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                              EMPLOYMENT AGREEMENT


THIS AGREEMENT ("Agreement") is made and entered into as of this 10th day of
May, 1999, by and between Kenneth R. Burk, an individual resident of the State
of Pennsylvania ("Employee"), and RailWorks Corporation, a Delaware corporation
("Employer").

                                   WITNESSETH

         WHEREAS, the Employer desires to employ the Employee on the terms and
conditions as contained herein; and

         WHEREAS, the Employee desires to be so employed by the Employer, on
the terms and conditions as contained herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, the parties hereto, intending to be legally bound, hereby
agree as follows:

         Section 1. Employment.

         Subject to the terms hereof, Employer will employ Employee and
Employee hereby accepts such employment. The Employee shall serve as the
Executive Vice President and Chief Operating Officer of the transit, small
scale track construction and maintenance, large scale construction, and supply
and manufacturing divisions of the Employer. Employee's duties shall include,
but not limited to, full profit and loss responsibilities for such operations
and such other duties assigned to Employee during the Term (as defined herein).
Subject to the approval of the Shareholders of Employer, Employee shall be
elected to the Board of Directors of the Employer. The Employee shall also be
appointed to and serve upon Employer's Executive Committee, if same exists.
Employee shall continue to serve on the Board of Directors and Executive
Committee, at the pleasure of the Shareholders and/or Chief Executive Officer,
as applicable.

         Subject to the terms and conditions of this Agreement, from the date
hereof, Employee agrees to devote substantially all of his business time and
best efforts to the performance of his job with Employer, subject to direction
of the Chief Executive Officer of Employer.

         Section 2. Term of Employment. The term of the Employee's employment
hereunder (the "Initial Term") shall be from the date of this Agreement until
the earlier of (a) the three year an-



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niversary date of this Agreement (May 10, 2002),or (b) the occurrence of any of
the following events:

         (i)  The death or total disability of Employee (total disability
              meaning the failure to fully perform his normal required services
              hereunder for a period of six (6) consecutive months during any
              consecutive twelve (12) month period during the Term (as defined)
              hereof, as determined by an independent medical doctor jointly
              chosen by the Employee and the Employer) by reason of mental or
              physical disability;

         (ii) The termination by Employer of Employee's employment hereunder,
              upon thirty (30) days prior written notice to Employee, for "good
              cause", as reasonably determined by the Board of Directors. For
              purposes of this Agreement, "good cause" for termination of
              Employee's employment shall exist: (A) if Employee is convicted
              of, pleads guilty to or confesses to any felony or any act of
              fraud, misappropriation or embezzlement, (B) if Employee has
              engaged in a dishonest act to the material damage or prejudice of
              Employer or an affiliate of Employer, or in conduct or activities
              materially damaging to the property, business, or reputation of
              Employer or an affiliate of Employer, or (C) if Employee violates
              any of the provisions contained in Section 5 of this Agreement,
              after receiving written notice from the Employer specifically
              outlining the alleged violations by the Employee of Section 5
              hereof and either (1) the Employee fails to stop the alleged
              behavior which is claimed to be such a breach within thirty (30)
              days of receipt by the Employee of such written notice, or (2)
              the Employer prevails in mediation or binding arbitration
              pursuant to the commercial arbitration rules of the American
              Arbitration Association which arbitration is commenced by the
              Employee within thirty (30) days of receipt by the Employer of
              such notice in accordance with the provisions of Section 5.6
              hereof; or

         (iii) The termination by either the Employee or the Employer, upon
               thirty (30) days writ- ten notice to the other party, in the
               event of a Change of Control of the Employer (as defined herein
               below).

