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                                                                   EXHIBIT 10.24




                                PARENT AGREEMENT

                    (RELATING TO AMERICAN REF-FUEL COMPANY)



                          DATED AS OF JANUARY 25, 1991










<PAGE>   2

                                Parent AGREEMENT

                    (RELATING TO AMERICAN REF-FUEL COMPANY)



                               TABLE OF CONTENTS

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                                                        ARTICLE I
                                                   MARKETING AGREEMENT

Section 1.1  Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2

                                                        ARTICLE II
                                                         TRANSFER

Section 2.1  Restrictions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      2
Section 2.2  Additional Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3
Section 2.3  Transfers to Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      3

                                                       ARTICLE III
                                                  OPTIONS TO BUY OR SELL

Section 3.1  Buy-Sell Provision  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      4
Section 3.2  Option to Purchase in the Event of  Default . . . . . . . . . . . . . . . . . . . . . . . . .      7
Section 3.3  Closing of Purchases Under Sections 3.1 and 3.2 . . . . . . . . . . . . . . . . . . . . . . .     10
Section 3.4  Project Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
Section 3.5  No Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11
Section 3.6  Non-Competition After Sale  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     11

                                                        ARTICLE IV
                                               RESTRICTIONS ON SUBSIDIARIES

Section 4.1  Single Purpose Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
Section 4.2  Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
Section 4.3  Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     12
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                                                        ARTICLE V
                                          PERFORMANCE OF PARTNERSHIP OBLIGATIONS


Section 5.1  Parents' Performance Under Partnership Agreement  . . . . . . . . . . . . . . . . . . . . . .     13

                                                        ARTICLE VI
                                                     CERTAIN SERVICES

Section 6.1  BFI Services to Partnership Projects  . . . . . . . . . . . . . . . . . . . . . . . . . . . .     13
Section 6.2  Preferre Vendor Status  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     13

                                                       ARTICLE VII
                                        POSSIBLE FORMATION OF LIMITED PARTNERSHIPS

Section 7.1  Good Faith Negotiations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     15

                                                       ARTICLE VIII
                                                     CONFIDENTIALITY

Section 8.1  Agreement to Disclose  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
Section 8.2  Agreement to Keep Confidential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15
Section 8.3  Termination of Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    15

                                                        ARTICLE IX
                                                         DISPUTES

Section 9.1  Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
Section 9.2  Arbitration  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
Section 9.3  Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18
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                                                        ARTICLE X
                                                      MISCELLANEOUS
              
Section 10.1   Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      18
Section 10.2   Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      19
Section 10.3   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      19
Section 10.4   Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.5   Binding Effect; Amendments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.6   Multiple Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.7   Gender and Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.8   Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.9   Headings, etc.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
Section 10.10  Obligations of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      20
</TABLE>





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<PAGE>   5
                                PARENT AGREEMENT

                    (Relating to American Ref-Fuel Company)

This Agreement, dated as of January 25, 1991, is between Air Products and
Chemicals, Inc., a Delaware corporation ("APCI") having its principal place of
business at 7201 Hamilton Boulevard, Allentown, Pennsylvania 18195-1501, and
Browning-Ferris Industries, Inc., a Delaware corporation ("BFI") having its
principal place of business at 757 N.  Eldridge, Houston, Texas 77079.

A wholly-owned indirect subsidiary of APCI, Air Products Ref-Fuel, Inc.
("APRF"), is a partner in American REF-FUEL Company, a Delaware general
partnership (the "Partnership") existing under an Amended and Restated
Partnership Agreement, dated as of the date hereof (the "Partnership
Agreement").

Another wholly-owned indirect subsidiary of APCI, Air Products Ref-Fuel
Holdings Corp., a Delaware corporation (the "AP Holding Company"), wholly owns,
directly or indirectly, APRF and various Project Subsidiaries of APCI. Certain
inactive Project Subsidiaries are wholly owned, directly or indirectly, by
APCI, but are not owned by the AP Holding Company.

A wholly-owned indirect subsidiary of BFI, BFI Ref-Fuel, Inc. ("BFIES"), is
also a partner in the Partnership.

Another wholly-owned direct or indirect subsidiary of BFI (the "BFI Holding
Company"), wholly owns, directly or indirectly, BFIES and all Project
Subsidiaries of BFI.

APCI and BFI will each, directly or through their respective wholly-owned
subsidiaries, be the owner of a 50% interest in the Partnership and each of the
Project Companies.





<PAGE>   6

APCI and BFI are sometimes referred to herein as the "Parents" of their
respective subsidiaries.

Capitalized terms used herein and not specifically defined shall have the
meanings ascribed to them in the Partnership Agreement.

Therefore, APCI and BFI agree as follows:

                                   ARTICLE I
                              Marketing Agreement

SECTION 1.1. Termination. The Waste-Energy Resource Projects Marketing Cost
Sharing Agreement dated as of October l, 1983 (the "Marketing Agreement") is
terminated as of January 25, 1991 pursuant to clause (b) of paragraph 16 of
that Agreement and shall have no further force or effect, except the
cost-sharing and indemnity provisions (including, without limitation, clauses
(a), (c) and (d) of paragraph 7 and clauses (a), (b), (c), (d) and (e) of
paragraph 15) shall continue to apply in respect of any Projects or
opportunities for Projects that were undertaken prior to such termination and
that were terminated prior to such date. Activities in respect of other
Projects or opportunities for Projects shall after January 25, 1991 be governed
by the Partnership Agreement and any applicable Project Agreements, and except
that the Marketing Agreement shall continue to apply to the extent that its
provisions are made specifically applicable to any now existing Project Company
by reason of the provisions of that Project Company's Partnership Agreement.

                                   ARTICLE II
                                    Transfer

SECTION 2.1. Restrictions. Neither Parent will cause or permit any shares of
capital stock of its Holding Company, or of its Project Subsidiaries, or any of
its Project Subsidiaries' interests in any Project Company, to be issued, sold,
assigned, transferred, pledged or otherwise encumbered or disposed of, directly
or indirectly, by sale, merger or otherwise, except that a Parent may sell or
permit the sale of, all, but not less than all, of the shares of capital stock
of its Holding Company (the "Shares") if (1) it has received the prior written
consent of the other Parent, which consent shall not be withheld unreasonably,
and (2) the additional conditions set forth in Section 2.2 are satisfied, and
except that interests in the Partnership or in Project Subsidiaries may be sold
if and to the extent permitted pursuant to Article III or VII of this Agreement
or pursuant to applicable provisions, if any, of a partnership agreement (or
shareholders' agreement) for a Project Company.




