Document:

<PAGE>

                                                                    Exhibit 10.6

                    FOURTH AMENDMENT TO AMENDED AND RESTATED
                    REVOLVING CREDIT AND TERM LOAN AGREEMENT
                                   AND CONSENT

         THIS FOURTH AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AND TERM
LOAN AGREEMENT AND CONSENT (this "Fourth Amendment") is made and entered into as
of the ___ day of August, 2000, by and among CASELLA WASTE SYSTEMS, INC., a
Delaware corporation (the "Parent"), its Subsidiaries (other than Excluded
Subsidiaries) listed on SCHEDULE 1 to the Credit Agreement defined below
(together with the Parent, collectively the "Borrowers"), FLEET NATIONAL BANK
(f/k/a BankBoston, N.A., "Fleet") and such banks or other financial institutions
which may become a party thereto (the "Banks"), Fleet as Administrative Agent
for the Banks (the "Administrative Agent"), KEYBANK NATIONAL ASSOCIATION as
Documentation Agent, BANK OF AMERICA, N.A. as Syndication Agent and CANADIAN
IMPERIAL BANK OF COMMERCE as the Canadian Agent (the "Canadian Agent", and
together with the Administrative Agent, the "Bank Agents").

         WHEREAS, the Borrowers, the Banks and the Bank Agents are parties to an
Amended and Restated Revolving Credit and Term Loan Agreement dated as of
December 14, 1999, (as amended by a First Amendment to Revolving Credit and Term
Loan Agreement dated as of February 2, 2000, a Second Amendment to Revolving
Credit and Term Loan Agreement dated as of February 14, 2000, a Third Amendment
to Revolving Credit and Term Loan Agreement dated as of April 14, 2000, and as
the same may be further amended and in effect from time to time, the "Credit
Agreement"), pursuant to which the Banks have extended credit to the Borrowers
on the terms set forth therein;

         WHEREAS, the Borrowers have requested that the Banks and the
Administrative Agent make certain amendments to the Credit Agreement, and the
Banks and the Administrative Agent have are willing to amend the Credit
Agreement on the terms set forth herein;

         NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

         1. DEFINITIONS. Capitalized terms used herein without definition shall
have the meanings assigned to such terms in the Credit Agreement.

         2. AMENDMENTS TO SECTION 1.1 OF THE CREDIT AGREEMENT. Section 1.1 of
the Credit Agreement is hereby amended by adding the following definitions in
proper alphabetical order:

<PAGE>

                                      -2-

                  "CELLULOSE  ASSETS.  Those  cellulose  assets of U.S. Fiber
         with an aggregate book value not to exceed $12,500,000 to be
         contributed to the Cellulose Joint Venture."

                  "CELLULOSE JOINT VENTURE. The joint venture between U.S. Fiber
         and Greenstone Industries, Inc. with respect to the cellulose fibers
         business, including the manufacturing, marketing and selling of
         insulation, mulch and other cellulose-based products."

                  "FOURTH AMENDMENT EFFECTIVE DATE.  August __, 2000."

                  "SERIES A PREFERRED STOCK. The Series A Preferred Stock issued
         by the Parent to the entities listed on Schedule A hereto (the "Series
         A Holders") pursuant to the Certificate of Designation of Series A
         Convertible Preferred Stock, dated as of August 8, 2000, in an
         aggregate principal amount not to exceed $55,750,000 plus interest as
         provided for in the Certificate of Designation."

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

         3. AMENDMENT TO SECTION 4A.4.1 OF THE CREDIT AGREEMENT. Section
4A4.1(d) of the Credit Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:

                  "(d) Fifty-percent (50%) of the Net Equity Proceeds of any
         issuance of new capital stock, or any other securities exchangeable
         for or convertible into shares of such capital stock, including the
         Equity Offering, but excluding (i) stock issued as payment for
         acquisitions permitted pursuant to Section 8.4 and (ii) stock issued
         in connection with any investment by the Series A Holders in the
         Parent (including the issuance of the Series A Preferred Stock) so
         long as such investment is on substantially the same terms as the
         Series A Preferred Stock, shall be used by the Domestic Borrowers to
         pay down the Term Loan."

