Document:

December 16, 1999

                                WARRANT AGREEMENT

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE  THEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE  SECURITIES  LAWS,  AND MAY NOT BE SOLD,  OFFERED  FOR SALE,  PLEDGED,
HYPOTHECATED  OR  OTHERWISE   TRANSFERRED  UNLESS  THERE  IS  (i)  AN  EFFECTIVE
REGISTRATION  STATEMENT  UNDER  SUCH ACT  RELATED  THERETO,  (ii) AN  OPINION OF
COUNSEL  FOR THE  HOLDER,  REASONABLY  SATISFACTORY  TO THE  COMPANY,  THAT SUCH
REGISTRATION  IS NOT REQUIRED,  (iii) RECEIPT OF A NO-ACTION  LETTER(S) FROM THE
APPROPRIATE GOVERNMENTAL AUTHORITY(IES).

                               IMMUNOMEDICS, INC.

                WARRANT TO PURCHASE 75,000 SHARES OF COMMON STOCK

         IMMUNOMEDICS,  INC., a Delaware  corporation  (the  "Company"),  hereby
certifies  that,  for value  received,  Sutro & Co.  Incorporated  ("Sutro"),  a
_________  corporation,  or its  registered  transferees,  successors or assigns
(each,  a "holder"),  is the registered  holder of warrants (the  "Warrants") to
subscribe for and purchase  SEVENTY-FIVE  THOUSAND  (75,000) shares of the fully
paid and  nonassessable  Common Stock (as adjusted pursuant to Section 4 hereof,
the "Warrant Shares") of the Company, at a purchase price per share equal to SIX
DOLLARS AND FIFTY CENTS ($6.50) (such price,  as adjusted  pursuant to Section 4
hereof,  the "Warrant Price"),  subject to the provisions and upon the terms and
conditions  hereinafter set forth.  As used herein,  (a) the term "Common Stock"
shall mean the Company's  presently  authorized Common Stock, par value $.01 per
share,  and any stock  into or for which  such  Common  Stock may  hereafter  be
converted or exchanged, and (b) the term "Date of Grant" shall mean December 16,
1999.  The term  "Warrant" as used herein shall be deemed to include any warrant
issued upon  transfer or partial  exercise of this  Warrant,  unless the context
clearly  requires  otherwise.  This  Warrant is being  issued  pursuant  to that
certain  Letter  Engagement  Agreement (the  "Agreement")  of even date herewith
between the Company and Sutro.

         1.       Term.

         The purchase right represented by this Warrant is exercisable, in whole
or in part, at any time and from time to time from the Date of Grant through and
including  the close of business on December 16, 2004 (the  "Expiration  Date");
provided,  however,  that in the  event  that any  portion  of this  Warrant  is
unexercised  as of the  Expiration  Date,  the terms of Section 2(b) below shall
apply.

<PAGE>

         2.       Exercise.

                  a.       Method of Exercise; Payment; Issuance of New Warrant.

                  Subject to Section 1 hereof, the purchase right represented by
this Warrant may be exercised by the holder hereof, in whole or in part and from
time to time, by the surrender of this Warrant (with the notice of exercise form
attached  hereto as  Exhibit A duly  executed)  at the  principal  office of the
Company,  and,  except as otherwise  provided for herein,  by the payment to the
Company of an amount equal to the then  applicable  Warrant Price  multiplied by
the number of Warrant  Shares  then  being  purchased.  The person or persons in
whose name(s) any  certificate(s)  representing  shares of Common Stock shall be
issuable  upon  exercise  of this  Warrant  shall be deemed to have  become  the
holder(s)  of record  of, and shall be treated  for all  purposes  as the record
holder(s) of, the shares represented thereby (and such shares shall be deemed to
have been  issued)  immediately  prior to the close of  business  on the date or
dates upon which this Warrant is  exercised  if exercised  prior to the close of
business on such date; otherwise,  the date of record shall be the next business
day. In the event of any  exercise of the rights  represented  by this  Warrant,
certificates  for the shares of Common Stock so purchased  shall be delivered to
the holder  hereof as soon as  possible  after such  exercise  and,  unless this
Warrant  has  been  fully  exercised  (including  without  limitation,  exercise
pursuant to Section 2(b) below),  a new Warrant  representing the portion of the
Warrant  Shares,  if any, with respect to which this Warrant shall not then have
been exercised shall also be issued to the holder hereof as soon as possible.

                  b. Automatic  Exercise.  In the event that any portion of this
Warrant remains  unexercised as of the Expiration Date and the fair market value
(determined in accordance  with Section 4(i) below) of one share of Common Stock
as of the Expiration Date is greater than the applicable Warrant Price as of the
Expiration  Date,  then this  Warrant  shall be  deemed  to have been  exercised
automatically  immediately prior to the close of business on the Expiration Date
(or,  in the  event  that  the  Expiration  Date  is  not a  business  day,  the
immediately   preceding  business  day)  (the  "Automatic   Exercise  Date")  in
accordance  with  Section  2(c)  below,  and the person  entitled to receive the
shares of Common  Stock  issuable  upon such  exercise  shall be treated for all
purposes  as the  holder  of record  of such  Warrant  Shares as of the close of
business on such  Automatic  Exercise  Date.  This Warrant shall be deemed to be
surrendered  to the  Company on the  Automatic  Exercise  Date by virtue of this
Section  2(b) and without any action by the holder of this  Warrant or any other
person,  upon the payment to the Company of the then  applicable  Warrant  Price
multiplied by the number of Warrant Shares then being  purchased shall be deemed
to be made pursuant to the terms of Section 2(c) below  (without  payment by the
holder of any exercise price or any cash or other consideration). As promptly as
practicable on or after the Automatic Exercise Date but in no event prior to the
date on which this Warrant is surrendered to the Company at the principal office
of the Company, the Company at its expense shall issue and deliver to the person
or persons  entitled to receive the same a certificate or  certificates  for the
number of Warrant Shares issuable upon such exercise, in accordance with Section
2(c).

                                      -2-
<PAGE>

                  c. Cashless  Right to Convert  Warrant into Common Stock;  Net
Issuance.

                           (1)      Right to Convert.

                  In addition to and without  limiting  the rights of the holder
hereof  under the terms of this  Warrant,  the  holder  shall  have the right to
convert this Warrant or any portion thereof (the "Conversion Right") into shares
of Common  Stock as  provided in this  Section  2(c) at any time or from time to
time during the term of this Warrant. Upon exercise of the Conversion Right with
respect to all or a specified  portion of shares  subject to this  Warrant  (the
"Converted  Warrant  Shares"),  the Company shall deliver to the holder (without
payment by the holder of any exercise price or any cash or other  consideration)
that number of shares of fully paid and nonassessable  Common Stock equal to the
quotient  obtained by dividing (i) the value of this  Warrant (or the  specified
portion hereof) on the Conversion  Date (as defined in Section 2(c)(2)  hereof),
which  value  shall be  equal  to (A) the  aggregate  fair  market  value of the
Converted  Warrant  Shares  issuable  upon  exercise  of  this  Warrant  (or the
specified  portion hereof) on the Conversion Date less (B) the aggregate Warrant
Price of the Converted  Warrant Shares  immediately prior to the exercise of the
Conversion  Right by (ii) the fair market value of one (1) share of Common Stock
on the  Conversion  Date.  Expressed  as a  formula,  such  conversion  shall be
computed as follows:

X  =  A - B
      -----
        Y
Where:            X = the number of shares of Common Stock that may be issued to
the holder

Y = the fair  market  value  ("FMV")  of one (1) share of  Common  Stock
A = the aggregate FMV (i.e., FMV x Converted  Warrant Shares)
B = the aggregate Warrant Price (i.e., Converted Warrant Shares x Warrant Price)

No fractional  shares shall be issuable upon exercise of the  Conversion  Right,
and,  if the number of shares to be issued  determined  in  accordance  with the
foregoing  formula is other than a whole  number,  the Company  shall pay to the
holder  an  amount  in cash  equal to the  fair  market  value of the  resulting
fractional  share on the  Conversion  Date.  For  purposes  of Section 9 of this
Warrant,  shares issued pursuant to the Conversion  Right shall be treated as if
they were issued upon the exercise of this Warrant.

                           (2)      Method of Exercise.

     The  Conversion  Right may be exercised  by the holder by the  surrender of
this  Warrant at the  principal  office of the Company  together  with a written
statement  specifying that the holder thereby intends to exercise the Conversion
Right and  indicating  the number of shares  subject to this  Warrant  which are
being  surrendered  (referred  to in  Section  2(c)(1)  hereof as the  Converted
Warrant Shares) in exercise of the Conversion  Right.  Such conversion  shall be
effective  upon  receipt  by the  Company  of this  Warrant  together  with  the
aforesaid written statement,  or on such later date as is specified therein (the
"Conversion  Date").  Certificates  for the shares issuable upon exercise of the
Conversion Right and, if applicable, a new warrant evidencing the balance of the
shares remaining  subject to this Warrant,  shall be issued as of the Conversion

                                      -3-
<PAGE>

Date and shall be  delivered  to the holder as soon as  possible  following  the
Conversion Date.

                           (3)      Determination of Fair Market Value.

                  d.       For purposes of Section 2(c), "fair market  value" of
a share of Common Stock shall have the meaning set forth in Section 4(i) below.

         3.       Stock Fully Paid; Reservation of Shares.

         All Warrant  Shares that may be issued upon the  exercise of the rights
represented  by this  Warrant  will,  upon  issuance  pursuant  to the terms and
conditions  herein,  be fully paid and  nonassessable,  and free from all taxes,
liens,  charges,  and  statutory  pre-emptive  rights with  respect to the issue
thereof.  The Company shall pay all transfer taxes, if any,  attributable to the
issuance of the Warrant Shares upon the exercise of this Warrant,  provided that
such Warrant Shares are issued in the name of the holder of this Warrant. During
the period within which the rights represented by this Warrant may be exercised,
the Company will at all times have  authorized,  and reserved for the purpose of
the issue upon  exercise of the purchase  rights  evidenced by this  Warrant,  a
sufficient  number of shares of its Common  Stock to provide for the exercise of
the rights represented by this Warrant.

         4.       Adjustment of Warrant Price and Number of Shares.

         The number and kind of securities purchasable upon the exercise of this
Warrant and the Warrant Price shall be subject to  adjustment  from time to time
upon the occurrence of certain events, as follows:

                  a.       Intentionally omitted.

                  b.       Merger, Sale, Reclassification.

                  In case of any (i) consolidation or merger (including a merger
in which the Company is the surviving entity), (ii) sale or other disposition of
all or substantially  all of the Company's assets or distribution of property to
stockholders  (other  than  distributions  payable  out of  earnings or retained
earnings), or (iii) reclassification,  change or conversion of securities of the
class  issuable upon exercise of this Warrant (other than a change in par value,
or from par value to no par value,  or from no par value to par  value,  or as a
result  of a  subdivision  or  combination),  then the  Company  shall  take all
necessary actions  (including but not limited to executing and delivering to the
holder of this Warrant an additional  Warrant or other  instrument,  in form and
substance  acceptable  to the holder of this Warrant such  acceptance  not to be
unreasonably  withheld)  to  ensure  that  the  holder  of  this  Warrant  shall
thereafter  have the right to receive,  at a total  purchase price not to exceed
that payable upon the exercise of the unexercised  portion of this Warrant,  and
in lieu of the shares of Common Stock theretofore issuable upon exercise of this
Warrant,  the kind and amount of shares of stock,  other  securities,  money and
property receivable upon such consolidation,  merger, sale or other disposition,

                                      -4-
<PAGE>

reclassification,  change or  conversion  by a holder of the number of shares of
Common Stock then purchasable under this Warrant. Such new Warrant shall provide
for adjustments that shall be as nearly  equivalent as may be practicable to the
adjustments  provided for in this Section 4. The provisions of this Section 4(b)
shall similarly apply to successive reclassifications, changes and conversions.

                  c.       Subdivision or Combination of Shares.

                  If  the  Company  at  any  time  while  this  Warrant  remains
outstanding and unexpired  shall subdivide or combine its outstanding  shares of
Common Stock, the Warrant Price shall be  proportionately  decreased in the case
of a  subdivision  or increased in the case of a  combination,  effective at the
close of business on the date the subdivision or combination becomes effective.

                  d.       Stock Dividends and Other Distributions.

                  If the Company at any time while this  Warrant is  outstanding
and  unexpired  shall (i) pay a dividend with respect to Common Stock payable in
Common Stock, or (ii) make any other  distribution  with respect to Common Stock
(except any  distribution  specifically  provided for in Section 4(b) or Section
4(c) hereof) of Common Stock, then the Warrant Price shall be adjusted, from and
after  the date of  determination  of  stockholders  entitled  to  receive  such
dividend or  distribution,  to that price  determined by multiplying the Warrant
Price in effect  immediately  prior to such date of  determination by a fraction
(i) the  numerator  of which shall be the total number of Fully  Diluted  Shares
outstanding  immediately  prior to such dividend or  distribution,  and (ii) the
denominator  of  which  shall  be the  total  number  of  Fully  Diluted  Shares
outstanding immediately after such dividend or distribution.

                  e.       Rights Offerings.

                  In case  the  Company  shall,  at any time  after  the Date of
Grant,  issue  rights,  options or warrants  generally  to the holders of equity
securities of the Company, entitling them to subscribe for or purchase shares of
Common Stock (or securities  convertible or exchangeable into Common Stock) at a
price per share of Common  Stock (or having a conversion  or exchange  price per
share of Common  Stock if a security  convertible  or  exchangeable  into Common
Stock) less than the fair market  value per share of Common  Stock on the record
date for such  issuance (or the date of issuance,  if there is no record  date),
the Warrant  Price to be in effect on and after such  record  date (or  issuance
date,  as the case may be) shall be  adjusted  so that it shall  equal the price
determined by multiplying the Warrant Price in effect  immediately prior to such
record  date  (or  issuance  date,  as the case  may be) by a  fraction  (i) the
numerator of which shall be the number of shares of Common Stock  outstanding on
such  record  date (or  issuance  date,  as the case may be) plus the  number of
shares of Common Stock which the aggregate offering price of the total number of
shares of such Common Stock so to be offered (or the aggregate  initial exchange
or  conversion  price of the  exchangeable  or  convertible  securities so to be
offered)  would  purchase  at such fair  market  value on such  record  date (or
issuance  date, as the case may be) and (ii) the  denominator  of which shall be
the  number of  shares  of Common  Stock  outstanding  on such  record  date (or
issuance  date,  as the case may be) plus the  number  of  additional  shares of
Common  Stock to be offered  for  subscription  or  purchase  (or into which the
convertible securities to be offered are initially exchangeable or convertible).
In case such subscription  price may be paid in part or in whole in a form other

                                      -5-
<PAGE>

than cash,  the fair market value of such  consideration  shall be determined by
the  Board of  Directors  of the  Company  in good  faith as set forth in a duly
adopted  board  resolution  certified  by the  Company's  Secretary or Assistant
Secretary,  provided, that in the event the Board of Directors is unable to make
such a determination,  then the fair market value of such consideration shall be
determined  in the same manner as a Valuation  under  Section  4(i) below.  Such
adjustment shall be made successively  whenever such an issuance occurs;  and in
the event that such rights,  options,  warrants,  or convertible or exchangeable
securities  are  not  so  issued  or  expire  or  cease  to  be  convertible  or
exchangeable before they are exercised, converted, or exchanged (as the case may
be), then the Warrant Price shall again be adjusted to be the Warrant Price that
would then be in effect if such issuance had not occurred,  but such  subsequent
adjustment  shall not  affect  the  number of  Warrant  Shares  issued  upon any
exercise of this Warrant prior to the date such subsequent adjustment is made.

                  f.       Other Special Distributions.