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SECTION 2.2. Additional Conditions. A Parent shall not sell or permit the sale
of the Shares unless the following conditions are met (or are waived in writing
by the other Parent):

(a)      There is not pending a "Buy-Sell" procedure initiated pursuant to
         Section 3.1(b)(1);

(b)      The transaction does not result in a violation of any applicable law,
         rule or regulation, including but not limited to antitrust and
         securities laws;

(c)      Neither the buyer nor any of its Affiliates is a competitor of the
         other Parent or its Affiliates in the waste- to-energy business or any
         other phase of the waste handling and disposal business;

(d)      The senior unsecured debt, if any, of the buyer is rated by Standard &
         Poor's or Moody's as investment grade, or, if the buyer has no senior
         unsecured debt rated by Standard & Poor's or Moody's, the financial
         condition of the buyer is reasonably satisfactory to the other Parent;

(e)      The transaction will not, with or without the giving of notice or the
         lapse of time, or both, conflict with, or result in any breach of, or
         in any right to accelerate or the creation of any lien, charge or
         encumbrance pursuant to the Project Agreements or any agreement or
         other instrument or obligation to which the Partnership, any Project
         Company, the transferor, or any Affiliate of the transferor is a
         party, or by which any of them or any of their properties or assets
         may be bound or affected, or any judgment, order, decree or law
         applicable to any of them;

(f)      Any outstanding borrowings by the transferor's subsidiaries from the
         Partnership or any Project Company shall be repaid in full; and

(g)      Each transferee shall agree to be bound by the provisions of this
         Agreement, and this Agreement shall be appropriately amended to take
         account of the transfer in a manner reasonably satisfactory to the
         transferee and all entities that will continue to be parties to this
         Agreement.

SECTION 2.3. Transfers to Affiliates. Notwithstanding the provisions of Section
2.1, a Parent may at any time transfer or permit the transfer of all, but not
less than all, of the Shares of its Holding Company, or the outstanding capital
stock of any of its Project Subsidiaries or of its subsidiary that is the
Partner in the Partnership, to any corporation that is wholly owned, directly
or indirectly, by that Parent, provided that the conditions set forth in
paragraphs (b), (e) and, if and to the extent that the other Parent may so
reasonably request, (g) of Section 2.2 are met, and provided that each of its
Project Subsidiaries and such Partner must at all times be wholly owned,
directly or indirectly, by its Holding Company (except as otherwise permitted
by Section 4.1 or 7.1).





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                                  ARTICLE III
                             Options to Buy or Sell

SECTION 3.1. Buy-Sell Provision.

(a)      Each Parent shall be entitled to initiate the "Buy-Sell" procedure
         described below at any time, subject to the conditions set forth
         below.

(b)      (1)     The Parent desiring to initiate the "Buy-Sell" procedure (the
                 "initiating party") shall give to the other Parent (the
                 "receiving party") at least 30 days' prior written notice that
                 it intends to submit the offers described below. During such
                 30-day period the initiating party shall enter in good faith
                 into such discussions as the receiving party shall reasonably
                 request regarding the circumstances that gave rise to the
                 initiating party's decision to initiate the "Buy-Sell"
                 procedure. Also, if APCI is the initiating party, during such
                 30-day period BFI shall furnish to APCI the Statement
                 described in Section 3.1(b)(2)(b). Within 45 days after the
                 expiration of such 30-day period, the initiating party may, at
                 its option, submit to the receiving party two offers in
                 writing, the first of which shall be an offer to purchase the
                 Shares of the receiving party's Holding Company and the second
                 shall be an offer to sell to the receiving party the Shares of
                 the initiating party's Holding Company. If BFI is the
                 initiating party, its submission of the two offers shall be
                 accompanied by the Statement described in Section
                 3.1(b)(2)(b). If APCI is the initiating party, its submission
                 of the two offers shall include its irrevocable election
                 whether or not to accept the arrangements contemplated by such
                 Statement (which must be accepted in their entirety or not at
                 all). Such offers shall be irrevocable except as expressly
                 provided in Section 3.1(e) or 3.3. If the initiating party
                 elects not to submit such offers within such 45-day period,
                 its 30-day notice shall be deemed withdrawn and it may not
                 again initiate the "Buy-Sell" procedure unless it has given a
                 new 30-day notice in accordance with the first sentence of
                 this Section 3.1(b)(1).

         (2)     (a)      Following the submission of the offers, BFI shall, if
                          so requested by APCI, continue to work in good faith
                          with APCI in an effort to develop terms and
                          conditions that would apply if APCI were to buy BFI's
                          Shares pursuant to the offers and under which BFI
                          would supply solid waste and provide ash and by-pass
                          disposal capacity and services and transportation
                          services to Projects that, at the date the offers are
                          submitted, are Development Projects. If terms and
                          conditions for those activities have, prior to the
                          submission of the Offers, been offered by BFI to the
                          Partnership or the relevant Project Company, then the
                          terms and conditions to be offered by BFI shall be
                          consistent with those previously offered, subject to
                          appropriate changes to reflect changed circumstances.

                 (b)      In accordance with Section 3.1(b)(1), BFI shall
                          furnish APCI a Statement that shall apply if APCI
                          were to buy BFI's Shares pursuant to the offers and
                          that shall set forth the terms and conditions on
                          which BFI 




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<PAGE>   9

                          would make disposal capacity available to
                          Projects that are initiated by APCI or its Affiliates
                          after the date the offers are submitted, but
                          excluding Development Projects that are covered by
                          Section 3.1(b)(2)(a). Such disposal capacity would be
                          made available, at the posted market rate at the site
                          in question, on an unreserved basis to such Projects
                          owned, operated or controlled by APCI and its
                          Affiliates, in solid waste landfills which are owned,
                          operated or controlled by BFI or its Affiliates. The
                          Statement shall also set forth the price, terms and
                          conditions of a Site Option Agreement under which BFI
                          would grant APCI an exclusive option for a minimum
                          term of three years to purchase, lease or sublease
                          lands that are owned or leased by BFI or its
                          Affiliates and are located on or adjacent to solid
                          waste landfill facilities owned, operated or
                          controlled by BFI or its Affiliates. Except as
                          specified above in this Section 3.1(b)(2)(b), the
                          terms and conditions to be set forth in the Statement
                          shall be determined solely by BFI. If APCI purchases
                          BFI's Shares, and has elected to accept the
                          arrangements contemplated by the Statement, then, at
                          the closing of such purchase, the appropriate parties
                          shall enter into definitive agreements regarding
                          those arrangements.  (Preliminary drafts of such
                          agreements have been furnished by BFI to APCI for
                          informational purposes, but shall not in any way be
                          determinative of the eventual terms and conditions of
                          the definitive agreements.) APCI's rights under such
                          agreements shall be assignable to and enforceable by
                          successors to APCI's interests in the Partnership and
                          the Project Companies.

         (3)     A party may not submit the offers described in Section
                 3.1(b)(1) if prior to such submission there has occurred and
                 at the time of such submission there is continuing any event
                 or condition which with or without the lapse of time or giving
                 of notice, or both, would constitute a Terminating Act of such
                 party, its Holding Company or a subsidiary that is a partner
                 (or shareholder) in the Partnership or in a Project Company
                 pursuant to Section 3.2(a)(1).

