<PAGE>
                                                                   Exhibit 10.47

                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT entered into as of the 28th day of November,
2001, by and between MCG Finance Corporation (the "Company"), a Delaware
corporation, and Robert J. Merrick, an individual (the "Executive") (hereinafter
collectively referred to as the "parties").

      WHEREAS, the Executive has heretofore been employed by the Company as its
Chief Credit Officer and is experienced in all phases of the business of the
Company and the Company desires to retain the services and employment of the
Executive on the terms set forth herein;

      WHEREAS, the Company recognizes the Executive's extraordinary experience
and relationships in the Company's industry, and the Company desires to retain
the services and employment of the Executive;

      WHEREAS, the Executive and the Company have entered into an Employment
Agreement dated December 16, 1998 (the "Prior Agreement"); and
                                        ---------------    ---

      WHEREAS, the Company and the Executive desire to enter into this Agreement
which will replace the Prior Agreement and will provide for the continued
employment of the Executive by the Company upon the terms and subject to the
conditions set forth herein.

      NOW, THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:

      1. Term. The initial term of employment (the "Term") under this Agreement
         ----
shall be for the period commencing on the date hereof, and shall continue in
effect until the fourth anniversary hereof, provided, however, that (a) if the
                                            --------  -------
consummation of the first public offering of the Common Stock of MCG Capital
Corporation, the parent of the Company (the "Parent") pursuant to a registration
statement (other than on Form S-8 or Form S-4 or a successor form thereto) filed
with, and declared effective by, the Securities and Exchange Commission does not
occur by the earlier of (1) the 20th day following the effective date of the
filing of the Form N-8A with the Securities and Exchange Commission pursuant to
which the Company will register under the Investment Company Act of 1940, as
amended as a closed-end investment company or (2) December 31, 2001, then the
                                           --                        ----
Prior Agreement shall be automatically re-instated and this Agreement shall be
                                                   ---
automatically terminated and superceded by the Prior Agreement, and (b) if the
                                                                ---
Term would otherwise expire prior to the expiration of twelve (12) months after
the occurrence of a Change in Control (as defined below), then the Term shall
                                                          ----
not expire prior to the expiration of twelve months after such Change in Control
so long as either the Executive consents to such extension of this Agreement or
           ------                                                            --
the Company causes all of the Executive's Tier 1, Tier 2 and Tier 3 Shares that
are still Forfeitable to thereupon become Non-Forfeitable.

      2. Employment. (a) The Executive shall be employed as the Chief Credit
         ----------
Officer of the Company or such other position(s) as may be mutually agreed upon
in writing by the parties. The Executive shall perform the duties, undertake the
responsibilities and exercise the authority customarily performed, undertaken
and exercised by persons situated in a similar executive capacity.


                                     - 1 -

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            (b) The Executive shall devote his full working time attention and
skill to the performance of such duties, services and responsibilities, and will
                                                                        ---
use his best efforts to promote the interests of the Company. The Executive will
not, without prior written approval of the Board of Directors of the Company
(the "Board"), engage in any other activities that would interfere with the
performance of his duties as an employee of the Company, are in violation of
written policies of the Company, are in violation of applicable law, or would
create a conflict of interest with respect to the Executive's obligations as an
employee of the Company. The Executive may (1) serve on corporate, civil or
charitable boards or committees, (2) deliver lectures and teach at educational
institutions, (3) serve as a personal representative or trustee, (4) manage his
personal, financial and legal affairs, and (5) invest personally in any business
                                       ---
where no conflict of interest exists between such investment and the business of
the Company, as long as the foregoing activities do not require a material time
commitment by the Executive.

      3. Base Salary. The Company agrees to pay or cause to be paid to the
         -----------
Executive during the term of this Agreement a base salary at the rate of
$175,000 per annum (such base salary, as may be adjusted from time to time in
accordance with this Section, the "Base Salary"). Such Base Salary shall be
payable in accordance with the Company's customary practices applicable to its
executives. Such Base Salary shall be reviewed (and may be adjusted) at least
annually by the Board or an authorized committee of the Board. Such Base Salary
may be reduced only if such reduction is implemented by the Company as part of
an overall general salary reduction plan among all of its employees and such
reduction to the Base Salary on a percentage basis is equal to or less than the
percentage reduction otherwise implemented under such plan.

      4. Employee Benefits. The Executive shall be entitled to participate in
         -----------------
all employee benefit plans, practices and programs maintained by the Company or
the Parent and made available to employees of the Company or the Parent
generally including, without limitation, all pension, retirement, profit
sharing, savings, medical, hospitalization, disability, dental, life or travel
accident insurance benefit plans, vacation and sick leave. The Executive's
participation in such plans, practices and programs shall be on the same basis
and terms as are applicable to employees of the Company or the Parent generally.

      5. Executive Benefits. The Executive shall be entitled to participate in
         ------------------
all executive benefit or incentive compensation plans now maintained or
hereafter established by the Company or the Parent for the purpose of providing
compensation and/or benefits to executives of the Company or the Parent. Unless
otherwise provided herein, the Executive's participation in such plans shall be
on the same basis and terms as other similarly situated executives of the
Company or the Parent. No additional compensation provided under any of such
plans shall be deemed to modify or otherwise affect the terms of this Agreement
or any of the Executive's entitlements hereunder.


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      6. Other Benefits.
         --------------

            (a) Fringe Benefits and Perquisites. The Executive shall be entitled
                -------------------------------
to all fringe benefits and perquisites generally made available by the Company
or the Parent to the Company or the Parent's executives.

            (b) Expenses. The Company agrees to pay all reasonable expenses,
                --------
subject to reasonable documentation, incurred by the Executive in furtherance of
the Company's business, including, without limitation, traveling and
entertainment expenses, and to reimburse the Executive for all such reasonable
expenses advanced by him and not reimbursed prior to the date of this Agreement.

