TRANSPORTATION AGREEMENT

         This Transportation Agreement (hereinafter referred to as the
"Agreement") is made and entered into on this 12th day of February 2001 by and
among Merco Joint Venture, LLC with a principal place of business located at
1265 Drummers Lane Suite 102 Wayne, PA 19087 (hereinafter referred to as
"MERCO") and New York NYCH Railroad Company with a principal place of business
located at 4302 First Avenue, Brooklyn, NY (hereinafter referred to as "NYCH")
(Merco and NYCH being hereinafter collectively referred to as the "Parties").


                                   WITNESSETH

         Whereas, NYCH is a short line rail carrier authorized to transport rail
within its rail terminal in Greenville, New Jersey (the "Greenville Yard");and

         Whereas, MERCO is in the business of of collecting, transporting,
treating, beneficially land applying and/or disposing of waste water residuals
referred to as biosolids ("Biosolids") and other non-hazadous contaminated soils
and waste materials; and

         Whereas, MERCO currently has a contract with The City of New York,
Department of Environmental Protection, Bureau of Waste Water Treatment ("NYC
DEP") to collect and transport biosolids to the Sierra Blanca Ranch in Sierra
Blanca, Hudspeth County, Texas for beneficial land application (the NYC
Contract") for a fifteen (15) year period ending June 30, 2013; and

         Whereas, MERCO desires to transport Biosolids from New York to Sierra
Blanca, Texas in covered, water tight, twenty-eight or thirty (28 or 30 cu yd)
cubic yard, twenty-four (24) ton, inter-modal containers (the "Containers") on
flat bed, articulated rail cars, capable of currently carrying seven (7),
twenty-four (24) ton loaded Containers (the "Railcars") (the Containers and
Railcars collectively sometimes referred to as the "Equipment") and utilize in
connection therewith a designated portion of NYCH's facility at the Greenville
Yard located in Greenville, New Jersey for the purpose of: (i) transferring the
Containers to and from the Railcars, (ii) dispatching and receiving the Railcars
to and from other carriers, and (iii) storing and repairing Railcars and empty
Containers in furtherance thereof.

         Now, Therefore, In consideration of the premises and of the mutual
promises, covenants, representations and warranties herein contained, the
parties hereto, intending to be legally bound by the terms hereof, covenant and
agree as follows:

         1. Term. This Agreement shall commence on March 1, 2001 or such date as
this Agreement is approved by NYC DEP (the "Commencement Date") and shall
terminate on the earlier of: (i) June 30, 2013, (ii) the termination or material
modification of the NYC Contract that terminates or materially reduces the
quantity of Biosolids to be transported by Merco by rail, or (iii) upon mutual
written agreement of the Parties. MERCO shall have the right to terminate this
Agreement by written notice sixty (60) days prior to the fifth (5th) and tenth
(10th) year anniversary dates from the Commencement Date. MERCO shall also have
the right, upon sixty (60) days advance written notice to NYCH, and so long as
Merco is not in default of this Agreement, to extend this Agreement for one
additional five (5) year term. Either Party shall have the right to terminate
this Agreement upon the occurrence of a material default of the other Party,
which default shall remain uncured for a period of one month or such shorter
cure period as may otherwise be provided for herein.

         2. Conditions Precedent. No shipments can be made under the terms and
provisions of this Agreement and this Agreement is expressly conditioned upon,
the execution and delivery of this Agreement by all parties to this Agreement
and all the documentation required to be furnished hereunder by each party to
the other has been received and accepted. Additionally, this Agreement shall be
expressly conditioned upon the approval by NYC DEP of (i) the terms and
conditions of this Agreement, (ii) Greenville Yard as an inter-modal
transportation site for the containers transporting NYC Biosolids, (iii) and of
NYCH as a transportation provider to Merco under the NYC Contract. Failure to
comply with these conditions precedent of the Agreement will result in the
return of such shipments to the Origin. Any return movement shall be subject to
the rate provided herein for the movement from origin to original destination,
and any movement to an alternate destination shall be made at applicable freight
rates at Merco's expense.

         3.       Services to be Performed by NYCH.
                  --------------------------------

                  (a) Top Lift Service. From the Commencement Date to the
Termination Date, NYCH shall be responsible for lifting by top lift the
Containers containing Biosolids delivered to the Greenville Yard by MERCO or its
assigned agents upon motorized chassis or trailer, and placing the Containers on
the Railcars. NYCH shall reload the empty Containers back upon the motorized
chassis or trailer. NYCH shall perform the top lift service within a
commercially reasonable time, consistent with the requirements of NYC DEP
pursuant to the NYC Contract, following the arrival of the chassis and
Containers to the Greenville Yard.

