995 pursuant to
which Clean Harbors of Chicago, Inc. is acquiring certain assets,
formerly owned by CWM Chemical Services, Inc. and Chemical Waste
Management, which are located at 11700 South Stony Island Avenue,
Chicago, Illinois ("Asset Acquisition"); and

WHEREAS, in connection therewith, Clean Harbors and Chemical
Waste Management are entering into this Disposal Services
Agreement in order to provide Clean Harbors with incentives to
deliver certain Waste Products for disposal at Permitted
Facilities owned and operated by Chemical Waste Management and to
establish waste approval, disposal decision, pricing and delivery
schedule obligations between the parties with respect to such
deliveries of Waste Products.

NOW, THEREFORE, in consideration of the mutual promises of
the parties contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, do
hereby agree as follows:

ARTICLE I

REPRESENTATIONS AND WARRANTIES OF CHEMICAL WASTE MANAGEMENT

Chemical Waste Management hereby represents and warrants to
Clean Harbors as follows:

Section 1.1 Participating Facilities
------------------------------------
Directly or through its subsidiaries or affiliates, Chemical
Waste Management owns and operates the Participating Facilities.
The Participating Facilities are intended to include all
facilities owned or operated by Chemical Waste Management, now or
in the future, including but not limited to those listed in
Article VI.

Section 1.2 Operation of Participating Facilities
-------------------------------------------------
(a) Chemical Waste Management understands the currently known
hazards and risks which are presented to human beings, property
and the environment in the handling, transportation, storage,
treatment, processing and disposal of Permitted Waste Products.

(b) Chemical Waste Management is engaged in the business of
transportation, storage and disposal of industrial and other
wastes, and has developed the requisite expertise for the
handling, transportation, storage, treatment, processing and
disposal of Permitted Waste Products.
(c) Chemical Waste Management will handle, load, stow,
transport, store, treat, process and dispose of Permitted Waste
Products in a safe and workmanlike manner and in full compliance
with all valid and applicable statutes, ordinances, orders, rules
and regulations of the federal, state and local governments in
whose jurisdictions such activities are performed under this
Agreement.
(d) Chemical Waste Management has been issued, as of the date
of execution of this Agreement, all permits, licenses,
certificates or approvals, required by valid and applicable
statutes, ordinances, orders, rules and regulations of the
federal, state and local governments having jurisdiction over each
of the Participating Facilities, necessary to accept and store,
treat, process and dispose of Permitted Waste Products.
(e) During the term of this Agreement, Chemical Waste
Management shall provide Clean Harbors with reasonable advance
notice if any permit, license, certificate or approval for any of
the Participating Facilities is to expire and not be renewed
during the term of this Agreement.  Such notice shall also be
provided if Chemical Waste Management determines not to seek any
necessary permit, license, certificate of approval for any of the
Participating Facilities which becomes required after execution of
this Agreement.
(f) Chemical Waste Management shall at all times during the
term of this Agreement cause the Participating Facilities to be in
compliance with all financial responsibility requirements
pertaining to sudden and non-sudden occurrences and closure or
post-closure costs as may be required by applicable federal, state
or local statute, bylaw, ordinance or regulation.  Chemical Waste
Management shall also at all times during the term of this
Agreement cause the Participating Facilities to be in compliance
with all applicable liability, worker's compensation and other
insurance requirements.  Chemical Waste Management shall, upon
request, furnish Clean Harbors with a copy of certificates of
insurance or other documents evidencing such insurance or
financial assurances.
(g) During the term of this Agreement, Chemical Waste
Management shall promptly advise Clean Harbors of the institution
of judicial or administrative proceedings by federal, state or
local authorities to suspend, modify or revoke any permit,
license, certificate or like approval for any of the Participating
Facilities.

Section 1.3 Effect on Other Warranties
--------------------------------------
The warranties and representations contained in this Article
are in addition to and not in derogation of the warranties and
representations contained in any other written agreements executed
by the parties.

ARTICLE II

TERM OF THE AGREEMENT; DISPOSAL FEES; DISPOSAL COMMITMENT;
ACCEPTANCE OF PERMITTED WASTE; PREFERRED CUSTOMER STATUS PRODUCTS

Section 2.1 Term of the Agreement
---------------------------------
The term of this Agreement shall be for five (5) years,
commencing on October 31, 1995 and terminating on the fifth
anniversary thereof.