      7. Termination. The Executive's employment hereunder may be terminated
         -----------
under the following circumstances:

            (a) Disability. The Company may terminate the Executive's employment
                ----------
after having established the Executive's Disability or the Executive can
terminate if he has established his Disability. For purposes of this Agreement,
"Disability" means a physical or mental infirmity which impairs the Executive's
ability to substantially perform his duties under this Agreement for at least
one hundred eighty (180) days during any 365-consecutive-day period. The
Executive shall be entitled to the compensation and benefits provided for under
this Agreement for any period during the term of this Agreement and prior to the
establishment of the Executive's Disability during which the Executive is unable
to work due to a physical or mental infirmity. Notwithstanding anything
contained in this Agreement to the contrary, until the Termination Date
specified in a Notice of Termination (as each term is hereinafter defined)
relating to the Executive's Disability, the Executive shall be entitled to
return to his position with the Company as set forth in this Agreement in which
event no Disability of the Executive will be deemed to have occurred.

            (b) Cause. The Company may terminate the Executive's employment for
                -----
"Cause". A termination for Cause shall mean (1) if the Executive has been
 -----
convicted of a felony (other than a traffic offense) or (2) a termination
                                                     --
evidenced by a resolution adopted in good faith by two-thirds (2/3) of the Board
that the Executive (i) failed to substantially perform his duties and
obligations with the Company (other than a failure resulting from the
Executive's incapacity due to physical or mental illness) which, if it is the
first instance of such conduct, is not cured within thirty (30) days after a
written notice of demand for substantial performance has been delivered to the
Executive specifying the manner in which the Executive has failed to
substantially perform (and, if it is any instance of such conduct after the
                       ---
first instance thereof and opportunity to cure, then no such opportunity to cure
need be provided with respect to such conduct), or (ii) willfully engaged in
                                                --
conduct which is demonstrably and materially injurious to the Company,
monetarily or otherwise; provided, however, that no termination of the
                         -----------------
Executive's employment shall be for Cause as set forth in clause (ii) above
until (y) there shall have been delivered to the Executive a copy of a written
notice setting forth that the Executive was guilty of the conduct set forth in
clause (ii) and specifying the particulars thereof in detail, and (z) the
                                                              ---
Executive shall have been provided an opportunity to be heard by the Board (with
the assistance of the Executive's counsel if the Executive so desires). No act,
nor failure to act, on the Executive's part, shall be considered "willful"
                                                                  -------
unless he has acted or failed to act, with an absence of good faith and without
a


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reasonable belief that his action or failure to act was in the best interest of
the Company. Notwithstanding anything contained in this Agreement to the
contrary, no failure to perform by the Executive after Notice of Termination is
given by the Executive shall constitute Cause for purposes of this Agreement.

            (c) Good Reason. The Executive may terminate his employment for
                -----------
"Good Reason" at any time within three (3) months of his knowledge of its
occurrence. For purposes of this Agreement, "Good Reason" shall mean the
                                             -----------
occurrence of any of the events or conditions described in the following
Subsections hereof:

                  (i) a change in the Executive's status, title, position or
            responsibilities (including reporting responsibilities) that
            represents a demotion from his status, title, position or
            responsibilities as in effect immediately prior thereto; the
            assignment to the Executive of any material duties or
            responsibilities that are inconsistent with such status, title,
            position or responsibilities; or any removal of the Executive from
            or failure to reappoint or reelect him to any of such positions (or
            positions of substantially similar status, title or responsibility),
            except in connection with the termination of his employment for
            Disability, Cause, as a result of his death or by the Executive
            other than for Good Reason;

                  (ii) a reduction in the Executive's Base Salary from the Base
            Salary in effect in the prior year (unless such reduction is
                                                ------
            implemented in accordance with Section 3);
                                                   -

                  (iii) the Company's requiring the Executive to be based at any
            place outside a 50-mile radius from the office in which the
            Executive is employed on the date hereof, except for reasonably
            required travel on the Company's business;

                  (iv) the failure by the Company or the Parent to (A) continue
            in effect any material compensation or benefit plan, or (B) provide
                                                                 --
            the Executive with compensation and benefits at least equal (in
            terms of benefit levels and/or reward opportunities) to those
            provided for under each employee benefit plan, program and practice;
            provided, however, if the Executive's participation in (A) or (B)
            --------  -------
            above shall be reduced or altered on the same basis and terms as
            other similarly situated executives of the Company or the Parent, it
            shall not be Good Reason;

                  (v) any material breach by the Company of any provision of
            this Agreement, including failure to pay Base Salary.
                            ---------

Notwithstanding the foregoing, the occurrence of any conduct or circumstance
--------------- --- ---------
covered under Clauses (i), (iv) or (v) shall not constitute Good Reason if (Y)
                                                                        --
such particular conduct or circumstance has not previously occurred during the
Term of this Agreement and (Z) such conduct or circumstance is cured by the
                       ---
Company within thirty (30) days after written notice thereof has been delivered
to the Company by the Executive specifying the nature of such Good Reason,
provided, however, that such cure period shall be limited to five (5) business
--------  -------
days in the instance of a failure by the Company to pay Base Salary under Clause
(v).


                                     - 4 -

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            (d) Change in Control. For purposes of this Agreement, "Change in
                -----------------                                   ---------
Control" means the occurrence of any of the following events:
-------

                  (1) An acquisition in one or more transactions (other than
      directly from the Company or the Parent, as applicable) of any voting
      securities of the Company or the Parent by any Person (as defined below)
      immediately after which such Person has Beneficial Ownership (as defined
      below) of fifty percent (50%) or more of the combined voting power of the
      Company's or the Parent's, as applicable, then outstanding voting
      securities; provided, however, in determining whether a Change in Control
                  --------  -------
      has occurred, voting securities which are acquired in a "Non-Control
      Acquisition" (as hereinafter defined) shall not constitute an acquisition
      which would cause a Change in Control. A "Non-Control Acquisition" shall
                                                -----------------------
      mean an acquisition by (i) an employee benefit plan (or a trust forming a
      part thereof) maintained by (A) the Company or the Parent or (B) any
      corporation or other Person of which a majority of its voting power or its
      voting equity securities or equity interest is owned, directly or
      indirectly, by the Company or the Parent (for purposes of this definition,
      a "Subsidiary"), (ii) the Company, the Parent or their Subsidiaries, or
                                                                           --
      (iii) any Person in connection with a "Non-Control Transaction" (as
      hereinafter defined);