                  For purposes of this Agreement, a "Change of Control" shall
         deemed to have occurred if (A) any "person" (as such term is used in
         Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
         amended (the "Exchange Act")), other than a trustee or other fiduciary
         holding securities under an employee benefit plan of the Employer, a
         corporation owned directly or indirectly by the stockholders of the
         Employer or any of their respective affiliates, becomes the
         "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
         directly or indirectly, of securities of the Employer representing 50%
         or more of the total voting power represented by the Employer's then
         outstanding securities that vote generally in the election of
         directors (referred to herein as "Voting Securities"); (B) during any
         period of two consecutive years, individuals who at the beginning of
         such 

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         period constitute the Board of Directors and any new directors whose
         election by the Board of Directors or nomination for election by the
         Employer's stockholders was approved by a vote or a majority of the
         directors then still in office who either were directors at the
         beginning of the period or whose election or nomination for election
         was previously so approved, cease for any reason to constitute a
         majority of the Board of Directors; (C) the stockholders of the
         Employer approve a merger or consolidation of the Employer with any
         other corporation, other than a merger or consolidation (i) which
         would result in the Voting Securities of the Employer outstanding
         immediately prior thereto continuing to represent (either by remaining
         outstanding or by being converted into Voting Securities of the
         surviving entity) at least 50% of the total voting power represented
         by the Voting Securities of the Employer or such surviving entity
         outstanding immediately after such merger or consolidation, or (ii) in
         which 50% or more of the board of directors of the surviving entity is
         composed of members from the Board of Directors of the Employer; (D)
         the stockholders of the Employer approve a plan of complete
         liquidation of the Employer or an agreement for the sale or
         disposition by the Employer of (in one transaction or a series of
         transactions) all or substantially all of the Employer's assets; or
         (E) the executive offices of the Employer are relocated from the
         Greater Baltimore Metropolitan Area.

         2.1 After May 10, 2002 (Initial Term) and subject to Sections 2(b) and
  2.2, this Agreement shall continue upon a year-to-year basis (each year a
  "Successive Term", which together with the Initial Term shall constitute the
  "Term") unless terminated by either the Employer or the Employee upon written
  notice to the other before the January 31 immediately preceding the end of
  the Initial Term or particular Successive Term, as applicable.

         2.2 Notwithstanding anything to the contrary herein and subject to
  Section 3.2.1 at any time during the Initial Term or a Successive Term, as
  applicable:

                  (i) Employee shall have the right to terminate this Agreement
  in the event his duties and responsibilities are materially and substantially
  reduced. The failure of Employer to assign responsibility to Employee for any
  new operation of Employer shall constitute a material and substantial
  reduction in Employee's duties and responsibilities; and

                  (ii) Employer shall have the right to terminate the Agreement
  for any reason, including, but not limited to, without "good cause".

         Section 3. Compensation.

         3.1 Terms of Employment. Employer will provide Employee with the
following salary, expense reimbursement and additional employee benefits during
the Term of employment hereunder.


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         (a) Salary. From the date Employee commences working and performing
his duties hereunder in the Employer's Baltimore, Maryland office, Employee
will be paid a salary (the "Base Salary") calculated based on the amount of Two
Hundred Seventy-Five Thousand Dollars ($275,000.00) per annum, less deductions
and withholdings required by applicable law. Subject to the foregoing, the Base
Salary shall be paid to Employee in equal monthly installments (or on such more
frequent basis as other executives of Employer are compensated).

         (b) Performance Bonus. In addition to the Base Salary, the Employee
shall have the right to receive from the Employer, and the Employer shall be
obligated to pay to the Employee, a performance bonus (the "Performance Bonus")
for each fiscal year ("Annual Period") during the Term of this Agreement, equal
to the aggregate amount determined by the bonus formula delineated herein
below. Any amount of a Performance Bonus required to be paid to the Employee
for an Annual Period during the Term of this Agreement shall be paid by the
Employer in the first pay period of the Employer immediately following the
finalization of the accounting audit for financial accounting purposes of the
Employer for the Annual Period, but in all events by March 31 of the fiscal
year immediately following the end of the Annual Period for which such
Performance Bonus is attributable.

         The formula to determine a Performance Bonus for any Annual Period
during the Term of this Agreement shall be as follows:

                  (i) For each Annual Period of Employer during the Term
hereof, three-tenths of one percent (.003) of net income before income taxes
and bonuses ("Profits") of the Employer for said Annual Period.