Section 2.2 Disposal Fees
-------------------------
The fees payable by Clean Harbors for disposal of all
Permitted Waste Products at any of the Participating Facilities
shall, in each instance,  be that price mutually agreed upon by
Chemical Waste Management and Clean Harbors.  The disposal fees
paid by Clean Harbors to Chemical Waste Management shall, in every
instance, be:  (1) no higher than the lowest disposal fees offered
by Chemical Waste Management to its commercial, non-governmental
customers; (2) no more than ten (10) percent higher than the
disposal fees charged by Chemical Waste Management to its
subsidiaries or affiliated companies, including but not limited to
AETS ("Affiliates"), for field services work or project bids where
Clean Harbors is bidding in competition against such Affiliates;
and (3) no more than five (5) percent higher than the disposal
fees offered to Clean Harbors by competitors of Chemical Waste
Management.  The parties acknowledge that it is the intent of this
Agreement that Clean Harbors shall pay lower disposal fees each
year by utilizing the Participating Facilities pursuant to this
Agreement than it would otherwise pay to utilize the disposal and
treatment facilities of Chemical Waste Management without the
benefit of this Agreement or Facilities of competitors of Chemical
Waste Management.  Clean Harbors may request a fixed price for a
specific time period for a contract that Clean Harbors is bidding
or has been awarded.

Section 2.3 Disposal Commitment; Acceptance of Permitted
--------------------------------------------------------
Waste Products
--------------
Subject to the conditions below and the disposal fee criteria
in Section 2.2, Clean Harbors shall use its best efforts to
deliver Permitted Waste Products to Chemical Waste Management for
disposal or treatment at Participating Facilities, and Chemical
Waste Management shall accept, store, treat and dispose of all
Permitted Waste Products so delivered in accordance with this
Agreement; provided, however, that the foregoing shall not
prohibit or restrict Clean Harbors from utilizing (a) its own
disposal or treatment facilities (or those owned by any subsidiary
or affiliated company of Clean Harbors) for disposal or treatment
of any Permitted Waste Products, or (b) the disposal or treatment
facilities of any competitor of Chemical Waste Management for
disposal or treatment when (i) so requested by Clean Harbors'
customers; (ii) the Participating Facility cannot meet the
schedule for acceptance of the Waste Products required by Clean
Harbors; (iii) CWM fails to meet (within 5%) a lower price offered

to Clean Harbors by a competitor of Chemical Waste Management in
accordance with Section 2.2 hereof after a reasonable opportunity
to do so (which shall include making a Disposal Decision within
the time limits specified in Section 4.3 hereof); (iv) the
Chemical Waste Management Participating Facility has been unable
to offload and return Clean Harbors' vehicles in a timely manner;
or (v) Chemical Waste Management decides to cease accepting a
Permitted Waste Product or Products at a Participating Facility or
Facilities.

When Clean Harbors requests a lower price from Chemical Waste
Management, Clean Harbors shall give Chemical Waste Management
verbal notice of having been quoted (or of a customer or
prospective customer of Clean Harbors having been quoted) a price
for disposal or treatment services substantially similar in type
and quality to those provided hereunder, which price is lower than
the price determined pursuant to Section 2.2 hereof, when
aggregated with any applicable transportation charges (priced
according to Clean Harbors' published schedule of standard
transportation charges), taxes, fees, special handling charges and
other assessments.

Section 2.4 Preferred Customers Status
--------------------------------------
For the term of this Agreement, Clean Harbors shall be
treated as a preferred customer by Chemical Waste Management with
regard to Waste Products approval, scheduling of Waste Products
delivery and the offloading and return of waste handling vehicles.
No special charges, profile or analytical costs, levies or
assessments of any type shall be charged to Clean Harbors by
Chemical Waste Management or the Participating Facilities.
Notwithstanding the foregoing, Chemical Waste Management may
charge standard off-specification charges for Permitted Waste
Products which are not in substantial conformance with the Waste
Profile Sheet, PROVIDED, however, that Clean Harbors agrees to pay
such off-specification charges prior to the acceptances of the
Waste by the Participating Facility.

