<PAGE>

                                                                    Exhibit 99.1

                            AGREEMENT FOR AUTO POUND
                         MANAGEMENT AND TOWING SERVICES


     This agreement is made as of this 31st day of July, 1997 (the "Effective
Date"), by and between the City of Chicago, a municipal corporation and a home
rule unit of government under Section 6(a), Article VII of the 1970 Constitution
of the State of Illinois, acting by and through its Department of Streets &
Sanitation (the "City"), and Environmental Auto Removal, Inc. (the
"Contractor").


                                    RECITALS

     WHEREAS, the City initiated a pilot program for the privatization of auto
pound management and towing services; and

     WHEREAS, the City has determined that the pilot has been a success and
desires to expand the program; and

     WHEREAS, the City issued an RFP for Auto Pound Management and Related
Towing Services ("RFP"); and

     WHEREAS, after evaluation of the responses to the RFP, the City has
selected the Contractor to provide auto pound management and towing services;

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the parties agree as follows:


     SECTION I.  INCORPORATION OF RECITALS
                 -------------------------

     THE ABOVE RECITALS ARE EXPRESSLY INCORPORATED BY REFERENCE AND MADE A PART
OF THIS AGREEMENT AS THOUGH FULLY SET FORTH HEREIN.


     SECTION 2.  DEFINITIONS
                 -----------

     1.  "Abandoned Tows" shall mean those abandoned Vehicles identified by the
City to be removed and impounded as such in the Facilities by the Contractor.

     2.  "Agreement" shall mean this contract and any exhibits or attachments
hereto.

     3.  "Code" shall mean the Municipal Code of the City (1990), as amended.
<PAGE>

     4.  "Commissioner" shall mean the chief executive officer of the Department
of Streets & Sanitation of the City or her duly authorized representative.

     5.  "Comptroller" shall mean the chief executive officer of the Department
of Finance of the City or her duly authorized representative.

     6.  "Corporation Counsel" shall mean the chief executive officer of the
Department of Law of the City or her duly authorized representative.

     7.  "Emergency Tow" shall mean those Vehicles designated by the City to be
removed from their locations by the Contractor during an operational emergency
in which some or all of the normal Services may be suspended.

     8.  "Facilities" shall mean the auto pounds depicted in Exhibit 1
incorporated herein by this reference.

     9.  "Immediate Tows" shall mean those Vehicles identified during normal
operations by the City as immediate tows to be removed from their locations
within one (1) hour and impounded in the Facilities or in the City's Police Auto
Pounds within ninety (90) minutes by the Contractor.

     10.  "Inventory Report" shall mean a report prepared by the Contractor for
each Vehicle detailing its condition in a form acceptable to the Commissioner.

     11.  "Purchasing Agent" shall mean the Chief Executive of the Department of
Purchases, Contracts and Supplies of the City or his duly authorized
representative.

     12.  "Relocation Tows" shall mean those Vehicles designated by the City
during an emergency to be moved immediately to a nearby location.

     13.  "Snow Tows" shall mean those Vehicles parked in snow routes to be
removed during the posted dates and times and impounded in the Facilities by the
Contractor when directed by the City or where otherwise directed by the
Commissioner.

     14.  "Subcontractors" shall mean any person or entity with whom the
Contractor contracts to provide any part of the Services, including without
limitation, towing Vehicles and the disposal and sale of Vehicles.

     15.  "Tow Report" shall mean the report prepared by the City for each Tow.

     16.  "Tows" shall mean collectively:  (i) Abandoned Tows; (ii) Immediate
Tows; (iii) Snow Tows; (iv) Relocation Tows; and (v) Emergency Tows.

     17.  "Vehicles" shall mean automobiles, trucks, motorcycles, bikes, buses,
taxicabs, trailers, boats and such other vehicles as designated by the
Commissioner.

                                       2
<PAGE>

     SECTION 3.  DUTIES AND OBLIGATIONS OF THE PARTIES
                 -------------------------------------

     3.01.  SCOPE OF WORK
            -------------

     The Contractor shall be responsible for providing auto pound management and
towing services and reporting on such activities (collectively, "Services"), in
accordance with the terms and conditions of this Agreement as more fully
described in Exhibit 2 incorporated herein by this reference.

     3.02.  CONTRACTOR'S SERVICE REQUIREMENTS
            ---------------------------------

A.   Customer Service

     The City greatly values prompt and courteous public service.  Therefore,
the Contractor must provide prompt service so the public does not have to wait
an unreasonable amount of time either on the telephone or in person.  In all
contacts with the public, the Contractor must act in accordance with the highest
standards of its business and in accordance with customer service practices as
approved by the Commission.  The Contractor must promptly return Vehicles when
presented with sufficient proof of payment and ownership pursuant to applicable
law and any guidelines provided by the City.  The Contractor must act on all
claims by the public in good faith in a reasonable and expeditious manner.  The
Contractor shall advise the Commissioner in writing of any such complaints and
their resolution in such format and at such times as directed by the
Commissioner.

B.   Performance Standards

     1.   Abandoned Tows - The Contractor shall remove the Vehicle taking it
          --------------
          directly to the Facilities, except to the extent required to perform
          multiple Tows with a tow truck.  The Contractor shall impound the
          Vehicle in the Facilities within twenty-four (24) hours of receiving
          written notice from the City, provided that the time allowed shall
          increase to forty-eight (48) hours for any Abandoned Tow the City
          requests on day in which the City requests more than seven hundred
          (700) Abandoned Tows.  The Vehicle shall be impounded within thirty
          (30) minutes of being removed from its location unless impracticable
          due to multiple Tows being performed by the same tow truck, the
          distance from the Facilities and traffic and weather conditions;
          provided that in no event shall a Vehicle be impounded more than two
          (2) hours after being removed from its location.

