Document:

<Page>

                                                                   EXHIBIT 10.41

                       LIMITED LIABILITY COMPANY AGREEMENT

                                       OF

                               US GREENFIBER LLC,

                      A DELAWARE LIMITED LIABILITY COMPANY

<Page>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                         PAGE
<S>                                                                                                        <C>
ARTICLE I      DEFINITIONS.................................................................................1
ARTICLE II     GENERAL.....................................................................................7
 2.01  Name of the Limited Liability Company................................................................7
 2.02  Office of the Limited Liability Company; Agent for Service of Process................................7
 2.03  Organization........................................................................................7
 2.04  Purposes............................................................................................7
 2.05  Members.............................................................................................7
 2.06  Term................................................................................................8
 2.07  Liability of Members................................................................................8
ARTICLE III    CAPITAL CONTRIBUTIONS; ADDITIONAL FINANCING..................................................9
 3.01  Capital Accounts....................................................................................9
 3.02  Initial Capital Contributions; Assumption of Liabilities.............................................9
 3.03  Representations and Warranties.....................................................................11
 3.04  Indemnification for Breaches of Representations and Warranties, etc.................................12
 3.05  Subsequent Capital Contributions...................................................................12
 3.06  Failure to Contribute..............................................................................12
 3.07  No Other Contributions; No Withdrawal of or Interest on Capital.....................................14
 3.08  Third Party Loans..................................................................................14
ARTICLE IV     DISTRIBUTIONS..............................................................................14
 4.01  Distribution of Distributable Cash..................................................................14
 4.02  Distributions of  Distributable Cash from Capital Transactions and Net Proceeds upon Liquidation....14
 4.03  Distributions Upon Transfer or Admission............................................................15
 4.04  Certain Payments to the Internal Revenue Service Treated as Distributions...........................15
 4.05  Distribution of Assets in Kind.....................................................................16
ARTICLE V      ALLOCATION OF NET PROFITS AND NET LOSSES....................................................16
 5.01  Basic Allocations..................................................................................16
 5.02  Regulatory Allocations.............................................................................17
 5.03  Allocations Upon Transfer or Admission..............................................................17
ARTICLE VI     MANAGEMENT.................................................................................18
 6.01  Management of the LLC..............................................................................18
 6.02  Approved Budget....................................................................................22
 6.03  Contracts with Members, etc........................................................................22
 6.04  Binding the LLC....................................................................................23
 6.05  Indemnification and Exculpation....................................................................23
 6.06  No Solicitation or Hiring of Former Employees.......................................................24
 6.07  Non-Competition Agreement..........................................................................24
 6.08  Other Activities...................................................................................25
ARTICLE VII    FISCAL MATTERS.............................................................................25
 7.01  Books and Records..................................................................................25
 7.02  Financial Information..............................................................................25
 7.03  Bank Accounts......................................................................................26
</Table>

                                       -i-
<Page>

<Table>
<S>                                                                                                        <C>
 7.04  Fiscal Year........................................................................................26
 7.05  Tax Matters Partner................................................................................26
 7.06  Information........................................................................................26
 7.07  Audits.............................................................................................27
 7.08  Tax Audits.........................................................................................27
 7.09  Confidentiality....................................................................................27
ARTICLE VIII   TRANSFERS OF INTERESTS.....................................................................28
 8.01  General Restrictions on Transfer...................................................................28
 8.02  Right of First Refusal.............................................................................28
 8.03  Failure to Fully Exercise Options; Co-Sale..........................................................29
ARTICLE IX     OPTION TO SELL OTHER MEMBER'S INTEREST......................................................30
 9.01  Option to Sell the Other Member's Interest..........................................................30
 9.02  Notification of Offers.............................................................................31
ARTICLE X      DISSOLUTION AND LIQUIDATION................................................................31
 10.01 Events Causing Dissolution.........................................................................31
 10.02 Continuation of the LLC............................................................................31
 10.03 Procedures on Dissolution..........................................................................31
 10.04 Distributions Upon Liquidation.....................................................................32
 10.05 Survival of Certain Provisions.....................................................................32
ARTICLE XI     GENERAL PROVISIONS.........................................................................32
 11.01 Notices............................................................................................32
 11.02 Word Meanings; Schedules and Exhibits...............................................................32
 11.03 Binding Provisions.................................................................................33
 11.04 Applicable Law.....................................................................................33
 11.05 Arbitration........................................................................................33
 11.06 Counterparts.......................................................................................34
 11.07 Separability of Provisions.........................................................................34
 11.08 Article and Section Titles.........................................................................34
 11.09 Amendments.........................................................................................34
 11.10 Third Party Beneficiaries..........................................................................34
 11.11 Certain Ancillary Document Matters; Entire Agreement................................................35
 11.12 Offset.............................................................................................35
 11.13 Waiver of Partition................................................................................35
</Table>

                                      -ii-
<Page>

                                US GREENFIBER LLC

                       LIMITED LIABILITY COMPANY AGREEMENT

THIS LIMITED LIABILITY COMPANY AGREEMENT of US GreenFiber LLC, a Delaware
limited liability company (the "LLC"), dated as of the 26th day of June, 2000,
by and between the Members (as defined below).

                                    ARTICLE I

                                   DEFINITIONS

The following capitalized terms used in this Agreement shall have the respective
meanings ascribed to them below:

"AAA" has the meaning given it in Section 11.05(a).

"ACT" means the Delaware Limited Liability Company Act, in effect at the time of
the initial filing of the Certificate with the office of the Secretary of State
of the State of Delaware, and as thereafter amended from time to time.

"ADJUSTED CAPITAL ACCOUNT" means, for each Member, such Member's Capital Account
balance increased by such Member's Share of "minimum gain" and of "partner
nonrecourse debt minimum gain" (as determined pursuant to Treasury Regulation
Sections 1.704-2(g) and 1.704-2(i)(5), respectively).

"AFFILIATE" shall mean, with respect to any specified Person, (i) any Person
that directly or indirectly controls, is controlled by, or is under common
control with such specified Person, (ii) any Person that directly or indirectly
controls 50% or more of the outstanding equity securities of the specified
Person or of which the specified Person is directly or indirectly the owner of
50% or more of any class of equity securities, (iii) any Person that is an
officer of, director of, member of, partner in, or trustee of, or serves in a
similar capacity with respect to, the specified Person or of which the specified
Person is an officer, director, partner, member or trustee, or with respect to
which the specified Person serves in a similar capacity, or (iv) any Person that
is a member of the immediate family of the specified Person; provided, however,
that, for the purposes of this Agreement or any Ancillary Document, the LLC
shall not be deemed to be an Affiliate of any Member.

"AGREEMENT" means this Operating Agreement as it may be amended, supplemented,
or restated from time to time.

"ANCILLARY DOCUMENTS" means the U.S. Fiber Assignment Documentation, the
GreenStone Assignment Documentation, and any other agreements, documents or
instruments executed and delivered in connection herewith or therewith.

"APPOINTING AUTHORITY" has the meaning given it in Section 11.05(b).

<Page>

"APPROVED BUDGET" means the budget approved by the Board of Managers pursuant to
Section 6.02 below.

"BANKRUPTCY" means the occurrence of any of the following events:

          (i)     A Member or the LLC makes an assignment for the benefit of
creditors;

          (ii)    A Member or the LLC files a voluntary petition in bankruptcy;

          (iii)   A Member or the LLC is adjudged a bankrupt or insolvent, or
has entered against it an order for relief, in any bankruptcy or insolvency
proceeding;

          (iv)    A Member or the LLC files a petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law or regulation;

          (v)     A Member or the LLC files an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against it in any proceeding of this nature;

          (vi)    A Member or the LLC seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator of the Member or the LLC or of
all or any substantial part of the Member's or the LLC's properties; or

          (vii)   120 days elapse after the commencement of any proceeding
against a Member or the LLC seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, if the proceeding has not been dismissed, or if within 90 days
after the appointment without its consent or acquiescence of a trustee, receiver
or liquidator of the Member or the LLC or of all or any substantial part of the
Member's or the LLC's properties, the appointment is not vacated or stayed, or
within 90 days after the expiration of any such stay, the appointment is not
vacated.

"BOARD OF MANAGERS" means the board of managers of the LLC as more fully
described in Section 6.01(d) below.

"BUSINESS" means the business of the LLC as described in Section 2.04 below.

"BUSINESS DAY" means any day on which banking institutions in the State of North
Carolina are required or permitted by law to be open for business, other than a
Saturday or a Sunday.

"CAPITAL ACCOUNT" means a separate account maintained for each Member and
adjusted in accordance with Treasury Regulations under Section 704 of the Code.
To the extent consistent with such Treasury Regulations, the adjustments to such
accounts shall include the following:

          (i)     There shall be credited to each Member's Capital Account the
amount of any cash actually contributed by such Member to the capital of the
LLC, the fair market value of any property contributed by such Member to the
capital of the LLC, the amount of liabilities of the LLC assumed by the Member
or to which property distributed to the Member was subject

                                       -2-
<Page>

and such Member's share of the Net Profits of the LLC and of any items in the
nature of income or gain separately allocated to the Members; and there shall be
charged against each Member's Capital Account the amount of all cash
distributions to such Member, the fair market value of any property distributed
to such Member by the LLC, the amount of liabilities of the Member assumed by
the LLC or to which property contributed by the Member to the LLC was subject
and such Member's share of the Net Losses of the LLC and of any items in the
nature of losses or deductions separately allocated to the Members.

          (ii)    If the LLC at any time distributes any of its assets in-kind
to any Member, the Capital Account of each Member shall be adjusted to account
for that Member's allocable share of the Net Profits, Net Losses or items
thereof that would have been realized by the LLC had it sold the assets that
were distributed at their respective fair market values (taking Code Section
7701(g) into account) immediately prior to their distribution.

          (iii)   If elected by the LLC at any time specified in Treasury
Regulation Section 1.704-1(b)(2)(ii)(F), the Capital Account balance of each
Member shall be adjusted to the extent provided under such Treasury Regulation
to reflect the Member's allocable share (as determined under Article V) of the
Net Profits or Net Losses that would be realized by the LLC if it sold all of
its property at its fair market value (taking Code Section 7701(g) into account)
on the day of the adjustment.

          (iv)    In the event any interest in the LLC is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account of the transferor to the extent it relates to the transferred
interest.

"CAPITAL CONTRIBUTION" means any contribution by a Member to the capital of the
LLC.

"CAPITAL TRANSACTION" means a sale or other disposition of all or a portion of
the LLC's property in a single transaction or in a series of related
transactions, other than such a sale or disposition in the ordinary course of
the LLC's business, and any refinancing.

"CARRYING VALUE" means, with respect to any asset, the asset's adjusted basis
for federal income tax purposes; PROVIDED, HOWEVER, that (i) the initial
Carrying Value of any asset contributed to the LLC shall be adjusted to equal
its gross fair market value at the time of its contribution and (ii) the
Carrying Values of all assets held by the LLC shall be adjusted to equal their
respective gross fair market values (taking Code Section 7701(g) into account)
upon an adjustment to the Capital Accounts of the Members described in paragraph
(iii) of the definition of "Capital Account." The Carrying Value of any asset
whose Carrying Value was adjusted pursuant to the preceding sentence thereafter
shall be adjusted in accordance with the provisions of Treasury Regulation
Section 1.704-1(b)(2)(iv)(g).

"CERTIFICATE" means the certificate of formation of the LLC filed under and
pursuant to the Act with the office of the Secretary of State of the State of
Delaware, as it may, from time to time, be amended in accordance with the Act.

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

                                       -3-
<Page>

"CONSENT" means, subject to the provisions of Section 3.06(c), the mutual
written consent of the Members.

"DEFAULT RATE" means a rate per annum equal to the lesser of (a) 8% plus the
Interest Rate, and (b) the maximum rate permitted by applicable law.

"DELINQUENT MEMBER" has the meaning given it in Section 3.06(a).

"DISPUTE" has the meaning given it in Section 11.05(a).

"DISTRIBUTABLE CASH" means, with respect to any fiscal period, the excess of all
cash receipts of the LLC from any source whatsoever, including normal
operations, sales of assets, proceeds of borrowings, capital contributions of
the Members, proceeds from a Capital Transaction, and any and all other sources
over the sum of the following amounts:

          (i)     cash disbursements for advertising and promotion expenses,
salaries, employee benefits (including profit-sharing, bonus and similar plans),
fringe benefits, accounting and bookkeeping services and equipment, commodity
costs, costs of inventory, costs of sales of assets, utilities, rental payments
with respect to equipment or real property, management fees and expenses,
insurance, real estate taxes, legal expenses, costs of repairs and maintenance,
and any and all other items which are customarily considered to be "operating
expenses";

          (ii)    payments of interest, principal and premium and points and
other costs of borrowing under any indebtedness of the LLC, including without
limitation any mortgages or deeds of trust encumbering the real property or
other assets owned or leased by the LLC;

          (iii)   payments made to purchase inventory or capital assets, and for
capital construction, rehabilitation, acquisitions, alterations and
improvements;

          (iv)    payments to employees or former employees of the LLC in
connection with any phantom equity or similar bonus plan; and

          (v)     amounts set aside as reserves for working capital, contingent
liabilities, replacements or for any of the expenditures described in clauses
(i), (ii), (iii) and (iv) above which are deemed by the Board of Managers to be
necessary to meet the current and anticipated future needs of the LLC.

"ENTITY" means any corporation, limited liability company, limited or general
partnership, trust, estate, unincorporated association, governmental agency,
bureau, department or other body, or any other organization or entity.

"FUNDING NOTICE" has the meaning given it in Section 3.05(a).

"GAAP" means United States generally accepted accounting principles consistently
applied.

"GREENSTONE" means GreenStone Industries, Inc., a Delaware corporation.

                                       -4-
<Page>

"GREENSTONE ASSIGNMENT DOCUMENTATION" means the instruments of assignment made
by GreenStone to the LLC as of the date hereof, as listed hereto on EXHIBIT 1.

"INTEREST RATE" means a rate per annum equal to the lesser of (a) 2% plus the
rate per annum publicly announced by Bank of America in Charlotte, North
Carolina as its prime commercial rate, and (b) the maximum rate permitted by
applicable law.

"INVESTED CAPITAL" means, at any point in time, for any Member, the excess of
(i) the aggregate amount of the capital contributed to the LLC by such Member
over (ii) the aggregate amount distributed (or deemed distributed) to such
Member pursuant to Section 4.01(b) or 4.02(c).

"LENDING MEMBER" has the meaning given it in Section 3.06(a).

"LIQUIDATOR" has the meaning given it in Section 10.03.

"LLC" has the meaning given it in the introductory paragraph hereof.

"LLC ACCOUNT" means a financial institution account established by or on behalf
of the LLC and identified on SCHEDULE B.

"MEMBER" means any Person executing this Agreement as of the date of this
Agreement as a member or hereafter admitted to the LLC as a member as provided
in this Agreement, but such term does not include any Person which has ceased to
be a member of the LLC.

"MEMBERSHIP INTEREST" means all of a Member's interest in the LLC, including the
rights to receive allocations and distributions, to designate officers and
managers of the LLC, to vote, and to consent or approve any matter, and any
other rights of a Member as specified in this Agreement or the Act.

"NET PROFITS" AND "NET LOSSES" mean the taxable income or loss, as the case may
be, for a period as determined in accordance with Code Section 703(a) computed
with the following adjustments:

          (i)     Items of gain, loss, and deduction shall be computed based
upon the Carrying Values of the LLC's assets (in accordance with Treasury
Regulation Sections 1.704-1(b)(2)(iv)(g) and 1.704-3(d)) rather than upon the
assets' adjusted bases for federal income tax purposes;

          (ii)    Any tax-exempt income received by the LLC shall be included as
an item of gross income;

          (iii)   The amount of any adjustments to the Carrying Values of any
assets of the LLC pursuant to Code Section 743 shall not be taken into account;

          (iv)    Any expenditure of the LLC described in Code Section
705(a)(2)(B) (including any expenditures treated as being described in Code
Section 705(a)(2)(B) pursuant to Treasury Regulations under Code Section 704(b))
shall be treated as a deductible expense;

                                       -5-
<Page>

          (v)     The amount of items of income, gain, loss or deduction
specially allocated to any Members pursuant to Section 5.02 shall not be
included in the computation; and

          (vi)    The amount of any items of Net Profits or Net Losses deemed
realized pursuant to paragraphs (ii) and (iii) of the definition of "Capital
Account" shall be included in the computation.

"PERCENTAGE INTEREST" means, with respect to each Member, the percentage set
forth opposite such Member's name on SCHEDULE A.

"PERSON" means any individual or Entity.

"PRESIDENT" means the person occupying the office of the President (as provided
in Section 6.01(e)(ii) of the LLC at any time or from time to time.

"PRIORITY RETURN" means, at any point in time, for any Member, that amount
which, when considered together with all amounts previously distributed (or
deemed distributed) to such Member pursuant to Section 4.01(a) or 4.02(b), will
result in such Member having received a 10% annual return, compounded annually,
on such Member's weighted average Invested Capital.

"THIRD PARTY COSTS" means reasonable out-of-pocket costs and expenses incurred
by the relevant Person and its Affiliates (other than travel and related
expenses incurred by employees of such Person and its Affiliates) that have been
or will be paid to Persons who are not Affiliates of such Person.

"TRANSFER" and any grammatical variation thereof means any sale, exchange,
redemption, assignment, conveyance, license, sublicense, encumbrance,
hypothecation, gift, pledge, grant of a security interest, or other transfer,
disposition or alienation in any way (whether voluntarily, involuntarily or by
operation of law), including any assignment or distribution resulting from
merger, consolidation or other business combination, death, incompetency,
Bankruptcy, liquidation or dissolution; provided, however, that "Transfer" shall
not include (i) a bona fide pledge by a Member of its interest in the LLC to one
or more financial institutions in connection with a credit facility obtained by
the Member, as part of a general pledge of the Member's assets, or (ii) a
transfer of a Member's interest to a directly or indirectly wholly-owned
subsidiary of such Member.

"U.S. FIBER" means U.S. Fiber, Inc., a North Carolina corporation.

"U.S. FIBER ASSIGNMENT DOCUMENTATION" means the instruments of assignment made
by U.S. Fiber to the LLC as of the date hereof, as listed hereto on EXHIBIT 2.

                                       -6-
<Page>

                                   ARTICLE II

                                     GENERAL

2.01  NAME OF THE LIMITED LIABILITY COMPANY. The name of the LLC is "US
GreenFiber LLC". The name of the LLC may be changed at any time or from time to
time by Consent of the Members.

2.02  OFFICE OF THE LIMITED LIABILITY COMPANY; AGENT FOR SERVICE OF PROCESS. The
address of the principal office of the LLC is:

                  809 W. Hill Street
                  Charlotte, N.C. 28208

and the name and address of the resident agent for service of process on the LLC
in the State of Delaware for purposes of Section 18-104 of the Act is:

                  Corporation Trust Center
                  1209 Orange Street
                  Wilmington, DE

The Board of Managers may cause the LLC to establish places of business of the
LLC within and without the State of Delaware, as and when required by the LLC's
business and in furtherance of its purposes set forth in Section 2.04 hereof,
and may appoint agents for service of process in all jurisdictions in which the
LLC shall conduct business. The President may cause the LLC to change from time
to time its resident agent for service of process, or the location of its
principal office or of its office in the State of Delaware where the LLC
maintains its records as required by the Act; provided, however, that the
President shall cause the LLC to promptly notify all Members in writing of any
such change.

2.03  ORGANIZATION. The President shall cause to be filed such certificates and
documents as may be necessary or appropriate to comply with the Act and any
applicable requirements for the operation of a limited liability company in
accordance with the laws of the State of Delaware and any other jurisdictions in
which the LLC shall conduct business, and shall continue to do so for so long as
the LLC conducts business therein.

2.04  PURPOSES. The purposes of the LLC are to engage in the cellulose fibers
business, including the manufacturing, marketing and selling of insulation,
mulch and other cellulose-based products, and to engage in any and all lawful
activities directly or indirectly related to or incidental to the foregoing (the
"Business"). The LLC may also, as appropriate, consider the use of alternative
fibers.

2.05  MEMBERS.

      (a) The initial Members of the LLC are identified on SCHEDULE A.
Additional Members may be admitted to the LLC pursuant to and in accordance with
Article VIII hereof, or otherwise with the prior Consent of the Members. In
connection with any such admission, this Agreement (including SCHEDULE A) shall
be amended to reflect each additional Member, its

                                       -7-
<Page>

Capital Contribution, if any, its Percentage Interest, any other rights and
obligations of such additional Member, and any other changes desired by the
Members to be made in connection with the admission of such additional Member.

      (b) No Member shall have any right to resign, withdraw or retire from the
LLC except as may be otherwise expressly provided herein (including upon a
Transfer of all of such Member's Membership Interest in accordance with the
provisions of Article VIII, or by operation of the provisions of Article IX),
and any attempt by a Member to do so shall be of no force or effect and null and
void AB INITIO. The Members expressly agree that, if a Member resigns, withdraws
or retires from the LLC in violation of the foregoing covenant, such Member (i)
shall be immediately liable to the LLC for the full amount of all Capital
Contributions required to be made by such Member hereunder excluding all Capital
Contributions previously made by such Member (notwithstanding the fact that such
Member may not otherwise be obligated hereunder to make all or a portion of such
Capital Contributions until a later date), and (ii) shall be liable to the LLC
for damages to the full extent permitted by the Act.

      (c) No Member may be expelled or required to resign, withdraw or retire
from the LLC (except upon a Transfer of all of such Member's Membership Interest
in accordance with the provisions of Article VIII, or by operation of the
provisions of Article IX).

2.06  TERM. The LLC commenced upon the effectiveness of the Certificate and
shall have a perpetual existence, unless and until it is dissolved and
terminated in accordance with Article X.

2.07  LIABILITY OF MEMBERS. The liability of each Member for the losses, debts
and obligations of the LLC shall be limited to such Member's Capital
Contributions actually made or actually then due to the LLC by such Member
pursuant to the terms hereof; provided, however, that under applicable law, a
Member may under certain circumstances be liable to the LLC to the extent of
previous distributions made to such Member in the event that the LLC does not
have sufficient assets to discharge its liabilities. Without limiting the
foregoing, (i) no Member, in its capacity as a Member, shall have any liability
or obligation to restore any negative balance in its Capital Account, and (ii)
the failure of the LLC to observe any formalities or requirements relating to
exercise of its powers or management of its business or affairs under this
Agreement or the Act shall not be grounds for imposing personal liability on any
Member for liabilities of the LLC.

                                       -8-
<Page>

                                   ARTICLE III

                   CAPITAL CONTRIBUTIONS; ADDITIONAL FINANCING

3.01  CAPITAL ACCOUNTS. For each Member (and each permitted assignee), the LLC
shall establish and maintain a separate Capital Account.

3.02  INITIAL CAPITAL CONTRIBUTIONS; ASSUMPTION OF LIABILITIES. The Members
agree as follows:

      (a) On or before the Closing (as defined in Section 3.02(f) below), U.S.
Fiber shall contribute to the capital of the LLC all of its assets, properties,
claims, rights and interests of U.S. Fiber which exist on the Closing Date, of
every kind and nature and description, whether tangible or intangible, real,
personal or mixed, to the extent such assets are used by U.S. Fiber exclusively
in the cellulose fibers business, including without limitation the assets set
forth in EXHIBIT 3-A attached hereto (the "U.S. Fiber Assets"). The U.S. Fiber
Assets shall be free and clear of all liens, claims and security interests,
subject only to the U.S. Fiber Assumed Liabilities.

      (b) At the Closing, the LLC shall assume and agree to perform, pay and
discharge the liabilities of U.S. Fiber described on EXHIBIT 3-B attached hereto
(the "U.S. Fiber Assumed Liabilities").

      (c) On or before the Closing, GreenStone shall contribute to the capital
of the LLC all of its assets, properties, claims, rights and interests of
GreenStone which exist on the Closing Date, of every kind and nature and
description, whether tangible or intangible, real, personal or mixed, to the
extent such assets are used by GreenStone exclusively in the cellulose fibers
business, including without limitation the assets set forth in EXHIBIT 4-A
attached hereto (the "GreenStone Assets"). The GreenStone Assets shall be free
and clear of all liens, claims and security interests, subject only to the
GreenStone Assumed Liabilities.

      (d) At the Closing, the LLC shall assume and agree to perform, pay and
discharge the liabilities of GreenStone described on EXHIBIT 4-B attached hereto
(the "GreenStone Assumed Liabilities").

      (e) At the Closing, each of U.S. Fiber and GreenStone shall contribute
$2,500,000 in cash to the capital of the LLC by wire transfer of immediately
available funds.

      (f) The obligation of a Member to consummate the transactions described in
this Section 3.02 (the "Closing") shall be subject to the satisfaction or waiver
of the following conditions. The Closing shall occur at a time and place which
is mutually acceptable to the Members within 10 business days following the
satisfaction or waiver of all such conditions. In the event that the Closing
does not take place within 120 days after the date of this Agreement, then at
the written election of either Member this Agreement shall be void and of no
further force or effect, and neither party shall have any liability to the
other.

          (i)     CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE OTHER
MEMBER; COMPLIANCE WITH COVENANTS AND OBLIGATIONS. The representations and
warranties of the other

                                       -9-
<Page>

Member set forth in this Agreement shall be true on and as of the Closing as
though such representations and warranties were made on and as of such date,
except for any changes permitted by the terms hereof or consented to in writing
by the Member. The other Member shall have performed and complied with all
terms, conditions, covenants, obligations, agreements and restrictions required
by this Agreement to be performed or complied with by it prior to or at the
Closing.

          (ii)    CORPORATE PROCEEDINGS. All corporate and other proceedings
required to be taken on the part of such Member and the other Member to
authorize or carry out this Agreement and to convey, assign, transfer and
deliver the Assets to be transferred by it shall have been taken.

          (iii)   GOVERNMENTAL APPROVALS. All governmental agencies,
departments, bureaus, commissions and similar bodies, the consent, authorization
or approval of which is necessary under any applicable law, rule, order or
regulation for the consummation by the Members of the transactions contemplated
by this Agreement shall have consented to, authorized, permitted or approved
such transactions.

          (iv)    CONSENTS OF LENDERS, LESSORS AND OTHER THIRD PARTIES. All
Members shall have received all requisite consents and approvals of all lenders,
lessors and other third parties whose consent or approval is required in order
for the Members to consummate the transactions contemplated by this Agreement.

          (v)     ADVERSE PROCEEDINGS. No action or proceeding by or before any
court or other governmental body shall have been instituted or threatened by any
governmental body or person whatsoever which shall seek to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or which might affect
the right of the LLC to own or use the U.S. Fiber Assets or the GreenStone
Assets after the Closing.

          (vi)    CLOSING DELIVERIES. The Member and the LLC shall have received
at or prior to the Closing from the other Member:

                  (A) the other Member's Assignment Documentation;

                  (B) such certificates of the other Member's officers and such
other documents evidencing satisfaction of the conditions specified in this
Section 3.02(f) as the Buyer shall reasonably request;

                  (C) certificates of the Secretary of the other Member
attesting to the incumbency of the other Member's officers, respectively, and
the authenticity of the resolutions authorizing the transactions contemplated by
the Agreement;

                  (D) a title policy or policies (together, the "Title Policy")
from one or more title companies reasonably acceptable to the LLC (the "Title
Insurer"), in form and substance reasonably satisfactory to the LLC covering the
real estate being transferred by the other Member;

                                      -10-
<Page>

                  (E) such affidavits and indemnities executed by the other
Member as the Title Insurer may reasonably require in order to omit from the
Title Policy all exceptions for (i) judgments, bankruptcies or other returns
against persons or entities whose names are the same as or similar to the other
Member; (ii) parties in possession; (iii) mechanics' liens; and (iv) hazardous
waste (if applicable). It shall be the obligation of the other Member to obtain
the Title Policy and the cost of the Title Policy shall be borne by the other
Member; and

                  (F) such other documents, instruments or certificates as the
Member may reasonably request.

      (g) At any time and from time to time after the Closing, at GreenStone's
request and without further consideration, U.S. Fiber promptly shall execute and
deliver such instruments of sale, transfer, conveyance, assignment and
confirmation, and take such other action, as GreenStone may reasonably request
to more effectively transfer, convey and assign to the LLC, and to confirm the
LLC's title to, all of the U.S. Fiber Assets, to put the LLC in actual
possession and operating control thereof, to assist the LLC in exercising all
rights with respect thereto and to carry out the purpose and intent of this
Agreement. At any time and from time to time after the Closing, at U.S. Fiber's
request and without further consideration, GreenStone promptly shall execute and
deliver such instruments of sale, transfer, conveyance, assignment and
confirmation, and take such other action, as U.S. Fiber may reasonably request
to more effectively transfer, convey and assign to the LLC, and to confirm the
LLC's title to, all of the GreenStone Assets, to put the LLC in actual
possession and operating control thereof, to assist the LLC in exercising all
rights with respect thereto and to carry out the purpose and intent of this
Agreement.

3.03  REPRESENTATIONS AND WARRANTIES. Each Member hereby represents and warrants
to the other Member, as of the date hereof, that:

      (a) such Member is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation and is
duly qualified and in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification;

      (b) such Member has full corporate power and authority to enter into this
Agreement and each Ancillary Document to which such Member is a party and to
perform its obligations hereunder and thereunder;

      (c) the execution, delivery and performance of this Agreement and each
Ancillary Document to which such Member is a party have been duly authorized by
all necessary corporate action on the part of such Member;

      (d) this Agreement and each Ancillary Document to which such Member is a
party have been duly executed and delivered by such Member;

      (e) the authorization, execution, delivery and performance by such Member
of this Agreement and each Ancillary Document to which such Member is a party do
not conflict with any other agreement or arrangement to which such Member is a
party or by which it is bound;

                                      -11-
<Page>

      (f) this Agreement and each Ancillary Document to which such Member is a
party constitute the valid, binding and enforceable agreements of such Member;
and

      (g) each of the representations and warranties set forth on EXHIBIT 5
attached hereto is true and correct on the date hereof.

3.04  INDEMNIFICATION FOR BREACHES OF REPRESENTATIONS AND WARRANTIES, ETC. Each
of the Members hereby agrees to indemnify the other Member as and to the extent
set forth in EXHIBIT 6 attached hereto.

3.05  SUBSEQUENT CAPITAL CONTRIBUTIONS.

      (a) In the event of a Funding Shortfall (as defined below), the President
may, by notice given to each Member (a "Funding Notice"), request the Members to
make additional Capital Contributions to the LLC. Each Member shall, not later
than five Business Days after the date of the relevant Funding Notice (or, if a
later date is specified for the making of the relevant Capital Contributions in
such Funding Notice, not later than such date), contribute to the LLC its
Percentage Interest of the aggregate amount of Capital Contributions requested
by such Funding Notice, in cash by wire transfer of immediately available funds
to the account specified in such Funding Notice unless otherwise set forth in
such Funding Notice. For purposes hereof, a "Funding Shortfall" means the amount
by which the sum of the cash then held by the LLC and the cash anticipated in
the Approved Budget to be generated by the LLC over the next succeeding
six-month period is less than the cash anticipated in the Approved Budget to be
used by the LLC over such period and otherwise reasonably required by the LLC to
pay expenditures actually incurred.

      (b) Notwithstanding anything to the contrary herein, the provisions of
this Section 3.05 are not intended to, and shall not, be interpreted, construed
or implied to create any rights in favor of any third party.