                  In case the Company  shall fix a record date for the making of
a distribution (other than dividends,  distributions or issuances referred to in
Section 4(c), Section 4(d) or Section 4(e) above, and other than cash dividends)
to all holders of shares of Common Stock (including any such  distribution  made
in  connection  with a  consolidation  or  merger in which  the  Company  is the
surviving  corporation)  of evidences of  indebtedness,  assets or  subscription
rights, options,  warrants, or exchangeable or convertible securities containing
the right to subscribe for or purchase shares of any class of equity  securities
of the Company,  the Warrant Price to be in effect on and after such record date
shall be adjusted by multiplying the Warrant Price in effect  immediately  prior
to such record date by a fraction  (i) the  numerator of which shall be the fair
market  value per share of  Common  Stock on such  record  date  (determined  in
accordance  with Section 4(i) below),  less the fair market value (as determined
by the Board of  Directors  of the  Company in good faith as set forth in a duly
adopted  board  resolution  certified  by the  Company's  Secretary or Assistant
Secretary)  of the portion of the assets or evidences of  indebtedness  so to be
distributed or of such subscription rights,  options,  warrants, or exchangeable
or  convertible  securities  applicable  to one (1)  share of the  Common  Stock
outstanding  as of such record  date,  provided,  that in the event the Board of
Directors is unable to make such a determination,  then the fair market value of
such  consideration  shall be determined in the same manner as a Valuation under
Section 4(i) below,  and (ii) the  denominator of which shall be the fair market
value per share of Common  Stock as  determined  in the manner  set forth  under
Section 4(i) below. Such adjustment shall be made  successively  whenever such a
record date is fixed;  and in the event that such  distribution  is not so made,
the Warrant  Price  shall again be adjusted to be the Warrant  Price which would
then be in effect if such record date had not been  fixed,  but such  subsequent
adjustment  shall not  affect  the  number of  Warrant  Shares  issued  upon any
exercise of this Warrant prior to the date such subsequent adjustment was made.

                                       -6-
<PAGE>

                  g.        Other Issuances of Securities.

                  Shares  outstanding  immediately after such sale and issuance.
Such adjustment shall be made successively whenever such an issuance is made.

                  h.       Adjustment of Number of Shares.

                  Upon each  adjustment  in the  Warrant  Price,  the  number of
Warrant Shares  purchasable  hereunder  shall be adjusted,  to the nearest whole
share,  to the product  obtained  by  multiplying  the number of Warrant  Shares
purchasable  immediately  prior to such  adjustment  in the  Warrant  Price by a
fraction, the numerator of which shall be the Warrant Price immediately prior to
such  adjustment  and the  denominator  of  which  shall  be the  Warrant  Price
immediately thereafter.

                  i.       Determination of Fair Market Value.

                  For purposes of those  provisions of this Warrant  requiring a
determination  in accordance with this Section 4(i), "fair market value" as of a
particular  date (the  "Determination  Date") shall mean (i) for any security if
such security is traded on a national securities  exchange (an "Exchange"),  the
weighted  average (based on daily trading  volume) of the mid-point  between the
daily high and low trading  prices of the  security on each of the last five (5)
trading days prior to the Determination Date reported on such Exchange, (ii) for
any security that is not traded on an Exchange but which is quoted on the Nasdaq
Stock Market ("NASDAQ"), the weighted average (based on daily trading volume) of
the mid-point  between the daily high and low trading prices  reported on NASDAQ
on each of the last five (5) trading days (or if the relevant price or quotation
did not exist on any of such days,  the relevant  price or quotation on the next
preceding business day on which there was such a price or quotation, for a total
of five trading days) prior to the Determination Date, or (iii) for any security
or any  other  asset,  if no price can be  determined  on the basis of the above
methods of valuation, then the judgment of valuation shall be determined in good
faith by the Board of  Directors of the Company,  which  determination  shall be
described  in a  duly  adopted  board  resolution  certified  by  the  Company's
Secretary  or Assistant  Secretary.  If the Board of Directors of the Company is
unable to determine any Valuation (as defined  below),  the Company shall select
an investment  banking firm of national  reputation which has not had a material
relationship with the Company or any officer of the Company within the preceding
two (2) years,  which shall  determine such Valuation.  Such investment  banking
firm's determination of such Valuation shall be final, binding and conclusive on
the Company and the holders of all of the  Warrants  issued  hereunder  and then
outstanding,  to the  extent  of the  issuance  or  distribution  to which  such
Valuation  applies.  If the Board of  Directors  of the  Company  was  unable to
determine such  Valuation,  all costs and fees of such  investment  banking firm
shall be borne by the  Company.  For  purposes of this  Section  4(i),  the term
"Valuation" shall mean the  determination,  to be made initially by the Board of
Directors  of the  Company,  of the fair market  value of any asset  pursuant to
clause (iii) above in this paragraph.

                                      -7-
<PAGE>

         5.       Notice of Adjustments.

         Whenever the Warrant Price or the number of Warrant Shares  purchasable
hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make
a certificate signed by its chief financial officer setting forth, in reasonable
detail,  the event requiring the adjustment,  the amount of the adjustment,  the
method by which such  adjustment was  calculated,  and the Warrant Price and the
number of Warrant  Shares  purchasable  hereunder  after  giving  effect to such
adjustment, which shall be mailed (without regard to Section 11 hereof, by first
class mail, postage prepaid) to the holder of this Warrant.

         6.       Fractional Shares.

         No fractional  shares of Common Stock will be issued in connection with
any exercise hereunder,  but in lieu of such fractional shares the Company shall
make a cash payment  therefor  based on the fair market value (as  determined in
accordance  with  Section  4(i) above) of a share of Common Stock on the date of
exercise.

         7. Compliance  with  Securities Act;  Disposition of Warrant or Warrant
Shares.

                  a.       Compliance with Securities Act.

                  The holder of this Warrant, by acceptance hereof,  agrees that
this Warrant and the shares of Common Stock to be issued upon  exercise  hereof,
are being acquired for  investment and that such holder will not offer,  sell or
otherwise  dispose of this  Warrant,  or any shares of Common Stock to be issued
upon  exercise  hereof  except  under  circumstances  which will not result in a
violation of the Securities  Act of 1933, as amended (the "Act").  Upon exercise
of this Warrant,  the holder  hereof shall confirm in writing,  by executing the
form attached as Schedule 1 to Exhibit A hereto, that the shares of Common Stock
so  purchased  are being  acquired  for  investment  and not with a view  toward
distribution or resale.  All shares of Common Stock issued upon exercise of this
Warrant (unless  registered  under the Act) shall be stamped or imprinted with a
legend in  substantially  the following form: "THE SECURITIES  EVIDENCED  HEREBY
HAVE NOT BEEN  REGISTERED  UNDER THE SECURITIES ACT OF 1933, AS AMENDED,  OR ANY
STATE  SECURITIES  LAWS. NO SALE OR DISPOSITION  MAY BE EFFECTED  WITHOUT (i) AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, (ii) AN OPINION OF COUNSEL FOR
THE HOLDER,  REASONABLY  SATISFACTORY TO THE COMPANY,  THAT SUCH REGISTRATION IS
NOT REQUIRED,  or (iii) RECEIPT OF A NO-ACTION  LETTER(S)  FROM THE  APPROPRIATE
GOVERNMENTAL AUTHORITY(IES)"

                  In addition,  in connection with the issuance of this Warrant,
the holder specifically  represents to the Company by acceptance of this Warrant
as follows:

     (1) The holder is aware of the  Company's  business  affairs and  financial
condition, and has acquired information about the Company sufficient to reach an
informed  and  knowledgeable  decision to acquire  this  Warrant.  The holder is
acquiring this Warrant for its own account for investment  purposes only and not
with a view to, or for resale in connection with any "distribution"  thereof for
purposes of the Act.

                                      -8-
<PAGE>

     (2) The holder  understands  that this Warrant and the Warrant  Shares have
not  been  registered  under  the  Act in  reliance  upon a  specific  exemption
therefrom,  which  exemption  depends upon,  among other  things,  the bona fide
nature  of  the  holder's   investment  intent  as  expressed  herein.  In  this
connection,  the holder  understands  that,  in the view of the  Securities  and
Exchange  Commission  (the "SEC"),  the statutory basis for such exemption maybe
unavailable if the holder's  representation was predicated solely upon a present
intention  to hold the Warrant and the  Warrant  Shares for the minimum  capital
gains period  specified  under  applicable tax laws, for a deferred sale, for or
until an increase or decrease in the market price of the Warrant and the Warrant
Shares, or for a period of one (1) year or any other fixed period in the future.

     (3) The holder further understands that this Warrant and the Warrant Shares
must be held indefinitely unless  subsequently  registered under the Act and any
applicable  state securities  laws, or unless  exemptions from  registration are
otherwise available.

     (4) The holder is aware of the provisions of Rule 144 and 144A, promulgated
under the Act, which, in substance,  permit limited public resale of "restricted
securities" acquired,  directly or indirectly,  from the issuer thereof (or from
an  affiliate  of  such  issuer),  in  a  non-public  offering  subject  to  the
satisfaction  of certain  conditions,  if  applicable,  including,  among  other
things:  the availability of certain public  information about the Company,  the
resale  occurring  not less than one (1) year after the party has  purchased and
paid for the  securities to be sold;  the sale being made through a broker in an
unsolicited  "broker's  transaction" or in  transactions  directly with a market
maker (as said term is defined  under the  Securities  Exchange Act of 1934,  as
amended) and the amount of securities  being sold during any three-month  period
not exceeding the specified limitations stated therein.

     (5) The holder further  understands that at the time it wishes to sell this
Warrant and the Warrant  Shares there may be no public market upon which to make
such a sale, and that, even if such a public market then exists, the Company may
not be satisfying the current public  information  requirements  of Rule 144 and
144A,  and that,  in such event,  the holder may be precluded  from selling this
Warrant and the Warrant  Shares under Rule 144 and 144A even if the one (1)-year
minimum holding period had been satisfied.

     (6)  The  holder  further   understands  that  in  the  event  all  of  the
requirements of Rule 144 and 144A are not satisfied, registration under the Act,
compliance  with  Regulation  A, or some other  registration  exemption  will be
required;  and  that,  notwithstanding  the fact  that  Rule 144 and 144A is not
exclusive, the Staff of the SEC has expressed its opinion that persons proposing
to sell private  placement  securities  other than in a registered  offering and
otherwise  than pursuant to Rule 144 and 144A will have a substantial  burden of
proof in establishing  that an exemption from registration is available for such
offers or  sales,  and that  such  persons  and  their  respective  brokers  who
participate in such transactions do so at their own risk.

                                      -9-
<PAGE>

                  b. Disposition of Warrant or Warrant Shares.  This Warrant and
the  Warrant  Shares  may be  detached  and  transferred,  in  whole or in part,
separately from the Agreement.

                  With respect to any offer,  sale or other  disposition of this
Warrant, or any Warrant Shares acquired pursuant to the exercise of this Warrant
prior to registration  of such Warrant or Warrant Shares,  the holder hereof and
each  subsequent  holder of this Warrant  agrees to give  written  notice to the
Company prior thereto,  describing  briefly the manner thereof,  together with a
written  opinion  of such  holder's  counsel,  if  reasonably  requested  by the
Company,  to the  effect  that  such  offer,  sale or other  disposition  may be
effected without  registration or qualification (under the Act as then in effect
or any  federal  or state law then in effect)  of this  Warrant or such  Warrant
Shares and indicating whether or not under the Act certificates for this Warrant
or  such  Warrant  Shares  to be sold  or  otherwise  disposed  of  require  any
restrictive legend as to applicable  restrictions on transferability in order to
ensure  compliance  with  applicable  law.  Promptly upon receiving such written
notice and reasonably  satisfactory  opinion,  if so requested,  the Company, as
promptly as  practicable,  shall notify such holder that such holder may sell or
otherwise dispose of this Warrant or such Warrant Shares, all in accordance with
the terms of the notice  delivered to the Company.  If a determination  has been
made pursuant to this Section 7(b) that the opinion of counsel for the holder is
not  reasonably  satisfactory  to the Company,  the Company  shall so notify the
holder  promptly  after  such   determination   has  been  made.  The  foregoing
notwithstanding,  this  Warrant or such  Warrant  Shares may, as to such federal
laws, be offered,  sold or otherwise disposed of in accordance with Rule 144 and
144A under the Act,  provided  that the Company shall have been  furnished  with
such  information as the Company may reasonably  request to provide a reasonable
assurance  that the  provisions of Rule 144 and 144A have been  satisfied.  Each
certificate  representing  this Warrant or the Warrant  Shares thus  transferred
(except  a  transfer  pursuant  to  Rule  144)  shall  bear a  legend  as to the
applicable  restrictions on  transferability  in order to ensure compliance with
such laws,  unless in the  aforesaid  opinion of counsel  for the  holder,  such
legend is not required in order to ensure compliance with such laws. The Company
may issue stop transfer  instructions to its transfer agent or, if acting as its
own transfer  agent,  the Company may stop transfer on its corporate  books,  in
connection with such restrictions.

         8.       Rights as Stockholders; Information.

         No  holder  of this  Warrant,  as such,  shall be  entitled  to vote or
receive  dividends  or be  deemed  the  holder  of  Common  Stock  or any  other
securities  of the Company  which may at any time be  issuable  on the  exercise
hereof for any  purpose,  nor shall  anything  contained  herein be construed to
confer  upon the  holder  of this  Warrant,  as  such,  any of the  rights  of a
stockholder  of the  Company  or any  right  to  vote  for the  election  of the
directors or upon any matter  submitted to stockholders at any meeting  thereof,
or to receive notice of meetings, or to receive dividends or subscription rights
or  otherwise,  until this  Warrant  shall have been  exercised  and the Warrant
Shares  purchasable upon the exercise hereof shall have become  deliverable,  as
provided herein. The foregoing notwithstanding, the Company will transmit to the
holder of this Warrant such information,  documents and reports as are generally
distributed  to the  holders  of any class or series  of the  securities  of the
Company concurrently with the distribution thereof to the stockholders.

                                      -10-
<PAGE>

         9.       Registration Rights

         9.1      Demand Registration Rights

                  a. The  Company  covenants  and agrees  that at any time after
receipt of a written request (a "Demand Registration Request") from holder(s) of
Warrants and/or Warrant Shares (collectively,  the "Securityholders") holding at
least twenty-five  percent (25%) of the Registrable  Securities not already sold
pursuant  to this  Section  9 or Rule 144  under  the  Act,  stating  that  such
Securityholders  desire and intend to have the Company register all or a portion
of the Warrant  Shares then  outstanding  or  issuable  pursuant to  unexercised
Warrants (the  "Registrable  Securities")  for sale, then the Company shall: (i)
promptly  deliver  written  notice  (the  "Registration  Notice")  to all  other
Securityholders of the Company's receipt of such registration request; (ii) file
with the SEC,  within  forty-five  (45)  days of  delivery  of the  Registration
Notice,  a  registration  statement  on  Form  S-3,  or any  successor  form  of
registration to such form, or, if the Company is ineligible therefore, Form S-1,
or any successor form of  registration  to such form, for an offering to be made
covering all of the Registrable Securities;  (iii) use its best efforts to cause
such registration  statement to be declared effective within ninety (90) days of
delivery of the Registration Notice; and (iv) use its best efforts to cause such
registration  statement to become  effective under the Act and remain  effective
for six (6)  months  or such  shorter  period  as may be  required  if all  such
Registrable  Securities covered by such registration statement are sold prior to
the expiration of such six (6)-month period; provided, however, that the Company
shall be obligated to effect only one such registration pursuant to this Section
9.1. For purposes of this Section 9.1(a), a registration  shall not be deemed to
have  been  effected  unless  a  registration   statement   including  at  least
eighty-five  percent (85%) of the  Registrable  Shares  requested to be included
therein has been  declared  effective  and,  subject to Section  9.3(b)  hereof,
remained  effective for a period of six (6) months (or such shorter period as is
permitted in clause (iv) of the first sentence of this Section 9.1(a)).

                  b. The foregoing Section 9.1(a) notwithstanding,  in the event
of an  underwritten  offering  pursuant to this  Section  9.1,  if the  managing
underwriter of such offering shall advise the  Securityholders  in writing that,
in its  opinion,  the  distribution  of a  specified  portion of the  securities
requested to be included in the registration  would materially  adversely affect
the  distribution of such  securities by increasing the aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can reasonably be sold in the  contemplated  distribution,
then the securities to be included in the  registration  shall be reduced in the
following  order: (i) first,  securities  proposed to be included by the Company
and  securities  that  are not  Registrable  Securities  shall  be  excluded  as
determined  by the  Company  and (ii)  second,  Registrable  Securities  will be
excluded  pro rata  among  all of the  Registrable  Securities  requested  to be
included therein. For purposes of this Section 9.1, the Securityholders who have
requested  registration  of Common  Stock to be  acquired  upon the  exercise of
Warrants not theretofore exercised shall furnish the Company with an undertaking
that they or the  underwriters  or other  persons to whom such  Warrants will be
transferred  have undertaken to exercise such Warrants and to sell,  transfer or
otherwise  dispose of the Shares received upon exercise of such Warrants in such
registration.