         4. AMENDMENTS TO SECTION 8.1 OF THE CREDIT AGREEMENT. Section 8.1 of
the Credit Agreement is hereby amended by (a) deleting subsection (j) thereof in
its entirety and replacing it with the following:

                  "(j) Indebtedness of MERC with respect to the ING L/C,
         PROVIDED that no later than September 30, 2000, either (i) the ING L/C
         shall be replaced by a Letter of Credit under this Agreement or (ii)
         the ING L/C shall be cancelled and the Indebtedness of MERC with
         respect to the ING L/C shall be paid in full;" and

<PAGE>

                                      -3-

                  (b)      adding the following new subsection (m) thereto:

                  "and (m) Indebtedness with respect to mandatory redemption
                  obligations as set forth in the Certificate of Designation of
                  the Series A Preferred Stock, PROVIDED THAT no payments or
                  Distributions shall be made with respect to such Indebtedness
                  during the term of this Credit Agreement except as set forth
                  in Section 8.6 hereof, or as otherwise permitted by the prior
                  written consent of the Required Banks."

         5. AMENDMENTS TO SECTION 8.3 OF THE CREDIT AGREEMENT. Section 8.3 of
the Credit Agreement is hereby amended by (a) deleting the word "and" at the end
of subsection (k) thereof, (b) deleting the period at the end of subsection (l)
thereof and replacing it with "; and", and (c) inserting the following new
subsection (m) at the end thereof:

                  "(m)  Investments by U.S. Fiber in the Cellulose Joint Venture
         consisting of (i) the Cellulose Assets and (ii) cash in an amount not
         to exceed $5,000,000 in the aggregate during the term of this
         Agreement."

         6. AMENDMENTS TO SECTION 8.4.2 OF THE CREDIT AGREEMENT. Section 8.4.2
of the Credit Agreement is hereby amended by (a) deleting the words "PROVIDED
FURTHER THAT any sale pursuant to subsections (b) - (d) must occur on or prior
to June 30, 2000" and replacing them with the words "PROVIDED FURTHER THAT any
sale pursuant to subsections (b) - (d) must occur on or prior to June 30 ,2001",
and (b) inserting at the end thereof the following new sentence:

         "In addition, U.S. Fiber shall be permitted to spin-off its Cellulose
         Assets into the Cellulose Joint Venture, so long as U.S. Fiber (i)
         controls at least fifty percent (50%) of the board of directors of the
         Cellulose Joint Venture, (ii) owns at least fifty percent (50%) of the
         ownership interests of the Cellulose Joint Venture, and (iii) pledges
         such ownership interests to the Administrative Agent for the benefit of
         the Administrative Agent and the Banks."

         7. AMENDMENTS TO SECTION 8.6 OF THE CREDIT AGREEMENT. Section 8.6 of
the Credit Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:

                  "Section 8.6. RESTRICTED DISTRIBUTIONS AND REDEMPTIONS. None
         of the Borrowers will declare or pay any cash Distributions; PROVIDED
         that (a) any Subsidiary may declare or pay cash Distributions to the
         Parent, and (b) so long as no Default or Event of Default has occurred
         and is continuing, or would occur after giving effect thereto, the
         Parent may make cash Distributions on its common stock in an aggregate
         amount, together with redemptions permitted by the following

<PAGE>

                                      -4-

          sentence, not to exceed $500,000 during the term of this Agreement. In
          addition, the Borrowers shall not redeem, convert, retire or otherwise
          acquire shares of any class of capital stock of the Borrowers or
          Excluded Subsidiaries in aggregate amount, together with cash
          Distributions by the Parent permitted by the previous sentence, in
          excess of $500,000 during the term of this Agreement. So long as no
          Default or Event of Default has occurred and is continuing, or would
          occur after giving effect thereto, at any time after August 9, 2003,
          the Parent may make quarterly cash Distributions on its Series A
          Preferred Stock in an amount up to five percent (5%) of the face value
          of the Series A Preferred Stock per year, but in no event to exceed
          $3,226,879 in any fiscal year. Notwithstanding the foregoing, so long
          as no Default or Event of Default has occurred and is continuing, or
          would occur after giving effect thereto, the Parent may, during the
          period commencing on the Fourth Amendment Effective Date through
          December 14, 2002, redeem shares of its common stock in an aggregate
          amount of up to $27,500,000."

          8. AMENDMENTS TO SECTION 9.4 OF THE CREDIT AGREEMENT. Section 9.4 of
the Credit Agreement is hereby amended by inserting after the words "determined
in accordance with GAAP", the words "(including, without duplication, any
preferred stock of the Parent)."

          9. AMENDMENT TO SECTION 13.1 OF THE CREDIT AGREEMENT. The following
new subsection (o) is added thereto:

                  "or (o) A "Change of Control" as defined in the Certificate of
         Designation of the Series A Preferred Stock shall occur;".