     2.   Immediate Tows - The Contractor shall remove the Vehicle within one
          --------------
          (1) hour of receiving written notice from the City.  The Contractor
          shall impound it in the Facilities within ninety (90) minutes of
          receiving notice, except in the event of a snow emergency declared by
          the Commissioner during which the Contractor shall have three (3)
          hours.

     3.   Relocation and Snow Tows - The Contractor shall move the Vehicle
          ------------------------
          immediately as requested by the City.

                                       3
<PAGE>

     4.     Emergency Tows - The Contractor shall suspend such other operations
            --------------
            as may be requested by the Commissioner make equipment available to
            the City.

     3.03.  OPERATION AND USE OF THE FACILITIES
            -----------------------------------

     The Contractor must perform its Services and operate the Facilities
exercising that degree of care required of a fiduciary.  The City shall have the
right to enter the Facilities at all times.  The Contractor shall maintain an
office at each Facility with sufficient space for a City cashier, City employee
checking Code compliance of vehicles and the Contractor's personnel.  The office
shall have all necessary telephone, facsimile and electrical lines to provide
customer service.  The Contractor shall supply necessary toilet facilities at
the Facilities; provided that the Contractor shall not be required to install
any sewer lines in furnishing such Facilities.  In addition, the Contractor
shall supply signage for the facilities subject to the approval of the
Commissioner.  The Contractor shall be responsible for securing the Facilities,
all Vehicles located therein and for the safety and security of all towed
Vehicles, including without limitation limiting access to authorized persons.
The Contractor shall operate and maintain the Facilities in accordance with
applicable zoning requirements, local, state, and federal laws and any leases
the City has for land on which Facilities are located.  In addition, the
Contractor shall be responsible for all losses or damages to Vehicles and
personal property therein and the Facilities without regard to the cause of such
losses and damages, including but not limited to those caused by third parties
or acts of god.  In no event shall the immediately preceding sentence be
interpreted to create any third party beneficiary rights in any third party.

     3.04.  POLICE CHECKS
            -------------

     The Contractor and its officers and directors, and all other employees of
the Contractor and its Subcontractor identified by the Commissioner must submit
to a Chicago Police Department background check, including but not limited to a
fingerprint check.  The Contractor shall supply to the Commissioner a list,
including the names and drivers' license numbers of drivers and other personnel
performing Services, and provide the Commissioner with updates within seven (7)
days of the time personnel commence performing Services.  Notwithstanding
anything contained in this paragraph, the Contractor remains responsible for
determining whether its subcontractors and personnel are qualified and for their
actions or omissions.

     3.05.  TOW SIGNS
            ---------

     When performing Tows under to this Agreement, the Contractor's vehicles
shall display "Police Tow" signs as provided by the Commissioner.  The
Contractor's vehicles may not display these signs at any other time.

                                       4
<PAGE>

     3.06.  CITY'S RESPONSIBILITIES
            -----------------------

     The City shall be responsible for identifying Vehicles to be towed and
those to be disposed.  In addition, the City or its designee shall collect fees
and issue receipts therefor.  Notwithstanding anything to the contrary in this
Agreement, the City shall be responsible for providing containers and disposing
of any debris in the Vehicles towed to the Facilities which debris is not a
component part of such Vehicle; provided that the Contractor shall be
responsible for disposing of all tires and batteries.

     3.07.  DISPOSAL OF VEHICLES
            --------------------

     For all Vehicles towed to the Facilities, after the City gives the
Contractor notice that the statutory limit for claiming a Vehicle by a third
party has expired, the City shall transfer all of its rights to such Vehicles to
the Contractor.  The Contractor must remove Vehicles to be crushed from the
Facilities within twenty-four (24) hours of receiving notice from the City and
all other Vehicles shall be removed from the Facilities within twenty-four (24)
hours after the following auction, but in no event shall a vehicle remain at the
Facilities more than one week after the City's notice to the Contractor.  The
Contractor shall dispose of Vehicles in accordance with applicable law,
including without limitation transferring the Vehicles to parties licensed as
required by the Illinois Vehicle Code.

     3.08.  IMPROVEMENTS TO AND MAINTENANCE AND REPAIR OF THE FACILITIES
            ------------------------------------------------------------

     The Contractor will be required to repair and maintain the Facilities in a
condition satisfactory to the Commissioner.  Repair and maintenance activities
include but are not limited to repair and maintenance of fences, signs, security
lighting systems, and roadways, including the grading of and snow removal for
such roadways and elimination of conditions hazardous to the public, but shall
exclude (except as provided in Exhibit 9) constructing new structures or roads
which rights are retained by the City.  The Contractor must perform all needed
repairs on the Facilities, regardless of the reasons therefore, including
without limitation those caused by actions of third parties, operations of the
Contractor, or acts of god in a manner acceptable to the Commissioner.  The
Contractor shall not be entitled to additional compensation for any such
maintenance and repairs regardless of whether they increase the value of the
Facilities (i.e., new fence to replace damaged fence).  In performing such
repairs and maintenance, the Contractor must comply with the provisions set
forth in Exhibit 5 incorporated herein by this reference.  The Contractor shall
be required to complete the improvements to the Facilities in accordance with
Exhibit 9 to this Agreement, which is hereby incorporated in this Agreement by
this reference, and in a manner satisfactory to the Commissioner.

     3.09.  ADDITIONAL SERVICES
            -------------------

     From time to time the Commissioner may request the Contractor, in writing,
to provide Additional Services which are within the general scope of this
Agreement but which are not within the Services set forth in Exhibit 2.  Any
                                                             ---------
Additional Services requested by the Commissioner shall be subject to approval
by the Contractor and the Purchasing Agent and shall

                                       5
<PAGE>

require a written modification to this Agreement pursuant to Section 8.03 before
the City shall become obligated to pay for such Additional Services in
accordance with Section 4 and Exhibit 3 of this Agreement.

     SECTION 4.  TERM AND COMPENSATION
                 ---------------------

     4.01.  TERM OF AGREEMENT
            -----------------

     The term of this Agreement shall be thirty-six (36) months commencing on
the Effective Date, unless terminated or extended as otherwise provided in this
Agreement.