         (4)     Upon due submission of the offers, neither party shall
                 thereafter have the right to submit other offers pursuant to
                 this Section 3.1(b) (unless and until the closing under the
                 offers previously duly submitted fails to occur on the closing
                 date therefor as defined in Section 3.3, by reason of any
                 failure on the part of only one of the parties to perform its
                 obligations under this Section and Section 3.3, in which event
                 the party not so failing may, if otherwise so entitled, submit
                 other offers). During the pendency of the offers, the Parents
                 shall cause the Partnership and the Project Companies to be
                 operated in the ordinary course in accordance with prior
                 practice and in the best interest of the Partnership and the
                 Project Companies and with due regard to the fiduciary
                 obligations among partners.





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(c)      The price to be contained in the offer to purchase shall be an amount
         of cash as the initiating party shall determine, subject to adjustment
         as provided in Section 3.1(f), plus the undertaking described below.
         The price to be contained in the offer to sell shall be the same
         amount of cash as is contained in the offer to purchase, subject to
         adjustment as provided in Section 3.1(f), plus the undertaking
         described below. The undertaking shall be as follows: APCI or BFI,
         whichever shall be the buyer (or shall be the Parent of the buyer),
         shall undertake at the closing of the purchase, subject to the
         provisions of Section 3.5, (i) to assume and indemnify the other
         Parent and its Affiliates against all obligations under the Company
         Support Agreements, (ii) to indemnify the other Parent and its
         Affiliates against, but not to assume, all other Project Liabilities,
         and (iii) to use its reasonable business efforts to have the other
         Parent and its Affiliates released from all Project Liabilities.

(d)      After submission of the irrevocable offers, the receiving party on
         behalf of itself or an Affiliate must accept one such offer and may
         not reject both offers (the acceptance of one such offer to constitute
         a rejection of the other and to be made in writing within 180 days
         following the submission of the offers) and if the receiving party has
         not accepted in writing one of the offers in such 180-day period, the
         receiving party shall be deemed to have accepted on the last day of
         such period the offer to purchase its Shares for the specified price.
         If APCI is the receiving party and elects to purchase BFI's Shares,
         its notice of acceptance shall be accompanied by a statement of its
         irrevocable election whether it will accept the arrangements
         contemplated by the Statement (which must be accepted in their
         entirety or not at all).

(e)      The foregoing provisions of this Section to the contrary
         notwithstanding, if, at any time after the offers described in Section
         3.1(b)(1) have been submitted, either party becomes unable to meet the
         conditions set forth in Section 3.1(b)(3) for submitting the offers
         described in Section 3.1(b)(1), then the non-defaulting party shall
         have the right, upon notice to the defaulting party prior to the
         closing referred to in Section 3.3, unilaterally to rescind and
         invalidate such offers, and any acceptance thereof made or deemed to
         have been made, whereupon such offers and acceptance shall be deemed
         to have no further force or effect.

(f)      The purchase price to be paid pursuant to Section 3.1 is intended to
         be the amount that would be paid if the Holding Company that is being
         purchased (the "Sold Company") had no assets or liabilities other than
         its direct or indirect interests in the Partnership and the Project
         Companies and if the value of the Sold Company were equal to one-half
         of the value of the Partnership and the Project Companies. Although
         the Sold Company would have been restricted in its activities as
         provided in Section 4.1, the Parents recognize that the Sold Company
         may have acquired additional assets or liabilities, primarily because
         of its cash management policy and because of its income and franchise
         tax obligations. Accordingly, at the closing of a purchase under
         Section 3.1 APCI or BFI, whichever is the Parent of the Sold Company,
         shall indemnify the purchaser and its Affiliates, pursuant to an
         indemnity reasonably satisfactory to the purchaser, against all
         liabilities of the Sold Company and its Affiliates, other than Project
         Liabilities (as defined in Section 3.4) that the purchaser or its
         Parent is 




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<PAGE>   11

         assuming or indemnifying against pursuant to the undertaking
         described in Section 3.1(c), and at or prior to the closing the Parent
         of the Sold Company may withdraw from the Sold Company and its
         subsidiaries any assets other than the Parent's direct or indirect
         interests in the Partnership and the Project Companies. In addition,
         if for any reason the Sold Company immediately prior to the closing
         has more or less than a one-half direct or indirect interest in the
         Partnership and each of the Project Companies, the purchase price
         shall be appropriately adjusted. The amount of such adjustment shall
         be based on the fair value of each entity that is not one-half owned
         by the Sold Company as determined in accordance with the procedures
         set forth in Section 3.2(d) (the second through the eighth sentences
         thereof) except that the fair value shall be determined as of the date
         of the submission of the irrevocable offers described in Section
         3.1(b)(1) and the parties shall have 20 days after a request for
         valuation is made in which to attempt to agree on the selection of one
         nationally recognized investment banking firm.

SECTION 3.2. Option to Purchase in the Event of Default

(a)      Each of the following circumstances shall constitute an "event of
         default" for purposes of this Section 3.2;

         (1)     A Parent, or its Holding Company or its subsidiary that is a
                 partner (or shareholder) in the Partnership or in a Project
                 Company shall commit any Terminating Acts;

         (2)     A partner (or shareholder) in the Partnership or in a Project
                 Company or its Parent shall fail to pay when due any amounts
                 owing pursuant to this Agreement, the Partnership Agreement, a
                 Project Company Partnership Agreement (or Shareholders' or
                 Parent Agreement for a Project Company), a Company Support
                 Agreement or any other Project Agreement (but, in the case of
                 such other Project Agreement, solely to the extent that such
                 failure under such other Project Agreement results in a breach
                 of a Company Support Agreement or a guaranty agreement entered
                 into by a Parent in lieu of a Company Support Agreement) and
                 such failure is not cured within 60 days after written notice
                 thereof from the other Parent referring to this Section and
                 specifying such failure;

         (3)     It shall be finally determined that (i) a partner (or
                 shareholder) in the Partnership or in a Project Company or its
                 Parent shall have failed (other than a payment default) in any
                 material respect to observe, perform or comply with any
                 material agreement, condition or obligation required by this
                 Agreement, the Partnership Agreement, a Project Company
                 Partnership Agreement (or Shareholders' or Parent Agreement
                 for a Project Company), a Company Support Agreement or any
                 other Project Agreement (but, in the case of such other
                 Project Agreement, solely to the extent that such failure
                 under such other Project Agreement results in a breach of a
                 Company Support Agreement or a guaranty agreement entered into
                 by a Parent in lieu of a Company Support Agreement), (ii) such
                 failure was still continuing at the time of the initiation of





                                     -7-
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                 such proceeding and had continued for a period of at least 30
                 days after written notice thereof from the other Parent
                 referring to this Section and specifying such failure, and
                 (iii) steps to cure such failure have not commenced, or, if
                 commenced, have not continued with all due diligence;

         (4)     A Parent, directly or through Affiliates, shall have sold its
                 direct or indirect equity interests in at least two Project
                 Companies to the other Parent or its Affiliates pursuant to
                 options to purchase because of the occurrence of an Event of
                 Default under the applicable Project Company Partnership
                 Agreement (or the Shareholders' Agreement or Parent Agreement
                 of the Project Company).

