WASTE MANAGEMENT INC
REIMBURSEMENT AGREEMENT - OAKMONT ASSET TRUST
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>3
<FILENAME>h12380exv10w10.txt
<DESCRIPTION>REIMBURSEMENT AGREEMENT - OAKMONT ASSET TRUST
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.10

                             REIMBURSEMENT AGREEMENT

         This REIMBURSEMENT AGREEMENT, dated as of December 22, 2003 (as
amended, supplemented and otherwise modified from time to time, the
"Agreement"), is entered into among WASTE MANAGEMENT, INC., a Delaware
corporation ("Waste Management"), WASTE MANAGEMENT HOLDINGS, INC., a Delaware
corporation and wholly-owned subsidiary of Waste Management ("Holdings")
(executing this Agreement for the limited purposes set forth in Article VIII
hereof), OAKMONT ASSET TRUST, a Delaware statutory trust (the "Trust"), and THE
BANK OF NEW YORK (DELAWARE), as owner trustee (the "Owner Trustee") of the
Trust.

                             PRELIMINARY STATEMENTS:

         WHEREAS, Waste Management has heretofore and may from time to time
hereafter request Fleet National Bank (the "Fleet"), to issue from time to time
certain letters of credit ("Fleet Letters of Credit") for or on behalf of Waste
Management and its subsidiaries and other affiliates.

         WHEREAS, as a condition to Fleet issuing the Fleet Letters of Credit,
Fleet requires that Waste Management deliver an irrevocable master letter of
credit identifying Fleet as beneficiary thereunder and covering all unreimbursed
amounts drawn under the Fleet Letters of Credit designated as Designated Letters
of Credit (as defined below).

         WHEREAS, Waste Management has requested the Trust to issue such
irrevocable master letter of credit, in substantially the form of Exhibit A
attached hereto (such letter of credit being the "Master Letter of Credit"), in
the amount of $352,000,000.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Trust to issue the Master Letter of Credit, the parties hereto agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

         SECTION 1.01. Certain Defined Terms. The following terms used in this
Agreement shall have the following meanings, applicable both to the singular and
the plural forms of the terms defined:

         "Administration Agreement" shall mean the Administrative Services
Agreement dated as of the date hereof executed and delivered by the Trust and
the Administrator, as the same may be amended, supplemented and otherwise
modified from time to time.

         "Administrator" shall mean AMACAR Northwest, Inc., a Delaware
corporation.

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          "Agreement" shall have the meaning ascribed to such term in the
preamble hereof.

         "Allocated Amount" shall mean, with respect to a Designated Letter of
Credit, the amount indicated as such on the Schedule to the Designation
Certificate with respect to such Designated Letter of Credit, as such amount may
be reduced from time to time in accordance with the provisions of the Master
Letter of Credit. The maximum aggregate amount available to be drawn with
respect to a Designated Letter of Credit shall be the Allocated Amount of such
Designated Letter of Credit.

         "Applicable Interest Rate" shall mean a per annum rate equal to LIBOR
minus 0.10%.

         "Attributable Debt" shall mean, as of any particular time, the present
value, discounted at a rate per annum equal to (i) the implied lease rate of or
(ii) if the implied lease rate is not known to Waste Management or Holdings,
then the interest rate of the securities issued under the Senior Debt Indenture
compounded semi-annually, in either case, of the obligation of a lessee for
rental payments during the remaining term of any lease (including any period for
which such lease has been extended or may, at the option of the lessor, be
extended); the net amount of rent required to be paid for any such period shall
be the total amount of the rent payable by the lessee with respect to such
period but may exclude amounts required to be paid on account of maintenance and
repairs, insurance, taxes, assessments, water rates and similar charges; and, in
the case of any lease which is terminable by the lessee upon the payment of a
penalty, such net amount shall also include the amount of such penalty, but no
rent shall be considered as required to be paid under such lease subsequent to
the first date upon which it may be so terminated.

         "Bankruptcy Code" shall mean Title 11 of the United States Code (11
U.S.C. Sections 101 et seq.), as amended from time to time, and any successor
statute.

         "Board of Directors" shall mean either the board of directors of Waste
Management or any duly authorized committee of that board.

         "Business Day" shall mean a day which is not a Saturday or Sunday or a
legal holiday and on which banks or trust companies are not required or
authorized by law or other governmental action to close in New York, New York.

         "Cash Collateral Account" shall have the meaning ascribed to such term
in the Master Letter of Credit.

         "Certificateholder" means the person in whose name the certificate
representing the entire beneficial ownership of the Trust is registered;
provided that the sole initial Certificateholder shall be AMACAR GP, Inc.

         "Closing Date" shall mean the date on which the conditions precedent
set forth in Sections 3.01 and 3.02 hereof have been satisfied.

         "Consolidated Net Tangible Assets" shall mean, at any date of
determination, the total amount of assets of Waste Management after deducting
therefrom: (i) all the current liabilities

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(excluding (a) any current liabilities that by their terms are extendible or
renewable at the option of the obligor thereon to a time more than twelve months
after the time as of which the amount thereof is being computed, and (b) current
maturities of long term debt) and (ii) the value (net of any applicable
reserves) of all intangible assets such as excess of cost over net assets of
acquired businesses, customer lists, covenants not to compete, licenses, and
permits, all as set forth on the consolidated balance sheet of Waste Management
and its consolidated Subsidiaries for Waste Management's most recently completed
fiscal quarter, prepared in accordance with GAAP.

         "Designated Letters of Credit" shall mean those Fleet Letters of Credit
identified as a "Designated Letter of Credit" in a properly presented
Designation Certificate under the Master Letter of Credit and as otherwise
provided for in the Master Letter of Credit.

         "Designation Certificate" shall mean a notice, substantially in the
form of Annex C to the Master Letter of Credit, executed and delivered by the
Administrator (on behalf of the Trust), Waste Management and Fleet identifying
those Fleet Letters of Credit that are Designated Letters of Credit.

         "Disclosure Documents" shall mean filings that have been made prior to
the date hereof by Waste Management with the Securities and Exchange Commission
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as
amended.

         "Drawing Certificate" shall mean a certificate, substantially in the
form of Annex A-1 or A-2 to the Master Letter of Credit.

         "Drawn Principal Amount" shall mean the aggregate amount of the
Reimbursable Payments.

         "Event of Default" shall have the meaning ascribed to such term in
Section 6.01 hereof.

         "Expense Payment Account" shall have the meaning ascribed to such term
in the Indenture.

         "Final Drawing Certificate" shall have the meaning ascribed to such
term in the Master Letter of Credit.

         "Fixed Rate Notes" shall mean the Fixed Rate Notes due December 22,
2008 in the Principal Amount issued by the Trust pursuant to the Indenture.

         "Fixed Rate Payment Date" shall have the meaning ascribed to such term
in the Indenture.

         "Fleet" shall have the meaning ascribed to such term in the Preliminary
Statements.

         "Fleet Collateral" shall mean the Fleet Note, the Cash Collateral
Account (as defined in the Fleet Security Agreement), including all sums
credited to the Cash Collateral Account and all proceeds of the Fleet Note
(other than the actual cash payments paid by Fleet to the Trust that are

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deposited into a Segregated Account) or the Cash Collateral Account or any and
all sums from time to time credited to the Cash Collateral Account.

         "Fleet Letters of Credit" shall mean letters of credit, denominated in
United States dollars and issued directly or indirectly for the account of Waste
Management or any of its subsidiaries or affiliates by Fleet.

         "Fleet Lien" shall mean the first priority Lien of Fleet in the Fleet
Collateral securing the Fleet Obligations.

         "Fleet Note" means a five-year term note issued by Fleet to the Trust
in an amount initially equal to the amount of the proceeds from the sale of the
Fixed Rate Notes, and due on December 21, 2008, or if such day is not a Business
Day on the immediately preceding Business Day.

         "Fleet Obligations" shall mean the "obligations" as defined in the
Fleet Security Agreement.

         "Fleet Security Agreement" shall mean the Security Agreement dated as
of December 22, 2003 between the Trust and Fleet pursuant to which the Trust
grants to Fleet a first priority Lien in the Fleet Collateral.

         "GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants Standards Board or in such
other statements by such other entity as may be in general use by significant
segments of the accounting profession as in effect on the date of the most
recent audited financial statements of Waste Management.

         "Governmental Authority" shall mean any nation or government, any
federal, state, local or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.

         "Guaranteed Obligations" shall have the meaning ascribed to such term
in Section 8.01 hereof.

         "Guaranty" shall mean any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the debt, payment or
other financial obligation or liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the shares of any other Person.
The amount of the obligor's obligation under any Guaranty shall (subject to any
limitation set forth therein) be deemed to be the amount of such other Person's
debt, payment or other financial obligation or other liability or the amount of
such dividends or other distributions guaranteed.

         "Holdings" shall have the meaning ascribed to such term in the preamble
hereof.

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         "Holdings Guaranty" shall have the meaning ascribed to such term in
Section 8.01 hereof.

         "Improperly Extended Letter of Credit" shall mean any letter of credit
which either (i) has an expiration date that has been extended by Fleet
subsequent to the fifth Business Day after the receipt by Fleet of a Notice of
No Further Designation if Fleet had the contractual right not to extend such
expiration date or (ii) is a so-called evergreen letter of credit and Fleet did
not exercise any right it had to terminate, cancel or otherwise not renew such
letter of credit subsequent to the fifth Business Day after the receipt of a
Notice of No Further Designation, to the extent that Fleet had the contractual
ability to do so.