ARTICLE III

FORCE MAJEURE

Section 3.1 Suspension of Performance
-------------------------------------
The performance of this Agreement, except for the payment of
money for services already rendered, may be suspended (a) by Clean
Harbors in the event that the delivery or transportation of
Permitted Waste Products by Clean Harbors is prevented by a cause
or causes beyond the reasonable control of Clean Harbors, or (b)
by Chemical Waste Management in the event that the transportation,
storage, treatment, processing or disposal of Permitted Waste
Products by Chemical Waste Management is prevented by a cause or
causes beyond the reasonable control of Chemical Waste Management.
Such causes shall include, but not be limited to, acts of God,
acts of war, riot, fire, explosion, accident, flood, or sabotage;

lack of adequate fuel, power, raw materials, labor or
transportation facilities; government laws, regulations,
requirements, orders of actions; breakage or failure of machinery
or apparatus; national defense requirements; injunctions or
restraining orders; labor trouble, strike, lockout or injunction
(provided that neither party shall be required to settle a labor
dispute against its own best judgment).

The party asserting a right to suspend performance under this
Section 3.1 shall, within a reasonable time after it has knowledge
of the effective cause, notify the other party of the cause for
suspension, the performance suspended and the anticipated duration
of suspension, and shall use its reasonable best efforts to
rectify the effective cause of the suspension.

ARTICLE IV

HAZARDOUS WASTE ANALYSIS AND
ACCEPTANCE AT PARTICIPATING FACILITIES

Section 4.1 Waste Profiles
--------------------------
For the term of this Agreement, Clean Harbors may utilize the
waste profile sheets currently established and on file with
Chemical Waste Management for Permitted Waste Products presently
originating from any facility owned or operated by Clean Harbors,
or directly from the customers of either of them; provided,
however, that Chemical Waste Management reserves the right to
require periodic recertification (including, but not limited to,
submission of a new waste material profile sheet and a
representative sample of waste) of any waste stream for which a
waste profile sheet is currently maintained, and such other
recertifications as my be required by Chemical Waste Management
policies and procedures or government regulations.

Section 4.2 Laboratory Analysis
-------------------------------
During the term of this Agreement, for all Permitted Waste
Products delivered or caused to be delivered by Clean Harbors to
Participating Facilities, Chemical Waste Management shall accept
the analysis performed by the Clean Harbors laboratory located at
Braintree, Massachusetts, or by a certified laboratory of similar
capabilities operated by Clean Harbors at another location,
provided such laboratory has been certified by Chemical Waste
Management; provided further, that Chemical Waste Management
reserves the right to require a yearly audit and recertification
of any laboratory operated by Clean Harbors and qualifying under
this Section.  Certification and recertification of laboratories
by Chemical Waste Management shall be conducted in accordance with
its policies and procedures and such certification or
recertification shall not be unreasonably withheld by Chemical
Waste Management.

Section 4.3 Disposal Decision and Disposal Request Deadlines
------------------------------------------------------------
Chemical Waste Management and Participating Facilities shall
render disposal decisions on Waste Products offered for disposal

by Clean Harbors in accordance with the following schedule: (1)
for disposal decisions that require Chemical Waste Management to
perform laboratory analysis, a decision will be rendered and
communicated within ten (10) business days from receiving a new
waste material profile sheet and sample, and (2) for disposal
decisions that Clean Harbors has provided the laboratory analysis
in accordance with Section 4.2, or for which laboratory analysis
is not required, a decision will be rendered and communicated
within three (3) business days from receipt of paperwork.

Chemical Waste Management and Participating Facilities shall
communicate a schedule date within two (2) business days after a
disposal request is received from Clean Harbors.  In no event
shall the waste product delivery to the Participating Facilities
be scheduled more than ten (10) business days after the receipt of
the disposal request by Chemical Waste Management or the
participating facilities.

Section 4.4 Analysis Charges
----------------------------
For the term of this Agreement, Chemical Waste Management
will not charge Clean Harbors for analysis of any Permitted Waste
Product proposed for disposal at Participating Facilities,
provided that an analysis necessary for disposal of said waste has
been performed by a laboratory identified in Section 4.2 and
provided to Chemical Waste Management.