                  (b) Transportation Service. NYCH will transport the Railcars
to and from the Greenville Yard in Jersey City, New Jersey to the Shared Asset
Interchange located in Oak Island, New Jersey (the "SAI") or other approved
location where the Railcars will be picked up and returned by MERCO's designated
rail service provider for transport to and from the Primary or the Alternate
Designated Location(s) set forth in below.

                  (c)      Designated Land ApplicationLocations.

                 Primary Designated Location:       The Sierra Blanca Ranch,
                                                       Sierra Blanca, Texas.

                 Alternate Designated Location:     RC Land Company,
                                 Bowie Arizona.

                 Additional Alternative
                 Designated Location:           As designated from time to time.

                  (d) Permits and Capacity of Designated Locations. Merco agrees
that each Designated Location will provide NYCH a letter of assurance specifying
that the Designated Location has all necessary permits and capacity to handle
the Biosolid and has agreed to take of the Biosolids transported to their
location.

                   (e) Occupancy of NYCH Premises. To perform the services
identified in Sections 3(a) and 3(b) above and subject to the terms of this
Agreement, and within thirty (30) days following execution of this Agreement,
NYCH shall grant to MERCO (i) the exclusive right to occupy approximately twelve
(12) thousand (12,000 sq. ft.) square feet of the NYCH premises for the storage
and repair of containers and the storage of container trailers and related
equipment, as shown on Exhibit "A", attached hereto and made a part hereof, (ii)
the right to occupy approximately one hundred (100) square feet of office
trailer space to be used by Merco as office space, together with the reasonable
shared use of common facilities, (iii) the non-exclusive right, from time to
time, to occupy for the storage of railcars up to approximately thirty six
hundred (3600 ft.) linear feet of rail track located at the Greenville Yard, as
shown on Exhibit "A", and (iv) access to power and telephone service (the access
costs for which shall be borne by NYCH and the service charges shall be borne
directly by Merco).

                  (f) Status of Greenville Yard as Inter-modal Site. NYCH
represents and warrants that the Greenville Yard is fully qualified to be used
as an inter-modal transportation site for the purposes of this Agreement and
that NYCH has obtained all permits, licenses, registrations or approvals from
its over-landlord, and all applicable local, state or federal regulatory
authorities, if any, required to perform the services to be provided to Merco
hereunder.

                  (g) NYCH's Right's to Use and Occupancy of the Greenville
Yard. NYCH represents and warrants that it is entitled to the use and occupancy
of the Greenville Yard pursuant to its Lease Agreement dated January 20, 1993
with CONRAIL that permits such use and occupancy by NYCH for the full term of
this Agreement and that the use of a portion of the premise for the purposes set
forth herein are in full force and effect and in compliance with such
agreements. NYCH shall provide to Merco a true copy of all agreements between
NYCH and CONRAIL and any other party relating to NYCH's right to use and occupy
such premises for providing rail transportation services. NYCH covenants and
agrees to notify Merco within five (5) days in the event that at any time NYCH
shall be in default under the terms of any agreement between it and CONRAIL, or
any other party, with respect to the agreements providing for NYCH's rights to
use and occupy the Greenville Yard or any portion thereof.

         4.       Base Rail Transportation Rates and Conditions of Transport.
                  ----------------------------------------------------------

                  (a) NYCH Base Rate. NYCH's base rail transportation rate for
the movement of the rRailcars from the Greenville Yard in Jersey City, New
Jersey to the SAI located in Oak Island, New Jersey, or alternative site
mutually acceptable to the Parties hereto, including top lift services of up to
seven (7) filled or eight (8) empty containers per r Railcar, shall be Six
Hundred Seventy Five and 00/100 ($675.00) Dollars per Railcar. (the "Base
Rate"). There is a minimum requirement of forty-five (45) Railcars per month or
five hundred forty (540) annually. The Base Rate shall be retroactively adjusted
on a prorata basis for any shortfall in the required volume of railcars and
Merco shall pay one-twelfth the additional amount due to NYCH each month over
the following twelve-month period. The Base Rate shall be adjusted to Six
Hundred Fifty and 00/100 ($650.00) Dollars per Railcar, retroactively to the
commencement date of this Agreement as, if and when NYCH shall obtain an
additional customer or customers that will require the use of the heavy
container lifter located within the Greenville Yard and Merco shall be entitled
to a credit in the amount of such adjustment against Merco's future payments to
NYCH pursuant to this Agreement.

                  (b) Primary Carrier. MERCO shall be responsible for
negotiating the rail rate from the SAI to the MERCO rail siding in Sierra
Blanca, Texas (or other Alternative Designated Site) with MERCO's designated
rail service provider and shall pay for such services directly to the
appropriate parties. Merco shall provide route and contract number information
to NYCH, which shall then prepare all proper way bill documentation relating to
the movement of the Merco Railcars.