3.06  FAILURE TO CONTRIBUTE.

      (a) If a Member does not timely contribute all or any portion of a Capital
Contribution required to be made by such Member pursuant to Section 3.02 or
Section 3.05(a), the President shall cause the LLC to exercise, on notice to
such Member (the "Delinquent Member"), one or more of the following remedies:

          (i)     taking such action (including arbitration and enforcement
proceedings) as the President may deem appropriate to obtain payment by the
Delinquent Member of the portion of the Delinquent Member's Capital Contribution
that is in default, together with interest thereon at the Default Rate from the
date that the Capital Contribution was due until the date that it is made, all
at the cost and expense of the Delinquent Member;

          (ii)    at the request of the other Member (the "Lending Member"),
permitting the Lending Member to advance the portion of the Delinquent Member's
Capital Contribution that is in default, with the following results:

                                      -12-
<Page>

                  (A) the sum advanced shall constitute a loan from the Lending
Member to the Delinquent Member and a Capital Contribution of that sum to the
LLC by the Delinquent Member pursuant to the applicable provisions of this
Agreement,

                  (B) the principal balance of such loan and all accrued unpaid
interest thereon shall be due and payable in full on the fifth Business Day
after written demand therefor by the Lending Member to the Delinquent Member,

                  (C) the amount loaned shall bear interest at the Default Rate
from the date on which the advance is deemed made until the date that the loan,
together with all interest accrued thereon, is repaid to the Lending Member,

                  (D) all distributions from the LLC that otherwise would be
made to the Delinquent Member (whether before or after dissolution of the LLC)
instead shall be paid to the Lending Member until the loan and all interest
accrued thereon have been paid in full to the Lending Member (with payments
being applied first to accrued and unpaid interest and then to principal),

                  (E) the payment of the loan and interest accrued thereon shall
be secured by a security interest in the Delinquent Member's Membership
Interest, as more fully set forth in Section 3.06(b), and

                  (F) the Lending Member shall have the right, in addition to
the other rights and remedies granted to it pursuant to this Agreement or
available to it at law or in equity, to take any action (including court
proceedings) that the Lending Member may deem appropriate to obtain payment by
the Delinquent Member of the loan and all accrued and unpaid interest thereon,
at the cost and expense of the Delinquent Member;

          (iii)   exercising the rights of a secured party under the Uniform
Commercial Code of the State of Delaware, as more fully set forth in Section
3.06(b); or

          (iv)    exercising any other rights and remedies available at law or
in equity.

      (b) Each Member grants to the LLC, and to each Lending Member with respect
to any loans made by the Lending Member to such Member as a Delinquent Member
pursuant to Section 3.06(a)(ii), as security, equally and ratably, for the
payment of all Capital Contributions that such Member has agreed to make and the
payment of all loans and interest accrued thereon made by the Lending Member to
such Member as a Delinquent Member pursuant to Section 3.06(a)(ii), a security
interest in and a general lien on its Membership Interest and the proceeds
thereof, all under the Uniform Commercial Code of the State of Delaware. On any
default in the payment of a Capital Contribution or in the payment of such a
loan or interest accrued thereon, the LLC or the Lending Member, as applicable,
shall be entitled to all the rights and remedies of a secured party under the
Uniform Commercial Code of the State of Delaware with respect to the security
interest granted in this Section 3.06(b). Each Member shall execute and deliver
to the LLC and the other Member all financing statements and other instruments
that the President or the Lending Member, as applicable, may request to
effectuate and carry out the preceding provisions of this Section 3.06(b). At
the option of the President or the Lending Member, this Agreement or a carbon,
photographic, or other copy hereof may serve as a financing statement.

                                      -13-
<Page>

      (c) In addition to the remedies which may be exercised by the LLC as set
forth in Section 3.06(a), if a Member becomes, and for so long as such Member
remains, a Delinquent Member, such Delinquent Member may not initiate the
procedures contemplated by Article IX. For the purposes of this Section 3.06(c),
if the LLC exercises the remedies set forth in Section 3.06(a)(ii) and the
Lending Member advances the portion of the Delinquent Member's Capital
Contribution that is in default as set forth therein, the Delinquent Member
shall not cease to be such until the loan to the Delinquent Member arising by
reason of such advance, together with interest accrued thereon, is repaid in
full to the Lending Member.

3.07  NO OTHER CONTRIBUTIONS; NO WITHDRAWAL OF OR INTEREST ON CAPITAL. Except as
otherwise provided in this Article III, no Member shall be obligated or
permitted to contribute any additional capital to the LLC. No interest shall
accrue on any Capital Contributions, and no Member shall have the right to
withdraw or to be repaid any Capital Contribution made by it or to receive any
other payment in respect of its Membership Interest, including as a result of
the withdrawal or resignation of such Member from the LLC (whether in violation
of Section 2.05(b) or otherwise), except as specifically provided in this
Agreement.

3.08  THIRD PARTY LOANS. In the event that the LLC requires additional funds to
carry out its purposes, to conduct its business and affairs, or to meet its
obligations, or to make any expenditure authorized by this Agreement, the LLC
may borrow funds from such Persons, and on such terms and conditions, as may be
approved by the President or, to the extent such approval is required by the
provisions of Section 6.01(b), by the Board of Managers.

                                   ARTICLE IV

                                  DISTRIBUTIONS

4.01  DISTRIBUTION OF DISTRIBUTABLE CASH. Distributable Cash, other than
Distributable Cash arising from Capital Transactions or constituting net
proceeds upon liquidation of the LLC, shall be distributed to the Members, at
such times and in such amounts as the Board of Managers may approve (it being
acknowledged that the Board of Managers will be instructed that it is the desire
of the Members that Distributable Cash be distributed rather than retained by
the LLC for extended periods), as follows:

      (a) First, to the Members, in proportion to their respective amounts of
Priority Return, until the Priority Return of each Member has been reduced to
zero;

      (b) Second, to the Members, in proportion to their respective amounts of
Invested Capital, until the Invested Capital of each Member has been reduced to
zero; and

      (c) The balance, if any, to the Members in accordance with their
Percentage Interests.

4.02  DISTRIBUTIONS OF DISTRIBUTABLE CASH FROM CAPITAL TRANSACTIONS AND NET
PROCEEDS UPON LIQUIDATION. Distributable Cash arising from Capital Transactions
or constituting net proceeds upon liquidation of the LLC, shall be distributed
to the Members as follows:

                                      -14-
<Page>

      (a) First, to all Members with positive Adjusted Capital Account balances
(after such balances have been adjusted to reflect all debits and credits
required by applicable Treasury Regulations under Section 704(b) of the Code for
all events through and including the Capital Transaction or the distribution in
liquidation of the LLC, as the case may be) in proportion to and to the extent
of such positive balances;

      (b) Second, to the Members, in proportion to their respective amounts of
Priority Return, until the Priority Return of each Member has been reduced to
zero;

      (c) Third, to the Members, in proportion to their respective amounts of
Invested Capital, until the Invested Capital of each Member has been reduced to
zero; and

      (d) The balance, if any, to the Members in accordance with their
Percentage Interests.

Amounts distributed pursuant to paragraph (a) above shall be considered to have
been distributed pursuant to paragraphs (b) through (e) (as applicable) to the
extent that they would have been distributed pursuant to paragraphs (b) through
(e) had paragraph (a) not been contained in this Agreement.

4.03  DISTRIBUTIONS UPON TRANSFER OR ADMISSION. In the event that a Member
acquires an interest in the LLC either by transfer from another Member or by
acquisition from the LLC, an equal portion of the Distributable Cash (other than
Distributable Cash from a Capital Transaction) of the LLC for the year in which
such acquisition occurs shall be allocated to each day of such year, and such
Distributable Cash so allocated to the portion of the year prior to the date of
the acquisition of the interest in the LLC by the Member shall be distributed
among the Members without giving effect to such acquisition, and such
Distributable Cash so allocated to the portion of the year from and after the
date of the acquisition of such interest shall be distributed among the Members
by giving effect to such acquisition. Distributable Cash from a Capital
Transaction or upon the liquidation of the LLC shall be distributed to the
Members based upon the actual ownership of interests in the LLC on the date of
the event giving rise to such Distributable Cash.

4.04  CERTAIN PAYMENTS TO THE INTERNAL REVENUE SERVICE TREATED AS DISTRIBUTIONS.

      (a) For purposes of this Section 4.04, the Board of Managers may assume
that any Member who fails to provide to the Board of Managers or the Treasurer
satisfactory evidence of its tax status for United States federal income tax
purposes is a foreign person taxable as a corporation.

      (b) Notwithstanding anything to the contrary herein, to the extent that
the LLC is required, or elects, pursuant to applicable law, either (i) to pay
tax (including estimated tax) on a Member's allocable share of LLC items of
income or gain, whether or not distributed, or (ii) to withhold and pay over to
the tax authorities any portion of a distribution otherwise distributable to a
Member, the Board of Managers or Treasurer may pay over such tax or such
withheld amount to the tax authorities, and such amount shall be treated as a
distribution to such Member at the time it is paid to the tax authorities.

                                      -15-
<Page>

4.05  DISTRIBUTION OF ASSETS IN KIND. No Member shall have the right to require
any distribution of any assets of the LLC in kind. If any assets of the LLC are
distributed in kind, such assets shall be distributed on the basis of their fair
market value as determined by the Board of Managers. Any Member entitled to any
interest in such assets shall, unless otherwise determined by the Board of
Managers, receive separate assets of the LLC and not an interest as a
tenant-in-common with other Members so entitled in any asset being distributed.

                                    ARTICLE V

                    ALLOCATION OF NET PROFITS AND NET LOSSES

5.01  BASIC ALLOCATIONS.

      (a) Except as provided in Sections 5.02 below (which shall be applied
first), Net Profits of the LLC for any relevant period shall be allocated as
follows:

          (i)     First, to any Members having negative Adjusted Capital Account
balances, in proportion to and to the extent of such negative balances; and

          (ii)    The balance, if any, to the Members in such proportions and in
such amounts as would result in the Adjusted Capital Account balance of each
Member equaling, as nearly as possible, such Member's share of the then LLC
Capital determined by calculating the amount the Member would receive if an
amount equal to the LLC Capital were distributed to the Members in accordance
with the provisions of Section 4.02 hereof, other than clause (a) thereof.

      (b) Except as provided in Sections 5.02 below (which shall be applied
first), Net Losses of the LLC for any relevant period shall be allocated among
the Members as follows:

          (i)     First, to each Member with a positive Adjusted Capital Account
balance, in the amount of such positive balance; provided, however, that if the
amount of Net Losses to be allocated is less than the sum of the Adjusted
Capital Account balances of all Members having positive Adjusted Capital Account
balances, then the Net Losses shall be allocated to the Members in such
proportions and in such amounts as would result in the Adjusted Capital Account
balance of each Member equaling, as nearly as possible, such Member's share of
the then LLC Capital determined as set forth in Section 5.01(a) above; and

          (ii)    The balance, if any, to the Members in accordance with their
Percentage Interests.

      (c) If the amount of Net Profits allocable to the Members pursuant to
Section 5.01(a)(ii) or the amount of Net Losses allocable to them pursuant to
Section 5.01(b)(i) is insufficient to allow the Adjusted Capital Account balance
of each Member to equal such Member's share of the LLC Capital, such Net Profits
or Net Losses shall be allocated among the Members in such a manner as to
decrease the differences between the Members' respective Adjusted Capital
Account balances and their respective shares of the LLC Capital in proportion to
such differences.

                                      -16-
<Page>

      (d) Allocations of Net Profits and Net Losses provided for in this Section
5.01 shall generally be made as of the end of the fiscal year of the LLC;
PROVIDED, HOWEVER, that allocations of items of Net Profits and Net Losses
described in clause (vi) of the definition of "Net Profits" and "Net Losses"
shall be made at the time deemed realized as described in the definition of
"Capital Account."

5.02  REGULATORY ALLOCATIONS. Notwithstanding the provisions of Section 5.01
above, the following allocations of Net Profits, Net Losses and items thereof
shall be made in the following order of priority:

      (a) Items of income or gain (computed with the adjustments contained in
paragraphs (i), (ii) and (iii) of the definition of "Net Profits and Net
Losses") for any taxable period shall be allocated to the Members in the manner
and to the minimum extent required by the "minimum gain chargeback" provisions
of Treasury Regulation Section 1.704-2(f) and Treasury Regulation Section
1.704-2(i)(4).

      (b) All "nonrecourse deductions" (as defined in Treasury Regulation
Section 1.704-2(b)(1)) of the LLC for any year shall be allocated to the Members
in accordance with their respective Percentage Interests; provided, however,
that nonrecourse deductions attributable to "partner nonrecourse debt" (as
defined in Treasury Regulation Section 1.704-2(b)(4)) shall be allocated to the
Members in accordance with the provisions of Treasury Regulation Section
1.704-2(i)(1).

      (c) Items of income or gain (computed with the adjustments contained in
paragraphs (i), (ii) and (iii) of the definition of "Net Profits and Net
Losses") for any taxable period shall be allocated to the Members in the manner
and to the extent required by the "qualified income offset" provisions of
Treasury Regulation Section 1.704-1(b)(2)(ii)(D).

      (d) In no event shall Net Losses of the LLC be allocated to a Member if
such allocation would cause or increase a negative balance in such Member's
Adjusted Capital Account (determined for purposes of this Section 5.02(d) only,
by increasing the Member's Adjusted Capital Account balance by the amount the
Member is obligated to restore to the LLC pursuant to Treasury Regulation
Section 1.704-1(b)(2)(ii)(c).

      (e) Except as otherwise provided herein or as required by Code Section
704, for tax purposes, all items of income, gain, loss, deduction or credit
shall be allocated to the Members in the same manner as are Net Profits and Net
Losses; provided, however, that if the Carrying Value of any property of the LLC
differs from its adjusted basis for tax purposes, then items of income, gain,
loss, deduction or credit related to such property for tax purposes shall be
allocated among the Members so as to take account of the variation between the
adjusted basis of the property for tax purposes and its Carrying Value in the
manner provided for under Code Section 704(c).

5.03  ALLOCATIONS UPON TRANSFER OR ADMISSION. In the event that a Member
acquires an interest in the LLC either by Transfer from another Member or by
acquisition from the LLC, the LLC shall close its books as of the date of the
acquisition and (i) Net Profits and Net Losses and items thereof computed for
the portion of the year ending on the date of the acquisition shall be

                                      -17-
<Page>

allocated among the Members without regard to such acquisition, and (ii) Net
Profits and Net Losses and items thereof computed for the portion of the year
commencing on the day following the date of the acquisition shall be allocated
among the Members taking into account such acquisition. For purposes of
determining the date on which the acquisition occurs, the LLC may make use of
any convention allowable under Section 706(d) of the Code.

                                   ARTICLE VI

                                   MANAGEMENT

6.01  MANAGEMENT OF THE LLC.

      (a) BOARD OF MANAGERS. The business and affairs of the LLC shall be
managed by or under the direction of a Board of Managers, who may exercise all
of the powers of the LLC (including, without limitation, as set forth in Section
6.01(b), but subject to the provisions of Section 6.01(c) except as otherwise
provided by law or this Agreement). All management and other responsibilities
not specifically reserved to the Members in this Agreement shall be vested in
the Board of Managers, and the Members shall have no voting rights except as
specifically provided in this Agreement or required by non-waivable provisions
of applicable law. In the event of a vacancy on the Board of Managers, the
remaining Managers, except as otherwise provided by law, may exercise the powers
of the full Board until the vacancy is filled.

      (b) ACTIONS REQUIRING THE APPROVAL OF THE BOARD OF MANAGERS. Without
limiting the foregoing Section 6.01(a), the LLC shall not, without the approval
of the Board of Managers, engage in or undertake any of the following actions or
activities:

          (i)     granting any wage or salary increases to any officer of the
LLC or entering into any employment agreements or severance arrangements with
any officer or other employee of the LLC;

          (ii)    causing or permitting the LLC to sell or otherwise dispose of
or acquire any real estate;

          (iii)   causing or permitting the LLC to make, or permitting to exist,
any pledge, mortgage or otherwise encumbrance on any assets of the LLC, other
than arising solely out of capital or operating leases for the purchase or use
of equipment (provided that the aggregate fair market value or book value of any
equipment so purchased or used pursuant to such leases does not exceed
$100,000);

          (iv)    causing or permitting the LLC to make any capital expenditure,
or to acquire any businesses (whether by assets acquisition, merger or
otherwise), except as set forth in the Approved Budget in which such expenditure
or acquisition is to be made, or incurring any other obligations, or making any
other expenditures, in any period in excess of the Approved Budget for such
period;

          (v)     causing or permitting the LLC to enter into any contract or
agreement with a term in excess of three years or involving payments by or to
the LLC in excess of $1,000,000

                                      -18-
<Page>

over the term of such contract or agreement (taking into account any permitted
renewals or extensions thereof);

          (vi)    except as set forth in clause (i) above, causing or permitting
the LLC to incur any indebtedness for borrowed money, or to guarantee any
obligation of any other person or entity;

          (vii)   providing loans to any third party, or guarantees or otherwise
extend credit to or for any other party;

          (viii)  making any election under the Internal Revenue Code of 1986,
as amended, with respect to the tax position of the LLC, unless such power has
been previously delegated by the Board of Managers to the LLC;

          (ix)    appointing, removing or otherwise changing any officer of the
LLC;

          (x)     engaging in any business other than as set forth in Section
2.04;

          (xi)    subject to the last sentence of this Section 6.01(b), causing
or permitting the LLC to initiate any litigation, or to enter into any
settlement agreement in connection with any litigation or regulatory proceeding
involving the payment by the LLC of $100,000 or more pursuant to such
settlement, or to enter into any settlement agreement brought by any
governmental authority against the LLC under OSHA or environmental laws;

          (xii)   causing or permitting the LLC to cancel, amend or restate, or
relinquish any material rights under, any contract or agreement of the kind
described in clause (v) above to which the LLC is a party;

          (xiii)  causing or permitting the LLC to enter into or engage in any
transaction, contract, agreement or arrangement with a Member, Manager, officer
of the LLC, or an Affiliate of any of the foregoing (provided, however, that any
actions with respect to the enforcement of any such transaction, contract,
agreement or arrangement shall be in the sole discretion and control of the
members of the Board of Managers not affiliated with the Member which is, or
whose representative is a Manager or officer which is, party to any such
transaction, contract, agreement or arrangement);

          (xiv)   causing or permitting the LLC to enter into or engage in any
transaction, contract, agreement or arrangement that (A) is unrelated to the
LLC's purposes (as set forth in Section 2.04), (B) otherwise contravenes the
Certificate or this Agreement, (C) would make it impossible to carry on the
ordinary business of the LLC, or (D) is not apparently for the carrying on of
the business of the LLC in the usual way; and

          (xv)    causing or permitting the LLC to become Bankrupt or to
commence liquidation (but this provision shall not be construed to require any
Member to ensure the profitability or solvency of the LLC).

                                      -19-
<Page>

Notwithstanding any other provision of this Agreement, each Member shall have
the right to take any action on behalf of the LLC as may be reasonably deemed
necessary by such Member to enforce the obligations of the other Member to the
LLC.

      (c) ACTIONS REQUIRING THE CONSENT OF THE MEMBERS. The LLC shall not,
without the Consent of the Members, engage in or undertake any of the following
actions or activities:

          (i)     causing or permitting the LLC (A) to be a party to a merger,
consolidation, share exchange, interest exchange or other transaction authorized
by or subject to the provisions of Section 18-209 of the Act, or (B) to convert
into any other type of entity; or

          (ii)    admitting any person as a Member of the LLC, or purchasing or
redeeming the interest of any Member, other than as expressly set forth in this
Agreement.

      (d) GOVERNANCE ISSUES REGARDING MANAGERS.

          (i)     The number of Managers who shall constitute the whole Board of
Managers shall be four (4), two (2) of whom shall be designated by U.S. Fiber
and two (2) of whom shall be designated by GreenStone. Managers need not be
Members of the LLC.

          (ii)    Each Manager shall hold office until his death, resignation or
removal in accordance with the provisions hereof.

          (iii)   Any Manager may resign by delivering his written resignation
to (A) the President or any other officer of the LLC designated by the Board of
Managers to receive such resignations, and (B) each Member. Such resignation
shall be effective upon receipt unless it is specified to be effective at some
other time or upon the happening of some other event.

          (iv)    Any Manager may be removed at any time, with or without cause,
by the Member which had designated such person as Manager as set forth in
Section 6.01(d)(i), by delivering written notice of such removal to (A) the
President or any other officer of the LLC designated by the Board of Managers to
receive such notices, and (B) each other Member. Such removal shall be effective
upon the giving of the notice specified in the preceding sentence to each person
or entity entitled thereto, unless such notice is specified to be effective at
some other time or upon the happening of some other event.

          (v)     Any vacancy on the Board of Managers resulting from the death,
resignation or removal of any Manager shall be filled, as promptly as
practicable, by the Member which had designated the Manager whose position has
become vacant, by designating a replacement Manager in a written notice given to
(A) the President or any other officer designated by the Board of Managers to
receive such notices, and (B) each other Member. Such designation of a
replacement Manager shall be effective upon the giving of the notice specified
in the preceding sentence to each person or entity entitled thereto, unless such
notice is specified to be effective at some other time or upon the happening of
some other event.

          (vi)    Regular meetings of the Board of Managers may be held without
notice at such time and place as shall be determined from time to time by the
Board of Managers; provided that any Manager who is absent when such a
determination is made shall be given

                                      -20-
<Page>

notice of the determination. Special meetings of the Board of Managers may be
held at any time and place designated in a call by the President or any Manager.
Notice of any special meeting of Managers shall be given to each Manager by the
officer or the Manager calling the meeting. Notice shall be duly given to each
Manager (A) by giving notice to such Manager in person or by telephone at least
48 hours in advance of the meeting, (B) by sending a telegram, telex or
facsimile transmission, or delivering written notice by hand, to his last known
business or home address at least 48 hours in advance of the meeting, or (C) by
mailing written notice to his last known business or home address at least five
days in advance of the meeting. A notice or waiver of notice of a meeting of the
Board of Managers need not specify the purposes of the meeting.

          (vii)   At any meeting of the Board of Managers, the vote of a
majority of all Managers then in office (whether or not present at the relevant
meeting) shall be sufficient to take any action, unless a different vote is
specified by law or this Agreement.

          (viii)  Managers or any members of any committee designated by the
Managers may participate in a meeting of the Board of Managers or such committee
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation by such means shall constitute presence in person at such meeting.
Any action required or permitted to be taken at any meeting of the Board of
Managers or of any committee of the Board of Managers may be taken without a
meeting, if the members of the Board or committee, as the case may be, who would
be empowered to take the relevant action at a duly convened meeting of the Board
or committee, as the case may be, consent to the action in writing, and the
written consents are filed with the minutes of proceedings of the Board or
committee.

          (ix)    The Board of Managers may, by resolution, designate one or
more committees, each committee to consist of one or more of the Managers of the
LLC. Any such committee, to the extent provided in the resolution of the Board
of Managers and subject to the provisions of the Act, shall have and may
exercise all the powers and authority of the Board of Managers in the management
of the business and affairs of the LLC. Each such committee shall keep minutes
and make such reports as the Board of Managers may from time to time request.
Except as the Board of Managers may otherwise determine, any committee may make
rules for the conduct of its business, but unless otherwise provided by the
Managers or in such rules, its business shall be conducted as nearly as possible
in the same manner as is provided in this Agreement for the Board of Managers.

          (x)     Managers shall not be paid for their services as such.

      (e) OFFICERS.

          (i)     The officers of the LLC shall consist of (A) the President,
(B) a Vice President of Sales, (C) a Vice President of Manufacturing, (D) a
Chief Financial Officer and such other officers with such other titles as the
Board of Managers may determine; provided, however, that, if the Board of
Managers so determine to establish any such other officer position with a title
customarily used in corporations organized and existing under the Delaware
General Corporation Law, such officer shall, to the maximum extent possible,
have the duties and responsibilities associated with such officer position in
such corporations.

                                      -21-
<Page>

          (ii)    The President shall be the Chief Executive Officer of the LLC
and have general charge and supervision of the business and affairs of the LLC.
Mr. Dennis Barrineau shall serve as the initial President of the LLC. The
President shall be appointed by the Board of Managers.

          (iii)   No officer need be a Member or a Manager. Any two or more
offices may be held by the same individual. All officers other than the
President shall be appointed by the President of the LLC, subject to the
approval of the Board of Managers.

          (iv)    Except as otherwise provided by law or by this Agreement, each
officer shall hold office until his death, resignation or removal, unless a
different term is specified in the action of the Board of Managers designating
such officer. Any officer may resign by delivering his written resignation to
the President, any Manager, or each Member. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event. Any officer, including the President, may be
removed at any time, with or without cause, by action of the Board of Managers.

          (v)     Except as the Board of Managers may otherwise determine, no
officer who resigns or is removed shall have any right to any compensation as an
officer for any period following his resignation or removal, or any right to
damages on account of such removal, whether his compensation be by the month or
by the year or otherwise, unless such compensation is expressly provided in a
duly authorized written agreement with the LLC.

          (vi)    Any vacancy occurring for any reason in the offices set forth
in clauses (A) through (D) of paragraph (i) above shall be filled by the Board
of Managers as promptly as practicable. The Board of Managers may, in their
mutual discretion, fill any vacancy occurring in any other office for any reason
or leave such vacancy unfilled for such period as they may determine.

6.02  APPROVED BUDGET. Not later than 30 days prior to the beginning of any
fiscal year during the term of this Agreement, the President of the LLC shall
submit to the Board of Managers an annual budget, which shall include in
reasonable detail a listing of anticipated revenues and expenses, including an
operating plan, a capital expenditure plan and an itemization of any other
anticipated expenditures of the LLC for such fiscal year. Such budget shall also
show such anticipated revenues and expenses for each fiscal quarter of such
fiscal year. Such budget will be submitted to the Board of Managers and, once
approved by the Board of Managers shall constitute the "Approved Budget" of the
LLC for such fiscal year and each fiscal quarter therein. In the event that the
Board of Managers fails to approve the budget submitted by the President of the
LLC prior to the beginning of the fiscal period covered by such budget, the
"Approved Budget" for such period shall, until a new budget is approved, be
deemed to be equal to the corresponding period of the most recent Approved
Budget (the "Prior Budget"), plus an additional amount which the LLC shall be
deemed authorized to spend in such period until a budget is approved equal to 5%
of the expenditures on a line item basis as set forth for the corresponding
period in the most recent Approved Budget.

6.03  CONTRACTS WITH MEMBERS, ETC.. The LLC may engage in business with, or
enter into one or more agreements, leases, contracts or other arrangements for
the furnishing to or by the LLC

                                      -22-
<Page>

of goods, services or space with, any Member, Manager, officer or employee of
the LLC, or an Affiliate of any of the foregoing, and may pay compensation in
connection with such business, goods, services or space, provided in each case
that the relevant agreement, lease, contract or other arrangement or transaction
is, to the extent required under Section 6.01, approved by the Board of Managers
in accordance with the provisions of such Section 6.01.

6.04  BINDING THE LLC. Except as the President may generally or in any
particular case or cases otherwise authorize, and subject to the other
provisions of this Agreement, all deeds, leases, contracts, bonds, notes,
checks, drafts or other obligations made, accepted or endorsed by the LLC shall
be signed by the President or such other officer or officers of the LLC as the
President may designate.

6.05  INDEMNIFICATION AND EXCULPATION.

      (a) No Manager or officer shall have any liability to the LLC or to any
Member for any loss suffered by the LLC which arises out of any action or
inaction of such Manager or officer if such Manager or officer determined in
good faith that such course of conduct was in the best interests of the LLC and
such course of conduct did not constitute gross negligence, willful misconduct
or a breach of this Agreement by such Manager or officer.

      (b) The Members' respective obligations to each other and to the LLC under
this Agreement are limited to the express obligations expressly described in
this Agreement, which obligations the Members shall carry out with ordinary
prudence and in a manner characteristic of business persons in similar
circumstances. Each Member and Manager may, with respect to any vote, consent or
approval that it, he is entitled to grant pursuant to this Agreement, grant or
withhold such vote, consent or approval in its, his or her sole and absolute
discretion, with or without cause, and subject to such conditions as it, he
shall deem appropriate. The Members acknowledge and agree that the relationship
among them as members of the LLC as specified in this Agreement is, to the
maximum extent permissible under the Act, contractual in nature and not
fiduciary. Accordingly, pursuant to Section 18-1101 of the Act, the Members
agree that to the maximum extent permissible under the Act, each Member's
fiduciary and any other similar duties and obligations to the LLC or any other
Member (if any) shall be eliminated (or, if complete elimination of such duties
and obligations is deemed to be not permissible under the Act, then reduced to
the maximum extent permissible) hereby.

      (c) Each Manager and officer shall be indemnified by the LLC against any
losses, judgments, liabilities, expenses and amounts paid in settlement of any
claims sustained by him with respect to actions taken by such Manager or officer
on behalf of the LLC, provided that no indemnification shall be provided for any
person with respect to any matter as to which he shall have been adjudicated in
any proceeding to have been grossly negligent or to have acted with willful
misconduct or in breach of this Agreement, or in which he shall have been
adjudicated in any proceeding not to have acted in good faith in the reasonable
belief that his action was in the best interest of the LLC. Without limiting the
foregoing, the Board of Managers may elect (on a case by case basis) to permit
such indemnification to include payment by the LLC of expenses incurred in
defending a civil or criminal action or proceeding in advance of the final
disposition of such action or proceeding, upon receipt of an undertaking by the
person indemnified to repay such payment if he shall be adjudicated not to be
entitled to indemnification under this

                                      -23-
<Page>

Section 6.04, which undertaking may be accepted without reference to the
financial ability of such person to make repayment. Any indemnification to be
provided hereunder may be provided although the person to be indemnified is no
longer a Manager or officer.

      (d) Any indemnity under this Section 6.05 shall be paid from, and only to
the extent of, LLC assets, and no Member shall have any personal liability on
account thereof in the absence of a separate written agreement to the contrary.
The LLC shall not incur the cost of that portion of any insurance, other than
public liability insurance, which insures any party against any liability as to
which such party is herein prohibited from being indemnified.

6.06  NO SOLICITATION OR HIRING OF FORMER EMPLOYEES. Except as provided by law
or with the Consent of the Members, during the period that a Member is a Member
and for a period of two years after a Member ceases to be a Member, the Member
shall not solicit any person who is then, or at any time within the six months
preceding such date was, an employee of the LLC to terminate his employment with
the LLC or to become an employee of the Member or hire any person.

6.07  NON-COMPETITION AGREEMENT.

      (a) During the period that a Member is a Member and for a period of two
years after a Member ceases to be a Member, such Member shall not (i)
manufacture, market or sell any product which has the same or substantially the
same form, function and primary application as any existing or proposed product
manufactured by the LLC at any time while the Member was a Member or (ii) engage
in any business competitive with the business of the LLC as conducted at any
time while the Member was a Member, in the United States or Canada.
Notwithstanding the foregoing, (X) GreenStone shall not be deemed to be in
violation of this Section by virtue of its "Engineered for Life(TM)" product
line, provided that GreenStone does not manufacture any cellulose-based products
and so long as any cellulose-based products sold by GreenStone are purchased
from the LLC; and (Y) in the event that a Member (an "Acquiring Member")
acquires any competitive business as a non-integral part of an acquisition made
by the Acquiring Member, the Acquiring Member shall not be deemed to be in
violation of this Section if (i) it promptly offers such competitive business to
the LLC for purchase at a cash purchase price equal to five times the
twelve-month trailing EBITDA of such business for the most recently completed
twelve months, or, if less, the amount actually paid by the Acquiring Member for
such business; and (ii) in the event that the other Member declines on behalf of
the LLC to have the LLC purchase such business, it disposes of such business
within 18 months of the date of acquisition thereof by the Acquiring Member.

      (b) The parties hereto agree that the duration and geographic scope of the
non-competition provision set forth in this Section 6.07 are reasonable. In the
event that any court determines that the duration or the geographic scope, or
both, are unreasonable and that such provision is to that extent unenforceable,
the parties hereto agree that the provision shall remain in full force and
effect for the greatest time period and in the greatest area that would not
render it unenforceable. The parties intend that this non-competition provision
shall be deemed to be a series of separate covenants, one for each and every
county of each and every state of the United States of America and each and
every political subdivision of each and every country outside the United States
of America where this provision is intended to be effective. Each Member agrees

                                      -24-
<Page>

that damages are an inadequate remedy for any breach of this provision and that
the LLC shall, whether or not it is pursuing any potential remedies at law, be
entitled to equitable relief in the form of preliminary and permanent
injunctions without bond or other security upon any actual or threatened breach
of this non-competition provision.

      (c) For purposes of Section 6.06 and this Section 6.07, "GreenStone" shall
include all of GreenStone's Affiliates, and "U.S. Fiber" shall include all of
U.S. Fiber's Affiliates.