Section 4.5 Termination of Disposal
-----------------------------------
In the event that Chemical Waste Management decides to cease
accepting a Permitted Waste Product at a Participating Facility
for which a waste profile sheet currently exists, Clean Harbors
shall be given 30 days advance notice thereof, provided that in
the event that Chemical Waste Management is obligated to cease
accepting a Permitted Waste Product due to force majeure, this
notice provision shall not apply.  In the event that Chemical
Waste Management elects to cease accepting a Permitted Waste
Product or Products pursuant to this Section 4.5, Clean Harbors
shall thereby be authorized by Chemical Waste Management to
contract with competitors of Chemical Waste Management on such
terms as may be necessary to dispose of such Permitted Waste
Product or Products.

ARTICLE V

INDEMNIFICATION

Section 5.1 Indemnification by Chemical Waste Management
--------------------------------------------------------
Chemical Waste Management shall indemnify and save harmless
Clean Harbors, and its subsidiary companies and its affiliates,
and their present and future officers or directors (or officials),
employees and agents, from and against any and all liabilities,
penalties, fines, forfeitures, demands, claims, causes of action,
suits, and costs and expenses incidental thereto (including cost
of defense, settlement, and reasonable attorney's fee), which any

or all of them may hereafter suffer, incur, be responsible for or
pay out as a result of bodily injuries (including death) to any
person, damage (including loss of use) to any property (public or
private), contamination of or adverse effects on the environment,
or any violation or alleged violation of statutes, ordinances,
orders, rules or regulations of any governmental entity or agency,
either (a) directly or indirectly caused by, or arising out of
breach of any warranties by Chemical Waste Management or any
negligent of willful act or omission of Chemical Waste Management,
its employees or its subcontractors in the performance of this
Agreement; or (b) associated with cleanup of any of the
Participating Facilities, arising out of said Participating
Facilities' becoming subject to removal or remedial actions under
the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, the Resource Conservation and
Recovery Act, or any comparable state statutes or other applicable
environmental authorities except to the extent of the
indemnification by Clean Harbors provided for in Section 5.2
hereof.

Section 5.2 Indemnification by Clean Harbors
--------------------------------------------
Clean Harbors shall indemnify and save harmless Chemical
Waste Management and its affiliates, and its present and future
officers or directors (or officials), employees and agents, from
and against any and all liabilities, penalties, fines,
forfeitures, demands, claims, causes of action, suits, and costs
and expenses incidental thereto (including cost of defense,
settlement, and reasonable attorney's fees), which any or all of
them any hereafter suffer, incur, be responsible for or pay out as
a result of bodily injuries (including death) to any person,
damage (including loss of use) to any property (public or
private), contamination of or adverse effects on the environment,
or any violation or alleged violation of statutes, ordinances,
orders, rules or regulations of any governmental entity or agency,
directly or indirectly caused by, or arising out of breach of any
warranties by Clean Harbors, or any negligent or willful act or
omission of Clean Harbors, its employees or its subcontractors in
the performance of this Agreement except to the extent of the
indemnification by Chemical Waste Management provided for in
Section 5.1 hereof.

ARTICLE VI

CERTAIN DEFINITIONS

As used in this Agreement or Appendix A hereto, the following
capitalized terms shall have the meanings stated below or, as
indicated, elsewhere in this Agreement:

Business Day - Business Day shall mean Monday through
------------
Friday excluding national holidays.

Disposal Decision - Disposal Decision shall mean a
-----------------
determination by Chemical Waste Management or a
Participating Facility to:  (1) accept or reject a given
"hazardous waste" for disposal, based on acceptance
criteria of the Participating Facility; and (2) the
schedule by which such waste shall be accepted by the
Participating Facility in accordance with Section 4.3
hereof.

Disposal Fee - Disposal Fee shall be that price,
------------
including transportation costs, taxes, special
assessments and all other fees, that Clean Harbors may
pay to Chemical Waste Management or to competitors of
Chemical Waste Management for the disposal of Waste
Products.

Disposal Request - Disposal Request shall mean
----------------
notification by Clean Harbors, either orally or in
writing, of a desire to deliver a Permitted Waste
Product to a Participating Facility for disposal.

Part A Permits - Part A Permits shall mean the
--------------
Participating Facilities' respective RCRA Part A
Permits, as from time to time amended or modified.