                  (c) Other Services. The Base Rate does not include any
provision for any transportation, repair, or other services to be rendered by
any individual or entity other than NYCH. It shall be the sole responsibility of
MERCO to pay for any services other than the movement and dispatch of the
Railcars from the Greenville Yard to the SAI.

                  (d) Return to the Greenville Yard. The Base Rate includes the
return of the Railcar with empty Containers from SAI at Oak Island, New Jersey
to the Greenville Yard in Jersey City, New Jersey on NYCH.

         5. Invoicing. NYCH shall invoice MERCO on the fifteenth (15th) and
thirtieth (30th) day of every month. MERCO shall pay such invoice within
fourteen (14) days. NYCH irrevocably states that it will not under any
circumstances request or accept being classified by The City of New York as a
"subcontractor" pursuant to the NYC Contract.

         6.  Consumer  Price  Index.  The Base Rate shall be  adjusted  after
the end of the fifth year and tenth year by a percentage equal to the percentage
increase in the Consumer Price Index for Northern New Jersey.

         7. Car Supply, Condition and Cleaning. MERCO shall be responsible for
supplying all Equipment. The Equipment provided by MERCO must not display any
railroad marks or logos other than those of MERCO and/or those of MERCO's Master
Lessor or Lender. The Equipment is subject to the prior approval of the NYCH's
Mechanical Department, which approval shall not be unreasonably withheld or
delayed. No demurrage, mileage or car hire charges will be paid by NYCH in
connection with the operation of the Equipment. No loaded or empty car will be
accepted by NYCH unless the Container doors are properly closed and secured and
Container coverings are properly in position and secured.

         Railcars and Containers used in this service must be kept clean MERCO
recognizes that in order for the movement covered by this Agreement to be
successful, all necessary steps must be taken by MERCO to keep the Equipment
clean and minimize as far as possible, any other objectionable aspects of the
movement of the material covered by this Agreement.

         8. Equipment Standards. The Equipment used for transportation pursuant
to this Agreement will be supplied by MERCO per diem free. Equipment shall
comply with all applicable Federal, State and Local law rules, regulations,
permits and licenses, provided that compliance therewith shall in no way relieve
any party from any liabilities otherwise assumed under this Agreement. The laws,
rules and regulations referred to above, include AAR Interchange Rules and
regulations of the Federal Railroad Administration (FRA). Gross weight on rail
of loaded car and container shall not exceed the individual car's stenciled load
limit.

         9.       Inspection.

                  (a) Railcars. Must be made available for inspection and
acceptance by NYCH's Mechanical Department, prior to being placed in service.
When utilized for transport of containers of bulk non-hazardous waste, and
containers are equipped with end doors, Railcars, which are not equipped with
end-of-car cushioning, will not be accepted. Any private railcar, which has not
been accepted by NYCH for transportation of non-hazardous waste, may require the
successful completion of additional testing prior to receiving final approval.
Such testing shall not be unreasonably delayed.

         If the Railcar meets all applicable regulations and the provisions of
this Agreement, approval of the Railcar will not be unreasonably withheld.
Railcars for Container service must be equipped with positive locking devices or
curb restraints that meet AAR standards.

                  (b) Containers. All Containers supplied by MERCO must be made
available for inspection and acceptance by NYCH's Mechanical Departments, prior
to being placed in service. Containers must meet all design and construction
criteria outlined in AAR or FRA standards.

         Containers without an approved covering will not be accepted. Covering
may be a hard removable lid (hinged or latched) or heavy-duty non-permeable
tarping. The lids or tarping must have proper securements in order to eliminate
any possibility of the lids or tarping becoming dislodged from container during
transport.

         If Containers are equipped with end-doors, these doors must have proper
securement apparatus to insure that doors remain tightly closed during
transport. Containers must be watertight so that there is no leakage or seepage
from cContainers.

         10. Damage to MERCO Railcars and/or Containers. In the event of damage
to MERCO Railcars and/or Containers while in the care of NYCH, NYCH will, in a
timely manner notify MERCO of such damage. In the event that the damage to
MERCO's Railcar and/or Containers is the result of the negligence of NYCH, then
NYCH shall bear the financial responsibility of repairing such damage. In the
event that the damage to MERCO's Railcar and/or Containers is the result of the
negligence of MERCO, then MERCO shall bear the financial responsibility of
repairing such damage. In the event that the damage to MERCO's Railcar and/or
Containers is the result of the negligence of both NYCH and MERCO, then each
Party shall bear the proportionate share of the financial responsibility of
repairing such damage.

         11. Incorporated Provisions. Except as provided otherwise in this
Agreement or in a Schedule attached hereto, all classifications, tariffs, and
exempt circulars; government, AAR, and NYCH's rules, regulations, and
provisions; and the terms and provisions of the Uniform Straight Bill of Lading
shall apply to transportation hereunder, expect that stop-off or transit
privileges or proportional or intermediate application will not be permitted.
Diversion and reconsignment will be allowed only as a result of an inability to
unload at destination caused by a Force Majeure event. A diverted or reconsigned
shipment will be subject to applicable freight rates from the point of diversion
or reconsignment to the new destination, unless otherwise provided herein, and
payable by MERCO.