6.08  OTHER ACTIVITIES. Subject to the compliance with their respective
obligations hereunder and under any other agreements to which they are a party,
each Member may engage in and possess interests in other business ventures and
investment opportunities of every kind and description, independently or with
others, including acting as stockholders, members and general or limited
partners of corporations, partnerships or other limited liability companies.
Subject to such compliance, neither the LLC nor the other Member, nor any
Manager or officer of the LLC, shall have any rights in or to such ventures or
opportunities or the income or profits therefrom.

                                   ARTICLE VII

                                 FISCAL MATTERS

7.01  BOOKS AND RECORDS. The President shall keep or cause another officer of
the LLC or a designated third party to keep, at the principal office of the LLC
or in such other location as the President may designate, complete and accurate
books and records of the LLC, maintained in such form and manner as the
President may determine, as well as any other documents and information required
to be furnished to the Members under the Act, all of which shall be available
for examination and copying by any Member, at its reasonable request and at its
expense during ordinary business hours, to the extent provided by the Act.

7.02  FINANCIAL INFORMATION. The LLC shall prepare, or shall cause to be
prepared, and shall provide to the Members, as soon as practicable after the end
of each fiscal year of the LLC, and in any event on or before the 60th day
thereafter, a balance sheet, an income statement and a statement of changes in
Members' capital in the LLC for, or as of the end of, such year, certified by an
internationally recognized firm of certified public accountants selected by the
President with the Consent of the Members. Such financial statements shall be
prepared in accordance with GAAP and shall be accompanied by a report of the
certified public accountants certifying the statements and stating that (a)
their examination was made in accordance with GAAP and, in their opinion, the
financial statements fairly present the financial position, financial results of
operations, and changes in Members' capital in accordance with GAAP, and (b) in
making the examination and reporting on the financial statements described
above, nothing came to their attention that caused them to believe that (i) the
income and revenues were not paid or credited in accordance with the financial
and accounting provisions of this Agreement, (ii) the costs and expenses were
not charged in accordance with the financial and accounting provisions of this
Agreement, or (iii) either Member failed to comply in any material respect with
the financial and accounting provisions of this Agreement, or if they are unable
to make one or more of the statements set forth in clauses (i) through (iii)
above, specifying in detail the reasons for such inability. The LLC also shall
prepare and provide to the Members, as soon as practicable after the end of each
fiscal quarter of the LLC, and in any event on or before the 30th day
thereafter, a

                                      -25-
<Page>

balance sheet, an income statement and a statement of changes in Members'
capital in the LLC for, or as of the end of, (x) such quarter and (y) the
portion of the then current fiscal year of the LLC ending at the end of such
quarter, in each case unaudited but certified as to accuracy and completeness by
the chief financial officer of the LLC or, if no such officer is serving at the
relevant time, by another appropriate officer of the LLC designated by the
President. The LLC also shall prepare and provide to the Members (A) as soon as
practicable after the end of each fiscal year of the LLC, and in any event on or
before the 75th day thereafter, such information as may be required by the
Members in order to file their respective federal, state and, to the extent
applicable, local income tax returns, and (B) such other reports relating to the
LLC's business and affairs as any Member may reasonably request. The LLC shall
bear the cost of all reports specified in this Section 7.02.

7.03  BANK ACCOUNTS. The President shall (or shall authorize and direct one or
more other officers of the LLC to) cause the LLC to open and maintain one or
more accounts with one or more financial institutions as the President or such
other officers may determine to be necessary or advisable. The President shall
make such statements and determinations (including statements and determinations
concerning withdrawal authority of officers and employees of the LLC) as may be
necessary to implement the provisions of this Section 7.03, and each Member
hereby unconditionally appoints the President as such Member's true and lawful
attorney-in-fact (which appointment is irrevocable and is coupled with an
interest) for the purpose of adopting, ratifying, executing and delivering such
documents and instruments setting forth such Consents, resolutions and other
agreements or decisions of the Members as the President may deem to be necessary
or appropriate to implement the provisions of this Section 7.03. No funds
belonging to any Person other than the LLC (whether or not a Member) shall in
any way be deposited or kept in any such account of the LLC or otherwise be
commingled with any funds of the LLC.

7.04  FISCAL YEAR. The fiscal year of the LLC shall end on December 31 of each
year.

7.05  TAX MATTERS PARTNER. U.S. Fiber shall serve as the "tax matters partner"
of the LLC. If at any time U.S. Fiber is not eligible under the Code to serve,
or refuses to serve, as the "tax matters partner," GreenStone shall serve as the
"tax matters partner." The "tax matters partner" is hereby authorized to and
shall perform all duties of a "tax matters partner" under the Code and shall
serve as "tax matters partner" until its resignation or until the designation of
its successor, whichever occurs sooner. The "tax matters partner" shall be
reimbursed by the LLC for all reasonable expenses actually incurred by the "tax
matters partner" in connection with its performance of its duties as such, and
the LLC shall indemnify and hold harmless the "tax matters partner," to the
maximum extent permissible under the Act, from and against any and all losses,
claims, liabilities, costs and expenses incurred by the "tax matters partner" in
connection with its performance of its duties as such, except insofar as the
same may have been incurred by reason of gross negligence or willful misconduct
of such "tax matters partner."

7.06  INFORMATION. In addition to the other rights specifically set forth in
this Agreement, each Member shall be entitled to all information to which such
Member is entitled to have access pursuant to Section 18-305 of the Act, under
the circumstances and subject to the conditions therein stated, and in
compliance with such other conditions as may be reasonably established by the
Board of Managers.

                                      -26-
<Page>

7.07  AUDITS. Each Member shall have the right to conduct, or cause to be
conducted, from time to time, an audit of the books and records of the LLC. The
Member conducting the audit shall bear the entire expense of the audit.

7.08  TAX AUDITS. Each Member shall have the right to review and approve (which
approval shall not be unreasonably withheld) any proposed tax audit adjustment
before it is accepted by the Tax Matters Partner.

7.09  CONFIDENTIALITY.

      (a) Unless the Members acting by Consent determine otherwise, each Member
shall hold in strict confidence any confidential information regarding the
business of the LLC or of the other Member (or its Affiliates), and the LLC
shall so hold in confidence any such information regarding any Member (or its
Affiliates), whether such information is received from the LLC, the other Member
or its Affiliates, or another Person; provided, however, that such restrictions
shall not apply to (i) information that is or becomes available to the public
generally without breach of this Section 7.09(a); (ii) disclosures required to
be made by applicable laws and regulations, stock exchange requirements or
requirements of the Nasdaq National Market or the National Association of
Securities Dealers, Inc.; (iii) disclosures required to be made pursuant to a
court or governmental order, subpoena or legal process; (iv) disclosures to
officers, directors, employees or Affiliates of such Member (and the officers,
directors and employees of such Affiliates), and to auditors, counsel, and other
professional advisors to such Persons, or to the LLC or its officers, employees
and professional advisors (provided, however, that all such Persons have been
informed of the confidential nature of the information), or (v) disclosures in
connection with any litigation or dispute among the Members, the LLC and the
officers of the LLC; provided further that any disclosure pursuant to clause
(ii), (iii) or (iv) of this sentence shall be made only subject to such
procedures as the Person making such disclosure determines in good faith are
reasonable and appropriate in the circumstances, taking into account the need to
maintain the confidentiality of such information and the availability, if any,
of procedures under laws, regulations, court or governmental orders, subpoenas,
or other legal process. Each Member and the LLC shall notify each other Member
and/or the LLC, as appropriate, immediately upon becoming aware of any court or
governmental order, subpoena, or other legal process providing for the
disclosure or production of information subject to the provisions of the
immediately preceding sentence and, to the extent not prohibited by applicable
law, immediately shall supply each other Member and/or the LLC, as appropriate,
with a copy of any such court or governmental order, subpoena, or other legal
process. In addition, each Member shall notify each other Member and/or the LLC,
as appropriate, prior to disclosing or producing any information subject to the
provisions of the two immediately preceding sentences and, to the extent not
prohibited by applicable law, shall permit each other Member and/or the LLC, as
appropriate, to seek a protective order protecting the confidentiality of such
information. The rights and obligations of a Member pursuant to this Section
7.09(a) shall continue following the time it ceases to be a Member. Each Member
acknowledges that disclosure of information in violation of the provisions of
this Section 7.09(a) may cause irreparable injury to the LLC and the Members for
which monetary damages are inadequate, difficult to compute, or both.
Accordingly, each Member agrees that its and the LLC's obligations under this
Section 7.09(a) may be enforced by specific performance and that breaches or
prospective breaches of this Section 7.09(a) may be preliminarily and/or
permanently enjoined. Notwithstanding the

                                      -27-
<Page>

foregoing, each Member acknowledges that the other Member may be required to
file this Agreement and related documentation as an exhibit to its filings with
the Securities and Exchange Commission and hereby consents to any such filing.

      (b) Each officer and employee of the LLC shall be required by the LLC, in
connection with the commencement of such Person's employment by, or service
with, the LLC, to enter into a written agreement with the LLC (whether an
employment agreement or otherwise) containing confidentiality, non-disclosure,
non-use and non-competition provisions prepared by counsel to the LLC.

                                  ARTICLE VIII

                             TRANSFERS OF INTERESTS

8.01  GENERAL RESTRICTIONS ON TRANSFER. No Member may Transfer all or any part
of its Membership Interest (including the interest of an assignee within the
meaning of Section 18-702 of the Act) to any Person except (i) with the prior
written approval of the other Member, the granting or denying of which approval
shall be in such other Member's sole and absolute discretion, (ii) following the
second anniversary of the Closing Date, pursuant to Sections 8.02 and 8.03
below, or (ii) by operation of the provisions of Article IX or pursuant to an
exercise by the Lending Member or the LLC of the remedies granted them by the
provisions of Sections 3.06(a)(ii)(E) or 3.06(a)(iii), respectively, and Section
3.06(b). Any Transfer in contravention of the foregoing sentence or any other
provision of this Agreement shall be null and void and ineffective to transfer
all or any part of any Membership Interest (including the interest of an
assignee within the meaning of Section 18-702 of the Act), and shall not bind,
or be recognized by, or on the books of, the LLC, and any transferee or assignee
in such transaction shall not be or be treated as or deemed to be a Member (or
an assignee) for any purpose. If any Member shall at any time attempt or purport
to Transfer a Membership Interest, or any part thereof, in contravention of any
of the provisions of this Agreement, then the other Member shall, in addition to
all rights and remedies at law and equity, be entitled to a decree or order
restraining and enjoining such transaction, and the offending Member shall not
plead in defense thereto that there would be an adequate remedy at law, it being
expressly hereby acknowledged and agreed that damages at law would be an
inadequate remedy for a breach or threatened breach of the provisions of this
Agreement concerning such transactions.

8.02  RIGHT OF FIRST REFUSAL.

      (a) Notwithstanding the provisions of Section 8.01 above, in the event a
Member desires to Transfer any portion of its Membership Interest, or any
interest therein, following the second anniversary of the Closing Date, such
Member (the "Selling Member") shall first deliver written notice of his desire
to do so (the "Notice") to the LLC and to the other Member, in the manner
prescribed in Section 11.01 of this Agreement. The Notice must specify: (i) the
name and address of the party to which the Selling Member proposes to sell or
otherwise dispose of the Membership Interest or an interest in the Membership
Interest (the "Offeror"), (ii) the nature of the Membership Interest the Selling
Member proposes to sell or otherwise dispose of (the "Offered Interest"), (iii)
the consideration to be delivered to the Selling Member for the proposed

                                      -28-
<Page>

sale, transfer or disposition, and (iv) all other material terms and conditions
of the proposed transaction.

      (b) The LLC shall have the first option to purchase all or any part of the
Offered Interest for the consideration and on the terms and conditions specified
in the Notice. The Company must exercise such option, no later than 30 days
after such Notice is deemed under Section 11.01 hereof to have been delivered to
it, by written notice to the Selling Member.

      (c) In the event the LLC does not exercise its option within such 30-day
period with respect to all of the Offered Interest, the LLC shall, by the last
day of such period, give written notice of that fact to the other Member (the
"Purchaser Notice"). The Purchaser Notice shall specify the Offered Interest not
purchased by the LLC (the "Remaining Interest").

      (d) In the event the LLC duly exercises its option to purchase all or part
of the Offered Interest, the closing of such purchase shall take place at the
offices of the LLC on the later of (i) the date 20 days after the expiration of
such 30-day period or (ii) the date that the other Member consummates its
purchase of Remaining Interest under paragraph (g) below.

      (e) To the extent that the consideration proposed to be paid by the
Offeror for the Offered Interest consists of property other than cash or a
promissory note, the consideration required to be paid by the LLC and/or the
other Member exercising their options hereunder may consist of cash equal to the
value of such property, as determined in good faith by agreement of the Selling
Member and the LLC and/or the other Member acquiring such Offered Interest.

      (f) Notwithstanding anything to the contrary herein, neither the LLC nor
the other Member shall have any right to purchase any of the Offered Interest
hereunder unless the Company and/or the other Member exercise their option or
options to purchase all of the Offered Interest.

      (g) Subject to Section 8.03, the other Member shall have an option,
exercisable for a period of three days from the date of delivery of the
Purchaser Notice, to purchase the Remaining Interest for the consideration and
on the terms and conditions reflected in the Notice. Such option shall be
exercised by delivery by such Member of written notice to the Selling Member.
Alternatively, the other Member may within the same three-day period, notify the
Selling Member of its desire to participate in the sale of the Membership
Interests on the terms set forth in the Notice, and the nature of the Membership
Interest it wishes to sell.

      (h) The closing of the purchase of the Remaining Interest shall take place
at the offices of the LLC no later than 15 days after the date of the Purchaser
Notice.

8.03  FAILURE TO FULLY EXERCISE OPTIONS; CO-SALE.

      (a) If the LLC and the other Member do not exercise their options to
purchase all of the Offered Interest within the periods described in this
Agreement (the "Option Period"), then all options of the LLC and the other
Member to purchase the Offered Interest, whether exercised or not, shall
terminate, but the other Member shall be entitled to sell its Membership
Interest in the transaction pursuant to this Section. The LLC shall promptly, on
expiration of the Option Period, notify the Selling Member of the nature of the
Membership Interest the other Member

                                      -29-
<Page>

wishes to sell. The Selling Member shall use reasonable efforts to interest the
Offeror in purchasing, in addition to the Offered Interest, the Membership
Interest the other Member wishes to sell. If the Offeror does not wish to
purchase the entire Membership Interest made available by the Selling Member and
the other Member, then each Member shall be entitled to sell a portion of the
Membership Interest being sold to the Offeror, in the same proportion as the
Percentage Interest of such Members; provided, however, that the price to be
paid to each Member shall be in the proportion of the amount that would be
distributed to the Members pursuant to Section 4.02 if all of the assets of the
LLC were sold for the aggregate purchase price being paid by the Offeror and the
proceeds thereof were distributed to the Members. The transaction contemplated
by the Notice shall be consummated not later than 75 days after the expiration
of the Option Period.

      (b) If the other Member does not elect to sell the full Membership
Interest which it is entitled to sell pursuant to the preceding paragraph, the
Selling Member shall be entitled to sell to the Offeror, according to the terms
set forth in the Notice, the Membership Interest which equals the difference
between the Membership Interest desired to be purchased by the Offeror and the
Membership Interest the other Member is entitled to sell pursuant to Section
8.3. If the Selling Member wishes to Transfer any such Membership Interest at a
price which differs from that set forth in the Notice, upon terms different from
those previously offered to the LLC and the other Member, or more than 60 days
after the expiration of the Option Period, then, as a condition precedent to
such transaction, such Membership Interest must first be offered to the LLC and
the other Member on the same terms and conditions as given the Offeror, and in
accordance with the procedures and time periods set forth above.

      (c) The proceeds of any sale made by the Selling Member without compliance
with the provisions of this Section 8 shall be deemed to be held in constructive
trust in such amount as would have been due the other Member if the Selling
Member had complied with this Agreement.

                                   ARTICLE IX

                     OPTION TO SELL OTHER MEMBER'S INTEREST

9.01  OPTION TO SELL THE OTHER MEMBER'S INTEREST. Following the second
anniversary of the Closing, either Member (the "Electing Member") shall have the
right to elect to Transfer its Membership Interest to a person which is not an
Affiliate of such Electing Member, subject to compliance with the provisions of
Sections 8.02 and 8.03 above; provided, however, that in the event that (A) the
Electing Member desires to sell its entire Membership Interest in the LLC, (B)
the LLC and the other Member (the "Non-Electing Member") do not exercise their
options to purchase all of the Offered Interest within the periods described in
Section 8.02, and (C) the Non-Electing Member does not elect to sell all of its
Membership Interest to the Offeror pursuant to Section 8.03, then the Electing
Member shall have the right to require the Non-Electing Member to sell its
entire Membership Interest to the Offeror on the same terms as, and at the same
time as, the Electing Member sells its interest to the Offeror; provided that
the price to be paid to each Member shall be in the proportion of the amount
that would be distributed to the Members pursuant to Section 4.02 if all of the
assets of the LLC were sold for the aggregate

                                      -30-
<Page>

purchase price being paid by the Offeror and the proceeds thereof were
distributed to the Members.

9.02  NOTIFICATION OF OFFERS. Each Member agrees to promptly notify the other
Member of any bona fide offer it receives from a third party to purchase all or
any portion of a Membership Interest in the LLC; provided, however, that no
Member shall have any liability to the other Member for failing to so notify the
other Member.

                                    ARTICLE X

                           DISSOLUTION AND LIQUIDATION

10.01 EVENTS CAUSING DISSOLUTION. The LLC shall be dissolved and its affairs
wound up upon:

      (a) The sale or other disposition of all or substantially all of the
assets of the LLC, or any merger, consolidation or other business combination or
similar transaction as a result of which the LLC is not the surviving entity;

      (b) Subject to the provisions of Section 10.02, the occurrence of any
event which terminates the membership of a Member under the Act;

      (c) The election to dissolve the LLC made by approval of the Board of
Managers in accordance with Section 6.01(b)(xv); or

      (d) The entry of a decree of judicial dissolution under Section 18-802 of
the Act.

10.02 CONTINUATION OF THE LLC. Notwithstanding the occurrence of an event
specified in Section 10.01(b), the LLC shall not be dissolved and its business
and affairs shall not be discontinued or wound up, and the LLC shall remain in
existence as a limited liability company under the laws of the State of
Delaware, if the remaining Member elects, within 90 days after such occurrence,
to continue the LLC and its business without dissolution or winding up;
provided, however, that such remaining Member shall, automatically and with no
further action being necessary on the part of any Person, be deemed to have so
elected to continue the LLC and its business without dissolution or winding up
unless such remaining Member expressly elects in writing, within such 90-day
period, not to continue the LLC and its business.

10.03 PROCEDURES ON DISSOLUTION. Dissolution of the LLC shall be effective on
the day on which occurs the event giving rise to the dissolution, but the LLC
shall not terminate until the Certificate shall have been cancelled and the
assets of the LLC shall have been distributed as provided herein.
Notwithstanding the dissolution of the LLC, prior to the termination of the LLC,
as aforesaid, the business of the LLC and the affairs of the Members, as such,
shall continue to be governed by this Agreement. The President or a liquidator
appointed by the President (or, if there be none, by the Consent of the Members)
shall liquidate the assets of the LLC (the Person so charged with liquidating
the assets of the LLC, the "Liquidator"), apply and distribute the proceeds
thereof as contemplated by this Agreement and cause the cancellation of the
Certificate.

                                      -31-
<Page>

10.04 DISTRIBUTIONS UPON LIQUIDATION. In each case except as may be required
otherwise by provisions of the Act which may not be modified by a limited
liability company's operating agreement:

      (a) After payment of liabilities owing to creditors, the Liquidator shall
set up such reserves as it deems reasonably necessary for any contingent or
unforeseen liabilities or obligations of the LLC. Said reserves may be paid over
by the Liquidator to a bank or another appropriate financial institution, to be
held in escrow for the purpose of paying any such contingent or unforeseen
liabilities or obligations and, at the expiration of such period as the
Liquidator may deem advisable, such reserves shall be distributed to the Members
or their assigns in the manner set forth in paragraph (b) below.

      (b) After paying such liabilities and providing for such reserves, the
Liquidator shall cause the remaining net assets of the LLC to be distributed to
and among the Members in the priority set forth in Section 4.02 above. In the
event that any part of such net assets consists of notes or accounts receivable
or other noncash assets, the Liquidator may take whatever steps he deems
appropriate to convert such assets into cash or into any other form which would
facilitate the distribution thereof. If any assets of the LLC are to be
distributed in kind, such assets shall be distributed on the basis of their fair
market value net of any liabilities.

10.05 SURVIVAL OF CERTAIN PROVISIONS. The provisions of Sections 3.04, 6.05,
6.06 and 6.07 shall survive for a period of 24 months after the date of
cancellation of the Certificate upon liquidation and distribution of the assets
of the LLC as set forth in Section 10.03.

                                   ARTICLE XI

                               GENERAL PROVISIONS

11.01 NOTICES. Except to the extent specifically provided otherwise, any and all
notices under this Agreement shall be deemed given (a) on the second Business
Day after being sent by express mail, receipt confirmed telecopy, or an
internationally recognized commercial overnight delivery service providing a
receipt for delivery, or (b) on the date actually received, if sent by any other
method. In order to be effective, all such notices shall be addressed, if to the
LLC (or a specified officer thereof), at its office in the State of North
Carolina where the LLC maintains its records as set forth in the Certificate,
and if to a Member, at such Member's last address of record on the books of the
LLC, and copies of such notices shall also be sent to the last address for the
recipient which is known to the sender, if different from the address so
specified.

11.02 WORD MEANINGS; SCHEDULES AND EXHIBITS. The words such as "herein,"
"hereto," "hereof," and "hereunder" refer to this Agreement as a whole and not
merely to a subdivision in which such words appear unless the context otherwise
requires. The word "including" (and grammatical variations thereof) shall be
construed to mean "including, without limitation" (and grammatical variations
thereof), and shall not be interpreted so as to imply exclusivity or
comprehensive listing, unless the context otherwise requires. The singular shall
include the plural and the masculine gender shall include the feminine and
neuter, and vice versa, unless the context otherwise requires. References to
Articles, Sections, Schedules and Exhibits shall be construed as references to
the Articles and Sections of, and the Schedules and Exhibits to, this

                                      -32-
<Page>

Agreement, in each case unless the context otherwise requires. All such
Schedules and Exhibits shall be deemed to be, and constitute, an integral part
hereof for all purposes.

11.03 BINDING PROVISIONS. Subject to the restrictions on Transfers set forth
herein, the covenants and agreements contained herein shall be binding upon, and
inure to the benefit of, the parties hereto, their heirs, legal representatives,
successors and assigns.

11.04 APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Delaware, including the Act, as
interpreted by the courts of the State of Delaware, notwithstanding any rules
regarding choice of law to the contrary.

11.05 ARBITRATION.

      (a) The parties hereto agree that any and all legal disputes,
controversies or claims arising out of or relating to the interpretation or
enforcement of this Agreement or any Ancillary Document or any breach or
termination of any thereof (each, a "Dispute") (other than any Dispute with
respect to which this Agreement or the relevant Ancillary Document provides for
temporary or preliminary injunctive or other similar provisional relief, which
relief may be obtained without reference to this Section 11.05) shall be
resolved by agreement among all parties to the relevant Dispute or, if notice is
given by any such party as provided below and the matter is not settled within
30 days thereafter, by reference to arbitration in accordance with the
Commercial Arbitration Rules, as amended from time to time, of the American
Arbitration Association (the "AAA") and the following provisions; provided,
however, that the provisions of this Section 11.05 shall prevail in the event of
any conflict with such Rules.

      (b) The parties to the relevant Dispute shall jointly designate a single
neutral and impartial arbitrator to resolve the Dispute; provided, however, that
if such parties are unable to reach agreement with respect to the identity of
the arbitrator within 30 days after the giving of notice by one party to such
Dispute to each other party to such Dispute of the first party's desire to refer
the matter in dispute to arbitration, then any party to such Dispute may
petition the Chicago, Illinois office of the AAA (the "Appointing Authority")
for appointment of such arbitrator, and all parties to the Dispute shall be
bound by the selection of the Appointing Authority. If any Person appointed as
arbitrator shall die, fail to act, resign, or otherwise become disqualified, a
substitute arbitrator shall be appointed in the manner set forth above within 15
days after such death, failure to act, resignation or other disqualification. If
such substitute appointment is not made within such 15-day period, any party to
the Dispute may petition the Appointing Authority for appointment of such
substitute arbitrator, and such appointment shall be binding on all parties to
the Dispute. No matter how selected, the arbitrator shall have no prior or
existing affiliation or relationship with any party to the relevant Dispute or
its counsel, and shall sign an oath or affirmation of impartiality upon
appointment.

      (c) Any arbitration proceedings conducted pursuant to this Section 11.05
shall be held in Chicago, Illinois and shall be conducted in the English
language.

      (d) The parties to the Dispute may conduct such pre-hearing discovery
through depositions and requests for the production and copying of documents by
the other parties to the Dispute, in each case in accordance with such
procedures, as the arbitrator may determine. The

                                      -33-
<Page>

arbitrator may consult with and engage disinterested third parties, including
attorneys, accountants and other consultants, to advise him.

      (e) The arbitrator, in deciding any Dispute, shall base his decision on
the record and in accordance with this Agreement, any relevant Ancillary
Documents and applicable law. In no event shall the arbitrator make any ruling,
finding or award that does not conform to the terms and conditions of this
Agreement and any relevant Ancillary Document, is not supported by the weight of
the evidence, or is contrary to applicable law. The final arbitration award
shall be a factually detailed, reasoned opinion stating the arbitrator's
findings of fact and conclusions of law. Unless the arbitrator for good cause
determines otherwise, the final arbitration award shall include attorneys' fees,
costs and expenses of the prevailing party, including expert and non-expert
witness fees and the prevailing party's share of the administrative fee and the
arbitrator's fees and expenses, if any. The final arbitration award and any
other written decisions and conclusions of the arbitrator with respect to the
matters referred to him pursuant hereto shall be final and binding on all
parties to the Dispute, and confirmation and enforcement thereof may be rendered
thereon by any court having jurisdiction upon application of any such party.

11.06 COUNTERPARTS. This Agreement may be executed in several counterparts and
as so executed shall constitute one agreement binding on all parties hereto,
notwithstanding that all of the parties have not signed the same counterpart.

11.07 SEPARABILITY OF PROVISIONS. Each provision of this Agreement shall be
considered separable. To the extent that any provision of this Agreement is
prohibited or ineffective under the Act, this Agreement shall be considered
amended to the smallest degree possible in order to make the Agreement effective
under the Act (and, if the Act is subsequently amended or interpreted in such
manner as to make effective any provision of this Agreement that was formerly
rendered invalid, such provision shall automatically be considered to be valid
from the effective date of such amendment or interpretation).

11.08 ARTICLE AND SECTION TITLES. Article and section titles are included herein
for descriptive purposes only and shall not control or alter the meaning of this
Agreement as set forth in the text.

11.09 AMENDMENTS. Except as otherwise specifically provided herein, this
Agreement (including all Schedules and Exhibits) may be amended or modified only
by a Consent executed by each Member.

11.10 THIRD PARTY BENEFICIARIES. The provisions of this Agreement, including
Article III, are not intended to be for the benefit of any creditor (other than
a Member who is a creditor) or other Person (other than a Member in its capacity
as such) to whom any debts, liabilities or obligations are owed by (or who
otherwise has any claim against) the LLC or any of the Members. Moreover,
notwithstanding anything contained in this Agreement, including Article III, no
such creditor or other Person shall obtain any rights under this Agreement or
shall, by reason of this Agreement, make any claim in respect of any debt,
liability or obligation (or otherwise) against the LLC or any Member.

                                      -34-
<Page>

11.11 CERTAIN ANCILLARY DOCUMENT MATTERS; ENTIRE AGREEMENT.

      (a) At the Closing, each Member and the LLC shall execute each Ancillary
Document to which such Member is a party. Except as otherwise expressly provided
herein, in the event of any irreconcilable conflict between the provisions of
any Ancillary Document and the provisions of this Agreement, the provisions of
this Agreement shall be controlling.

      (b) Any breach by any Member of, and any default by any Member under, any
Ancillary Document to which such Member is a party shall be deemed and construed
to be, for all purposes, a breach by such Member of, and a default by such
Member under, this Agreement.

      (c) This Agreement, together with the Ancillary Documents, embodies the
entire agreement and understanding between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter. The Members hereby agree that each Member and
each officer of the LLC shall be entitled to rely on the provisions of this
Agreement and the Ancillary Documents, and no Member or officer of the LLC shall
be liable to the LLC or any other Member or officer for any action or refusal to
act taken in good faith reliance on the terms of this Agreement or any Ancillary
Document.

11.12 OFFSET. Whenever the LLC is to pay any sum to any Member, any amounts owed
by such Member to the LLC may be deducted from such sum before payment.

11.13 WAIVER OF PARTITION. Each Member agrees that irreparable damage would be
done to the LLC if any Member brought an action in court to dissolve the LLC.
Accordingly, each Member agrees that it shall not, either directly or
indirectly, take any action to require partition or appraisal of the LLC or of
any of the assets or properties of the LLC, and notwithstanding any provisions
of this Agreement to the contrary, each Member (and its successors and assigns)
accepts the provisions of the Agreement as its sole entitlement on termination,
dissolution and/or liquidation of the LLC and hereby irrevocably waives any and
all right to maintain any action for partition or to compel any sale or other
liquidation with respect to its interest, in or with respect to, any assets or
properties of the LLC. Each Member agrees that it will not petition a court for
the dissolution, termination or liquidation of the LLC.

                                      -35-
<Page>

IN WITNESS WHEREOF, the Members have executed this Agreement under seal as of
the day and year first above written.

                                  U.S. FIBER, INC.

                                  By: /s/ James W. Bohlig
                                      ------------------------------------------

                                  Name: James W. Bohlig
                                        ----------------------------------------

                                  Title: SVP & Chief Operating Officer
                                         ---------------------------------------

                                  GREENSTONE INDUSTRIES, INC.

                                  By: /s/ Anita C. Kirchloff
                                      ------------------------------------------

                                  Name: Anita C. Kirchloff
                                        ----------------------------------------

                                  Title: Secretary
                                         ---------------------------------------

                                    GUARANTY

The undersigned hereby guarantees the obligations of its subsidiary pursuant to
the terms of this Agreement.

                                  CASELLA WASTE SYSTEMS, INC.
                                  For its subsidiary U.S. Fiber, Inc.

                                  By: /s/ John W. Casella
                                      ------------------------------------------

                                  Name: John W. Casella
                                        ----------------------------------------

                                  Title: President and Chief Executive Officer
                                         ---------------------------------------

                                  LOUISIANA-PACIFIC CORPORATION
                                  For its subsidiary GreenStone Industries, Inc.

                                  By: /s/ William L. Hebert
                                      ------------------------------------------

                                  Name: William L. Hebert
                                        ----------------------------------------

                                  Title: Director, Business Development
                                         ---------------------------------------

                                      -36-
<Page>

                               US GREENFIBER, LLC

                SCHEDULE A TO LIMITED LIABILITY COMPANY AGREEMENT

                                  June 26, 2000

                                     MEMBERS

                      NAME AND BUSINESS
                      ADDRESS OF MEMBER                PERCENTAGE INTEREST

      U.S. FIBER, INC.                                        50%
      809-A W. Hill Street
      Charlotte, NC 28208

      GREENSTONE INDUSTRIES, INC.                             50%
      111 S.W. Fifth Avenue
      Portland, OR 97204
      Attn: Vice President and General Counsel

<Page>

                                    EXHIBIT 1

                   LIST OF GREENSTONE ASSIGNMENT DOCUMENTATION

<Page>

                                    EXHIBIT 2

                   LIST OF U.S. FIBER ASSIGNMENT DOCUMENTATION

<Page>

                                   EXHIBIT 3-A

             LIST OF ASSETS BEING ASSIGNED BY U.S. FIBER TO THE LLC

<Page>

                                   EXHIBIT 3-B

          LIST OF LIABILITIES BEING ASSUMED BY THE LLC FROM U.S. FIBER

1.  All obligations of U.S. Fiber continuing after the Closing under the leases,
    contracts and employee benefit plans set forth on the U.S. Fiber Disclosure
    Schedule which become due and payable after the Closing Date.