     4.02.  EXTENSION OPTION
            ----------------

     The City shall have the option to extend this Agreement for two (2)
additional periods of up to one (1) year from the expiration date of this
Agreement under the same terms and conditions by providing written notice from
the Purchasing Agent to the Contractor, subject to the approval of the
Contractor.

     4.03.  COMPENSATION
            ------------

     The Contractor shall be paid in accordance with Exhibit 3 incorporated
herein by this reference which shall constitute its entire compensation
hereunder.  The Contractor shall compensate the City for Vehicles not redeemed
by the public and transferred to the Contractor as provided for in Exhibit 3.

     4.04.  METHOD OF PAYMENTS
            ------------------

     The City shall pay the Contractor on the basis of monthly invoices in
accordance with Exhibit 3 with supporting documentation attached, payable from
Fund Number 300-81-2070-0140 and any other funds so designated by the City
subject to the availability of funds therein.  The invoices shall be prepared by
the Contractor in such detail as the City may require and shall be provided to
the Commissioner within ten (10) days of the end of the month.  The City shall
pay the Contractor within sixty (60) days after receipt of invoices completed in
accordance with the terms hereof.

     The Contractor shall pay the City on the basis of monthly invoices issued
by the City within ten (10) days of the end of the month.  The Contractor shall
pay the City within sixty (60) days of the date of the City's invoice.
Compensation due to the City shall not be subject to set-off for compensation
due to the Contractor.

     4.05.  NON-APPROPRIATION
            -----------------

     In the event that no funds or insufficient funds are appropriated and
budgeted in any fiscal period of the City for payments to be made under this
Agreement, then the City shall notify the Contractor of such occurrence and this
Agreement shall terminate on the earlier of the last day of the fiscal period
for which sufficient appropriation was made or whenever the funds

                                       6
<PAGE>

appropriated for payment under this Agreement are exhausted. No payments shall
be made or due to the Contractor and under this Agreement beyond those amounts
appropriated and budgeted by the City to fund payments hereunder.

     SECTION 5.  DISPUTES
                 --------

     In the event of any dispute between the City and the Contractor relating to
a question of fact arising under the terms of this Agreement, including without
limitation questions concerning the compensation herein provided, which is not
otherwise resolved by the parties shall be decided after a hearing by the
Purchasing Agent, who shall reduce his decision to writing and mail or otherwise
furnish a copy thereof to the Contractor.  The decision of the Purchasing Agent
shall be final and binding.  The Contractor shall not withhold performance
required under this Agreement during the resolution period, unless the
Purchasing Agent notifies the Contractor in writing to suspend services pending
resolution of the dispute.

     SECTION 6.  SPECIAL CONDITIONS
                 ------------------

     6.01.  REPRESENTATIONS AND WARRANTIES
            ------------------------------

     In connection with the execution of this Agreement, the Contractor
represents and warrants:

     (a) That it is financially solvent, that its employees, agents or
Subcontractors are competent to perform as required under this Agreement, and
that the Contractor is legally authorized to execute and perform this Agreement
under the terms and conditions stated herein; and

     (b) That the Contractor has carefully examined and analyzed the provisions
and requirements of this Agreement, that it has satisfied itself as to the
nature of all things needed for the performance of this Agreement and all other
matters that in any way affect this Agreement or its performance, and that the
time available to it for such examination, analysis, inspection and
investigation was adequate; and

     (c) That the Agreement is feasible of performance in accordance with all of
its provisions and requirements and that the Contractor can and shall perform
the Services, or cause to be performed the Services, in strict accordance with
the provisions and requirements of this Agreement; and

     (d) That no payment, gratuity or offer of employment was, or will be, made
in connection with this Agreement as prohibited under the Code, Chapter 2-156;
and

     (e) That the Contractor, its officers, agents and employees are, and will
remain, in compliance with the requirements of the City's Ethics Code, Chapter
2-156 of the Code, including Section 2-156-100(b) which provides, in pertinent
part, that:  "No former [City] official or employees shall, for a period of one
year after the termination of the official's or employee's term of office or
employment, assist or represent any person in any business

                                       7
<PAGE>

transaction involving the City or any of its agencies if the official or
employee participated personally and substantially in the subject matter of the
transaction during his term of office employment . . ."; and

     (f) That, except only for those representational statements or promises
expressly contained in this Agreement, no representation, statement or promise,
oral or in writing, of any kind whatsoever by the City, its officials, agents,
employees, has induced the Contractor to enter into this Agreement or has been
relied upon by the Contractor, including any with reference to:  (a) the
meaning, correctness, suitability, or completeness of any provisions or
requirements of this Agreement; (b) the compensation stated herein; or (c) any
other matters, whether similar to or different from those referred to in (a) and
(b) immediately above, affecting or having any connection with this Agreement,
the negotiation thereof, any discussions thereof, the performance thereof or
those employed therein or connected or concerned therein; and

     (g) That the Contractor shall make all reasonable and good faith efforts to
conduct any business operations in Northern Ireland in accordance with the
MacBride Principles for Northern Ireland as defined in Illinois Public Act 85-
1390.

     6.02.  NO JOINT VENTURE
            ----------------

     The Contractor is an independent contractor in the performance of this
Agreement and under no circumstances is the Contractor to be considered in a
joint venture or partnership with the City.