         12.      Claims.  No claims will be filed against NYCH for damages to
 the material or for delay in transit and delivery.

         13. Loading and Unloading. NYCH, while performing the top lift service
and transportation service as defined in Paragraph 3(a) and 3(b), shall be
responsible for the proper loading and unloading of Railcars, and will comply
with the loading rules of the AAR and applicable Federal and state laws and
regulations regarding the handling of solid waste. NYCH will not load a Railcar
in excess of its stenciled gross vehicle weight. NYCH shall rely upon the NYC
DEP container scale weigh tickets, provided by Merco or its trucking
subcontractor, in determining the weight of each loaded container.

         MERCO's responsibility shall include obtaining any necessary permits,
authoritizations or permissions required to affect any required weight reduction
and subsequent handling of the material unloaded, as well maintaining the
general order of the operation by providing adequate supervision to supervise
the operation. Unloading is further subject to the provisions of Section 15 (b)
hereof.

         14.      Delivery to Destinations.
                  ------------------------

                  (a) Identification of Alternative Destination. MERCO shall
designate both a primary and one or more alternate destinations for the
shipments. All the requirements in this Agreement, including, but not limited
to, Sections 17 and 18 herein, shall apply to each and every destination and
alternate destination.

                  (b) Non-Acceptance of Railcar for Unloading. Notwithstanding
the provisions of Section 20, if MERCO, or any party selected by MERCO, fails
for any reason to accept delivery at a designated delivery point, which point
shall not be located on NYCH's property, or to provided for removal of such car
from NYCH's property, within forty-eight (48) hours after the giving of notice
of constructive placement at destination, MERCO shall promptly direct NYCH how
to handle the Railcar. MERCO shall be solely responsible for selecting any
alternate destination or disposal site, and the parties agree that NYCH did not
select the Designated Location for any shipment tendered pursuant to this
Agreement. If MERCO fails to provide directions for handling the Railcar to an
Alternate Destination, within these forty-eight (48) hours, NYCH may return the
Railcar to origin. Moreover, MERCO shall provide a letter, which states that
said return movement has received any and all necessary permits and legal
approvals to transport and dispose of the material returned to original origin
by such return movement. The charges for any return movement will be rated on a
mileage pro-rate of the rate from the original origin to the original
destination.

         NYCH shall cease loading cars at origin if any judicial, administrative
or enforcement action is commenced, which would prohibit, or unduly impede, the
proposed operation or the transportation of the Equipment contemplated
hereunder. NYCH shall also cease loading cars at origin if for any reason
Railcars are not accepted for unloading within 48 hours of notice of
constructive placement.

         15.      Limit of Carrier's  Obligation.  NYCH shall have no obligation
with regard to  disposition of the Biosolids  tendered to it for  transportation
other than to deliver it to the Oak Island  Interchange,  or to an  operator  or
other person selected by MERCO at a Designated Location.

         16. Selection of Disposal Location. All sites selected by MERCO as a
Designated Location for the shipments made hereunder were selected by MERCO
alone and MERCO hereby certifies that NYCH has not participated in, nor taken
any active interest in the site selection for the storage or disposal of the
materials transported hereunder.

         17. Federal, State and local Laws and Permits. MERCO shall comply with
all applicable Federal, State and local laws, ordinances and regulation,
including, but not limited to, all laws pertaining to the transportation,
transfer and delivery, treatment, dumping, storage and disposal of the the
Biosolids.

         Prior to any transportation hereunder, MERCO shall obtain, and shall
maintain in effect during the term of this Agreement, any and all necessary
permits or licenses for the transportation, transfer, delivery, treatment,
dumping, storage and disposal of the Biosolids subject to this Agreement, and
shall furnish copies of all necessary permits and licenses to NYCH. Prior to any
transportation hereunder, MERCO shall obtain from the responsible state and
local regulatory authorities for each and every State and/or locality in which
the subject commodity is originated, transferred between modes, and disposed of,
written confirmation, or other documentation deemed sufficient by NYCH, to meet
this requirement, that all elements of the transportation and disposal of the
commodity, including, but not limited to, transportation, transfer, delivery,
treatment, dumping, storage and disposal, meet all legal requirements.

         MERCO shall be responsible for compliance with all new or changed laws
and regulations, which apply to it and affect the proposed operation. Any new or
changed law or regulation, and/or any legal action commenced, which prohibits or
seeks to prohibit, or unduly impedes, the proposed operation or the
transportation or other service necessary or convenient to the efficient
transportation and disposal of the Biosolids shall, at the election of NYCH, be
deemed a substantial change in circumstances or conditions within the meaning of
Section 27 hereof.