2.  All of the liabilities and obligations of U.S. Fiber reflected on SCHEDULE
    3-B hereto.

<Page>

                                   EXHIBIT 4-A

             LIST OF ASSETS BEING ASSIGNED BY GREENSTONE TO THE LLC

<Page>

                                   EXHIBIT 4-B

          LIST OF LIABILITIES BEING ASSUMED BY THE LLC FROM GREENSTONE

1.  All obligations of GreenStone continuing after the Closing under the leases,
    contracts and employee benefit plans set forth on the GreenStone Disclosure
    Schedule which become due and payable after the Closing Date.

2.  All of the liabilities and obligations of GreenStone reflected on SCHEDULE
    4-B hereto.

<Page>

                                    EXHIBIT 5

              REPRESENTATIONS AND WARRANTIES OF EACH OF THE MEMBERS

<Page>

                                    EXHIBIT 6

                                 INDEMNIFICATION

      (a) INDEMNIFICATION. Each Member each hereby indemnifies and holds
harmless the LLC and the other Member against all claims, damages, losses,
liabilities, costs and expenses (including, without limitation, settlement costs
and any legal, accounting or other expenses for investigating or defending any
actions or threatened actions) reasonably incurred by the LLC or the other
Member in connection with each and all of the following:

          (i)     Any breach by the indemnifying party of any representation or
warranty in this Agreement;

          (ii)    Any breach of any covenant, agreement or obligation of the
indemnifying party contained in this Agreement, any Ancillary Agreement or any
other agreement, instrument or document contemplated by this Agreement;

          (iii)   Any claims against, or liabilities or obligations of, the
Member not specifically assumed by the LLC pursuant this Agreement; and

          (iv)    Any warranty claim or product liability claim relating to (i)
products manufactured or sold by the Member prior to the Closing or (ii) the
Member's business or operation prior to the Closing Date.

      (b) CLAIMS FOR INDEMNIFICATION. Whenever any claim shall arise for
indemnification hereunder the party seeking indemnification (the "Indemnified
Party"), shall promptly notify the party from whom indemnification is sought
(the "Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim. In the event of any such claim for indemnification
hereunder resulting from or in connection with any claim or legal proceedings by
a third party, the notice to the Indemnifying Party shall specify, if known, the
amount or an estimate of the amount of the liability arising therefrom. The
Indemnified Party shall not settle or compromise any claim by a third party for
which it is entitled to indemnification hereunder without the prior written
consent of the Indemnifying Party, which shall not be unreasonably withheld,
unless suit shall have been instituted against it and the Indemnifying Party
shall not have taken control of such suit after notification thereof as provided
in paragraph (c) of this EXHIBIT 6.

      (c) DEFENSE BY INDEMNIFYING PARTY. In connection with any claim giving
rise to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person who is not a party to this Agreement, the Indemnifying
Party at its sole cost and expense may, upon written notice to the Indemnified
Party, assume the defense of any such claim or legal proceeding if it
acknowledges to the Indemnified Party in writing its obligations to indemnify
the Indemnified Party with respect to all elements of such claim. The
Indemnified Party shall be entitled to participate in (but not control) the
defense of any such action, with its counsel and at its own expense. If the
Indemnifying Party does not assume the defense of any such claim or litigation
resulting therefrom within 30 days after the date such claim is made, (a) the

<Page>

Indemnified Party may defend against such claim or litigation, in such manner as
it may deem appropriate, including, but not limited to, settling such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate, and (b) the Indemnifying
Party shall be entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense. If the Indemnifying Party
thereafter seeks to question the manner in which the Indemnified Party defended
such third party claim or the amount or nature of any such settlement, the
Indemnifying Party shall have the burden to prove by a preponderance of the
evidence that the Indemnified Party did not defend or settle such third party
claim in a commercially reasonable manner.

      (d) PAYMENT OF INDEMNIFICATION OBLIGATION. Each Member hereby agrees that
any claim against it for indemnification by the LLC or the other Member under
this EXHIBIT 6 may, at the Indemnified Party's option, be set off against the
LLC's obligation to make payments under the Agreement, and all distributions
from the LLC that otherwise would be made to the Indemnifying Party (whether
before or after dissolution of the LLC) instead shall be paid to the Indemnified
Party until the indemnification obligations have been paid in full to the
Indemnified Party. All indemnification by the Members hereunder (to the extent
not satisfied in the manner specified in the preceding sentence) shall be
effected by payment of cash or delivery of a cashier's or certified check in the
amount of the indemnification liability and shall bear interest at the Default
Rate to the extent not paid within 30 days after written notification thereof is
delivered to the Indemnifying Party.

      (e) SURVIVAL OF REPRESENTATIONS; CLAIMS FOR INDEMNIFICATION. All
representations and warranties made by the parties herein or in any instrument
or document furnished in connection herewith shall survive the Closing and any
investigation at any time made by or on behalf of the parties hereto. All such
representations and warranties shall expire on the second anniversary of the
Closing, except for claims, if any, asserted in writing prior to such second
anniversary, which shall survive until finally resolved and satisfied in full.
All claims and actions for indemnity pursuant to this EXHIBIT 6 for breach of
any representation or warranty shall be asserted or maintained in writing by a
party hereto on or prior to the expiration of such two-year period.
Notwithstanding anything to the contrary in this EXHIBIT 6, neither the LLC nor
any Member shall be entitled to receive, and a Member shall not be obligated to
pay, the first $250,000 in the aggregate of indemnity obligations otherwise
payable by such Member pursuant to paragraph (a)(i) of this EXHIBIT 6.

<Page>

  U.S. FIBER DISCLOSURE SCHEDULE (EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES)

<Page>

  GREENSTONE DISCLOSURE SCHEDULE (EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES)<Page>

                                                                 EXHIBIT 10.42

                                                                [EXECUTION FORM]

                               PURCHASE AGREEMENT

                                  BY AND AMONG

                         CRUMB RUBBER INVESTORS CO., LLC

                                  AS THE BUYER,

                                       AND

                           CASELLA WASTE SYSTEMS INC.,

                                       AND

                         KTI ENVIRONMENTAL GROUP, INC.,

                                 AS THE SELLERS

                           DATED AS OF AUGUST 17, 2001

<Page>

                               PURCHASE AGREEMENT

        THIS PURCHASE AGREEMENT, dated as of August 17, 2001 (this "AGREEMENT"),
is made by and among Crumb Rubber Investors Co., LLC, a Delaware limited
liability company (the "BUYER"), Casella Waste Systems, Inc., a Delaware
corporation ("CASELLA"), KTI Environmental Group, Inc., a New Jersey corporation
("KTI ENVIRONMENTAL GROUP"; together with Casella, the "SELLERS"). Unless
otherwise defined herein or the context clearly requires otherwise, all
capitalized terms herein shall have the meanings given to them in ARTICLE I of
this Agreement.

                                 R E C I T A L S

        WHEREAS, Casella is the sole stockholder of Recovery Technologies Group,
Inc., a Delaware corporation ("RTG");

        WHEREAS, Casella and KTI Environmental Group hold all right, title and
interest in, to and under the Purchased Debt (as defined below);

        WHEREAS, the Controlled Purchased Companies (as defined below) are
engaged in, among other activities, the business of collecting, processing and
recycling automobile, truck and other vehicle tires (as operated by the
Controlled Purchased Companies, the business of collecting, processing and
recycling such tires is referred to as the "BUSINESS");

        WHEREAS, the Buyer desires to purchase from the Sellers, and the Sellers
desire to sell, assign and transfer to the Buyer, Sellers' right, title and
interest in and to the Purchased Stock and Debt (as defined below);

        WHEREAS, concurrently herewith, Casella, KTI Operations, Inc., a
Delaware corporation ("KTI OPERATIONS"), KTI, Inc., a New Jersey corporation and
wholly owned subsidiary of Casella ("KTI"), and New Heights Holding Corporation,
a Delaware corporation and an Affiliate of the Buyer ("NEW HEIGHTS BUYER"), are
entering into a Purchase Agreement, dated as of the date hereof (the "NEW
HEIGHTS PURCHASE AGREEMENT"), with respect to the purchase and sale of certain
assets including a certain limited liability company interest in New Heights
Recovery and Power LLC, a Delaware limited liability company ("NEW HEIGHTS");
and

        WHEREAS, it is a condition to the Sellers' and the Buyer's obligations
hereunder that the transactions contemplated by the New Heights Purchase
Agreement and this Agreement are consummated simultaneously.

                                A G R E E M E N T

        NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements hereinafter contained, the
parties hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

        For purposes of this Agreement, unless the context clearly indicates
otherwise, the following terms shall have the following meanings:

        "ACCOUNTS RECEIVABLE" means all accounts receivable (including, without
limitation, amounts due from customers whether recorded as accounts receivable
or reductions in accounts payable) and related

<Page>

deposits, security or collateral therefor, including recoverable customer
deposits, of any of the Controlled Purchased Companies existing on the Closing
Date.

        "AFFILIATE" as to any Person means any other Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person, provided that any entity formed by AG
Special Situation Corp. in connection with this Agreement shall be deemed to be
an Affiliate of the Buyer. For purposes of this Agreement, on and after the
Closing, neither the Sellers nor any of their Affiliates shall be considered to
be an Affiliate of Holdco 1 Corp. or any of the Purchased Companies.

        "ASSIGNMENT AGREEMENT" means the Assignment Agreement, to be dated as of
the Closing Date, by and between the Sellers and the Buyer, providing for the
transfer of the Purchased Stock and Debt from the Sellers to the Buyer, in the
form of EXHIBIT A attached hereto.

        "BASE PURCHASE PRICE" has the meaning set forth in Section 3.1 of this
Agreement.

        "BAYTOWN ACQUISITION COSTS" means the amounts set forth on SCHEDULE A
attached hereto, together with such other amounts as may be advanced by Casella
or any of its affiliates (other than any of the Purchased Companies) prior to
the Closing Date with respect to the facility in Baytown, Texas or Atlanta,
Georgia to be purchased from WRI pursuant to the Baytown Agreement, net of any
amounts collected and retained by Casella or its affiliates on account of the
accounts receivable relating to such facilities; provided, that any amounts
included in the calculation of the Capital Expenditure Adjustment shall not be
Baytown Acquisition Costs.

        "BAYTOWN AGREEMENT" means all agreements (including drafts of unexecuted
agreements), memoranda of understanding, letters of intent and other
correspondence and instruments relating to the purchase or lease by Recovery
Technologies Group of Baytown, Inc. of the facility in Baytown, Texas from WRI.

        "BENEFIT PLANS" has the meaning set forth in Section 5.18(a) of this
Agreement.

        "BUSINESS" has the meaning set forth in the recitals to this Agreement.

        "BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banking institutions in the State of New York or State of
Vermont are authorized by law or executive order to close.

        "BUSINESS EMPLOYEES" has the meaning set forth in Section 5.17(a) of
this Agreement.

        "BUYER" has the meaning set forth in the introductory paragraph of this
Agreement.

        "BUYER INDEMNITEES" has the meaning set forth in Section 12.1(a) of this
Agreement.

        "BUYER LIABILITY CAP" means an aggregate of US$4,000,000 with respect to
(i) the amounts (if any) due and payable by the Buyer pursuant Article XII of
this Agreement, and (ii) the amounts (if any) payable by New Heights Buyer
pursuant Article XII of the New Heights Purchase Agreement.

        "BUYER'S ACCOUNTANTS" means Ernst & Young LLP or such other independent
accountants as may be selected by the Buyer.

                                       -2-
<Page>

        "BUYER'S EVENT OF BREACH" has the meaning set forth in Section 12.2(a)
of this Agreement.

        "CANADIAN SUBSIDIARIES" means 1316991 Ontario Inc., RT Canada, Prairie
Rubber Corporation and Atlantic Recycled Rubber Inc.

        "CAPITAL EXPENDITURE" has the meaning defined by GAAP.

        "CAPITAL EXPENDITURE ADJUSTMENT" means the aggregate amount of all of
the Capital Expenditures that Casella has made by means of equity investments in
or loans from Casella or any Affiliate of Casella (provided that such loans will
constitute Seller Liabilities) to or on behalf of the Controlled Purchased
Companies, as specified on SCHEDULE 3.3 to this Agreement.

        "CERCLA" has the meaning set forth in Section 5.21(b) of this Agreement.

        "CERCLIS" has the meaning set forth in Section 5.21(e) of this
Agreement.

        "CLAIMS" means, whether or not formally asserted, all demands, claims,
actions or causes of action, assessments, suits, proceedings, disputes,
investigations, Losses, damages, costs, expenses, liabilities, judgments,
awards, fines, sanctions, penalties, charges, and/or amounts paid in settlement,
including, without limitation, costs, fees and expenses of attorneys, court
costs, experts, accountants, appraisers, consultants, witnesses, investigators
and/or any other Persons employed or retained in connection with any of the
foregoing.

        "CLOSING" has the meaning set forth in Section 4.1 of this Agreement.

        "CLOSING DATE" has the meaning set forth in Section 4.1 of this
Agreement.

        "CLOSURE BONDS" has the meaning set forth in Section 5.27 of this
Agreement.

        "CODE" means the Internal Revenue Code of 1986, as amended.

        "COLLECTIBLE" has the meaning set forth in Section 5.16 of this
Agreement.

        "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 8.5(c)
of this Agreement.

        "CONTRACTS" has the meaning set forth in Section 5.15(a) of this
Agreement.

        "CONTROLLED PURCHASED COMPANIES" means all of the Purchased Companies
other than RECI.

        "EMPLOYEE POLICIES" has the meaning set forth in Section 5.17(i) of this
Agreement.

        "EMPLOYMENT AND LABOR AGREEMENTS" has the meaning set forth in Section
5.17(b) of this Agreement.

        "ENVIRONMENT" has the meaning set forth in Section 5.21(g) of this
Agreement.

        "ENVIRONMENTAL CONDITION" means a condition of the soil, subsoil,
surface waters, groundwater, stream sediments, air or other environmental media,
including the presence or Release of a Hazardous Substance, at, under, or
migrating from a property that, by virtue of Environmental Laws, (a) requires
investigatory, corrective or remedial measures of any Seller, any of the
Controlled Purchased Companies

                                       -3-
<Page>

or the Buyer, and/or (b) comprises a basis for claims against, demands of and/or
liabilities of any Seller, any of the Controlled Purchased Companies or the
Buyer by any Person, including, without limitation, adjacent land owners.
"Environmental Condition" shall include those conditions identified or
discovered before or after the Closing Date resulting from any activity,
inactivity or operations of any Seller or any of the Controlled Purchased
Companies before the Closing Date.

        "ENVIRONMENTAL LAWS" means all laws, regulations and other requirements
of any Governmental Authority and any judicial or administrative interpretation
thereof, any duties under the common law, any orders, decrees, judgments,
agreements or recorded covenants, conditions, restrictions or easements in any
way relating to the protection of the Environment, human health, public safety
or welfare, or natural resources.

        "EQUIPMENT AND MACHINERY" means (a) all the equipment, machinery,
fixtures and improvements, tooling, spare parts, supplies, furniture, mobile
equipment, tractors, trailers, and vehicles owned or leased by any of the
Controlled Purchased Companies on the Closing Date, and all replacements for any
of the foregoing, (b) any rights of any of the Controlled Purchased Companies or
their respective Subsidiaries to the warranties (to the extent assignable) and
licenses with respect to the aforesaid items, and (c) any related Claims,
credits, rights of recovery and set-off with respect to any of the foregoing.

        "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.

        "ERISA AFFILIATES" has the meaning set forth in Section 5.18(c) of this
Agreement.

        "EXCESS PAYMENT" has the meaning set forth in Section 12.1(b) of this
Agreement.

        "FILES AND RECORDS" means all files and records, whether in hard copy,
magnetic or electronic format, of any of the Controlled Purchased Companies and
their respective Subsidiaries relating to the Business, or the Business
Employees (whether owned or held by the Controlled Purchased Companies, their
respective Subsidiaries or the Sellers), including, without limitation, customer
files, equipment maintenance records, warranty records for equipment,
maintenance records and sales tax exemption certificates.

        "FINANCIAL STATEMENTS" has the meaning set forth in Section 5.6 of this
Agreement.

        "FORMER REAL PROPERTY" has the meaning set forth in Section 5.21(a) of
this Agreement.

        "GAAP" means the generally accepted accounting principles for financial
reporting in the United States.

        "GOVERNMENTAL AUTHORITY" means any agency, department, court or any
other administrative, legislative or regulatory authority of any foreign,
Federal, state, provincial, local or municipal governmental body.

        "GOVERNMENTAL AUTHORIZATIONS" has the meaning set forth in Section 5.12
of this Agreement.

        "HAZARDOUS SUBSTANCE" means any pollutant, contaminant, hazardous
substance, radioactive substance, toxic substance, hazardous waste, medical
waste, radioactive waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls, or any hazardous or
toxic constituent thereof, and includes, but is not limited to, any substance or
material defined in or regulated under the Environmental Laws, or for which
levels are prescribed by any Environmental Laws.

                                       -4-
<Page>

        "HOLDCO 2 LLC" means NH Investors Co., LLC, a Delaware limited liability
company.

        "HOLDCO 2 LLC AGREEMENT" means the limited liability company operating
agreement of Holdco 2 LLC.

        "HOLDCO 1 CORP." means RTG Holding Corporation, a Delaware corporation.

        "HOLDCO 1 INTEREST" means the equity interest in Holdco 1 Corp. to be
held by Casella and/or its Affiliates.

        "HOLDCO 1 STOCKHOLDER AGREEMENT" means the Stockholders Agreement of
Holdco 1 Corp. in the form of EXHIBIT B attached hereto.

        "INSURANCE POLICIES" has the meaning set forth in Section 5.19 of this
Agreement.

        "INTELLECTUAL PROPERTY" has the meaning set forth in Section 5.22 of
this Agreement.

        "INTERCOMPANY DEBT" means the debt evidenced by (i) the promissory note
of RT Canada payable to KTI Environmental Group, the outstanding principal
amount of which as of the date hereof is US$2,293,142.15; (ii) the book entry
intercompany debt owed by RT Canada to Casella, the outstanding principal amount
of which as of the date hereof is US$2,896,754.00; and (iii) the U.S.
intercompany debt of approximately US$4,810,103.85.

        "ITA" has the meaning set forth in Section 5.8(b)(vi) of this Agreement.

        "KTI" has the meaning set forth in the recitals hereto.

        "KTI ENVIRONMENTAL GROUP" has the meaning set forth in the introductory
paragraph hereto.

        "KTI OPERATIONS" has the meaning set forth in the recitals hereto.

        "LEASED REAL PROPERTY" has the meaning set forth in Section 5.20(c) of
this Agreement.

        "LEASES" has the meaning set forth in Section 5.20(c) of this Agreement.

        "LICENSES AND PERMITS" has the meaning set forth in Section 5.12 of this
Agreement.

        "LIEN" means any lien, mortgage, deed of trust, security interest,
charge, pledge, retention of title agreement, title defect, easement,
encroachment, condition, reservation, restriction, covenant, right of way or
other encumbrance affecting title.

        "LOSSES" has the meaning set forth in Section 12.1(a) of this Agreement.

        "NEW HEIGHTS" has the meaning set forth in the recitals hereto.

        "NEW HEIGHTS BUSINESS" means the "Business" as defined in the New
Heights Purchase Agreement.

        "NEW HEIGHTS BUYER" has the meaning set forth in the recitals hereto.

        "NEW HEIGHTS PURCHASE AGREEMENT" has the meaning set forth in the
recitals hereto.

                                       -5-
<Page>

        "NEW HEIGHTS PURCHASED COMPANIES" means the "Purchased Companies" as
defined in the New Heights Purchase Agreement.

        "NEW HEIGHTS PURCHASED EQUITY AND ASSETS" means the "Purchased Equity
and Assets" as defined in the New Heights Purchase Agreement.

        "NEW HEIGHTS SELLERS" means Casella, KTI and KTI Operations.

        "NLRB" has the meaning set forth in Section 5.17(d) of this Agreement.

        "ORGANIZATIONAL DOCUMENTS" means the certificate or articles of
incorporation, memorandum or articles of association, certificate of formation,
operating, partnership or limited liability company agreement, by-laws or
similar organizational or governing documents or instruments, including all
amendments thereto of a Person.

        "OUTSIDE DATE" has the meaning set forth in Section 15.1 of this
Agreement.

        "OWNED REAL PROPERTY" has the meaning set forth in Section 5.20(a)(i) of
this Agreement.

        "PARTY'S EVENT OF BREACH" has the meaning set forth in Section 12.4 of
this Agreement.

        "PARTY INDEMNITEE" has the meaning set forth in Section 12.4 of this
Agreement.

        "PERMITTED LIENS" means (i) Liens for Taxes not yet due and payable,
(ii) Liens arising under worker's compensation, unemployment insurance, social
security, retirement, and similar legislation and (iii) Liens identified in
SCHEDULE B attached hereto.

        "PERMITTED ENCUMBRANCES" has the meaning set forth in Section
5.20(a)(ii) of this Agreement.

        "PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or any Governmental Authority.

        "PRE-CLOSING TAX PERIOD" means any taxable period ending on or before
the Closing Date and the portion ending as of the end of the Closing Date of any
taxable period that includes, but does not end until after, the Closing Date.

        "PURCHASE PRICE" has the meaning set forth in Section 3.1 of this
Agreement.

        "PURCHASED COMPANIES" means (i) RTG and all of its Subsidiaries, and
(ii) RECI (but only to the extent of Casella's 10% indirect interest therein
through its ownership of RT Canada).

        "PURCHASED DEBT" means 80.1% of the Intercompany Debt.

        "PURCHASED INTELLECTUAL PROPERTY" has the meaning set forth in Section
5.22 of this Agreement.

        "PURCHASED STOCK" means 801 shares of the issued and outstanding shares
of common stock of RTG, representing 80.1% of the issued and outstanding capital
stock of RTG on a fully diluted basis as of the Closing Date.

        "PURCHASED STOCK AND DEBT" means the Purchased Stock and the Purchased
Debt.

                                       -6-
<Page>

        "RECI" means RECI Industries de Reciclagen, SGPL, S.A., an entity formed
under the laws of Portugal.

        "RECONCILED DISTRIBUTIONS" means the actual, aggregate amount paid by
Sellers on behalf of the Purchased Companies with respect to the payables and
payroll expenses of the Purchased Companies for which Seller Distributions were
made by the Purchased Companies.

        "RELEASE" means the release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migrating into
the indoor or outdoor environment of any Hazardous Substance.

        "RIGHTS" has the meaning set forth in Section 5.3 of this Agreement.

        "RT CANADA" means Recovery Technologies (Canada), Inc., a Canadian
corporation.

        "RTG" has the meaning set forth in the introductory paragraph hereto.

        "SELLER CONFIDENTIAL INFORMATION" has the meaning set forth in Section
9.2 of this Agreement.

        "SELLER DISTRIBUTIONS" means all payments and other distributions made
by the Purchased Companies to Sellers from and after June 30, 2001 up to and
including the Closing Date to reimburse Sellers for the payments made by Sellers
in the ordinary course of business on behalf of the Purchased Companies with
respect to the payables and employee payroll expenses of the Purchased
Companies.

        "SELLER GROUP" has the meaning set forth in Section 8.5(a) of this
Agreement.

        "SELLER INDEMNITEES" has the meaning set forth in Section 12.2(a) of
this Agreement.

        "SELLER LIABILITIES" shall mean all of the following liabilities,
obligations or commitments:

                (a) all of the liabilities of the Controlled Purchased
Companies, whether known or unknown (including, without limitation, all
contingent, unliquidated and all other Claims against the Purchased Companies)
in existence as of, or arising prior to or on, the Closing (whether or not
asserted on or prior to the Closing) other than (i) liabilities reflected on the
June 30, 2001 balance sheet of the Controlled Purchased Companies, (ii)
liabilities which have arisen since the date of the June 30, 2001 balance sheet
of the Controlled Purchased Companies in the ordinary course of business
consistent with past practices, (iii) contractual and other liabilities which
are incurred in the ordinary course of business consistent with past practices,
and not required by GAAP to be reflected on a balance sheet, or (iv) liabilities
specifically disclosed in the exhibits and schedules to this Agreement (except
the liabilities specified in subclauses (b) through (g) of this definition, all
of which shall constitute Seller Liabilities);

                (b) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities relating to any litigation or
arbitrations against or involving the Controlled Purchased Companies in
existence as of or arising prior to or on the Closing;

                (c) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the Losses (which, for purposes hereof, shall
include the costs of remediation of any violation of any Environmental Law or of
an Environmental Condition) of the Controlled Purchased Companies arising from
or in any way relating to any Environmental Condition, or any actual or alleged
violation of Environmental Law (including the failure to have or obtain Permits
and other Governmental

                                       -7-
<Page>

Authorizations required by any Environmental Law) existing, occurring or
commencing prior to or on the Closing Date, or in connection with the
transactions contemplated by this Agreement or otherwise necessary to conduct
the Business as currently conducted by the Purchased Companies and the Sellers;

                (d) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities for, relating to or in respect of:

                        (i)     Taxes payable with respect to, or as a result of
the sale and transfer (or deemed transfer) of the Purchased Stock and Debt
pursuant to this Agreement, including, but not limited to, Transfer Taxes and
other taxes, if any, resulting from the sale and transfer of the Purchased Stock
and Debt;

                        (ii)    Taxes of any of the Controlled Purchased
Companies for any Pre-Closing Tax Period (including any Taxes resulting from the
Closing);

                        (iii)   Treasury Regulation Section 1.1502-6(a) or any
comparable provision of state, provincial, local, or foreign law for Taxes of
any of Sellers or any other Person affiliated at any time before the Closing
with any of the Controlled Purchased Companies and any liability for Taxes of
any Person by contract, agreement or otherwise arising prior to, or in respect
of conditions existing as of, the Closing;

                        (iv)    breaches by Sellers of the representations and
warranties set forth in Section 5.8 and for breaches by Sellers of the
covenants, obligations and agreements set forth in Article VIII; and

                        (v)     all Losses relating to, or arising out of,
warranty claims (including claims under implied warranties of merchantability
and fitness for a particular purpose) against RT Canada with respect to the
cryogenic crumb rubber processing plant constructed by RT Canada for RECI in
Portugal;

                (e) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities in respect of the employment or
termination of current or former employees of the Controlled Purchased
Companies, on or prior to the Closing (including, without limitation, any
Claims, civil penalty or other cause of action by any current or former
employee, governmental entity, or any other party against the Buyer with respect
to violations of WARN), except for liabilities relating to accrued but unused
vacation days and sick time with respect to employees who remain employed by the
Controlled Purchased Companies after the Closing;

                (f) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities and obligations with respect to
the Owned Real Property or Leased Real Property arising or relating to any
condition existing prior to the Closing, or with respect to the Former Real
Property other than Permitted Encumbrances;

                (g) whether or not disclosed in this Agreement or any of its
exhibits or schedules, all of the liabilities with respect to Benefit Plans
arising prior to the Closing Date; or

                (h) whether or not disclosed in this Agreement or any of its
exhibits or schedules, the amount by which Seller Distributions exceeds the
Reconciled Distributions.

                                       -8-
<Page>

        "SELLER LIABILITY CAP" means an aggregate of US$16,000,000 with respect
to (i) the amounts (if any) due and payable by the Sellers pursuant Article XII
of this Agreement, and (ii) the amounts (if any) payable by the New Heights
Sellers pursuant Article XII of the New Heights Purchase Agreement.

        "SELLER MATERIAL ADVERSE EFFECT" means any material adverse effect on
the aggregate value of the Purchased Stock and Debt and the New Heights
Purchased Equity and Assets; provided, however, that without limiting the
foregoing, a reduction of five percent (5%) or more in the aggregate value of
the Purchased Stock and Debt and the New Heights Purchased Equity and Assets
shall constitute a "Seller Material Adverse Effect."

        "SELLERS" has the meaning set forth in the introductory paragraph of
this Agreement.

        "SELLERS' ACCOUNTANTS" means such independent accountant selected by
Casella.

        "SELLERS' EVENT OF BREACH" has the meaning set forth in Section 12.1(a)
of this Agreement.

        "SELLERS' SENIOR MANAGEMENT" means John Casella, James Bohlig, Richard
Norris and Mike Brennan.

        "STOCK" with respect to any Person, means shares of capital stock or any
other equity securities, and any other shares of stock issued or issuable
therefor, all membership or partnership interests, or any options, warrants or
other rights to acquire any of the above.

        "STRADDLE PERIOD" means any taxable period that includes, but ends
after, the Closing Date.

        "SUBSIDIARY" means any Person with respect to which a specified Person
(or a Subsidiary thereof) directly or indirectly owns a majority of the Stock or
has the power to vote or direct the voting of sufficient securities to elect 50%
or more of the members of the board of directors or similar governing body.

        "TAXES" means any Federal, state, provincial, local, foreign, or other
tax of any kind whatsoever (together with any interest, penalties, or additions
imposed with respect thereto), including, without limitation, income, gross
receipts, license, payroll, employment, excise, severance, stamp, occupation,
service, premium, windfall profits, environmental, customs duties, capital
stock, franchise, profits, withholding, social security (or similar),
unemployment, disability, real property, personal property, intangible property,
sales, use, transfer, recording, registration, value added, alternative or
add-on minimum, estimated, rental, lease, ad valorem, or other tax.

        "TAX RETURNS" means any return, report, information return or other
document filed or required to be filed with any governmental authority in
connection with the determination, assessment, collection or administration of
any Taxes.

        "TRANSACTION EXPENSES" means the expenses incurred by the Sellers or
Buyer and their respective Affiliates, as the case may be, in connection with
this Agreement and the New Heights Purchase Agreement and the transactions
contemplated hereby and thereby, including, without limitation, all reasonable
legal fees (both U.S. and foreign), accounting fees, fees and expenses of
consultants and travel and similar expenses.

        "TRANSFER TAXES" means sales, use, transfer, transfer gains or similar
Taxes.

                                       -9-
<Page>

        "WARN" means the Worker Adjustment and Retraining Notification Act.

        "WRI" means Waste Recovery, Inc.

                                   ARTICLE II
                                PURCHASE AND SALE

        SECTION 2.1     TRANSFER OF EQUITY AND ASSETS

                (a)     Subject to the terms and conditions set forth in this
Agreement, the Sellers shall sell, convey, transfer, assign and deliver the
Purchased Stock and Debt to the Buyer, and the Buyer shall purchase and accept
the Purchased Stock and Debt from the Sellers, on the Closing Date.

                (b)     The sale, transfer, conveyance, assignment and delivery
by the Sellers of the Purchased Stock and Debt shall be made free and clear of
all Liens.

                                   ARTICLE III
                                 PURCHASE PRICE

        SECTION 3.1     PURCHASE PRICE. Subject to the terms and conditions
set forth in this Agreement, the aggregate purchase price to be paid to the
Sellers for the Purchased Stock and Debt shall be an amount equal to (i)
US$12,400,000 (the "BASE PURCHASE PRICE") PLUS (ii) the Baytown Acquisition
Costs and (iii) the Capital Expenditure Adjustment, if any (the Base Purchase
Price, as adjusted by the foregoing clauses (ii) and (iii), the "PURCHASE
PRICE").

        SECTION 3.2     PAYMENT OF PURCHASE PRICE. Subject to the terms and
conditions set forth in this Agreement, the Buyer shall pay, at the Closing, the
Purchase Price to the Sellers in cash by wire transfer in immediately available
funds to an account or accounts designated by Casella (which account or accounts
shall be designated not less than two (2) Business Days prior to the Closing
Date).