                  (ii) The Profits of the Employer for the Annual Period shall
be calculated in accordance with GAAP as consistently applied by Employer.

                  (iii) Subject to Section 3.2, in the event Employee is
employed hereunder during a particular Annual Period of the Term for less than
twelve (12) full calendar months, the Performance Bonus for such Annual Period
shall be calculated only based on the Profits for the number of full calendar
months that Employee is employed hereunder during such Annual Period.

                  (iv) Notwithstanding anything to the contrary herein, unless
the Agreement is terminated as provided under Sections 2(b) or 2.2 prior to
December 31, 1999, the Performance Bonus paid by Employer to Employee for the
1999 Annual Period shall equal the greater of (i) $100,000, or (ii) the amount
of the Performance Bonus calculated under Sections 3.1(b)(i),(ii) and (iii).
This subsection 3.1(b)(iv) shall only be applicable to the Annual Period for
1999.


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         (c) Discretionary Bonus. The Board of Directors may, from time to
time, award the Employee an additional discretionary bonus based upon such
factors as the Board of Directors deems appropriate. The Employee shall have no
entitlement to such a discretionary bonus until and unless so awarded by the
Board of Directors.

         (d) Vacation. Employee shall receive four (4) weeks vacation time per
calendar year during the Term of this Agreement in addition to customary
holidays afforded other employees of Employer. Any unused vacation days in any
calendar year may not be carried over to subsequent years.

         (e) Expenses. Employer shall reimburse Employee, within thirty (30)
days of its receipt of a reimbursement report from the Employee, for all
reasonable and necessary expenses incurred by Employee on behalf of Employer.

         (f) Benefit Plans. Employee shall have the option of participating in
such medical, dental, disability, hospitalization, life insurance, and other
benefit plans (such as pension and profit sharing plans) as Employer maintains
from time to time for the benefit of all other employees of Employer, on the
terms and subject to the conditions set forth in such plans.

         (g) Relocation. In addition to other compensation and reimbursement of
expenses required to be paid under this Agreement, Employer shall reimburse
Employee within ten (10) days of submission of a reimbursement report:

                  (A) Out-of-pocket expenses, incurred by Employee relating to
the relocation ("Relocation") of Employee and his family from the Pittsburgh,
Pennsylvania ("Pittsburgh") area to the Baltimore, Maryland Metropolitan
("Baltimore") area as follows:

                           I. Packing, storage and professional mover costs 
relating to the furniture, clothing, household belongings and other personal
property of Employee and his family;

                           II. Travel expenses incurred by Employee and his 
family in connection with commuting to and from Pittsburgh and Baltimore
relating to searching for a new residence ("Baltimore Home") in Baltimore and
the sale of Employee's existing home ("Pittsburgh Home") in Pittsburgh;

                           III. Real estate commissions and Pennsylvania real
property transfer taxes (currently calculated at 1.25 percent of the sales
price) paid relating to the sale of the Pittsburgh Home;



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                           IV.  Mortgage application, points, fees, charges,  
appraisal, attorney fees of the mortgage lender, title insurance, survey, and
all other costs and expenses associated with obtaining a loan and mortgage and
the purchase of the Baltimore Home; and

                           V. Attorney fees incurred by Employee relating to the
sale of the Pittsburgh Home and purchase of the Baltimore Home.

                  (B) An additional Fifty Thousand ($50,000.00) dollars to
cover any other incidental expenses incurred by Employee in connection with the
Relocation; which shall be paid to the Employee ten (10) days after Employee
commences working and performing his duties hereunder in the Employer's
Baltimore, Maryland office.

                  (C) Temporary housing costs in Baltimore for Employee and/or
his family pending completion of the Relocation for a period not exceeding six
(6) months from the date of this Agreement.