          10. RATIFICATION, ETC. Except as expressly amended hereby, the Credit
Agreement, the other Loan Documents and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects and
shall continue in full force and effect. This Fourth Amendment and the Credit
Agreement shall hereafter be read and construed together as a single document,
and all references in the Credit Agreement or any related agreement or
instrument to the Credit Agreement shall hereafter refer to the Credit Agreement
as amended by this Fourth Amendment.

          11. GOVERNING LAW. THIS FOURTH AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          12. COUNTERPARTS. This Fourth Amendment may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument.

<PAGE>

                                      -5-

         13. COVENANTS. Within thirty (30) days of the Fourth Amendment
Effective Date (as hereinafter defined), U.S. Fiber shall execute and deliver to
the Agent, a Membership Interest Pledge Agreement (the "Pledge Agreement"),
pledging all of its limited liability company interests in the Cellulose Joint
Venture, and such Pledge Agreement will constitute a Security Document under the
Credit Agreement.

         14. EFFECTIVENESS. This Fourth Amendment shall become effective (the
"Fourth Amendment Effective Date") upon the receipt by the Agent of (a) a
counterpart of this Fourth Amendment, executed by the Required Banks and the
Borrowers, (b) an amendment fee in an aggregate amount equal to seven basis
points on the Commitment or outstanding principal portion of the Term Loan, as
applicable, of each Bank which consents to this Fourth Amendment on or prior to
5:00 p.m. (Boston time) on August 4, 2000, (c) payment of all fees and expenses
of the Administrative Agent's legal counsel, and (d) all items outstanding in
connection with the initial closing of the Credit Agreement, all as more fully
described on EXHIBIT A attached hereto.

<PAGE>

                                      -6-

         IN WITNESS WHEREOF, each of the undersigned have duly executed this
Fourth Amendment as of the date first set forth above.

                                FLEET NATIONAL BANK
                                (f/k/a BankBoston, N.A.),
                                individually and as Administrative Agent

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KEYBANK NATIONAL ASSOCIATION,
                                individually and as Documentation Agent

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                BANK OF AMERICA, N.A.,
                                individually and as Syndication Agent

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                COMERICA BANK

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CIBC INC.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -7-

                                LASALLE BANK NATIONAL
                                ASSOCIATION

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CREDIT LYONNAIS NEW YORK BRANCH

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                FIRST VERMONT BANK AND TRUST
                                COMPANY

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CANADIAN IMPERIAL BANK OF
                                COMMERCE, individually and as
                                Canadian Agent

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                SANKATY HIGH YIELD PARTNERS II, L.P.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                GREAT POINT CLO 1999-1 LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -8-

                                NORTH AMERICAN SENIOR
                                FLOATING RATE FUND

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KEMPER FLOATING RATE FUND

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CARLYLE HIGH YIELD PARTNERS II, LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CYPRESSTREE INVESTMENT
                                PARTNERS I, LTD

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                OPPENHEIMER SENIOR FLOATING
                                RATE FUND

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -9-

                                HARBOURVIEW CDI II, LIMITED

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                INDOSUEZ CAPITAL FUNDING IIA, LIMITED
                                By:  Indosuez Capital Luxembourg, as Collateral
                                     Manager

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                MAGNETITE ASSET INVESTORS, LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                ARES LEVERAGED INVESTMENT FUND II, L.P.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                ARES III CLO LTD.
                                By: ARES CLO Management LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -10-

                                ELT LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                STRATEGIC MANAGED LOAN PORTFOLIO

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                FIRST DOMINION FUNDING II

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                FIRST DOMINION FUNDING III

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KZH SHOSHONE LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                PILGRIM AMERICA HIGH INCOME
                                INVESTMENTS, LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -11-

                                PILGRIM CLO 1999-1 LTD.
                                By:  Pilgrim Investments, Inc., as its
                                     investment manager

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                BANKERS TRUST COMPANY

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                ARCHIMEDES FUNDING III, LTD.
                                By: ING Capital Advisors LLC,
                                as Collateral Manager

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                CYPRESSTREE INVESTMENT PARTNERS II, LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KZH-ING-1 LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KZH-ING-3 LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -12-

                                SEQUILS-ING I (HBDGM), LTD.
                                By: ING Capital Advisors LLC,
                                as Collateral Manager and Authorized Signatory

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                MORGAN STANLEY DEAN WITTER
                                PRIME INCOME TRUST

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                THE TRAVELERS INSURANCE COMPANY

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                TRAVELERS CORPORATE LOAN FUND INC.
                                By: Travelers Asset Management
                                    International Company LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                VAN KAMPEN PRIME RATE INCOME TRUST