                                      -11-
<PAGE>

         9.2      Incidental Registration

                  a. Subject to Section 9.2(b) below, the Company  covenants and
agrees that in the event the Company  proposes after the Date of Grant to file a
registration  statement  under  the  Act  with  respect  to any  of  its  equity
securities  (other than pursuant to registration  statements on Form S-4 or Form
S-8 or any successor or similar forms and other than  registrations  pursuant to
Section 9.1 hereof),  whether or not for its own account, then the Company shall
give written notice of such proposed filing to all Securityholders promptly (and
in any event at least twenty (20) days before the anticipated filing date). Such
notice  shall  offer to such  Securityholders,  together  with  others  who have
similar rights,  the opportunity to include in such registration  statement such
number of  Registrable  Securities as they may request  (other than  Registrable
Securities already registered pursuant to a Shelf Registration  Statement).  The
Company shall direct and use its  reasonable  best efforts to cause the managing
underwriter  of a proposed  underwritten  offering  (unless  the  offering is an
underwritten  offering of a class of the Company's equity  securities other than
Common  Stock and the  managing  underwriter  has advised the Company in writing
that,  in its  opinion,  the  inclusion  in such  offering of Common Stock would
materially  adversely  affect the  distribution  of such offering) to permit the
holders of Registrable  Securities  requested to be included in the registration
to include such Registrable  Securities in the proposed offering and the Company
shall use its reasonable best efforts to include such Registrable  Securities in
such  proposed  offering  on the  same  terms  and  conditions  as  any  similar
securities of the Company included therein. If the offering of which the Company
gives  notice is a public  offering  involving  an  underwriter,  the right of a
Securityholder to registration pursuant to this Section 9.2 shall be conditioned
upon  (i)  such  Securityholder's  participation  in such  underwriting  and the
inclusion of the Registrable Securities to be sold by such Securityholder in the
underwriting and (ii) such  Securityholder  executing an underwriting  agreement
entered  into by the  Company  which  includes  customary  terms and  conditions
relating to sales by shareholders. The foregoing notwithstanding, in the case of
a  firm  commitment  offering  on  underwriting  terms  appropriate  for  such a
transaction,  other than a registration requested by Securityholders pursuant to
Section 9.1, if any such  managing  underwriter  of  recognized  standing  shall
advise the Company and the Securityholders in writing that, in its opinion,  the
distribution  of all  or a  specified  portion  of  the  Registrable  Securities
requested to be included in the  registration  concurrently  with the securities
being  registered  by  the  Company  would   materially   adversely  affect  the
distribution  of such  securities  by  increasing  the  aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can reasonably be sold in the  contemplated  distribution,
then  the  securities  to be  included  in a  registration  which  is a  primary
underwritten offering on behalf of the Company shall be reduced in the following
order: (i) first,  Registrable Securities and such other securities requested to
be included by holders of such other  securities  shall be excluded pro rata and
(ii) second the  securities  the Company  proposes to include  therein  shall be
excluded.

                  b. In the event  that a holder  or  holders  of the  Company's
securities (other than a Securityholder or Securityholders)  requests,  pursuant
to  rights  granted  to  such  holder  or  holders,  that  the  Company  file  a
registration statement for the public offering of securities and the Company and
the other holders of the Company's  securities  (including the  Securityholders)
who have rights to be included in such  registration,  request to be included in

                                      -12-
<PAGE>>
such registration and the managing underwriter of such offering shall advise the
Company  and the holders  requesting  inclusion  in the  offering  that,  in its
opinion,  the distribution of a specified portion of the securities requested to
be  included  in  the  registration   would  materially   adversely  affect  the
distribution  of such  securities  by  increasing  the  aggregate  amount of the
offering  in excess of the  maximum  amount of  securities  which such  managing
underwriter  believes can  reasonably be sold in the  contemplated  distribution
then, the securities to be included in the registration  shall be reduced in the
following order:  (i) first, any securities  requested to be included therein by
the  holders  of such other  securities  in such a manner as  determined  by the
Company,  (ii) second  Registrable  Securities shall be excluded pro rata, (iii)
securities  proposed to be included by the Company  shall be excluded  and, (iv)
fourth,  securities  requested  to be included  therein by the holder or holders
making the initial  request for the  registration.  For purposes of this Section
9.2(b),  the Company  agrees to request for inclusion in the  registration  only
that number of securities that the Company  intends,  in good faith, to sell, if
all such securities so requested by the Company were permitted to be included by
the managing underwriter in such registration and sold pursuant thereto.

         9.3      Company's Obligations

                  a.  In  connection   with  the   registration  of  Registrable
Securities on behalf of the holders thereof (such Securityholders being referred
to herein as "Sellers") in accordance with Section 9.1 or Section 9.2 above, and
in addition to its other  obligations  under this Section 9, the Company  agrees
to:

                           (i)      with  respect to any  registration  pursuant
to  Section  9.1(a)  or  Section  9.1(b),  prepare  and  file  with  the  SEC  a
registration  statement on the form  specified in such section,  with respect to
the Registrable Securities to be registered pursuant to such section, and to use
its best  efforts  to cause  such  registration  statement  to become and remain
effective as provided in such section;

                           (ii)  enter  into  a  cross-indemnity  agreement,  in
customary form, with each underwriter, if any, and each
Seller;

                           (iii)    subject  to the  provisions  of Section  9.1
and Section 9.2 regarding reductions in Registrable Securities to be included in
a registration,  include in the  registration  statement filed with the SEC, the
Registrable  Securities for which requests for registration  have been made (or,
in the  case of a  registration  under  Section  9.1(a),  all  such  Registrable
Securities),   promptly  after  filing  of  such  a  registration  statement  or
prospectus or any  amendments  or  supplements  thereto,  furnish to each Seller
copies  of  all  such  documents  filed  including,   if  requested,   documents
incorporated by reference in the registration statement,  and notify each Seller
of any stop order  issued or  threatened  by the SEC and use its best efforts to
prevent the entry of such stop order or to remove it if entered;

                           (iv) subject to Section 9.3(b), prepare and file with
the SEC such  amendments of and supplements to such  registration  statement and
the  prospectus  used in  connection  therewith as may be necessary to keep such
registration  statement effective with respect to a registration statement under

                                      -13-
<PAGE>

Section  9.1 or  Section  9.2,  for a period of six (6)  months or such  shorter
period as may be required  if all such  Registrable  Securities  covered by such
registration  statement  are sold prior to the  expiration of such period and to
otherwise  comply with the provisions of the Act with respect to the disposition
of all securities  covered by such registration  statement during such period in
accordance with the intended  methods of disposition by the Sellers set forth in
such registration statement;

                           (v) furnish to each Seller and each  underwriter,  if
any, without charge, such number of copies of the registration  statement,  each
amendment and supplement  thereto (in each case including all exhibits thereto),
the  prospectus  included  in  such  registration   statement   (including  each
preliminary  prospectus)  and such other documents as such Seller may reasonably
request in order to facilitate  the  disposition of the  Registrable  Securities
proposed to be sold by such Seller;

                           (vi) use its  reasonable  best efforts to register or
qualify such Registrable Securities under such other securities or Blue Sky laws
of such jurisdictions as any Seller or any such underwriter  reasonably requests
in writing and keep such  registrations or  qualifications in effect for so long
as such  registration  statement  remains  in effect and do any and all acts and
things which may be  reasonably  necessary or advisable to enable such Seller to
consummate the disposition in such  jurisdictions of the Registrable  Securities
owned by such Seller; provided,  however, that the Company shall not be required
to (A) qualify  generally to do business in any jurisdiction  where it would not
otherwise  be  required to qualify but for this  Subsection  9.3(a)(vi),  or (B)
consent to general service of process in any such jurisdiction;

                           (vii)  notify  each  Seller,   at  any  time  when  a
prospectus  relating to such Seller's  Registrable  Securities is required to be
delivered under the Act, of the occurrence of any event as a result of which the
prospectus included in such registration  statement contains an untrue statement
of a material  fact or omits to state any  material  fact  necessary to make the
statements  therein  not  misleading,  and as  soon  as  practicable  prepare  a
supplement or amendment to such  prospectus so that, as thereafter  delivered to
the purchasers of such Registrable Securities,  such prospectus will not contain
an  untrue  statement  of a  material  fact or omit to state any  material  fact
necessary to make the statements therein not misleading;

                           (viii) cause all such  Registrable  Securities  to be
listed  on any  Exchange  or NASDAQ on which  similar  securities  issued by the
Company are then listed;

                           (ix) provide a transfer  agent,  registrar  and CUSIP
number for all such Registrable  Securities not later than the effective date of
such registration statement;

                           (x) enter into such customary  agreements  (including
an  underwriting  agreement in customary  form) and take all such other  actions
that the Sellers or the  underwriters,  if any,  reasonably  request in order to
expedite or facilitate the disposition of such Registrable Securities;

                                      -14-
<PAGE>

                           (xi) make available for inspection by the Sellers and
their counsel, any underwriter participating in any disposition pursuant to such
registration  statement,  and any counsel retained by any such underwriter,  all
pertinent  financial  and  other  information  and  corporate  documents  of the
Company, and cause the Company's officers, directors and employees to supply all
information  reasonably requested by any such Seller,  underwriter or counsel in
connection with such registration statement;

                           (xii) with respect to any underwritten  offering, use
its reasonable best efforts to obtain a "cold comfort" letter from the Company's
independent  public  accountants  in customary form and covering such matters of
the type  customarily  covered by "cold  comfort"  letters as the Sellers or any
underwriter may reasonably request;

                           (xiii)  with  respect  to an  underwritten  offering,
obtain an opinion of counsel to the  Company,  addressed  to the Sellers and any
underwriter,  in customary  form and including  such matters as are  customarily
covered  by  such  opinions  in  underwritten  registered  offerings  of  equity
securities  as the  Sellers or any  underwriter  may  reasonably  request,  such
opinion to be reasonably satisfactory in form and substance to each Seller; and

                           (xiv)  otherwise  use its best efforts to comply with
all  applicable  rules and  regulations  of the SEC,  and make  available to its
Securityholders,  as soon  as  reasonably  practicable,  an  earnings  statement
covering the period of at least twelve (12) months  subsequent  to the effective
date of the registration  statement,  which earnings statement shall satisfy the
provisions of Section 11(a) of the Act and Rule 158 thereunder.

                  b. Any other  provisions  of this  Section 9  notwithstanding,
upon  receipt by the  Securityholders  of a written  notice  signed by the chief
executive  officer or chief  financial  officer of the Company to the effect set
forth below,  the Company shall not be obligated  during a reasonable  period of
time (not to exceed ninety (90) days) thereafter (i) to effect any registrations
pursuant  to  this  Section  9 or  (ii)  with  respect  to  an  effective  Shelf
Registration  Statement,  may suspend  the  effectiveness  of such  registration
statement, at any time at which, in the Company's reasonable judgment, (i) there
is a  development  involving  the  Company  or any of its  affiliates  which  is
material but which has not yet been publicly disclosed or (ii) sales pursuant to
the registration statement would materially and adversely affect an underwritten
public  offering for the account of the Company or any other material  financing
project or a proposed or pending  material merger or other material  acquisition
or material  business  combination  or  material  disposition  of the  Company's
assets,  to which the Company or any of its affiliates is, or is expected to be,
a party.  In the event a  registration  is  postponed  in  accordance  with this
Section  9.3(b),  (x) the Company must  (unless  otherwise  instructed  by those
holders who requested such registration) file the requested  registration within
nine (9) months  from the date the  Company  first  received  the request of the
holders, (y) the Company may not defer the filing of a requested registration or
suspend the  effectiveness of a Shelf  Registration  Statement  pursuant to this
Section 9.3(b) more than once in any eighteen  (18)-month  period, and (z) there
shall be added to any period  during  which the Company is  obligated  to keep a
registration  effective  the  number  of days for  which  the  registration  was
postponed pursuant to this Section 9.3(b).

                                      -15-
<PAGE>

                  c. The Company may require that each Seller, as a condition to
registering his, her or its Registrable  Securities pursuant hereto, furnish the
Company with such  information  regarding the  distribution  of the  Registrable
Securities  proposed  to be sold by such  Seller as the Company may from time to
time reasonably request in writing.

                  d. Each Seller  agrees  that,  upon receipt of any notice from
the  Company of the  occurrence  of any event of the kind  described  in Section
9.3(a)(vii)  above,  such Seller  shall  forthwith  discontinue  disposition  of
Registrable  Securities  pursuant to the  registration  statement  covering such
Registrable Securities until such Seller's receipt of copies of the supplemented
or amended  prospectus  contemplated  by Section  9.3(a)(vii)  above and,  if so
directed  by the  Company,  such  Seller  will  deliver to the  Company  (at the
Company's expense) all copies, other than permanent file copies in such Seller's
possession,  of the prospectus  covering such Registrable  Securities current at
the time of receipt of such notice. In the event the Company shall give any such
notice,  the period  mentioned in Section  9.3(a)(iv) above shall be extended by
the number of days  during the period from and  including  the date of giving of
such notice to and  including  the date when each Seller shall have received the
copies  of the  supplemented  or  amended  prospectus  contemplated  by  Section
9.3(a)(vii) above.

                  e. The  Company  shall  not file or permit  the  filing of any
registration  or  comparable  statement  which  refers to any  Seller by name or
otherwise as the Seller of any  securities of the Company  unless such reference
to such Seller is agreed to by the Seller or is specifically required by the Act
or any similar federal statute then in force.