         MERCO shall immediately advise NYCH of any new or changed law or
regulation, or any change in its permits or licenses, which may affect the
operation. If MERCO fails to provide such proper notification, NYCH may
terminate this Agreement, and MERCO shall pay any and all damages, costs and
fees to which NYCH are subjected as a result of such new or changed laws or
regulations. MERCP shall insure that NYCH maintains all permits that they are
required to have for transportation of the material herein contemplated.

         18.      Biosolids  Analysis  Reports.  If requested by NYCH, MERCO
shall  provide  NYCH with a copy of any  analysis  report that is required to be
submitted to any federal or state  agency or to the  operator of any  Designated
Location.

         19.      Hazardous Material  Excluded.  This Agreement is only for the
transportation  of  non-hazardous   municipal   wastewater  residuals  known  as
Biosolids  or  other  non-hazardous   contaminated  soils  or  waste  materials.
Hazardous  materials or hazardous wastes shall not be tendered to transportation
hereunder.

         20. Description of Excluded Hazardous Substances. Hazardous Substances
or hazardous wastes prohibited from transportation hereunder include all
materials designated by the Department of Transportation as hazardous for
purposes of transportation as described in 49 CFR Part 172, and all materials
designated as hazardous pursuant to the Resource Conservation and Recovery Act
(RCRA) (42 U.S.C. 6901 et seq.) or the Comprehensive Environmental Response
Compensation and Liability Act (CERCLA) (42 U.S.C. 9601 et seq.) as each may be
amended from time to time, all regulations promulgated thereunder, including but
not limited to material designated as hazardous by the Environmental Protection
Agency in 40 CFT Part 261, and all waste defined or characterized as hazardous,
chemical, industrial or special waste by the principal agency of any state
having jurisdiction over the collection, transportation, transfer, treatment,
dumping, storage or disposal of waste transported under this Agreement.

         21.      Environmental Indemnification.

                  (a) NYCH covenants and agrees to indemnify, exonorate and hold
MERCO harmless from and against any and all damages, losses liabilities,
obligations, penalties, fines, claims, litigatio, demands, defenses, judgments,
suits, proceedings, costs, disbursements or expenses (including, without
limitation, attorney's and experts' reasonable fees and disbursements) of any
kind or of any nature whatsoever which may at any time be imposed upon, incurred
by or asserted or awarded against MERCO arising from or out of or relating to
any Hazardous Substance on, in, under or affecting all or any portion of the
Premises of the Greenville Yard or any adjacent property(ies).

                  (b) NYCH covenants and agrees to indemnify, exonorate and hold
The City of New York harmless from and against any and all damages, losses
liabilities, obligations, penalties, fines, claims, litigatio, demands,
defenses, judgments, suits, proceedings, costs, disbursements or expenses
(including, without limitation, attorney's and experts' reasonable fees and
disbursements) of any kind or of any nature whatsoever which may at any time be
imposed upon, incurred by or asserted or awarded against New York arising from
or out of or relating to any Hazardous Substance on, in, under or affecting all
or any portion of the Premises of the Greenville Yard or any adjacent
property(ies).

                  (c) MERCO covenants and agrees to indemnify, exonorate and
hold NYCH harmless from and against any and all damages, losses liabilities,
obligations, penalties, fines, claims, litigatio, demands, defenses, judgments,
suits, proceedings, costs, disbursements or expenses (including, without
limitation, attorney's and experts' reasonable fees and disbursements) of any
kind or of any nature whatsoever which may at any time be imposed upon, incurred
by or asserted or awarded against NYCH arising from or out of or relating to the
Biosolids on, in, under or affecting all or any portion of the Premises of the
Greenville Yard or any adjacent property(ies).

                  (d)      The matters covered by the foregoing indemnity shall
include, without limitation, any of the following:

                           (i)      The costs of removal or remediation of any
and all  Hazardous  Substances  from all or any  portion of the  Premises of the
Greenville Yard or any adjacent property(ies);

                           (ii)     The costs  required to take necessary
precautions  to protect  against the release of any Hazardous  Substance on, in,
under or affecting the Premises  into the air,  ground,  any body of water,  any
other public domain or any adjacent property(ies); to the extent required by any
Environmental Law or any governmental  authority,  including without limitation,
the costs and expenses of environmental  testing and assessments;  and (iii) the
costs  incurred,  in  connection  with all or any portion of the Premises of the
Greenville  Yard or any  adjacent  property(ies),  to  comply  with  any and all
Environmental Laws including fines,  penalties,  and administrative and overhead
costs charged by any governmental entity.