         "Indebtedness" shall mean, with respect to any Person:

                  (a) all obligations of such Person for borrowed money
         (including, without limitation, all notes payable and drafts accepted
         representing extension of credit and all obligations evidenced by
         bonds, debentures, notes or other similar instruments) or on which
         interest charges are customarily paid, all as shown on a balance sheet
         of such Person as of the date at which Indebtedness is to be
         determined;

                  (b) all other items which, in accordance with GAAP, would be
         included as liabilities on the liability side of a balance sheet of
         such Person as of the date at which Indebtedness is to be determined;
         and

                  (c) whether or not so included as liabilities in accordance
         with GAAP, (i) all indebtedness (excluding, however, prepaid interest
         thereon) secured by a Security Interest in property owned or being
         purchased by such Person (including, without limitation, indebtedness
         arising under conditional sales or other title retention agreements)
         whether or not such indebtedness shall have been assumed by such
         Person, and (ii) all Guaranties of such Person.

         "Indenture" shall mean the Trust Indenture dated as of December 22,
2003 among the Trust and the Indenture Trustee.

         "Indenture Trustee" shall mean The Bank of New York, as trustee, under
the Indenture.

         "Interest Payment Obligation" shall have the meaning ascribed to such
term in Section 2.04 hereof.

         "Interest Period" shall mean the period commencing with the immediately
preceding Reimbursement Payment Date (or the Closing Date for the first Interest
Period) to (but not including) the immediately succeeding Reimbursement Payment
Date.

         "Letter of Credit Fee" shall have the meaning ascribed to such term in
Section 2.05 hereof.

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         "LIBOR" shall mean, as of the relevant LIBOR Determination Date, the
annual rate for a three month period for deposits in United States dollars which
appears on Telerate Page 3750 as of 11:00 a.m., London time, on such date. If
such rate does not appear on Telerate Page 3750, the rate for that LIBOR
Determination Date will be an annualized rate determined on the basis of the
rates at which deposits in United States dollars are offered by the Reference
Banks at approximately 11:00 a.m., London time, on that day to prime banks in
the London inter-bank market for a three month period. The LIBOR Calculation
Agent will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate for the LIBOR Determination Date will be an annualized rate equal to
the arithmetic mean of the quotations. If fewer than two quotations are provided
as requested, the rate for that LIBOR Determination Date will be the arithmetic
mean of the rates quoted by three major banks in New York City, selected by the
LIBOR Calculation Agent, at approximately 11:00 a.m., New York City time, on
that day for loans in United States dollars to leading European banks for a
three month period.

         "LIBOR Calculation Agent" shall mean the Indenture Trustee.

         "LIBOR Determination Date" shall mean the second London Banking Day
immediately preceding the beginning of each Interest Period.

         "Lien" shall mean, with respect to any Person, any interest granted by
such Person in any real or personal property, asset or other right owned or
being purchased or acquired by such Person which secures payment or performance
of any obligation and shall include any mortgage, lien, encumbrance, charge or
other security interest of any kind, whether arising by contract, as a matter of
law, by judicial process or otherwise.

         "LOC Fee Accrual Period" shall mean the period commencing with the
immediately preceding LOC Fee Payment Date (or the Closing Date for the first
LOC Fee Accrual Period) to (but not including) the immediately succeeding LOC
Fee Payment Date.

         "LOC Fee Payment Date" shall mean the 21st day of each June and
December of each year commencing on June 21, 2004. If any LOC Fee Payment Date
is not a Business Day then that date will nevertheless by a LOC Fee Payment Date
but the payment of the Letter of Credit Fee will be made on the immediately
preceding Business Day.

         "London Banking Day" shall mean any business day on which dealings in
deposits in United States dollars are transacted in the London interbank market.

         "Majority" means holders holding the Fixed Rate Notes the aggregate
principal amount of which is more than 50% of the principal amount of all Fixed
Rate Notes.

         "Master Letter of Credit" shall have the meaning ascribed to such term
in the Preliminary Statements.

         "Material Subsidiary" shall mean a Subsidiary of Waste Management
having assets, revenues or liabilities of $50,000,000 or more.

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         "Maturity Date" shall mean December 21, 2008 or, if such day is not a
Business Day, the immediately preceding Business Day..

         "Note Interest Payment Account" shall mean the deposit account in the
name of the Indenture Trustee at The Bank of New York, ABA #021-000-018,
GLA-111-565, For further credit to: TAS #718550, Ref: Oakmont Asset Trust (Note
Interest Payment Account), Attention: Jon Farber.

         "Note Principal Payment Account" shall mean the deposit account in the
name of the Indenture Trustee at The Bank of New York, ABA #021-000-018,
GLA-111-565, For further credit to: TAS #718552, Ref: Oakmont Asset Trust (Note
Principal Payment Account), Attention: Jon Farber.

         "Notice of No Further Designation" shall mean a notice, substantially
in the form of Annex E to the Master Letter of Credit, sent by the Administrator
(on behalf of the Trust) to Fleet advising Fleet that the Trust has terminated
Waste Management's right to designate additional Designated Letters of Credit.
No additional Designated Letters of Credit will be covered by the Master Letter
of Credit.

         "Obligations" shall mean all obligations, liabilities, debts,
Reimbursement Obligations, Interest Payment Obligation owing by Waste Management
to the Trust of any kind or nature, present or future, whether or not evidenced
by any note, guaranty or other instrument, arising under this Agreement. This
term includes, without limitation, all interest, charges, expenses, fees,
attorney fees and disbursements, indemnities, obligations to cash collateralize
and any other sum chargeable to Waste Management under this Agreement.

         "Officers' Certificate" shall mean a certificate signed by any
Executive or Senior Vice President and by the Treasurer, an Assistant Treasurer,
the Secretary or an Assistant Secretary, of Waste Management and delivered to
the Owner Trustee.

         "Owner Trustee" shall have the meaning ascribed to such term in the
preamble hereof.

         "Person" shall mean any natural person, corporation, limited
partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
limited liability company or other organization, whether or not a legal entity,
and any Governmental Authority.

         "Principal Amount" shall mean $350,000,000.

         "Principal Property" shall mean any waste processing, waste disposal or
resource recovery plant or similar facility located within the United States
(other than its territories and possessions and Puerto Rico) or Canada and owned
by, or leased to, Waste Management or any Restricted Subsidiary, except (a) any
such plant or facility (i) owned or leased jointly or in common with one or more
persons other than Waste Management and its Restricted Subsidiaries in which the
interest of Waste Management and its Restricted Subsidiaries does not exceed
50%, or (ii) which the Board of Directors determines in good faith is not of
material importance to the

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total business conducted, or assets owned, by Waste Management and its
Subsidiaries as an entirety, or (b) any portion of such plant or facility which
the Board of Directors determines in good faith not to be of material importance
to the use or operation thereof.

         "Rating Agency Condition" shall have the meaning ascribed to such term
in the Indenture.

         "Reference Banks" shall mean four major banks in the London interbank
market selected by the LIBOR Calculation Agent.

         "Reimbursable Payment" shall mean each setoff and reduction made by
Fleet with respect to the principal amount owing under the Fleet Note including
the amount of set-off and reduction made by Fleet with respect to the
presentation of the Final Drawing Certificate.

         "Reimbursement Payment Date" shall mean the 21st day of each March,
June, September and December of each year or, if such day is not a Business Day,
on the immediately preceding Business Day, commencing on March 21, 2004.

         "Reimbursement Obligations" shall mean the aggregate non-contingent
reimbursement or repayment obligations of Waste Management with respect to the
Reimbursable Payments.

         "Related Documents" shall have the meaning ascribed to such term in
Section 2.07 hereof.

         "Removal Certificate" shall mean a Certificate, substantially in the
form of Annex G to the Master Letter of Credit, executed and delivered by the
Administrator (on behalf of the Trust), Fleet and Waste Management, identifying
those Designated Letters of Credit that should no longer be entitled to the
benefits of the Master Letter of Credit.

         "Restricted Subsidiary" shall mean any Subsidiary (other than a
Subsidiary of which Waste Management owns directly or indirectly less than all
of the outstanding Voting Stock) (a) principally engaged in, or whose principal
assets consist of property used by Waste Management or any Restricted Subsidiary
in, the storage, collection, transfer, interim processing or disposal of waste
within the United States of America or Canada, or (b) which Waste Management
shall designate as a Restricted Subsidiary in an Officers' Certificate delivered
to the Owner Trustee.

         "Sale and Leaseback" shall have the meaning ascribed to such term in
Section 5.03 hereof.

         "Security Instrument" shall mean any security agreement, chattel
mortgage, assignment, financing or similar statement or notice, continuation
statement, other agreement or instrument, or amendment or supplement to any
thereof, providing for, evidencing or perfecting any Security Interest or lien.

         "Security Interest" shall mean any interest in any real or personal
property or fixture which secures payment or performance of an obligation and
shall include any mortgage, lien,

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encumbrance, charge or other security interest of any kind, whether arising
under a Security Instrument or as a matter of law, judicial process or
otherwise.