        SECTION 3.3     [INTENTIONALLY OMITTED]

        SECTION 3.4     ALLOCATION OF PURCHASE PRICE. The Purchase Price
shall be allocated for Tax and accounting purposes among the Purchased Stock and
Debt and the covenants contained in Section 8.5 hereof, as provided in SCHEDULE
3.4. Such schedule shall also set forth the manner in which the Purchase Price
and the Holdco 1 Interest are allocated among the acquired assets and covenants.
The Buyer and the Sellers shall not, at any time prior to or following the
Closing Date, take any position with respect to the allocation of the Purchase
Price that is inconsistent with the final SCHEDULE 3.4 that is attached hereto.

                                   ARTICLE IV
                                     CLOSING

        SECTION 4.1     CLOSING. The closing of the sale and purchase of the
Purchased Stock and Debt contemplated hereby (the "CLOSING") shall take place at
the offices of Hale and Dorr LLP, 60 State Street, Boston, MA 02109 at 10:00
a.m. on the later of (i) September 7, 2001 and (ii) the second Business Day
following the sastisfaction or waiver by the party entitled to the benefit of
such condition of each of the

                                      -10-
<Page>

conditions set forth in Articles XIII and XIV, or on such other date and place
as shall be mutually agreed upon by Casella and the Buyer (the "CLOSING DATE").

        SECTION 4.2     ITEMS TO BE DELIVERED BY THE SELLER AT THE CLOSING.

        In addition to the other deliveries or actions required to be delivered
or performed hereby, at the Closing, the Sellers shall deliver or cause to be
delivered to the Buyer the following:

                (a)     the officer's certificate required by Section 14.1;

                (b)     evidence of all consents, waivers, novations,
authorizations and approvals required by Section 14.3;

                (c)     the certificates or other instruments representing all
of the Purchased Stock duly accompanied by stock powers assigned in blank;

                (d)     the certificates, notes or other instruments or
documents representing all of the Purchased Debt;

                (e)     the Assignment Agreement, duly executed by the Sellers;

                (f)     a counterpart of the Holdco 1 Stockholder Agreement,
duly executed by Casella or an Affiliate thereof;

                (g)     the resignation of each of the directors of each of the
Controlled Purchased Companies;

                (h)     the corporate seal and all of the minute books and stock
transfer books of each of the Controlled Purchased Companies;

                (i)     evidence reasonably satisfactory to the Buyer of the
approval of the transactions contemplated hereby by the board of directors of
each Seller;

                (j)     copies of the Organizational Documents of each of the
Controlled Purchased Companies, certified by the Secretary of State or other
appropriate official of its jurisdiction of incorporation;

                (k)     certificates from the Secretary of State or other
appropriate official of the respective jurisdictions of incorporation or
formation and the respective jurisdictions of qualification (as listed on
SCHEDULE 5.1) to the effect that each of the Controlled Purchased Companies is
in good standing and subsisting in such jurisdictions;

                (l)     an opinion of counsel to the Sellers, dated as of the
Closing Date, in the form of EXHIBIT C attached hereto; and

                (m)     such other certificates, agreements, documents and other
instruments and documents as are required to be delivered by the Sellers or any
of the Purchased Companies pursuant to this Agreement at or prior to the
Closing.

        SECTION 4.3     Items to be Delivered by the Buyer at the Closing.

                                      -11-
<Page>

        In addition to the other deliveries or actions required to be delivered
or performed hereby, at the Closing, the Buyer shall deliver or cause to be
delivered to the Sellers the following:

                (a)     the officer's certificate contemplated by Section 13.1;

                (b)     evidence of all consents, waivers, novations,
authorizations and approvals required by Section 13.3;

                (c)     a counterpart of the Holdco 1 Stockholder Agreement,
duly executed by the Buyer;

                (d)     stock certificates in the name of Casella evidencing
19.9% of each class of stock of Holdco 1 Corp., accompanied by (i) the
Certificate of Incorporation of Holdco 1 Corp., certified by the Secretary of
State of the State of Delaware; (ii) the Bylaws of Holdco 1 Corp., as certified
by the Secretary of the Buyer; and (iii) a certificate of good standing issued
by the Secretary of State of the State of Delaware as to the legal existence and
corporate good standing of Holdco 1 Corp. in Delaware;

                (e)     an opinion of the Buyer's counsel, dated as of the
Closing Date, in the form of EXHIBIT D attached hereto;

                (f)     a wire transfer of immediately available funds in an
amount equal to the Purchase Price to be paid on the Closing Date;

                (g)     the Assignment Agreement, duly executed by the Buyer;
and

                (h)     such other certificates and other instruments and
documents required to be delivered by the Buyer pursuant to this Agreement at or
prior to the Closing.

                                    ARTICLE V
                  REPRESENTATIONS AND WARRANTIES OF THE SELLERS

        The Sellers, jointly and severally, hereby represent and warrant to the
Buyer that the statements contained in this Article V are true and correct,
except as set forth in the disclosure schedule provided by the Sellers to the
Buyer on the date hereof (the "DISCLOSURE SCHEDULE").

        SECTION 5.1     CORPORATE ORGANIZATION. Each Seller and each of the
Controlled Purchased Companies is a corporation or limited liability company
that is duly incorporated or organized, as applicable, validly existing and in
good standing under the laws of the jurisdiction of its incorporation,
continuance or organization, as applicable, and it has all requisite corporate
or other power and authority to own its properties and assets and to conduct its
business as now conducted. Each of the Controlled Purchased Companies is duly
qualified to do business as a foreign corporation or limited liability company
in good standing in every jurisdiction in which the character or location of the
properties and other assets owned or leased by it or the nature of the business
conducted by it makes such qualification necessary. Schedule 5.1 lists every
jurisdiction in which (a) each of the Controlled Purchased Companies is
incorporated or organized, as applicable, and (b) each of the Controlled
Purchased Companies is qualified to do business.

        SECTION 5.2     AUTHORIZATION AND VALIDITY OF AGREEMENTS. Each
Seller has all requisite corporate or other power and authority to enter into,
execute and deliver this Agreement and the other

                                      -12-
<Page>

agreements and instruments delivered by it pursuant to this Agreement and to
carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement by each Seller and the other agreements and instruments
delivered by such Seller pursuant to this Agreement and the performance of its
obligations hereunder and thereunder have been duly authorized by all necessary
corporate or other action by its board of directors and no other corporate or
other proceedings on its part are necessary to authorize such execution,
delivery and performance. This Agreement and the other agreements and
instruments delivered by such Seller pursuant to this Agreement have been duly
executed and delivered by such Seller and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with their respective
terms.

        SECTION 5.3     CAPITALIZATION. SCHEDULE 5.3 sets forth the
authorized Stock of each of the Controlled Purchased Companies and the owners of
record of all of the issued and outstanding Stock of each of the Controlled
Purchased Companies. The Controlled Purchased Companies are the record owners of
all of the issued and outstanding Stock of each of their respective Subsidiaries
other than Prairie Rubber Corporation, which is 92.53% owned by RT Canada, and
Recovery Technologies Collection Services, LLC, which is 95% owned by RTG, and
such ownership is free and clear of any Lien. RTG is the beneficial owner of all
of the issued and outstanding capital stock of the Controlled Purchased
Companies on a fully diluted basis (other than Recovery Technology Collection
Services, LLC and Prairie Rubber Corporation, where RTG is the beneficial owner
of a 95% and 92% equity interest therein, respectively,) and 10% of the
outstanding capital stock of RECI on a fully diluted basis. Casella is the
record and beneficial owner of, and has full power and authority to convey, the
Purchased Stock free and clear of any Lien, and, upon delivery of and payment
for such Purchased Stock as herein provided, the Buyer will acquire good and
valid title thereto, free and clear of any Lien. There is no other Stock
outstanding and no other outstanding options, warrants, convertible or
exchangeable securities, subscriptions, rights (including any preemptive,
registration or anti-dilutive rights), stock appreciation rights, calls or
commitments, agreements or understandings of any character whatsoever
(collectively, "RIGHTS") requiring the issuance or sale of shares of any Stock
of the Controlled Purchased Companies, and there are no contracts or other
agreements by which any of the Controlled Purchased Companies may become bound
to issue additional shares of Stock or any Rights. None of the Sellers nor any
of the Controlled Purchased Companies is a party to any voting trust, proxy, or
other agreement or understanding with respect to the voting of any Stock of any
of the Controlled Purchased Companies.

        SECTION 5.4     NO CONFLICT OR VIOLATION. The execution, delivery
and performance by each Seller of this Agreement and the other agreements and
instruments delivered by it pursuant to this Agreement do not and will not (a)
violate or conflict with any provision of such Seller's or any of the Controlled
Purchased Companies' Organization Documents or the Organization Documents of any
Subsidiary of a Seller or any of the Purchased Companies, (b) violate any
provision of law, or any order, judgment or decree of any Governmental Authority
applicable to any Seller, (c) violate or conflict with, or result in a breach of
or constitute (with due notice or lapse of time or both) a default under, or
result in the termination of, or accelerate the performance required by, any
contract, lease, loan agreement or other agreement or instrument to which any of
the properties or assets of any of the Controlled Purchased Companies or any of
the Purchased Stock or Purchased Debt is subject, (d) result in the creation or
imposition of any Lien upon any of the Purchased Stock or Purchased Debt or (e)
result in the cancellation, modification, revocation or suspension of any of the
Licenses and Permits.

        SECTION 5.5     CONSENTS AND APPROVALS. Except as set forth on
SCHEDULE 5.5 to this Agreement, there are no consents, waivers, authorizations,
filings with or approvals of any Governmental Authority or of any other Person
that are required in connection with the (a) the execution and delivery by the
Sellers of this Agreement and the other agreements and instruments required to
consummate the transactions contemplated by this Agreement and (b) the
performance by the Sellers of their respective

                                      -13-
<Page>

obligations hereunder and pursuant to the other agreements and instruments
required to consummate the transactions contemplated by this Agreement, except
for those consents, waivers, authorizations, filings and approvals, the absence
of which would not have a material adverse effect on the Business, any
Controlled Purchased Company, any of the Purchased Stock or Purchased Debt or
the ability to consummate the transaction contemplated by this Agreement.

        SECTION 5.6     FINANCIAL STATEMENTS. Attached as SCHEDULE 5.6 are
true and complete copies of (i) the unaudited balance sheets for each of the
Controlled Purchased Companies as at June 30, 2001, and (ii) the statements of
income for the Controlled Purchased Companies for the year ended June 30, 2001;
in each case, together with the notes and schedules thereto, as applicable. The
financial statements described in this Section 5.6, including the notes and
schedules thereto, are referred to herein collectively as the "FINANCIAL
STATEMENTS." The Financial Statements (a) have been prepared in accordance with
GAAP, consistently with the accounting practices previously employed by the
Controlled Purchased Companies (except as indicated in the notes thereto), (b)
present fairly the financial position, results of operations and cash flows of
the Controlled Purchased Companies as of the dates thereof and for the periods
then ended, (c) are complete, correct and in accordance with the books of
account and records of the Controlled Purchased Companies, and (d) can be
reconciled with the financial records maintained and the accounting methods
applied by the Controlled Purchased Companies for Federal income tax purposes.

        SECTION 5.7     ABSENCE OF CERTAIN CHANGES OR EVENTS.

                (a)     Since June 30, 2001, there has not been:

                        (i)     any material adverse change in the business,
operations, properties, condition (financial or other) or prospects of the
Purchased Stock, Purchased Debt or any of the Controlled Purchased Companies,
and no factor or condition exists and no event has occurred that would be likely
to result in any such change;

                        (ii)    any material loss, damage, or other casualty to
the Purchased Stock or the Controlled Purchased Companies, whether or not
covered by insurance; or

                        (iii)   any loss of the employment, services or benefits
of any officer or key employee of any of the Controlled Purchased Companies.

                (b)     Since June 30, 2001, the Controlled Purchased Companies
have operated their respective Business in the ordinary course of business
consistent with past practices and have not:

                        (i)     incurred or failed to pay or satisfy when due
any material obligation or liability (whether accrued, contingent or otherwise)
relating to the operations of the Business;

                        (ii)    incurred or failed to discharge or satisfy any
Lien that is not a Permitted Lien;

                        (iii)   transferred any of their assets with a value in
excess of US$10,000 other than in the ordinary course of business and consistent
with past practices, or canceled any debts or Claims or waived any rights
material to the Business or relating to the operations of the Business;

                        (iv)    intentionally defaulted on any obligation, or
unintentionally defaulted on any material obligation relating to the Business;

                                      -14-
<Page>

                        (v)     entered into any transaction material to the
Business, or amended or terminated any arrangement material to the Business or
relating to the Business;

                        (vi)    taken or omitted to take any other action, which
would, had it been taken subsequent to the date hereof, constitute a breach of
the provisions of Section 8.1; or

                        (vii)   entered into any agreement or made any
commitment to do any of the foregoing.

                (c)     Notwithstanding the foregoing or any other provision in
this Agreement to the contrary, since June 30, 2001, none of the Sellers has
caused or permitted the Purchased Companies to distribute or pay, or authorize
the distribution or payment of, any cash or other assets or property to Sellers
or any of their Affiliates, except with respect to (i) the payment of
US$810,220, reduced by applicable withholding taxes, by RT Canada to Casella,
KTI Environmental Group and Affiliates of Casella of accrued management fees and
accrued interest on intercompany loans; provided, however, concurrently with the
payment of such accrued management fees and interest, Casella shall make an
intercompany loan to RT Canada of US$810,220; and (ii) Seller Distributions.

        SECTION 5.8     TAX MATTERS.

                (a)     (i)     All Tax Returns required to be filed by or on
behalf of the Controlled Purchased Companies, either separately or as a member
of an affiliated group, have been filed, and all such Tax Returns were correct
and complete in all material respects. All Taxes of the Controlled Purchased
Companies (whether or not shown to be due on any Tax Return) that were due
(determined after taking into account all applicable extensions) have been paid.
None of the Controlled Purchased Companies currently is the beneficiary of any
extension of time within which to file any Tax Return. None of the Sellers nor
any of the Controlled Purchased Companies has carried on business or performed
any acts in a jurisdiction where Tax Returns were required to be, but were not,
filed which activity would cause it to be subject to the taxing authority of
such jurisdiction. No claim has been made by a taxing authority in a
jurisdiction where any of the Sellers or the Controlled Purchased Companies does
not file Tax Returns that any of the Sellers or the Controlled Purchased
Companies is or may be subject to taxation by that jurisdiction.

                        (ii)    The Controlled Purchased Companies have withheld
and paid all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder, or other third party.

                        (iii)   There is no material, unresolved dispute or
claim concerning any liability for Tax in respect of any of the Controlled
Purchased Companies either (A) claimed or proposed by any representative of any
taxing authority or (B) as to which any of the Sellers or the Controlled
Purchased Companies or the directors and officers of any of the Sellers or the
Controlled Purchased Companies has knowledge. SCHEDULE 5.8 lists all Federal,
state, local, and foreign income and franchise Tax returns filed with respect to
each of the Controlled Purchased Companies for taxable periods ended after
December 31, 1996, indicates any such Tax returns that have been audited by any
taxing authority, identifying such authority, indicates those Tax returns that
currently are the subject of audit by any taxing authority, identifying such
authority, and indicates those Tax returns that remain open to future audit by
any taxing authority. Casella has delivered, or has caused to be delivered, to
the Buyer correct and complete copies of all income and franchise Tax returns,
examination reports, and statements of deficiencies assessed against or agreed
to by or on behalf of any of the Controlled Purchased Companies for taxable
periods ending after December 31, 1996.

                                      -15-
<Page>

                        (iv)    There are no outstanding agreements, waivers, or
arrangements extending the statutory period of limitations applicable to any
claim for, or the period for the collection or assessment of, Taxes due from or
with respect to any of the Controlled Purchased Companies.

                        (v)     None of the Controlled Purchased Companies has
made any payments, is obligated to make any payments, nor is party to any
agreement that could obligate them to make any payments that will not be
deductible under Code Section 280G. None of the Controlled Purchased Companies
is a party to, bound by, or subject to, any Tax sharing, Tax allocation, Tax
indemnification, or similar agreement, other than (i) agreements for the benefit
of one or more of the Controlled Purchased Companies made in connection with the
acquisition transactions whereby the Controlled Purchased Companies were
acquired by RTG or its Subsidiaries and (ii) agreements among only some or all
of the Purchased Companies. None of the Controlled Purchased Companies (A) has
been a member of an affiliated group filing a consolidated or combined Federal,
state, local, or foreign income or franchise Tax return (other than a group the
common parent of which was Casella) or (B) has any liability for the Taxes of
any Person under Treasury Regulations Section 1.1502-6 (or any similar provision
of state, local, or foreign law), as a transferee or successor, by contract, or
otherwise. No closing agreement pursuant to Code Section 7121 or any similar
provision of state, local, or foreign law has been entered into by or with
respect to any of the Controlled Purchased Companies. None of the Controlled
Purchased Companies has agreed to make any adjustment pursuant to Code Section
481(a) by reason of any change in any accounting method, and there is no
application pending with any taxing authority requesting permission for any
changes in any accounting method of any of the Controlled Purchased Companies.
The Internal Revenue Service has not proposed any such adjustment or change in
accounting method that has not been resolved.

                        (vi)    None of the Sellers nor any of their respective
Affiliates has made, with respect to any of the Controlled Purchased Companies,
or any property held by any of the Controlled Purchased Companies, any consent
under Section 341(f) of the Code. No property of any of the Controlled Purchased
Companies is "tax exempt use property" within the meaning of Section 168(h) of
the Code. None of the Controlled Purchased Companies is a party to any lease
made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended. There are no Liens on the Purchased Stock, Purchased Debt or any of the
Controlled Purchased Companies that arose in connection with any failure (or
alleged failure) to pay any Tax.

                        (vii)   SCHEDULE 5.8 sets forth the estimated basis of
each of the Controlled Purchased Companies in their assets as of January 31,
2001.

                (b)     (i)     With respect to the Canadian Subsidiaries, all
installments or other payments on account of Taxes that relate to periods for
which Tax Returns are not yet due have been paid on a timely basis. There are no
arrangements providing for an extension of time with respect to the filing of,
or assessment or reassessment of, any Tax Return of the Canadian Subsidiaries or
the payment of any Taxes payable by any of such Canadian Subsidiaries. Canadian
Federal and provincial income tax assessments have been issued to the Canadian
Subsidiaries covering all past periods up to and including the fiscal years
ended on or before December 31, 2000 and such assessments, if any amounts were
owing in respect thereof, have been paid or settled, and only fiscal years ended
subsequent to December 31, 2000 remain open for assessment of additional Taxes.
There are no actions, suits or other proceedings or claims in progress, pending
or threatened against the Canadian Subsidiaries in respect of any Taxes, and in
particular there are no currently outstanding reassessments, written inquiries
or written notices of deficiencies which have been issued or raised, as the case
may be, by any governmental authority relating

                                      -16-
<Page>

to any such Taxes. No claim has ever been made by an authority in a jurisdiction
where the Canadian Subsidiaries do, or any of them does, not file Tax Returns
that such entity is or may be subject to taxation by that jurisdiction.

                        (ii)    The Canadian Subsidiaries have withheld,
collected and paid to the proper Governmental Authority all Taxes required to
have been withheld, collected and paid by such Canadian Subsidiaries including,
without limitation, any Taxes in connection with (A) amounts paid or owing to
any shareholder, employee or any non-resident of Canada and (B) goods and
services received from or provided to any Person.

                        (iii)   No steps have been taken by any Governmental
Authority to assess any additional Taxes (including any source deductions or
Employment Insurance or Canada Pension Plan premiums) against any of the
Canadian Subsidiaries for any period for which Tax Returns have been filed nor
are there any actual or pending investigations of any such entity relating to
Taxes. Either Casella or RTG has made available to the Buyer correct and
complete copies of all of the Tax Returns of the Canadian Subsidiaries and all
written notices of assessment which have been received by Casella or RTG and the
Canadian Subsidiaries, examination reports or statements of deficiencies
assessed against or agreed to by any of the Canadian Subsidiaries for all
taxable periods for which the statute of limitations has not yet closed and any
correspondence relating thereto.

                        (iv)    None of the Canadian Subsidiaries (A) is a party
to any Tax allocation or sharing agreement, (B) has been a member of an
affiliated, combined or unitary group filing a combined, unitary or other return
for provincial, local or foreign tax purposes reflecting the income, assets, or
activities of Affiliates, or (C) has any liability for the Taxes of any Person
other than such Canadian Subsidiary under any provision of Federal, provincial,
local or foreign law as a transferee or successor, or by contract, or otherwise.
None of the Canadian Subsidiaries is a party to any joint venture, partnership
or other arrangement or contract that could be treated as a partnership for Tax
purposes.

                        (v)     The tax basis of the assets of the Canadian
Subsidiaries by category, including the classification of such assets and the
amounts claimed for capital cost allowances with respect to the depreciable
property or legible capital property as reflected in their respective Tax
Returns and related work papers is true and correct.

                        (vi)    There are no circumstances existing at or prior
to the Closing Date which could, in themselves, result in the application of any
of Sections 80 to 80.03 of the Income Tax Act (Canada) (the "ITA") or any
equivalent provincial or foreign provision to the Canadian Subsidiaries. None of
the Canadian Subsidiaries has (A) made any election pursuant to Section 80.04 of
the ITA or any equivalent provincial or foreign provision in which it is an
eligible transferee, (B) filed, or will file in respect of any taxation year
ending on or before the Closing Date, an agreement pursuant to Section 191.3 of
the ITA or any equivalent provincial or foreign provision, (C) claimed, and
shall not claim in their Tax Returns for any taxation year ending on the Closing
Date, any reserve under any of Sections 40(1)(a)(iii) or 20(1)(n) of the ITA or
any equivalent provincial provision of any amount could be included in the
income of such Canadian Subsidiary for any period ending after the Closing Date
in respect of any such reserve, or (D) deducted any amounts in computing its
income in a taxation year which may be included in income in a subsequent year
under Section 78 of the ITA.

                        (vii)   None of the Purchased Stock is taxable Canadian
property for purposes of the ITA.

                                      -17-
<Page>

                        (viii)  Each of the Canadian Subsidiaries is not a
non-resident of Canada under the ITA.

        SECTION 5.9     OPERATION OF THE BUSINESS; SUFFICIENCY OF ASSETS.
Except as set forth on SCHEDULE 5.9, no part of the Business is operated by or
through any Person other than the Controlled Purchased Companies. The Controlled
Purchased Companies have good and marketable title to all of the assets owned or
used by the Controlled Purchased Companies and, upon consummation of the
transactions contemplated by this Agreement, such assets shall be free and clear
of all Liens (other than Permitted Liens). The Sellers have good and marketable
title to the Purchased Stock and Debt and, upon consummation of the transactions
contemplated by this Agreement, the Buyer will acquire good and marketable title
to the Purchased Stock and Debt and all of the Sellers' right, title and
interest in and under the Purchased Stock and Debt free and clear of all Claims,
Liens and objections or equities of any kind. The assets owned or used by the
Controlled Purchased Companies comprise all assets and services required for the
continued conduct of the Business as now being conducted by the Controlled
Purchased Companies. The assets owned or used by the Controlled Purchased
Companies in connection with the Business are adequate for the purposes for
which such assets are currently used or are held for use, and are in working
repair and operating condition and there are no facts or conditions affecting
such assets which could, individually or in the aggregate, interfere materially
with the use or operation thereof as currently used or operated, or their
adequacy for such use.

        SECTION 5.10    EQUIPMENT AND MACHINERY. SCHEDULE 5.10 sets forth a
complete and correct list of each item of Equipment and Machinery and lists the
owner thereof. The Controlled Purchased Companies have good title, free and
clear of all Liens (other than Permitted Liens) and title defects of any kind to
the Equipment and Machinery. The Controlled Purchased Companies hold good and
transferable leaseholds in all of the Equipment and Machinery leased by the
Controlled Purchased Companies, and each such lease is valid and enforceable.
The Controlled Purchased Companies are not in default with respect to any item
of leased Equipment and Machinery and no event has occurred that constitutes, or
with due notice or lapse of time or both may constitute, a default under any
lease thereof.

        SECTION 5.11    CUSTOMER RELATIONSHIPS. SCHEDULE 5.11 contains a true,
accurate and complete list of the ten largest customer accounts, in terms of
revenues to each of the Controlled Purchased Companies (a) for the calendar year
ended December 31, 2000 and (b) for the year ended June 30, 2001, together with
the dollar amount of revenue earned from each such customer during each of such
periods. With respect to any such customer listed on SCHEDULE 5.11, no such
customer has terminated or is expected to terminate a material portion of its
normal business (based on past practice) with any of the Controlled Purchased
Companies. No director or executive officer of any Seller or any Purchased
Company, or any Affiliate of any of the foregoing, has any direct or indirect
interest, either by way of equity ownership or otherwise, in any Person which
competes with, is a customer of, or is a sales agent for, or is a party to any
Contract with, any of the Controlled Purchased Companies.

        SECTION 5.12    LICENSES AND PERMITS. SCHEDULE 5.12 sets forth a true
and complete list, including the owner or holder thereof, of all of the material
licenses, permits, franchises, authorizations, registrations, approvals and
certificates of occupancy (or their equivalent) ("GOVERNMENTAL AUTHORIZATIONS")
issued or granted to any of the Controlled Purchased Companies by any
Governmental Authority, including without limitation, those required under the
Environmental Laws (collectively, the "LICENSES AND PERMITS"), and all pending
applications therefor. Such scheduled Licenses and Permits comprise all of the
Governmental Authorizations necessary or required for the operation of the
Business as currently conducted. Except as set forth of SCHEDULE 5.12;
Governmental Authorizations held by the Controlled Purchased Companies or used
in connection with the Business have been duly obtained, are valid and in full
force and effect, and are not subject to any pending or threatened
administrative or

                                      -18-
<Page>

judicial proceeding to revoke, cancel, suspend or declare any such Governmental
Authorization invalid in any respect. Except as set forth on SCHEDULE 5.12, the
Governmental Authorizations are owned or held, as applicable, by the applicable
Purchased Company free and clear of all Liens.

        SECTION 5.13    COMPLIANCE WITH LAW. The operations of the Controlled
Purchased Companies and their respective businesses have been conducted in
accordance with all applicable laws, regulations, orders and other requirements
of all Governmental Authorities having jurisdiction over the Controlled
Purchased Companies and their assets, properties and operations, except where
the failure to do so would not have a material adverse effect on any of the
Controlled Purchased Companies or the Purchased Stock or Purchased Debt or the
ability to consummate the transactions contemplated by this Agreement. Except as
set forth on SCHEDULE 5.13, no Seller nor any Purchased Company has received
notice of any violation of any such law, regulation, order or other legal
requirement, or are in default with respect to any order, writ, judgment, award,
injunction or decree of any Governmental Authority.

        SECTION 5.14    LITIGATION. Except as set forth of SCHEDULE 5.14,
there are no Claims pending or, to the Sellers' knowledge, threatened, before
any Governmental Authority brought by or against any Seller or any of the
Controlled Purchased Companies or the Sellers' or any of the Controlled
Purchased' respective officers, directors, partners, employees, agents or
Affiliates involving, affecting or relating to the Business, the Controlled
Purchased Companies, or any of the Purchased Stock or Purchased Debt or the
transactions contemplated by this Agreement. None of the Sellers nor any of the
Controlled Purchased Companies are named in, or otherwise bound by, any order,
writ, judgment, award, injunction or decree of any Governmental Authority that
affects or may reasonably be expected to affect the Business, any of the
Controlled Purchased Companies, any of the Purchased Stock or Purchased Debt, or
that would interfere with the transactions contemplated by this Agreement.
SCHEDULE 5.14 lists all pending or to the Sellers' knowledge, threatened
litigation brought by or against the Sellers, any of the Purchased Companies or
their respective Subsidiaries with respect to the Business any of the Purchased
Stock or Purchased Debt.

        SECTION 5.15    CONTRACTS.

                (a)     SCHEDULE 5.15(a) sets forth a true and complete list of
all of the contracts, agreements and other instruments and arrangements (whether
written or oral) to which any of the Controlled Purchased Companies is a party
or by which any of the Controlled Purchased Companies or any of the Purchased
Stock or Purchased Debt is bound, in each case, which are of the nature
described below or are otherwise material to the Business (collectively, the
"CONTRACTS"), including but not limited to:

                        (i)     arrangements relating to providing collection,
transportation or disposal services for automobile, vehicle or other vehicle
tires involving in excess of US$100,000 per year;

                        (ii)    leases, licenses, permits, insurance policies,
service contracts and other arrangements concerning or relating to real estate;

                        (iii)   employment, consulting, collective bargaining or
other similar arrangements relating to or for the benefit of current, future or
former employees, agents, and independent contractors or consultants of the
Controlled Purchased Companies;

                        (iv)    agreements and instruments relating to the
borrowing of money or obtaining of or extension of credit;

                                      -19-
<Page>

                        (v)     material brokerage or finder's agreements;

                        (vi)    contracts involving a sharing of profits or
                                expenses;

                        (vii)   material acquisition or divestiture agreements;

                        (viii)  material service agreements;

                        (ix)    manufacturer's representative, or
distributorship agreements;

                        (x)     arrangements limiting or restraining it from
engaging or competing in any lines of business or with any Person; and

                        (xi)    documents granting a power of attorney.

                (b)     All of the Contracts are in full force and effect and
are valid, binding and enforceable against the parties thereto in accordance
with their terms; provided that the agreements identified in Section 5.15(a)(x)
may not be enforceable under all circumstances. The Sellers, the Controlled
Purchased Companies and, to the best knowledge of the Sellers, each other party
to the Contracts, has performed all obligations required to be performed by it
to date under, and is not in default or delinquent in performance, status or any
other respect (claimed or actual) in connection with, the Contracts, and no
event has occurred which, with due notice or lapse of time or both, would
constitute such a default. The enforceability of the Contracts will not be
affected in any manner by the execution, delivery and performance of this
Agreement or the other documents and instruments delivered in connection with
this Agreement. The Sellers have delivered to the Buyer or its representatives
true and complete originals or copies of all of the Contracts.

        SECTION 5.16    RECEIVABLES. All Accounts Receivable are reflected
on SCHEDULE 5.16, were legally and validly incurred pursuant to bona fide
transactions in the ordinary course of business consistent with past practices,
and are current and Collectible in amounts not less than the aggregate amount
thereof net of reserves reflected on the balance sheets of the Controlled
Purchased Companies included in the Financial Statements as set forth on
SCHEDULE 5.16, and are not subject to any counterclaims or set-offs. The term
"COLLECTIBLE" shall mean that not less than one hundred percent (100%) of the
book value of such Accounts Receivable are payable within ninety (90) days of
the applicable due date. None of the Sellers nor any Controlled Purchased
Company has any knowledge of any fact or circumstance generally that would
result in any material increase in the uncollectability of the Accounts
Receivable as a class. SCHEDULE 5.16 sets forth, as of June 30, 2001, all of the
Accounts Receivable, the Controlled Purchased Company to which such amount is
owed, the amount owing and the aging of such receivable, the name and last known
address of the party from whom such receivable is owing, and any security in
favor of it for the repayment of such receivable which the Controlled Purchased
Companies purport to have.

        SECTION 5.17    LABOR MATTERS.

                (a)     SCHEDULE 5.17(a) sets forth a true, accurate and
complete list containing the names of all employees who are employed by any of
the Controlled Purchased Companies, or who otherwise provide substantially all
of their services to the Controlled Purchased Companies, as of the date hereof
(the "BUSINESS EMPLOYEES"), the employer of such Business Employee, the job
designations of each such Business Employee, the compensation paid to each such
Business Employee and the basis for such compensation, currently and for
calendar year 2000.

                                      -20-
<Page>

                (b)     None of the Controlled Purchased Companies is a party to
(i) any employment agreement or consulting agreement with any Person, (ii) any
agreement, policy or past or present practice that requires it to pay
termination or severance pay to salaried, non-exempt or hourly employees (other
than as required by law), (iii) any collective bargaining agreement or other
labor union contract, nor does any Seller know of any activities or proceedings
of any labor union to organize any such employees of the Controlled Purchased
Companies, (iv) or subject to any conciliation agreements, consent decrees or
settlements with respect to their employees. The Sellers have furnished, or have
caused to be furnished, to the Buyer complete and correct copies of all such
agreements, contracts and policies (the "EMPLOYMENT AND LABOR AGREEMENTS"). None
of the Controlled Purchased Companies has breached or otherwise failed to comply
with any provisions of any of the Employment and Labor Agreements and there are
no grievances outstanding thereunder. The transactions contemplated hereby do
not cause or give rise to the payment of any severance or "change of control"
payments to any employee of the Controlled Purchased Companies.