     6.03.  CONFIDENTIALITY
            ---------------

     A.  All documents, data, studies, reports, research, information, manuals,
analyses, studies or other data provided to the Contractor by the City under
this Agreement ("City Confidential Information") shall be treated as
confidential in accordance with this provision as follows:

     (i) The Contractor shall only use the City Confidential Information to
assist the Contractor in connection with its performance hereunder; and

     (ii) The Contractor agrees to protect the confidentiality of the City
Confidential Information.  The Contractor shall restrict access to the City
Confidential Information to those members of the Contractor's personnel and
Subcontractors engaged in a use permitted hereby.  The Contractor shall further
require that members of its staff and Subcontractors be bound by the provisions
contained herein; and

     (iii)  The City Confidential Information may not be copied or reproduced
without the Commissioner's prior written consent and such copies or
reproductions shall not alter its confidential status; and

     (iv) All City Confidential Information made available to the Contractor,
including copies and reproductions thereof, shall be returned to the City upon
request; and

                                       8
<PAGE>

     (v) Nothing in this Agreement shall prohibit or limit Contractor's use of
information (including, but not limited to, ideas, concepts, know-how,
techniques, and methodologies):  (i) previously known to it, (ii) independently
developed by it, or (iii) legally acquired by it from a third party that is not,
to the Contractor's knowledge, under an obligation to the City not to disclose
such information.

     B.  The Contractor, its staff, or Subcontractors, shall not disseminate any
information regarding the nature of this Agreement without prior written consent
from the Commissioner.  In the event that the Contractor is presented with a
request for documents by any administrative agency or with a subpoena duces
                                                                      -----
tecum regarding any records, data, or documents that may be in Contractor's
-----
possession because of the Agreement, the Contractor shall immediately give
notice to the Corporation Counsel with the understanding that the City shall
have the opportunity to contest such process by any means available to it before
such records or documents are submitted to a court or other third parties.

     6.04.  RECORDS, DOCUMENTS AND AUDITS
            -----------------------------

     A.  The Contractor shall maintain complete books and records regarding its
activities under this Agreement.  The Contractor shall immediately make such
books and records available for inspection by the Commissioner upon reasonable
notification and during reasonable business hours at a location within the City
of Chicago.  In addition, the City reserves the right to conduct an audit of the
Contractor's activities under this Agreement.  The Contractor shall be
responsible for the costs of the audit if it is determined that the Contractor
has underpaid by at least two percent (2%) of the amount invoiced by the City
during any year or been overpaid by at least two percent (2%) during any year.
The Contractor shall maintain its records in a safe, secure and reasonably
accessible location for no less than five (5) years after termination of this
Agreement.

     B.  All documents, data, studies, reports, information and instruments of
service supplied to the Contractor or prepared by the City under this Agreement
are the property of the City.  During the performance hereunder the Contractor
shall be responsible for any loss or damage to these documents while in the
Contractor's possession and any such document lost or damaged shall be restored
at the expense of the Contractor.  The Contractor shall deliver or cause to be
delivered all documents, including references, photocopies, reproductions, data,
studies, maps and computations, prepared by or for the City under the terms of
this Agreement (except the Contractor's work papers), to the City within thirty
(30) calendar days, upon reasonable demand in writing therefor or upon
termination of this Agreement.

     6.05.  INSPECTOR GENERAL
            -----------------

     The Contractor shall cooperate with the Inspector General in any
investigation or hearing undertaken pursuant to Chapter 2-56 of the Municipal
Code.  The Contractor will abide by all provisions of Chapter 2-56 of the
Municipal Code.

                                       9
<PAGE>

     6.06.  PERSONNEL
            ---------

     A.  Experienced Professionals
         -------------------------

     The Contractor shall assign and maintain a team of experienced,
professional personnel from its staff for performing its responsibilities
hereunder, including but not limited to the following key personnel:

          Jerry Corcoran
          Edward Corcoran

     The Commissioner reserves the right to direct the Contractor, in writing,
to remove any personnel from the performance of Services upon reason therefor
given in writing, and to review and approve the replacement.  Any dispute under
this Section 6.06 related to a question of fact shall be resolved pursuant to
Section 5.  Any cost of such removal shall be borne by the Contractor.

     If any key personnel should be unable to continue in the performance of
assigned duties, the Contractor shall promptly notify the Commissioner.  The
Contractor shall furnish to the Commissioner the name of a person to substitute
for the person unable to continue, together with any information the
Commissioner may require to judge the experience and competence of the
substitute person.  Upon approval by the Commissioner, such substitute person
shall begin performing Services.

     B.  Salaries
         --------

     Salaries of all employees of the Contractor performing services under this
Agreement shall be paid unconditionally and not less often than once a month
without deduction or rebate on any account, except only for such payroll
deductions as are mandatory by law or permitted by the applicable regulations
issued by the United States Secretary of Labor pursuant to the "Anti-Kickback
Act" of June 13, 1934 (48 Stat. 948; 62 Stat. 740; 63 Stat. 108; Title 18
U.S.C., Section 874, and Title 40 U.S.C., Section 276c).  The Contractor shall
comply with all applicable "Anti-Kickback" regulations and shall insert
appropriate provisions in all subcontracts covering work under this Agreement to
insure compliance of all subcontractors with such regulations, and shall be
responsible to the submission of affidavits required thereunder, except as the
United States Secretary of Labor may specifically provide for variations of or
exemptions from the requirements thereof.

     If, in the performance of this Agreement, there is any undisputed
                                                            ----------
underpayment of salaries by the Contractor, the Comptroller may withhold out of
payments due to Contractor an amount sufficient to pay to employees underpaid
the difference between the salaries required hereby to be paid and the salaries
actually paid such employees for the total number of hours worked; however, the
Comptroller shall not withhold salaries in the event of a dispute.  The amounts
withheld may be disbursed by the Comptroller for and on account of the
Contractor to the respective employees to whom they are due.

                                       10
<PAGE>

     6.07.  NONDISCRIMINATION
            -----------------

     A.   Federal Requirements
          --------------------

          It shall be an unlawful employment practice for the Contractor:  (1)
          to fail or refuse to hire or to discharge any individual, or otherwise
          to discriminate against any individual with respect to his
          compensation, or the terms, conditions, or privileges of his
          employment, because of such individual's race, color, religion, sex,
          age, handicap or national origin; or (2) to limit, segregate, classify
          his employees or applicants for employment in any way which would
          deprive or tend to deprive any individual of employment opportunities
          or otherwise adversely affect his status as an employee, because of
          such individual's race, color, religion, sex, age, handicap or
          national origin.