         "Senior Debt Indenture" shall mean the Indenture dated as of September
10, 1997 between Waste Management and JP Morgan Chase Bank, as trustee.

         "Stated Termination Date" shall have the meaning ascribed to such term
in the Master Letter of Credit.

         "Subsidiary" shall mean a corporation or other business entity, more
than 50% of the outstanding equity or voting interests of which is owned,
directly or indirectly, by Waste Management or by one or more other
Subsidiaries, or by Waste Management and one or more other Subsidiaries.

         "Swap Agreement" shall mean the obligation of the Swap Counterparties
to provide for the payment of a fixed interest rate against receipt from the
Trust, unconditionally guaranteed by the Swap Guarantor, of a floating interest
rate on a specified notional principal amount, documented pursuant to an ISDA
Master Agreement (1992 Multicurrency-Cross Border version) in the form published
by the International Swaps and Derivatives Association, Inc. and the schedule
attached thereto and any confirmation relating thereto.

         "Swap Counterparties" shall mean (1) ABN AMRO Bank N.V., (2) The Bank
of Nova Scotia, (3) Deutsche Bank AG, New York Branch, (4) Fleet National Bank,
(5) Lehman Brothers Special Financing Inc., and (6) PNC Bank, National
Association.

         "Swap Guarantor" shall mean Waste Management and Holdings.

         "Swap Payment Account" shall mean the deposit account in the name of
the Indenture Trustee at The Bank of New York, ABA #021-000-018, GLA-111-565,
For further credit to: TAS #718553, Ref: Oakmont Asset Trust (Swap Payment
Agreement), Attention: Jon Farber.

         "Tax Matters Partner" shall mean AMACAR Northwest, Inc.

         "Telerate Page 3750" shall mean the display page currently so
designated on the Dow Jones Market Service or any successor service (or such
other page as may replace that page on that service or any successor service for
the purpose of displaying comparable rates or prices).

         "Termination Certificate" shall mean a Certificate, substantially in
the form of Annex F to the Master Letter of Credit, executed and delivered by
the Administrator (on behalf of the Trust), Fleet and Waste Management,
identifying those Designated Letters of Credit that as of the date which shall
be no earlier than the thirtieth day, nor later than the fifth Business Day,
immediately preceding the Stated Termination Date (as defined in the Master
Letter of Credit) will no longer be designated as a "Designated Letter of
Credit" under the Master Letter of Credit.

         "Transaction Documents" shall mean this Agreement, the Swap Agreements,
the Indenture, the Master Letter of Credit, the Fleet Note, the Fleet Security
Agreement, the Administration

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Agreement, the Trust Agreement and all documents, instruments and agreements
delivered in connection therewith.

         "Trust" shall have the meaning ascribed to such term in the preamble
hereof.

         "Trust Agreement" means the Amended and Restated Trust Agreement of the
Trust, dated December 22, 2003, between Waste Management, as Depositor, and the
Owner Trustee.

         "Undrawn Principal Amount" shall mean the Principal Amount minus the
Drawn Principal Amount.

         "Voting Stock" shall mean stock which ordinarily has voting power for
the election of directors, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.

         "Waste Management" shall have the meaning ascribed to such term in the
preamble hereof.

         SECTION 1.02. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such period, provided that if such period commences on the last day
of a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month during which such period is to end), such period
shall, unless otherwise expressly required by the other provisions of this
Agreement, end on the last day of the calendar month.

         SECTION 1.03. Accounting Terms. For purposes of this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP.

         SECTION 1.04. Other Definitional Provisions. References to the
"preamble", "Articles", "Sections", "subsections", "Schedules" and "Exhibits"
shall be to the preamble, Articles, Sections, subsections, Schedules and
Exhibits, respectively, of this Agreement unless otherwise specifically
provided. The words "hereof", "herein", and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.

                                   ARTICLE II

                      AMOUNT AND TERMS OF LETTER OF CREDIT

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         SECTION 2.01. The Master Letter of Credit. The Trust agrees, on the
terms and conditions hereinafter set forth, to issue the Master Letter of Credit
to Fleet on the Closing Date in the amount of up to $352,000,000. Under the
Master Letter of Credit, the Trust will pay to Fleet the amount of each
unreimbursed draw under a Designated Letter of Credit in accordance with the
Master Letter of Credit.

         SECTION 2.02. Designating/Removing Fleet Letters of Credit.

         (a)      Fleet Letters of Credit may be designated as Designated
Letters of Credit by delivery to Fleet of a Designation Certificate executed and
delivered by the Administrator on behalf of the Trust, Waste Management and
Fleet. Such notice shall specify for each Fleet Letter of Credit to be
designated a Designated Letter of Credit the Allocated Amount with respect
thereto. No Fleet Letter of Credit shall be designated a Designated Letter of
Credit and entitled to the benefits of the Master Letter of Credit until the
Designation Certificate has been executed by all parties thereto and delivered
to Fleet.

         (b)      Designated Letters of Credit may be removed from the coverage
of the Master Letter of Credit by delivery to the Trust of a Removal Certificate
or Termination Certificate executed by Fleet, Waste Management and the
Administrator on behalf of the Trust. After a Removal Certificate or Termination
Certificate has been delivered to the Trust, those Designated Letters of Credit
identified in such Removal Certificate or the Termination Certificate, as the
case may be, shall no longer be entitled to the benefits of the Master Letter of
Credit.

         (c)      If a Notice of No Further Designation has been delivered by
the Trust to Fleet, no Improperly Extended Letter of Credit shall constitute a
Designated Letter of Credit.

         SECTION 2.03. Reimbursement of the Reimbursable Payments. On the
Maturity Date, Waste Management shall pay to the Trust by depositing into the
Note Principal Payment Account, for the ratable benefit of the holders of the
Fixed Rate Notes, the aggregate principal amount of all Reimbursable Payments
outstanding at such time.

         SECTION 2.04. Interest. Interest shall accrue on each Reimbursable
Payment during the period commencing on the date Fleet is deemed to have made a
setoff or reduction with respect to the principal amount owing under the Fleet
Note as set forth in the Master Letter of Credit and the Fleet Security
Agreement to the date such Reimbursable Payment is paid in full under Section
2.03 at the Applicable Interest Rate. On each Reimbursement Payment Date, Waste
Management shall pay to the Indenture Trustee, for the ratable benefit of the
holders of the Fixed Rate Notes, interest at the Applicable Interest Rate on
each Reimbursable Payment outstanding or deemed to be outstanding as set forth
in the Master Letter of Credit and the Fleet Security Agreement during the
immediately preceding Interest Period (calculated based on the actual number of
days occurring in the Interest Period divided by 360). In the event that Fleet
draws under the Master Letter of Credit by presenting a Drawing Certificate in
the form of Annex A-2 during any Interest Period, Waste Management agrees to pay
to the Indenture Trustee, for the ratable benefit of the holders of the Fixed
Rate Notes, on the Reimbursement Payment Date the amount of such draw (all
amounts payable by Waste Management under this

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Section 2.04 collectively referred to as the "Interest Payment Obligation").
Waste Management is hereby directed to deposit such Interest Payment Obligation
paid by Waste Management into the Swap Payment Account.

         SECTION 2.05. Letter of Credit Fee. Waste Management shall pay to the
Indenture Trustee for the benefit of the holders of the Fixed Rate Notes a
letter of credit fee (the "Letter of Credit Fee") on the Principal Amount from
the Closing Date until the Maturity Date in an amount equal to the Fixed Rate
Principal Amount times the rate of 1.13011428571429% per annum (calculated based
on 30 days divided by 360) over the LOC Fee Accrual Period, payable
semi-annually in arrears on each LOC Fee Payment Date. If the LOC Fee Payment
Date is not a Business Day, the Letter of Credit Fee will be paid on the
immediately preceding Business Day; however, the LOC Fee Accrual Period will not
be adjusted. In addition, Waste Management shall pay, only on the first LOC Fee
Payment Date, an additional fee in an amount equal to $43,886.12. Waste
Management is hereby directed to deposit such Letter of Credit Fees and
additional fee paid by Waste Management under this Section 2.05 into the Notes
Interest Payment Account.

         SECTION 2.06. Payments and Computations. Waste Management and Holdings
shall make each payment hereunder not later than by 12:30 p.m. (New York City
time) on the day when due in lawful money of the United States of America in
immediately available funds to the Indenture Trustee at its office in New York,
New York unless otherwise indicated herein..

         SECTION 2.07. Obligations Absolute. The obligations of Waste Management
under this Agreement shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including, without limitation, the following circumstances:

                  (i) any lack of validity or enforceability of this Agreement,
         the Master Letter of Credit and the Designated Letters of Credit
         (collectively the "Related Documents");

                  (ii) any change in the time, manner or place of payment of,
         all or any of the obligations of Waste Management in respect of the
         Master Letter of Credit or any other amendment or waiver of or any
         consent to departure from all or any of the Related Documents, provided
         that any such change, amendment, waiver or consent is made in
         compliance with the Related Documents;

                  (iii) the existence of any claim, set-off, defense or other
         right that Waste Management may have at any time against Fleet or any
         other beneficiary or any transferee of the Master Letter of Credit (or
         any persons or entities for whom Fleet, any such beneficiary or any
         such transferee may be acting), the Trust, the Swap Counterparties or
         any other Person, whether in connection with this Agreement, the
         transactions contemplated hereby or by the Related Documents or any
         unrelated transaction;

                  (iv) any statement or any other document presented under the
         Master Letter of Credit proving to be forged, fraudulent, invalid or
         insufficient in any respect or any

                                       12
<PAGE>

         statement therein being untrue or inaccurate in any respect (unless due
         to the gross negligence or willful misconduct of the Trust or Fleet);

                  (v) payment by the Trust under the Master Letter of Credit
         against presentation of a draft or certificate which does not comply
         with the terms of the Master Letter of Credit;

                  (vi) any exchange, release or non-perfection of any
         collateral, or any release or amendment or waiver of or consent to
         departure from any guarantee, for all or any of the obligations of
         Waste Management in respect of the Master Letter of Credit; or

                  (vii) any other circumstance that might otherwise constitute a
         defense available to, or a discharge of, Waste Management.