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -13-

                                ELC (CAYMAN) LTD. 1999-III

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                FIRST ALLAMERICA FINANCIAL LIFE
                                INSURANCE CO.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                AVALON CAPITAL LTD.
                                By:  INVESCO Senior Secured Management,
                                     Inc., as Portfolio Advisor

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                AVALON CAPITAL LTD. 2
                                By:  INVESCO Senior Secured Management,
                                     Inc., as Portfolio Advisor

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                OLYMPIC FUNDING TRUST, SERIES 1999-1

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                KZH CYPRESSTREE-1 LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                NORSE CBO, LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                    [SIGNATURES CONTINUED ON FOLLOWING PAGE]

<PAGE>

                                      -14-

                                COLUMBUS LOAN FUNDING LTD.
                                By:  Travelers Asset Management International
                                Company LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                MUIRFIELD TRADING LLC

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                STANFIELD/RMF TRANSATLANTIC CDO, LTD.

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                VANKAMPEN CLO I, LIMITED

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

                                VANKAMPEN CLO II, LIMITED

                                By:
                                    --------------------------------------------
                                Name:
                                     -------------------------------------------
                                Title:
                                      ------------------------------------------

<PAGE>

                                      -15-

                DOMESTIC BORROWERS:
                -------------------

                ALL CYCLE WASTE, INC.
                BRISTOL WASTE MANAGEMENT, INC.
                CASELLA T.I.R.E.S., INC.
                CASELLA TRANSPORTATION, INC.
                CASELLA WASTE MANAGEMENT, INC.
                CASELLA WASTE MANAGEMENT OF N.Y., INC.
                CASELLA WASTE MANAGEMENT OF PENNSYLVANIA, INC.
                CASELLA WASTE SYSTEMS, INC.
                GRASSLANDS INC.
                HAKES C & D DISPOSAL, INC.
                HIRAM HOLLOW REGENERATION CORP.
                NATURAL ENVIRONMENTAL, INC.
                NEWBURY WASTE MANAGEMENT, INC.
                NEW ENGLAND WASTE SERVICES, INC.
                NEW ENGLAND WASTE SERVICES OF MASSACHUSETTS, INC.
                NEW ENGLAND WASTE SERVICES OF N.Y., INC.
                NEW ENGLAND WASTE SERVICES OF VERMONT, INC.
                NORTH COUNTRY ENVIRONMENTAL SERVICES, INC.
                NORTHERN SANITATION, INC.
                PINE TREE WASTE, INC.
                RESOURCE RECOVERY OF CAPE COD, INC.
                RESOURCE TRANSFER SERVICES, INC.
                RESOURCE WASTE SYSTEMS, INC.
                SAWYER ENVIRONMENTAL RECOVERY FACILITIES, INC.
                SAWYER ENVIRONMENTAL SERVICES
                SCHULTZ LANDFILL, INC.
                SUNDERLAND WASTE MANAGEMENT, INC.
                WASTE-STREAM INC.
                WESTFIELD DISPOSAL SERVICE, INC.
                WINTERS BROTHERS, INC.

                  By:
                      --------------------------
                  Name:  Jerry S. Cifor
                  Title:  Treasurer

                       [SIGNATURES CONTINUED ON NEXT PAGE]

<PAGE>

                                      -16-

                ADVANCED ENTERPRISES RECYCLING INC.
                THE AFA GROUP, INC.
                AFA PALLET, INC.
                AGRO PRODUCTS, INC.
                ALLIED EQUIPT. & SALES CORP., INC.
                AMERICAN SUPPLIES SALES GROUP, INC.
                ARTIC INC.
                ATLANTIC TRANSPORTATION TECHNOLOGIES INC.
                DATA DESTRUCTION SERVICES, INC.
                FAIRFIELD COUNTY RECYCLING, INC.
                FCR CAMDEN, INC.
                FCR FLORIDA, INC.
                FCR GEORGIA, INC.
                FCR GREENSBORO, INC.
                FCR GREENVILLE, INC.
                FCR MORRIS, INC.
                FCR PLASTICS, INC.
                FCR REDEMPTION, INC.
                FCR TENNESSEE, INC.
                FCR VIRGINIA, INC.
                FCR, INC.
                KTI BIO FUELS, INC.
                KTI ENERGY OF MARTINSVILLE, INC.
                KTI ENERGY OF VIRGINIA, INC.
                KTI ENVIRONMENTAL GROUP, INC.
                KTI NEW JERSEY FIBERS, INC.
                KTI OPERATIONS, INC.
                KTI RECYCLING OF ILLINOIS, INC.
                KTI RECYCLING OF NEW ENGLAND, INC.
                KTI RECYCLING OF NEW JERSEY, INC.
                KTI RECYCLING, INC.
                KTI SPECIALTY WASTE SERVICES, INC.
                KTI TRANSPORTATION SERVICES, INC.
                KTI, INC.
                MANNER RESINS, INC.
                MECKLENBURG COUNTY RECYCLING, INC.
                POWER SHIP TRANSPORT, INC.
                TOTAL WASTE MANAGEMENT CORP.
                U.S. FIBER, INC.