                  (D) Upon the execution of this Agreement, Employee shall
undertake his best efforts to sell the Pittsburgh Home. Employer agrees to
purchase ("Purchase") the Pittsburgh Home from Employee in the event : (i)
Employee is not able to sell the Pittsburgh Home within six (6) months from the
date of this Agreement, or (ii) prior to said sixth month anniversary Employee
enters a contract to buy ("Baltimore Contract") a Baltimore Home. If Employee
enters into a Baltimore Contract, Employer shall Purchase the Pittsburgh Home
at least thirty (30) days prior to the scheduled closing date for the
acquisition of the Baltimore Home. Under either circumstance, the Purchase
shall be completed within eight (8) months from the date of this Agreement. The
Purchase by Employer shall be subject to the issuance of title insurance and
compliance with other customary conditions to the satisfaction of Employer's
counsel. The purchase price ("Price") paid by Employer to Employee shall be the
fair market value of the Pittsburgh Home as determined based on the average of
separate appraisals conducted by three (3) independent appraisers. Pending the
sale of the Pittsburgh Home to a third party or Purchase of same by Employer,
as applicable, Employee shall undertake his best efforts to maintain the
Pittsburgh Home in good condition.

                  (E) In addition to the amounts outlined in Sections 3.1(g)(A)
through (D) (collectively called "Moving Expenses"), Employer shall pay
Employee the sum ("Additional Sum") equal to the Federal and applicable state
income taxes Employee is required to pay attributable to Moving Expenses he
receives which are not deductible by the Employer and deemed income to
Employee. The Additional Sum shall be paid by Employer to Employee to result in
a tax equalization in connection with Employee's receipt of the Moving
Expenses.

         3.2 Effect of Termination. Except as hereinafter provided, upon the
termination of the employment of Employee hereunder for any reason, Employee
shall be entitled to all compensa-



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tion and benefits earned or accrued under Section 3.1 as of the effective date
of termination (the "Termination Date"), but from and after the Termination
Date no additional compensation or benefits shall be earned by Employee
hereunder. Except upon termination by the Employer of the employment of the
Employee pursuant to the provisions of Section 2(b)(ii) hereof, Employee shall
be deemed to have earned any Performance Bonus payable with respect to the
fiscal year in which the Termination Date occurs in accordance with Sections
3.1(b)(iii) or (iv), as applicable. Any such Performance Bonus shall be payable
on the date on which the Performance Bonus would have been paid had Employee
continued his employment hereunder. In addition, the Employee and his eligible
dependents shall be entitled to receive at the sole cost of the Employer: (A)
the health insurance benefits specified hereunder for a period of twelve (12)
months following the Termination Date (the "Continuation Period") and following
such time period, the Employee shall be entitled to all rights afforded to him
under the Federal Omnibus Reconciliation Act ("COBRA") to purchase continuation
coverage of such health insurance benefits for himself and his dependents for
the maximum period permitted by law, and the Employee shall be deemed to have
elected to exercise his rights under COBRA as of the first day of the
Continuation Period, and (B) the life insurance benefits specified hereinabove
for the period of the Continuation Period.

         (i) Upon termination of this Agreement, pursuant to the provisions of
Sections 2(b)(i), 2(b)(iii) or 2.2 hereof, any stock grants previously awarded
to the Employee, either by this Agreement or otherwise, shall fully and
completely vest and the Employee shall be able to retain or obtain as the case
may be, such stock, as though there was no vesting period or criteria of any
kind or nature, with respect to such stock.

         (ii) Upon termination of the Agreement pursuant to the terms of
Sections 2(b)(ii) or 2.1 hereof, all granted but unvested stock grants as of
the Termination Date shall be forfeited upon such termination; provided that
the Employee shall be able to retain or exercise any rights for a period of one
(1) month after the Termination Date, notwithstanding the terms and provisions
of such stock plan under which they were awarded, with respect to any shares of
stock granted that have fully vested as of the Termination Date.

         (iii) Upon termination of this Agreement pursuant to the provisions of
Sections 2(b)(i), (ii) or (iii), 2.1, or 2.2, any stock options previously
awarded to the Employee pursuant to Section 4.1 or otherwise, shall vest in
accordance with the terms and conditions of such award or any plan pursuant to
which such stock options were awarded.