                  (2) The individuals who, as of the date hereof are members of
      the Company's or the Parent's Board of Directors, as applicable in each
      case, (the "Incumbent Board"), cease for any reason to constitute at least
      a majority of the members of the Board or, following a Merger (as defined
      below), the board of directors of the ultimate Parent Corporation (as
      defined below); provided, however, that if the election, or nomination for
                      --------  -------
      election by the Company's or the Parent's common stockholders, as
      applicable, of any new director was approved by a vote of at least a
      majority of the Company's or the Parent's Incumbent Board, as applicable
      (or, with respect to the directors who are not "interested persons" as
      defined in the Investment Company Act of 1940, by a majority of the
      directors who are not "interested persons" serving on the Parent's
      Incumbent Board), such new director shall, for purposes of this Agreement,
      be considered as a member of the Company's or the Parent's Incumbent
      Board, as applicable; provided further, however, that no individual shall
                            -------- -------  -------
      be considered a member of the Company's or the Parent's Incumbent Board,
      as applicable, if such individual initially assumed office as a result of
      an actual or threatened solicitation of proxies or consents by or on
      behalf of a Person other than the Company's or the Parent's Board, as
      applicable (a "Proxy Contest") including by reason of any agreement
      intended to avoid or settle any Proxy Contest; or

                  (3) The consummation of:

                        (i) A merger, consolidation or reorganization involving
            the Company or the Parent, as applicable, (a "Merger") or an
            indirect or direct subsidiary of the Company or the Parent, as
            applicable, or to which securities of the Company or the Parent, as
            applicable, are issued, unless:
                                    ------

                              (A) the stockholders of the Company or the Parent,
            as applicable, immediately before a Merger, own, directly or
            indirectly immediately following the Merger, more than fifty percent
            (50%) of the combined voting power


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            of the outstanding voting securities of (x) the corporation
            resulting from the Merger (the "Surviving Corporation") if fifty
            percent (50%) or more of the combined voting power of the then
            outstanding voting securities of the Surviving Corporation is not
            Beneficially Owned, directly or indirectly, by another Person or
            group of Persons (a "Parent Corporation"), or (y) if there is one or
                                                       --
            more Parent Corporations, the ultimate Parent Corporation,

                              (B) the individuals who were members of the
            Company's or the Parent's Incumbent Board, as applicable,
            immediately prior to the execution of the agreement providing for a
            Merger constitute at least a majority of the members of the board of
            directors of (x) the Surviving Corporation or (y) the ultimate
                                                       --
            Parent Corporation, if the ultimate Parent Corporation, directly or
            indirectly, owns fifty percent (50%) or more of the combined voting
            power of the then outstanding voting securities of the Surviving
            Corporation, and

                              (C) no Person other than (1) the Company, (2) the
            Parent, (3) any Subsidiary, (4) any employee benefit plan (or any
            trust forming a part thereof) maintained by the Company, the Parent,
            the Surviving Corporation, any Subsidiary, or the ultimate Parent
            Corporation, or (5) any Person who, together with its Affiliates (as
                         --
            defined below), immediately prior to a Merger had Beneficial
            Ownership of fifty percent (50%) or more of the then outstanding
            voting securities, owns, together with its Affiliates, Beneficial
            Ownership of fifty percent (50%) or more of the combined voting
            power of the then outstanding voting securities of (x) the Surviving
            Corporation or (y) the ultimate Parent Corporation.
                        --

            Each transaction described in clauses (A) through (C) above shall
            herein be referred to as a "Non-Control Transaction".

                        (ii) A complete liquidation or dissolution of the
            Company or the Parent (other than where assets of the Company or the
            Parent are transferred to or remain with a Subsidiary or
            Subsidiaries of the Company or the Parent).

                        (iii) The direct or indirect sale or other disposition
            of all or substantially all of the assets of the Company or the
            Parent to any Person (other than (A) a transfer to a Subsidiary, (B)
            under conditions that would constitute a Non-Control Transaction
            with the disposition of assets being regarded as a Merger for this
            purpose, or (C) the distribution to the Company's or the Parent's
                     --
            stockholders, as applicable, of the stock of a Subsidiary or any
            other assets).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
solely because any Person (the "Subject Person") acquired Beneficial Ownership
of more than the permitted amount of the then outstanding voting securities as a
result of the acquisition of voting securities by the Company or the Parent, as
applicable, which, by reducing the number of voting securities then outstanding,
increases the proportional number of shares Beneficially Owned by the Subject
Persons, provided that if a Change in Control would occur (but for the operation
of this sentence) as a result of the acquisition of voting securities by the
Company or the Parent, as applicable, and after such share acquisition by the
Company or the Parent, as applicable, the Subject Person


                                     - 6 -

<PAGE>

becomes the Beneficial Owner of any additional voting securities which increases
the percentage of the then outstanding voting securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur. "Affiliate" means,
                                                           ---------
with respect to any Person, any other Person that, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Person. "Beneficial Ownership" means ownership within
the meaning of Rule 13d-3 promulgated under the Exchange Act. "Person" means
"person" as such term is used for purposes of Section 13(d) or 14(d) of the
Exchange Act, including without limitation, any individual, corporation, limited
liability company, partnership, trust, unincorporated organization, government
or any agency or political subdivision thereof or any other entity or any group
of Persons.

            (e) Notice of Termination. Any purported termination by the Company
                ---------------------
or by the Executive shall be communicated by written Notice of Termination to
the other. For purposes of this Agreement, a "Notice of Termination" shall mean
a notice which indicates the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated. For purposes of this Agreement, no such purported
termination of employment shall be effective without such Notice of Termination.
For the purposes of this Agreement, after a Notice of Termination has been
delivered to the Executive by the Company, he may not terminate his employment
for Good Reason or otherwise. After the Executive has terminated his employment
for Good Reason or otherwise, the Company may not deliver a Notice of
Termination to the Executive terminating his employment.

