EXHIBIT 10.12


CERBCO, Inc.


                          INSITUFORM EAST, INCORPORATED
                               SEVERANCE AGREEMENT


         AGREEMENT  dated  as of the  13th  day of  April,  2001 by and  between
Insituform East,  Incorporated,  a Delaware  corporation  (the  "Company"),  and
Robert F. Hartman (the "Executive").

                              W I T N E S S E T H:

         WHEREAS,  the Board of  Directors  of the  Company  (the  "Board")  has
determined that it is in the best interests of the Company and its  stockholders
to assure that the Company shall have the continued  dedication of the Executive
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below);

         NOW, THEREFORE, it is hereby agreed as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

         As used in this Agreement,  the following  capitalized terms shall have
the meanings set forth below:

         (a) The term  "Accrued  Obligations"  shall mean the sum of the amounts
described  in clauses (1),  (2),  and (3) of  Paragraph  (b)(i)(x) of Article II
hereof.

         (b) The term "Affiliate" shall mean any person controlling,  controlled
by or under common control with the subject referenced.

         (c) The term "Annual Base Salary"  shall mean an amount equal to twelve
times the highest monthly base salary paid or payable, including any base salary
which has been  earned but  deferred,  to the  Executive  by the  Company or its
Affiliates in respect of the twelve-month period immediately preceding the month
in which the  Effective  Date occurs,  or, if higher,  the  twelve-month  period
immediately preceding the month in which the Date of Termination occurs.

         (d) The term  "Annual  Bonus"  shall  mean  the  annual  bonus  paid or
payable,  including  any bonus or  portion  thereof  which has been  earned  but
deferred (and annualized for any fiscal year consisting of less than twelve full
months or during  which the  Executive  was  employed  for less than twelve full
months),  for the most  recently  completed  fiscal year prior to the  Effective
Date, or, if higher,  for the most recently  completed  fiscal year prior to the
Date of Termination.

         (e) The term "Business Combination" shall have the meaning as set forth
in Section 203 of the Delaware General Corporation Law as of the date hereof.

         (f) The term "Cause" shall mean:

               (i) the willful and continued failure of the Executive to perform
          substantially  the  Executive's  duties with the Company or any of its
          Affiliates  (other than any such failure resulting from incapacity due
          to physical or mental illness), after a written demand for substantial
          performance  is delivered  to the  Executive by the Board or the chief
          executive  officer of the Company which  specifically  identifies  the
          manner in which the Board or chief executive officer believes that the
          Executive has not substantially performed the Executive's duties, or

               (ii) the willful  engaging by the Executive in illegal conduct or
          gross misconduct which is materially and demonstrably injurious to the
          Company; or

               (iii)  conviction  of a crime  (other  than  misdemeanor  traffic
          offenses).

For  purposes  hereof,  no act or failure to act, on the part of the  Executive,
shall be considered  "willful"  unless it is done, or omitted to be done, by the
Executive  intentionally,  or  recklessly,  in bad faith or without a reasonable
belief that the Executive's  action or omission was in the best interests of the
Company.  The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been  delivered  to the  Executive a
copy of a resolution duly adopted by the Board,  finding that, in the good faith
opinion  of the Board,  the  Executive  is guilty of the  conduct  described  in
subparagraph (i) or (ii) immediately preceding.

         (g) The term "Change of Control" shall apply to circumstances affecting
either the Company or its parent  corporation,  CERBCO,  Inc.,  or both,  and in
either or both cases shall mean:

               (i) The acquisition by any Person of beneficial ownership (within
          the  meaning  of Rule 13d-3  promulgated  under the  Exchange  Act) or
          either (x) 50% or more of the combined voting power of all Outstanding
          Voting  Securities,  or (y)  50% or more of the  voting  power  of the
          Outstanding Class B Common Stock; or

               (ii)  consummation  of a  Business  Combination,  in  each  case,
          unless, following such Business Combination:  (x) all or substantially
          all of the  individuals  and entities who were the beneficial  owners,
          respectively,  of the Outstanding Voting Securities  immediately prior
          to such Business Combination beneficially own, directly or indirectly,
          more than 50% of the  combined  voting  power of the then  outstanding
          voting  securities  entitled  to vote  generally  in the  election  of
          directors  of the  entity  resulting  from such  Business  Combination
          (including,  without  limitation,  an entity which as a result of such
          transaction  owns  the  Company  or  all or  substantially  all of the
          Company's   assets,   either   directly   or   through   one  or  more
          subsidiaries);  or (y) all or substantially all of the individuals and
          entities who were the beneficial owners, respectively,  of 50% or more
          of  the  voting  power  of  the  Outstanding   Class  B  Common  Stock
          immediately  prior to such Business  Combination  would be entitled to
          elect a  majority  of  directors  of the  entity  resulting  from such
          Business Combination (including without limitation, an entity which as
          a result of such  transaction owns the Company or all or substantially
          all of the Company's  assets,  either  directly or through one or more
          subsidiaries); or

               (iii) Approval by the  stockholders  of the Company of a complete
          liquidation or dissolution of the Company.