                  3.2.1 Employee shall be entitled to a severance payment
("Severance Payment") under the following limited circumstances:


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         (i) In the event this Agreement is terminated by Employer or Employee
under Section 2(b)(iii) due to and within two (2) months from a Change in
Control, the Severance Payment shall be equal to one (1) year of the annual
Base Salary under Section 3.1(a);

         (ii) In the event this Agreement is terminated by Employee under
Section 2.2(i) or Employer under Section 2.2(ii), the Severance Payment shall
be the lesser of (x) one (1) year of the annual Base Salary under Section
3.1(a), or (y) the remaining amount of annual Base Salary Employee would have
earned from the Termination Date through the end of the particular Initial Term
or Successive Term, as applicable.

                           3.2.1.1  Subject to the foregoing, the Severance  
Payment shall be paid by Employer to Employee within thirty (30) days of the
Termination Date by Employer under Sections 2(b)(iii) or 2.2(ii),or Employee
under Sections 2(b)(iii) or 2.2(i), as applicable.

         Section 4. Common Stock.

         4.1 Stock Options. So that Employee can share in the increase in value
of the business of Employer over time, as of the effective date of this
Agreement Employee will be granted stock options ("Options") to purchase
200,000 shares of common stock of Employer. The Options shall be issued
pursuant to Employer's 1998 Incentive Stock Plan ("ISO Plan"). The Options to
acquire the underlying shares shall vest and be exercisable as follows: (i)
fifty thousand (50,000) shares as of the date of this Agreement, (ii) fifty
thousand (50,000) shares as of the first anniversary of this Agreement if
Employee remains a Key Employee (as defined under the ISO Plan) until said date
as provided under the ISO Plan, (iii) fifty thousand (50,000) shares as of the
second anniversary of this Agreement if Employee remains a Key Employee until
said date as provided under the ISO Plan, and (iv) fifty thousand (50,000)
shares (the balance of shares) as of the third anniversary of this Agreement if
Employee remains a Key Employee until said date as provided under the ISO Plan.

         4.2 The price of the Options shall be calculated as of the date of
this Agreement in accordance with the ISO Plan.

         4.3 The Options granted pursuant to this Section 4 shall be subject to
all of the terms and conditions of the ISO Plan. In the event of any conflict
between the terms of this Agreement and the ISO Plan (including, but not
limited to an Option Certificate issued thereunder), the terms of the ISO Plan
shall govern.

         Section 5.  Partial Restraint on Competition.

         5.1 Definitions. For the purposes of this Section 5, the following
         definitions shall apply: 


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         (a) "Company Activities" means the business of construction and
maintenance of railway beds and tracks; construction and maintenance of elevated
rail systems and structures; construction and maintenance of railway switching
and signaling equipment, distributorships and supply in the field of rail and
railway construction materials; distributorships and supply in the field of
electromechanical controls for use in the railroad industry, namely, railway
switching equipment and railway signaling equipment; and design for others in
the field of railroad industry, namely, engineering design of rail and railway
related structures and equipment, transit, commercial, industrial and electrical
contracting, or any other business of the Employer and its consolidated (for
financial accounting purposes) subsidiaries (the "Consolidated Group") which
said entities are engaged in on the Termination Date as long as such business
generated gross sales of at least 10% or more of the total gross sales of the
Consolidated Group for the most recent fiscal year of the Employer before or on
the Termination Date.

         (b) "Competitor" means any business, individual, partnership, joint
venture, association, firm, corporation or other entity, other than the
Employer or its affiliates or subsidiaries, engaged, wholly or partly, in
Company Activities.

         (c) "Competitive Position" means (i) having any financial interest in
a Competitor, including but not limited to, the direct or indirect ownership or
control of all or any portion of a Competitor, or acting as a partner, officer,
director, principal, agent or trustee of any Competitor, or (ii) engaging in
any employment or independent contractor arrangement, business or other
activity with any Competitor whereby Employee will serve such Competitor in any
senior managerial capacity.