(b)      A Terminating Act by an entity shall consist of:

                 (i)      the commencement by such entity of any proceeding
                          under any applicable bankruptcy or insolvency law, or
                          its consent to the commencement of any such
                          proceeding against it, or the entry against it of a
                          decree or order of a court having jurisdiction over
                          it adjudicating it a bankrupt or insolvent or
                          approving a petition seeking its reorganization under
                          any applicable bankruptcy or insolvency law, if such
                          decree or order shall have continued undischarged or
                          unstayed for a period of 90 days or more;

                 (ii)     the assignment by such entity for the benefit of its
                          creditors of all or any substantial part of its
                          property or the winding up or liquidation of its
                          affairs, its admission in writing of its inability to
                          pay its debts generally as they become due or its
                          consent to the appointment of a receiver, liquidator,
                          trustee, curator or assignee of all or any
                          substantial part of its properties, which appointment
                          shall not have been vacated;

                 (iii)    the acquisition, pursuant to court order or
                          otherwise, by a creditor of such entity of any rights
                          with respect to its interest in a Holding Company,
                          the Partnership, a Project Company or a partner (or
                          shareholder) in the Partnership or in a Project
                          Company or any property or activities arising
                          therefrom, and such condition continues uncured for
                          more than the shorter of 30 days or the period, if
                          any, available to avoid having such acquisition
                          constitute a breach of any Company Support Agreement
                          or Project Agreement; or

                 (iv)     the Board of Directors of such entity taking formal
                          action for the dissolution or the winding up of its
                          affairs.

(c)      If an event of default shall occur at any time, then the Parent that
         is not affiliated with the defaulting entity shall have the right to
         purchase capital stock as follows: if the defaulting entity is the
         other Parent, the option shall apply to all, but not less than all, of
         the outstanding capital stock of the defaulting Parent's Holding
         Company; if the defaulting entity is a Holding Company, the option
         shall apply to all, but not less than 




                                     -8-
<PAGE>   13

         all, of the outstanding capital stock of the Holding Company or, if the
         purchaser so elects, of its subsidiaries; and if the defaulting entity
         is a partner (or shareholder) in the Partnership or in a Project
         Company, the option shall apply to all, but not less than all, of the
         outstanding capital stock of the defaulting entity. In each case, the
         price shall be equal to 90% of the fair value of the capital stock
         (except that in the case of an event of default that is specified in
         clause (1) of Section 3.2(a) and that relates to a Terminating Act
         described in clause (i), (ii) or (iii) of Section 3.2(b), the
         percentage shall be 100%), plus (B) an undertaking, subject to the
         provisions of Section 3.5, to indemnify the seller and its Affiliates
         against all Project Liabilities, except that if only the capital stock
         of a partner (or shareholder) in the Partnership or in a Project
         Company is being sold, the indemnity shall be against only those
         Project Liabilities that arise out of the Partnership or the Project
         Company. The financial benefit conferred by this right to purchase at
         90% of fair value shall be considered liquidated damages, and not a
         penalty, in respect of the event of default, it being agreed that it
         would be impracticable or extremely difficult to fix the actual
         damages, and shall be exclusive of any other right to damages in
         respect of the event of default. The right of purchase provided in this
         Section 3.2(c) shall be inapplicable if there has occurred and is
         continuing any event of default described in this Section 3.2(c) on the
         part of the purchaser or its Affiliates.
        
(d)      The right to purchase under Section 3.2(c) shall be exercisable by the
         purchaser giving written notice to the seller on or before the
         ninetieth day after such event of default has occurred, of its
         intention to exercise such right. The fair value of the capital stock
         of a corporation shall be deemed to be 50% of the fair value of the
         Partnership and Project Companies (such percentage to be appropriately
         adjusted if there are outstanding any minority equity interests in
         those entities), and shall be determined, as of the most recent
         practicable date prior to the delivery of the initial report referred
         to below, by a nationally recognized investment banking firm selected
         by agreement of the purchaser and the seller or, if they fail to
         select such firm not later than 20 days after the giving of the notice
         by the purchaser, then each of them shall within 10 days thereafter
         select, at its own expense, a nationally recognized investment banking
         firm. Such firms shall be instructed to attempt to agree on the fair
         value within 30 days after their selection or, failing such agreement,
         to select, within such 30 days, a third nationally recognized
         investment banking firm who shall alone determine the fair value. In
         determining such fair value, the investment banking firm or firms
         shall take into account the value of the obligations of the Parents
         and Affiliates under the Company Support Agreements, the effect of any
         minority equity interests that may be outstanding pursuant to Article
         VII and all other factors as such firm or firms deem relevant. Where
         the fair value is being determined by only one firm, as promptly as
         practicable, such firm shall deliver to the purchaser and the seller
         an initial report of its determination of fair value. The purchaser
         and the seller shall then have 20 days in which to submit to such firm
         their objections, if any, to the report. Thereafter, as promptly as
         practicable, such firm shall deliver to the purchaser and the seller
         its final report. The determination of fair value in accordance with
         the foregoing procedures shall be final, conclusive and binding on the
         purchaser and the seller for the purposes of this Section 3.2.
         However, the purchaser shall have the right, at its election, to
         rescind its notice of intention to purchase by so 




                                     -9-
<PAGE>   14

         notifying the seller within 10 days after receipt of notice of the fair
         value as so determined. The fees and expenses of a firm selected by
         agreement of the purchaser and the seller or by agreement of two firms
         shall be borne equally by the purchaser and the seller, except that if
         the purchaser elects to rescind its notice of intention to purchase
         pursuant to the proviso in the preceding sentence, those fees and
         expenses shall be borne solely by the purchaser.
        
(e)      If the Partnership Agreement, or Shareholders' Agreement, or Parent
         Agreement, for a particular Project Company contains an option to
         purchase in the event of default, and the provisions of such other
         option are inconsistent with the provisions of Sections 3.2 through
         3.6 of this Agreement, then the applicable provisions of this
         Agreement shall be controlling unless the provisions of such other
         option specifically state that they shall be controlling.