         9.4  Fees  and  Expenses.   All  expenses  incident  to  the  Company's
performance  of or  compliance  with this Warrant shall be borne by the Company,
including without limitation all registration and filing fees, fees and expenses
relating  to filings  with any  Exchange  and/or  NASDAQ,  fees and  expenses of
compliance  with  securities  or  Blue  Sky  laws  in  jurisdictions  reasonably
requested by any Seller or underwriter pursuant to Section 9.3(a)(vi) (including
reasonable  fees and  disbursements  of  counsel  in  connection  with  Blue Sky
qualifications of the Registrable Securities), all word processing,  duplicating
and printing expenses,  messenger and delivery expenses,  fees and disbursements
of counsel for the Company  and one (1)  counsel  for the Sellers  (selected  by
those  Sellers  owning  a  majority  of the  Registrable  Securities),  fees and
expenses  of  independent  public  accountants  (including  the  expenses of any
special  audit  or  "cold  comfort"  letters  required  by or  incident  to such
performance),   fees  and  expenses  of   underwriters   (excluding   discounts,
commissions or fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals  attributable directly to the securities being
registered,  which  discounts,  commissions or fees with respect to any Seller's
respective  shares shall be paid by such  Seller),  all the  Company's  internal
expenses  (including,  without  limitation,  all  salaries  and  expenses of its
officers and employees  performing legal or accounting  duties),  the expense of
any  annual  audit,  the  expense of any  liability  insurance  (if the  Company
determines  to  obtain  such  insurance),  the fees  and  expenses  incurred  in
connection  with the listing of the  securities to be registered on any Exchange
and/or  NASDAQ on which such  securities  issued by the Company are then listed,
the reasonable  fees and expenses of any special experts  (including  attorneys)
retained by the Company (if it so desires) in connection with such registration,
and fees and  expenses  of other  persons  retained  by the  Company  (all  such
expenses being herein called "Registration Expenses").

                                      -16-
<PAGE>

         9.5  Participation.  In connection  with the  preparation and filing of
each  registration  statement  under the Act  pursuant  to this  Section  9, the
Company  shall  give  the  Sellers  under  such  registration  statement,  their
underwriters,  if  any,  and  their  respective  counsel  and  accountants,  the
opportunity to participate in the  preparation of such  registration  statement,
each  prospectus  included  therein  or filed with the SEC,  and each  amendment
thereof or  supplement  thereto,  and will give each of them such  access to its
books and records and such  opportunities to discuss the business of the Company
with its officers and the independent  public accountants who have certified its
financial statements as shall be necessary,  in the opinion of such Sellers' and
such underwriters'  respective  counsel,  to conduct a reasonable  investigation
within the meaning of the Act.

         9.6      Indemnification

                  a. In the event of any  registration  of any securities of the
Company under the Act, the Company  shall,  and hereby does,  indemnify and hold
harmless in the case of any registration statement filed pursuant to Section 9.1
or Section 9.2 above, the Seller of any Registrable  Securities  covered by such
registration  statement,  its directors,  officers,  employees and agents,  each
other person who  participates as an underwriter in the offering or sale of such
Registrable  Securities and each other person,  if any, who controls such Seller
or any such  underwriter  within the  meaning  of the Act  against  any  losses,
claims,  damages, or liabilities (or actions or proceedings whether commenced or
threatened in respect  thereof),  joint or several,  to which such Seller or any
such  director  or officer or employee or agent or  underwriter  or  controlling
person may become  subject under the Act or  otherwise,  insofar as such losses,
claims, damages, or liabilities (or actions or proceedings, whether commenced or
threatened,  in  respect  thereof)  arise  out of or are based  upon any  untrue
statement or alleged  untrue  statement of any  material  fact  contained in any
registration  statement under which such Registrable  Securities were registered
under  the  Act,  any  preliminary  prospectus,   final  prospectus  or  summary
prospectus  contained therein,  or any amendment or supplement  thereto,  or any
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements  therein not misleading,  and
the  Company  shall  reimburse  such  Seller  and each such  director,  officer,
employee,  agent,  underwriter and controlling person for any legal or any other
expenses  reasonably  incurred  by  them in  connection  with  investigating  or
defending any such loss,  claim,  liability,  action,  or proceeding;  provided,
however,  that the  Company  shall not be liable in any such case to the  extent
that any such loss, claim, damage,  liability (or action or proceeding,  whether
commenced or  threatened  in respect  thereof),  or expense  arises out of or is
based upon an untrue  statement  or alleged  untrue  statement  or  omission  or
alleged  omission  made in such  registration  statement,  any such  preliminary
prospectus,  final prospectus,  summary prospectus,  amendment, or supplement in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such Seller for the express purpose of use in the preparation thereof
and, provided, further, that the Company shall not be liable in any such case to
the  extent  that  any  such  loss,  claim,  damage,  liability  (or  action  or
proceeding,  whether commenced or threatened,  in respect  thereof),  or expense
arises  out of such  person's  failure  to  send  or  give a copy  of the  final
prospectus,  as the same may be then  supplemented  or amended,  within the time
required  by the Act to the  person  asserting  an untrue  statement  or alleged
untrue  statement or omission or alleged  omission if such statement or omission
was  corrected in such final  prospectus.  Such  indemnity  shall remain in full
force and effect  regardless of any  investigation  made by or on behalf of such
Seller  or  any  such  director,   officer,   employee,  agent,  underwriter  or
controlling person and shall survive the transfer of such Registrable Securities
by such Seller.

                                      -17-
<PAGE>

                  b. In the event  that the  Company  includes  any  Registrable
Securities of a prospective Seller in any registration  statement filed pursuant
to Section 9.1 or Section 9.2 above,  such prospective  Seller shall, and hereby
does,  indemnify  and  hold  harmless  the  Company,  its  directors,  officers,
employees and agents,  each other person who  participates  as an underwriter in
the offering or sale of such  Registrable  Securities and each other person,  if
any, who controls the Company or any such underwriter  within the meaning of the
Act  against  any  losses,  claims,  damages,  or  liabilities  (or  actions  or
proceedings  whether  commenced  or  threatened  in respect  thereof),  joint or
several,  to which the  Company or any such  director  or officer or employee or
underwriter or controlling person may become subject under the Act or otherwise,
insofar  as  such  losses,  claims,  damages,  or  liabilities  (or  actions  or
proceedings,  whether commenced or threatened,  in respect thereof) arise out of
or are based  upon any  untrue  statement  or alleged  untrue  statement  of any
material  fact  contained  in  any  registration   statement  under  which  such
Registrable   Securities  were   registered   under  the  Act,  any  preliminary
prospectus,  final prospectus or summary prospectus  contained  therein,  or any
amendment or supplement  thereto,  or any omission or alleged  omission to state
therein a material fact  required to be stated  therein or necessary to make the
statements  therein not misleading,  and such prospective Seller shall reimburse
the Company and any such  director,  officer,  employee,  agent,  underwriter or
controlling  person for any legal or any other expenses  reasonably  incurred by
them in  connection  with  investigating  or  defending  any such  loss,  claim,
liability,  action,  or  proceeding  if, and only if, such  statement or alleged
statement  or omission  or alleged  omission  was made in  reliance  upon and in
conformity  with  written  information  furnished  to  the  Company  through  an
instrument duly executed by such Seller specifically  stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus,  amendment, or supplement. In no event shall the
liability of any Seller hereunder be greater in amount than the dollar amount of
the proceeds received by such Seller upon the sale of the Registrable Securities
giving rise to such indemnification  obligation.  Such indemnity shall remain in
full force and effect  regardless of any  investigation  made by or on behalf of
the Company or any such  director,  officer,  employee,  agent,  underwriter  or
controlling person and shall survive the transfer of such Registrable Securities
by such Seller.

                  c. The Company shall be entitled to receive  indemnities  from
underwriters,  selling brokers, dealer managers, and similar securities industry
professionals  participating  in the distribution to the same extent as provided
above with  respect  to  information  so  furnished  in writing by such  persons
specifically for inclusion in any prospectus or registration statement.

                  d. Promptly after receipt by an indemnified party of notice of
the  commencement  of any action or proceeding  involving a claim referred to in
this Section 9.6, such indemnified party shall, if a claim in respect thereof is
to be made against an indemnifying  party,  give written notice to the latter of
the  commencement  of such action;  provided,  however,  that the failure of any

                                      -18-
<PAGE>

indemnified  party to give  notice as  provided  herein  shall not  relieve  the
indemnifying  party of its obligations under the preceding  subdivisions of this
Section  9.6,  except to the  extent  that the  indemnifying  party is  actually
prejudiced  by such failure to give  notice.  In case any such action is brought
against an indemnified  party,  unless in such  indemnified  party's  reasonable
judgment a conflict  of  interest  between  such  indemnified  and  indemnifying
parties  may exist in respect of such  claim,  the  indemnifying  party shall be
entitled to participate in and to assume the defense  thereof,  jointly with any
other indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably  satisfactory to such indemnified party,
and after notice from the indemnifying  party to such  indemnified  party of its
election so to assume the defense thereof,  the indemnifying  party shall not be
liable to such  indemnified  party for any legal or other expenses  subsequently
incurred  by the  latter in  connection  with the  defense  thereof  other  than
reasonable costs of  investigation.  If, in the indemnified  party's  reasonable
judgment a conflict  of  interest  between  such  indemnified  and  indemnifying
parties may exist in respect of such claim, the indemnified party may assume the
defense of such claim,  jointly with any other indemnified party that reasonably
determines such conflict of interest to exist, and the indemnifying  party shall
be liable to such indemnified parties for the reasonable legal fees and expenses
of one  counsel  for  all  such  indemnified  parties  and  for  other  expenses
reasonably  incurred  in  connection  with the defense  thereof  incurred by the
indemnified  party.  No  indemnifying  party  shall,  without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an  unconditional  term thereof the
giving by the claimant or plaintiff to such indemnified  party of a release from
all liability, or a covenant not to sue, in respect of such claim or litigation.
No  indemnified  party shall  consent to entry of any judgment or enter into any
settlement  of any such  action  the  defense  of which has been  assumed  by an
indemnifying party without the consent of such indemnifying party.

                  e.  Indemnification and contribution similar to that specified
in this  Section  9.6  (with  appropriate  modifications)  shall be given by the
Company and each  Seller  with  respect to any  required  registration  or other
qualification  of  Registrable  Securities  under  any  Federal  or state law or
regulation of any governmental authority, other than the Act.

                  f. The  indemnification  required by this Section 9.6 shall be
made by  periodic  payments  of the  amount  thereof  during  the  course of the
investigation  or defense,  as and when bills are  received  or  expense,  loss,
damage or liability is incurred.

                  g. If the  indemnification  provided  for in this  Section 9.6
from the indemnifying  party is unavailable to an indemnified party hereunder in
respect of any losses,  claims,  damages,  liabilities,  or expenses referred to
herein,  then the indemnifying  party, in lieu of indemnifying  such indemnified
party,  shall contribute to the amount paid or payable by such indemnified party
as a result  of  losses,  claims,  damages,  liabilities,  or  expenses  in such
proportion as is appropriate  to reflect the relative fault of the  indemnifying
party and  indemnified  party in connection  with the actions which  resulted in
such losses,  claims,  damages,  liabilities,  or expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying party
and  indemnified  party shall be determined by reference to, among other things,
whether any action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has

                                      -19-
<PAGE>

been made by, or relates to information  supplied by, such indemnifying party or
indemnified  party,  and the  parties'  relative  intent,  knowledge,  access to
information,  and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims,  damages,  liabilities,
and  expenses  referred  to above  shall be deemed to include any legal or other
fees or  expenses  reasonably  incurred  by such  party in  connection  with any
investigation  or  proceeding.  In no event  shall the  liability  of any Seller
hereunder be greater in amount than the dollar  amount of the proceeds  received
by such Seller upon the sale of the Registrable  Securities  giving rise to such
contribution obligation.  The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 9.6(g) were determined by pro
rata  allocation or by any other method of  allocation  which does not take into
account the  equitable  considerations  referred to in this Section  9.6(g).  No
person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Act) shall be  entitled to  contribution  from any person or entity
who was not guilty of such fraudulent misrepresentation.

         9.7      Assignment of Rights; Termination.

         The  rights  granted  under  this  Section  9 may  be  assigned  to the
transferee of any of the  Registrable  Securities and will terminate on the five
(5) year anniversary of the Expiration Date.
10.  Representations and Warranties.

                  The  Company  represents  and  warrants  to the holder of this
Warrant as follows:

                  a. This Warrant has been duly  authorized  and executed by the
Company and is a valid and binding  obligation  of the  Company  enforceable  in
accordance with its terms,  subject to laws of general  application  relating to
bankruptcy,  insolvency  and the  relief  of  debtors  and the  rules  of law or
principles at equity governing specific performance, injunctive relief and other
equitable remedies;

                  b. The Warrant  Shares have been duly  authorized and reserved
for  issuance  by the Company  and,  when  issued in  accordance  with the terms
hereof, will be validly issued, fully paid and nonassessable;

                  c.  The  rights,  preferences,   privileges  and  restrictions
granted to or imposed upon the Common  Stock and the holders  thereof are as set
forth in the certificate of incorporation of the Company, as amended to the Date
of Grant (as so amended,  the "Charter"),  a true and complete copy of which has
been delivered to the original holder of this Warrant;

                  d. The execution and delivery of this Warrant are not, and the
issuance of the Warrant Shares upon exercise of this Warrant in accordance  with
the terms  hereof will not be,  inconsistent  with the Charter or by-laws of the
Company,  do  not  and  will  not  contravene,  in  any  material  respect,  any
governmental  rule or regulation,  judgment or order  applicable to the Company,
and do not and will  not  conflict  with or  contravene  any  provision  of,  or
constitute  a  default  under,  any  indenture,   mortgage,  contract  or  other
instrument  of which the  Company  is a party or by which it is bound or require
the consent or approval of, the giving of notice to, the  registration or filing

                                      -20-
<PAGE>

with or the taking of any action in  respect  of or by,  any  Federal,  state or
local government  authority or agency or other person,  except for the filing of
notices  pursuant to federal and state  securities  laws,  which filings will be
effected by the time required thereby;

                  e. There are no  actions,  suits,  audits,  investigations  or
proceedings pending or, to the knowledge of the Company,  threatened against the
Company in any court or before any governmental  commission,  board or authority
which,  if  adversely  determined,  will have a material  adverse  effect on the
ability of the Company to perform its obligations under this Warrant;

                  f. Intentionally omitted.

                  g. Intentionally omitted.

                  h. The Company is not subject to any obligation (contingent or
otherwise)  to  repurchase  or  otherwise  acquire  or retire  any shares of its
capital stock or any security  convertible  into or exchangeable  for any of its
capital stock.

         10.      Modification and Waiver.

         This  Warrant  and  any  provision  hereof  may  be  changed,   waived,
discharged  or terminated  only by an instrument in writing  signed by the party
against which enforcement of the same is sought.

         11.      Notices.

         Unless otherwise specifically provided herein, all communications under
this Warrant shall be in writing and shall be deemed to have been duly given (i)
on the date of service if served personally on the party to whom notice is to be
given,  (ii) on the day of transmission  if sent by facsimile  transmission to a
number  provided  to a party  specifically  for such  purposes,  and  telephonic
confirmation of receipt is obtained  promptly after  completion of transmission,
(iii) on the day after delivery to Federal Express or similar overnight courier,
or (iv) 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, return receipt requested, to each such holder at its address
as shown on the books of the Company or to the Company at the address  indicated
therefor on the signature page of this Warrant.  Any party hereto may change its
address for purposes of this Section 11 by giving the other party written notice
of the new address in the manner set forth herein.

                                      -21-
<PAGE>

         12.      Binding Effect on Successors.

         This  Warrant  shall be binding  upon any  corporation  succeeding  the
Company by merger,  consolidation or acquisition of all or substantially  all of
the Company's assets,  and all of the obligations of the Company relating to the
Common Stock  issuable  upon the exercise or  conversion  of this Warrant  shall
survive the exercise,  conversion and termination of this Warrant and all of the
covenants  and  agreements  of the  Company  shall  inure to the  benefit of the
successors  and assigns of the holder  hereof.  The Company will, at the time of
the exercise or conversion of this Warrant, in whole or in part, upon request of
the holder  hereof but at the  Company's  expense,  acknowledge  in writing  its
continuing obligation to the holder hereof in respect of any rights to which the
holder hereof shall continue to be entitled after such exercise or conversion in
accordance with this Warrant; provided, that the failure of the holder hereof to
make any such request shall not affect the continuing  obligation of the Company
to the holder hereof in respect of such rights.