         (d) "Confidential Information" means any confidential, proprietary
business information or data belonging to or pertaining to Employer that does
not constitute a "Trade Secret" (as hereinafter defined) and that is not
generally known by or available through legal means to the public, including,
but not limited to, information regarding Employer's customers or actively
sought prospective customers, acquisition targets, suppliers, manufacturers and
distributors gained by Employee as a result of his employment with Employer.
Information shall be excluded from this definition if: (i) it, at the time of
disclosure, is generally known to the trade or public, (ii) it becomes at a
later date generally known to the trade or public through no fault of the
Employee, (iii) it is known or possessed by the Employee prior to the
effectiveness of this Agreement, (iv) it is disclosed to the Employee in good
faith by a third party who has a right to such information, (v) it is disclosed
in compliance with a subpoena or court order, or (vi) it is possessed by the
recipient of the information prior to receipt of same from the Employee.

         (e) "Customer" means actual customers or actively sought prospective
customers of Employer during the Term.



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         (f) "Noncompete Period" or "Nonsolicitation Period" means the period
beginning the date hereof and ending on the first anniversary of the
termination of Employee's employment with Employer; provided that such
Noncompete Period or Nonsolicitation Period shall end on the Termination Date
in the event this Agreement is terminated pursuant to the provisions of Section
2(b)(iii) hereof.

         (g) "Territory" means the area within a one hundred (100) mile radius
of any corporate office or job site of Employer or any of its subsidiaries,
affiliates or divisions.

         (h) "Trade Secrets" means information or data of or about Employer,
including but not limited to technical or non-technical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, products plans, or lists of actual
or potential customers, clients, distributees or licensees, information
concerning Employer's finances, services, staff, contemplated acquisitions,
marketing investigations and surveys, that are not generally known to, and/or
are not readily ascertainable by legal means by, other persons. Information
and/or data shall be excluded from this definition if (i) it, at the time of
disclosure, is generally known to the trade or public or (ii) it becomes at a
later date generally known to the trade or public through no fault of the
Employee.

         (i) "Work Product" means any and all work product property, data
documentation or information of any kind prepared, conceived, discovered,
developed or created by Employee for Employer or its affiliates or
subsidiaries, or any of Employer's or its affiliates' or subsidiaries' clients
or customers for utilization in Company Activities, not generally known by
and/or not readily ascertainable by proper means by other persons who can
obtain economic value from their disclosure or use.

         5.2  Trade Name and Confidential Information.

         (a) Employee hereby agrees that (i) with regard to each item
constituting all or any portion of the Trade Secrets and Confidential
Information, at all times during the Term and all times during which such item
continues to constitute a Trade Secret or Confidential Information,
respectively:

                  (i) Employee shall not, directly or by assisting others own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be connected in any manner with, any business
conducted under any corporate or trade name of Employer or name confusingly
similar thereto, without the prior written consent of Employer;

                  (ii) Employee shall hold in confidence all Trade Secrets and
all Confidential Information and will not, either directly or indirectly, use,
sell, lend, lease, distribute, license, give, transfer, assign, show, disclose,
disseminate, reproduce, copy, appropriate or otherwise commun-



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icate any Trade Secrets or Confidential Information, without the prior written
consent of Employer; and

                  (iii) Employee shall immediately notify Employer of any
unauthorized disclosure or use of any Trade Secrets or Confidential Information
of which Employee becomes aware. Employee shall assist Employer, to the extent
necessary, in the procurement or any protection of Employer's rights to or in
any of the Trade Secrets or Confidential Information.

         (b) Upon the request of Employer and, in any event, upon the
termination of Employee's employment with Employer, Employee shall deliver to
Employer all memoranda, notes, records, manuals and other documents, including
all copies of such materials and all documentation prepared or produced in
connection therewith, pertaining to the performance of Employee's services
hereunder or Employer's business or containing Trade Secrets or Confidential
Information, whether made or complied by Employee or furnished to Employee from
another source by virtue of Employee's employment with Employer.