SECTION 3.3. Closing of Purchases Under Sections 3.1 and 3.2. The closing of
any purchase made pursuant to either of the offers provided for in Section 3.1
or pursuant to the option to purchase provided for in Section 3.2 shall be held
at the principal office of the Partnership on the closing date, or such other
location as shall be mutually agreeable. Such closing date shall be the date,
which shall be not less than 20 days nor more than 60 days after the date upon
which acceptance of the offer is made or deemed to be made or the notice of
intention to exercise the right to purchase is given (the "Acceptance Date"),
as the case may be, designated by written notice by the purchaser to the seller
given not later than 10 days after such acceptance or notice of intention;
provided, however, that if a dispute exists as to the right of a party to
purchase or sell, or if an interest is to be valued, the closing shall be held
not more than 45 days after the resolution of such dispute or the determination
of such value; provided further that if there is any litigation or governmental
requirement relating to such purchase and sale, the closing date shall be
postponed until a date not more than 30 days after the termination of such
litigation or satisfaction of all governmental requirements, and the parties
shall use their reasonable business efforts to satisfy such requirements
promptly; provided further that if the closing date shall be delayed more than
180 days after the Acceptance Date, either party, unless it has acted in bad
faith in substantially contributing to the delay, shall, at its election, have
the right to terminate the Buy-Sell or option procedure and the offers, and any
acceptance thereof, shall have no further force or effect. At such closing the
purchaser shall receive from the seller the certificates representing the
capital stock being purchased, duly endorsed in blank and with all appropriate
transfer and documentary stamps, if any, affixed and shall deliver to the
seller (i) funds, by bank or certified check, in the amount of the purchase
price, and (ii) the undertaking, in accordance with Section 3.1 or 3.2,
whichever is applicable, regarding Project Liabilities, all in such form as
shall be reasonably requested by the seller. Such stock shall be conveyed free
and clear of any claims, pledges, liens or encumbrances. In addition, at the
closing, there shall be paid in full any debts between the Sold Company or its
subsidiaries and (x) the Project Companies and the Partnership in which the
Sold Company or its subsidiaries participated, and (y) the seller and its
Affiliates, except in each case to the extent that such debts are already
appropriately reflected in the purchase price. Any party's right or obligation
to purchase at the closing may be exercised or discharged by any Affiliate of
that party.




                                     -10-
<PAGE>   15

SECTION 3.4. Product Liabilities. For the purposes of this Article III,
"Project Liabilities" shall mean: (1) all liabilities, obligations and
commitments of the Parents or their Affiliates under or arising out of this
Agreement, the Partnership Agreement, any Project Company Partnership Agreement
(or Shareholders' Agreement), the Company Support Agreements or any Project
Agreements, and (2) all liabilities, obligations and commitments incurred or
assumed by the Partnership or any Project Company, except that Project
Liabilities to be assumed or indemnified by a Parent or its Affiliates shall
not include liabilities, obligations and commitments that are specifically
intended to apply to the other Parent or its Affiliates following a sale of its
Shares pursuant to this Article III or the dissolution or termination of the
Partnership or a Project Company (such as obligations under the Site Option
Agreement or obligations regarding maintaining confidentiality of information
or refraining from competition with the Partnership or a Project Company), or
that are incurred by the other Parent or its Affiliates in providing to the
Partnership or a Project Company services described in the second sentence of
Section 2.2(f) of the Partnership Agreement, or any liabilities for income or
franchise taxes.

SECTION 3.5. No Waiver of Defaults. Nothing contained in this Article III shall
be construed as a limitation upon, and no action or transaction in pursuance of
this Article III shall be deemed a satisfaction, waiver or discharge of, any
rights, claims or causes of action of either Parent or its Affiliates against
the other Parent or its Affiliates, whether for damages or other relief,
arising out of or by virtue of (i) breach of this Agreement, the Partnership
Agreement, any Project Company Partnership Agreement (or Shareholders'
Agreement) or any Project Agreement, theretofore or thereafter committed, by
the other Parent or its Affiliates or (ii) any event of default, theretofore or
thereafter arising on the part of the other Partner or its Affiliates, and the
undertakings provided for in Sections 3.1 and 3.2 shall not be construed to
include or relate to any such rights, claims or causes of action, or any
liability incident thereto, except, in each case, as and to the extent that
such default or breach is taken into account in any computation or adjustment
made pursuant to this Article III.

SECTION 3.6 Non-Competition After Sale. For a period of three years following
the sale of its Shares pursuant to Section 3.1 or 3.2, neither the selling
Parent nor any of its Affiliates, without the express written consent of the
other Parent, shall, (l) as principal, agent or in any other capacity or
through the agency of any other corporation, partnership, joint venture or
other agency, design, construct, own or operate Other Waste Incineration Plants
that would compete with any Project that on the date the offers were submitted
pursuant to Section 3.1, or on the date the notice of exercise of option was
given pursuant to Section 3.2, was in Operation or was a Development Project,
or (2) provide any services to Other Waste Incineration Plants that would
compete with any Project that on the date the offers were submitted, or the
notice of exercise of option was given, was a Development Project if to provide
the services referred to in this clause (2) would, in the reasonable judgment
of the other Parent, have a substantial adverse effect on any such Development
Project. If the provisions of this Section 3.6 should be deemed to exceed the
time or geographic limitations permitted by the applicable laws, then such
provisions shall be and are hereby reformed to the maximum time or geographic
limitations permitted by the applicable laws.





                                     -11-
<PAGE>   16
                                   ARTICLE IV
                          Restrictions on Subsidiaries

SECTION 4.1. Single Purpose Subsidiaries. It is the intention and agreement of
each Parent that at all times it will own and operate BFIES, the BFI Holding
Company, or APRF and the AP Holding Company, as the case may be, solely for the
purpose of holding interests, directly or through wholly-owned Project
Subsidiaries, in the Partnership or the Project Companies and will not permit
them to acquire any assets or incur any liabilities not reasonably necessary to
such purpose, and each of its Project Subsidiaries that participates in a
Project that is being actively pursued will be wholly owned, directly or
indirectly, by the Parent's Holding Company, will be owned and operated solely
for the purpose of such participation and will not acquire any assets or incur
any liabilities not reasonably necessary to such purpose, except as may be
specifically permitted by this Agreement or the Partnership Agreement. The
Parents recognize, however, that certain Project Subsidiaries of APCI that
participated in Projects that are no longer being actively pursued are not so
owned by the AP Holding Company, and that in the future other Project
Subsidiaries of either Parent that participated in Projects that are not then
being actively pursued may not be wholly owned by the Parent's Holding Company.
If pursuant to this Agreement any entity shall have the right to purchase the
capital stock of a Parent's Holding Company or the capital stock of the Holding
Company's subsidiaries, then such right shall also extend to the capital stock
of any Project Subsidiaries that are not so owned by the Holding Company, and
the Parent of the Holding Company shall take such actions as the purchaser may
reasonable request to effectuate such purchase.

SECTION 4.2. Transfer Restrictions. It is the intention and agreement of each
Parent that at all times its Holding Company and Project Subsidiaries will each
be wholly owned, directly or indirectly, by it, and that it will, directly or
indirectly, own a 50% interest in the Partnership and each of the Project
Companies, except for transfers expressly permitted by this Agreement, the
Partnership Agreement or the applicable Project Agreement.

SECTION 4.3. Security Interest. As security for the performance by a Parent and
its Affiliates of their obligations under this Agreement, the Partnership
Agreement and the Partnership (or Shareholders') Agreements for the Project
Companies, each Parent and its Affiliates hereby grant to the other Parent a
security interest in all of the outstanding capital stock of the granting
Parent's Holding Company and Project Subsidiaries and in any subsequently
issued capital stock in such Holding Company or any present or future Project
Subsidiaries. The certificates for all such capital stock shall be
appropriately legended and promptly delivered to the other Parent. Such
security interest may be foreclosed in any manner provided by law and is
additional to any other security and remedies that may be available. Each
Parent shall, and shall cause its Affiliates to, execute and deliver such
financing statements and other instruments as the other Parent shall from time
to time reasonably request to effectuate, perfect or confirm such security
interest.