            (f) Termination Date, Etc. "Termination Date" shall mean (1) in the
                ----------------------  ----------------
case of the Executive's Death, the Executive's date of Death, (2) if the
Executive's employment is terminated for Disability, the date on which the
Notice of Termination is given, (3) if the Executive terminates his employment,
on the date such termination is announced by the Executive, and (4) if the
                                                            ---
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination, which shall not be longer than seven (7) days after
the Notice of Termination.

      8. Compensation Upon Termination. Upon termination of the Executive's
         -----------------------------
employment during the term of this Agreement (including any extensions thereof),
the Executive shall be entitled to the following benefits:

            (a) If the Executive's employment is terminated by the Company for
Cause or by the Executive (other than for Good Reason), then the Company shall
                                                        ----
pay the Executive all amounts earned or accrued hereunder through the
Termination Date but not paid as of the Termination Date, including (i) Base
Salary, (ii) reimbursement for any and all monies advanced or expenses incurred
in connection with the Executive's employment for reasonable and necessary
expenses incurred by the Executive on behalf of the Company for the period
ending on the Termination Date, (iii) vacation pay, (iv) any bonuses or
incentive compensation with respect to the fiscal year ended prior to the fiscal
year in which the Termination Date occurs that was earned and unpaid and (v) any
                                                                     ---
previous compensation which the Executive has previously deferred (including any
interest earned or credited thereon) (collectively, "Accrued Compensation"). The
                                                     --------------------
Executive will forfeit any Tier 1, Tier 2 and Tier 3 Shares (as defined in the
Restricted Stock Agreement between the Executive and the Parent (the "RSA"))
that are Forfeitable Shares (as


                                     - 7 -

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defined in the RSA) as to which the forfeiture restrictions have not lapsed as
of the Termination Date.

            (b) If the Executive's employment terminates for Disability or for
reason of the Executive's death, then the Executive shall be entitled to the
                                 ----
benefits provided below:

                  (i) the Company shall pay the Executive or his beneficiaries
            all Accrued Compensation;

                  (ii) the Company shall pay to the Executive or his
            beneficiaries an amount equal to the bonus or incentive award
            (which, for this purpose, shall not include the restricted stock
            under the RSA) that the Executive would have been entitled to
            receive in respect of the fiscal year in which the Executive's
            Termination Date occurs had he continued in employment until the end
            of such fiscal year, calculated as if all performance targets and
            goals (if applicable) had been fully met by the Company and/or the
            Parent, as applicable and by the Executive, as applicable, for such
            year, multiplied by a fraction the numerator of which is the number
            of days in such fiscal year through the Termination Date and the
            denominator of which is 365 (a "Pro Rata Bonus"); and

                  (iii) (A) With respect to the Tier 1 and Tier 2 Shares, for
            purposes of determining the Tier 1 and Tier 2 Shares with respect to
            which forfeiture restrictions have lapsed, the Executive will be
            considered to remain an Executive through the end of the fourth
            three-month period beginning immediately after the end of the
            three-month period in which the Termination Date occurs. The
            Executive will forfeit any Tier 1 and Tier 2 Shares as to which the
            forfeiture restrictions have not lapsed as of the end of that fourth
            three-month period.

                        (B) With respect to the Tier 3 Shares, the following
            Tier 3 Shares shall become non-forfeitable to the same extent as if
            Executive had remained employed by the Company through September 30,
            2005: (i) the Tier 3 Shares allocable to the Performance Period (as
            defined in the RSA) in which the Termination Date occurs, (ii) the
            Tier 3 Shares allocable to the Performance Periods ending before the
            beginning of the Performance Period in which the Termination Date
            occurs and (iii) the pro rata portion (determined on a quarterly
                   ---
            basis) of the Tier 3 Shares allocable to the Performance Period
            immediately after the Performance Period in which the Termination
            Date occurs as if the Termination Date occurred one year after the
            last day of the three-month period in which the Termination Date
            occurs.

            (c) If the Executive's employment with the Company shall be
terminated (1) by the Company other than for Cause, death, Disability or as
                              ----- ----
provided in Section 8(d), or (2) by the Executive for Good Reason, then the
                    ----  --                                       ----
Executive shall be entitled to the benefits provided below:

                  (i) the Company shall pay the Executive all Accrued
            Compensation and a Pro Rata Bonus (which Pro Rata Bonus shall be
            calculated based upon actual


                                     - 8 -

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            performance by the Company and/or the Parent, as applicable during
            such fiscal year rather than assuming all applicable performance
                             ------ ----
            targets and goals had been fully met by the Company and/or the
            Parent, as applicable);

                  (ii) the Company shall pay the Executive as severance pay and
            in lieu of any further salary for periods subsequent to the
            Termination Date, in twenty-four (24) equal monthly installments on
            the first business day of each month, an amount in cash equal to
            1/24th of two (2) times the sum of (A) the Executive's Base Salary
            at the highest rate in effect at any time within the current or the
            prior three (3) fiscal year periods preceding the Termination Date
            (or if the Executive's employment is terminated after a Change in
            Control, the Executive's Base Salary immediately prior to the Change
            in Control, if greater) and (B) the "Bonus Amount" (as defined
                                    ---          ------------
            below). The term "Bonus Amount" shall mean the total amount of all
            cash bonus or incentive compensation received or earned by the
            Executive (which, for this purpose, shall not include the restricted
            stock under the RSA) during the three (3) fiscal year periods
            immediately preceding the Termination Date divided by three (3);
                                                       ------- --

                  (iii) for twenty-four (24) months following the Termination
            Date, the Company shall at its expense continue on behalf of the
            Executive and his dependents and beneficiaries the life insurance,
            disability, medical, dental and hospitalization benefits which were
            being provided to the Executive at the time Notice of Termination is
            given (or, if the Executive is terminated following a Change in
            Control, the benefits provided to the Executive at the time of the
            Change in Control, if greater). The benefits provided in this
            Section 8(c)(iii) shall be no less favorable to the Executive, in
                    ---------
            terms of amounts and deductibles and costs to him, than the coverage
            provided the Executive under the plans providing such benefits at
            the time Notice of Termination is given (or, if the Executive is
            terminated following a Change in Control, at the time of the Change
            in Control if more favorable to the Executive). The Company's
            obligation hereunder with respect to the foregoing benefits shall be
            limited to the extent that the Executive obtains any such benefits
            pursuant to a subsequent employer's benefit plans, in which case the
            Company may reduce the coverage of any benefits it is required to
            provide the Executive hereunder as long as the aggregate coverage of
            the combined benefit plans is no less favorable to the Executive, in
            terms of amounts and deductibles and costs to him, than the coverage
            required to be provided hereunder. This Subsection (iii) shall not
            be interpreted so as to limit any benefits to which the Executive or
            his dependents may be entitled under any of the Company's or the
            Parent's employee benefit plans, programs or practices following the
            Executive's termination of employment, including without limitation,
            retiree medical and life insurance benefits;

                  (iv) With respect to the Tier 1, Tier 2 and Tier 3 Shares, the
            forfeiture restrictions will lapse on the Termination Date and such
                                                                       ---
            shares shall become Non-Forfeitable Shares (as defined in the RSA)
            on such date.