         (c) To the greatest extent possible, all Work Product shall be deemed
to be "work made for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss.
101 et seq., as amended) and owned exclusively by Employer. Employee hereby
unconditionally and irrevocably transfers and assigns to Employer all rights,
title and interest Employee may have in or to any and all Work Product,
including, without limitation, all patents, copyrights, trademarks, service
marks and other intellectual property rights. Employee agrees to execute and
deliver to Employer any transfers, assignments, documents or other instruments
which Employer may deem necessary or appropriate to vest complete title and
ownership of any and all such Work Product, and all rights therein, exclusively
in Employer.

         5.3  Noncompetition.

         (a) The parties hereto acknowledge that Employee is conducting Company
Activities throughout the Territory. Employee acknowledges that to protect
adequately the interest of Employer in the business of Employer it is essential
that any noncompete covenant with respect thereto cover all Company Activities
and the entire Territory.

         (b) Employee hereby agrees that, during the Term and the Noncompete
Period, Employee will not, in the Territory, either directly or indirectly,
alone or in conjunction with any other party, accept, enter into or take any
action in conjunction with or in furtherance of a Competitive Position with
Employer. Employee shall notify Employer promptly in writing if Employee
receives a formal written offer of a Competitive Position during the Noncompete
Term, and such notice shall describe all material terms of such offer.



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         Nothing contained in this Section 5 shall prohibit Employee from
acquiring not more than five percent (5%) of any Competitor, or from acquiring
any percentage of any company which is non-competitive with Employer, whose
common stock is publicly traded on a national securities exchange or in the
over-the-counter market.

         5.4 Nonsolicitation During Employment Term. Employee hereby agrees
that Employee will not, during the Term, either directly or indirectly, alone
or in conjunction with any other party:

         (a) solicit, divert or appropriate or attempt to solicit, divert or
appropriate, any Customer for the purpose of providing the Customer with
services or products competitive with those offered by Employer during the
Term, or

         (b) solicit or attempt to solicit any officer, director, employee,
consultant, contractor, agent, lessor, lessee, licensor, licensee, supplier or
any shareholder or other personnel of Employer or any of its affiliates or
subsidiaries to terminate, alter or lessen that party's affiliation with
Employer or such affiliate or subsidiary or to violate the terms of any
agreement or understanding between such employee, consultant, contractor or
other person and Employer.

         5.5 Nonsolicitation During Nonsolicitation Period. Employee hereby
agrees that Employee will not, during the Nonsolicitation Period, either
directly or indirectly, alone or in conjunction with any other party:

         (a) solicit, divert or appropriate or attempt to solicit, divert or
appropriate, any Customer for the purpose of providing the Customer with
services or products that qualify as Company Activities during the Term;
provided, however, that the covenant in this clause shall limit Employee's
conduct only with respect to those Customers with whom Employee had substantial
contact (through direct or supervisory interaction with the Customer or the
Customer's account) during a period of time up to but no greater than two (2)
years prior to the last day of the Term; or

         (b) solicit or attempt to solicit any officer, director, employee,
consultant, contractor, agent, lessor, lessee, licensor, licensee, supplier or
any shareholder or other personnel of Employer or any of its affiliates or
subsidiaries residing at the time of the solicitation in the Territory to
terminate, alter or lessen that party's affiliation with Employer or such
affiliate or subsidiary or to violate the terms of any agreement or
understanding between such employee, consultant, contractor or other person and
Employer. For purposes of this clause (b), employees, consultants, contractors,
or other personnel are those with knowledge of or access to Trade Secrets and
Confidential Information of the Employer.



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         5.6 Binding Arbitration. Except as otherwise provided under Sections
6.1 and 6.8,the parties shall refer any dispute as to whether or not the
Employee has violated the provisions of this Section 5 to a mediator and, in
the event that mediation is unsuccessful, such dispute shall be resolved by
binding arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. The arbitrator shall be selected by the
mediator. The cost of the mediator and, if necessary, the arbitrator and all
other costs of the mediation and, if necessary, the arbitration shall be split
equally between the Employee and the Employer, except for attorneys fees which
shall be paid by the party employing such attorney. Such mediation and
arbitration, if necessary, shall be convened at Employer's option in either (i)
Baltimore, Maryland or (ii) New York, New York.