          The Contractor shall comply, as applicable, with the Civil Rights Act
          of 1964, 42 U.S.C. 2000 et seq. (1988), as amended.  Attention is
                                  ------
          called to:  Exec. Order No. 11,246, 30 Fed. Reg. 12,319 (1965),
          reprinted in 42 U.S.C. 2000(e) note, as amended by Exec. Order No.
          11,375, 32 Fed. Reg. 14,303 (1967) and by Exec. Order No. 12,086, 43
          Fed. Reg. 46,501 (1978); Age Discrimination Act, 42 U.S.C. 6101-06
          (1988); Rehabilitation Act of 1973, 29 U.S.C. 793-94 (1988); Americans
          with Disabilities Act, P.L. 101-596; and 41 C.F.R. Part 60 et seq.
                                                                     ------
          (1990).

     B.   State Requirements
          ------------------

          The Contractor shall comply, as applicable, with the Illinois Human
          Rights Act, 775 ILCS 5/1-101 et seq., as amended and any rules and
                                       ------
          regulations promulgated in accordance therewith, including, but not
          limited to the Equal Employment Opportunity Clause, 5 Ill. Admin. Code
          (S) 750 Appendix A.  Furthermore, the Contractor shall comply with the
          discrimination in Public Contracts Act, 775 ILCS 10.01 et seq., as
                                                                 ------
          amended.

     C.   City Requirements
          -----------------

          The Contractor shall comply, as applicable, with the Chicago Human
          Rights Ordinance, section 2-160-010 et seq. of the Code.  Further, the
                                              ------
          Contractor shall furnish or shall cause each of its Subcontractor(s)
          to furnish such reports and information as requested by the Chicago
          Commission on Human Relations.

     D.   Subcontractors
          --------------

          The Contractor agrees that all of the above provisions, (A), (B), and
          (C), will be incorporated in all agreements entered into with any
          suppliers of materials, furnishers of services, Subcontractors, and
          labor organizations which may provide any materials, labor, or
          services in connection with this Agreement.

                                       11
<PAGE>

     6.08.  MINORITY AND WOMEN BUSINESS ENTERPRISES
            ---------------------------------------

     In the performance of this Agreement, including the procurement and lease
of materials or equipment, the Contractor shall abide by the minority and
women's business enterprise commitment requirements of the Code, section 2-92-
420 et seq., except to the extent waived by the Purchasing Agent.  The
    ------
Contractor's completed Schedules C-1 and D-1 evidencing its compliance hereunder
along with the Special Conditions regarding Minority Business Enterprise
Commitment and Women Business Enterprise Commitment are attached hereto Exhibit
4 and incorporated herein by this reference.  The Contractor shall utilize
minority and women's business enterprises at the greater of the amounts listed
in the foregoing Schedules C-1 and D-1 or 16.9% for MBEs and 4.5% for WBEs of
the amounts due from the City to the Contractor pursuant to this Agreement.

     6.09.  SUBCONTRACTS AND ASSIGNMENTS
            ----------------------------

     The Contractor shall not assign, subcontract, or otherwise delegate all or
any part of its rights or obligations hereunder, without the approval of the
Purchasing Agent.  Any other attempted assignment or transfer shall be void and
of no effect.

     The City hereby expressly approves the Contractor's use of the
Subcontractors named in the Schedules C-1 and D-1 included herein in Exhibit 4;
however, such approval shall be expressly conditioned upon performance by the
Subcontractors in accordance with the terms and conditions of this Agreement.
Any approval for the use of Subcontractors shall under no circumstances
alleviate the Contractor's obligations under this Agreement, including without
limitation the requirement for background checks as provided in Section 3.04.

     6.10.  COMPLIANCE WITH ENVIRONMENTAL LAWS
            ----------------------------------

     The Contractor and its Subcontractors shall comply with all laws relating
to environmental matters including without limitation, those relating to fines,
orders, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the release or threatened
release of Hazardous Materials, special wastes or other contaminants into the
environment and to the generation, use, storage, transportation, or illegal
disposal of solid wastes, Hazardous Materials, special wastes or other
contaminants including, without limitation, the Comprehensive Environment
Response and Compensation and Liability Act (42 U.S.C. (S) 9601 et seq.), the
                                                                ------
Hazardous Material Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource
                                                          -------
Conservation and Recovery Act of 1976 (42 U.S.C. (S) 6901 et seq.), the Clean
                                                          -------
Water Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et
                              -------                                         --
seq.), the Toxic Substances Control Act of 1976 (15 U.S.C. (S) 2601 et seq.),
----                                                                -------
the Safe Drinking Water Act (42 U.S.C. (S) 300f), the Occupational Safety and
Health Act of 1970 (29 U.S.C. (S) 651 et seq.), the Emergency Planning and
                                      -------
Community Right-to-Know Act (42 U.S.C. (S) 1101 et seq.), the Illinois
                                                -------
Environmental Protection Act (Ill. Rev. Stat. Ch. (415 ILCS 5/1 through 5/56.6),
and the Code of each as amended or supplemented, and any analogous future or
present local, state or Federal statutes, rules and regulations promulgated
thereunder or pursuant thereto, and any other present

                                       12
<PAGE>

or future law, ordinance, rule, regulation, permit or permit condition, order or
directive regulating, relating to or imposing liability or standards of conduct
concerning any Hazardous Materials or by Federal government, any state or any
political subdivision thereof, or any agency, court or body of the Federal
government, any state or any political subdivision thereof, exercising
executive, legislative, judicial, regulatory or administrative functions
(collectively, "Environmental Laws").