         13.      Lost Warrants or Stock Certificates.

         The  Company  covenants  to the holder  hereof  that,  upon  receipt of
evidence reasonably satisfactory to the Company of the loss, theft,  destruction
or mutilation of this Warrant or any stock  certificate  and, in the case of any
loss, theft or destruction,  upon receipt of an executed lost securities bond or
indemnity  reasonably  satisfactory  to the Company,  or in the case of any such
mutilation upon surrender and cancellation of such Warrant or stock certificate,
the Company  will make and deliver a new Warrant or stock  certificate,  of like
tenor,  in lieu of the lost,  stolen,  destroyed or  mutilated  Warrant or stock
certificate.

         14.      Descriptive Headings.

         The descriptive  headings of the several paragraphs of this Warrant are
inserted for convenience only and do not constitute a part of this Warrant.

         15. Governing Law. The validity, interpretation and performance of this
Warrant shall be governed by, and construed in accordance  with, the laws of the
State of California  applicable to contracts  made and to be performed  entirely
within such State,  regardless of the law that might be applied under principles
of conflicts of law.

         16. Survival of Representations, Warranties and Agreements. Each of the
respective  representations  and warranties of the Company and the holder hereof
contained  herein shall survive the Date of Grant, the exercise or conversion of
this  Warrant (or any part  hereof) and the  termination  or  expiration  of any
rights hereunder.  Each of the respective  agreements of each of the Company and
the holder hereof  contained herein shall survive  indefinitely  until, by their
respective terms, they are no longer operative.  Without limiting the generality
of the foregoing sentence,  the registration rights contained in Section 9 above
shall  survive the exercise or  conversion  of this Warrant (or any part hereof)
and the termination or expiration of any other rights hereunder.

                                      -22-
<PAGE>
         17.      Remedies.

         In case any one (1) or more of the covenants and  agreements  contained
in this Warrant shall have been  breached,  the holders hereof (in the case of a
breach by the  Company),  or the  Company (in the case of a breach by a holder),
may proceed to protect and enforce  their or its rights either by suit in equity
and/or by action at law, including, but not limited to, an action for damages as
a result of any such breach  and/or an action for  specific  performance  of any
such covenant or agreement contained in this Warrant.

         18.      Acceptance.

         Receipt  of  this  Warrant  by  the  holder  hereof  shall   constitute
acceptance of and agreement to the foregoing terms and conditions.

         19.      No Impairment of Rights.

         The Company  will not, by amendment of its Charter or through any other
means,  avoid or seek to avoid the observance or performance of any of the terms
of this Warrant,  but will at all times in good faith assist in the carrying out
of all such terms and in the taking of all such  action as may be  necessary  or
appropriate in order to protect the rights of the holder of this Warrant against
material impairment.

         20. Amendment.  This Warrant may be amended by written agreement of the
Company  and  holders  of  65%  of  the  Warrant  Shares,   collectively  on  an
as-exercised  basis,  and such amendment shall be binding on all holders of this
Warrant or Warrant Shares.

[Signature page follows.]

                                      -23-
<PAGE>

IN WITNESS  WHEREOF,  the Company has caused this  Warrant to be executed on its
behalf by one of its officers thereunto duly authorized.

IMMUNOMEDICS, INC.

         By:   /s/ David M. Goldenberg
               Name:  David M. Goldenberg
               Title: Chairman and Chief Executive Officer
               Address:

Dated:  as of December 16, 1999

                                      -24-
<PAGE>

                                    EXHIBIT A
                               NOTICE OF EXERCISE

To:      IMMUNOMEDICS, INC.

1. The  undersigned  hereby  elects to purchase  _____ shares of Common Stock of
______________________  pursuant  to the  terms  of the  attached  Warrant,  and
tenders herewith payment of the purchase price of such shares in full.

2. Please issue a certificate or  certificates  representing  said shares in the
name of the undersigned or in such other name or names as are specified below:

------------------------------

------------------------------
               (Name)

------------------------------
               (Address)

3. The undersigned  represents that the aforesaid  shares are being acquired for
the account of the  undersigned  for  investment  and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present  intention  of  distributing  or reselling  such  shares.  In support
thereof,  the  undersigned has executed an Investment  Representation  Statement
attached hereto as Schedule 1.

_________________________ (Signature)
__________________(Date)

4.  Please  issue a new  Warrant  for the  unexercised  portion of the  attached
Warrant in the name of the  undersigned  or in such  other name as is  specified
below:

------------------------------------------

Date: _________________________
                                                  By:

(Warrantholder) _________________________

Name: (Print) ______________________________

                                                  Its:

--------------------------------------

                                      -25-
<PAGE>

                                   Schedule 1
                       INVESTMENT REPRESENTATION STATEMENT

Purchaser:  _______________________________
Company:    IMMUNOMEDICS, INC.
Security:   Common Stock
Amount:     _____________________________
Date:       _____________________________

In connection with the purchase of the above-listed securities (the "Registrable
Securities"),  the undersigned  (the  "Purchaser")  represents to the Company as
follows:

(a) The  Purchaser  is aware of the  Company's  business  affairs and  financial
condition, and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Registrable  Securities.  The
Purchaser  is  purchasing  the  Registrable  Securities  for its own account for
investment purposes only and not with a view to, or for the resale in connection
with, any "distribution"  thereof for purposes of the Registrable Securities Act
of 1933, as amended (the "Act").

(b) The Purchaser  understands  that the  Registrable  Securities  have not been
registered under the Act in reliance upon a specific exemption therefrom,  which
exemption  depends  upon,  among  other  things,  the bona  fide  nature  of the
Purchaser's  investment  intent as expressed  herein.  In this  connection,  the
Purchaser  understands  that,  in the  view of the  Registrable  Securities  and
Exchange  Commission  ("SEC"),  the  statutory  basis for such  exemption may be
unavailable  if the  Purchaser's  representation  was  predicated  solely upon a
present intention to hold these  Registrable  Securities for the minimum capital
gains period  specified  under  applicable tax laws, for a deferred sale, for or
until an increase or decrease in the market price of the Registrable Securities,
or for a period of one year or any other fixed period in the future.

(c) The Purchaser  further  understands that the Registrable  Securities must be
held  indefinitely  unless  subsequently  registered  under the Act or unless an
exemption from registration is otherwise available.  In addition,  the Purchaser
understands that the certificate  evidencing the Registrable  Securities will be
imprinted with the legend referred to in the Warrant under which the Registrable
Securities are being purchased.

(d) The Purchaser is aware of the  provisions of Rule 144 and 144A,  promulgated
under the Act, which, in substance,  permit limited public resale of "restricted
securities" acquired,  directly or indirectly,  from the issuer thereof (or from
an  affiliate  of  such  issuer),  in  a  non-public  offering  subject  to  the
satisfaction  of certain  conditions,  if  applicable,  including,  among  other
things:  The availability of certain public  information about the Company,  the
resale  occurring  not less than one (1) year after the party has  purchased and
paid for the  securities to be sold;  the sale being made through a broker in an
unsolicited  "broker's  transaction" or in  transactions  directly with a market
maker (as said term is defined under the Registrable  Securities Exchange Act of
1934, as amended) and the amount of securities being sold during any three-month
period not exceeding the specified limitations stated therein.

                                      -26-
<PAGE>

(e) The  Purchaser  further  understands  that at the time it wishes to sell the
Registrable  Securities  there may be no public market upon which to make such a
sale, and that, even if such a public market then exists, the Company may not be
satisfying the current public information requirements of Rule 144 and 144A, and
that, in such event, the Purchaser may be precluded from selling the Registrable
Securities  under Rule 144 and 144A even if the one-year  minimum holding period
had been satisfied.

(f) The Purchaser further  understands that in the event all of the requirements
of Rule 144 and 144A are not satisfied,  registration under the Act,  compliance
with Regulation A, or some other  registration  exemption will be required;  and
that,  notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
SEC has expressed its opinion that persons  proposing to sell private  placement
securities  other than in a registered  offering and otherwise  than pursuant to
Rule 144 will  have a  substantial  burden  or  proof  in  establishing  that an
exemption from registration is available for such offers or sales, and that such
persons and their respective  brokers who participate in such transactions do so
at their own risk.

Purchaser:___________________

                                      -27-
<PAGE>ALLIED WASTE INDUSTRIES, INC.
                 AMENDED AND RESTATED 1991 INCENTIVE STOCK PLAN

                           Effective September 8, 1999

1.       Purpose of the Plan

         The Plan is intended to provide a means  through  which the Company and
its  subsidiaries  may  attract  able  persons  to enter  into the employ of the
Company or its  subsidiaries,  and to promote  the  interests  of the Company by
providing the employees and consultants of the Company or its subsidiaries,  who
are  largely  responsible  for the  management,  growth  and  protection  of the
business of the Company,  with a  proprietary  interest in the Company,  thereby
strengthening  their  concern for the welfare of the Company and their desire to
remain in its employ.  A further  purpose of the Plan is to provide such persons
with  additional  incentive and reward  opportunities  to enhance the profitable
growth of the Company.

         The Plan amends and restates the Company's  1991  Incentive  Stock Plan
("Former Plan"). Upon the effectiveness of the Plan, no further Incentive Awards
shall be granted under the Former Plan,  but all  outstanding  Incentive  Awards
granted under the Former Plan shall remain outstanding pursuant to the terms and
provisions of the agreements (if any) relating to their grant.

2.       Definitions

         As used in the  Plan,  the  following  definitions  apply to the  terms
indicated below.

         (a)      "Board of Directors" means the Board of Directors of Allied
Waste Industries, Inc.

         (b)  "Cause,"  when  used  in  connection  with  the  termination  of a
Participant's  employment  with  the  Company,  means  the  termination  of  the
Participant's  employment by the Company by reason of (i) the  conviction of the
Participant by a court of competent  jurisdiction  as to which no further appeal
can be taken of a crime involving moral turpitude; (ii) the proven commission by
the  Participant  of an act of fraud upon the  Company;  (iii) the  willful  and
proven  misappropriation  of  any  funds  or  property  of  the  Company  by the
Participant;  (iv)  the  willful,  continued  and  unreasonable  failure  by the
Participant  to perform  duties  assigned  to him and agreed to by him;  (v) the
knowing  engagement  by the  Participant  in any  direct,  material  conflict of
interest with the Company  without  compliance  with the  Company's  conflict of
interest  policy,  if any,  then in effect;  (vi) the knowing  engagement by the
Participant,  without the  written  approval  of the Board of  Directors  of the
Company,  in any  activity  which  competes  with the business of the Company or
which would  result in a material  injury to the  Company;  or (vii) the knowing
engagement in any activity  which would  constitute a material  violation of the
provisions  of the Company's  Policies and  Procedures  Manual,  if any, then in
effect.

         (c) "Cash Bonus" means an award of a bonus  payable in cash pursuant to
Section 11.

<PAGE>

         (d) "Change in Control" means (i) a "change in control" of the Company,
as that  term is  contemplated  in the  federal  securities  laws;  or (ii)  the
occurrence of any of the following  events:  (A) any Person  becomes,  after the
effective  date of this Plan, the  "beneficial  owner" (as defined in Rule 13d-3
promulgated  under the Exchange Act),  directly or indirectly,  of securities of
the  Company  representing  20% or  more of the  combined  voting  power  of the
Company's then outstanding securities; provided, that the Board of Directors (as
constituted  immediately  prior to such person becoming such a beneficial owner)
may  determine,  in its  sole  discretion,  that a  Change  in  Control  has not
occurred;  and provided,  further,  that the  acquisition  of additional  voting
securities,  after the effective  date of this Plan, by any Person who is, as of
the effective date of this Plan, the beneficial  owner,  directly or indirectly,
of 20% or more of the combined  voting power of the Company's  then  outstanding
securities,  shall not  constitute  a "Change in  Control"  of the  Company  for
purposes of this Section 2(d), (B) a majority of  individuals  who are nominated
by the Board of  Directors  for  election to the Board of Directors on any date,
fail to be elected to the Board of Directors  as a direct or indirect  result of
any proxy fight or contested election for positions on the Board of Directors or
(C) the Board of Directors  determines in its sole and absolute  discretion that
there has been a change in control of the Company.

         (e) "Code"  means the Internal  Revenue  Code of 1986,  as amended from
time to time.  Reference  in the Plan to any Code  Section  shall be  deemed  to
include any  amendments or successor  provisions to any Section and any treasury
regulations promulgated thereunder.

         (f)  "Committee"  means  the  Compensation  Committee  of the  Board of
Directors or such other  committee as the Board of Directors  shall appoint from
time to time to administer the Plan.

         (g) "Common Stock" means the Company's common stock, par value $.01 per
share.

         (h)  "Company"  means  Allied  Waste   Industries,   Inc.,  a  Delaware
corporation, and each of its Subsidiaries, and its successors.

         (i) "Consultant"  means any person who is engaged by the Company or any
Subsidiary to render consulting services and is compensated for such services.

         (j)  "Employee"  means any person who is an  employee of the Company or
any  Subsidiary  within the meaning of Code Section  3401(c) and the  applicable
interpretive authority thereunder.

         (k)  "Exchange  Act"  means the  Securities  Exchange  Act of 1934,  as
amended from time to time.

<PAGE>

         (l) "Fair  Market  Value" of a share of Common Stock on any date is (i)
the closing sales price on the immediately  preceding business day of a share of
Common Stock as reported on the principal securities exchange on which shares of
Common  Stock are then listed or admitted to trading;  (ii) if not so  reported,
the average of the closing bid and asked  prices for a share of Common  Stock on
the immediately  preceding business day as quoted on the National Association of
Securities Dealers Automated  Quotation System ("NASDAQ") or (iii) if not quoted
on NASDAQ, the average of the closing bid and asked prices for a share of Common
Stock as quoted by the National Quotation Bureau's "Pink Sheets" or the National
Association of Securities  Dealers' OTC Bulletin Board System. If the price of a
share of Common  Stock is not so  reported,  the Fair Market Value of a share of
Common Stock shall be determined by the Committee in its absolute discretion.

         (m) "Incentive  Award" means an Option, a share of Restricted  Stock, a
Performance Award, a share of Phantom Stock, a Stock Bonus or Cash Bonus granted
pursuant to the terms of the Plan.

         (n)  "Incentive  Stock  Option"  means an Option which is an "incentive
stock option"  within the meaning of Code Section 422 and which is identified as
an Incentive Stock Option in the agreement by which it is evidenced.

         (o) "Issue Date" means the date  established  by the Committee on which
certificates  representing  shares of  Restricted  Stock  shall be issued by the
Company pursuant to the terms of Section 7(d).

         (p) "Non-Employee  Director" means a member of the Board who (i) is not
at the time in question an officer or Employee of the Company or any Subsidiary;
(ii) has not received  compensation  for serving as a consultant or in any other
non-director capacity or who had an interest in any transaction with the Company
or any Subsidiary that would exceed the $60,000  threshold for which  disclosure
would be  required  under Item  404(a) of  Regulation  S-K or (iii) has not been
engaged through another party in a business relationship with the Company or any
Subsidiary that would be disclosable under Item 404(b) of Regulation S-K.

         (q)  "Non-Qualified  Stock  Option"  means  an  Option  which is not an
Incentive Stock Option and which is identified as a  Non-Qualified  Stock Option
in the agreement by which it is evidenced.

         (r) "Option" means an option to purchase  shares of Common Stock of the
Company granted pursuant to Section 6. Each Option shall be identified as either
an Incentive  Stock Option or a  Non-Qualified  Stock Option in the agreement by
which it is evidenced.

         (s) "Parent" means a "parent  corporation" of the Company,  whether now
or hereafter existing, as defined in Code Section 424(e).

         (t)  "Participant"  means an Employee or Consultant  who is eligible to
participate  in the Plan and to whom an Incentive  Award is granted  pursuant to
the  Plan  and,  upon  his  death,   his   successors,   heirs,   executors  and
administrators, as the case may be, to the extent permitted herein.