         Section 6. Miscellaneous.

         6.1 Severability. The covenants in this Agreement shall be construed
as covenants independent of one another and as obligations distinct from any
other contract between Employee and Employer. Any claim that Employee may have
against Employer shall not constitute a defense to enforcement by Employer of
this Agreement. It is the desire and intent of the parties that the terms and
conditions of this Agreement be enforced to the fullest extent permissible.
Accordingly, if any particular term or condition of this Agreement shall be
adjudicated or become by operation of law invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom such term or condition
and the remainder of the Agreement shall remain in full force and effect. With
particular reference to the covenants set forth in Section 5, if any court
pursuant to Section 6.8 concludes such clause is unenforceable it shall reform
it to set forth the maximum scope, duration and geographic area over which it
shall be enforceable.

         6.2 Survival of Obligations. The covenants in Section 5 of this
Agreement shall survive termination of Employee's employment, except in the
case of termination of this Agreement pursuant to the provisions of Section
2(b)(iii) hereof, in which case they shall terminate also and have no further
force or legal effect as of the Termination Date.

         6.3 Notices. Any notice or other document to be given hereunder by any
party hereto to any other party hereto shall be in writing and delivered in
person or by courier, by telecopy transmission or sent by any express mail
service, postage or fees prepaid at the following addresses:

                  EMPLOYER
                  RailWorks Corporation
                  1104 Kenilworth Drive
                  Suite 301
                  Baltimore, MD  21204
                  Attention:  John G. Larkin, Chief Executive Officer
                  Telecopy No. (410) 825-6920


                                      13
<PAGE>   14

                  EMPLOYEE
                  Kenneth R. Burk
                  157 Bittersweet Circle
                  Venetia, PA  15367

or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.

         6.4 Binding Effect. This Agreement ensures to the benefit of, and is
binding upon, Employer and its respective successors and assigns, and Employee,
together with Employee's executor, administrator, personal representative,
heirs, and legatees.

         6.5 Entire Agreement. This Agreement is intended by the parties hereto
to be the final expression of their agreement with respect to the subject
matter hereof and is the complete and exclusive statement of the terms thereof,
notwithstanding any representations, statements or agreements to the contrary
heretofore made. This Agreement supersedes and terminates all prior employment
and compensation agreements, arrangements and understandings between or among
Employer and Employee. This Agreement may be modified only by a written
instrument signed by all of the parties hereto.

         6.6 Governing Law. This Agreement shall be deemed to be made in, and
in all respects shall be interpreted, construed, and governed by and in
accordance with, the laws of the State of Maryland exclusive of reference to
choice of law or conflicts of law. No provision of this Agreement shall be
construed against or interpreted to the disadvantage of any party hereto by any
court of other governmental or judicial authority or by any board of
arbitrators by reasons of such party or its counsel having or being deemed to
have structured or drafted such provision.

         6.7 Headings. The section and paragraph headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.

         6.8 Specific Performance. Notwithstanding Section 5.6, each party
hereby agrees that any remedy at law for any breach of provisions contained in
this Agreement, including, but not limited to Section 5, shall be inadequate
and that the other parties hereto shall be entitled to specific performance and
any other appropriate injunctive relief in addition to any other remedy such
party might have under this Agreement or at law or in equity. The waiver of a
breach of any term or condition of this Agreement shall not be deemed to
constitute a waiver of any other or subsequent breach of the same or any other
term or condition hereof.



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<PAGE>   15

         6.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

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

                                     RAILWORKS CORPORATION


                                     By: /S/ John G. Larkin
                                        ---------------------------------------
                                        John G. Larkin, Chief Executive Officer


                                     EMPLOYEE

                                        /S/ Kenneth R. Burk
                                     ------------------------------------------
                                             Kenneth R. Burk

























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