                                     - 9 -

<PAGE>

            (d) If the Executive's employment with the Company shall be
terminated by the Company (other than for Cause, death or Disability) by an
                           ----- ----
affirmative vote of more than 50% of the number of directors constituting the
entire Board, then the Executive shall be entitled to the benefits provided
              ----
below:

                        (i) the Company shall pay the Executive all Accrued
                  Compensation and a Pro Rata Bonus (which Pro Rata Bonus shall
                  be calculated based upon actual performance by the Company
                  and/or the Parent, as applicable during such fiscal year
                  rather than assuming all applicable performance targets and
                  ------ ----
                  goals had been fully met by the Company and/or the Parent, as
                  applicable);

                        (ii) the Company shall pay the Executive as severance
                  pay and in lieu of any further salary for periods subsequent
                  to the Termination Date, in twenty-four (24) equal monthly
                  installments on the first business day of each month, an
                  amount in cash equal to 1/24th of two (2) times the sum of (A)
                  the Executive's Base Salary at the highest rate in effect at
                  any time within the current or the prior three (3) fiscal year
                  periods preceding the Termination Date (or if the Executive's
                  employment is terminated after a Change in Control, the
                  Executive's Base Salary immediately prior to the Change in
                  Control, if greater) and (B) the "Bonus Amount" (as defined
                                       ---          ------------
                  Section 8(c)(ii));
                          --------

                        (iii) for twenty-four (24) months following the
                  Termination Date, the Company shall at its expense continue on
                  behalf of the Executive and his dependents and beneficiaries
                  the life insurance, disability, medical, dental and
                  hospitalization benefits which were being provided to the
                  Executive at the time Notice of Termination is given (or, if
                  the Executive is terminated following a Change in Control, the
                  benefits provided to the Executive at the time of the Change
                  in Control, if greater). The benefits provided in this Section
                  8(d)(iii) shall be no less favorable to the Executive, in
                  ---------
                  terms of amounts and deductibles and costs to him, than the
                  coverage provided the Executive under the plans providing such
                  benefits at the time Notice of Termination is given (or, if
                  the Executive is terminated following a Change in Control, at
                  the time of the Change in Control if more favorable to the
                  Executive). The Company's obligation hereunder with respect to
                  the foregoing benefits shall be limited to the extent that the
                  Executive obtains any such benefits pursuant to a subsequent
                  employer's benefit plans, in which case the Company may reduce
                  the coverage of any benefits it is required to provide the
                  Executive hereunder as long as the aggregate coverage of the
                  combined benefit plans is no less favorable to the Executive,
                  in terms of amounts and deductibles and costs to him, than the
                  coverage required to be provided hereunder. This Subsection
                  (iii) shall not be interpreted so as to limit any benefits to
                  which the Executive or his dependents may be entitled under
                  any of the Company's or the Parent's employee benefit plans,
                  programs or practices following the Executive's termination of
                  employment, including without limitation, retiree medical and
                  life insurance benefits;

                        (iv) On the Termination Date: (a) with respect to the
                  Executive's Tier 1 Shares that are still Forfeitable Shares,
                  the forfeiture restrictions will lapse with


                                     - 10 -

<PAGE>

                  respect to all such Tier 1 Shares, and (b) with respect to the
                                                     ---
                  Executive's Tier 2 Shares that are still Forfeitable Shares,
                  the forfeiture restrictions will lapse with respect to all
                  such Tier 2 Shares that are otherwise scheduled to become
                  Non-Forfeitable during the current quarter and during the
                  immediately succeeding quarter, and (c) with respect to the
                                                  ---
                  Executive's Tier 3 Shares, the forfeiture restrictions will
                  lapse with respect to all Tier 3 Shares for which a
                  Performance Based Criteria Test (as defined in the RSA) has
                  been satisfied on or prior to the Termination Date. On the
                  Termination Date, all such shares as to which the forfeiture
                  restrictions lapse shall become Non-Forfeitable Shares (as
                  defined in the RSA).

            (e) The amounts provided for in Sections 8(a), 8(b)(i), (ii),
                                                     ----  -------  ----
8(c)(i) (with respect to Accrued Compensation only) and 8(d)(i) (with respect to
-------                                                 ------
Accrued Compensation only) shall be paid within ten (10) business days after the
Executive's Termination Date, and the amounts provided for in Sections 8(c)(i)
                              ---                                      -------
and 8(d)(i) with respect to Pro Rata Bonus shall be paid to the Executive in
--- -------
accordance with the Company's customary timing for paying such bonuses or
incentive awards.

            (f) The Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Executive in any subsequent employment
other than as provided under Section 8(c)(iii) and 8(d)(iii).
----- ----                           --------      --------

            (g) Executive's entitlement to any other compensation or benefits
shall be determined in accordance with the Company's or the Parent's employee
benefit plans and other applicable programs and practices then in effect.