                                      -12-
<PAGE>   17
                                   ARTICLE V
                     Performance of Partnership Obligations

SECTION 5.1. Parents' Performance Under Partnership Agreement. If and to the
extent that the Partnership Agreement for the Partnership, or the Partnership
Agreement or Shareholders' Agreement for any Project Company, provides for
obligations of APCI or BFI or their Affiliates that are not parties to such
Agreement, APCI and BFI shall each perform the obligations provided for it, and
shall cause its Affiliates to perform the obligations provided for them
therein.  Without limiting the generality of the foregoing, each Parent hereby
agrees to be bound by Section 1.7 of the Partnership Agreement and guarantees
the payment on demand of any borrowings by its Affiliates pursuant to Section
7.4 of the Partnership Agreement or the comparable provisions of any
Partnership (or Shareholders') Agreement for any Project Company. Such
guarantee is absolute, unconditional, present and continuing and is in no way
conditional or contingent upon any event or circumstance, action or omission
that might in any way discharge a guarantor or surety.

                                   ARTICLE VI
                                Certain Services

SECTION 6.1. BFI Services to Partnership Projects. If a particular Project
shall be designated as a Development Project by the Partnership, BFI, if
selected as the vendor in accordance with Section 6.2, will use its reasonable
business efforts to cause one or more of its Affiliates to (a) provide or
attempt to arrange through contracts with others to provide, adequate
quantities of solid waste to the Project to the extent such solid waste is not
being provided by the client or others that are under contract to the client or
to the Project, (b) provide for the conceptual design of and operate, to the
extent consistent with the Project, any stand-alone solid waste transfer
stations or stand-alone recycling facilities that may be established as part of
a particular Project, and (c) to the extent consistent with the Project,
attempt to dispose of, if required (or provide for the disposal of), ash,
bypass waste and other solid waste residues from the Projects, including
undertaking to provide for the site for such disposal.

SECTION 6.2. Preferred Vendor Status. It is the intention of BFI and APCI that
the Partnership, or an appropriate Project Company, will construct, own and
operate, at competitive prices, terms and conditions, any waste-to-energy
plants which would be required by BFI for its sole or principal use as a
provider of waste. BFI, in its capacity as the vendee of the services of the
Partnership or a Project Company and APCI and BFI, each acting through its
subsidiary that is a partner in the Partnership or the appropriate Project
Company, will employ reasonable business efforts to achieve this goal.
Accordingly, the Partnership and the Project Companies will be the preferred
vendor to BFI for all procurement by BFI of waste-to-energy plant services of
the types then being offered by them. The status of the Partnership and the
Project Companies as the "preferred vendor" shall mean that BFI and its
subsidiaries will not, so long as the Partnership is at least 45% owned by BFI
(whether directly or through subsidiaries), purchase any such services from any
unaffiliated third party unless BFI has determined in the exercise of its
reasonable business judgment that the overall value, in terms of price, terms
and conditions, quality, documentation, service and other matters, of such
services available from the Partnership and the Project Companies is not
competitive with that available from such 




                                     -13-
<PAGE>   18

other party, in which event BFI may purchase such services from such other
party; provided, however, that BFI shall be excused from the foregoing
obligation if upon written notice to the Partnership, BFI advises that (i) the
Partnership has failed to respond within a reasonable period of time to a
request by BFI (or its subsidiary) for a price quotation or other terms or
information with respect to such services or has failed to commit to deliver
such services within the time period in which BFI (or its subsidiary) shall have
required such services to be delivered, which time period, in either case, shall
not be substantially shorter than the time period that would have been required
from or allowed to an unaffiliated third party; or (ii) in BFI's reasonable
business judgment, it is not appropriate for the Partnership or a Project
Company to furnish the particular service in light of the Partnership's
expertise and experience; provided further that nothing in this Section 6.2
shall authorize BFI to take any action that would result in a breach of the DBA
License or of BFI's covenant to DBA set forth in the Agreement dated December
12, 1990 by and among BFI, APCI, the Partnership and DBA. If at any time in
accordance with this Section 6.2 BFI determines not to use the services of the
Partnership or a Project Company, BFI shall give a full and prompt report to the
Management Committee of the Partnership giving the rationale for this decision.
The foregoing shall not authorize BFI or any of its subsidiaries to provide such
services on their own in lieu of purchasing them from unaffiliated third parties
or the Partnership.
        
It is the intention of BFI and APCI that BFI will supply certain of its
traditional services to the Partnership and the Project Companies at
competitive prices, terms and conditions, including, without limitation, those
services specified in Section 6.1. BFI, in its capacity as service provider,
and APCI and BFI, each acting through its subsidiary that is a partner in the
Partnership or the appropriate Project Company, will employ reasonable business
efforts to achieve this goal. Accordingly, BFI will be the preferred vendor to
the Partnership and each Project Company for all services of the types then
being offered by BFI (directly or through its subsidiaries) in the Territory.
The status of BFI as the "preferred vendor" shall mean that neither the
Partnership nor any Project Company will, so long as it is at least 45% owned
by BFI (whether directly or through subsidiaries), purchase any such services
from any one other than BFI and its subsidiaries unless the Chief Executive
Officer of the Partnership (the "CEO") has determined in the exercise of his
reasonable business judgment that the overall value, in terms of price, terms
and conditions, quality, documentation, service and other matters, of such
services available from BFI and its subsidiaries is not competitive with that
available from such other party, in which event the vendee may purchase such
services from such other party; provided, however, that the vendee shall be
excused from the foregoing obligation if upon written notice to BFI, the vendee
advises that (i) BFI (or its appropriate subsidiary) has failed, in the
reasonable business judgment of the CEO, to respond within a reasonable period
of time to a request by the vendee for a price quotation or other terms or
information with respect to such services or has failed to commit to deliver
such services within the time period in which the vendee shall have required
such services to be delivered, which time period, in either case, shall not be
substantially shorter than the time period that would have been required from
or allowed to an unaffiliated third party; or (ii) in the reasonable business
judgment of the CEO, it is not appropriate for BFI and its subsidiaries to
furnish the particular service in light of the expertise and experience of BFI
and its subsidiaries or the stated preference of the vendee's customers
regarding the selection of service providers. If at any time in accordance with
this





                                     -14-
<PAGE>   19
Section 6.2 the vendee elects not to use the services of BFI for any contract
involving the expenditure of greater than $250,000, the CEO shall give a full
and prompt report to the Management Committee of the Partnership giving the
rationale for this decision.

                                  ARTICLE VII
                   Possible Formation of Limited Partnerships

SECTION 7.1. Good Faith Negotiations. The Parents recognize that one or both of
them may desire to organize or reorganize Project Companies as limited
partnerships, or to organize limited partnerships that would hold interests in
Projects, and arrange for the sale of limited partnership interests to
investors in order to reduce the financial commitments of the parties, while at
the same time maintaining control of their interests in the Project Companies.
The Parents agree that, following the submission of any such proposal by either
Parent or an Affiliate, they, or their Affiliates, as appropriate, shall
negotiate in good faith regarding such proposal and will not withhold their
approval unreasonably.