Participating Facility - A Participating Facility shall
----------------------

mean all facilities owned or operated by Chemical Waste
Management or its subsidiaries or affiliates including,
but not limited to, the following facilities:

Participating Facility             Location

Controlled Waste                 Menomenee Falls, Wisconsin
Coatesville Facility             Coatesville, Pennsylvania
Arlington Facility               Arlington, Oregon
Kettleman Facility               Kettleman Hills, California
RML Facility                     Morrow, Georgia
LWMRR Facility                   West Carrolton, Ohio
Model City Treatment Center      Model City, New York
Adams Center Facility            Fort Wayne, Indiana
Emelle Treatment Center          Emelle, Alabama
Lake Charles Treatment Center    Lake Charles, Louisiana
Newark Treatment Center          Newark, New Jersey
Injection Well Facility          Vickery, Ohio
Port Arthur Facility             Port Arthur, Texas
Trade Waste Incineration         Sauget, Illinois
Memphis Facility                 Millington, Tennessee
OSCO Facility                    Azula, California
OSCO Facility                    Henderson, Colorado

In addition to the above-described Participating

Facilities, the term "Participating Facilities" shall
apply to any other treatment or disposal facility which
is permitted to accept any type of Waste Products and
which Chemical Waste Management directly or through
subsidiaries owns or operates, now or in the future.
Conversely, the term "Participating Facilities" shall
not apply, after 60 days prior written notice to Clean
Harbors, to any of such Participating Facilities which
are no longer permitted to accept Waste Products by
applicable government regulations and/or the policies
and procedures of Chemical Waste Management.

Permitted Waste Products - Permitted Waste Products
------------------------
shall mean those Waste Products which are identified in
the Part A Permits and which applicable government
regulations and the policies and procedures of Chemical
Waste Management permit the Participating Facilities to
dispose or otherwise handle.

Waste Products - Waste Products shall mean any substance
--------------
or material identified as a "hazardous waste", either by
characteristics or listing, in regulations promulgated
or revised under Section 3001 of the Resource
Conservation and Recovery Act of 1976, as amended
("RCRA"); any substance or material that is regulated as
a hazardous waste by the state in which Clean Harbors
took possession of said substance or material and by the

state in which the Participating Facility is located;
and any substance or material whose disposal is
regulated pursuant to the Toxic Substances Control Act
of 1976 ("TSCA").  Waste Products shall not include
waste oil or any substance or material that is not
required by applicable state or federal law to be
disposed of at a facility regulated under RCRA or TSCA.

ARTICLE VII

OTHER PROVISIONS

Section 7.1 Extension of Time; Waiver of Performance
----------------------------------------------------
The parties may extend the time for or waive the performance
of any of the obligations or warranties of the other, or waive
compliance by the other with any of the covenants or conditions
contained in this Agreement.  Any such extension or waiver shall
be in writing and shall be signed by the party extending or
waiving the performance or decision deadline.

Section 7.2 Notice
------------------
Except for notice given pursuant to Section 4.3 hereof, any
notice to a party pursuant to this Agreement shall be given by
certified or registered mail, or by private carrier providing
evidence of receipt as part of its services, addressed as follows:

if to Chemical Waste          Chemical Waste Management, Inc.
Management or SCA             3001 Butterfield Road
Services:                     Oak Brook, IL 60521

Attn:  President

with a copy to:               Chemical Waste Management, Inc.
3001 Butterfield Road
Oak Brook, IL 60521

Attn:  General Counsel

if to Clean Harbors:          Clean Harbors
325 Wood Road
Braintree, MA 02184

Attn:  President

with a copy to:               Clean Harbors
325 Wood Road

Braintree, MA 02184

Attn:  General Counsel

or to such other address as may be designated in writing by either
party from time to time in accordance herewith, and shall be
deemed delivered when placed in the mail or given to private
carrier so addressed, with postage prepaid.

Section 7.3 Contract Administrators
-----------------------------------
As soon as practicable after the date of this Agreement,
Chemical Waste Management and Clean Harbors shall each designate a
representative who shall act as the initial contact for matters
arising under this Agreement and who shall assist in the
administration of this Agreement.