         (u) "Performance Award" means an award payable in cash or Common Stock,
which  award is  granted  pursuant  to  Section 8 and  subject  to the terms and
conditions contained herein.

<PAGE>

         (v) "Person"  means a "person" as such term is used in  Sections  13(d)
and 14(d) of the Exchange  Act and the rules and regulations in effect from time
to time thereunder.

         (w) A share of "Phantom Stock"  represents the right to receive in cash
the Fair Market Value of a share of Common Stock of the Company,  which right is
granted pursuant to Section 9 and subject to the terms and conditions  contained
herein.

         (x) "Plan" means the Allied Waste Industries, Inc. Amended and Restated
1991 Incentive Plan, as it may be amended from
time to time.

         (y) "Qualified  Domestic  Relations  Order" means a qualified  domestic
relations  order as  defined  in the Code,  Title I of the  Employee  Retirement
Income  Security Act, or in the rules and  regulations  as may be in effect from
time to time thereunder.

         (z) Share of "Restricted  Stock" means a share of Common Stock which is
granted  pursuant  to the  terms  of  Section  7 and  which  is  subject  to the
restrictions set forth in Section 7(c) for so long as such restrictions continue
to apply to such share.

         (aa) "Securities Act" means the Securities Act of 1933, as amended from
time to time.

         (bb) "Stock Bonus" means a grant of a bonus payable in shares of Common
Stock pursuant to Section 10.

         (cc)  "Subsidiary" or  "Subsidiaries"  mean any and all corporations in
which,  at the pertinent time, the Company owns,  directly or indirectly,  stock
vested with more than 50% of the total  combined  voting power of all classes of
stock of such corporations within the meaning of Code Section 424(f).

         (dd) "Vesting Date"  means the date established  by  the  Committee  on
which a share of Restricted Stock or Phantom Stock may vest.

3.       Stock Subject to the Plan

         Under the Plan,  the Committee may grant to  Participants  (a) Options;
(b) shares of Restricted  Stock; (c) Performance  Awards;  (d) shares of Phantom
Stock; (e) Stock Bonuses and (f) Cash Bonuses.

<PAGE>

         The  Committee  may  grant   Options,   shares  of  Restricted   Stock,
Performance  Awards,  shares of Phantom  Stock and Stock  Bonuses under the Plan
with respect to a number of shares of Common Stock that in the  aggregate at any
time does not exceed the greater of (a) 750,000 shares or (b) 7.5% of the shares
of Common Stock issued and  outstanding  as  reflected  on the  Company's  stock
transfer records on the final day of the previous fiscal quarter. The grant of a
Cash Bonus shall not reduce the number of shares of Common Stock with respect to
which Options, shares of Restricted Stock, Performance Awards, shares of Phantom
Stock or Stock Bonuses may be granted pursuant to the Plan.

         If any outstanding  Option  expires,  terminates or is canceled for any
reason,  the shares of Common Stock subject to the  unexercised  portion of such
Option  shall  again be  available  for grant  under the Plan.  If any shares of
Restricted  Stock or Phantom  Stock,  or any shares of Common Stock granted as a
Performance  Award or a Stock Bonus are  forfeited  or canceled  for any reason,
such shares shall again be available for grant under the Plan.

         Shares of Common Stock issued under the Plan may be either newly issued
or treasury shares, at the discretion of the Committee.

4.       Administration of the Plan

         The Plan shall be  administered  by the Board or by a Committee  of not
less than two  Non-Employee  Directors who shall be appointed by the Board.  For
purposes  of grants and awards  pursuant  to,  and  administration  of this Plan
under,  Sections 4 through 24, the terms  "Committee"  and "Board" shall be used
interchangeably.

         The Committee  shall from time to time  designate the key Employees and
Consultants  who shall be  granted  Incentive  Awards and the amount and type of
such Incentive Awards.

         The  Committee  shall  have  full  authority  to  administer  the Plan,
including  authority to interpret and construe any provision of the Plan and the
terms  of any  Incentive  Award  issued  under it and to adopt  such  rules  and
regulations for  administering  the Plan as it may deem necessary.  Decisions of
the Committee shall be final and binding on all parties.

         The Committee  may, in its absolute  discretion (a) accelerate the date
on which any Option granted under the Plan becomes  exercisable;  (b) extend the
date on which any Option  granted under the Plan ceases to be  exercisable;  (c)
accelerate  the  Vesting  Date or Issue  Date,  or waive any  condition  imposed
pursuant to Section 7(b), with respect to any share of Restricted  Stock granted
under  the Plan and (d)  accelerate  the  Vesting  Date or waive  any  condition
imposed  pursuant  to  Section 9, with  respect  to any share of  Phantom  Stock
granted under the Plan.

         In  addition,  the  Committee  may, in its absolute  discretion,  grant
Incentive  Awards  to  Participants  on the  condition  that  such  Participants
surrender  to  the  Committee  for  cancellation  such  other  Incentive  Awards
(including, without limitation, Incentive Awards with higher exercise prices) as
the Committee specifies.  Notwithstanding Section 3, Incentive Awards granted on
the  condition  of  surrender of  outstanding  Incentive  Awards shall not count
against the limits set forth in such Section 3 until such time as such Incentive
Awards are surrendered.

<PAGE>

         Except as provided in Section 6(e)(iv),  whether an authorized leave of
absence,  or  absence  in  military  or  government  service,  shall  constitute
termination  of employment  shall be determined by the Committee in its absolute
discretion.

         No member of the Committee shall be liable for any action,  omission or
determination  relating to the Plan,  and the Company  shall  indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company  to  whom  any  duty  or  power  relating  to  the   administration   or
interpretation  of the Plan  has been  delegated  from and  against  any cost or
expense  (including  attorneys'  fees) or liability  (including  any sum paid in
settlement  of a claim with the  approval of the  Committee)  arising out of any
action,  omission or determination relating to the Plan, unless, in either case,
such  action,  omission  or  determination  was  taken  or made by such  member,
director or employee in bad faith and without  reasonable  belief that it was in
the best interests of the Company.

         The  Committee or Board may  delegate to an officer of the  Corporation
the authority to make decisions  pursuant to this Plan;  provided,  that no such
delegation may be made that would cause any award or other transaction under the
Plan to cease to be exempt from Section 16(b) of the Exchange Act. The Committee
may  authorize  any one or more of its  members or any officer of the Company to
execute and deliver documents on behalf of the Committee.

5.       Eligibility

         The persons who shall be eligible to receive  Incentive Awards pursuant
to the Plan shall be (a) those  Employees  who are largely  responsible  for the
management,  growth  and  protection  of  the  business  of the  Company  or any
Subsidiary (including officers of the Company, whether or not they are directors
of the  Company)  or (b)  any  Consultant,  as the  Committee,  in its  absolute
discretion,  shall select from time to time; provided,  however, Incentive Stock
Options may only be granted to Employees.

6.       Options

         The  Committee may grant  Options  pursuant to the Plan,  which Options
shall be evidenced by agreements  in such form as the Committee  shall from time
to time approve. Options shall comply with and be subject to the following terms
and conditions.

         (a) Identification of Options. All Options granted under the Plan shall
be  clearly  identified  in the  agreement  evidencing  such  Options  as either
Incentive Stock Options or as Non-Qualified Stock Options.

         (b) Exercise Price.  The exercise price of any Option granted under the
Plan shall be such price as the Committee  shall  determine on the date on which
such Option is granted; provided, that such price shall be not less than 100% of
the  Fair  Market  Value of a share of  Common  Stock on the date on which  such
Option is granted,  subject to (i) the restrictions provided in Section 6(d) and
(ii) the adjustments provided in Section 12.

<PAGE>

         (c)      Term and Exercise of Options

                  (i) Each Option  shall be  exercisable  on such date or dates,
         during  such  period and for such  number of shares of Common  Stock as
         shall be determined by the Committee on the day on which such Option is
         granted and set forth in the agreement evidencing the Option; provided,
         however, that (A) subject to the restrictions provided in Section 6(d),
         no Option shall be  exercisable  after the expiration of ten years from
         the date such Option was granted and (B) no Option shall be exercisable
         until six months after the date of grant; and, provided,  further, that
         each  Option  shall be subject to earlier  termination,  expiration  or
         cancellation as provided in the Plan.

                  (ii) Each Option shall be exercisable in whole or in part with
         respect to whole  shares of Common  Stock.  The partial  exercise of an
         Option shall not cause the  expiration,  termination or cancellation of
         the remaining portion thereof.  Upon the partial exercise of an Option,
         the  agreement   evidencing  such  Option  shall  be  returned  to  the
         Participant  exercising  such Option  together with the delivery of the
         certificates described in Section 6(c)(v).

                  (iii) An Option shall be exercised by delivering notice to the
         Company's principal office, to the attention of its Secretary, no fewer
         than  five  business  days  in  advance  of the  effective  date of the
         proposed  exercise.  Such notice shall be  accompanied by the agreement
         evidencing  the  Option,  shall  specify the number of shares of Common
         Stock  with  respect  to which the  Option is being  exercised  and the
         effective  date of the  proposed  exercise,  and shall be signed by the
         Participant. The Participant may withdraw such notice at any time prior
         to the close of business on the business day immediately  preceding the
         effective date of the proposed  exercise,  in which case such agreement
         shall be  returned  to the  Participant.  Payment  for shares of Common
         Stock  purchased  upon the  exercise of an Option  shall be made on the
         effective date of such exercise either (A) in cash, by certified check,
         bank cashier's  check or wire transfer,  (B) subject to the approval of
         the Committee,  in shares of Common Stock owned by the  Participant and
         valued  at  their  Fair  Market  Value  on the  effective  date of such
         exercise, (C) subject to the approval of the Committee,  in the form of
         a  "cashless  exercise"  (as  described  below) or (D)  subject  to the
         approval of the Committee,  in any  combination  of the foregoing.  Any
         payment in shares of Common  Stock shall be effected by the delivery of
         such shares to the Secretary of the Company,  duly endorsed in blank or
         accompanied  by stock powers duly executed in blank,  together with any
         other  documents  and  evidences as the  Secretary of the Company shall
         require from time to time.

                           The cashless  exercise of an Option shall be pursuant
         to procedures whereby the Participant by written notice, directs (A) an
         immediate  market sale or margin loan  respecting  all or a part of the
         shares of Common Stock to which he is entitled upon  exercise  pursuant
         to an  extension  of credit by the  Company to the  Participant  of the
         exercise price, (B) the delivery of the shares of Common Stock directly
         from the Company to a brokerage  firm and (C)  delivery of the exercise
         price from the sale or the margin loan proceeds from the brokerage firm
         directly to the Company.

<PAGE>

                  (iv) Any Option  granted  under the Plan may be exercised by a
         broker-dealer   acting  on  behalf   of  a   Participant   if  (A)  the
         broker-dealer  has received from the  Participant or the Company a duly
         endorsed  agreement  evidencing such Option and instructions  signed by
         the Participant  requesting the Company to deliver the shares of Common
         Stock  subject  to such  Option to the  broker-dealer  on behalf of the
         Participant and specifying the account into which such shares should be
         deposited,  (B)  adequate  provision  has been made with respect to the
         payment of any  withholding  taxes due upon such  exercise  and (C) the
         broker-dealer and the Participant have otherwise  complied with Section
         220.3(e)(4) of Regulation T, 12 CFR Part 220.

                  (v) Certificates for shares of Common Stock purchased upon the
         exercise of an Option shall be issued in the name of the Participant or
         permitted   transferee  of  the   Participant   and  delivered  to  the
         Participant or permitted  transferee as soon as  practicable  following
         the effective date on which the Option is exercised; provided, however,
         that such  delivery  shall be effected  for all  purposes  when a stock
         transfer agent of the Company shall have deposited such certificates in
         the United  States  mail,  addressed  to the  Participant  or permitted
         transferee.

                  (vi) Except as set forth in this Section 6(c)(vi),  during the
         lifetime  of a  Participant,  each  Option  granted  to  him  shall  be
         exercisable  only  by  him or a  broker-dealer  acting  on  his  behalf
         pursuant  to  Section  6(c)(iv).  No  Option  shall  be  assignable  or
         transferable for value. Each Option may be assigned by a Participant by
         will or by the laws of  descent  and  distribution,  or  pursuant  to a
         Qualified Domestic Relations Order.  Non-Qualified Stock Options may be
         assigned  to:  (A) a  child,  stepchild,  grandchild,  sibling,  niece,
         nephew,  mother-in-law,   father-in-law,  son-in-law,  daughter-in-law,
         brother-in-law or sister-in-law,  including adoptive relationships, (B)
         any person sharing the Participant's  household (other than a tenant or
         employee), (C) a trust in which the persons described in (A) or (B) (or
         the Participant) hold more than 50% of the beneficial interest or (D) a
         private foundation in which the persons described in (A) or (B) (or the
         Participant) own more than 50% of the voting  interests.  A transfer to
         any entity in which more than 50% of the voting  interests are owned by
         the persons  described in (A) or (B) (or the  Participant)  in exchange
         for an interest  in that entity  shall not  constitute  a transfer  for
         value.

         (d)      Limitations on Grant of Incentive Stock Options

<PAGE>

                  (i) The aggregate  Fair Market Value of shares of Common Stock
         with respect to which  "incentive stock options" (within the meaning of
         Code  Section  422,   without  regard  to  Code  Section   422(d))  are
         exercisable  for the first time by a  Participant  during any  calendar
         year under the Plan (and any other stock option plan of the Company, or
         of its Parent or any Subsidiary)  shall not exceed $100,000.  Such Fair
         Market  Value  shall be  determined  as of the date on which  each such
         Incentive Stock Option is granted.  If such aggregate Fair Market Value
         of shares of Common  Stock  underlying  such  Incentive  Stock  Options
         exceeds  $100,000,  then Incentive Stock Options  granted  hereunder to
         such  Participant  shall,  to the extent and in the order  required  by
         Regulations  promulgated  under the Code (or any other authority having
         the force of Regulations),  automatically be deemed to be Non-Qualified
         Stock  Options,  but all other terms and  provisions of such  Incentive
         Stock  Options  shall  remain   unchanged.   In  the  absence  of  such
         Regulations  (and  authority),  or if such  Regulations  (or authority)
         require or permit a  designation  of the  options  which shall cease to
         constitute  Incentive Stock Options, the Incentive Stock Options shall,
         to the  extent  of such  excess  and in the  order in which  they  were
         granted, automatically be deemed to be Non-Qualified Stock Options, but
         all other terms and  provisions of such  Incentive  Stock Options shall
         remain unchanged.

                  (ii) No Incentive Stock Option may be granted to an individual
         if, at the time of the  proposed  grant,  such  individual  owns  stock
         possessing  more than 10% of the  total  combined  voting  power of all
         classes of stock of the  Company,  or of its Parent or any  Subsidiary,
         unless (A) the  exercise  price of such  Incentive  Stock  Option is at
         least 110% of the Fair Market  Value of a share of Common  Stock at the
         time such  Incentive  Stock  Option is granted  and (B) such  Incentive
         Stock Option is not exercisable after the expiration of five years from
         the date such Incentive Stock option is granted.

         (e)      Effect of Termination of Employment

                  (i) If the employment of a Participant  with the Company shall
         terminate  for any  reason  other  than  Cause,  "permanent  and  total
         disability"  (within the meaning of Code Section 22(e)(3)) or the death
         of the  Participant  (A) Options  granted to such  Participant,  to the
         extent  that they  were  exercisable  at the time of such  termination,
         shall remain  exercisable  until the expiration of one month after such
         termination, on which date they shall expire and (B) Options granted to
         such  Participant,  to the extent that they were not exercisable at the
         time of such termination,  shall expire at the close of business on the
         date of such termination;  provided,  however,  that no Option shall be
         exercisable after the expiration of its term.