                                   ARTICLE III

                             CONDITIONS TO ISSUANCE

         SECTION 3.01. Condition Precedent to Issuance of the Master Letter of
Credit. The obligation of the Trust to issue the Master Letter of Credit is
subject to the condition precedent that the Owner Trustee shall have received on
or before the date of the issuance of the Master Letter of Credit the following,
each dated such date, in form and substance satisfactory to the Owner Trustee:

                  (a) An original of this Agreement executed and delivered by
         the parties hereto.

                  (b) A certified copy of the resolutions of the Board of
         Directors of Waste Management approving this Agreement, the form and
         content of the Master Letter of Credit and the other matters
         contemplated hereby, and of all other documents evidencing any other
         necessary corporate action.

                  (c) Originals (or copies certified to be true copies by an
         appropriate officer of Waste Management and Holdings) of all
         governmental and regulatory approvals, if any, necessary for Waste
         Management and Holdings with respect to this Agreement and the
         transactions contemplated hereby.

                  (d) A certificate of the Secretary or an Assistant Secretary
         of Waste Management and Holdings certifying the names and true
         signatures of the officers of Waste Management and Holdings authorized
         to sign this Agreement and the other documents to be delivered by it
         hereunder.

                  (f) An opinion of John S. Tsai, Esq., counsel for Waste
         Management and Holdings, substantially in the form of Exhibit B
         attached hereto.

                  (g) An executed copy (or a duplicate thereof) of the
         Indenture.

                                       13
<PAGE>

                  (h) The Owner Trustee shall have received a certificate signed
         by a duly authorized officer of Waste Management and by a duly
         authorized officer of Holdings, dated the date of the issuance of the
         Master Letter of Credit, stating that:

                           (i) The representations and warranties contained in
                  Section 4.01 of this Agreement are true and correct on and as
                  of the date of issuance of the Master Letter of Credit, before
                  and after giving effect to such issuance; and

                           (ii) No event has occurred and is continuing, or
                  would result from such issuance, which constitutes an Event of
                  Default or would constitute an Event of Default but for the
                  requirement that notice be given or time elapse or both.

         SECTION 3.02. Conditions Precedent to the Designation of Fleet Letters
of Credit. The obligation of the Trust to designate any Fleet Letter of Credit
as a Designated Letter of Credit shall be subject to the conditions precedent
that on the date of the designation of a Fleet Letter of Credit the Owner
Trustee and the Administrator shall have received a certificate signed by a duly
authorized officer of Waste Management and by a duly authorized officer of
Holdings, dated the date of such designation, stating that:

                  (i) The representations and warranties contained in Section
         4.01 of this Agreement are true and correct on and as of the date of
         designation of each Fleet Letter of Credit, before and after giving
         effect to such designation, as though made on and as of such date; and

                  (ii) No event has occurred and is continuing, or would result
         from such issuance, which constitutes an Event of Default or would
         constitute an Event of Default but for the requirement that notice be
         given or time elapse or both.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         SECTION 4.01. Representations and Warranties. In order to induce the
Trust to enter into this Agreement and to issue the Master Letter of Credit and
to designate the Designated Letters of Credit, each of Waste Management and
Holdings represents and warrants as follows:

         (a)      Waste Management is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite power and authority to own, operate and encumber its assets and to
conduct its business as presently conducted. Holdings is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware and has all requisite power and authority to own, operate and
encumber its assets and to conduct its business as presently conducted.

                                       14
<PAGE>

         (b)      Each of Waste Management and Holdings has the requisite power
and authority to execute, deliver and perform this Agreement and each of the
Related Documents to which it is a party.

         (c)      The execution, delivery and performance by each of Waste
Management and Holding of this Agreement and the Related Documents to which it
is a party are within its corporate powers, have been duly authorized by all
necessary corporate action, and do not contravene (i) Waste Management's or
Holdings' charter or by-laws or (ii) law or any contractual restriction binding
on or affecting Waste Management or Holdings, and do not result in or require
the creation of any lien, security interest or other charge or encumbrance upon
or with respect to any of its properties.

         (d)      No authorization or approval or other action by, and no notice
to or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by Waste Management or Holdings of
this Agreement or any Related Document to which it is a party.

         (e)      This Agreement has been executed and delivered by Waste
Management and Holdings and constitutes the legal, valid and binding obligation
of Waste Management and Holdings enforceable against Waste Management and
Holdings in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws or equity affecting the enforcement of creditor's rights
generally.

         (f)      Except as disclosed in the Disclosure Documents, there is no
pending or threatened action or proceeding affecting Waste Management or any of
its Subsidiaries before any court, governmental agency or arbitrator which may
materially adversely affect the financial condition or operations of Waste
Management and its Subsidiaries, taken as a whole, or which purports to affect
the legality, validity or enforceability of this Agreement or any Related
Document.

                                    ARTICLE V

                                    COVENANTS

         SECTION 5.01. Mergers; Consolidations; Sales of Assets. Waste
Management shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to any
Person, unless:

                  (i) the Person formed by such consolidation or into which
         Waste Management is merged or the Person which acquires by conveyance
         or transfer, or which leases, the properties and assets of Waste
         Management substantially as an entirety shall be a corporation,
         partnership or trust and shall expressly assume, by satisfactory
         documentation (it being expressly understood that any documentation
         with respect to the assumption of the Obligations shall be deemed to be
         satisfactory if the obligations of Waste Management under the Senior
         Debt Indenture are expressly assumed pursuant to

                                       15
<PAGE>

         documentation satisfactory to JP Morgan Chase Bank as trustee under the
         Senior Debt Indenture), the due and punctual payment of the
         Reimbursement Obligations and any premium and interest thereon and all
         other amounts owing hereunder and the performance or observance of
         every other covenant of this Agreement on the part of Waste Management
         to be performed or observed;

                  (ii) immediately after giving effect to such transaction and
         treating any indebtedness which becomes an obligation of Waste
         Management or a Subsidiary as a result of such transaction as having
         been incurred by Waste Management or such Subsidiary at the time of
         such transaction, no Event of Default, and no event which, after notice
         or lapse of time or both, would become an Event of Default, shall have
         happened and be continuing; and

                  (iii) Waste Management has delivered to the Owner Trustee an
         Officers' Certificate and an opinion of counsel, each stating that such
         consolidation, merger, conveyance, transfer or lease and such
         documentation relating thereto comply with this Section 5.01 and that
         all conditions precedent herein provided for relating to such
         transaction have been complied with.

         SECTION 5.02. Limitation on Security Interests. (a) Waste Management
will not, and will not permit any of its Restricted Subsidiaries to, create,
incur, assume or suffer to exist, directly or indirectly, any Indebtedness
secured by a Security Interest upon any Principal Property of Waste Management
or of a Restricted Subsidiary, whether owned as of the date of this Agreement or
hereafter acquired, without making effective provision (and Waste Management
hereby covenants that in any such case it shall make or cause to be made
effective provision) whereby the Obligations shall be secured by such Security
Interest equally and ratably with any and all other Indebtedness of Waste
Management or any Restricted Subsidiary thereby secured for so long as any such
other Indebtedness of Waste Management or any Restricted Subsidiary shall be so
secured; provided that nothing in this Section 5.02 shall prevent, restrict or
apply to Indebtedness secured by:

                  (1) (a) Any Security Interest upon property or assets which is
         created prior to or contemporaneously with, or within 360 days after,
         (i) in the case of the acquisition of such property or assets, the
         completion of such acquisition and (ii) in the case of the
         construction, development or improvement of such property or assets,
         the later to occur of the completion of such construction, development
         or improvement or the commencement of operation or use of the property
         or assets, which Security Interest secures or provides for the payment,
         financing or refinancing, directly or indirectly, of all or any part of
         the acquisition cost of such property or assets or the cost of
         construction, development or improvement thereof; or (b) any Security
         Interest upon property or assets existing at the time of the
         acquisition thereof, which Security Interest secures obligations
         assumed by Waste Management or any Restricted Subsidiary; or (c) any
         conditional sales agreement or other title retention agreement with
         respect to any property or assets acquired by Waste Management or any
         Restricted Subsidiary; or (d) any Security Interest existing on the
         property or assets or shares of stock of a corporation or firm at the
         time such corporation or firm is merged into or consolidated with Waste
         Management or any