         (h)  The  term  "Change  of  Control  Period"  shall  mean  the  period
commencing  on the date hereof and ending on the third  anniversary  of the date
hereof.

         (i) The term "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended.

         (j) The term "Date of  Termination"  shall mean: (i) if the Executive's
employment is terminated  during the Protected  Period by the Company for Cause,
or by the  Executive  for Good  Reason,  the date of  receipt  of the  Notice of
Termination or any later date specified therein, as the case may be, (ii) if the
Executive's  employment is terminated during the Protected Period by the Company
other than for Cause or Disability or by the Executive without Good Reason,  the
Date of  Termination  shall be the date on which the  Company  or the  Executive
notifies the other of such termination,  and (iii) if the Executive's employment
is terminated during the Protected Period by reason of death or Disability,  the
Date  of  Termination  shall  be the  date  of  death  of the  Executive  or the
Disability Effective Date, as the case may be.

         (k) The term "Disability"  shall mean the absence of the Executive from
the Executive's duties with the Company on a full-time basis for 180 consecutive
business days as a result of incapacity due to mental or physical  illness which
is determined  to be total and permanent by a physician  selected by the Company
and   reasonably   acceptable  to  the  Executive  or  the   Executive's   legal
representative.  In such event  during the  Protected  Period,  the  Executive's
employment  with  the  Company  shall  terminate  effective  on  the  Disability
Effective Date.

         (1) The term "Disability  Effective Date" shall mean the 30th day after
receipt by the Executive of Notice of Termination in the event of Disability.

         (m) The term  "Effective  Date"  shall mean the first  date  during the
Change of Control Period on which a Change of Control  occurs.  Anything in this
Agreement to the contrary notwithstanding,  if a Change of Control occurs and if
the Executive's  employment with the Company is terminated  prior to the date on
which the Change of Control occurs, and if it is reasonably  demonstrated by the
Executive that such  termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise  arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

         (n) The term "Exchange  Act" shall mean the Securities  Exchange Act of
1934.

         (o) The term  "Excise Tax" shall mean the excise tax imposed by Section
4999 of the Code and any interest or penalties  incurred by the  Executive  with
respect to such excise tax.

         (p) The term "Good Reason" shall mean:

               (i) the assignment to the Executive  during the Protected  Period
          of  any  duties  inconsistent  in any  respect  with  the  Executive's
          position   (including   status,    offices,   titles   and   reporting
          requirements),   authority,   duties  or   responsibilities  at  least
          commensurate  in all material  respects with the most  significant  of
          those  held,  exercised  and  assigned  at any time during the 120-day
          period  immediately  preceding the Effective Date, or any other action
          by  the  Company  during  the  Protected  Period  which  results  in a
          diminution in such position,  authority,  duties or  responsibilities,
          excluding for this purpose an isolated,  insubstantial and inadvertent
          action  not taken in bad faith and which is  remedied  by the  Company
          promptly after receipt of notice thereof given by the Executive; or

               (ii) the Company's  requiring the Executive  during the Protected
          Period to be based at any office or location  other than the Company's
          corporate head office or the Company's  requiring the Executive during
          the Protected  Period to travel on Company business to a substantially
          greater extent than required  immediately prior to the Effective Date;
          or

               (iii) any purported  termination  during the Protected  Period by
          the Company of the Executive's employment otherwise than for Cause.

For purposes hereof,  any good faith  determination of "Good Reason" made by the
Executive  shall be  conclusive.  Anything  in this  Agreement  to the  contrary
notwithstanding,  a  termination  by the  Executive  for any  reason  during the
earlier of the 30-day period immediately  following the first anniversary of the
Effective  Date,  or (if the  Effective  Date has  occurred)  the 30-day  period
immediately preceding the expiration of the Protected Period, shall be deemed to
be a termination for Good Reason for all purposes of this Agreement.