         22.      Indemnification.
                  ---------------

                  (a) Each Party (the "First Party") shall protect, indemnify,
and save harmless the other Party, its affiliated Companies and their officers,
directors, stockholders, employees, and agents (the "Second Party") from and
against all liabilities, losses, claims, damages, penalties, causes of action,
suits (including suits for personal injuries or death and including reasonable
attorneys' fees and expenses) caused by the negligence or willful and wanton
acts of the First Party arising out of or in connection with its obligations
under this Agreement, and shall pay any judgments of any nature rendered against
the Second Party for such injuries or damage due to or arising out of or in
connection with such negligence or willful and wanton acts of the First Party.
If any liability, loss, claim, damage, penalty, cause of action or suit arises
from the joint negligence or willful and wanton acts of NYCH and MERCO, each
Party shall be responsible for only that portion of the liability, loss, claim,
damage, penalty, cause of action or suit caused by its negligence or willful and
wanton acts.

                  (b) If the proximate cause of any claim, loss suit, liability
or expense is caused by the joint and concurring negligence of NYCH and MERCO
the liability shall be apportioned according to the respective negligence of the
parties. If the proximate cause of any claim, loss, damages, suit, liability or
expense cannot be determined as between the parties, the liability therefore
shall be borne fifty (50%) percent by NYCH and fifty (50%) by MERCO.

                  (c) MERCO shall save, indemnify, defend and hold harmless NYCH
and its directors, officers and employees from and against any and all claim,
loss, damages (including special and consequential damages caused by sudden and
accidental pollution), suit, liability, and expense arising from or in any way
connected with the transportation, transfer, delivery, treatment, unloading,
storage or disposal of Biosolids by MERCO, or any other act or omission of MERCO
to receive, transfer, deliver, treat, unload, store or dispose of the Biosolids,
including but not limited to, damages caused by sudden accidental pollution or
the contamination of Biosolids (including but not limited to leaking
containers), and any fines, penalties or suits resulting from alleged or actual
violation of federal, state or local environmental or other law, statute,
ordinance, code, or regulation.

                  (d) MERCO shall further save, indemnify, defend and hold
harmless NYCH and its directors, officers and employees from and against any and
all claim, loss, damages (including special and consequential damages caused by
sudden and accidental pollution), suit, liability, and expense, including
reasonable attorney's fees, arising from or in any way connected with MERCO
leaving Environmental Protection Improvement Company's Brill Yard located in
Newark, New Jersey. The rights of NYCH pursuant to the foregoing provision shall
be expressly conditioned upon the strict compliance by NYCH with the provisions
of Section 26 hereof.

                  (e) Merco shall be responsible for any fines, penalties or
suits imposed on NYCH resulting from any alleged or actual violation of federal,
state or local environmental or other law, statute, ordinance, code, or
regulation.

                  (f) Notwithstanding the other provisions of Section 19, if
Merco, knowingly or unknowingly, tenders or ships any hazardous material or
hazardous waste, as defined herein, Merco shall save, indemnify, defend and hold
harmless NYCH and their directors, officers and employees from and against any
and all claim, loss, damages (including special and consequential damages, or
damages caused by sudden accidental pollution), suit, liability and expense
arising out of the transportation, transfer, delivery, treatment, dumping,
storage or disposal of such hazardous materials, including but not limited to
any and all cleanup or decontamination costs, any environmental fines or
penalties, and any liability pursuant to Section 107(a) and (b) of CERCLA and
any amendments thereto, and for any similar liability pursuant to state or local
laws which may hold NYCH liable for any release or hazardous waste or materials,
regardless or NYCH's negligence.

                  (g) Merco shall further indemnify and hold NYCH harmless from
any and all cost, fine, penalty, claim or other expense incurred by NYCH
(including attorney's fees and other legal or investigative expenses) resulting
from any order or directive of any governmental body or agency or any court
prohibiting, regulating, restricting or requiring movement of a loaded car
subject to this Agreement, or prohibiting, regulating or restricting delivery of
the commodity at destination or at any alternate destination or at origin if the
commodity is returned to origin pursuant to Section 8 hereof. Such costs shall
include transportation costs (including applicable charges for any
transportation service performed by NYCH), dumping, storage, transfer, delivery,
treatment or other costs, both direct and indirect, incurred as a result of any
such order or directive.

         23.      Insurance.
                  ---------

                  (a) MERCO shall maintain general liability insurance with
coverage limits or not less that Two Million ($2,000,000) Dollars each
occurrence for bodily injury, Two Million ($2,000,000) Dollars each occurrence
for property damage liability, and a minimum of Five Million ($5,000,000)
Dollars umbrella coverage. MERCO shall also maintain automobile insurance with
coverage limits or not less than One Million ($1,000,000.00) Dollars. The
Insurance policies shall identify as an additional insured NYCH, New York
Regional Rail Corporation, C. H. Propriety Inc., JS Transportation and Conrail
Shared Assets.