     If any of the above laws require the Contractor or Subcontractors to file
any notice or report of a release or threatened release of Hazardous Materials
or special wastes on, under or about the Facilities, the Contractor shall
provide a copy of such report or notice to the City.  In the event of a release
or threatened release of Hazardous Materials, specials wastes or other
contaminants into the environment or in the event any claim, demand, action or
notice is made against the Contractor or Subcontractors regarding the
Contractor's or Subcontractor's failure or alleged failure to comply with any of
the above Environmental Laws, the Contractor shall immediately notify the City
in writing and shall provide the City with copies of any written claims,
demands, notices or actions so made.

     If the Contractor or Subcontractors fails to comply with any of the above
referenced Environmental Laws, the City may terminate this Agreement in
accordance with Article 7.

     For purposes of this provision, the following definitions shall apply:

     "Hazardous Materials" means friable asbestos or asbestos-containing
materials, polychlorinated biphenyls (PCB's), cholorofluorocargon (CFC)
refrigerator gas, petroleum or crude oil or any fraction thereof, natural gas,
source material, special nuclear materials; and by- product materials regulated
under the Atomic Energy Act (42 U.S.C. (S) 2011 et seq.), pesticides under the
                                                -------
Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C. (S) 136 et seq.),
                                                                    -------
and any hazardous waste, toxic or dangerous substance or related material
including any material defined or treated as "hazardous substance," "hazardous
waste," "toxic substance," or contaminant (or comparable term) under any of the
Environmental Laws.

     "Special Wastes" means those substances as defined in 415 ILCS 5/3.45, and
as further referred to in Section 809.13 of 35 Illinois Code, Subtitle G, ch.1.

     SECTION 7.  TERMINATION AND REMEDIES
                 ------------------------

     7.01.  EVENTS OF DEFAULT DEFINED
            -------------------------

     The following shall constitute an Event of Default:

     A.   Any material misrepresentation made by the Contractor to the City.

     B.   A failure by the Contractor to make any payment in full when due
          hereunder and failure to cure such default within five (5) days after
          receipt of written notice of such non-payment from the Commissioner to
          the Contractor, and in the event that the Contractor fails to make any
          such payment within five (5) days after such

                                       13
<PAGE>

          written notice more than three (3) times in any Calendar year, then
          such shall constitute an Event of Default without the necessity of the
          Commissioner giving notice thereof to the Contractor or any
          opportunity to cure the same;

     C.   A failure by the Contractor to promptly and fully keep, fulfill,
          comply with, observe, or perform any promise, covenant, term,
          condition or other non-monetary obligation or duty of the Contractor
          contained in this Agreement (other than those obligations or matters
          set forth in this section or other provisions of this Agreement, which
          set forth different cure periods or which provide for no right to
          cure, and which different cure periods or absence thereof shall take
          precedence) and the failure to cure such default within thirty (30)
          days after delivery of written notice of such failure;

     D.   A failure by the Contractor to promptly and fully perform any
          obligation or duty, or to comply with any restriction, of the
          Contractor contained in this Agreement concerning assignment or
          transfer, whether directly or indirectly, of the Contractor's rights
          or interests herein;

     E.   A failure by the Contractor to provide or maintain the insurance
          coverage or letter of credit required pursuant to this Agreement
          (including any material non-compliance with said requirements) and the
          failure to cure such default within two (2) business days following
          oral or written notice of such failure from the Commissioner;

     F.   The Contractor's failure to continuously provide Services during the
          term hereof without the right to cure;

     G.   The Contractor's failure to comply with the MBE/WBE requirements of
          this Agreement and the failure to cure such default;

     H.   The material default of the Contractor under any other agreement it
          may presently have or may enter into with the City during the term of
          this Agreement and failure to cure said default within any applicable
          cure period;

     I.   The failure to meet the performance standards set forth in Section 3.2
          hereof on at least three (3) days during a calendar year without right
          to cure;

     J.   The failure by the Contractor to comply with applicable Environmental
          Laws and the Illinois Vehicle Code; and

     K.   A violation of law which results in a guilty plea, a plea of nolo
          contendere, or conviction of a criminal offense, by the Contractor, or
          any of its directors, officers, partners or key management employees
          directly or indirectly relating to this Agreement, and which may
          threaten, in the judgment of Commissioner, the performance of this
          Agreement in accordance with its terms, without a right to cure.

                                       14
<PAGE>

     7.02.  REMEDIES
            --------

     The occurrence of any Event of Default which the Contractor has failed to
cure within thirty (30) calendar days after receipt of written notice, unless a
shorter or no cure period is specified in the preceding Section, shall entitle
the City to terminate invoke any or all of the following remedies:

     A.     The right to terminate this Agreement, in whole or in part. In the
            event that the entire Agreement is terminated the Contractor shall
            deliver to the City all finished or unfinished documents, data,
            studies and reports prepared by the Contractor under this Agreement
            (except the Contractor's workpapers).

     B.     The right to an injunction or any other appropriate equitable
            remedy.

     C.     The right to money damages.

     D.     The right to deem all or any of the entities comprising the
            Contractor non-responsive in future contracts to be awarded by the
            City.

     7.03.  NON-EXCLUSIVITY
            ---------------

     No remedy under the terms of this Agreement is intended to be exclusive of
any other remedy, but each and every such remedy shall be cumulative and shall
be in addition to any other remedies, at law, in equity or by statute; no delay
or omission to exercise any right or power accruing upon any Event of Default
shall impair any such right or power nor shall it be construed to be a waiver of
any Event of Default or acquiescence therein, and every such right and power may
be exercised from time to time and as often as may be deemed expedient.

     7.04.  EARLY TERMINATION
            -----------------

     The City may terminate this Agreement, or any portion thereof, at any time
by a providing written notice to the Contractor.  The Contractor shall be
compensated for any services performed prior to the termination on the basis set
forth in Exhibit 3.  If the Agreement is terminated by the City, the Contractor
shall immediately deliver to the City all finished or unfinished documents,
data, studies, and reports prepared by the Contractor under this Agreement
(except the Contractor's workpapers).