Section 7.4 Access to Records; Confidential Information
-------------------------------------------------------
The parties shall afford their respective representatives
such access during normal business hours and upon reasonable
notice to each other's business records as may be necessary to
ascertain their compliance with the terms of this Agreement,
including, in the case of environmental audits from time to time
conducted by Clean Harbors, access to such records of the
Participating Facilities demonstrating compliance with applicable
environmental laws or regulations.  Except as required by law or
as is necessary to perform this Agreement, any information
obtained by either party from the other shall not be disclosed or
used by such party for any purpose other than for which it was
intended pursuant to this Agreement, and except as required by
law, neither party shall disclose to others the terms of this
Agreement.

Section 7.5 Remedies
--------------------
The parties agree that any material breach of Article II of
this Agreement by Chemical Waste Management could cause
irreparable damage or harm to Clean Harbors and in the event of
any such breach Clean Harbors shall have, in addition to any and
all other remedies at law, the right to an injunction, specific
performance or other equitable relief to prevent the violation of
this Agreement, provided that in any such case Clean Harbors shall
be in compliance with the terms of the Subsidiary Agreements.

Section 7.6 Arbitration
-----------------------
In the event that a dispute shall arise as to the meaning of
any term or provision of this Agreement or as to the accuracy of
any amount calculated or reported hereunder or as to whether
either party shall have breached or caused a default hereunder,
the parties agree to submit their dispute to final and binding
arbitration before the American Arbitration Association, and
pursuant to the rules and regulations thereof, with the site of
such arbitration to be within ten (10) miles of the City of
Boston.  Neither party shall have the right to terminate this
Agreement unless and until it shall be determined by a decision of
such arbitration that the other party has caused a breach and the

other party shall not, within twenty (20) days after any such
decision becomes final, paid all damages awarded by the
arbitration decision and/or corrected any default or inaccuracy
determined by the arbitration.

Section 7.7 Quarterly Meeting
-----------------------------
Representatives of Chemical Waste Management and Clean
Harbors shall meet at least once in each calendar quarter during
the term of this Agreement to review the implementation of this
Agreement.

Section 7.8 Assignment
----------------------
This Agreement shall not be transferred or assigned except to
a parent, subsidiary or other affiliated company of either party
and except as collateral security to an institutional lender which
shall have all of the rights of a secured party under the Uniform
Commercial Code; provided, however, that no such transfer or
assignment shall operate to relieve either party of its
responsibilities under this Agreement.

Section 7.9 Confidentiality
---------------------------
The provisions of this Agreement shall be kept confidential
by the parties.  In the event that either party is requested to
disclose any information concerning this Agreement by any third
party, it shall promptly notify the other party.

Section 7.10 Construction of Agreement
--------------------------------------
This instrument is to take effect as a sealed instrument and
is to be construed according to the laws of the Commonwealth of
Massachusetts.  This instrument sets forth the entire agreement
between the parties with respect to the subject matter hereof and
is binding upon and inures to the benefit of the parties hereto
and their respective legal successors and assigns.  It may be
canceled, modified or amended only by a written instrument
executed by the parties.  The captions are used only as a matter
of convenience, and are not to be considered a part of this
Agreement or to be used in determining the intent of the parties
to it.

Section 7.11 Execution in Counterparts
--------------------------------------
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.

IN WITNESS WHERE, the parties have executed this Agreement as
of the date first above written.

CHEMICAL WASTE MANAGEMENT, INC.

____________________________       By:____________________________
Witness                                 President

CLEAN HARBORS ENVIRONMENTAL
SERVICES, INC.

__________________________         By:_________________________
Witness                                 President

EXHIBIT 11

CLEAN HARBORS, INC. AND SUBSIDIARIES

COMPUTATION OF NET INCOME (LOSS) PER SHARE

FOR THE THREE YEARS ENDED DECEMBER 31, 1995
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

FULLY
TYPE OF SECURITY                                        PRIMARY  DILUTED
----------------                                        -------  -------