                  (b)      NYCH shall maintain general liability insurance,
including  motor vehicle  coverage,  with coverage  limits or not less that Five
Million ($5,000,000) Dollars each occurrence for bodily injury, and Five Million
($5,000,000)  Dollars  each  occurrence  for  property  damage  liability.   The
Insurance  policies shall identify as an additional insured MERCO Joint Venture,
LLC., Eagle Land Management,  Inc., Fleet Capital Leasing,  Inc., and Bombardier
Capital Leasing, Inc.

         24. Force Majeure. Except as otherwise provided herein, if any party is
unable to perform its obligation under this Agreement due to or as a result of a
an Act of God, including flood, storm, earthquake, hurricane, tornado, or other
severe weather or climatic condition; act of public enemy, war blockage,
insurrection, or riot; fire wreck, derailment, washout or explosion; strike,
lockout or labor dispute; or embargo or governmental law, order or regulation
beyond the reasonable control of the party affected, this Agreement shall be
suspended between the affected origin and destination for the duration of such
disability. The party claiming Force Majeure shall promptly notify the party of
the commencement and termination of such disability.

         25. Notice. Except as otherwise provided in this Agreement or a
Schedule attached hereto, any notice given under this Agreement shall be in
writing and shall be delivered in person or by telefax and overnight delivery
service, or U.S. Certified Mail, Return Receipt Requested, addressed as follows,
or to such other address as the party may designate by notice:

To MERCO:                                            To NYCH:

     William E. Iorio                            Ronald W. Bridges, President
     Merco Joint Venture, LLC                    New York Cross Harbor Railroad
     1265 Drummers Lane, Suite 102               4302 First Avenue
     Wayne, PA 19087                             Brooklyn, NY 11232
     Fax:     610-293-0550                       Fax: 718-788-4462

With a Copy to:                             With a Copy to:

         John C. Iorio, Esq.                         Darryl S. Caplan, Esq.
         Eagle Land Management, Inc.                 Cureton Caplan
         Managing Member,                            950B Chester Avenue
         Merco Joint Venture, LLC.                   Delran NJ 08075
         1265 Drummers Lane, Suite 102               Fax: 856-824-1008
         Wayne, PA 19087 Fax: 610-293-0550

Any notice given under this Contract shall be effective, if sent by mail or
overnight delivery service, on the date of placing the same in the U.S. mails,
and, if by personal delivery, on the date of such delivery.

         26. Non-Disclosure. The Parties to this Agreement will protect the
confidentiality of the terms and conditions of this Agreement. Only where a
Party is required by a court of competent jurisdiction or Federal agency to
reveal any of the terms and provision of this Agreement, or where all parties
give their written consent to disclosure, will disclosure be allowed. The Party
making disclosure will notify the others in advance of such disclosure. Nothing
in this confidentiality provision will preclude the use of this Agreement by any
Party hereto to obtain financing, a lease license or acquisition of real
property, track rights, riparian rights, water rights or any other rights
reasonably necessary in the ordinary and regular business operations of the
Parties hereto. NYCH specifically consents to the disclosure to NYC DEP, EPA,
TNRCC any other regulatory authority, or MERCO's current or future lending
institutions.

         The Parties hereto recognize and agree that upon the approval of NYC
DEP of this Agreement and the consent of MERCO, which consent will not be
unreasonably withheld, NYCH has the right to issue a press release concerning
the existence of this Agreement and revealing the approximate anticipated value
of this Agreement to NYCH. The timing and text of such release shall be subject
to prior written consent of MERCO but shall not be later than the first date of
operation under this Agreement.

         27. Inequities. It is the intent of the Parties hereto that they will
mutually benefit from this Contract. If either party suffers a gross inequity
resulting from a substantial change in circumstances or conditions, except for
an inequity resulting from competitive transportation considerations, the
parties will negotiate in good faith to resolve or remove such inequity or to
terminate this Agreement.

         28.      Default and Termination of this Agreement.
                  -----------------------------------------

                  (a) Failure to Perform. Failure to perform as provided under
the terms and conditions of this Agreement, including the failure to make any
payment when due, shall constitute default hereunder.

                  (b)      Monetary  Default.  With  respect to a monetary
default  by MERCO if not cured  within  five (5) days  after  receiving  written
notice thereof, NYCH may terminate this Agreement.

                  (c) Non-Monetary Defaults. With respect to non-monetary
defaults, the defaulting party must in good faith undertake all reasonable steps
to cure within ten (10) days of receipt of written notice from the
non-defaulting party. If the default is incapable of being cured within a
reasonable period of time thereafter this Agreement may be terminated by the
non-defaulting party.

                  (d) Waiver of Default. Waiver of any default will not be
construed as waiver of either a subsequent or continuing default, unless the
issue has been submitted to arbitration as outlined in Section 31.