                (c)     Each of the Controlled Purchased Companies is in
compliance in all material respects with all applicable laws relating to
employment and employment practices, wages, hours, and terms and conditions of
employment.

                (d)     There is no unfair labor practice charge or complaint
pending or to the knowledge of the Sellers, threatened before the National Labor
Relations Board ("NLRB") or any other Governmental Authority relating to any of
the Controlled Purchased Companies, including, without limitation, the Canada
Industrial Relations Board and any labor relations board of any province or
territory of Canada.

                (e)     There is no labor strike, material slowdown or material
work stoppage or lockout pending or to the knowledge of the Sellers threatened
against or affecting any of the Controlled Purchased Companies, and none of the
Controlled Purchased Companies has experienced any strike, material slowdown or
material work stoppage, lockout or other collective labor action by or with
respect to their employees.

                (f)     There is no representation, claim or petition pending
before the NLRB or any other Governmental Authority, including, without
limitation, the Canada Industrial Relations Board and any labor relations board
of any province or territory of Canada, and no question concerning
representation exists relating to the employees of any of the Controlled
Purchased Companies.

                (g)     There are no charges with respect to or relating to any
of the Controlled Purchased Companies pending before the Equal Employment
Opportunity Commission or any other Governmental Authority responsible for the
prevention of unlawful employment practices.

                (h)     None of the Sellers nor the Controlled Purchased
Companies has received notice from any Governmental Authority responsible for
the enforcement of labor or employment laws of an intention to conduct an
investigation of it relating to the Business and no such investigation is in
progress.

                (i)     Each Controlled Purchased Company has furnished to the
Buyer a complete and accurate list of all its employee manuals, policies,
procedures and work-related rules that apply to employees of any of the
Controlled Purchased Companies ("EMPLOYEE POLICIES"). Each Controlled Purchased
Company has provided the Buyer with copies of all of the written Employee
Policies and a written description of all material unwritten Employee Policies.
Each of the Employee Policies can be amended or terminated at will by the
applicable Controlled Purchased Company.

                                      -21-
<Page>

                (j)     None of the Sellers nor the Controlled Purchased
Companies has any liability in Canada for sick leave, vacation time, severance
pay or similar items or any occupational disease of any of the employees, former
employees or other Persons relating to any of the Controlled Purchased
Companies.

        SECTION 5.18    EMPLOYEE PLANS.

                (a)     SCHEDULE 5.18(a) sets forth a complete and correct list
of all benefit plans and all employment, compensation, bonus, stock option,
stock purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance, change of control
or other benefit plans, programs or arrangements, in each case, which are
maintained, contributed to or sponsored by any Seller on behalf of any current
or former employees of the Business or by any of the Controlled Purchased
Companies, or for which any of the Controlled Purchased Companies have any
liability, contingent or otherwise (collectively, the "BENEFIT PLANS").

                (b)     The Benefit Plans have been operated and administered in
all material respects in accordance with their terms and the applicable
requirements of the Code and applicable law, except for such failures as would
not reasonably have a material adverse effect on any of the Controlled Purchased
Companies. All contributions and all payments required to have been made to or
under any Benefit Plan have been properly made, except for such failures as
would not have a material adverse effect on any of the Controlled Purchased
Companies.

                (c)     No Benefit Plan is subject to Title IV of ERISA or is a
multi-employer plan within the meaning of Section 3(37)(A) of ERISA. None of the
Sellers nor any of the Controlled Purchased Companies, nor any trade or business
(whether or not incorporated) which is or has ever been treated as a single
employer with the Controlled Purchased Companies under Section 414(b), (c), (m)
or (o) of the Code ("ERISA AFFILIATES"), has incurred any liability under Title
IV of ERISA or Section 412 of the Code, except for such liability that has been
paid in full.

                (d)     There is no Claim (excluding claims for benefits
incurred in the ordinary course consistent with past practices) that is pending
or to the Sellers' knowledge threatened with respect to any of the Benefit
Plans.

                (e)     Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
payment becoming due to any current or former employee or consultant of the any
of the Controlled Purchased Companies, (ii) increase any benefits under any
Benefit Plan, or (iii) result in the acceleration of the time of payment,
vesting or other rights with respect to any benefits under any Benefit Plan.

                (f)     All pension plans maintained or required to be
maintained by the Controlled Purchased Companies are duly registered under, and
have been maintained in accordance with, all applicable laws.

        SECTION 5.19    INSURANCE. SCHEDULE 5.19 lists the fidelity bonds
and the aggregate coverage amount and type and generally applicable deductibles
of all insurance policies insuring, or maintained by, the Controlled Purchased
Companies (the "INSURANCE POLICIES") or the Sellers with respect to the
Business. The Insurance Policies (together with all riders and amendments
thereto) are in full force and effect and all premiums due on the Insurance
Policies have been paid. The Controlled Purchased Companies have complied with
the provisions of the Insurance Policies. Neither the Sellers nor any of the
Controlled Purchased Companies has received any written notice canceling or
threatening to cancel or

                                      -22-
<Page>

refusing to renew any of the Insurance Policies. The rights of the insured under
the Insurance Policies will not be terminated or adversely affected by the
transactions contemplated hereby. The Controlled Purchased Companies shall
maintain the coverage under all Insurance Policies in full force and effect
through and including the Closing Date. The Sellers have delivered to the Buyer
or its representatives true and complete originals or copies of all of the
Insurance Policies. The Insurance Policies are sufficient to comply with all
requirements of applicable law, Contracts and Licenses and Permits, and are in
amounts and coverages customary in the industry for similarly situated
companies.

        SECTION 5.20    OWNED REAL PROPERTY; LEASED REAL PROPERTY.

                (a)     (i)     SCHEDULE 5.20(a)(i) sets forth a complete and
accurate description of the real property owned by any of the Controlled
Purchased Companies (the "OWNED REAL PROPERTY"). Except as may be indicated on
the title insurance policies covering the Owned Real Property, the applicable
Controlled Purchased Company has good, indefeasible and marketable fee simple
title to the Owned Real Property. The Sellers have delivered to the Buyer or its
representatives true and complete originals or copies of all of the existing
title insurance policies covering the Owned Real Property.

                        (ii)    Except as set forth in the title policies
covering the Owned Real Property, (the "PERMITTED ENCUMBRANCES"), the Owned Real
Property is not subject to any Liens (other than Permitted Liens). All Liens
listed on SCHEDULE 5.20(a)(ii) shall be satisfied and discharged on or prior to
the Closing Date unless otherwise indicated on SCHEDULE 5.20(a)(ii). All
building, structures and improvements on the Owned Real Property and the
operations therein conducted conform in all material respects to all applicable
zoning and building laws, Environmental Laws, ordinances and administrative
regulations, and neither the Sellers nor any of the Controlled Purchased
Companies has received any notice of violation of the foregoing from any
Governmental Authority, and all such buildings, structures, improvements and
fixtures are in good order, condition and repair.

                        (iii)   None of the Sellers nor any of the Controlled
Purchased Companies has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise), nor
has any knowledge that any operations on or uses of the Owned Real Property
constitute non-conforming uses under any applicable building, zoning, land use
or other similar statutes, laws, ordinances, regulations, permits or other
requirements. None of the Sellers nor any of the Controlled Purchased Companies
has knowledge of or has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise) of any
pending or contemplated rezoning proceeding affecting the Owned Real Property.

                        (iv)    The Owned Real Property has access to public
roads, streets or the like or valid easements over private streets, roads or
other private property providing ingress to and egress from such Owned Real
Property.

                        (v)     None of the Sellers nor any of the Controlled
Purchased Companies has received any written notice (and none of Sellers' Senior
Management has received notice of any kind, whether written or otherwise) from
any utility company or municipality of any fact or condition which could
reasonably be expected to result in the discontinuation of presently available
or otherwise necessary sewer, water, electric, gas, telephone or other utilities
or services for the Owned Real Property. The Owned Real Property has adequate
rights of access to all water, sewer, sanitary sewer and storm drain facilities
and community services. All public utilities necessary or convenient to the full
use, occupancy, disposition and enjoyment of the Owned Real Property are located
in the public right-of-way abutting the Owned Real Property and all such
utilities are connected so as to serve the Owned Real Property without passing
over other property.

                                      -23-
<Page>

                        (vi)    Neither the Sellers nor any of the Controlled
Purchased Companies have knowledge of any proposed reassessment of the Owned
Real Property by the local taxing agencies, and there is no pending or
threatened special assessment, tax reduction proceeding or other action which
could reasonably be expected to increase or decrease real property taxes or
assessments against the Owned Real Property.

                (b)     The Owned Real Property is not subject to any right or
option of any other Person to purchase or lease or otherwise obtain title to an
interest in the Owned Real Property. No Person other than the applicable
Controlled Purchased Companies has any right to use, occupy or lease any of the
Owned Real Property.

                (c)     A list of all of the leases (the "LEASES") affecting any
real property with respect to which any of the Controlled Purchased Companies is
a lessor or lessee is set forth on SCHEDULE 5.20(c) (the "LEASED REAL
PROPERTY"). SCHEDULE 5.20(c) sets forth the lessor, lessee, commencement date,
termination date, renewal or expansion options (if any), options to purchase
such Leased Real Property and annual rents for each Lease and the amount of any
security deposit delivered pursuant to such Lease. Each of the Leases is valid
and enforceable in accordance with its terms and is in full force and effect.
The Sellers have delivered to the Buyer true and complete copies of each Lease
and all documents relating to such Leases including, without limitation, any
non-disturbance and recognition agreements, subordination agreements, attornment
agreements and agreements regarding the term or rental of any of the Leases.
None of the Controlled Purchased Companies, nor any other party to any Lease, is
in default of its obligations thereunder or has delivered or received any
written notice (and none of Sellers' Senior Management has delivered or received
notice of any kind, whether written or otherwise) of default under any Lease,
nor has any event occurred which, with the giving of notice, the passage of time
or both, would constitute a default under any Lease.

                (d)     The plumbing, electrical, heating, air conditioning,
ventilating and all other mechanical or structural systems of all buildings and
structures located on the Owned Real Property and the Leased Real Property are
in good order, condition and repair and the roof, basement and foundation walls
of all buildings and structures located on the Owned Real Property and the
Leased Real Property are free of leaks and other defects that would have an
adverse effect on their continued use and are suitable for their actual current
use. The applicable Controlled Purchased Companies are in possession of valid
certificates of occupancy with respect to all buildings and structures located
on the Owned Real Property and the Leased Real Property.

                (e)     There are no proceedings in eminent domain or other
similar proceedings pending which affect any of the Owned Real Property and the
Leased Real Property nor, to the knowledge of the Sellers, is any such matter
threatened. Except as disclosed on SCHEDULE 5.20(e), there exists no writ,
injunction, decree, order or judgment outstanding relating to the ownership,
lease, use, occupancy or operation of any Owned Real Property or any Leased Real
Property, nor to the knowledge of the Sellers, is any such matter threatened.

                (f)     None of the Sellers nor any of the Controlled Purchased
Companies has received written notice (and none of Sellers' Senior Management
has received notice of any kind, whether written or otherwise) of any violation
of any applicable statutes, laws, ordinances, regulations, permits or other
requirements of any government, or any agency body or subdivision thereof,
pertaining to the use, operation, or construction of the Owned Real Property or
the Leased Real Property (including, without limitation, those relating to
zoning, building, fire, health and safety, environmental control and safety, or
the Americans with Disabilities Act or other similar state, provincial, local or
foreign legislation) and no such violations exist.

                                      -24-
<Page>

                (g)     None of the Sellers nor any of the Controlled Purchased
Companies has received written notice (and none of Sellers' Senior Management
has received notice of any kind, whether written or otherwise) from any of its
insurance carriers of any defects or inadequacies in any Owned Real Property or
any Leased Real Property which, if not corrected, would result in termination of
any Insurance Policy or insurance coverage therefore or an increase in the cost
thereof.

                (h)     The buildings, driveways and all other structures and
improvements upon the Owned Real Property and the Leased Real Property are
within the boundary lines of such property or have the benefit of valid
easements and there are no encroachments thereon that would adversely affect the
use thereof.

        SECTION 5.21    ENVIRONMENTAL MATTERS. The Buyer and the Sellers
each agree that the only representations and warranties of the Sellers herein as
to any environmental matters are those contained in this Section 5.21. Without
limiting the generality of the foregoing, the Buyer specifically acknowledges
that the representations and warranties contained in Sections 5.12, 5.13 and
5.14 do not relate to environmental matters.

                (a)     All of the Licenses and Permits required under
Environmental Laws for the operation of the Business have been obtained and
maintained in effect in good standing by the Controlled Purchased Companies. No
material change in the facts or circumstances reported or assumed in the
applications for such Licenses and Permits exists. The Controlled Purchased
Companies are in compliance, and at all times have complied, with all
Environmental Laws applicable to the operations associated with the Business,
the transactions contemplated by this Agreement, the Owned Real Property, the
Leased Real Property and each of the properties formerly owned, leased or
operated by them with respect to the periods during which such entities owned,
leased or operated such properties (the "FORMER REAL PROPERTY") and with all of
the Licenses and Permits (including, without limitation, all filing and
reporting requirements under all applicable Environmental Laws). Except as set
forth on SCHEDULE 5.21(d), no Seller or Controlled Purchased Company, nor any of
their respective Subsidiaries has received any notice of any violation with
respect to any of such Licenses or Permits, which violations are outstanding or
uncured as of the date hereof, and no proceeding is pending, or to the knowledge
of the Sellers, threatened, to revoke or limit any of such Licenses or Permits.
All of such Licenses and Permits are listed on SCHEDULE 5.21(a).

                (b)     None of the Controlled Purchased Companies has performed
or suffered any act which could give rise to, or has otherwise incurred,
liability to any Person, including itself, under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.
("CERCLA") or any other Environmental Law, nor do the Sellers or any of the
Controlled Purchased Companies have notice of any such liability or any Claim
therefore or submitted notice pursuant to Section 103 of CERCLA to any
governmental agency nor provided information in response to a request for
information pursuant to Section 104(e) of CERCLA or any analogous state or local
information gathering authority.

                (c)     No Hazardous Substance has been Released on, placed,
dumped, disposed of, manufactured, stored or otherwise come to be located in,
on, at, beneath or near any of the Owned Real Property, the Leased Real Property
or the Former Real Property or any surface waters or groundwaters thereon or
thereunder in excess of the levels prescribed or permitted under Environmental
Laws.

                (d)     Except as set forth on SCHEDULE 5.21(d), there have not
been and are no aboveground or underground storage tanks, polychlorinated
biphenyls or asbestos-containing materials located at or within the Owned Real
Property, the Leased Real Property or the Former Real Property.

                                      -25-
<Page>

                (e)     None of the Owned Real Property, the Leased Real
Property or the Former Real Property is identified or, to the Sellers'
knowledge, proposed for listing on the National Priorities List under 40 C.F.R.
Section300 Appendix B, the Comprehensive Environmental Response Compensation
and Liability Inventory System ("CERCLIS") or any analogous list of any
Government Authority and none of the Sellers nor any of the Controlled Purchased
Companies is aware of any conditions on such properties which, if known to a
Governmental Authority, would qualify such properties on any such list.

                (f)     The Sellers have furnished, or caused to be furnished,
to the Buyer copies of all environmental studies, assessments or reports
relating to any of the Controlled Purchased Companies, the Leased Real Property,
the Owned Real Property and the Former Real Property in its possession or under
its control.

                (g)     Except as set forth of SCHEDULE 5.21(g), none of the
Owned Real Property, the Leased Real Property or the Former Real Property, or
any current or previous business operations conducted by any of the Controlled
Purchased Companies, is the subject of any pending or threatened investigation
or judicial or administrative proceeding, notice, decree or settlement
respecting any actual, potential or alleged violation of any Environmental Law,
or any Releases of Hazardous Substances into any surface water, ground water,
drinking water supply, soil, land surface, subsurface strata, or ambient air, or
in the workplace at a level that exceeds standards established by an applicable
Governmental Authority (collectively, the "ENVIRONMENT"). None of the Sellers,
nor any Controlled Purchased Company, nor any of their respective Subsidiaries
has received from any Governmental Authority, insurance company or other Person:
any request for information that a Seller, Controlled Purchased Company or
Subsidiary thereof is the subject of an investigation under Environmental Laws;
notice of any potential or alleged violations of any Environmental Laws or of
any proposed order under any Environmental Laws; or any order or proposed order
requiring any of such parties to prepare studies, action plans, or clean-up
strategies as required by any Environmental Law because of any Environmental
Condition on any of the Owned Real Property, the Leased Real Property or the
Former Real Property.

                (h)     None of the Sellers, with respect to the Business, nor
any of the Controlled Purchased Companies has reported any violation of any
applicable Environmental Law to any Governmental Authority; and no Releases have
occurred on any of the Owned Real Property, Leased Real Property or Former Real
Property, which would require the Controlled Purchased Companies to report to
any Governmental Authority under any Environmental Laws.

                (i)     None of the Controlled Purchased Companies has sent,
transported, or directly arranged for the transport of any garbage, solid waste
or Hazardous Substance, whether generated by the Controlled Purchased Companies
or another Person, to any site listed on the National Priorities List or,
proposed for listing on the National Priorities List or to a site included on
the CERCLIS list or any analogous state list of sites.

                (j)     Except as set forth on SCHEDULE 5.21(j), there is not
now, nor has there ever been, on or in any Owned Real Property, Leased Real
Property or Former Real Property, any generation, treatment, recycling, storage
or disposal of any hazardous waste, as that term is defined under 40 C.F.R. Part
261 or any state or foreign equivalent, including, without limitation, the
Environmental Management and Protection Act (Saskatchewan) and the Environmental
Protection Act (Ontario), except in accordance with Environmental Laws.

        SECTION 5.22    INTELLECTUAL PROPERTY AND OTHER TANGIBLE ASSETS.
Except as indicated on SCHEDULE 5.22, the applicable Controlled Purchased
Companies own, or have a valid license to use all domestic and foreign patents,
patent rights, patents pending, patent applications and registrations,

                                      -26-
<Page>

industrial designs, trademarks, trademark rights, trademark applications,
trademark registrations, trade names, trade name rights, domain names, service
marks, copyrights, computer software, databases, licenses and other proprietary
rights and all know how relating to the foregoing (collectively, the
"INTELLECTUAL PROPERTY") owned, licensed or used by any of the Controlled
Purchased Companies (the "PURCHASED INTELLECTUAL PROPERTY"), in the manner
currently used by them. Schedule 5.22 contains a list of the Purchased
Intellectual Property which is registered and indicates the owner and/or
licensee and registration status and registration number thereof. The Purchased
Intellectual Property is valid and none of the Sellers nor any of the Controlled
Purchased Companies has received, or has knowledge of, any challenges to the
validity thereof. To the knowledge of the Sellers, none of the Controlled
Purchased Companies is infringing upon or in violation of the Intellectual
Property of any other Person. To the knowledge of the Sellers and the Controlled
Purchased Companies, none of the Purchased Intellectual Property is being
infringed upon by any Person or is otherwise used or available for use by any
Person other than the Controlled Purchased Companies.

        SECTION 5.23    ORGANIZATIONAL DOCUMENTS. Copies of the
certificates of incorporation or articles or certificates of formation, as
applicable, of each of the Purchased Companies (as certified by a Governmental
Authority of the jurisdiction of their respective organization) and copies of
the by-laws or operating agreements of each of the Purchased Companies and all
amendments thereto and all other Organizational Documents of each of the
Purchased Companies have been delivered to the Buyer, and such copies, as so
amended, are true, complete and accurate. None of the Controlled Purchased
Companies is in violation of any of its respective Organizational Documents.

        SECTION 5.24    UNLAWFUL OR UNDISCLOSED PAYMENTS. None of the
Sellers, with respect to the conduct of the Business, nor any of the Controlled
Purchased Companies, nor any Person acting on behalf of any of them, has made
any payments or otherwise provided any benefits, direct or indirect, to any
customer, supplier, Governmental Authority or otherwise, or to any employee or
agent thereof, for the purpose of acquiring purchase or sales relationships, or
otherwise, that:

                (a)     may be unknown or undisclosed to the employers of any
Persons who received any such payments;

                (b)     are unlawful, in any respect; or

                (c)     are not fully disclosed as such on the books and records
of the Sellers or the Controlled Purchased Companies (and have been disclosed in
writing to the Buyer).

        SECTION 5.25    DISCLOSURE OF CONFIDENTIAL INFORMATION TO OTHERS;
NON-COMPETITION AGREEMENTS.

                (a)     There are no currently existing and effective Contracts
to which any Seller or any of the Controlled Purchased Companies is a party and
which restrict any of them from engaging in the Business as currently, or
currently proposed to be, conducted or from competing with any other Person.

                (b)     There are no non-disclosure or similar such agreements
to which any of the Controlled Purchased Companies is a party that binds any of
them with respect to information provided to a Controlled Purchased Company.

                (c)     There are no non-disclosure, non-competition or similar
such agreements with respect to which any of the Controlled Purchased Companies
is a beneficiary.

                                      -27-
<Page>

        SECTION 5.26    ACCURACY OF INFORMATION. None of the representations,
warranties or statements contained in this Article V, or in any of the exhibits
hereto or any certificate delivered to Buyer pursuant to this Agreement contains
any untrue statement of a material fact or omits to state any material fact
necessary in order to make any of such representations, warranties or
statements, in light of the circumstances under which they were made, not
misleading.

        SECTION 5.27    CLOSURE BONDS. SCHEDULE 5.27 sets forth a description
of all of the "closure bonds" issued to or on behalf of, guaranteed by or
otherwise controlled by any of the Controlled Purchased Companies, or by any of
the Sellers with respect to the Business to be transferred to the Buyer (the
"CLOSURE BONDS").

        SECTION 5.28    RTO. Seller acknowledges and agrees that Buyer's
current intention is to cause all of the membership and other interests of
Recovery Technology Operations, LLC, an Illinois limited liability company, held
by RTG to be transferred to Holdco 2 LLC after the Closing.

                                   ARTICLE VI
                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

        The Buyer hereby represents and warrants to the Sellers as follows:

        SECTION 6.1     CORPORATE ORGANIZATION. The Buyer is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, and has all requisite power and authority to
own its properties and assets as now conducted.

        SECTION 6.2     CAPITALIZATION OF THE BUYER. Other than the funds
managed or controlled by Angelo, Gordon & Co., L.P. and its Affiliates, and
certain members of management of RTG, New Heights and their Subsidiaries, no
person or entity is a member of the Buyer and there are no Rights requiring the
admission of any Person as a member of Buyer, and there are no contracts or
other agreements by which any person has a right to become a member of the
Buyer. Neither the Buyer nor, to the Buyer's knowledge, its members, is a party
to any voting trust, proxy, or other agreement or understanding with respect to
the voting of any membership interest of Buyer.

        SECTION 6.3     AUTHORIZATION AND VALIDITY OF AGREEMENTS. The Buyer
has all requisite corporate power and authority to enter into this Agreement and
the other agreements and instruments delivered by the Buyer under this Agreement
and to carry out its obligations hereunder and thereunder. The execution and
delivery of this Agreement and the other agreements and instruments delivered by
the Buyer under this Agreement and the performance of the Buyer's obligations
hereunder and thereunder have been duly authorized by all necessary action by
the members of the Buyer, and no other limited liability company proceedings on
the part of the Buyer is necessary to authorize such execution, delivery and
performance. This Agreement and the other agreements and instruments delivered
by the Buyer under this Agreement have been duly executed by the Buyer and
constitute its legal, valid and binding obligations, enforceable against it in
accordance with their respective terms.

        SECTION 6.4     NO CONFLICT OR VIOLATION. The execution, delivery
and performance by the Buyer under this Agreement and the other agreements and
instruments delivered by it pursuant to this Agreement do not and will not
violate or conflict with any provision of the Organizational Documents of the
Buyer and do not and will not violate any provision of law, or any order,
judgment or decree of any court or other governmental or regulatory authority,
nor violate nor will result in a breach of or constitute

                                      -28-
<Page>

(with due notice or lapse of time or both) a default under any contract, lease,
loan agreement, mortgage, security agreement, trust indenture or other agreement
or instrument to which the Buyer is a party or by which it is bound or to which
any of its properties or assets is subject.

        SECTION 6.5     CONSENTS AND APPROVALS. The execution, delivery and
performance of this Agreement on behalf of the Buyer do not require the consent,
waiver, authorization or approval of any Governmental Authority or of any other
Person.

        SECTION 6.6     INVESTMENT PURPOSES. The Buyer is acquiring the
Purchased Stock and Debt for its own account for investment and not with a view
to the distribution thereof, and agrees that it shall not make any sale,
transfer or other disposition of such Stock in violation of the Securities Act
of 1933, as amended, or the rules and regulations thereunder.

                                   ARTICLE VII

                             [INTENTIONALLY OMITTED]

                                  ARTICLE VIII
                            COVENANTS OF THE SELLERS

        SECTION 8.1     CONDUCT OF BUSINESS PRIOR TO THE CLOSING DATE.

                (a)     Without the prior written consent of the Buyer, between
the date hereof and the Closing Date, the Sellers shall not, and shall cause the
Controlled Purchased Companies not to, except (1) as required or expressly
permitted pursuant to the terms hereof, (2) as set forth on SCHEDULE 8.1(a), or
(3) the prior written consent of the Buyer:

                        (i)     make any material change in the conduct of the
Business or enter into any transaction other than in the ordinary course of
business consistent with past practices;

                        (ii)    make any sale, transfer, or other conveyance of
any assets of any of the Controlled Purchased Companies in an amount greater
than US$10,000, other than in the ordinary course of business consistent with
past practices (except as otherwise provided in subclause (xii) of this SECTION
8.1(a));

                        (iii)   subject any of the assets owned by the
Controlled Purchased Companies to any Lien;

                        (iv)    pay, lend or advance any amount to, or sell,
transfer or lease any properties or assets to, or enter into any agreement or
arrangement with, any of its Affiliates with respect to the Controlled Purchased
Companies, other than in the ordinary course of business consistent with past
practices (except as otherwise provided in subclause (xii) of this SECTION
8.1(a));

                        (v)     take any action that would cause any of the
representations and warranties made by it in this Agreement not to remain true
and correct;

                        (vi)    write down or write off as uncollectable any of
the Accounts Receivable;

                                      -29-
<Page>

                        (vii)   settle, release or forgive any Claim or
litigation or waive any right thereto with respect to the Controlled Purchased
Companies or the Business except claims that are Seller Liabilities (provided,
however, that any liability resulting from any such settlement, release or
forgiveness shall constitute a Seller Liability);

                        (viii)  make, enter into, modify, amend in any material
respect or terminate any of the Contracts, bids or expenditures with respect to
the Business involving an expenditure of more than US$50,000, other than as set
forth in Section (viii) of SCHEDULE 8.1(a), which agreements the Sellers may
continue to negotiate and enter into for so long as they exercise commercially
reasonable judgment and keep the Buyer informed as to progress and terms;

                        (ix)    make, change or revoke any election or method of
accounting with respect to the Taxes affecting or relating to the Controlled
Purchased Companies;

                        (x)     enter into, or permit to be entered into, any
closing or other agreement or settlement with respect to the Taxes affecting or
relating to the Controlled Purchased Companies;

                        (xi)    adopt any new employee benefit plan or
arrangement for Business Employees, or increase the compensation of Business
Employees;

                        (xii)   cause or permit the Controlled Purchased
Companies to distribute or pay, or authorize the distribution or payment by the
Controlled Purchased Companies of, any cash or other assets or property to
Sellers or any of their Affiliates, except with respect to (A) the payment of
US$810,220, reduced by applicable withholding taxes, by RT Canada to Casella,
KTI Environmental Group and Affiliates of Casella of accrued management fees and
accrued interest on intercompany loans; provided, however, concurrently with the
payment of such accrued management fees and interest, Casella shall make an
intercompany loan to RT Canada of US$810,220; and (B) Seller Distributions; or

                        (xiii)  commit to do any of the foregoing.

                (b)     From and after the date hereof through the Closing Date,
the Sellers shall, and shall cause the Controlled Purchased Companies, to:

                        (i)     continue to maintain, in all material respects,
the Business in accordance with present practice in a condition suitable for
their current use;

                        (ii)    file, when due or required, its Federal, state,
foreign and other Tax Returns required to be filed and pay when due all the
Taxes, unless the validity thereof is contested in good faith and by appropriate
proceedings diligently conducted;

                        (iii)   keep, and cause the Controlled Purchased
Companies to keep, the Files and Records in the ordinary course consistent with
past practices;

                        (iv)    use commercially reasonable efforts to continue,
and to cause the Controlled Purchased Companies to continue, to maintain
existing business relationships with customers with respect to the Business;

                        (v)     pay and satisfy when due all payables and
payroll expenses of the Purchased Companies as and when due consistent with past
practice; and

                                      -30-
<Page>

                        (vi)    notify the Buyer no later than three (3)
Business Days following the date of any notice or other communication from any
Governmental Authority, in connection with the transactions contemplated by this
Agreement.

        SECTION 8.2     CONSENTS AND APPROVALS. Prior to the Closing, the
Sellers (a) shall, at its own cost and expense, use commercially reasonable
efforts to obtain all necessary consents, waivers, authorizations, and approvals
of all Governmental Authorities and all other Persons required in connection
with the execution, delivery and performance by the Sellers of this Agreement
and the other agreements and instruments required to consummate the transactions
contemplated hereby and (b) shall diligently assist and cooperate with the Buyer
in preparing and filing all documents, including permits, transfers,
modifications and applications required to be submitted by the Buyer to any
Governmental Authority, in connection with such transactions and in obtaining
any governmental consents, waivers, authorizations or approvals which may be
required to be obtained by the Buyer in connection with such transactions (which
assistance and cooperation shall include, without limitation, timely furnishing
to the Buyer all information concerning the Sellers that counsel to the Buyer
determines is required to be included in such documents or would be helpful in
obtaining any such consent, waiver, notation, authorization or approval).

        SECTION 8.3     ACCESS TO PROPERTIES AND RECORDS. The Sellers shall
afford to the Buyer, and to its accountants, counsel, prospective lenders,
agents and representatives, upon reasonable notice, full access during normal
business hours throughout the period from the date hereof through the Closing
Date to all Owned Real Property, Leased Real Property, operations, books,
Contracts and Files and Records (including but not limited to Tax Returns and
correspondence with accountants) of the Controlled Purchased Companies and,
during such period, shall furnish promptly to the Buyer all other information
concerning the Business and its properties and personnel as the Buyer may
reasonably request; provided, that no investigation or receipt of information
pursuant to this Section 8.3 shall qualify any representation or warranty of the
Sellers or the conditions to the obligations of the Buyer.

        SECTION 8.4     GOVERNMENTAL FILINGS. As soon as practicable, the
Sellers and the Buyer shall make any and all filings and submissions to any
Governmental Authority which are required to be made in connection with the
transactions contemplated hereby. The Sellers shall furnish to the Buyer such
information and assistance as the Buyer may reasonably request in connection
with the preparation by them of any such filings or submissions. The Sellers
shall supply the Buyer and the Buyer shall supply the Sellers with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or its representatives, on the one hand,
and any Governmental Authority or members of their respective staffs, on the
other hand, with respect to this Agreement or the transactions contemplated
hereby.

        SECTION 8.5     NON-COMPETE AND NON-SOLICITATION PROVISIONS;
CONFIDENTIALITY.

                (a)     Each of the Sellers, for itself and on behalf of each of
its direct and indirect Subsidiaries (the "SELLER GROUP"), agree that, without
the prior written consent of the Buyer, for a period of five (5) years after the
Closing Date, none of the Seller Group shall, within the United States, Canada
or Mexico, directly or indirectly (whether as a stockholder, director, officer,
employee, principal, member, manager, agent, trustee, partner, joint venturer,
financing source, consultant or employee or in any other capacity whatsoever),
engage in the business of collecting, processing and recycling automobile, truck
and other vehicle tires, provided that the Sellers shall be entitled to (i)
collect and shred automobile, truck and other vehicle tires to the extent
permitted by the Holdco 1 Stockholder Agreement and (ii) collect and dispose of
automobile, truck and other vehicle tires in connection with and incidental to
their municipal solid waste programs.