                                       16
<PAGE>

         Restricted Subsidiary or at the time of a sale, lease or other
         disposition of the property or assets of such corporation or firm as an
         entirety or substantially as an entirety to Waste Management or any
         Restricted Subsidiary or at the time such corporation becomes a
         Restricted Subsidiary; or (e) any Security Interest existing on the
         property, assets or shares of stock of any successor which shall have
         become Waste Management in accordance with the provisions of Section
         5.01 hereof; provided, in each case, that any such Security Interest
         described in the foregoing clauses (b), (c), (d) or (e) does not attach
         to or affect property or assets owned by Waste Management or any
         Restricted Subsidiary prior to the event referred to in such clauses;
         or

                  (2) Mechanics', materialmen's, carriers' or other like liens
         arising in the ordinary course of business (including construction of
         facilities) in respect of obligations which are not due or which are
         being contested in good faith; or

                  (3) Any Security Interest arising by reason of deposits with,
         or the giving of any form of security to, any governmental agency or
         any body created or approved by law or governmental regulation, which
         is required by law or governmental regulation as a condition to the
         transaction of any business or the exercise of any privilege, franchise
         or license (including, without limitation, any Security Interest
         arising by reason of one or more letters of credit in connection with
         any international waste management contract to be performed by Waste
         Management or any of its Subsidiaries or their respective affiliates);
         or

                  (4) Security Interests for taxes, assessments or governmental
         charges or levies not yet delinquent or Security Interests for taxes,
         assessments or governmental charges or levies already delinquent but
         the validity of which is being contested in good faith; or

                  (5) Security Interests (including judgment liens) arising in
         connection with legal proceedings so long as such proceedings are being
         contested in good faith and, in the case of judgment liens, execution
         thereon is stayed; or

                  (6) Landlords' liens on fixtures located on premises leased by
         Waste Management or any Restricted Subsidiary in the ordinary course of
         business; or

                  (7) Any Security Interest in favor of any governmental
         authority in connection with the financing of the cost of construction
         or acquisition of property; or

                  (8) Any Security Interest arising by reason of deposits to
         qualify Waste Management or any Restricted Subsidiary to conduct
         business, to maintain self-insurance, or to obtain the benefit of, or
         comply with, laws; or

                  (9) Any Security Interest that secures any Indebtedness of a
         Restricted Subsidiary owing to Waste Management or another Restricted
         Subsidiary or by Waste Management to a Restricted Subsidiary; or

                                       17
<PAGE>

                  (10) Any Security Interest incurred in connection with
         pollution control, sewage or solid waste disposal, industrial revenue
         or similar financing; or

                  (11) Any Security Interest created by any program providing
         for the financing, sale or other disposition of trade or other
         receivables qualified as current assets in accordance with GAAP entered
         into by Waste Management or by any Restricted Subsidiary, provided that
         such program is on terms comparable for similar transactions, or any
         document executed by Waste Management or any Restricted Subsidiary in
         connection therewith, and provided that such Security Interest is
         limited to the trade or other receivables in respect of which such
         program is created or exists and the proceeds thereof; or

                  (12) Any extension, renewal or refunding (or successive
         extensions, renewals or refundings) in whole or in part of any
         Indebtedness secured by any Security Interest referred to in the
         foregoing clauses (1) through (11), inclusive, provided that the
         Security Interest securing such Indebtedness shall be limited to the
         property or assets which, immediately prior to such extension, renewal
         or refunding, secured such Indebtedness and additions to such property
         or assets.

         Notwithstanding the foregoing provisions of this Section 5.02(a), Waste
Management or any of its Restricted Subsidiaries may create, incur, assume or
suffer to exist any Indebtedness secured by a Security Interest without so
securing the Obligations if, at the time such Security Interest becomes a
Security Interest upon any Principal Property of Waste Management or such
Restricted Subsidiary and after giving effect thereto, the aggregate outstanding
principal amount of all Indebtedness of Waste Management and its Restricted
Subsidiaries secured by Security Interests permitted by this sentence (excluding
Indebtedness secured by a Security Interest existing as of the date of this
Agreement, but including the Attributable Debt in respect of Sale and Leaseback
Transactions, other than Sale and Leaseback Transactions which, if the
Attributable Debt in respect thereof had been Indebtedness secured by a Security
Interest, would have been permitted by clause (1)(a) above, other Sale and
Leaseback Transactions the proceeds of which have been applied or committed to
be applied in accordance with Section 5.03(b) or Section 5.03(c) and other than
Sale and Leaseback Transactions between Waste Management and any Restricted
Subsidiary) does not exceed 15% of Consolidated Net Tangible Assets.

         (b) If, upon any consolidation or merger of any Restricted Subsidiary
with or into any other corporation, or upon any consolidation or merger of any
other corporation with or into Waste Management or any Restricted Subsidiary or
upon any sale or conveyance of the Principal Property of any Restricted
Subsidiary as an entirety or substantially as an entirety to any other Person,
or upon any acquisition by Waste Management or any Restricted Subsidiary by
purchase or otherwise of all or any part of the Principal Property of any other
Person, any Principal Property theretofore owned by Waste Management or such
Restricted Subsidiary would thereupon become subject to any Security Interest
not permitted by the terms of this Section 5.02, Waste Management, prior to such
consolidation, merger, sale or conveyance, or acquisition, will, or will cause
such Restricted Subsidiary to, secure payment of the principal of and interest,
if any, on the Obligations (equally and ratably with or prior to any other
Indebtedness of Waste Management or such Restricted Subsidiary then entitled
thereto) by a

                                       18
<PAGE>

direct lien on all such Principal Property prior to all liens other than any
liens theretofore existing thereon by supplemental indenture hereto or
otherwise.

         (c) If at any time Waste Management or any Restricted Subsidiary shall
create, incur, assume or suffer to exist any Indebtedness secured by any
Security Interest not permitted by this Section 5.02, to which the covenant in
the first paragraph of Section 5.02(a) or Section 5.02(b) is applicable, Waste
Management will promptly deliver to the Owner Trustee (1) an Officers'
Certificate stating that the covenant of Waste Management contained in the first
paragraph of Section 5.02(a) or Section 5.02(b) has been complied with; and (2)
an opinion of counsel to the effect that such covenant has been complied with,
and that any instruments executed by Waste Management in the performance of such
covenant comply with the requirements of such covenant.

         (d) In the event that Waste Management or any Restricted Subsidiary
shall hereafter secure the Obligations equally and ratably with or prior to any
other obligation or indebtedness pursuant to the provisions of this Section
5.02, the Owner Trustee is hereby authorized to enter into an indenture or
agreement supplemental hereto in accordance with Section 9.04 of the Indenture
and Section 11.01 of the Trust Agreement and to take such action, if any, as it
may deem advisable to enable it to enforce effectively the rights of the Trust
so secured, equally and ratably with or prior to such other obligations or
indebtedness.

         SECTION 5.03. Limitations On Sale And Leaseback Transactions. Waste
Management will not, and will not permit any Restricted Subsidiary to, enter
into any arrangement with any Person (other than with any Restricted Subsidiary)
providing for the leasing to Waste Management or any Restricted Subsidiary of
any Principal Property owned or hereafter acquired by Waste Management or such
Restricted Subsidiary (except for temporary leases for a term, including any
renewal thereof, of not more than three years and except for leases between
Waste Management and a Restricted Subsidiary or between Restricted
Subsidiaries), which Principal Property has been or is to be sold or transferred
by Waste Management or such Restricted Subsidiary to such person (herein
referred to as a "Sale and Leaseback Transaction") unless (a) Waste Management
or such Restricted Subsidiary would be entitled, pursuant to the provisions of
(i) clause (1)(a) of Section 5.02(a) or (ii) the second paragraph of Section
5.02(a), to incur Indebtedness secured by a Security Interest on the property to
be leased without equally and ratably securing the Obligations, or (b) Waste
Management shall, and in any such case Waste Management covenants that it will,
within 180 days after the effective date of any such arrangement, deliver to the
Owner Trustee, cash collateral for deposit in a cash collateral account in an
amount equal to the fair value (as determined by the Board of Directors) of such
property (such deposit to be held by the Indenture Trustee as security for, and
to provide for the payment of, the Obligations), or (c) Waste Management shall
within 180 days after entering into the Sale and Leaseback Transaction, enter
into a bona fide commitment or commitments to expend for the acquisition or
capital improvement of a Principal Property an amount at least equal to the fair
value (as determined by the Board of Directors) of such property.
Notwithstanding the foregoing, Waste Management may, and may permit any
Restricted Subsidiary to, effect any Sale and Leaseback Transaction that is not
acceptable pursuant to clauses (a) through (c), inclusive, of this Section 5.03,
provided that the Attributable Debt associated with such Sale and Leaseback
Transaction, together with the aggregate principal amount of outstanding debt
secured

                                       19
<PAGE>

by Security Interests upon Principal Property not acceptable pursuant to clauses
(1) through (12) of Section 5.02, inclusive, do not exceed 15% of Consolidated
Net Tangible Assets.