                                  ARTICLE VIII
                                Confidentiality

SECTION 8.1. Agreement to Disclose. The Parents shall disclose or cause to be
disclosed to the Partnership, the Project Companies and to each other and their
respective Affiliates all information which in the collective judgment of the
Parents is required for fulfillment of the business purpose of the Partnership
and the Project Companies.

SECTION 8.2. Agreement to Keep Confidential. Each Parent and its Affiliates
will receive in confidence, will not use except in accordance with any
applicable agreements and except for "permitted purposes," and will not
disclose to a third party not under obligations of confidentiality and non-use
acceptable to the disclosing Parent or its Affiliate, without the prior written
consent of the disclosing Parent or its Affiliate, any information disclosed to
a Parent or its Affiliates by the other Parent or its Affiliates in writing, or
orally or by demonstration and reduced to writing within 15 days of disclosure,
and identified as confidential at the time of such disclosure. "Permitted
purposes" shall mean purposes consistent with the business purposes of the
Partnership and its affiliated Project Companies. The care exercised by each
Parent and its Affiliates in maintaining such information in confidence shall
be the care exercised by that Parent with respect to its own information that
it considers confidential. This Section 8.2 shall apply also to any
confidential information disclosed to a Parent or its Affiliates by the other
Parent or its Affiliates under the Marketing Agreement or the related
Confidentiality Agreement dated as of October 1, 1983.

SECTION 8.3. Termination of Confidentiality. The obligations set forth in
Section 8.2 shall automatically terminate five years from and after the
dissolution and winding up of the Partnership and all Project Companies or at
such earlier time to the extent that the information identified as
confidential:

                 (i)      has become available to the public through no fault
                          of the receiving Parent or its Affiliates;



                                     -15-
<PAGE>   20

                 (ii)      is already known to the receiving Parent or its
                          Affiliates at the time of disclosure and was not
                          previously provided to such Parent or its Affiliates
                          pursuant to the Marketing Agreement or the aforesaid
                          related Confidentiality Agreement:

                 (iii)    is received by the receiving Parent or its Affiliates
                          from a third party without obligation of
                          confidentiality or non-use; or

                 (iv)     is subsequently developed by employees or consultants
                          of the receiving Parent or its Affiliates
                          independently of the disclosure hereunder.

                                   ARTICLE IX
                                    Disputes

SECTION 9.1. Dispute Resolution. The parties shall endeavor in good faith to
resolve any controversies or claims arising out of or relating to this
Agreement, the Partnership Agreement or any Partnership (or Shareholders' or
Parent) Agreement for any Project Company without resort to litigation or
arbitration. To that end, if either party gives the other written notice (the
"Notice") of a claim or controversy (a "Dispute"), they shall promptly engage
in good faith discussions in an effort to resolve the Dispute and, if either
party so requests, they shall select a mutually acceptable expert (the
"Expert") to participate in the discussions, evaluate the respective positions
of the parties and advise the parties of his opinion as to the merits of the
Dispute. Such opinion shall be advisory only and shall not be binding on the
parties. If by means of this procedure the parties are unable to resolve the
Dispute within the 60-day period beginning when the Notice was given, then
either party may commence litigation or, if the parties so agree or if binding
arbitration is mandated by the applicable agreement, arbitration pursuant to
Section 9.2. Time shall be of the essence, and each party shall in good faith
proceed with the discussions contemplated herein. Each party shall be entitled
to utilize the services of advisers and experts in connection with those
discussions. The fees and expenses of the Expert will be borne equally by the
parties. The provisions of this Section shall not apply where a party believes
it requires a temporary restraining order, injunction or order for specific
performance issued by a court in order to protect its interests, and time does
not permit the party to comply with the procedures and the 60-day waiting
period specified in this Section without the risk of substantial detriment to
that party. In that event the party may apply for such judicial relief without
such compliance. If any controversy or claim is submitted to arbitration or
litigation, all counterclaims arising out of the same subject matter shall be
asserted and resolved in that arbitration or litigation.

SECTION 9.2. Arbitration. If the parties to a controversy or claim arising out
of or relating to this Agreement agree to submit the matter to arbitration,
then, unless the parties specify otherwise, the following procedures will
apply. The controversy or claim shall be settled by arbitration in New York
City in accordance with the Commercial Arbitration Rules of the American
Arbitration Association. The parties shall agree on one arbitrator or, if they
are





                                     -16-
<PAGE>   21
unable to agree within 60 days after an arbitrator has first been proposed,
then each party shall select one arbitrator, and the two arbitrators so
selected shall together select the third arbitrator. Any arbitration shall be
subject to the following:

(a)      Any award pursuant to such arbitration shall be accompanied by the
         written opinion of a majority of the arbitrators giving their reasons
         therefor and rendered within 30 days of the date of closing of the
         arbitration hearing.

(b)      The arbitrators shall be selected by mutual consent of the parties
         from a list of arbitrators knowledgeable about the operation of
         resource recovery facilities prepared by the American Arbitration
         Association, but if the parties cannot so agree within 20 days of the
         date of request for arbitration, the selection shall be made pursuant
         to the rules of such Association.

(c)      The award rendered by the arbitrators shall, solely with respect to
         the particular dispute, difference or alleged breach of this Agreement
         which was submitted to arbitration, be conclusive and binding upon the
         parties hereto and judgment on the award may be entered in any court
         of proper jurisdiction; provided, however, that nothing herein shall
         give the arbitrators any authority to amend, alter or delete any term,
         condition or provision of this Agreement.

(d)      Each party shall pay its own expenses of arbitration and the expenses
         of the arbitrators shall be equally shared; except that if any matter
         or dispute raised by a party or any defense or objection thereto was
         unreasonable, the arbitrators may assess, as part of the award, all or
         any part of the arbitration expenses (including reasonable attorneys'
         fees) of the other party or parties and of the arbitrators against the
         party raising such unreasonable matter or dispute or defense or
         objection thereto.

(e)      The arbitrators shall fix the time and place in New York City for the
         arbitration hearing, which shall be held within 45 days after
         appointment of the arbitrators. Notice of such hearing shall be given
         by the arbitrators to the parties at least 20 days in advance, unless
         the parties by mutual agreement waive such notice.

(f)      The parties shall submit all documents and proof upon which they
         intend to rely within 30 days after the appointment of the
         arbitrators. All parties shall be afforded a reasonable opportunity to
         examine such documents and proof prior to any hearing.

(g)      The arbitrators, when authorized by law to subpoena witnesses or
         documents, may do so upon their own initiative or upon the request of
         any party. All evidence shall be taken in the presence of the
         arbitrators and all of the parties, except when any of the parties is
         absent in default, or has waived the right to be present.