         (q) The term  "Gross-Up  Payment"  shall  mean the  additional  payment
described under Paragraph (c) of Article III hereof.

         (r) The term "Incumbent  Board" shall mean the  individuals  who, as of
the date hereof, constitute the Board.

         (s) The term  "Noncompete  Period" shall mean a period ending two years
after  the  Executive  ceases to be  employed  by the  Company  in the event the
Executive voluntarily  terminates employment during the Protected Period, except
for Good  Reason  (in which case the  period  shall be one  year);  or, a period
ending one year after the Executive  ceases to be employed by the Company during
the Protected  Period in the event the  Executive's  employment is terminated by
the Company, except for Cause (in which case the period shall be two years).

         (t) The term "Notice of  Termination"  means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the  extent  applicable,  sets  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 and (iii) if the Date of Termination
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such notice).

         (t) The term "Other Benefits" shall mean the other amounts and benefits
described under clause (iv) of paragraph (b) of Article II hereof.

         (u) The  term  "Outstanding  Voting  Securities"  shall  mean  the then
outstanding voting securities of the Company including both the Company's shares
of Common Stock and the Company's shares of Class B Common Stock.

         (v) The term "Payment"  shall mean any payment or  distribution  by the
Company to or for the  benefit of the  Executive  pursuant  to the terms of this
Agreement (but  determined  without regard to any additional  payments  required
under Paragraph (c) of Article III).

         (w) The term  "Protected  Period"  shall mean the period from and after
any Change in Control  through and  including  the  expiration  of the Change in
Control Period.

         (x) The term  "Person"  shall  mean  any  individual,  entity  or group
(within the meaning of Section 13 (d) (3) or 14 (d) (2) of the Exchange Act).

         (y) The term  "Welfare  Benefit  Plans" shall mean all welfare  benefit
plans,  practices,  policies  and  programs  provided  by the  Company  and  its
Affiliates  (including,  without  limitation,  medical,  prescription,   dental,
disability,  employee life,  group life,  accidental  death and travel  accident
insurance plans and programs) to the extent  applicable  generally to other peer
executives of the Company and its Affiliates,  but in no event shall such plans,
practices,  policies and programs  provide the Executive with benefits which are
less  favorable,  in the  aggregate,  than the  most  favorable  of such  plans,
practices,  policies and programs in effect for the Executive at any time during
the  120-day  period  immediately  preceding  the  Effective  Date  or,  if more
favorable  to the  Executive,  those  provided  generally  at any time after the
Effective Date to other peer executives of the Company and its Affiliates.

                                   ARTICLE II

                         OBLIGATIONS OF THE COMPANY UPON
                       TERMINATION DURING PROTECTED PERIOD

         (a) Notice of Termination.  Any termination during the Protected Period
by the  Company  for  Cause,  or by the  Executive  for  Good  Reason,  shall be
communicated  by  Notice  of  Termination  to the other  party  hereto  given in
accordance with Paragraph (a) of Article IV of this Agreement.

         (b) Good  Reason;  Other Than for Cause,  Death or  Disability.  If the
Company shall, during the Protected Period, terminate the Executive's employment
other than for Cause or Disability or the Executive shall,  during the Protected
Period, terminate employment for Good Reason:

               (i) the Company  shall pay to the Executive in a lump sum in cash
          within 30 days  after the Date of  Termination  the  aggregate  of the
          following amounts:

                    (x)  The  sum of (1)  the  Executive's  actual  base  salary
               through  the Date of  Termination  to the extent not  theretofore
               paid, (2) the product of (x) the Annual Bonus as annualized  from
               the  most  recently  closed  quarter  and  (y)  a  fraction,  the
               numerator  of which is the number of days in the  current  fiscal
               year  through the Date of  Termination,  and the  denominator  of
               which is 365 and (3) any compensation  previously deferred by the
               Executive   (together  with  any  accrued  interest  or  earnings
               thereon) and any accrued vacation pay, in each case to the extent
               not theretofore paid; and

                    (y) An amount equal to the sum of (x) the Annual Base Salary
               and (y) the Annual  Bonus as  annualized  from the most  recently
               closed period;

               (ii) for one year after the Executive's  Date of Termination,  or
          such longer period as may be provided by the terms of the  appropriate
          plan, program, practice or policy, the Company shall continue benefits
          to the Executive and/or the Executive's family at least equal to those
          which would have been provided to them under the Welfare Benefit Plans
          if the  Executive's  employment  had not been  terminated  or, if more
          favorable  to the  Executive,  as in  effect  generally  at  any  time
          thereafter  with respect to other peer  executives  of the Company and
          its  Affiliates and their  families,  provided,  however,  that if the
          Executive becomes  reemployed with another employer and is eligible to
          receive  medical or other  welfare  benefits  under  another  employer
          provided plan, the medical and other welfare benefits described herein
          shall be secondary to those provided under such other plan during such
          applicable period of eligibility;