                                      -31-
<Page>

                (b)     The Sellers acknowledge and agree that the value to the
Buyer of the transactions contemplated by this Agreement would be substantially
diminished if the Sellers or any member of the Seller Group were to solicit the
employment of any employees of a Seller or a Purchased Company on the date
hereof or on or after the Closing Date. The Sellers and each member of the
Seller Group agree, that, without the prior written consent of the Buyer, for
the five (5) year period commencing on the Closing Date, they will not, except
by general advertising not targeted or directed at any employees of the
Purchased Companies, make, offer, solicit or induce to enter into, any written
or oral arrangement, agreement or understanding regarding employment or
retention as a consultant with any person who is, on the date hereof or on or
after the Closing Date, an employee of any of the Controlled Purchased
Companies.

                (c)     The Sellers recognize and acknowledge that information
about the Controlled Purchased Companies and the Business or relating to the
services provided by the Controlled Purchased Companies or any phase of their
operations or business or financial affairs that is not a matter of public
record, including, without limitation, techniques, know-how, plans, contracts,
business methods, strategies, technologies, trade secrets, customers,
subscribers, distributors, suppliers, inventions and computer programs
(collectively, the "CONFIDENTIAL INFORMATION"), is not generally known to its
competitors. Notwithstanding the foregoing, Confidential Information shall not
include any information which is or becomes generally available to the public
other than as a result of disclosure in violation of this Agreement.
Accordingly, the Sellers will not, at any time after the date hereof, directly
or indirectly, without the prior written consent of the Buyer: (i) use any
Confidential Information for its own benefit; or (ii) except as may be required
by law, divulge, disclose or make accessible any of the Confidential Information
or any part thereof to any Person for any reason or purpose whatsoever. In the
event that a Seller becomes legally compelled to disclose any of the
Confidential Information, such Seller will provide the Buyer with prompt notice
so that the Buyer may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Section 8.5(c). In the event that
such protective order or other remedy is not obtained, or that the Buyer waives
compliance with this Section 8.5(c), the Sellers will furnish only that portion
of the Confidential Information which is legally required.

                (d)     The Sellers specifically acknowledge and agree that the
value to the Buyer of the transactions contemplated by this Agreement would be
substantially diminished if any of the Sellers or any member of the Seller Group
does not comply in all respects with this Section 8.5, and the Sellers have
agreed to the covenants set forth in this Section 8.5 as an inducement to the
Buyer to enter into this Agreement. The Sellers acknowledge that the Buyer would
not purchase the Purchased Stock or Purchased Debt but for the agreements and
covenants of the Sellers set forth in this Section 8.5. The Sellers acknowledge
and agree that the covenants set forth in this Section 8.5 are commercially
reasonable and reasonably necessary to protect the interests the Buyer intends
to acquire hereunder. The Buyer and the Sellers agree that the Buyer will suffer
substantial damages in the event of a breach of the provisions of this Section
8.5, the amount of which may be difficult to establish promptly and with
certainty. The Sellers acknowledge and agree that a monetary remedy for a breach
of the covenants set forth in this Section 8.5 hereof may be inadequate and
further agree that such a breach would cause the Buyer irreparable harm, and
that the Buyer shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.

                (e)     If a court of competent jurisdiction determines that any
of the provisions of this Section 8.5 is unenforceable because of the scope,
duration or area of applicability of such provision(s), it is the intention of
the parties that the court making such determination (i) shall modify such
scope, duration or area, or all of them, only to the extent required to cause
such provisions to be deemed enforceable; and (ii) that such provision(s) as so
modified shall then be deemed by such court to be applicable and enforceable in
such modified form and shall be enforced.

                                      -32-
<Page>

        SECTION 8.6     DISCLOSURE. Until the Closing, the Sellers shall have
the continuing obligation to promptly supplement or amend the written
disclosures being made pursuant to this Agreement with respect to any matter
hereafter arising or discovered which, if existing or known at the date of this
Agreement, would have been required to be set forth or described in such written
disclosures; provided, however, that for the purpose of the rights and
obligations of the parties hereunder, any such supplemental disclosure shall not
be deemed to have been disclosed as of the date of this Agreement for purposes
of Section 14.1 (in which case Casella shall reimburse Buyer for all of its
Transaction Expenses pursuant to Section 16.4 if the transactions contemplated
by this Agreement are not consummated as a result of any of the matters not
disclosed in writing to Buyer pursuant to this Agreement as of the date hereof),
but if the Closing occurs, such disclosure shall be deemed to have been
disclosed for purposes of Section 12.1. Until the Closing, Casella shall
promptly give to the Buyer written notice upon learning of or having knowledge
of any matter that may constitute a breach of any representation, warranty,
agreement or covenant contained in this Agreement, which notice shall identify
and describe the breach in reasonable detail.

        SECTION 8.7     RECONCILED DISTRIBUTIONS. Sellers shall provide to Buyer
all information necessary or otherwise requested by Buyer to determine the
amount of the Reconciled Distributions and the Seller Distributions.

        SECTION 8.8     CONTINUED USE OF SELLERS' FACILITIES. Sellers shall
permit Buyer and the Purchased Companies (without any cost to the Buyer or any
of the Purchased Companies) to use all of the Intellectual Properties of the
Sellers (including, without limitation, the management information systems of
the Sellers) currently being used by the Purchased Companies for a period of 90
days after the Closing Date in the same manner as currently being used by the
Purchased Companies.

                                   ARTICLE IX
                             COVENANTS OF THE BUYER

        SECTION 9.1     ACTIONS PRIOR TO THE CLOSING DATE. Between the date
hereof and the Closing Date, the Buyer shall not take any action which shall
cause it to be in breach of any of its representations, warranties, covenants or
agreements contained in this Agreement. The Buyer shall use its commercially
reasonable efforts to perform all its obligations and satisfy all conditions to
Closing to be performed or satisfied by it under this Agreement as soon as
practicable, but in no event later than the Closing Date. Until the Closing, the
Buyer shall promptly give to Casella written notice upon learning of or having
knowledge of any matter that may constitute a breach of any representation,
warranty, agreement or covenant of the Buyer contained in this Agreement, which
notice shall identify and describe the breach in reasonable detail.

        SECTION 9.2     CONFIDENTIALITY. The Buyer recognizes and
acknowledges that all information about the Purchased Companies and the Business
or relating to the services provided by the Purchased Companies or any phase of
their operations or business or financial affairs that is not a matter of public
record, including, without limitation, techniques, know-how, plans, contracts,
business methods, strategies, technologies, trade secrets, customers,
subscribers, distributors, suppliers, inventions and computer programs
(collectively, the "SELLER CONFIDENTIAL INFORMATION"), is not generally known to
its competitors. Notwithstanding the foregoing, Seller Confidential Information
shall not include any information which is or becomes generally available to the
public other than as a result of disclosure in violation of this Agreement.
Accordingly, the Buyer will not, at any time prior to the Closing Date, except
as necessary for the consummation of the transactions contemplated hereby,
directly or indirectly, without the prior written consent of Casella: (i) use
the Seller Confidential Information for its own

                                      -33-
<Page>

benefit; (ii) except as may be required by law, divulge, disclose or make
accessible the Seller Confidential Information or any part thereof to any Person
for any reason or purpose whatsoever; or (iii) render any services to any Person
to whom the Seller Confidential Information, in whole or in part, has been
disclosed or is threatened to be disclosed by or at the instance of the Buyer.
In the event that the Buyer becomes legally compelled to disclose the Seller
Confidential Information, the Buyer will provide Casella with prompt notice so
that the Sellers may seek a protective order or other appropriate remedy and/or
waive compliance with the provisions of this Section 9.2. In the event that such
protective order or other remedy is not obtained, or that Casella waives
compliance with this Section 9.2, the Buyer will furnish only that portion of
the Seller Confidential Information which is legally required. The Buyer
acknowledges and agrees that the covenants set forth in this Section 9.2 are
commercially reasonable and reasonably necessary to protect the interests of the
Sellers hereunder. The Buyer agrees that the Sellers will suffer substantial
damages in the event of a breach of the provisions of this Section 9.2, the
amount of which may be difficult to establish promptly and with certainty. The
Buyer acknowledges and agrees that a monetary remedy for a breach of the
covenants set forth in this Section 9.2 hereof may be inadequate and further
agrees that such a breach would cause the Sellers irreparable harm, and that the
Sellers shall be entitled to temporary and permanent injunctive relief without
the necessity of proving actual damages. If a court of competent jurisdiction
determines that any of the provisions of this Section 9.2 is unenforceable
because of the scope, duration or area of applicability of such provision(s), it
is the intention of the parties that the court making such determination (i)
shall modify such scope, duration or area, or all of them, only to the extent
required to cause such provisions to be deemed enforceable; and (ii) that such
provision(s) as so modified shall then be deemed by such court to be applicable
and enforceable in such modified form and shall be enforced.

        SECTION 9.3     CONSENTS AND APPROVALS. The Buyer shall, at its cost
and expense, use reasonable efforts to obtain all necessary consents and
approvals of third parties required to be obtained by it to effect the
transactions contemplated by this Agreement.

        SECTION 9.4     ACCESS TO PROPERTIES. The Sellers, its agents,
employees, consultants and representatives shall have access to the Leased Real
Property and Owned Real Property during normal business hours (or such other
times as the parties hereto may mutually agree) subsequent to the Closing with
right to conduct inspections, surveys, sampling, test borings, well
installation, removal, containment, treatment or remediation of Hazardous
Substances (hereafter, "Work") to the extent such Work is required by applicable
law and pursuant to this Agreement; provided, however, that the Seller shall
provide the Buyer with reasonable prior notice of the Work (but not less than 5
Business Days), and any such Work shall be performed in a manner that does not
unreasonably interfere with the Buyer's ownership or use of the Lease Real
Property and Owned Real Property. Seller shall provide Buyer a copy of each
final report prepared in connection with the Work.

                                    ARTICLE X
                                      TAXES

        SECTION 10.1    TAX RETURNS.

                (a)     For any Pre-Closing Tax Period that is not part of a
Straddle Period, the Sellers shall or shall cause the Controlled Purchased
Companies to, timely prepare and file with the appropriate authorities all
income Tax Returns required to be filed by or with respect to the Controlled
Purchased Companies regardless of the due date of such Tax Returns, and shall
pay or cause to be paid all Taxes shown to be due or required to be paid on such
Tax Returns. The Sellers also shall prepare and timely

                                      -34-
<Page>

file, or cause the Controlled Purchased Companies to prepare and timely file,
all other Tax Returns required to be filed by or with respect to the Controlled
Purchased Companies that are due on or before the Closing Date, and the Sellers
shall pay all Taxes shown to be due or required to be paid on such Tax Returns.
The Sellers shall include the income of the Controlled Purchased Companies (to
the extent such Controlled Purchased Companies are members of the Sellers'
"Affiliated Group") (within the meaning of Section 1504(a) of the Code)) for all
Pre-Closing Tax Periods (including any deferred income included in income by
Treasury Regulations Sections 1.1502-13 and 1.1502-14 and similar provisions of
state, local or foreign law and any excess loss accounts taken into account
under Treasury Regulations Section 1.1502-19 and similar provisions of state,
local or foreign law) on the Sellers' consolidated or combined returns and pay
any Taxes attributable to such income. The Buyer shall timely prepare and file,
or cause the Controlled Purchased Companies to prepare and timely file, all
other Tax Returns required to be filed by or with respect to the Controlled
Purchased Companies, and shall pay, or cause the Controlled Purchased Companies
or the appropriate Subsidiary thereof to pay, all Taxes shown to be due or
required to be paid on those Tax Returns. Each party that prepares Tax Returns
pursuant to this Section 10.1 shall permit the other party a reasonable
opportunity to review and comment on such Tax Returns and shall make such
changes as are reasonably requested.

                (b)     In the case of any Straddle Period, and in the case of
the final taxable year of the Controlled Purchased Companies (other than the
Canadian Subsidiaries) for U.S. Federal income tax purposes as a member of the
Sellers' affiliated group for the Pre-Closing Tax Period, to the extent that
Taxes of the Controlled Purchased Companies are based on or measured by income
or gross receipts in lieu of income and not on a transaction basis (which are
subject to indemnification by the Sellers to the extent set forth in this
Section 10.1 and Article XII of this Agreement), such Taxes shall be computed
using a closing-of-the-books method as if such taxable period ended as of the
end of the Closing Date, with all standard deductions, exemptions, progressivity
in rates, and other items calculated with respect to the full Straddle Period
apportioned to the Pre-Closing Tax Period based upon the ratio of the number of
days during the Straddle Period that are in the Pre-Closing Tax Period to the
total number of days in the Straddle Period; provided, however, that any
transactions not in the ordinary course of a Purchased Company's business that
occur on the Closing Date but after the Closing shall be considered to occur on
the day following the Closing Date. In the case of any Straddle Period, to the
extent that Taxes are not based on or measured by income or gross receipts in
lieu of income, such Taxes for the Pre-Closing Tax Period shall be (i) for any
Tax that is determined based upon specific transactions (including, but not
limited to, value added, sales and use Taxes), all Taxes applicable to
transactions that have been consummated during the period through the Closing
Date and (ii) for any Tax that is not based upon specific transactions
(including, but not limited to, license, real property, personal property,
franchise and doing business Taxes), an amount equal to the full amount of such
Tax for the entire Straddle Period multiplied by a fraction, the numerator of
which is the number of days during the Straddle Period that are in the
Pre-Closing Tax Period and the denominator of which is the total number of days
in the Straddle Period (as such amount shall be equitably adjusted to reflect
material acquisitions or disposition during the Straddle Period).

                (c)     The Sellers' indemnity obligations for Taxes for a
Straddle Period of any Controlled Purchased Company shall initially be effected
by its payment to the Buyer of 100% of the excess of (a) such Taxes for the
Pre-Closing Tax Period, over (b) the sum of (i) the amount of such Taxes paid by
the Sellers or any of their respective affiliates (other than such Controlled
Purchased Company) at any time, plus (ii) the amount of such Taxes paid by such
Controlled Purchased Company before the Closing. The Sellers shall initially pay
such excess to the Buyer within fifteen (15) days after the Tax Return with
respect to the liability for such Taxes is required to be filed (or, if later,
is actually filed). If the amount of such Taxes paid to Buyer by the Sellers or
any of their respective Affiliates (other than a Controlled Purchased Company)
pursuant to this Section 10.1(c) at any time exceeds 100% of the excess

                                      -35-
<Page>

if any of (x) the amount of such Taxes for the Pre-Closing Period, over (y) the
amount of such Taxes paid by the Controlled Purchased Companies, the Buyer shall
pay to the Sellers the amount of such excess, within fifteen (15) days after the
Tax Return with respect to the liability for such Taxes is required to be filed.
The payments to be made under this paragraph by the Sellers or the Buyer with
respect to any Straddle Period shall be appropriately adjusted to reflect any
final determination with respect to Taxes for such Straddle Period.

        SECTION 10.2    COOPERATION. The Sellers, the Buyer, and each of the
Controlled Purchased Companies shall reasonably cooperate, and shall cause their
respective Affiliates, officers, employees, agents, auditors, and other
representatives to reasonably cooperate, in preparing and filing all Tax Returns
relating to Taxes of the Controlled Purchased Companies, including maintaining
and making available to each other all records necessary in connection with such
Taxes and in resolving all disputes and audits with respect to all taxable
periods relating to such Taxes. The Buyer and the Sellers recognize and agree
that the other party and its Affiliates will need access from time to time after
the Closing to certain accounting and Tax records and information held by such
party and its respective Affiliates to the extent such records and information
pertain to events occurring on or before the Closing Date. Therefore, each of
the Buyer and the Sellers shall, and the Buyer shall cause each of the
Controlled Purchased Companies to, (a) properly retain and maintain such records
and information in accordance with the past custom and practice of such Person
until such time as such retention and maintenance is no longer reasonably
necessary, provided that such records and information shall be retained and
maintained until the expiration of the applicable statute of limitations, and
(b) allow the other party, its Affiliates and their agents and representatives,
at times and dates mutually acceptable to the parties, to inspect, review and
make copies of such records and information as such other party may deem
necessary or appropriate from time to time, such activities to be conducted
during normal business hours and at the other party's expense. Notwithstanding
anything to the contrary in this Agreement, the provisions of this Section 10.2
shall be effective until the expiration of the applicable statute of
limitations.

        SECTION 10.3    REFUNDS. Except as otherwise provided in this Section
10.3, any refunds or credits of Taxes of the Controlled Purchased Companies for
any Pre-Closing Tax Period that is distributed to Holdco 1 Corp. that is not
part of a Straddle Period shall be for the account of the Sellers. Any refunds
or credits of Taxes of the Controlled Purchased Companies for any Straddle
Period that is distributed to Holdco 1 Corp. shall be equitably apportioned
between the Sellers and the Buyer (based on each party's respective
indemnification obligations with respect to such Taxes). Any other refunds or
credits of Taxes of the Controlled Purchased Companies that is distributed to
Holdco 1 Corp. shall be for the account of the Buyer.

        SECTION 10.4    AMENDED RETURNS. The Sellers shall be responsible for
filing any amended consolidated, combined, or unitary income Tax Returns for
Pre-Closing Tax Periods that are not part of a Straddle Period that are required
as a result of examination adjustments made by the Internal Revenue Service or
by the applicable state, local, or foreign taxing authorities for such taxable
years as finally determined. For those jurisdictions in which separate income
Tax Returns are filed by any of the Controlled Purchased Companies, any required
amended income Tax Returns resulting from such examination adjustments, as
finally determined, shall be prepared by the Sellers and furnished to the Buyer
for approval (which shall not be unreasonably withheld), signature and filing at
least ten (10) days before the due date for filing such amended income Tax
Returns.

        SECTION 10.5    AUDITS. The Sellers shall allow the Buyer and its
counsel to participate in any audits of the Sellers' consolidated or combined
income Tax Returns to the extent that such returns relate to the Controlled
Purchased Companies. The Sellers shall not settle any such audit in a manner
that would adversely affect the Buyer or any of the Purchased Companies after
the Closing Date without the

                                      -36-
<Page>

consent of the Buyer (which shall not be unreasonably withheld or delayed). The
Buyer shall allow the Sellers and their counsel to participate in any audits of
any Controlled Purchased Companies to the extent that such audits pertain to
Taxes for which the Sellers are liable pursuant to Section 10.1 hereof. The
Buyer shall not settle or cause to have settled any such audit without the
consent of the Sellers (which shall not be unreasonably withheld or delayed.)

        SECTION 10.6    TAX SHARING AGREEMENTS. All Tax sharing, Tax allocation,
Tax indemnity or other similar agreements in effect prior to the Closing to
which any of the Controlled Purchased Companies is a party or by which any of
them is bound shall be terminated as of the Closing Date and, after the Closing
Date, each of the Controlled Purchased Companies shall not be bound thereby or
have any liability thereunder except those tax indemnifications disclosed on
SCHEDULE 5.8(a)(v).

        SECTION 10.7    CERTIFICATE OF NON-FOREIGN STATUS. At the Closing, the
Sellers shall deliver to the Buyer, pursuant to Section 1445(b)(2) of the Code
and Treasury Regulation Section 1.1445-2(b)(2), a duly executed certification of
non-foreign status. Such certification shall conform to the model certification
provided in Treasury Regulation Section 1.1445-2(b)(2)(iii)(B).

        SECTION 10.8    GOVERNING PROVISIONS. To the extent that any amounts are
payable to Buyer or Sellers pursuant to this Article X, the provisions of this
Article X shall solely govern the payment of such amounts; provided, however,
that the provisions of Article XII of this Agreement shall govern the remedies
available to Buyer and Sellers as a result of any breach of the provisions of
this Article X.

                                   ARTICLE XI
                                EMPLOYEE BENEFITS

        SECTION 11.1    EMPLOYMENT MATTERS.

                (a)     Notwithstanding anything to the contrary contained
herein, SCHEDULE 11.1 sets forth a list of those current employees of, and
consultants to, the Controlled Purchased Companies who will be employees of or
consultants to the Controlled Purchased Companies as of the Closing and no other
person shall have any right to become an employee of or consultant to any of the
Controlled Purchased Companies after the Closing nor shall any other person have
any right to any payment from any of the Controlled Purchased Companies.

                (b)     Nothing contained herein shall restrict Holdco 1 Corp.
in the future in the exercise of its independent business judgment as to the
terms and conditions under which the employment of the employees of any of the
Controlled Purchased Companies shall continue, the duration of such employment,
the basis on which such employment is terminated or the benefits provided to
such employees.

        SECTION 11.2    SELLERS' EMPLOYEE BENEFITS INDEMNIFICATION. Neither
Holdco 1 Corp. nor any of the Controlled Purchased Companies shall assume or
otherwise be responsible for any Benefit Plan or liability or obligation under
any plan, contract, payroll practice or other arrangement that the Sellers
sponsor, contribute to, or participate in on the date hereof, or that they have
or may have any liability or obligation under, whether or not disclosed under
this Agreement or in any schedule or exhibit hereto.

                                   ARTICLE XII
                                 INDEMNIFICATION

                                      -37-
<Page>

        SECTION 12.1    INDEMNIFICATION BY THE SELLERS.

                (a)     Subject to Section 12.1(b), notwithstanding the Closing
and regardless of any investigation at any time made by or on behalf of the
Buyer or any knowledge or information that the Buyer may have, the Sellers
shall, jointly and severally, indemnify and fully defend, save and hold harmless
the Buyer, any Affiliate of the Buyer (excluding Holdco 1 Corp., the Purchased
Companies and the Sellers), and their respective directors, officers, employees,
members, partners, shareholders, representatives, agents and attorneys (the
"BUYER INDEMNITEES"), from and against any damage, liability, loss, cost,
expense (including all costs of any investigation and reasonable attorneys',
experts' and consultants' fees), deficiency, interest, penalty, impositions,
assessments or fines (collectively, "LOSSES") arising out of or resulting from,
any Seller Liabilities and/or Sellers' Event of Breach. As used herein,
"SELLERS' EVENT OF BREACH" shall be and mean any one or more of the following:

                        (i)     any untruth or inaccuracy in any representation
or warranty of the Sellers in this Agreement or in any certificate delivered by
the Sellers at Closing;

                        (ii)    any failure of the Sellers to duly perform or
observe any term, provision, covenant, agreement or condition contained in this
Agreement on the part of such Seller to be performed or observed;

                        (iii)   any Claim for Taxes or interest  or penalty
thereon resulting from the failure of the Buyer to withhold Taxes owed by the
Sellers from the Purchase Price under any applicable Law; and

                        (iv)    any Claim or cause of action by any unrelated
third party against any Buyer Indemnitee with respect to the Seller Liabilities.

                (b)     The collective liability of (i) the Sellers in
connection with or arising out of this Agreement and (ii) the New Heights
Sellers in connection with or arising out of the New Heights Purchase Agreement,
shall be limited to an aggregate amount equal to the Seller Liability Cap plus
the aggregate amount of the reasonable legal fees, costs and expenses incurred
by the Sellers and (to the extent provided herein) the Buyers Indemnitees in
connection with any Seller Liabilities and/or any Sellers' Event of Breach;
provided that the Sellers shall not be liable under this Section 12.1 unless and
until the aggregate amount of Losses under this Section 12.1 and under Section
12.1 of the New Heights Purchase Agreement exceed US$100,000 (at which point the
Sellers shall become liable for the aggregate amount of Losses, and not just
amounts in excess of US$100,000, but subject to the limitations on Sellers'
liability set forth in this Section 12.1). Notwithstanding the foregoing or
anything to the contrary in this Agreement: (A) if any Buyer Indemnitee becomes
liable (pursuant to any statute, rule, regulation or other law or any judicial,
agency or governmental ruling or action, in each case, as a result of any
condition, event or circumstance that existed or occurred prior to the Closing,
other than solely due to the action or inaction of any Buyer Indemnitee) for any
liabilities of any Purchased Company that result in such Buyer Indemnitee being
required to make an out-of-pocket payment of any kind to a person or entity who
is not a Buyer Indemnitee (any such payment, an "EXCESS PAYMENT") and
specifically excluding any diminution or reduction in the value of Buyer's
equity investment in Holdco 1 Corp., then such Excess Payment shall not be
subject to the Seller Liability Cap, and the Sellers shall indemnify and fully
defend, save and hold harmless the Buyer Indemnitees from and against all such
liabilities; and (B) the Seller Liability Cap shall not apply to, or be reduced
by or limit Sellers' obligations to indemnify Buyer Indemnitees from and against
Losses incurred by them as a result of any Sellers' Event of Breach

                                      -38-
<Page>

described in clause 12.1(a)(ii) or (iii) and, to the extent arising out of any
Sellers' Event of Breach described in clause 12.1(a)(ii) or (iii), clause
12.1(a)(iv).

                (c)     Except as provided under Section 12.1(b), the Sellers
shall not be responsible or liable for any Losses that are consequential, in the
nature of lost profits, diminution in value, damage to reputation or the like,
special or punitive or otherwise not actual Losses; provided, however, that the
Sellers shall be liable for consequential damages resulting from (i) any breach
by the Sellers of their representations and warranties in this Agreement that
any Seller knew was not true and correct in all material respects when made or
as of the Closing, and (ii) any willful or intentional breach by any of the
Sellers of any of the covenants or agreements in this Agreement of which any
Seller has knowledge.

                (d)     In determining the amounts for any Losses hereunder for
which a Buyer Indemnitee is entitled to assert a claim for indemnification, the
amount of any such Losses shall be determined after deducting therefrom the
amount of any insurance proceeds received by such Buyer Indemnitee in respect of
such Losses (which recoveries the Buyer agrees to use its commercially
reasonable efforts to obtain or cause to be obtained). If an indemnification
payment is received by a Buyer Indemnitee and such Buyer Indemnitee later
receives insurance proceeds in respect of the related Loss, the Buyer shall
immediately pay to the Sellers a sum equal to the lesser of (i) the actual
amount of insurance proceeds received, or (ii) the actual amount of the
indemnification repayment previously paid by the Sellers with respect to such
Losses.

        SECTION 12.2    INDEMNIFICATION BY THE BUYER.

                (a)     Subject to Section 12.2(b), notwithstanding the Closing
or the delivery of the Purchased Stock and Debt, the Buyer shall indemnify and
fully defend, save and hold harmless the Sellers, any Affiliate of the Sellers
(excluding Holdco 1 Corp., the Purchased Companies and the Buyer) and their
respective officers, directors, employees, members, partners, shareholders,
representative, agents and attorneys), and their respective officers, directors,
employees, members, partners, shareholders, representatives, agents and
attorneys (the "SELLER INDEMNITEES") from and against any Losses arising out of
or resulting from any Buyer's Event of Breach. As used herein, "BUYER'S EVENT OF
BREACH" shall be and mean any one or more of the following:

                        (i)     any untruth or inaccuracy in any representation
or warranty of the Buyer in this Agreement or in any certificate delivered by
Buyer at Closing;

                        (ii)    all Claims against Seller Indemnitees arising
out of or relating to occurrences of any nature relating to the Purchased
Companies, the Purchased Stock and Debt and the Business after the Closing Date,
whether in contract or tort; and

                        (iii)   any failure of the Buyer to duly perform or
observe any term, provision, covenant, agreement or condition contained in this
Agreement on the part of the Buyer to be performed or observed.

                (b)     The collective liability of (i) the Buyer in connection
with or arising out of this Agreement and (ii) the New Heights Buyer in
connection with or arising out of the New Heights Purchase Agreement, shall be
limited to an aggregate amount equal to the Buyer Liability Cap plus the
aggregate amount of the reasonable legal fees, costs and expenses incurred by
the Buyer and (to the extent provided herein) the Seller Indemnitees in
connection with any Buyer's Event of Breach; provided that the Buyer shall not
be liable under this Section 12.2 unless and until the aggregate amount of
Losses under this Section 12.2 and under Section 12.2 of the New Heights
Purchase Agreement exceed US$100,000 (at

                                      -39-
<Page>

which point the Buyer shall become liable for the aggregate amount of Losses,
and not just amounts in excess of US$100,000, but subject to the limitations on
Buyer's liability to Seller Indemnitees set forth in this Section 12.2).
Notwithstanding the foregoing or anything to the contrary in this Agreement: (A)
if any Seller Indemnitee incurs any out-of-pocket cash Loss due to a Buyers'
Event of Breach (which shall exclude any diminution or reduction in the value of
the Sellers' equity interest in Holdco 1 Corp. that does not involve or require
any cash payment by a Seller Indemnitee to any person or entity), for purposes
of determining the obligations of the Buyer under this Section 12.2 with respect
to such Loss, the Buyer Liability Cap shall be deemed to be US$16,000,000; and
(B) the Buyer Liability Cap shall not apply to, or be reduced by or limit
Buyer's obligations to fully indemnify Seller Indemnitees against Losses
incurred by them as a result of any Buyer's Event of Breach described in clause
12.2(a)(ii) or (iii).

                (c)     The Buyer shall not be responsible or liable for any
Losses that are consequential, in the nature of lost profits, diminution in
value, damage to reputation or the like, special or punitive or otherwise not
actual Losses.

                (d)     In determining the amounts for any Losses hereunder for
which a Seller Indemnitee is entitled to assert a claim for indemnification, the
amount of any such Losses shall be determined after deducting therefrom the
amount of any insurance proceeds received by such Indemnitee in respect of such
Losses (which recoveries the Sellers agree to use their commercially reasonable
efforts to obtain or cause to be obtained). If an indemnification payment is
received by a Seller Indemnitee and such Seller Indemnitee later receives
insurance proceeds in respect of the related Loss, the Sellers shall immediately
pay to the Buyer a sum equal to the lesser of (i) the actual amount of insurance
proceeds received, or (ii) the actual amount of the indemnification repayment
previously paid by the Buyer with respect to such Losses.

        SECTION 12.3    TERM OF INDEMNIFICATION. Except as set forth below, the
obligations to indemnify under Section 12.1 and Section 12.2 hereof for breaches
of representations and warranties shall only apply in respect of Losses asserted
on or before the date that is two (2) years following the Closing Date.
Notwithstanding the foregoing, (a) the obligation to indemnify under Section
12.1 hereof in respect of the corporate or other authority of the Sellers,
Taxes, violations of Environmental Laws (or otherwise in respect of a breach of
or untruth or inaccuracy in the representation contained in Section 5.21) and
ERISA, shall apply in respect of Losses asserted prior to the end of the
statutory period for bringing such claims, and (b) the obligation to indemnify
under Section 12.2 hereof in respect of the authority of the Buyer shall apply
in respect of Losses asserted prior to the end of the statutory period for
bringing such claims.