                                     -17-
<PAGE>   22
(h)      Any party may be represented by counsel. A party intending to be so
         represented shall notify the other party or parties and the
         arbitrators of the name and address of counsel at least three days
         prior to the date set for the hearing at which counsel is first to
         appear. When an arbitration is initiated by counsel, or where any
         attorney replies for another party, such notice is deemed to have been
         given by such party.

(i)      The parties may modify any period of time by mutual agreement. The
         arbitrators for good cause may extend any period of time established
         by this Agreement, except the time for making the award. The panel
         shall notify the parties of any such extension of time and its reason
         therefor.

(j)      The scope of discovery allowed with respect to the arbitration
         proceeding shall be the same as that allowed under the Federal Rules
         of Civil Procedure.

(k)      If a controversy or claim that is to be settled by arbitration
         pursuant to this Agreement also arises under the Partnership Agreement
         or a Partnership (or Shareholders' or Parent) Agreement for any
         Project Company or any Project Agreement, the matter shall, to the
         extent permitted by the applicable agreements, be resolved in one
         combined arbitration proceeding, with each Parent and its Affiliates
         acting as only one party.

SECTION 9.3. Specific Performance. The parties acknowledge that the failure of
either party to substantially perform its material obligations and covenants
under this Agreement may result in a significant frustration of the respective
business objectives of the parties under this Agreement and that the remedies
at law may be inadequate to protect the rights and interests of the other
party. Accordingly, the parties, in addition to the remedies otherwise
available under the law for the enforcement of this Agreement and in view of
Section 10.1, expressly consent to an order for specific performance of such
obligations and covenants of a party or an order granting other substantially
equivalent equitable remedies calculated to require performance of any such
covenants or obligations.

                                   ARTICLE X
                                 Miscellaneous

SECTION 10.1. Damages. A Parent and its Affiliates shall not be entitled to
recover from the other Parent or its Affiliates special or consequential
damages, or damages for anticipated future profits, loss of business
opportunities or other similar speculative damages for breach of any covenant
or understanding set forth in this Agreement or the Partnership Agreement, and
shall only be entitled to seek reimbursement for the actual out-of-pocket costs
and expenses incurred by the non-breaching party as a direct result of the
conduct of the breaching party (except as provided in Section 3.2(c) for a
right of liquidated damages).





                                      -18-
<PAGE>   23
SECTION 10.2. Representations and Warranties. Each party represents and
warrants, as of January 25, 1991 ("the Execution Date"), as follows:

                 (i)      It is a corporation duly incorporated and validly
                          existing in good standing under the laws of the State
                          of Delaware, and is duly authorized, qualified,
                          permitted and licensed under all applicable laws,
                          regulations, ordinances and orders of public
                          authorities to carry on its business in the places
                          and in the manner as now conducted (except where
                          failure to be so authorized, qualified, permitted and
                          licensed would not have a material adverse effect on
                          the business, operations, properties, assets or
                          financial condition of such corporation).

                 (ii)     It is not a party to any contract, agreement or other
                          commitment or instrument or subject to any charter or
                          other corporate restriction or subject to any
                          restriction or condition contained in any permit,
                          license, judgment, order, writ, injunction, decree or
                          award which would prevent or restrict its ability to
                          enter into and perform its obligations under this
                          Agreement or which materially and adversely affects
                          or in the future is expected (as far as such party
                          can, as of the Execution Date, reasonably foresee) to
                          materially and adversely affect its business
                          operations, properties, assets or conditions
                          (financial or otherwise) considered as a consolidated
                          enterprise.

                 (iii)    This Agreement has been duly and validly authorized
                          by any necessary corporate action and will be, when
                          executed and delivered, its legal, valid and binding
                          obligation.

SECTION 10.3. Notices.

(a)      Any notice required or permitted to be given pursuant to this
         Agreement shall be in writing and shall be sufficient if personally
         delivered or sent by air courier, or by certified or registered mail
         (return receipt requested) properly stamped and addressed, or by
         telecopy as follows:

                 (i)      If to APCI, addressed to 7201 Hamilton Boulevard,
                          Allentown, Pennsylvania 18195-1501, marked for the
                          attention of the Corporate Secretary with a copy sent
                          to the same address marked for the attention of the
                          Vice President - Energy Systems (telecopy no. (215)
                          481-8223).

                 (ii)     If to BFI, addressed to, in the case of mail
                          delivery, P.O. Box 3151, Houston, Texas 77253, or, in
                          the case of other delivery, 757 N. Eldridge, Houston,
                          Texas 77079, in either case marked for the attention
                          of the Secretary, with a copy sent to the same
                          address marked for the attention of the Chairman,
                          American REF-FUEL Company (telecopy no. (713)
                          870-7825).



                                     -19-
<PAGE>   24

(b)      Either party may change its address by giving written notice of its
         new address to the other party.

SECTION 10.4. CHOICE OF LAW. THIS AGREEMENT AND ALL RIGHTS AND LIABILITIES OF
THE PARTIES SHALL BE SUBJECT TO AND GOVERNED BY THE LAWS OF THE STATE OF
DELAWARE.

SECTION 10.5. Binding Effect; Amendments. This Agreement shall be binding upon
and shall inure to the benefit of the parties and their respective legal
representatives, successors and permitted assigns. The written agreement of
both Parents is required for any amendment to this Agreement. Nothing in this
Agreement shall be deemed to create any right in any third party and this
Agreement shall not be construed in any respect to be a contract in whole or in
part for the benefit of any third party, except as expressly provided herein.

SECTION 10.6. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be an original hereof for all purposes, and
shall be binding upon the party so signing, irrespective of whether or not both
parties executed each counterpart, but all of which shall be and constitute one
instrument.

SECTION 10.7. Gender and Numbers. Whenever the context requires, the gender of
all words used herein shall include the masculine, feminine or neuter, and the
number of all words shall include the singular and plural.

SECTION 10.8. Severability. If any provision of this Agreement, or the
application thereof, shall, for any reason and to any extent, be invalid or
unenforceable, the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the maximum extent permissible under applicable
law. The Parents shall negotiate in good faith regarding amendments to this
Agreement that would, to the maximum extent permissible under applicable law,
effectuate the intent of any provision determined to be invalid or
unenforceable.

SECTION 10.9. Headings, etc. Captions and headings contained in this Agreement
are for ease of reference only and do not constitute a part of this Agreement.

SECTION 10.10. Obligations of Affiliates. Whenever this Agreement provides for
obligations of an Affiliate of a Parent, the failure of the Affiliate to
perform those obligations shall be deemed a breach of this Agreement by that
Parent, but shall not give rise to any cause of action against the Affiliate
pursuant to this Agreement (although a cause of action regarding such failure
may arise pursuant to an agreement to which the Affiliate is a party).





                                      -20-
<PAGE>   25

                                                   AIR PRODUCTS AND CHEMICALS,
                                                                INC.
                                      
ATTEST:                                    By:
                                              ---------------------------------
                                SEAL  
--------------------------------                                      
                                      
                                      
                                                    BROWNING-FERRIS INDUSTRIES,
                                                                INC.
                                      
ATTEST:                                    By:
                                              ---------------------------------
                                SEAL  
--------------------------------




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