         SECTION 5.04. Reporting Requirements. Waste Management and Holdings
shall furnish to the Owner Trustee and the Administrator the following:

                  (a) as soon as possible, and in any event within five days
         after the occurrence of each Event of Default or each event which, with
         the giving of notice or lapse of time, or both, would constitute an
         Event of Default, continuing on the date of such statement, a statement
         of the chief financial officer, the chief executive or the treasurer of
         Waste Management setting forth details of such Event of Default or
         event and the action which Waste Management has taken and proposes to
         take with respect thereto;

                  (b) as soon as available and in any event within 60 days
         following the end of each fiscal quarter of Waste Management, a copy of
         Waste Management's Quarterly Reports on Form 10-Q, together with a
         certificate of the chief financial officer of Waste Management stating
         that no Event of Default, or event which, with notice or lapse of time
         or both, would constitute an Event of Default, has occurred and is
         continuing or, if an Event of Default or such event has occurred and is
         continuing, a statement as to the nature thereof and the action which
         Waste Management has taken and proposes to take with respect thereto;

                  (c) as soon as available and in any event within 120 days
         following the end of each fiscal year of Waste Management and Holdings,
         a copy of Waste Management's audited Annual Reports on Form l0-K,
         together with a certificate of the chief financial officer of Waste
         Management stating that no Event of Default, or event which, with
         notice or lapse of time or both, would constitute an Event of Default,
         has occurred and is continuing or, if an Event of Default or such event
         has occurred and is continuing, a statement as to the nature thereof
         and the action which Waste Management has taken and proposes to take
         with respect thereto; and

                  (d) as soon as available and in any event within five Business
         Days of the delivery of a Designation Certificate signed by Waste
         Management, the Administrator on behalf of the Trust and Fleet and
         delivered by the Administrator to Fleet, an updated list identifying
         all Designated Letters of Credit (with such information as may have
         been originally scheduled for such Designated Letters of Credit
         including, in any event the LOC identifying number and the Allocated
         Amount).

         SECTION 5.05. Best Efforts. Waste Management agrees to use its best
efforts to remove all of the Designated Letters of Credit from the benefits of
the Master Letter of Credit during the period from the thirtieth day preceding
the Stated Termination Date to the fifth Business Day preceding the Stated
Termination Date.

                                   ARTICLE VI

                                EVENTS OF DEFAULT

                                       20
<PAGE>

         SECTION 6.01. Events of Default. The occurrence of any of the following
events shall be an "Event of Default" hereunder:

                  (a)      Waste Management shall fail to pay any Reimbursement
         Obligations when due and payable; or

                  (b)      Waste Management shall fail to pay any interest, fees
         or other obligations hereunder when the same becomes due and payable
         and such failure shall continue for a period of thirty days; or

                  (c)      Any representation or warranty made, or deemed made,
         by Waste Management or Holdings herein shall prove to have been
         incorrect in any material respect when made or deemed made; or

                  (d)      Waste Management shall fail to perform or observe any
         term, covenant or agreement contained in this Agreement and such
         failure shall remain unremedied for a period of sixty days after there
         has been given, by registered or certified mail, to Waste Management,
         the Trust and the Indenture Trustee by holders of at least 25% of the
         principal amount of the Fixed Rate Notes a written notice specifying
         such failure and requiring it to be remedied; or

                  (e)      Waste Management or any of its Subsidiaries shall
         fail to pay when due any Indebtedness in an aggregate principal amount
         greater than $50,000,000 (excluding Obligations under this Agreement),
         when the same becomes due and payable (whether by scheduled maturity,
         required prepayment, acceleration, demand or otherwise), and such
         failure shall continue after the applicable grace period, if any,
         specified in the agreement or instrument relating to such Indebtedness;
         or any other event shall occur or condition shall exist under any
         agreement or instrument relating to any such Indebtedness and shall
         continue after the applicable grace period, if any, specified in such
         agreement or instrument, if the effect of such event or condition is to
         accelerate, or to permit the acceleration of, the maturity of such
         Indebtedness; or any such Indebtedness shall be declared to be due and
         payable, or required to be prepaid (other than by a regularly scheduled
         required prepayment), redeemed, purchased or defeased, or an offer to
         prepay, redeem, purchase or defease such Indebtedness shall be required
         to be made, in each case prior to the stated maturity thereof; or

                  (f)      Waste Management or any Material Subsidiary shall
         generally not pay its debts as such debts become due, or shall admit in
         writing its inability to pay its debts generally, or shall make a
         general assignment for the benefit of creditors; or any proceeding
         shall be instituted by or against Waste Management or any Material
         Subsidiary seeking to adjudicate it as bankrupt or insolvent, or
         seeking liquidation, winding up, reorganization, arrangement,
         adjustment, protection, relief, or composition of it or its debts under
         any law relating to bankruptcy, insolvency or reorganization or relief
         of debtors, or seeking the entry of an order for relief or the
         appointment of a receiver, trustee, custodian or other similar official
         for it or for any substantial part of its property

                                       21
<PAGE>

         and, in the case of any such proceeding instituted against it (but not
         instituted by it), either such proceeding shall remain undismissed or
         unstayed for a period of sixty days, or any of the actions sought in
         such proceeding (including, without limitation, the entry of an order
         for relief against, or the appointment of a receiver, trustee,
         custodian or other similar official for, it or for any substantial part
         of its property) shall occur; or Waste Management or any Material
         Subsidiary shall take any corporate action to authorize any of the
         actions set forth above in this subsection (f).

         SECTION 6.02. Acceleration and Termination. If any Event of Default
shall have occurred and be continuing, the Owner Trustee shall, at the written
direction of the Majority, (i) declare the obligation of the Trust to increase
the amounts drawable under the Master Letter of Credit by designating additional
Fleet Letters of Credit as Designated Letters of Credit and to renew current
Designated Letters of Credit to be terminated, and send to Waste Management and
Fleet a Notice of No Further Designation, and (ii) declare all outstanding
Reimbursement Obligations, all Interest Payment Obligations and all other
amounts payable hereunder to be forthwith due and payable, whereupon such
Reimbursement Obligations, all such Interest Payment Obligations and all such
amounts shall become and be forthwith due and payable, without presentment,
demand, protest, or further notice of any kind, all of which are hereby
expressly waived by Waste Management; provided, however, that in the event of an
actual or deemed entry of an order for relief with respect to Waste Management
or any of its Subsidiaries under the Bankruptcy Code, (A) the obligation of the
Trust to increase the amounts drawable under the Master Letter of Credit by
designating additional Fleet Letters of Credit as Designated Letters of Credit
or to renew Interest Payment Obligations existing Designated Letters of Credit
shall automatically be terminated and (B) the outstanding Reimbursement
Obligations, all Interest Payment Obligations and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived by
Waste Management. The Owner Trustee shall not be deemed to have knowledge of an
Event of Default unless it receives written notice thereof.

         SECTION 6.03 Deposit for Master Letter of Credit. In addition, after
the occurrence and during the continuance of an Event of Default, Waste
Management shall, promptly upon demand by the Owner Trustee at the direction of
the Majority, deliver to the Owner Trustee, cash collateral for deposit in a
cash collateral account in an amount equal to the aggregate Allocated Amounts
for all Designated Letters of Credit existing at such time plus any outstanding
Reimbursement Obligations and Interest Payment Obligation. Such deposit shall be
held by the Indenture Trustee as security for, and to provide for the payment
of, the Reimbursement Obligations and the Interest Payment Obligations.

                                   ARTICLE VII

                                  MISCELLANEOUS

         SECTION 7.01. Amendments. No amendment or waiver of any provision of
this Agreement, nor consent to any departure by Waste Management therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Owner Trustee and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for

                                       22
<PAGE>

which given; provided, however, that (i) if any Fixed Rate Notes are outstanding
and have a rating, the Rating Agency Condition with respect to such amendment,
waiver or consent must be satisfied in order for such amendment, waiver or
consent to be effective and (ii) any amendment or waiver of Section 2.04 or
Section 7.04 shall not be effective unless consented to in writing by the Swap
Counterparties.

         SECTION 7.02. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telecopied, telexed or sent by courier service or United States
certified mail and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of a telecopy or telex or four (4) Business
Days after deposit in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 7.02) shall
be as set forth on Schedule 1 attached hereto, or, as to each party, at such
other address as may be designated by such party in a written notice to all of
the other parties to this Agreement. With respect to each notice and
communication sent to the Trust or the Owner Trustee on behalf of the Trust, a
copy of such notice or communication shall be sent to the Administrator at its
address on Schedule 1 attached hereto.

         SECTION 7.03. No Waiver; Remedies. No failure on the part of the Owner
Trustee to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

         SECTION 7.04. Indemnification. Waste Management hereby indemnifies and
holds harmless the Owner Trustee, the Administrator, the Indenture Trustee, the
Trust and their respective agents, officers, directors, trustees, agents,
attorneys and service providers (including the Certificateholder and the Tax
Matters Partner) (collectively, the "Indemnitees") from and against any and all
claims, actions, suits, damages, losses, liabilities, costs or expenses of any
kind and nature whatsoever which any Indemnitee may incur or which may be
claimed against any Indemnitee by any person or entity by reason of or in
connection with (i) the Indenture; (ii) the Fleet Note and the Fleet Security
Agreement; (iii) the Swap Agreements; (iv) the Trust Agreement, (v) the
Administration Agreement, (vi) the Master Letter of Credit or honoring or
failing to honor any draft or certificate presented thereunder, and (vii) any
other Transaction Document (clauses (i) through (vi) collectively referred to as
the "Indemnified Matters"); provided, however, that Waste Management shall not
be required to indemnify any Indemnitee pursuant to this Section 7.04 in
connection with any Indemnified Matter to the extent caused by such Indemnitee's
willful misconduct or gross negligence. Waste Management agrees to reimburse the
Trust for any obligations owing by the Trust to the Indenture Trustee pursuant
to Section 7.07 of the Indenture and to the Owner Trustee pursuant to Sections
8.01 and 8.02 of the Trust Agreement. Nothing in this Section 7.04 is intended
to limit the obligations of Waste Management contained in Article II. Without
prejudice to the survival of any other obligation of Waste Management hereunder,
the indemnities and obligations of Waste Management contained in this Section
7.04 shall survive the payment in full of amounts payable pursuant to Article
II, the termination of the Master Letter of Credit and the termination of the
Trust. The Owner Trustee, the Indenture Trustee, the Trust and their respective
agents, officers, directors, trustees,

                                       23
<PAGE>

agents, attorneys and service providers (including the Certificateholder and the
Tax Matters Partner) shall be deemed to be third party beneficiaries with
respect to this Section 7.04. All amounts payable by Waste Management under this
Section 7.04 shall be paid by depositing such amounts directly into the Expense
Payment Account.