            (h) Vesting and Severance Rights Upon a Change of Control. The RSA
                -----------------------------------------------------
will govern the applicability of forfeiture restrictions relating to Tier 1,
Tier 2 and Tier 3 Shares upon a Change in Control. Upon a Change of Control, if
the Executive enters into a new or amended employment agreement with the
acquiring or surviving entity, then such new or amended agreement shall
                               ----
supercede this Agreement and govern the extent to which the Executive is
thereafter entitled to severance. Alternatively, upon a Change of Control, if
the Executive does not enter into a new or amended employment agreement with the
acquiring or surviving entity and the Term is not extended pursuant to Section
1(b), then the Term of this Agreement shall terminate and the Executive shall
----  ----
thereupon be entitled to the severance set forth in Section 8(c)(i), (ii) and
                                                            -------  ---- ---
(iii).
-----

      9. Employee Covenants.
         ------------------

            (a) Confidentiality. The Executive shall not, without the prior
                ---------------
express written consent of the Company, directly or indirectly, use for any
purpose any Confidential Information (as defined below) in any way, or divulge,
disclose or make available or accessible any Confidential Information to any
person, firm, partnership, corporation, trust or any other entity or third party
unless (i) such disclosure is reasonably necessary or appropriate in connection
------
with the performance by the Executive of his duties as an executive of the
Company or (ii) such disclosure
        --


                                     - 11 -

<PAGE>

is required by applicable law or (iii) the Executive is requested or required by
                              --
a judicial or arbitration body or governmental agency (by oral question,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process) to disclose any such information, in
which case the Executive will (A) promptly notify the Company of such request or
requirement, so that the Company may seek an appropriate protective order and
(B) cooperate with the Company, at its expense, in seeking such an order.
"Confidential Information" means all information respecting the business and
 ------------------------
activities of the Company, the Parent and any of their Subsidiaries, including,
without limitation, respecting the clients, customers, suppliers, employees,
consultants, prospects, computer or other files, projects, products, computer
disks or other media, computer hardware or computer software programs,
underwriting, lending or investment standards, marketing plans, financial
information, methodologies, know-how, processes, trade secrets, policies,
practices, projections, forecasts, formats, operational methods, product
development techniques, research, strategies or information agreed to with
third-parties to be kept confidential by the Company, the Parent and any of
their Subsidiaries. Notwithstanding the immediately preceding sentence,
Confidential Information shall not include any information that is, or becomes,
a part of the public domain or generally available to the public (unless such
availability occurs as a result of any breach by the Executive of this
Agreement) or any business knowledge and experience of the type usually acquired
by persons engaged in positions similar to the Executive's position with the
Company, to the extent such knowledge and experience is non-Company specific and
not proprietary to the Company, the Parent or any of their Subsidiaries.

            (b) Non-Competition. During the period commencing on the date hereof
                ---------------
and ending two (2) years after the Termination Date (the "Applicable Period"),
                                                          -----------------
and provided the Company complies with all of its obligations set forth in
Section 8 hereof, the Executive shall not, without the prior written consent of
        -
the Company, engage in any business or activity, whether as an employee,
consultant, partner, principal, agent, representative, stockholder (other than
as the holder of an interest of two percent (2%) or less in the equity of a
publicly traded corporation) or other individual, corporate or representative
capacity, or render any services or provide any advice or assistance to any
business, person or entity, if such business, activity, person or entity
competes anywhere in the United States with the Company, the Parent or any of
their Subsidiaries in respect of (i) any then current product, service or
business of the Company, the Parent or any of their Subsidiaries on the
Termination Date or (ii) any product, service or business as to which the
                 --
Company, the Parent or any of their Subsidiaries has begun preparing to develop
or offer as of the Termination Date. Nothing herein shall be construed to
prevent the Executive from being employed by any person or entity in a line of
business or activity that does not compete with (i) products, services or
businesses offered or conducted by the Company, the Parent or their Subsidiaries
as of the Termination Date, or (ii) products, services or business which the
Company, the Parent or any of their Subsidiaries has begun preparing to develop
or offer as of the Termination Date. A product, service or business shall not be
deemed to compete with the Company, the Parent or their Subsidiaries if it is
offered in any industry or market sector in which the Company, the Parent and
their Subsidiaries do not compete nor have begun preparing to compete as of the
Termination Date. If termination of employment is due to the expiration of the
Term, this Section 9(b) shall not be applicable.
                   ---

            (c) Non-Solicitation. During the period commencing on the date
                ----------------
hereof and ending two (2) years after the Termination Date (the
"Non-Solicitation Period"), the Executive shall not divert, solicit or lure away
 -----------------------
the patronage of (1) any client or business of the Company,


                                     - 12 -

<PAGE>

the Parent or any of their Subsidiaries as of or within the two (2) year period
prior to the Termination Date or (2) any prospective client or business of the
                              --
Company, the Parent or any of their Subsidiaries. As used herein, "prospective
client" means any client that the Company, the Parent or any of their
Subsidiaries (i) has solicited within the two (2) year period prior to the
Termination Date, (ii) is soliciting as of the Termination Date, or (iii) as of
                                                                 --
the Termination Date, is maintained in the Company's or the Parent's data base
of prospective clients. Nothing herein shall be construed to prevent the
Executive from soliciting clients or prospective clients of the Company, the
Parent or their Subsidiaries with respect to products, services or businesses
which the Company, the Parent and their Subsidiaries neither offer or conduct,
nor have begun preparing to develop or offer, as of the Termination Date. The
Executive shall not, during the Non-Solicitation Period, directly or indirectly,
recruit, hire or assist others in recruiting or hiring, or otherwise solicit for
employment, any employees of the Company, the Parent or any of their
Subsidiaries. The provisions of this Section 9(c) shall not be deemed to limit
                                             ----
in any way the provisions of any other Section of this Agreement.