                  By:
                      --------------------------
                  Name:  Jerry S. Cifor
                  Title:  Treasurer

<PAGE>

                                      -17-

         PENOBSCOT ENERGY RECOVERY COMPANY,
           LIMITED PARTNERSHIP
                  By: PERC Management Company Limited
                           Partnership, general partner
                  By: PERC, Inc., general partner

                            By:
                               --------------------------
                                    Name:  Jerry S. Cifor
                                    Title:  Treasurer

         PERC MANAGEMENT COMPANY, LIMITED
           PARTNERSHIP
                  By: PERC, Inc., general partner

                            By:
                               --------------------------
                                    Name:  Jerry S. Cifor
                                    Title:  Treasurer

                CANADIAN BORROWERS:

                KTI RECYCLING OF CANADA, INC.
                1316991 ONTARIO, INC.

                By:
                    ------------------------------
                Name:  Jerry S. Cifor
                Title:  Treasurer

<PAGE>

                                   SCHEDULE A

Berkshire Fund V Investment Corp.

Berkshire Investors LLC

BancBoston Capital Inc.

RGIP, LLC

Squam Lake Investors IV, L.P.<PAGE>

                                                                    EXHIBIT 4.56

                             INTERMARK PARTNERS, LLC
                           484 EAST CARMEL DRIVE, #357
                              CARMEL, INDIANA 46302

June 29, 2000

Mr. Daniel McPeak, Sr.
The RiceX Company
1241 Hawks Flight Court
El Dorado Hills, CA  95762

                         RE: MEMORANDUM OF UNDERSTANDING

Dear Dan:

Intermark Partners, LLC (Intermark) is prepared to move forward with its equity
investment in The RiceX Company (RiceX) under the following terms. Note that
these terms essentially reflect the "original deal" outlined in the Agreement in
Principle with the addition of the one-for-one warrants similar to those granted
in most recent RiceX private placement. The management participation to be
provided by Intermark through Glenn Sullivan, Alan Kimbell, and Intermark
Partners Strategic Management, LLC, will be the subject of a separate agreement.

1.   Effective June 30, 2000, Intermark will convert its existing $2.5 million
     note receivable from RiceX into:
     a.   3,571,429 shares of RiceX common stock.
     b.   A warrant to purchase 3,571,429 shares of RiceX common stock for $0.70
          per share and exercisable for five years.
     c.   A warrant to purchase 1,785,715 shares of RiceX common stock for $0.70
          per share, exercisable for five years, transfer or sale restricted
          until RiceX's annualized GAAP basis sales reach $12 million on a
          trailing twelve month basis.
     d.   A warrant to purchase 2,678,572 shares of RiceX common stock for $0.70
          per share, exercisable for five years, transfer or sale restricted
          until RiceX's GAAP basis sales reach an annualized equivalent of $25
          million for four consecutive months.

2.   Intermark will invest an additional $2.5 million on or before December 22,
     2000 under the same terms as #1 above conditioned as follows:
     a.   The investment will be mandatory if RiceX's GAAP basis sales reach an
          annualized equivalent of $7.5 million for two consecutive calendar
          months between July 1, 2000 and November 30, 2000.
     b.   The investment will be at Intermark's option if the sales target in
          2(a) above is not achieved.

3.   Upon the closing of #1 above, it is our understanding that the following
     will also occur:
     a.   RiceX will pay up to $25,000 in due diligence costs incurred by
          Intermark (including legal and market research) in excess of the
          $50,000 limit stated in the Agreement in Principle.
     b.   The strategic management concepts outlined in the Agreement in
          Principle will be implemented by RiceX including consensus management
          through the executive management team and at least monthly board level
          update meetings via telephone (and at least two meetings per year in
          person) for at least the next year.

Sincerely,

Glenn H. Sullivan, Ph.D.
Senior Partner

I agree with the deal points outlined above and will sign the documents required
to formalize the agreements.

The RiceX Company

--------------------------
by:  Daniel McPeak, Sr.
For and on behalf of the RiceX Company

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