               (iii) to the extent not theretofore paid or provided, the Company
          shall  timely  pay or provide to the  Executive  any other  amounts or
          benefits  required to be paid or provided  or which the  Executive  is
          eligible  to receive  under any plan,  program,  policy or practice or
          contract or agreement of the Company and its affiliated companies.

         (c) Death.  If the  Executive's  employment  is  terminated  during the
Protected  Period by reason  of the  Executive's  death,  this  Agreement  shall
terminate without further  obligations to the Executive's legal  representatives
under this  Agreement,  other than for  payment of Accrued  Obligations  and the
timely payment or provision of other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary,  as applicable,  in a lump sum in cash
within 30 days of the Date of Termination.  Other Benefits,  as utilized in this
Paragraph (c), shall include,  without  limitation,  and the Executive's  estate
and/or  beneficiaries  shall be entitled to receive,  benefits at least equal to
the most  favorable  benefits  provided by the Company and its Affiliates to the
estates and  beneficiaries of peer executives of the Company and such Affiliates
under such plans,  programs,  practices and policies relating to death benefits,
if  any,  as  in  effect  with  respect  to  other  peer  executives  and  their
beneficiaries  at any time during the 120-day period  immediately  preceding the
Effective  Date or, if more  favorable  to the  Executive's  estate  and/or  the
Executive's  beneficiaries,  as in effect on the date of the  Executive's  death
with  respect to other peer  executives  of the Company and its  Affiliates  and
their beneficiaries.

         (d) Disability.  If the Executive's employment is terminated during the
Protected Period by reason of the Executive's  Disability,  this Agreement shall
terminate without further  obligations to the Executive,  other than for payment
of Accrued  Obligations  and the timely payment or provision of Other  Benefits.
Accrued  Obligations shall be paid to the Executive in a lump sum in cash within
30  days  of the  Date of  Termination.  Other  Benefits,  as  utilized  in this
Paragraph  (d),  shall  include,  and the Executive  shall be entitled after the
Disability  Effective  Date to receive,  disability  and other benefits at least
equal to the most favorable of those  generally  provided by the Company and its
Affiliates to disabled  executives and/or their families in accordance with such
plans,  programs,  practices and policies relating to disability,  if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period  immediately  preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's  family,  as in effect at
any time  thereafter  generally  with  respect to other peer  executives  of the
Company and its Affiliates and their families.

         (e) Cause;  Other than for Good Reason.  If the Executive's  employment
shall be terminated  during the Protected Period for Cause, this Agreement shall
terminate without further obligations to the Executive other than the obligation
to pay to the  Executive  (x)  his  actual  base  salary  through  the  Date  of
Termination,  (y) the  amount of any  compensation  previously  deferred  by the
Executive,  and (z)  Other  Benefits,  in each  case to the  extent  theretofore
unpaid. If the Executive voluntarily  terminates employment during the Protected
Period,  excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations  shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

                                   ARTICLE III

                                CERTAIN COVENANTS

         (a) Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent
or limit  the  Executive's  continuing  or  future  participation  in any  plan,
program, policy or practice provided by the Company or any of its Affiliates and
for  which  the  Executive  may  qualify,  nor shall  anything  herein  limit or
otherwise  affect such rights as the  Executive  may have under any  contract or
agreement  with the  Company or any of its  Affiliates,  except that any and all
severance  arrangements  extended by the Company to the  Executive and otherwise
applicable  in the  circumstances  covered  by this  Agreement  shall no  longer
operate and shall be superseded by the provisions hereof.

         (b) Full  Settlement.  The  Company's  obligation  to make the payments
provided  for in  this  Agreement  and  otherwise  to  perform  its  obligations
hereunder  shall  not be  affected  by any  set-off,  counterclaim,  recoupment,
defense or other  claim,  right or action which the Company may have against the
Executive or others.  In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts  payable
to the Executive  under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment.  The
Company  agrees to pay as  incurred,  to the full extent  permitted  by law, all
legal fees and expenses which the Executive may reasonably  incur as a result of
any contest (regardless of the outcome thereof) by the Company, the Executive or
others of the validity or  enforceability  of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive about the amount of any payment pursuant to this
Agreement).