            (d) Interpretation. The parties hereto recognize that the laws and
                --------------
public policies of the various states of the United States may differ as to the
validity and enforceability of covenants similar to those set forth in Sections
9(b) and (c). It is the intention of the parties that the potential restrictions
------------
on the Executive's activities imposed by Sections 9(b) and (c) be reasonable in
                                                  ------------
both duration and geographic scope and in all other respects, it being
understood that the business conducted by the Company, the Parent and their
Subsidiaries is nationwide in scope. It is also the intention of the parties
that the provisions of Sections 9(b) and (c) be enforced to the fullest extent
                       ---------------------
permissible under the laws and policies of each jurisdiction in which
enforcement may be sought, and that in the event that any provision of Sections
9(b) and (c) shall, for any reason, be held invalid or unenforceable in any
------------
respect, it shall not invalidate, render unenforceable or otherwise affect any
other provision hereof, and such invalid or unenforceable provision shall be
construed by limiting it so as to be valid and enforceable to the fullest extent
permissible under applicable law. If applicable law does not permit an invalid
or unenforceable provision to be so construed, then the invalid or unenforceable
provision shall be stricken and the remaining portions of Sections 9(b) and (c)
                                                                   ------------
shall be enforced to the fullest extent permitted by law. In addition, if any
provision of Sections 9(b) and (c) shall be determined to be invalid or
                      ------------
unenforceable, such invalidity or unenforceability shall be deemed to apply only
with respect to the operation of such provision in the particular jurisdiction
in which such determination is made and not with respect to any other provision
or jurisdiction.

            (e) Remedies. The Executive agrees that any breach of the terms of
                --------
this Section 9 would result in irreparable injury and damage to the Company for
             -
which the Company would have no adequate remedy at law; the Executive therefore
also agrees that in the event of said breach or any threat of breach, the
Company shall be entitled to an immediate injunction and restraining order from
a court of competent jurisdiction to prevent such breach and/or threatened
breach and/or continued breach by the Executive and/or any and all persons
and/or entities acting for and/or with the Executive, without having to prove
damages. The availability of injunctive relief shall be in addition to any other
remedies to which the Company may be entitled at law or in equity but remedies
other than injunctive relief may only be pursued in an arbitration brought in
accordance with Section 13 of this Agreement. The terms of this paragraph shall
not prevent the Company from pursuing in an arbitration any other available
remedies for any breach or


                                     - 13 -

<PAGE>

threatened breach of this Section 9, including but not limited to the recovery
of damages from the Executive.

            The provisions of this Section 9 shall survive any termination of
this Agreement, and the existence of any claim or cause of action by the
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
the covenants and agreements of this Section 9; provided, however, that this
                                             -  --------  -------
paragraph shall not, in and of itself, preclude the Executive from defending
himself against the enforceability of the covenants and agreements of this
Section 9.
        -

            (f) Return of Materials. Upon the request of the Company and, in any
                -------------------
event, upon termination of employment, the Executive will leave with the Company
all memoranda, notes, records, manuals, or other documents and media (in
whatever form maintained, whether documentary, computer storage or otherwise)
pertaining to the Company's or the Parent's business, including all copies
thereof; other than such documents and items that are personal to the employee
(e.g., pay stubs, personal tax documentation and other compensation or
employment related materials).

            (g) Ownership of Executive Developments. All copyrights, patents,
                -----------------------------------
trade secrets, or other intellectual property rights associated with any ideas,
concepts, techniques, inventions, processes, or works of authorship developed or
created by the Executive during the course of performing work for the Company,
the Parent or their clients, including, but not limited to, software programs,
manuals, publications and reports (collectively, the "Work Product") belongs and
                                                      ------------
shall belong exclusively to the Company and shall, to the extent possible, be
considered a work made by the Executive for hire for the Company within the
meaning of Title 17 of the United States Code. To the extent the Work Product
may not be considered work made by the Executive for hire for the Company, the
Executive agrees to assign, and automatically assign at the time of creation of
the Work Product, without any requirement of further consideration, any right,
title, or interest he may have in such Work Product. Upon request of the
Company, the Executive shall take such further actions, including execution and
delivery of instruments of conveyance, as may be appropriate to give full and
proper effect to such assignment. Notwithstanding anything else in this
Agreement, any ideas, concepts, techniques, inventions, processes or works of
authorship developed or created by the Executive on the Executive's own time,
and which have no application in the business of the Company or the Parent
("Executive Work Product"), shall not be considered Work Product, and the
Company shall have no interest in any such Executive Work Product.

            (h) Consequences of Challenging Enforceability of Non-Compete. If at
                ---------------------------------------------------------
any time the Executive or his subsequent employer successfully challenges the
enforceability of the Non-compete and/or Non-solicitation provisions of Sections
9(b) and 9(c), then (1) all references to 2 years and/or 24 months in Sections
----     ----  ----
8(c)(ii), 8(c)(iii), 8(d)(ii), 8(d)(iii), 9(b) and 9(c) shall instead be
--------  ---------  --------  --------   ----     ----
references to the time period that such non-compete and non-solicitation
restrictions actually remain in effect, and (2) the amount of Base Salary and
                                        ---
Bonus Amount that the Executive may receive as severance under Sections 8(c)(ii)
                                                                        --------
and/or 8(d)(ii) shall automatically be reduced proportionately.
       --------


                                     - 14 -

<PAGE>

      10. Treatment of Section 280G.
          -------------------------

            (a) Tax Payment. In the event it shall be determined that any
                -----------
payment (other than the payment provided for in this Section 10(a)) or
                                                             -----
distribution of any type to or for the benefit of the Executive, by the Company,
any Affiliate of the Company, any Person who acquires ownership or effective
control of the Company or ownership of a substantial portion of the Company's
assets (within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder) or any Affiliate of
such Person, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (the "Total Payments"), is or will be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive a payment in an amount equal to
the Excise Tax imposed upon the Total Payments; provided, however that the Total
                                                --------  -------
Payments shall be reduced (but not below zero) if and to the extent that a
reduction in the Total Payments would result in the Executive retaining a larger
amount, on an after-tax basis (taking into account federal, state and local
income taxes and the Excise Tax) than if the Executive received the entire
amount of such Total Payments and the amount equal to the Excise Tax. Unless the
Executive shall have given prior written notice specifying a different order to
the Company to effectuate the foregoing, the Company shall reduce or eliminate
the Total Payments by first reducing or eliminating the portion of the Total
Payments which are not payable in cash and then by reducing or eliminating cash
payments, in each case in reverse order beginning with payments or benefits
which are to be paid the farthest in time from the Determination (as hereinafter
defined). Any notice given by the Executive pursuant to the preceding sentence
shall take precedence over the provisions of any other plan, arrangement or
agreement governing the Executive's rights and entitlements to any benefits or
compensation.