     7.05.  RIGHT TO OFFSET
            ---------------

     A.     In connection with Performance under this Agreement.

     Any credits due to or overpayments made by the City may be offset by use of
any payment due to the Contractor.  If such amount offset is insufficient, the
Contractor shall be liable for and remit to the City the balance in accordance
with Section 4.04 hereof.  This right to offset is in addition to and not a
limitation of any other remedies available to the City.

                                       15
<PAGE>

     B.    In connection with Section 2-92-380 of the Code.

     (1)   In accordance with Section 2-92-380 of the Code and in addition to
any other rights and remedies (including any right of set-off) available to the
City under the contract or permitted at law or in equity, the City shall be
entitled to set-off a portion of the contract price or compensation due under
the contract in an amount equal to the amount of fines and penalties for each
outstanding parking violation complaint and/or the amount of any debt owed by
the Contractor to the City.  For purposes of this Section, "outstanding parking
violation complaint" means a parking ticket, notice of parking violation or
parking violation complaint on which no payment has been made or appearance
filed in the Circuit Court of Cook County within the time specified on the
complaint.  "Debt" means a specified sum of money owed to the City for which the
period granted for payment has expired.

     (2)   Notwithstanding the provisions of subsection (1), above, no such
debt(s) or outstanding parking violation complaint(s) shall be offset from the
contract price or compensation due under the contract if one or more of the
following conditions are met:

     (a)   the Contractor has entered into an agreement with the Department of
           Revenue, or other appropriate City department, for the payment of all
           outstanding parking violation complaints and/or debts owed to the
           City and the Contractor is in compliance with the agreement; and

     (b)   the Contractor is contesting liability for the amount of the
           outstanding parking violation complaint and/or debt in a pending
           administrative or judicial proceeding; and

     (c)   the Contractor has filed a petition in bankruptcy and the debts owed
           the City are dischargeable in bankruptcy.

     7.06. DELAYS AND EXTENSIONS
           ---------------------

     The Contractor agrees that no charges or claims for damages or additional
compensation shall be made by it for any delays or hindrances from any cause
whatsoever during its performance under this Agreement.  Delays beyond the
Contractor's control shall be compensated for by extensions of time.

     7.07. NON-LIABILITY OF INDIVIDUALS
           ----------------------------

     No official, employee, officer or agent of the City shall be charged
personally by the Contractor with any liability or expense of defense or be held
liable under any term or provision of the Agreement, or because of the execution
or attempted execution of this Agreement, or because of any breach hereof.

                                       16
<PAGE>

     7.08.  INSURANCE
            ---------

     The Contractor shall at all times maintain insurance as provided for in
Exhibit 6 of this Agreement incorporated herein by this reference.

     7.09.  INDEMNIFICATION
            ---------------

     The Contractor agrees to protect, defend, indemnify and hold the City, its
officers, officials, representatives, and employees free and harmless from
against any and all claims, damages, demands, injuries or death, costs and
expenses (collectively, "Loss"), in consequence of granting the Agreement or
arising out of or being in any way connected with the performance of the
Agreement except to the extent that the City's own negligence was the proximate
cause contributing to the Loss including but not limited to the unauthorized use
of tow signs; provided, however, that this limitation pertaining to the City's
negligence shall not operate to limit or deprive the City of the protection
afforded by any of the insurance policies required under the Agreement, and
provided further, notwithstanding anything to the contrary herein stated, should
any portion of this indemnity clause be found to be inoperative or unenforceable
pursuant to the Construction Contract Indemnification for Negligence Act, 740
ILCS 35/0.01 et seq. (Indemnification Act), the Contractor agrees that this
             ------
indemnification provision shall remain enforceable to the maximum extent
permitted by applicable law.  The Contractor hereby indemnifies and holds the
City, its officers, officials, representatives, and employees harmless from all
loss, penalties, or the payments of any and all sums of money on account of any
violations by the Contractor of any Federal, state or local law, statute,
ordinance, regulation or executive order in its performance hereunder.  To the
extent permissible by law, the Contractor hereby waives any limits to the
amounts of its obligations to indemnify, defend or contribute to any sums due
pursuant to any Loss, including defend or contribute to any sums of money on
account of any violation by the Contractor of any Federal, state or local law,
statute, ordinance, regulation or executive order in its performance hereunder.
To the extent permissible by law, the Contractor hereby waives any limits to the
amount of its obligation to indemnify, defend or contribute to any sums due
pursuant to any Loss, including, but not necessarily limited to, any claim by
any employee of the Contractor that may be subject to the Workers' Compensation
Act, 820 ILCS 305/1 et seq.; provided, however that such waiver shall not be
                    ------
construed to require the Contractor to indemnify the City for its own negligence
in violation of the Indemnification Act.

     7.10.  LETTER OF CREDIT
            ----------------

     The Contractor shall provide the City, on or before the Effective Date, an
irrevocable letter of credit in the form attached as Exhibit 7 incorporated
herein by this reference or other form acceptable to the City in the amount of
Six Hundred Thousand Dollars ($600,000) for the term of this Agreement.  The
Contractor must maintain the Letter of Credit for the term of this Agreement.
If the Contractor breaches this Agreement or fails to furnish a replacement
letter of credit at least thirty (30) days prior to the expiration of the Letter
of Credit, the City may draw under the letter of credit in part or in whole and
use, apply or retain all or any part of the proceeds thereof.  Any letter of
credit delivered by the Contractor shall be issued by companies

                                       17
<PAGE>

or financial institutions authorized to do business in Illinois, which have an
office in Chicago where the City may draw on the letter of credit.

     SECTION 8.  GENERAL CONDITIONS
                 ------------------

     8.01.  WHOLE AGREEMENT
            ---------------

     This Agreement shall constitute the entire agreement between the parties,
and no warranties, inducements, considerations, promises, or other inferences
shall be implied or impressed upon this Agreement that are not expressly
addressed herein.