1993
Weighted average common stock outstanding in 1993............   9,327    9,327
Stock options exercised in 1993..............................      82       82
Stock options and warrants outstanding during 1993...........     475      475
-------  -------
Weighted average shares of common stock outstanding..........   9,884    9,884
=======  =======
Net income................................................... $ 3,131  $ 3,131
Less preferred stock dividends accrued.......................     350      350
-------  -------
Adjusted net income.......................................... $ 2,781  $ 2,781
=======  =======
Earnings per share........................................... $   .28  $   .28
=======  =======
1994
Weighted average common stock outstanding in 1994............   9,426    9,426
Stock options exercised in 1994..............................       4        4
Stock options and warrants outstanding during 1994...........     205      205
-------  -------
Weighted average shares of common stock outstanding..........   9,635    9,635
=======  =======
Net income................................................... $   475  $   475
Less preferred stock dividends accrued.......................     441      441
-------  -------
Adjusted net income.......................................... $    34  $    34
=======  =======
Earnings per share........................................... $   .00  $   .00
1995
Weighted average common stock outstanding in 1995............   9,457    9,457
Stock options exercised in 1995..............................       3        3
Stock options and warrants outstanding during 1995...........      15       15
-------  -------
Weighted average shares of common stock outstanding..........   9,475    9,475
=======  =======
Net loss..................................................... $(6,893) $(6,893)
Less preferred stock dividends accrued.......................

447      447
-------  -------
Adjusted net loss............................................ $(7,340) $(7,340)
=======  =======
Loss per share............................................... $  (.77) $  (.77)
=======  =======

EXHIBIT 21

CLEAN HARBORS, INC. AND SUBSIDIARIES

SUBSIDIARIES

PRINCIPAL
STATE OF             PLACE OF
INCORPORATION          BUSINESS
------------- --------------------------

Clean Harbors Environmental Services, Inc.            MA       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors of Natick, Inc.                         MA       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors of Braintree, Inc.                      MA       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors of Chicago, Inc.                        MA       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors of Cleveland, Inc.                      MA       11800 S. Stony Island Ave.
Chicago, IL 60617
Clean Harbors of Baltimore, Inc.                      PA       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors of Connecticut, Inc.                    CT       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors Kingston Facility Corporation           MA       325 Wood Road
Braintree, MA 02184-2402
Murphy's Waste Oil Service, Inc.                      MA       325 Wood Road
Braintree, MA 02184-2402
Northeast Casualty Risk Retention Group, Inc.         VT       325 Wood Road
Braintree, MA 02184-2402
Clean Harbors Technology Corporation                  MA       325 Wood Road
Braintree, MA 02184-2402
Mr. Frank, Inc.                                       IL       21900 South Central Ave.
Matteson, IL 60443
Spring Grove Resource Recovery, Inc.                  DE       4879 Spring Grove Avenue
Cincinnati, OH 45232

EXHIBIT 23

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation by reference in the registration statements
of Clean Harbors, Inc. on Form S-8 (Files No. 33-22638, No. 33-51452 and No.
33-60187) of our report dated January 31, 1996 (except with respect to Note 9,
as to which the date is March 20, 1996) on our audits of the consolidated
financial statements and the financial statement schedule of Clean Harbors,
Inc., which report is included in Item 8 of this Form 10-K.

Coopers & Lybrand L.L.P.

Boston, Massachusetts
March 28, 1996

EXHIBIT 24

POWER OF ATTORNEY

(FORM 10-K)

Know all men by these presents, that the individuals whose signatures appear
below constitute and appoint Alan S. McKim and Stephen H. Moynihan, and each
of them acting alone, his true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution, to sign the Clean Harbors, Inc.
Form 10-K Annual Report Pursuant to Section 13 or 15(d) of the Securities and
Exchange Act of 1934 for the fiscal year ended December 31, 1995, and to file
the same with all exhibits thereto, and all documents in connection therewith,
with the Securities Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said substitute or
substitutes may lawfully do or cause to be done by virtue hereof.

SIGNATURE                        TITLE                 DATE
---------                        -----                 ---- 
/s/ Christy W. Bell           Director                  February 15,
- -------------------------------------                                1996
CHRISTY W. BELL

/s/ John F. Kaslow            Director                  February 15,
- -------------------------------------                                1996
JOHN F. KASLOW

/s/ Daniel J. McCarthy          Director                  February 15,
- -------------------------------------                                1996
DANIEL J. MCCARTHY

/s/ John T. Preston           Director                  February 15,
- -------------------------------------                                1996
JOHN T. PRESTON

/s/ Lorne R. Waxlax           Director                  February 15,
- -------------------------------------                                1996
LORNE R. WAXLAX