            (b) Determination By Accountant. All mathematical determinations,
                ---------------------------
and all determinations as to whether any of the Total Payments are "parachute
payments" (within the meaning of Section 280G of the Code), that are required to
be made under this Section 10(a), including determinations as to whether a
                           -----
Excise Tax is required, the amount of such Excise Tax and amounts relevant to
the last sentence of this Section 10(b) or whether the Total Payment should be
                                  -----
reduced, shall be made by an independent accounting firm selected by the
Executive from among the five (5) largest accounting firms in the United States
(the "Accounting Firm"), which shall provide its determination (the
"Determination"), together with detailed supporting calculations regarding the
amount of any Excise Tax and any other relevant matter, both to the Company and
the Executive by no later than ten (10) days following the Termination Date, if
applicable, or such earlier time as is requested by the Company or the Executive
(if the Executive reasonably believes that any of the Total Payments may be
subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax
is payable by the Executive, it shall furnish the Executive and the Company with
an opinion reasonably acceptable to the Executive and the Company that no Excise
Tax is payable (including the reasons therefor) and that the Executive has
substantial authority not to report any Excise Tax on his federal income tax
return. If an Excise Tax is determined to be payable, it shall be paid to the
Executive within ten (10) days after the Determination (and all accompanying
calculations and other material supporting the Determination) is delivered to
the Company by the Accounting Firm. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive, absent manifest error. As a
result of uncertainty in the application of Section 4999 of the Code at the time
of the initial


                                     - 15 -

<PAGE>

determination by the Accounting Firm hereunder, it is possible that Excise Tax
payments not made by the Company should have been made ("Underpayment"), or that
Excise Tax payments will have been made by the Company which should not have
been made ("Overpayments"). In either such event, the Accounting Firm shall
determine the amount of the Underpayment or Overpayment that has occurred. In
the case of an Underpayment, the amount of such Underpayment (together with any
interest and penalties payable by the Executive as a result of such
Underpayment) shall be promptly paid by the Company to or for the benefit of the
Executive. In the case of an Overpayment, the Executive shall, at the direction
and expense of the Company, take such steps as are reasonably necessary
(including, if reasonable, the filing of returns and claims for refund), and
otherwise reasonably cooperate with the Company to correct such Overpayment,
provided, however, that (1) the Executive shall not in any event be obligated to
--------  -------
return to the Company an amount greater than the net after-tax portion of the
Overpayment that he has retained or has recovered as a refund from the
applicable taxing authorities and (2) this provision shall be interpreted in a
                              ---
manner consistent with the intent of Section 10(a), it being understood that the
                                             -----
correction of an Overpayment may result in the Executive repaying to the Company
an amount which is less than the Overpayment. The fees and expenses of the
Accounting Firm shall be paid by the Company.

      11. Successors and Assigns.
          ----------------------

            (a) This Agreement shall be binding upon and shall inure to the
benefit of the Company, its successors and assigns. The term "Company" as used
                                                              -------
herein shall include such successors and assigns. The term "successors and
assigns" as used herein shall mean a corporation or other entity acquiring all
or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.

            (b) Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.

      12. Fees and Expenses. The Company shall pay all legal fees and related
          -----------------
expenses (including the costs of experts, evidence and counsel) in excess of
$50,000 incurred by the Executive as they become due as a result of (i) the
Executive's termination of employment (including all such fees and expenses, if
any, incurred in contesting or disputing any such termination of employment),
(ii) the Executive's hearing before the Board as contemplated in Section 7(b) of
                                                                         ----
this Agreement, or (iii) the Executive's seeking to obtain or enforce any right
                --
or benefit provided by this Agreement or by any other plan or arrangement
maintained by the Company or the Parent under which the Executive is or may be
entitled to receive benefits; provided, however, that if the Executive is
                              --------  -------
successful in enforcing any such rights or benefits provided under this
Agreement, then the Company shall reimburse the Executive for the first $50,000
           ----
of such fees and expenses incurred by the Executive.

      13. Arbitration. Except as set forth in Section 9(e) hereof, any and all
          -----------                                 ----
disputes, claims and controversies between the Company or any of its Affiliates
and the Executive arising out of or relating to this Agreement, or the breach
thereof, or otherwise arising out of or relating to the Executive's employment
or the termination thereof shall be resolved by binding arbitration in


                                     - 16 -

<PAGE>

accordance with the Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall take place in the Washington, D.C.
metropolitan area. The arbitrator shall have no authority to award punitive
damages. The award of the arbitrator shall be final and judgment thereon may be
entered in any court having jurisdiction. The parties shall share the costs of
the arbitration equally, unless otherwise ordered by the arbitrator. Judgment
upon the arbitration award may be entered in any federal or state court having
jurisdiction.

      14. Notice. For the purposes of this Agreement, notices and all other
          ------
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company. All notices
and communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.

      15. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
          -------------------------
limit the Executive's continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company, the Parent or any of
their subsidiaries and for which the Executive may qualify, nor shall anything
herein limit or reduce such rights as the Executive may have under any other
agreements with the Company, the Parent or any of their subsidiaries. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan or program of the Company, the Parent or any of their
subsidiaries shall be payable in accordance with such plan or program, except as
explicitly modified by this Agreement.

      16. Miscellaneous. No provision of this Agreement may be modified, waived
          -------------
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement.

      17. Governing Law. This Agreement shall be governed by and construed and
          -------------
enforced in accordance with the laws of the Commonwealth of Virginia without
giving effect to the conflict of law principles thereof.

      18. Severability. The provisions of this Agreement shall be deemed
          ------------
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.

      19. Entire Agreement. This Agreement constitutes the entire agreement
          ----------------
between the parties hereto and supersedes all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto
with respect to the subject matter hereof.

                      [Balance of Page Intentionally Blank]


                                     - 17 -

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer and the Executive has executed this Agreement as
of the day and year first above written.

                                        MCG Finance Corporation

                                        /s/ Samuel G. Rubenstein
                                        ---------------------------------
                                        Name: Samuel G. Rubenstein
                                        Title: Executive Vice President
                                               and General Counsel


                                        Executive: Robert J. Merrick

                                        /s/ Robert J. Merrick
                                        ---------------------------------


                                     - 18 -