                  (ii) If the employment of a Participant with the Company shall
         terminate as a result of the "permanent and total  disability"  (within
         the meaning of Code Section  22(e)(3)) or the death of the  Participant
         (A) Options granted to such  Participant,  to the extent that they were
         exercisable at the time of such termination,  shall remain  exercisable
         until the expiration of one year after such termination,  on which date
         they shall expire and (B) Options granted to such  Participant,  to the
         extent that they were not exercisable at the time of such  termination,
         shall expire at the close of business on the date of such  termination;
         provided,  however,  that no  Option  shall be  exercisable  after  the
         expiration of its term.

                  (iii)  In the  event  of the  termination  of a  Participant's
         employment  for  cause,   all  outstanding   Options  granted  to  such
         Participant shall expire at the commencement of business on the date of
         such termination.

<PAGE>

                  (iv) A  Participant's  employment  with the  Company  shall be
         deemed  terminated  if the  Participant's  leave of absence  (including
         military or such leave or other bona fide leave of absence) extends for
         more than 90 days and the Participant's  continued  employment with the
         Company is not guaranteed by contract or statute.

         (f)  Acceleration  of Exercise  Date Upon  Change in Control.  Upon the
occurrence  of a Change  in  Control,  each  Option  granted  under the Plan and
outstanding  at such time shall become  fully and  immediately  exercisable  and
shall remain  exercisable  until its  expiration,  termination  or  cancellation
pursuant to the terms of the P1an.

         (g) Buyout of Options.  The  Committee may at any time (i) offer to buy
out for a payment of cash or cash equivalents an Option previously  granted,  or
(ii)  authorize a holder of an Option to elect to cash out an Option  previously
granted, in either case at such time and based upon such terms and conditions as
the Committee shall establish.

7.       Restricted Stock

         The Committee may grant shares of Restricted Stock pursuant to the Plan
for such  consideration  as the  Committee  may  determine,  including  (without
limitation)  cash,  cash  equivalents,   full-recourse  promissory  notes,  past
services or future  services.  Each grant of shares of Restricted Stock shall be
evidenced by an agreement in such form as the Committee  shall from time to time
approve.  Each grant of shares of  Restricted  Stock  shall  comply  with and be
subject to the following terms and conditions.

         (a) Issue Date and Vesting  Date. At the time of the grant of shares of
Restricted Stock, the Committee shall establish an Issue Date or Issue Dates and
a Vesting Date or Vesting  Dates with respect to such shares.  The Committee may
divide such shares into classes and assign a different Issue Date and/or Vesting
Date for each class.  Except as provided  in  Sections  7(c) and 7(f),  upon the
occurrence  of the Issue Date with  respect to a share of  Restricted  Stock,  a
share of Restricted  Stock shall be issued in accordance  with the provisions of
Section  7(d).  Provided  that  all  conditions  to the  vesting  of a share  of
Restricted  Stock  imposed  pursuant to Section 7(b) hereof are  satisfied,  and
except as provided in Sections 7(c) and 7(f), upon the occurrence of the Vesting
Date with respect to a share of Restricted  Stock, such share shall vest and the
restrictions of Section 7(c) shall cease to apply to such share.

         (b)  Conditions  to  Vesting.  At the time of the  grant of  shares  of
Restricted Stock, the Committee may impose such restrictions or conditions,  not
inconsistent with the provisions hereof, to the vesting of such shares as it, in
its absolute discretion,  deems appropriate. By way of example and not by way of
limitation,  the  Committee  may  require,  as a condition to the vesting of any
class or classes of shares of  Restricted  Stock,  that the  Participant  or the
Company achieve certain performance  criteria,  such criteria to be specified by
the Committee at the time of the grant of such shares.

<PAGE>

         (c) Restrictions on Transfer Prior to Vesting.  Prior to the vesting of
a share of Restricted Stock, no transfer of a Participant's  rights with respect
to  such  share,  whether  voluntary  or  involuntary,  by  operation  of law or
otherwise,  shall  vest the  transferee  with any  interest  or right in or with
respect to such share, but immediately upon any attempt to transfer such rights,
such share,  and all of the rights  related  thereto,  shall be forfeited by the
Participant and the transfer shall be of no force or effect.

         (d)      Issuance of Certificates

                  (i) Except as provided in  Sections  7(c) or 7(f),  reasonably
         promptly  after the Issue  Date with  respect  to shares of  Restricted
         Stock,  the  Company  shall  cause to be  issued  a stock  certificate,
         registered  in the name of the  Participant  to whom such  shares  were
         granted,  evidencing such shares;  provided, that the Company shall not
         cause to be issued such a stock  certificate  unless it has  received a
         stock power duly endorsed in blank with respect to such shares.
         Each such stock certificate shall bear the following legend:

                  The  transferability  of this  certificate  and the  shares of
                  stock  represented  hereby are  subject  to the  restrictions,
                  terms and conditions  (including  forfeiture and  restrictions
                  against  transfer)  contained in the Allied Waste  Industries,
                  Inc.  Amended and Restated  1991  Incentive  Stock Plan and an
                  Agreement  entered into between the  registered  owner of such
                  shares and Allied  Waste  Industries,  Inc. A copy of the Plan
                  and  Agreement  is on file in the office of the  Secretary  of
                  Allied Waste  Industries,  Inc., 15880 North Greenway - Hayden
                  Loop, Suite 100, Scottsdale, Arizona 85260.

         Such legend shall not be removed from the  certificate  evidencing such
         shares  until such shares  vest  pursuant to the terms of this Plan and
         the agreement governing the grant of Restricted Stock.

                  (ii) Each  certificate  issued pursuant to Paragraph  7(d)(i),
         together  with the stock  powers  relating to the shares of  Restricted
         Stock evidenced by such certificate,  shall be held by the Company. The
         Company  shall  issue  to the  Participant  a  receipt  evidencing  the
         certificates  held  by it  which  are  registered  in the  name  of the
         Participant.

         (e)  Consequences  Upon  Vesting.  Upon  the  vesting  of  a  share  of
Restricted Stock pursuant to the terms hereof,  the restrictions of Section 7(c)
shall  cease  to  apply  to such  share.  Reasonably  promptly  after a share of
Restricted Stock vests pursuant to the terms hereof,  the Company shall cause to
be issued and delivered to the  Participant to whom such shares were granted,  a
certificate  evidencing  such share,  free of the legend set forth in  Paragraph
7(d)(i),  together with any other  property of the  Participant  held by Company
pursuant  to Section  12(a);  provided,  however,  that such  delivery  shall be
effected for all purposes when the Company shall have deposited such certificate
and other property in the United States mail, addressed to the Participant.

<PAGE>

         (f)      Effect of Termination of Employment

                  (i) If the employment of a Participant  with the Company shall
         terminate  for any  reason  other than  Cause  prior to the  vesting of
         shares of Restricted  Stock granted to such  Participant,  a portion of
         such  shares,  to the extent not  forfeited  or canceled on or prior to
         such termination  pursuant to any provision  hereof,  shall vest on the
         date of such  termination.  The portion  referred  to in the  preceding
         sentence  shall be determined by the Committee at the time of the grant
         of such shares of Restricted  Stock and may be based on the achievement
         of any conditions  imposed by the Committee with respect to such shares
         pursuant  to  Section  7(b).  Such  portion  may  equal  zero,  and any
         non-vested shares shall be forfeited as of the commencement of business
         on the date of the Participant's termination of employment.

                  (ii)  In the  event  of  the  termination  of a  Participant's
         employment  for Cause,  all shares of Restricted  Stock granted to such
         Participant which have not vested as of the commencement of business on
         the date of such termination shall immediately be forfeited.

         (g) Effect of Change in  Control.  Upon the  occurrence  of a Change in
Control,  all shares of  Restricted  Stock which have not yet vested  (including
those  with  respect  to  which  the  Issue  Date  has not yet  occurred)  shall
immediately vest.

         (h) Voting and Dividend Rights. The holders of Restricted Stock awarded
under this Plan shall have the same  voting,  dividend  and other  rights as the
Company's other stockholders (except that the transfer of such shares is limited
in accordance with Section 7(c) prior to vesting);  provided,  however, that the
Committee may require in the agreement  granting the Restricted  Stock that cash
dividends be invested in additional shares of Restricted  Stock,  subject to the
same  conditions and  restrictions  as the Incentive Award with respect to which
the dividends were paid.

8.       Performance Awards

         The Committee may grant  Performance  Awards pursuant to the Plan. Each
grant of  Performance  Awards shall be evidenced by an agreement in such form as
the Committee shall from time to time approve.  Each grant of Performance Awards
shall comply with and be subject to the following terms and conditions.

         (a)      Performance Period and Performance Award

                  (i) With  respect to each grant of a  Performance  Award,  the
         Committee  shall   establish  a  performance   period  over  which  the
         performance of the applicable Participant shall be measured.

<PAGE>

                  (ii) In determining the amount of the Performance  Award to be
         granted  to a  particular  Participant,  the  Committee  may take  into
         account  such  factors as the  Participant's  responsibility  level and
         growth  potential,  the  amount of other  Incentive  Awards  granted or
         received  by such  Participant,  and such other  considerations  as the
         Committee deems appropriate;  provided, however, the maximum value that
         can be granted as a Performance  Award to any one individual during any
         calendar year is $10,000,000.

         (b) Performance  Goals. A Performance Award shall be paid solely on the
attainment of certain  preestablished,  objective  performance goals (within the
meaning of Code Section 162(m)).  Such  performance  goals shall be based on any
one or any  combination of the following  business  criteria of the Company as a
whole  or any  of  its  subsidiaries  (or  any  division  or  department  of the
foregoing), as determined by the Committee:  revenues,  profitability,  earnings
(including, without limitation,  earnings per share); successful acquisitions of
other companies or assets; successful dispositions of subsidiaries, divisions or
departments  of the  Company or any of its  subsidiaries;  successful  financing
efforts;  return to stockholders;  market share; or cost or expense control. The
Committee shall establish,  in writing,  the applicable  performance goal(s) and
the  specific  targets  related  to  such  goal(s)  within  90  days  after  the
commencement  of the  performance  period to which such goal(s)  relate and at a
time when the outcome of such performance  goal(s) are  substantially  uncertain
within  the  meaning  of Code  Section  162(m),  subject  to  adjustment  by the
Committee as it deems  appropriate to reflect  significant  unforseen  events or
changes.

         (c) Payment.  Upon the expiration of the performance period relating to
a Performance Award granted to a Participant, such Participant shall be entitled
to  receive  payment  of an  amount  not  exceeding  the  maximum  value  of the
Performance  Award,  based on the achievement of the performance  goals for such
performance  period,  as determined by the Committee.  The Committee may, within
its  sole  discretion,  pay a  Performance  Award  under  any one or more of the
performance  goals established by the Committee with respect to such Performance
Award.  The  Committee  shall  certify  in  writing  prior to the  payment  of a
Performance  Award that the applicable  performance goals and any other material
terms of the grant have been  satisfied.  Subject  to  Section  3,  payment of a
Performance Award may be made in cash, Common Stock or a combination thereof, as
determined  by  the  Committee.  Payment  shall  be  made  in a  lump  sum or in
installments  as prescribed by the  Committee.  Any payment to be made in Common
Stock shall be based on the Fair Market Value of the Common Stock on the payment
date.

         (d)  Effect  of  Termination  of  Employment.  If the  employment  of a
Participant  shall  terminate  for any  reason  prior to the  expiration  of the
applicable   performance   period,  the  Performance  Awards  relating  to  such
performance  period shall  immediately  be forfeited as of the  commencement  of
business on the date of such  termination,  except as may be  determined  by the
Committee in its sole and absolute  discretion,  or as may be otherwise provided
in the agreement evidencing such Performance Award.

         (e) Effect of Change in  Control.  Upon the  occurrence  of a Change in
Control,  the  Committee  (as  constituted  immediately  prior to such Change in
Control) shall determine,  in its sole discretion,  whether  Performance Awards,
for which the requisite  performance  goals have not been satisfied or for which
the  performance  period has not expired,  shall  immediately be paid or whether
such Performance Awards shall remain  outstanding  according to their respective
terms.

<PAGE>

9.       Phantom Stock

         The Committee  may grant shares of Phantom Stock  pursuant to the Plan.
Each grant of shares of Phantom Stock shall be evidenced by an agreement in such
form as the Committee  shall from time to time approve.  Each grant of shares of
Phantom  Stock  shall  comply  with and be  subject to the  following  terms and
conditions.

         (a) Vesting Date. At the time of the grant of shares of Phantom  Stock,
the  Committee  shall  establish a Vesting Date or Vesting Dates with respect to
such  shares.  The  Committee  may divide such shares into  classes and assign a
different  Vesting  Date for each class.  Provided  that all  conditions  to the
vesting  of a share of  Phantom  Stock  imposed  pursuant  to  Section  9(c) are
satisfied,  and except as provided in Section 9(d),  upon the  occurrence of the
Vesting Date with respect to a share of Phantom Stock, such share shall vest.

         (b) Benefit Upon Vesting. Upon the vesting of a share of Phantom Stock,
a Participant  shall be entitled to receive in cash,  within 90 days of the date
on which such share  vests,  an amount in cash in a lump sum equal to the sum of
(i) the Fair Market  Value of a share of Common Stock of the Company on the date
on which such share of Phantom Stock vests and (ii) the aggregate amount of cash
dividends paid with respect to a share of Common Stock of the Company during the
period  commencing  on the date on which the share of Phantom  Stock was granted
and terminating on the date on which such share vests.

         (c)  Conditions  to  Vesting.  At the time of the  grant of  shares  of
Phantom Stock,  the Committee may impose such  restrictions  or conditions,  not
inconsistent with the provisions  herein, to the vesting of such shares as it in
its absolute  discretion deems appropriate.  By way of example and not by way of
limitation,  the  Committee  may  require,  as a condition to the vesting of any
class or classes of shares of Phantom Stock, that the Participant or the Company
achieve  certain  performance  criteria,  such  criteria to be  specified by the
Committee at the time of the grant of such shares.

         (d)      Effect of Termination of Employment

                  (i) If the employment of a Participant  with the Company shall
         terminate  for any  reason  other than  Cause  prior to the  vesting of
         shares of Phantom Stock granted to such Participant,  a portion of such
         shares,  to the extent not  forfeited  or  canceled on or prior to such
         termination  pursuant to any provision,  shall vest on the date of such
         termination. The portion referred to in the preceding sentence shall be
         determined  by the Committee at the time of the grant of such shares of
         Phantom  Stock and may be based on the  achievement  of any  conditions
         imposed by the  Committee  with  respect  to such  shares  pursuant  to
         Section 9(c).  Such portion may equal zero, and any  non-vested  shares
         shall be  forfeited as of the  commencement  of business on the date of
         the Participant's termination of employment.

<PAGE>

                  (ii)  In the  event  of  the  termination  of a  Participant's
         employment  for  Cause,  all shares of  Phantom  Stock  granted to such
         Participant  which have not  vested as of the date of such  termination
         shall immediately be forfeited.

         (e) Effect of Change in  Control.  Upon the  occurrence  of a Change in
Control,  all shares of Phantom  Stock which have not  theretofore  vested shall
immediately vest.

10.      Stock Bonuses

         The Committee may, in its absolute  discretion,  grant Stock Bonuses in
such  amounts as it shall  determine  from time to time.  A Stock Bonus shall be
paid at  such  time  and  subject  to such  conditions  as the  Committee  shall
determine at the time of the grant of such Stock Bonus.  Certificates for shares
of Common  Stock  granted  as a Stock  Bonus  shall be issued in the name of the
Participant  to whom such grant was made and  delivered to such  Participant  as
soon as  practicable  after the date on which such Stock Bonus is required to be
paid.