         (c) Certain Additional Payments by the Company.

               (i)  Except  as  set  forth  below,  in the  event  it  shall  be
          determined  that any Payment  would be subject to any Excise Tax, then
          the Executive  shall be entitled to receive an  additional  payment (a
          "Gross-Up  Payment")  in an amount  such  that  after  payment  by the
          Executive  of all taxes,  including,  without  limitation,  any income
          taxes (and any interest and penalties  imposed with respect  thereto),
          and  Excise Tax  imposed  upon the  Gross-Up  Payment,  the  Executive
          retains  an amount of the  Gross-Up  Payment  equal to the  Excise Tax
          imposed upon the Payments. Notwithstanding the foregoing provisions of
          this  Paragraph  (c), if it shall be determined  that the Executive is
          entitled to a Gross-Up  Payment,  but that the  Payments do not exceed
          110% of the greatest  amount that could be paid to the Executive  such
          that the  receipt of  Payments  would not give rise to any Excise Tax,
          then no  Gross-Up  Payment  shall  be made  to the  Executive  and the
          Payments, in the aggregate, shall be reduced to such greatest amount.

               (ii) All determinations  required to be made under this Paragraph
          (c) shall be made by the  Company's  independent  auditors,  who shall
          provide detailed  supporting  calculations both to the Company and the
          Executive  within 15  business  days of the receipt of notice from the
          Executive  that there has been a Payment,  or such  earlier time as is
          requested by the Company. All fees and expenses of the accounting firm
          acting  hereunder  shall be borne solely by the Company.  Any Gross-Up
          Payment,  as determined  pursuant to this Paragraph (c), shall be paid
          by the Company to the Executive within five days of the receipt of the
          accounting firm's determination.

               (iii) The Executive  shall promptly notify the Company in writing
          of any claim by the Internal  Revenue  Service  that,  if  successful,
          would require the payment by the Company of the Gross-Up  Payment.  If
          the Company  notifies the Executive in writing prior to the expiration
          of 30 days  after  receipt of such  notice  that it desires to contest
          such claim,  the Executive shall: (A) give the Company any information
          reasonably  requested by the Company  relating to such claim,  and (B)
          take such  action in  connection  with  contesting  such  claim as the
          Company  shall  reasonably  request  in  writing  from  time to  time,
          including,  without  limitation,  accepting legal  representation with
          respect  to such  claim  by an  attorney  reasonably  selected  by the
          Company,  provided,  however,  that  the  Company  shall  bear and pay
          directly all costs and  expenses  (including  additional  interest and
          penalties)   incurred  in  connection   with  such  contest.   Without
          limitation on the  foregoing  provisions  of this  Paragraph  (c), the
          Company shall control all  proceedings  taken in connection  with such
          contest.

         (d) Covenant Not to Compete During the Protected Period.

               (i) In the event the Executive voluntarily  terminates employment
          except for Good Reason  during the  Protected  Period,  the  Executive
          agrees that, for a period (the  "Noncompete  Period") ending two years
          after the Executive ceases to be employed by the Company, he will not,
          excerpt  with the  express  written  consent  of the  Company,  either
          directly or  indirectly,  for  himself or on behalf or in  conjunction
          with any other person, partnership,  corporation or other entity, own,
          maintain,  engage  in,  render  any  services  for,  manage,  have any
          financial  interest  in, or permit  his name to be used in  connection
          with (a) any  pipeline  rehabilitation  business  in any market in the
          United States in which the Company or its  subsidiaries are engaged or
          have firm plans to enter  within  six  months  after the date that the
          Executive's  employment  hereunder is  terminated,  or (b) any company
          operating   in  the  United   States  in  which  the  Company  or  its
          subsidiaries  are  process,  subject  matter,   specialized  equipment
          operators  or  licensees  of such  company;  provided,  however,  that
          notwithstanding  the foregoing  such  covenant  shall not apply to the
          Executive's ownership of up to 5% of the outstanding voting securities
          of any  publicly-held  company  which may be engaged  in the  pipeline
          rehabilitation  business. If the Executive voluntarily  terminates for
          Good Reason during the Protected  Period,  the Noncompete Period shall
          end one year after the Executive ceases to be employed by the Company.