         SECTION 7.05. No Liability of the Owner Trustee, the Administrator and
the Trust. Waste Management assumes all risks of the acts or omissions of Fleet
and any other beneficiary or transferee of the Master Letter of Credit with
respect to its use of the Master Letter of Credit. None of the Owner Trustee,
the Administrator, the Trust nor any of their respective officers or directors
shall be liable or responsible for: (a) the use which may be made of the Master
Letter of Credit or any acts or omissions of Fleet and any other beneficiary or
transferee in connection therewith; (b) the validity, sufficiency or genuineness
of documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Owner Trustee or the Trust against presentation of documents that
do not comply with the terms of the Master Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment or honoring any
drafts or certificates under the Master Letter of Credit, except that Waste
Management shall have a claim against the Trust, the Administrator and/or the
Owner Trustee, to the extent of any direct, but not consequential, damages
suffered by Waste Management which Waste Management proves were caused by (i)
the Owner Trustee's, the Administrator's or the Trust's willful misconduct or
gross negligence in determining whether documents presented under the Master
Letter of Credit comply with the terms of the Master Letter of Credit or (ii)
the Owner Trustee's, the Administrator's or the Trust's willful failure to make
lawful payment under the Master Letter of Credit after the presentation to it by
Fleet of a draft and certificate strictly complying with the terms and
conditions of the Master Letter of Credit. In furtherance and not in limitation
of the foregoing, the Owner Trustee, the Administrator and the Trust may accept
documents that appear on their face to be in order, without responsibility for
further investigation.

         SECTION 7.06. Costs, Expenses and Taxes. Waste Management agrees to pay
on demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording, administration, modification and amendment of this
Agreement or any other Transaction Document, any of the other Transaction
Documents and any other documents which may be delivered in connection
therewith, including, without limitation, the fees and out-of-pocket expenses of
counsel for the Owner Trustee, the Administrator, the Indenture Trustee, the
Trust and their respective agents, officers, directors, trustees, agents,
attorneys and service providers (including the Certificateholder and the Tax
Matters Partner) and Fleet with respect thereto and with respect to advising the
Owner Trustee, the Administrator and the Trust as to their rights and
responsibilities under this Agreement. Waste Management further agrees to pay on
demand all costs and expenses (including counsel fees and expenses) in
connection with (i) the enforcement (whether through negotiations, legal
proceedings or otherwise) of this Agreement or any other Transaction Document
and such other documents which may be delivered in connection with this
Agreement, including, without limitation, counsel fees and expenses in
connection with the enforcement of rights under this Section 7.06, or (ii) any
action or proceeding relating to a court order, injunction, or other process or
decree restraining or seeking to restrain the Owner Trustee, the Administrator
or the Trust from paying any amount under the Master Letter of Credit. In
addition, Waste Management shall pay any and all stamp

                                       24
<PAGE>

and other taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing and recording of this Agreement or the Master
Letter of Credit or the other Transaction Documents or any such other documents,
and agrees to save the Owner Trustee, the Administrator and the Trust harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes and fees. The Owner Trustee, the
Administrator, the Indenture Trustee, the Trust and their respective agents,
officers, directors, trustees, agents, attorneys and service providers
(including the Certificateholder and the Tax Matters Partner) and Fleet shall be
deemed to be third party beneficiaries with respect to this Section 7.06. All
amounts payable by Waste Management under this Section 7.06 shall be paid by
depositing such amounts directly into the Expense Payment Account.

         SECTION 7.07. Binding Effect. This Agreement shall become effective
when it shall have been executed by Waste Management, Holdings and the Owner
Trustee and thereafter shall be binding upon and inure to the benefit of Waste
Management, Holdings and the Trust and their respective successors and assigns,
except that Waste Management and Holdings shall not have the right to assign its
rights hereunder or any interest herein without the prior written consent of the
Owner Trustee. The Trust and the Owner Trustee may assign all or any part of, or
any interest (undivided or divided) in, their rights and benefits under this
Agreement, and to the extent of that assignment such assignee shall assume all
obligations and have the same rights and benefits against Waste Management and
Holdings hereunder as it would have had if such assignee were the Trust or Owner
Trustee hereunder.

         SECTION 7.08. Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.

         SECTION 7.09. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

         SECTION 7.10. Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.

         SECTION 7.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but both or all of
which, when taken together, shall constitute but one instrument, and shall
become effective when copies hereof which, when taken together, bear the
signatures of each of the parties hereto shall be delivered to the Owner Trustee
and Waste Management.

         SECTION 7.12. Waivers. Each of Waste Management and Holdings hereby
agrees not to challenge or contest directly or indirectly (i) the validity,
extent or enforceability of the Master Letter of Credit or (ii) the priority,
validity, extent, perfection or enforceability of the Fleet Lien. Each of Waste
Management and Holdings hereby agrees that they will not, prior to the date
which is one year and one day (or, if longer, the applicable preference period
then in effect plus

                                       25
<PAGE>

one day) after termination of the Master Letter of Credit, institute against, or
join any other Person in instituting against the Trust any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation proceedings,
or other proceedings under Federal or State bankruptcy or similar laws of any
jurisdiction.

         SECTION 7.13. Limitation of Liability. It is expressly understood and
agreed by the parties hereto that (a) this Agreement is executed and delivered
by The Bank of New York (Delaware), not individually or personally but solely as
Owner Trustee of the Trust, in the exercise of the powers and authority
conferred and vested in it as trustee, (b) each of the representations,
undertakings and agreements herein made on the part of the Trust is made and
intended not as personal representations, undertakings and agreements by The
Bank of New York (Delaware) but is made and intended for the purpose for binding
only the Trust, (c) nothing herein contained shall be construed as creating any
liability on The Bank of New York (Delaware), individually or personally, to
perform any covenant either expressed or implied contained herein, all such
liability, if any, being expressly waived by the parties hereto and by any
Person claiming by, through or under the parties hereto and (d) under no
circumstances shall The Bank of New York (Delaware) be personally liable for the
payment of any indebtedness or expenses of the Trust or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement or any other Transaction Document.

                                  ARTICLE VIII

                                HOLDINGS GUARANTY

         SECTION 8.01. Guaranty. For value received and hereby acknowledged and
as an inducement to the Trust to issue the Master Letter of Credit and enter
into this Agreement, Holdings hereby unconditionally and irrevocably guarantees
(a) the full punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of Waste Management now or
hereafter existing whether for principal, interest, fees, expenses or otherwise,
and (b) the strict performance and observance by Waste Management of all
agreements, warranties and covenants applicable to Waste Management in this
Agreement and the Related Documents and (c) the obligations of Waste Management
under the Related Documents (all of such obligations collectively being
hereafter referred to as the "Guaranteed Obligations"). The foregoing guaranty
is a guaranty of payment and not of collection. For purposes of this Article
VIII, the obligations of Holdings under this Article VIII are referred to as the
"Holdings Guaranty."

         SECTION 8.02. Guaranty Absolute. Holdings guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Trust. The
liability of Holdings under the Holdings Guaranty with regard to the Guaranteed
Obligations shall be absolute and unconditional irrespective of:

         (a)      any change in the time, manner or place of payment of, or in
any other term of, all or any of its Guaranteed Obligations or any other
amendment or waiver of or any consent to

                                       26
<PAGE>

departure from this Agreement or any other Related Documents (with regard to
such Guaranteed Obligations);

         (b)      any release or amendment or waiver of or consent to departure
from any other guaranty for all or any of its Guaranteed Obligations;

         (c)      any change in ownership of Waste Management;

         (d)      any acceptance of any partial payment(s) from Waste Management
or Holdings; or

         (e)      any other circumstance similar or dissimilar to the foregoing
which might otherwise constitute a defense available to, or a discharge of,
Waste Management in respect of its Obligations under this Agreement.

         The Holdings Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any Guaranteed Obligation is
rescinded or must otherwise be returned by the Trust upon the insolvency,
bankruptcy or reorganization of Waste Management or otherwise, all as though
such payment had not been made.