11.      Cash Bonuses

         The Committee may, in its absolute discretion, grant in connection with
any grant of Restricted Stock or shares of Common Stock granted as a Performance
Award or Stock Bonus or at any time thereafter,  a cash bonus,  payable promptly
after the date on which the  Participant  is  required to  recognize  income for
federal  income  tax  purposes  in  connection  with  such   Restricted   Stock,
Performance  Award  or Stock  Bonus,  in such  amounts  as the  Committee  shall
determine  from  time to time;  provided,  however,  that in no event  shall the
amount of a Cash Bonus  exceed the Fair Market  Value of the  related  shares of
Restricted  Stock or shares of Common Stock  granted  pursuant to a  Performance
Award or  Stock  Bonus on such  date.  A Cash  Bonus  shall be  subject  to such
conditions  as the  Committee  shall  determine at the time of the grant of such
Cash Bonus.

12.      Adjustment Upon Changes in Common Stock

         (a) Outstanding Restricted Stock, Performance Awards and Phantom Stock.
Unless the  Committee  in its absolute  discretion  otherwise  determines,  if a
Participant  receives any securities or other property (including dividends paid
in cash)  with  respect  to a share of  Restricted  Stock,  the Issue  Date with
respect to which occurs prior to such event,  but which has not vested as of the
date of such event, as a result of any dividend, stock split,  recapitalization,
merger,  consolidation,  combination,  exchange  of  shares or  otherwise,  such
securities or other property will not vest until such share of Restricted  Stock
vests and shall be held by the Company pursuant to Paragraph 7(d)(ii) as if such
securities or other property were non-vested shares of Restricted Stock.

<PAGE>

         The  Committee  may, in its  absolute  discretion,  adjust any grant of
shares of  Restricted  Stock,  the  Issue  Date  with  respect  to which has not
occurred as of the date of the  occurrence of any of the following  events,  any
shares of Common  Stock  upon the grant of a  Performance  Award or any grant of
shares of Phantom Stock, to reflect any dividend, stock split, recapitalization,
merger,  consolidation,  combination,  exchange  of shares or similar  corporate
change as the  Committee  may deem  appropriate  to prevent the  enlargement  or
dilution of rights of Participants under the grant.

         (b) Stock Subject to Plan, Outstanding Options, Increase or Decrease in
Issued  Shares  Without  Consideration.  Subject to any  required  action by the
shareholders  of the  Company,  in the event of any  increase or decrease in the
number  of issued  shares  of  Common  Stock  resulting  from a  subdivision  or
consolidation  of shares of Common Stock or the payment of a stock dividend (but
only on the shares of Common  Stock),  or any other  increase or decrease in the
number of such shares effected  without receipt of consideration by the Company,
the  Committee  shall  proportionally  adjust (i) the number of shares of Common
Stock for which  Incentive  Awards  may be  granted  under the Plan and (ii) the
number of shares and the  exercise  price per share of Common  Stock  subject to
each outstanding Option.

         (c)  Outstanding  Options,  Certain  Mergers.  Subject to any  required
action by the shareholders of the Company, if the Company shall be the surviving
corporation in any merger or consolidation  (except a merger or consolidation as
a result of which the holders of shares of Common Stock  receive  securities  of
another  corporation),  each  Option  outstanding  on the date of such merger or
consolidation  shall  entitle  the  Participant  to acquire  upon  exercise  the
securities  which a holder of the  number of shares of Common  Stock  subject to
such Option would have received in such merger or consolidation.

         (d) Outstanding Options, Certain Other Transactions.  In the event of a
dissolution or liquidation of the Company, a sale of all or substantially all of
the Company's  assets, a merger or consolidation  involving the Company in which
the  Company  is not the  surviving  corporation  or a merger  or  consolidation
involving the Company in which the Company is the surviving  corporation but the
holders of shares of Common  Stock  receive  securities  of another  corporation
and/or other  property,  including  cash, the Committee  shall,  in its absolute
discretion,  have the power to: (i) cancel,  effective  immediately prior to the
occurrence  of such event,  each Option  outstanding  immediately  prior to such
event  (whether or not then  exercisable),  and, in full  consideration  of such
cancellation,  pay to the  Participant to whom such Option was granted an amount
in cash,  for each share of Common  Stock  subject to such  Option  equal to the
excess  of (A)  the  value,  as  determined  by the  Committee  in its  absolute
discretion,  of the property  (including cash) received by the holder of a share
of Common  Stock as a result of such event over (B) the  exercise  price of such
Option; or (ii) provide for the exchange of each Option outstanding  immediately
prior to such event (whether or not then  exercisable)  for an option on some or
all of the property for which such Option is exchanged  and,  incident  thereto,
make an equitable  adjustment  as  determined  by the  Committee in its absolute
discretion  in the  exercise  price of the  option,  or the  number of shares or
amount of property subject to the option or, if appropriate,  provide for a cash
payment  to  the  Participant  to  whom  such  Option  was  granted  in  partial
consideration for the exchange of the Option.

<PAGE>

         (e) Outstanding  Options,  Other Changes. In the event of any change in
the  capitalization  of  the  Company  or  corporate  change  other  than  those
specifically  referred to in Sections  12(b),  (c) or (d), the Committee may, in
its absolute discretion, make such adjustments in the number and class of shares
subject to Options  outstanding  on the date on which such change  occurs and in
the per share  exercise  price of each such Option as the Committee may consider
appropriate to prevent dilution or enlargement of rights.

         (f) No Other  Rights.  Except as  expressly  provided  in the Plan,  no
Participant  shall have any rights by reason of any subdivision or consolidation
of shares of stock of any class,  the payment of any  dividend,  any increase or
decrease  in the  number of  shares  of stock of any  class or any  dissolution,
liquidation,  merger or consolidation  of the Company or any other  corporation.
Except as expressly  provided in the Plan,  no issuance by the Company of shares
of stock of any class,  or  securities  convertible  into shares of stock of any
class,  shall affect,  and no  adjustment  by reason  thereof shall be made with
respect to, the number of shares of Common Stock  subject to an Incentive  Award
or the exercise price of any Option.

13.      Deferral of Delivery of Shares

         The  Committee  (in its  sole  discretion)  may  permit  or  require  a
Participant  who  receives an Incentive  Award to have Common  Shares that would
otherwise be delivered to the Participant converted into a deferred compensation
account  established  for such  Participant  by the Committee as an entry on the
Company's  books.  Such  amounts  shall be  determined  by reference to the Fair
Market Value of such Common Shares as of the date they otherwise would have been
delivered to the Participant.  A deferred compensation account established under
this  Section 13 may be credited  with  interest  or other  forms of  investment
return,  as determined by the Committee.  A Participant for whom such an account
is  established  shall have no rights other than those of a general  creditor of
the  Company.  Such  an  account  shall  represent  an  unfunded  and  unsecured
obligation  of the Company and shall be subject to the terms and  conditions  of
the applicable  agreement  between the  Participant  and the Company;  provided,
however,  that the  Committee  may elect to establish a trust for the purpose of
securing any such  obligation.  If the deferral of Incentive Awards is permitted
or  required,  the  Committee  (in its sole  discretion)  may  establish  rules,
procedures and forms pertaining to such Awards,  including (without  limitation)
the settlement of deferred  compensation accounts established under this Section
13.

14.      Rights as a Stockholder

         No person  shall have any rights as a  stockholder  with respect to any
shares of Common Stock  covered by or relating to any  Incentive  Award  granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such shares. Except as otherwise expressly provided in Section 12, no
adjustment  to any  Incentive  Award shall be made for dividends or other rights
for which the record date  occurs  prior to the date such stock  certificate  is
issued.

15.      No Special Employment Rights; No Right to Incentive Award

<PAGE>

         Nothing  contained in the Plan or any Incentive Award shall confer upon
any Participant any right with respect to the  continuation of his employment by
the Company or interfere  in any way with the right of the  Company,  subject to
the terms of any separate employment  agreement to the contrary,  at any time to
terminate  such  employment or to increase or decrease the  compensation  of the
Participant  from the rate in existence at the time of the grant of an Incentive
Award.

         No person shall have any claim or right to receive an  Incentive  Award
hereunder.  The  Committee's  granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant  or any other  Participant  or other person at any time nor preclude
the Committee  from making  subsequent  grants to such  Participant or any other
Participant or other person.

16.      Securities Matters

         (a) The Company shall be under no obligation to effect the registration
pursuant  to the  Securities  Act of any  shares  of  Common  Stock to be issued
hereunder or to effect similar compliance under any state laws.  Notwithstanding
anything herein to the contrary,  the Company shall not be obligated to cause to
be  issued or  delivered  any  certificates  evidencing  shares of Common  Stock
pursuant to the Plan unless and until the Company is advised by its counsel that
the  issuance  and  delivery  of such  certificates  is in  compliance  with all
applicable laws,  regulations of governmental  authority and the requirements of
any  securities  exchange  on which  shares of  Common  Stock  are  traded.  The
Committee  may  require,  as  a  condition  of  the  issuance  and  delivery  of
certificates evidencing shares of Common Stock pursuant to the terms hereof that
the recipient of such stock make such covenants, agreements and representations,
and that such  certificates  bear such legends,  as the  Committee,  in its sole
discretion, deems necessary or desirable.

         (b)  The  exercise  of any  Option  granted  hereunder  shall  only  be
effective at such time as counsel to the Company shall have  determined that the
issuance and delivery of shares of Common Stock  pursuant to such exercise is in
compliance with all applicable laws, regulations of governmental authorities and
the requirements of any securities  exchange on which shares of Common Stock are
traded. The Company may, in its sole discretion,  defer the effectiveness of any
exercise of an Option granted hereunder in order to allow the issuance of shares
of Common  Stock  pursuant  thereto to be made  pursuant to  registration  or an
exemption  from  registration  or other methods for compliance  available  under
federal or state  securities  laws. The Company shall inform the  Participant in
writing of its decision to defer the  effectiveness of the exercise of an Option
granted  hereunder.  During the period that the effectiveness of the exercise of
an Option has been deferred,  the Participant  may, by written notice,  withdraw
such exercise and obtain the refund of any amount paid with respect thereto.

         (c) It is intended  that the Plan and any grant of an  Incentive  Award
made  to a  person  subject  to  Section  16 of the  1934  Act  meet  all of the
requirements of Rule 16b-3 promulgated thereunder.  If any provision of the Plan
or any Incentive  Award would  disqualify  the Plan or the Incentive  Award,  or
would  otherwise not comply with Rule 16b-3,  such provision or Incentive  Award
shall be  construed  or deemed  amended  to  conform to Rule 16b-3 to the extent
permitted by applicable law and deemed advisable by the Board.

<PAGE>

17.      Withholding Taxes

         Whenever  shares of Common  Stock are to be issued upon the exercise of
an Option,  the  occurrence  of the Issue Date or Vesting Date with respect to a
share of  Restricted  Stock,  the  payment of a  Performance  Award in shares of
Common Stock or the payment of a Stock Bonus,  the Company  shall have the right
to require the Participant to remit to the Company in cash an amount  sufficient
to  satisfy  federal,  state and local  withholding  tax  requirements,  if any,
attributable  to such  exercise,  occurrence or payment prior to the delivery of
any certificate or certificates for such shares. In addition,  upon the grant of
a Cash Bonus, the payment of a Performance Award or the making of a payment with
respect  to a share of  Phantom  Stock,  the  Company  shall  have the  right to
withhold from any cash payment  required to be made  pursuant  thereto an amount
sufficient to satisfy the federal, state and local withholding tax requirements,
if any, attributable to such exercise or grant.

18.      Amendment of the Plan

         The Board of Directors may at any time suspend or discontinue  the Plan
or revise or amend it in any respect whatsoever; provided, however, that without
approval  of the  shareholders  no  revision  or  amendment  shall (i) except as
provided in Section 12,  increase  the number of shares of Common Stock that may
be issued  under the Plan;  (ii) except as provided in Section 12,  increase the
maximum  number of shares of Common  Stock that may be  subject to an  Incentive
Award granted to any one individual  for any calendar  year;  (iii) increase the
maximum  value that can be  awarded  as a  Performance  Award;  (iv)  materially
increase the benefits accruing to an individual holding Incentive Awards granted
pursuant to the Plan; (v) materially  modify the  requirements as to eligibility
for participation in the Plan; (vi) extend the term of the Plan or (vi) decrease
any authority  granted to the Committee in contravention of Rule 16b-3 under the
Exchange Act.

19.      No Obligation to Exercise

         The grant to a Participant of an Option shall impose no obligation upon
such Participant to exercise such Option.

20.      Transfers Upon Death

         Upon the death of a Participant,  outstanding  Incentive Awards granted
to such Participant may be exercised only by the executors or  administrators of
the  Participant's  estate or by any person or persons  who shall have  acquired
such right to exercise by will or by the laws of descent  and  distribution.  No
transfer by will or the laws of descent and distribution of any Incentive Award,
or the right to exercise  any  Incentive  Award,  shall be effective to bind the
Company  unless the Committee  shall have been furnished with (a) written notice
thereof and with a copy of the will and/or such  evidence as the  Committee  may
deem necessary to establish the validity of the transfer and (b) an agreement by
the  transferee  to comply with all the terms and  conditions  of the  Incentive
Award that are or would have been  applicable to the Participant and to be bound
by the  acknowledgments  made by the Participant in connection with the grant of
the Incentive Award.

<PAGE>

21.      Expenses and Receipts

         The  expenses of the Plan shall be paid by the  Company.  Any  proceeds
received by the Company in connection  with any Incentive Award will be used for
general corporate purposes.

22.      Failure to Comply

         In addition  to the  remedies of the  Company  elsewhere  provided  for
herein,  failure by a Participant to comply with any of the terms and conditions
of the  Plan  or the  agreement  executed  by  such  Participant  evidencing  an
Incentive Award,  unless such failure is remedied by such Participant within ten
days after  having been  notified  of such  failure by the  Committee,  shall be
grounds for the cancellation and forfeiture of such Incentive Award, in whole or
in part as the Committee, in its absolute discretion, may determine.

23.      Effective Date and Term of Plan

         The Plan was adopted by the Board of Directors on September 8, 1999 and
shall become effective on such date,  subject to approval by the stockholders of
the Company in accordance with applicable law, the  requirements of Code Section
422 and the  requirements of Rule 16b-3 under Section 16b-3 of the Exchange Act.
No  Incentive  Award may be  granted  under the Plan  after  September  8, 2009.
Incentive  Awards may be granted under the Plan at any time prior to the receipt
of such stockholder approval;  provided,  however, that each such grant shall be
subject to such approval.  Without limitation on the foregoing, no Option may be
exercised prior to the receipt of such approval,  no share  certificate shall be
issued pursuant to a grant of Restricted Stock, Performance Award or Stock Bonus
prior to the receipt of such  approval and no Cash Bonus or payment with respect
to a  Performance  Award or a share of Phantom  Stock shall be paid prior to the
receipt of such  approval.  If the Plan is not so approved prior to September 8,
2000, then the Plan and all Incentive  Awards then  outstanding  hereunder shall
forthwith automatically terminate and be of no force and effect.

24.      Compliance With the Exchange Act

         With  respect to persons  subject  to Section 16 of the  Exchange  Act,
transactions  under  this  Plan are  intended  to  comply  with  all  applicable
conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent
any  provisions  of the Plan or action  by the  Committee  or Board  fails to so
comply,  it shall be deemed null and void,  to the extent  permitted  by law and
deemed advisable by the Committee or Board.

<PAGE>

DATED:  September 8, 1999.

                                               ALLIED WASTE INDUSTRIES, INC.,
                                                  a Delaware corporation

                                         By    /S/ STEVEN M. HELM
                                             --------------------------------
                                             Steven M. Helm, Vice President

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