        SECTION 12.4    PROCEDURES FOR INDEMNIFICATION. If the Sellers' Event of
Breach or a Buyer's Event of Breach (a "PARTY'S EVENT OF BREACH") occurs or is
alleged and a Buyer Indemnitee or a Seller Indemnitee (a "PARTY INDEMNITEE")
asserts that the other party has become obligated to it pursuant to Section 12.1
or Section 12.2, or if any Claim is begun, made or instituted as a result of
which the other party may become obligated to a Party Indemnitee hereunder, such
Party Indemnitee shall give prompt notice to the other party. The Party
Indemnitee shall permit the other party (at its expense) to assume the defense
of any Claim; provided, however, that (a) the counsel for the other party who
shall conduct the defense shall be reasonably satisfactory to the Party
Indemnitee (it being understood that if the Sellers are required to defend a
Claim hereunder that Hale and Dorr LLP is satisfactory for such purpose, and
that if the Buyer is required to defend a Claim hereunder that Duval &
Stachenfeld LLP is satisfactory for such purpose), (b) the Party Indemnitee may
participate in such defense at its own expense, and (c) the omission by the
Party Indemnitee to give notice as provided herein shall not relieve the other
party of its indemnification obligation except to the extent that such omission
results in a failure of actual notice to the other party and the other party is
damaged as a result of such failure to give notice. Except with the

                                      -40-
<Page>

prior written consent of the Party Indemnitee, the other party shall not, in the
defense of any such Claim, consent to entry of any judgment or enter into any
settlement that provides for injunctive or other nonmonetary relief affecting
the Party Indemnitee or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Party Indemnitee of a release
from all liability with respect to such Claim or litigation. In the event that
the Party Indemnitee shall in good faith determine that the conduct of any
defense of any Claim subject to indemnification hereunder or any proposed
settlement of any such Claim by the other party might reasonably be expected to
affect adversely the ability of the Party Indemnitee to conduct the Business or
that the Party Indemnitee may have available to it one or more defense or
counterclaims that are inconsistent with one or more of those that may be
available to the other party in respect of such Claim relating thereto, the
Party Indemnitee shall have the right at all times to take over and assume
control over the defense, settlement, negotiations or litigation relating to any
such Claim at the sole cost of the other party (including without limitation
reasonable attorneys' fees and disbursements and other amounts paid as the
result of such Claim). In the event that the Party Indemnitee does so take over
and assume control over the defense of a Claim pursuant to the immediately
preceding sentence, the Party Indemnitee (i) shall be entitled to satisfy or
settle any such Claim on a reasonable basis, without prior notice to or consent
from the other party, (ii) may subsequently make a claim for indemnification
with respect to such satisfaction or settlement of such Claim in accordance with
the provisions of this Article XII, and (iii) shall be reimbursed, in accordance
with the provisions of this Article XII, for any such Losses satisfied or
settled and for which the Party Indemnitee establishes that it is entitled to
indemnification pursuant to this Article XII. In any such claim for
indemnification, the Party Indemnitee agrees that the amount paid to any such
third party shall not be determinative of the amount of Losses suffered by the
Party Indemnitee or introduced as evidence of the amount of such Losses in any
such claim for indemnification, and the other party shall have the right to
dispute the Party Indemnitee's entitlement to indemnification and the amount for
which it is entitled to indemnification under the terms of this Article XII. In
the event that the other party does not accept and continue the defense of any
matter as provided above, the Party Indemnitee shall have the full right to
defend against any such Claim, and to satisfy or settle any such Claim, without
prior notice to or consent from the other party, subject in each case to the
limitations set forth in the prior two sentences of this Section 12.4. In any
other event, the Party Indemnitee shall have no right to settle or agree to pay
any claim to which it is entitled to indemnification hereunder.

        SECTION 12.5    PURCHASE PRICE ADJUSTMENT. The Buyer and the Sellers
shall treat any payments under this Article XII as an adjustment to the Purchase
Price for all Federal, provincial, state and local income tax purposes.

        SECTION 12.6    EXCLUSIVE REMEDIES. The remedies available to the
Sellers and Buyer shall be the exclusive remedies available to them for monetary
damages; provided, however, that the Sellers and the Buyer shall be entitled to
pursue any equitable remedies (including specific performance) to the extent
available to them.

        SECTION 12.7    ARTICLE X. To the extent that any amounts are payable to
Buyer or Sellers pursuant to Article X of this Agreement, the provisions of
Article X shall solely govern the payment of such amounts; provided, however,
that the provisions of this Article XII shall govern the remedies available to
Buyer or Sellers as a result of any breach of the provisions of Article X.

                                      -41-
<Page>

                                  ARTICLE XIII
               CONDITIONS PRECEDENT TO PERFORMANCE BY THE SELLERS

        The obligations of the Sellers to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before the
Closing Date, of the following conditions, any one or more of which may be
waived by Casella in its sole discretion:

        SECTION 13.1    REPRESENTATIONS AND WARRANTIES OF THE BUYER. The
representations and warranties of the Buyer contained in this Agreement shall be
true and correct (i) at and as of the date hereof, and (ii) on and as of the
Closing Date with the same effect as though made on and as of the Closing Date,
except in either such case (i) or (ii) where the failure of the representations
and warranties of Buyer in this Agreement or of the New Heights Buyer in the New
Heights Purchase Agreement to be true and correct, individually or in the
aggregate, could not reasonably be expected to (x) have a material adverse
effect on the Buyer, or (y) have a material adverse effect on the ability of the
Buyer or the New Heights Buyer to perform their obligations under this Agreement
and the New Heights Purchase Agreement; and the Sellers shall have received a
certificate dated the Closing Date and signed by any officer of the Buyer to
that effect.

        SECTION 13.2    PERFORMANCE OF THE OBLIGATIONS OF THE BUYER. The Buyer
shall have performed in all material respects all obligations required under
this Agreement to be performed by the Buyer on or before the Closing Date, and
the Sellers shall have received a certificate dated the Closing Date and signed
by any officer of the Buyer to that effect.

        SECTION 13.3    CONSENTS AND APPROVALS. All consents, waivers,
authorizations and approvals of any Governmental Authority required or desired
in connection with the execution, delivery and performance of this Agreement
shall have been duly obtained and shall be in full force and effect on the
Closing Date.

        SECTION 13.4    NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any Governmental Authority, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
Governmental Authority, that declares this Agreement invalid or unenforceable in
any respect or that prevents the consummation of the transactions contemplated
hereby shall be in effect, and no action or proceeding before any Governmental
Authority shall have been instituted or threatened by any government or
Governmental Authority which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, and which in any such case has a reasonable
likelihood of success in the opinion of counsel to the Sellers.

        SECTION 13.5    DELIVERY OF DOCUMENTS. Each document required to be
delivered pursuant to Section 4.3 must have been delivered.

        SECTION 13.6    NEW HEIGHTS PURCHASE AGREEMENT. The transactions
contemplated by the New Heights Purchase Agreement shall have been consummated
simultaneously herewith.

                                   ARTICLE XIV
                CONDITIONS PRECEDENT TO PERFORMANCE BY THE BUYER

                                      -42-
<Page>

        The obligations of the Buyer to consummate the transactions contemplated
by this Agreement are subject to the fulfillment, at or before the Closing Date,
of the following conditions, any one or more of which may be waived by the Buyer
in its sole discretion:

        SECTION 14.1    REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The
representations and warranties of the Sellers contained in this Agreement shall
be true and correct (i) at and as of the date hereof, and (ii) on and as of the
Closing Date with the same effect as though made on and as of the Closing Date,
except in either such case (i) or (ii) where the failure of the representations
and warranties of the Sellers in this Agreement and the New Heights Sellers
under the New Heights Purchase Agreement to be true and correct, individually or
in the aggregate, could not reasonably be expected to (x) have a Seller Material
Adverse Effect, or (y) have a material adverse effect on the ability of the
Sellers or the New Heights Sellers to perform their obligations under this
Agreement and the New Heights Purchase Agreement; provided, however, that
notwithstanding the foregoing, in the event that the representation made by
Sellers in SECTION 5.7(c) of this Agreement is not true and correct on and as of
the Closing Date, the condition set forth in this SECTION 14.1 shall be deemed
to have not been satisfied. The Buyer shall have received certificates dated the
Closing Date and signed by the Chief Executive Officer or Chief Operating
Officer of each Seller stating that the condition set forth in this SECTION 14.1
has been satisfied.

        SECTION 14.2    PERFORMANCE OF THE OBLIGATIONS OF THE SELLERS. The
Sellers shall have performed in all material respects all obligations required
under this Agreement to be performed by them on or before the Closing Date, and
the Buyer shall have received certificates dated as of the Closing Date and
signed by the Chief Executive Officer or Chief Operating Officer of each Seller
to that effect; provided, however, that notwithstanding the foregoing, in the
event that the Sellers are in breach of SECTION 8.1(a)(xii) or SECTION 8.1(b)(v)
of this Agreement, the condition set forth in this SECTION 14.2 shall be deemed
to have not been satisfied.

        SECTION 14.3    CONSENTS AND APPROVALS. All consents, waivers,
novations, authorizations and approvals of any Governmental Authority and all of
the consents, waivers, novations, authorizations and approvals set forth on
SCHEDULE 5.5 of this Agreement shall have been duly obtained and shall be in
full force and effect on the Closing Date.

        SECTION 14.4    NO VIOLATION OF ORDERS. No preliminary or permanent
injunction or other order issued by any Governmental Authority, nor any statute,
rule, regulation, decree or executive order promulgated or enacted by any
Governmental Authority, that declares this Agreement invalid in any respect or
that prevents the consummation of the transactions contemplated hereby, or that
materially and adversely affects the assets, properties, operations, prospects,
net income or financial condition of the Purchased Companies or the Business
shall be in effect, and no action or proceeding before any Governmental
Authority shall have been instituted or threatened by any government or
Governmental Authority which seeks to prevent or delay the consummation of the
transactions contemplated by this Agreement or which challenges the validity or
enforceability of this Agreement, and which in any such case has a reasonable
likelihood of success in the opinion of counsel to the Buyer.

        SECTION 14.5    NO MATERIAL ADVERSE CHANGE. During the period from July
1, 2001 through the Closing, there shall not have been any change in the
business, operations, or financial condition of the Controlled Purchased
Companies, the New Heights Purchased Companies, the Business, and the New
Heights Business, that, individually or in the aggregate, could reasonably be
expected to have a Seller Material Adverse Effect.

        SECTION 14.6    DELIVERY OF DOCUMENTS. Each document required to be
delivered pursuant to Section 4.2 must have been delivered.

                                      -43-
<Page>

        SECTION 14.7    LICENSES AND PERMITS. All Licenses and Permits shall be
in full force and effect.

        SECTION 14.8    PURCHASE AGREEMENT. The transactions contemplated by the
New Heights Purchase Agreement shall have been consummated simultaneously
herewith.

         SECTION 14.9   CANCELLATION OR CONTRIBUTION OF INTERCOMPANY DEBT. All
amounts (other than the Intercompany Debt) owed to Sellers or any of their
Affiliates (other than the Purchased Companies) by any of the Purchased
Companies shall have been contributed by Sellers or such Affiliates to RTG or
cancelled in full by Sellers or such Affiliates.

        SECTION 14.10.  MARTY SERGI. Marty Sergi shall not have died.

                                   ARTICLE XV
                                   TERMINATION

        SECTION 15.1    CONDITIONS OF TERMINATION. Notwithstanding anything to
the contrary contained herein, this Agreement may be terminated at any time
before the Closing: (a) by mutual consent of Casella and the Buyer, (b) by
either Casella or the Buyer if the other party shall have breached this
Agreement in any material respect and such breach cannot be cured by September
30, 2001 (the "OUTSIDE DATE") (c) by Casella if at the Outside Date, any of the
conditions set forth in Article XIII shall not have been met, unless a Sellers'
breach of this Agreement is the reason for the failure of such conditions to be
satisfied, or (d) by the Buyer if at the Outside Date, any of the conditions set
forth in Article XIV shall not have been met, unless the Buyer's breach of this
Agreement is the reason for the failure of such conditions to be satisfied.
Notwithstanding the foregoing, this Agreement may not be terminated by either
party unless the New Heights Purchase Agreement is also terminated in accordance
with its terms.

        SECTION 15.2    PROCEDURE UPON TERMINATION. In the event of termination
by Casella and/or the Buyer pursuant to Section 15.1 and written notice thereof
shall forthwith be given to the other party and the transactions contemplated by
this Agreement are terminated as provided herein:

                (a)     the Sellers and the Buyer each will return all
documents, work papers and other material of the other party relating to the
transactions contemplated hereby, whether so obtained before or after the
execution hereof, to the party furnishing the same;

                (b)     all Confidential Information received by the Sellers or
the Buyer with respect to the business of the other party or its subsidiaries
shall be treated in accordance with Section 8.5; and

                (c)     such termination shall not in any way limit or restrict
the rights and remedies of the Sellers or the Buyer against the other party
hereto which has violated or breached any of the representations, warranties,
agreements or other provisions of this Agreement prior to the termination
hereof.

        SECTION 15.3    EFFECT OF TERMINATION. In the event of termination
pursuant to Section 15.1, or as otherwise provided in this Agreement, this
Agreement shall become null and void and have no effect, with no liability on
the part of the parties, or their directors, officers, agents or stockholders,
with respect to this Agreement, except for (a) the liability of a party for
expenses pursuant to Section 16.4, (b) liability for breach of this Agreement,
and (c) the provisions of Section 8.5(c) and Section 9.2.

                                      -44-
<Page>

                                   ARTICLE XVI
                                  MISCELLANEOUS

        SECTION 16.1    SURVIVAL OF PROVISIONS. The respective representations,
warranties, covenants and agreements of each of the parties to this Agreement
made herein or in any certificate or other instrument delivered by one of the
parties to this Agreement (except covenants and agreements which are expressly
required to be performed and are performed in full on or before the Closing
Date), shall be considered to have been relied upon by the other party to this
Agreement, as the case may be, and shall survive the Closing Date for a period
of two (2) years following the Closing Date, provided that the representations
and warranties regarding the corporate or other authority of the Sellers, Taxes
and violations of Environmental Laws (or otherwise contained in Section 5.21
hereof) and ERISA, shall survive until the end of the statutory period for
bringing Claims related thereto. Notwithstanding any investigation by the Buyer
of the affairs of the Sellers and their respective Subsidiaries and
notwithstanding any knowledge of the facts determined or determinable by the
Buyer pursuant to such investigation, the Buyer has the right to rely fully upon
the representations, warranties, covenants and agreements of the Sellers
contained in this Agreement.

        SECTION 16.2    SUCCESSORS AND ASSIGNS. Except as otherwise provided in
this Agreement, no party hereto shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto and any such attempted assignment without such prior written consent
shall be void and of no force and effect; provided, however that the Buyer shall
be permitted to assign some or all of its rights hereunder to one or more of its
Affiliates. This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto.

        SECTION 16.3    GOVERNING LAW; JURISDICTION. THIS AGREEMENT SHALL BE
CONSTRUED, PERFORMED AND ENFORCED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF. THE PARTIES HERETO IRREVOCABLY ELECT AS THE SOLE JUDICIAL FORUM
FOR THE ADJUDICATION OF ANY MATTERS ARISING UNDER OR IN CONNECTION WITH THIS
AGREEMENT, AND CONSENT TO THE JURISDICTION OF, THE COURTS OF THE SOUTHERN
DISTRICT OF NEW YORK.

        SECTION 16.4    EXPENSES. In the event the transactions contemplated by
this Agreement are consummated, the fees, costs and expenses of each party
hereto in connection with this Agreement and the transactions contemplated
hereby, including without limitation, any legal fees (both U.S. and foreign),
accounting fees, brokers' fees and commissions, fees and expenses of consultants
and travel and similar expenses (collectively, the "TRANSACTION EXPENSES"),
shall be paid by Holdco 1 Corp. as and to the extent provided in the Holdco 1
Stockholder Agreement and all of the other Transactional Expenses shall be paid
by the party that incurred such expenses. Except as otherwise provided in this
Section 16.4, in the event the transactions contemplated by this Agreement are
not consummated, each of the parties hereto shall pay its own Transaction
Expenses. In the event that this Agreement is terminated by Casella pursuant to
Section 15.1(c) due to a breach of this Agreement by Buyer, Buyer shall pay all
of the reasonable Transaction Expenses and other reasonable fees, costs and
expenses incurred by the Sellers and their Affiliates in connection with this
Agreement and the New Heights Purchase Agreement, and the transactions
contemplated hereby and thereby, promptly (but in no event later than five days)
upon delivery by Casella to Buyer of reasonably specific summary or invoice of
such Transaction Expenses and other fees, costs expenses. In the event that this
Agreement is terminated by Buyer pursuant to Section 15.1(d) due to a breach of
this Agreement by Sellers, the Sellers shall pay all of the reasonable

                                      -45-
<Page>

Transaction Expenses and other reasonable fees, costs and expenses incurred by
the Buyer and its Affiliates in connection with this Agreement and the New
Heights Purchase Agreement, and the transactions contemplated hereby and
thereby, promptly (but in no event later than five days) upon delivery by the
Buyer to Casella of reasonably specific summary or invoice of such Transaction
Expenses. The Sellers shall pay all recording and filing fees that may be
imposed by reason of the sale, transfer, assignment and delivery of the
Purchased Stock and Debt. In the event of a dispute as to the amount of fees
payable pursuant to this Section 16.4, the parties agree to submit such dispute
to binding arbitration in front of a single arbitrator in New York, New York
designated by both the Buyer and the Sellers, under the commercial arbitration
rules of the American Arbitration Association with expedited procedures in
effect on the date thereof; provided, however, if the parties fail to agree upon
an arbitrator within 30 days from the date on which such dispute arose, the
arbitrator shall be selected in accordance with commercial arbitration rules of
the American Arbitration Association. The costs of any such arbitration shall be
determined by the arbitrator.

        SECTION 16.5    BROKER'S AND CONSULTANT'S FEES. Except as set forth on
SCHEDULE 16.5 of this Agreement, each of the parties represents and warrants
that it has not dealt with any broker or finder in connection with any of the
transactions contemplated by this Agreement and, insofar as it knows, no broker
or other Person is entitled to any commission or finder's fee in connection with
any of the transactions contemplated hereby.

        SECTION 16.6    FURTHER ASSURANCES. The Sellers shall, at any time and
from time to time after the Closing Date, upon the request of the Buyer and at
the expense of the Sellers, do, execute, acknowledge and deliver, or cause to be
done, executed, acknowledged and delivered, all such further deeds, assignments,
transfers and conveyances as may be required for the better assigning,
transferring, granting, conveying and confirming to the Buyer or its successors
and assigns, or for aiding and assisting in collecting and reducing to
possession, any or all of the Purchased Stock and Debt.

        SECTION 16.7    PUBLIC ANNOUNCEMENTS. Following the execution and
delivery of this Agreement, the Sellers may announce publicly that it has
reached an agreement with respect to the transactions contemplated herein;
provided, however, such announcement shall have been approved by Buyer in
writing prior to being made by Sellers, which approval shall not be unreasonably
withheld. Thereafter, prior to the Closing Date, no party hereto shall (and each
party hereto shall cause each of its Subsidiaries, Affiliates, successors and
assigns not to) furnish any communication (written or oral) to any third party
or to the public generally if the subject matter thereof relates to the
existence of this Agreement or the other party's involvement herein or to the
transactions contemplated hereby without the prior approval of the other party
hereto as to the content thereof, which approval may be granted or withheld in
the other party's sole discretion; PROVIDED HOWEVER, that the foregoing shall
not be deemed to prohibit any disclosure required by any applicable law or
Governmental Authority having jurisdiction over such matters, although in any
event, the disclosing party shall provide the other party the content of the
proposed disclosure and shall reflect all reasonable comments thereon made by
the other party. After the Closing Date, the Sellers and the Buyer shall consult
with each other before issuing, and provide each other the opportunity to review
and comment upon, any press release or other public statements with respect to
the transactions contemplated by this Agreement, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law or government regulation or decree,
court process or by obligations pursuant to any listing agreement with any
national securities exchange.

        SECTION 16.8    SEVERABILITY. In the event that any part of this
Agreement is declared by any court or other judicial or administrative body to
be null, void or unenforceable, said provision shall

                                      -46-
<Page>

survive to the extent it is not so declared, and all of the other provisions of
this Agreement shall remain in full force and effect.

        SECTION 16.9    NOTICES. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served personally on the
party to whom notice is to be given, (b) on the day of transmission if sent via
facsimile transmission to the facsimile number given below, (c) on the day after
delivery to an overnight courier service, or (d) on the fifth day after mailing,
if mailed to the party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid and properly addressed, to the party as
follows:

        If to the Sellers:

                Casella Waste Systems, Inc.
                25 Green Hill Lane
                Rutland, VT 05701
                Attention: Mr. James W. Bohlig
                Telecopier: (802) 775-6198

        with a copy (which shall not constitute notice) to:

                Casella Waste Systems, Inc.
                25 Green Hill Lane
                Rutland, VT 05701
                Attention: Michael Brennan, Esq.
                Telecopier: (802) 770-5030

        If to the Buyer:

                Crumb Rubber Investors Co.,  LLC
                c/o Angelo, Gordon & Co., L.P.
                245 Park Avenue, 26th Floor
                New York, New York 10167
                Attention:  Mr. Josh Brain
                Telecopier: (212) 599-2920

        with a copy (which shall not constitute notice) to:

                Duval & Stachenfeld LLP
                300 East 42nd Street, 3rd Floor
                New York, New York 10017
                Attention: Bruce Stachenfeld, Esq.
                Telecopier: (212) 883-8883

        Any party may change its address for the purpose of this Section 16.9 by
giving the other party written notice of its new address in the manner set forth
above.

                                      -47-
<Page>

        SECTION 16.10   AMENDMENTS; WAIVERS. This Agreement may be amended or
modified, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by the
parties hereto, or in the case of a waiver, by the party waiving compliance. Any
waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation or warranty contained in this Agreement, in any one or
more instances, shall not be deemed to be nor construed as a further or
continuing waiver of any such condition, or of the breach of any other
provision, term, covenant, representation or warranty of this Agreement.

        SECTION 16.11   ENTIRE AGREEMENT. This Agreement and the other documents
referred to herein contain the entire understanding between the parties hereto
with respect to the transactions contemplated hereby and supersede and replace
all prior and contemporaneous agreements and understandings, oral or written,
with regard to such transactions.

        SECTION 16.12   SECTION AND PARAGRAPH HEADINGS. The section and
paragraph headings in this Agreement are for reference purposes only and shall
not affect the meaning or interpretation of this Agreement.

        SECTION 16.13   NO THIRD PARTY BENEFICIARIES. This Agreement does not
create and shall not be construed as creating any rights enforceable by any
Person who or which is not a party to this Agreement.

        SECTION 16.14   GENDER; NUMBER. As used in this Agreement, the masculine
shall include the feminine and the neuter, the singular shall include the plural
and the plural shall include the singular as the context may require.

        SECTION 16.15   COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                    * * * * *

                                      -48-
<Page>

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

                                          CRUMB RUBBER INVESTORS CO., LLC

                                          By: AG Crumb Rubber Manager, Inc., its
                                              manager

                                              By: /s/ Michael Gordon
                                                  ------------------------------
                                                  Name:  Michael Gordon
                                                  Title: Vice President

                                          CASELLA WASTE SYSTEMS, INC.

                                          By:        /s/ James W. Bohlig
                                              ----------------------------------
                                              Name:  James W. Bohlig
                                              Title: President

                                          KTI ENVIRONMENTAL GROUP, INC.

                                          By:        /s/ James W. Bohlig
                                              ----------------------------------
                                              Name:  James W. Bohlig
                                              Title: Vice President

                      Signature Page to Purchase Agreement

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG Equity Partners, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 40% of all of the obligations of the Buyer set forth in
this Agreement and up to 40% of all of the obligations of the New Heights Buyer
set forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the
obligations of the Buyer's Parent hereunder is limited to, and under no
circumstances shall the Buyer's Parent be required to guarantee or pay more
than, 40% of the sum of the Purchase Price and the Purchase Price (as defined in
the New Heights Purchase Agreement). This guarantee is an irrevocable guarantee
of payment (and not just of collection) and shall continue in effect
notwithstanding any extension or modification of the terms of this Agreement,
any assumption of any such guaranteed obligation by any other party or any other
act or event that might otherwise operate as a legal or equitable discharge of
the Buyer's Parent hereunder. This guarantee is in no way conditioned upon any
requirement that the Sellers first attempt to collect or enforce any guaranteed
obligation from or against the Buyer. So long as any obligation of the Buyer to
the Sellers under this Agreement remains unpaid or undischarged, the Buyer's
Parent hereby waives (but only with respect to the Buyer and its Affiliates and
not as to any other parties) all rights to subrogation arising out of any
payment by the Buyer's Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG EQUITY PARTNERS, L.P.

                                          By: AG Equity LLC, General Partner

                                              By: /s/ Michael L. Gordon
                                                  -----------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG Super Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 23% of all of the obligations of the Buyer set forth in
this Agreement and up to 23% of all of the obligations of the New Heights Buyer
set forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the
obligations of the Buyer's Parent hereunder is limited to, and under no
circumstances shall the Buyer's Parent be required to guarantee or pay more
than, 23% of the sum of the Purchase Price and the Purchase Price (as defined in
the New Heights Purchase Agreement). This guarantee is an irrevocable guarantee
of payment (and not just of collection) and shall continue in effect
notwithstanding any extension or modification of the terms of this Agreement,
any assumption of any such guaranteed obligation by any other party or any other
act or event that might otherwise operate as a legal or equitable discharge of
the Buyer's Parent hereunder. This guarantee is in no way conditioned upon any
requirement that the Sellers first attempt to collect or enforce any guaranteed
obligation from or against the Buyer. So long as any obligation of the Buyer to
the Sellers under this Agreement remains unpaid or undischarged, the Buyer's
Parent hereby waives (but only with respect to the Buyer and its Affiliates and
not as to any other parties) all rights to subrogation arising out of any
payment by the Buyer's Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG SUPER FUND, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG Super Fund International Partners, L.P., a Delaware limited
partnership (the "BUYER'S PARENT"), hereby unconditionally guarantees the due
and punctual payment and performance of up to 9% of all of the obligations of
the Buyer set forth in this Agreement and up to 9% of all of the obligations of
the New Heights Buyer set forth in the New Heights Purchase Agreement; PROVIDED,
HOWEVER, the obligations of the Buyer's Parent hereunder is limited to, and
under no circumstances shall the Buyer's Parent be required to guarantee or pay
more than, 9% of the sum of the Purchase Price and the Purchase Price (as
defined in the New Heights Purchase Agreement). This guarantee is an irrevocable
guarantee of payment (and not just of collection) and shall continue in effect
notwithstanding any extension or modification of the terms of this Agreement,
any assumption of any such guaranteed obligation by any other party or any other
act or event that might otherwise operate as a legal or equitable discharge of
the Buyer's Parent hereunder. This guarantee is in no way conditioned upon any
requirement that the Sellers first attempt to collect or enforce any guaranteed
obligation from or against the Buyer. So long as any obligation of the Buyer to
the Sellers under this Agreement remains unpaid or undischarged, the Buyer's
Parent hereby waives (but only with respect to the Buyer and its Affiliates and
not as to any other parties) all rights to subrogation arising out of any
payment by the Buyer's Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG SUPER FUND INTERNATIONAL PARTNERS,
                                          L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        Nutmeg Partners, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 8% of all of the obligations of the Buyer set forth in this
Agreement and up to 8% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 8% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          NUTMEG PARTNERS, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        Angelo, Gordon & Co., L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 5% of all of the obligations of the Buyer set forth in this
Agreement and up to 5% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 5% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          ANGELO, GORDON & CO., L.P.

                                          By: /s/ Michael L. Gordon
                                              ------------------------------
                                              Name:  Michael L. Gordon
                                              Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        PHS Bay Colony Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 3% of all of the obligations of the Buyer set forth in this
Agreement and up to 3% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 3% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          PHS BAY COLONY FUND, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                          General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG CNG Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 3% of all of the obligations of the Buyer set forth in this
Agreement and up to 3% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 3% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG CNG FUND, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                          General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG MM, L.P., a Delaware limited partnership (the "BUYER'S PARENT"),
hereby unconditionally guarantees the due and punctual payment and performance
of up to 3% of all of the obligations of the Buyer set forth in this Agreement
and up to 3% of all of the obligations of the New Heights Buyer set forth in the
New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations of the
Buyer's Parent hereunder is limited to, and under no circumstances shall the
Buyer's Parent be required to guarantee or pay more than, 3% of the sum of the
Purchase Price and the Purchase Price (as defined in the New Heights Purchase
Agreement). This guarantee is an irrevocable guarantee of payment (and not just
of collection) and shall continue in effect notwithstanding any extension or
modification of the terms of this Agreement, any assumption of any such
guaranteed obligation by any other party or any other act or event that might
otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG MM, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              Investment Manager

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG Super Advantage, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 2% of all of the obligations of the Buyer set forth in this
Agreement and up to 2% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 2% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG SUPER ADVANTAGE, L.P.

                                          By: AG Super Advantage GP, LLC
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        PHS Patriot Fund, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 2% of all of the obligations of the Buyer set forth in this
Agreement and up to 2% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 2% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          PHS PATRIOT FUND, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                        GUARANTEE OF BUYER'S OBLIGATIONS

        AG Princess, L.P., a Delaware limited partnership (the "BUYER'S
PARENT"), hereby unconditionally guarantees the due and punctual payment and
performance of up to 2% of all of the obligations of the Buyer set forth in this
Agreement and up to 2% of all of the obligations of the New Heights Buyer set
forth in the New Heights Purchase Agreement; PROVIDED, HOWEVER, the obligations
of the Buyer's Parent hereunder is limited to, and under no circumstances shall
the Buyer's Parent be required to guarantee or pay more than, 2% of the sum of
the Purchase Price and the Purchase Price (as defined in the New Heights
Purchase Agreement). This guarantee is an irrevocable guarantee of payment (and
not just of collection) and shall continue in effect notwithstanding any
extension or modification of the terms of this Agreement, any assumption of any
such guaranteed obligation by any other party or any other act or event that
might otherwise operate as a legal or equitable discharge of the Buyer's Parent
hereunder. This guarantee is in no way conditioned upon any requirement that the
Sellers first attempt to collect or enforce any guaranteed obligation from or
against the Buyer. So long as any obligation of the Buyer to the Sellers under
this Agreement remains unpaid or undischarged, the Buyer's Parent hereby waives
(but only with respect to the Buyer and its Affiliates and not as to any other
parties) all rights to subrogation arising out of any payment by the Buyer's
Parent under this Agreement.

        The obligations of the Buyer's Parent hereunder shall be absolute and
unconditional irrespective of the validity, legality or enforceability of this
Agreement or any other document related hereto, and shall not be affected by or
contingent upon (i) the liquidation or dissolution of, or the merger or
consolidation of the Buyer with or into any corporation, or any sale or transfer
by the Buyer of all or any part of its property or assets, (ii) the bankruptcy,
receivership, insolvency, reorganization or similar proceedings involving or
affecting the Buyer, (iii) any modification, alteration, amendment or addition
of or to this Agreement, or (iv) any disability or any other defense of the
Buyer or any other person and any other circumstance whatsoever (with or without
notice to or knowledge of the Buyer's Parent) which may or might in any manner
or to any extent vary the risks of the Buyer's Parent or might otherwise
constitute a legal or equitable discharge of a surety or a guarantor or
otherwise.

        The Buyer's Parent hereby waives all special suretyship defenses and
protest, notice of protest, demand for performance, diligence, notice of any
other action at any time taken or omitted by the Sellers and, generally, all
demands and notices of every kind in connection with this Agreement and the
Buyer's obligations hereby guaranteed, and which the Buyer's Parent may
otherwise assert against the Sellers.

        The Buyer's Parent acknowledges that each of the waivers set forth above
is made with full knowledge of its significance and consequences and under the
circumstances the waivers are reasonable and not contrary to public policy. If
any of said waivers is determined to be contrary to any applicable law or public
policy, such waivers shall be effective only to the extent permitted by law.

        This guarantee shall continue to be effective or shall be reinstated, as
the case may be, if at any time payment or performance of any of the obligations
of the Buyer under this Agreement is rescinded or must otherwise be restored or
returned by the Sellers upon the insolvency, bankruptcy or reorganization of the
Buyer or otherwise.

        The obligations of the Buyer's Parent hereunder shall automatically
terminate and be of no force or effect without any action by any Person
immediately upon the payment of the Purchase Price to the Sellers.

<Page>

        IN WITNESS WHEREOF, the undersigned has executed this guarantee as of
the 17th day of August, 2001.

                                          AG PRINCESS, L.P.

                                          By: Angelo, Gordon & Co., L.P.,
                                              General Partner

                                              By: /s/ Michael L. Gordon
                                                  ------------------------------
                                                  Name:  Michael L. Gordon
                                                  Title: Chief Operating Officer

<Page>

                                                                       EXHIBIT A

                         [FORM OF ASSIGNMENT AGREEMENT]

<Page>

                                                                       EXHIBIT B

                      [FORM OF RTG STOCKHOLDERS AGREEMENT]

<Page>

                                                                       EXHIBIT C

                       [FORM OF OPINION OF HALE AND DORR]

<Page>

                                                                       EXHIBIT D

                  [FORM OF OPINION OF DUVAL & STACHENFELD LLP]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00041-of-00352.parquet"}]]