     8.02.  COUNTERPARTS
            ------------

     This Agreement, including the exhibits hereof, is comprised of several
identical counterparts, each to be fully executed by the parties and each to be
deemed an original having identical legal effect.

     8.03.  MODIFICATIONS AND AMENDMENTS
            ----------------------------

     No changes including without limitation those of scope, amendments,
modifications, cancellation or discharge of this Agreement, or any part hereof,
shall be valid unless in writing and signed by the parties hereto, or their
respective assigns.

     8.04.  WAIVER
            ------

     No term or provision hereof shall be waived and no breach excused unless
such waiver or consent shall be in writing and signed by the party claimed to
have waived or consented.  Any approvals granted by the City shall not operate
as a waiver of any rights hereunder.

     8.05.  CONFLICT OF INTEREST
            --------------------

     A.  No member of the governing body of the City, or other unit of
government, and no other officer, employee, or agent of the City, or other unit
of government, who exercises any decision-making authority with regard to this
Agreement or any governmental functions or responsibilities in relation to the
Agreement shall have any personal financial interest, direct or indirect, in
this Agreement.

     B.  The Contractor covenants that its officers and employees presently have
no interest and shall not acquire any interest, direct or indirect, which would
conflict in any manner or degree with performance hereunder.  The Contractor
further covenants that in the performance of this Agreement no person having any
such interest shall be employed.

                                       18
<PAGE>

     8.06.  COMPLIANCE WITH ALL LAWS
            ------------------------

     The Contractor shall comply with all applicable Federal, state, and local
laws, ordinances, and executive orders, including but not limited to the
Illinois Vehicle Code.  In accordance herewith, the Contractor shall execute a
Contractor's Affidavit, an executed copy of which shall be attached hereto and
incorporated herein by this reference as Exhibit 8.  Moreover, the Contractor
shall provide all Services and perform all operations at the Facilities in
accordance with the accessibility laws applicable to the City, including without
limitation the Americans with Disabilities Act, 42 U.S.C. (S) 12101 et seq.
                                                                    ------

     8.07.  GOVERNING LAW AND JURISDICTION
            ------------------------------

     This agreement shall be governed as to performance and interpretation in
accordance with the laws of the State of Illinois.  The Contractor hereby
irrevocably submits to the original jurisdiction of those courts located within
Cook County, Illinois, with regard to any controversy arising out of or relating
to this Agreement.  The Contractor agrees that service of process on the
Contractor may be made by registered or certified mail to the address set forth
in Article 9 or to any office maintained by the Contractor, or by personal
delivery on an officer, director or legal representative of the Contractor.

     8.08.  INTERPRETATION
            --------------

     Any headings of this Agreement are for convenience or reference only and do
not define or limit the provisions thereof.  Words of any gender shall be deemed
and construed to include correlative words of the other genders.  Words
importing the singular number shall include the plural number and vice versa,
unless the context shall otherwise indicate.  All references to any exhibit or
document shall be deemed to include all supplements and/or amendments to any
such exhibits or documents entered into in accordance with the terms hereof and
thereof.  All references to any person or entity shall be deemed to include any
person or entity succeeding to the rights, duties, and obligations of such
person or entity in accordance with the terms of this Agreement.  In the event
of any conflict between this Agreement and any exhibits hereto, the terms of the
Agreement shall be deemed to control.

     8.09.  SEVERABILITY
            ------------

     If any provision of this Agreement shall be held or deemed to be or shall
in fact be illegal, invalid, inoperative or unenforceable on its face or as
applied in any particular case in any jurisdiction or jurisdictions or in all
cases because it conflicts with any other provision or provisions hereof or any
constitution, statute, municipal ordinance, rule of law or public policy, or for
any other reasons, such circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained
illegal, invalid, inoperative or unenforceable to any extent whatever.  The
invalidity of any one or more phrases, sentences, clauses or sections contained
in this Agreement shall not affect the remaining portions of this Agreement or
any part there.

                                       19
<PAGE>

     SECTION 9.  NOTICES
                 -------

     Any notice required or permitted to be given hereunder shall be in writing,
and the mailing thereof by certified mail, return receipt requested, to the
respective addresses of the parties set forth below, or to such other place as
any party hereto may, by notice in writing, designate for itself, shall
constitute service of notice hereunder two (2) business days after the mailing
thereof.


     If to the City:       Department of Streets & Sanitation
                           Room 700, City Hall
                           121 North LaSalle Street
                           Chicago, Illinois 60602
                           Attn:  Commissioner

     With a copy to:       Department of Purchases,
                           Contracts and Supplies
                           Room 403, City Hall
                           121 N. LaSalle Street
                           Chicago, Illinois 60602
                           Attn:  Purchasing Agent

     If to Contractor:     Environmental Auto Removal, Inc.
                           16325 Crawford Avenue
                           Markham, Illinois 60424
                           Attn:  Jerry Corcoran


     Any such notice may also be served by personal delivery thereof, which
delivery shall constitute service of notice hereunder on the date of such
delivery.

                                       20
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first written hereinabove.


CITY OF CHICAGO


By:  /s/ Richard M. Daley
     --------------------------------
     Mayor


By:
     --------------------------------
     Acting Purchasing Agent


By:  /s/ Barbara A. Lumpkin
     --------------------------------
     Comptroller

Recommended by:


/s/ Eileen J. Carey
-------------------------------------
Commissioner of Department
of Streets and Sanitation

Approved as to form and legality:


/s/ David Walters
-------------------------------------
Assistant Corporation Counsel

                                     ENVIRONMENTAL AUTO REMOVAL, INC.


                                     By:  /s/ Gerald Corcoran
                                          ---------------------


                                     Its: President
                                          ---------------------
ATTEST


By:  /s/ Edward V. Corcoran
     --------------------------------

Its: Secretary
     --------------------------------
                                       21