         SECTION 8.03. Effectiveness; Enforcement. No invalidity, irregularity
or unenforceability by reason of any bankruptcy or similar law, or any law or
order of any government or agency thereof purporting to reduce, amend or
otherwise affect any liability of Waste Management, and no defect in or
insufficiency or want of powers of Waste Management or irregular or improperly
recorded exercise thereof, shall impair, affect, be a defense to or claim
against such guaranty. The Holding Guaranty is a continuing guaranty and shall
(a) survive any termination of this Agreement, and (b) remain in full force and
effect until payment in full of, and performance of, all Guaranteed Obligations
and all other amounts payable under this Agreement. The Holdings Guaranty is
made for the benefit of the Trust and its successors and assigns, and may be
enforced from time to time as often as occasion therefor may arise and without
requirement on the part of the Trust first to exercise any rights against Waste
Management, or to resort to any other source or means of obtaining payment of
any of the said obligations or to elect any other remedy.

         SECTION 8.04. Waiver. Except as otherwise specifically provided to the
contrary, Holdings hereby waives promptness, diligence, protest, notice of
protest, all suretyship defenses, notice of acceptance and any other notice with
respect to any of its Guaranteed Obligations and the Holdings Guaranty and any
requirement that the Trust protect, secure, perfect any security interest or
lien or any property subject thereto or exhaust any right or take any action
against Waste Management or any other Person. Holdings also irrevocably waives,
to the fullest extent permitted by law, all defenses which at any time may be
available to it in respect of its Guaranteed Obligations by virtue of any
statute of limitations, valuation, stay, moratorium law or other similar law now
or hereafter in effect.

         SECTION 8.05. Expenses. Holdings hereby promises to reimburse the Trust
(a) for all out-of-pocket fees and disbursements (including all attorney's
fees), incurred or expended in connection with the preparation, filing or
recording, or interpretation of the Holdings Guaranty, any Related Documents to
which Holdings is a party, or any amendment, modification, approval,

                                       27
<PAGE>

consent or waiver hereof or thereof, and (b) for all out-of-pocket fees and
disbursements (including attorney's fees), incurred or expended in connection
with the enforcement of its Guaranteed Obligations (whether or not legal
proceedings are instituted).

         SECTION 8.06. Concerning Joint and Several Liability of Holdings.

         (a)      Holdings hereby irrevocably and unconditionally accepts, not
merely as a surety but also as a co-debtor, joint and several liability with
Waste Management, with respect to the payment and performance of all of its
Guaranteed Obligations (including, without limitation, any Guaranteed
Obligations arising under this Article VIII), it being the intention of the
parties hereto that all such Guaranteed Obligations shall be the joint and
several Guaranteed Obligations of Holdings and Waste Management without
preferences or distinction among them.

         (b)      If and to the extent that Waste Management shall fail to make
any payment with respect to any of its Obligations as and when due or to perform
any of its Guaranteed Obligations in accordance with the terms thereof, then in
each such event Holdings will make such payment with respect to, or perform,
such Guaranteed Obligation.

         (c)      The Guaranteed Obligations of Holdings under the provisions of
this Article VIII constitute full recourse obligations of Holdings enforceable
against Holdings to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any other
circumstance whatsoever.

         (d)      Except as otherwise expressly provided in this Agreement,
Holdings hereby waives notice of acceptance of its joint and several liability,
notice of any action at any time taken or omitted by the Trust under or in
respect of any of the Guaranteed Obligations, and, generally, to the extent
permitted by applicable law, all demands, notices and other formalities of every
kind in connection with this Agreement. Holdings hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any of
the Guaranteed Obligations, the acceptance of any payment of any of the
Guaranteed Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by Trust at any time or times in
respect of any Event of Default by Waste Management or Holdings in the
performance or satisfaction of any term, covenant, condition or provision of
this Agreement or any other Related Document, any and all other indulgences
whatsoever by the Trust in respect of any of the Guaranteed Obligations, and the
taking, addition, substitution or release, in whole or in part, at any time or
times, of any security for any of the Guaranteed Obligations or the addition,
substitution or release, in whole or in part, of Waste Management or Holdings.
Without limiting the generality of the foregoing, Holdings assents to any other
action or delay in acting or failure to act on the part of the Trust with
respect to the failure by Waste Management or Holdings to comply with its
respective Obligations or Guaranteed Obligations, including, without limitation,
any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might,
but for the provisions of this Article VIII, afford grounds for terminating,
discharging or relieving Holdings, in whole or in part, from any of the
Guaranteed Obligations under this Article VIII, it being the intention of
Holdings that, so long as any of the Guaranteed Obligations hereunder remain
unsatisfied, the Guaranteed Obligations of Holdings under this Article VIII
shall not be discharged except by performance and then only to the extent of
such performance. The

                                       28
<PAGE>

Guaranteed Obligations of Holdings under this Article VIII shall not be
diminished or rendered unenforceable by any winding up, reorganization,
arrangement, liquidation, reconstruction or similar proceeding with respect to
Waste Management, Holdings or the Trust. The joint and several liability of
Holdings hereunder shall continue in full force and effect notwithstanding any
absorption, merger, consolidation, amalgamation or any other change whatsoever
in the name, membership, constitution or place of formation of Waste Management
or Holdings, the Trust or the Trust.

         (e)      Holdings shall be liable under this Article VIII only for the
maximum amount of such liabilities that can be incurred under applicable law
without rendering this Article VIII voidable under applicable law relating to
fraudulent conveyance and fraudulent transfer, and not for any greater amount.
Accordingly, if any obligation under any provision under this Article VIII shall
be declared to be invalid or unenforceable in any respect or to any extent, it
is the stated intention and agreement of Holdings, the Trust and the Owner
Trustee that any balance of the obligation created by such provision and all
other obligations of Holdings under this Article VIII to the Trust shall remain
valid and enforceable, and that all sums not in excess of those permitted under
applicable law shall remain fully collectible by the Trust from Waste Management
or Holdings, as the case may be.

         (f)      The provisions of this Article VIII are made for the benefit
of the Trust and its successors and assigns, and may be enforced in good faith
by it from time to time against Holdings as often as occasion therefor may arise
and without requirement on the part of the Trust first to marshal any of their
claims or to exercise any of their rights against Waste Management or Holdings
or to exhaust any remedies available to them against Waste Management or
Holdings or to resort to any other source or means of obtaining payment of any
of the obligations hereunder or to elect any other remedy. The provisions of
this Article VIII shall remain in effect until all of the Guaranteed Obligations
shall have been paid in full or otherwise fully satisfied, and all Guaranteed
Obligations shall have been paid in accordance with their terms. If at any time,
any payment, or any part thereof, made in respect of any of the Guaranteed
Obligations, is rescinded or must otherwise be restored or returned by the Trust
upon the insolvency, bankruptcy or reorganization of Waste Management or
Holdings, or otherwise, the provisions of this Article VIII will forthwith be
reinstated in effect, as though such payment had not been made.

         SECTION 8.07. Final Payment and Performance. Until the final payment
and performance in full of all of the Obligations, Holdings shall not exercise
and Holdings hereby waives any rights Holdings may have against Waste Management
arising as a result of payment by Holdings hereunder, by way of subrogation,
reimbursement, restitution, contribution or otherwise, and will not prove any
claim in competition with the Trust in respect of any payment hereunder in any
bankruptcy, insolvency or reorganization case or proceedings of any nature;
Holdings will not claim any setoff, recoupment or counterclaim against Waste
Management in respect of any liability of Waste Management to Holdings; and
Holdings waives any benefit of and any right to participate in any collateral
security which may be held by the Trust.

         SECTION 8.08. Subrogation; Subordination. The payment of any amounts
due with respect to any indebtedness of Waste Management for money borrowed or
credit received now or hereafter owed to Holdings is hereby subordinated to the
prior payment in full of all of the Obligations. Holdings agrees that, after the
occurrence of any default in the payment or

                                       29
<PAGE>

performance of any of the Obligations, Holdings will not demand, sue for or
otherwise attempt to collect any such indebtedness of Waste Management to
Holdings until all of the Obligations shall have been paid in full. If,
notwithstanding the foregoing sentence, Holdings shall collect, enforce or
receive any amounts in respect of such indebtedness while any Obligations are
still outstanding, such amounts shall be collected, enforced and received by
Holdings as trustee for the Trust and be paid over to the Trust upon an Event of
Default on account of the Obligations without affecting in any manner the
liability of Holdings under the other provisions hereof.

         SECTION 8.09. Release of Guaranty. The Trust and the Owner Trustee
hereby agree that the foregoing Holdings Guaranty shall remain in full force and
effect until the occurrence of either (a) the consolidation or merger of
Holdings into Waste Management or its successors, (b) the consolidation or
merger of Waste Management or its successors into Holdings, or (c) the release
of Holdings from all other guarantees of Waste Management's obligations under
Waste Management's existing credit facilities or other senior indebtedness, at
which time the foregoing Holdings Guaranty shall be concurrently released
without any further action on the part of the Trust or the Owner Trustee.

                                       30
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.

                                 WASTE MANAGEMENT, INC.

                                 By: /s/Waste Management, Inc.
                                     -------------------------

                                 WASTE MANAGEMENT HOLDINGS, INC.
                                 (for the limited purpose of Article VIII)

                                 By: /s/ Waste Management Holdings, Inc.
                                     -----------------------------------

                                 OAKMONT ASSET TRUST
                                 By: The Bank of New York (Delaware) not in its
                                 individual capacity but solely as Owner Trustee

                                 By: /s/ The Bank of New York (Delaware)
                                     -----------------------------------

                                       31

</TEXT>
</DOCUMENT>