                  (e) Cancellation of NYC Contract. In the event that (i) the
NYC Contract is cancelled, or (ii) NYC DEP directs or authorizes the delivery of
the Biosolids to a location, which will not require rail transportation
services, MERCO shall have the option of terminating this Agreement. Upon the
exercise of this right of termination, MERCO shall have the right to either:

                           (i)      Reimburse NYCH railroad for the future
financing costs the Container Handler; or

                           (ii)     Either  purchase the  Container  Handler or
the  equipment-financing  contract for the  Container Handler.

         29.      Non-Waiver.       The failure to enforce any  provision of
this  Agreement or waiver of any default  hereunder  shall not be construed as a
waiver of the provision or of any subsequent or continuing default.

         30. Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance, remediation and enforcement (including,
without limitation, provisions concerning limitations of actions) shall be
governed by and construed in accordance with the domestic laws of the State of
New Jersey, notwithstanding any choice-of-laws doctrines of such jurisdiction or
any other jurisdiction which ordinarily would cause the substantive law of
another jurisdiction to apply, without the aid of any canon, custom or rule of
law requiring construction against the draftsman.

         31. Arbitration. Any controversy, claim or dispute related to or
arising out of this Agreement shall be settled by arbitration pursuant to the
current commercial arbitration rules of the American Arbitration Association
strictly in accordance with the terms of this Agreement and the substantive law
of the State of New Jersey. The arbitration shall be conducted at the
Association's New Jersey office, by one arbitrator, who shall be an attorney
knowledgeable in the transportation industry. Judgment upon the arbitrator's
award may be entered and enforced in any court of competent jurisdiction.
Neither party shall institute a proceeding hereunder unless ten days prior
thereto such party shall have furnished the other written notice by certified
mail of its intent to do so. Neither party shall be precluded hereby from
seeking provisional remedies in the courts of any jurisdiction including, but
not limited to, temporary restraining orders and preliminary injunctions to
protect its rights.

         32.      Assignment.  No party may assign or transfer this Agreement,
in whole or in part,  or any  interest  arising  hereunder,  without  the  other
parties' prior written consent.

         33.      Entire  Understanding  and  Modifications.  This Agreement
shall be binding upon the parties and their successors and assigns,  constitutes
the entire  understanding  of the  parties,  and may not be modified or amended,
except by mutual agreement of the parties in writing.

         34.      Survivability.  If any  provision  of this  Agreement  shall
be held to be  invalid,  illegal or  unenforceable,  the  validity  of all other
provisions herein shall continue in effect unless a gross inequity will result.

         35. Abandonment of Rail Line. NYCH may, pursuant to appropriate
regulatory authority, abandon, sell or otherwise dispose of a line of railroad
on which an origin or destination facility is located, or which provides the
only practical rail connection between an origin and destination facility. The
provisions of this Agreement shall be inapplicable on and after the date of such
abandonment, sale or other disposition with respect to transportation services
that used such line. NYCH shall provide Merco with at least sixty (60) days'
prior written notice of such action.

         36. Government Approvals. NYCC shall deliver to MERCO an opinion letter
from the Railroad to the effect that pursuant to the Interstate Commece
Committee Termination Act ("ICCTA"), NYCH's Greenville Yard is permitted to
operate without the need to obtain permits, approvals, or licenses from the
State of New Jersey or any other, county or local government, or their agencies,
authorities or subdivisions.

         37.      Acknowledgement  of NYC Terms.  NYCH  acknowledges  the terms
and conditions of the NYC Contract and specificially  acknowledges and agrees as
follows:

                  (a) This Agreement shall not be effective until approved in
wirting by NYC DEP, a copy of which approval shall be attached to this Agreement
as Exhibit "B". If this approval is not granted within thirty (30) days, this
Agreement will have no force and effect. The Parties may mutually agree in
writing to extend such time period for approval;

                  (b)      Nothing  contained in this  Agreement  shall impair
the rights of NYC DEP pursuant to the NYC Contract, or otherwise;

                  (c)      Nothing  conatined in this Agreement or the NYC
Contract shall create any contractual relationship between NYC DEP and NYCH;

                  (d) NYCH specificially agrees to be bound by the
confidentiality provision set forth in the NYC Contract, a copy of which is
attached hereto as Exhibit "B".

                  (e) In the event of termination of the NYC Contract as a
result of default by MERCO, or otherwise, NYC DEP or its performance bonding
company may, at its sole option, elect to perform MERCO's obligations under the
NYC Contract in which event NYCH covenants and agrees to provide services
contemplated herein to NYC DEP or its performance bonding company on the terms
and conditions set forth herein.

         IN WITNESS WEREOF, the parties hereto have caused this Agreement to be
executed by their authorized officials on the date herein above first written.


NEW YORK CROSS HARBOR                       MERCO JOINT VENTURE, LLC
RAILROAD COMPANY


BY:                                                BY:
    ------------------------                       ----------------------------
    Ronald Bridges, President                      William E. Iorio, Chairman