               (ii) In the event the Executive's employment is terminated by the
          Company  for  other  than  Cause  during  the  Protected  Period,  the
          Executive  agrees that, for a period (the  Noncompete  Period") ending
          one year after the  Executive  ceases to be  employed,  the  Executive
          shall be restricted as set forth in Article III, paragraphs  (d)(i)(a)
          and (d)(i)(b) above. If the Executive is terminated by the Company for
          Cause during the Protected Period, the Noncompete Period shall end two
          years after the Executive ceases to be employed by the Company.

               (iii) If, at the time of  enforcement of any provision of Article
          III,  paragraphs  (d)(i) and  (d)(ii)  above,  a court  holds that the
          restrictions  stated therein are unreasonable under circumstances then
          existing,  the parties hereto agree that the maximum period,  scope or
          geographical  area  reasonable  under  such   circumstances   will  be
          substituted for the stated period, scope or area.

               (iv) In the even of a breach by the  Executive of the  provisions
          of Article III,  paragraphs  (d)(i) and (d)(ii) above,  the Company or
          its  successors  or  assigns  may,  in  addition  to other  rights and
          remedies  existing  in their  favor,  apply to any court of  competent
          jurisdiction  for  specific  performance  and/or  injunctive  or other
          relief in order to enforce or prevent any violations of the provisions
          thereof.

               (v) The provisions of Article III,  paragraphs (d)(i) and (d)(ii)
          above are independent of any other noncompete  restrictions applicable
          to  the  Executive  and  shall  be  cumulative  with  any  other  such
          noncompete restrictions.

         (e) Notice of Voluntary  Termination or Forfeiture of Stock Options. In
the event the Executive  should at any time determine to  voluntarily  terminate
from the employ of the  Company,  Executive  agrees to give the Company not less
than ninety days' written notice prior to the date of voluntary termination.  In
the event that the  Executive  fails to give the Company at least  ninety  days'
written notice prior to the date of voluntary  termination,  Executive agrees to
forfeit the  benefit of all Company  stock  options  not  previously  vested and
exercised  and,  for any  options  exercised  during the  period of ninety  days
preceding termination,  Executive agrees to repay the Company within thirty days
of termination  the economic  benefits  received from such  exercise.  The above
notice  provision  shall not be  applicable  under  circumstances  of  voluntary
termination by the Executive for Good Reason during the Protected Period.

                                   ARTICLE IV

                                  MISCELLANEOUS

         (a) Notices. All notices and other communications hereunder shall be in
writing and shall be given by hand  delivery to the other party or by registered
or certified  mail,  return receipt  requested,  postage  prepaid,  addressed as
follows:

                  If to the Executive:

                  2824 Durmont Court
                  Annapolis, MD  21401

                  If to the Company:

                  3421 Pennsy Drive
                  Landover, MD 20785-1608
                  Attention: Corporate Secretary

                  With a copy to:

                  The Bayard Firm
                  222 Delaware Avenue
                  Suite 900
                  Wilmington, DE 19899
                  Attention:  Vernon Proctor, Esq.

or to such other  address as either  party shall have  furnished to the other in
writing in accordance  herewith.  Notice and  communications  shall be effective
when actually received by the addressee.

         (b) Entire Agreement. This Agreement shall contain the entire agreement
of the parties with respect to the transactions contemplated hereby.

         (c) Successors.

               (i) This  Agreement is personal to the  Executive and without the
          prior  written  consent of the Company  shall not be assignable by the
          Executive   otherwise  than  by  will  or  the  laws  of  descent  and
          distribution.  This  Agreement  shall  inure to the  benefit of and be
          enforceable by the Executive's legal representatives.

               (ii) This Agreement  shall inure to the benefit of and be binding
          upon the Company and its successors and assigns.

               (iii) The Company will require any successor  (whether  direct or
          indirect, by purchase,  merger,  consolidation or otherwise) to all or
          substantially  all of the  business  and/or  assets of the  Company to
          assume  expressly  and agree to  perform  this  Agreement  in the same
          manner and to the same extent  that the  Company  would be required to
          perform  it if no such  succession  had taken  place.  As used in this
          Agreement,  "Company" shall mean the Company as  hereinbefore  defined
          and any  successor to its business  and/or  assets as aforesaid  which
          assumes and agrees to perform  this  Agreement by operation of law, or
          otherwise.

         (d)  Governing  Law;  Captions;  Amendments.  This  Agreement  shall be
governed by and construed in accordance  with the laws of the State of Delaware,
without  reference  to  principles  of  conflict of laws.  The  captions of this
Agreement  are not part of the  provisions  hereof  and  shall  have no force or
effect.  This  Agreement  may not be amended  or  modified  otherwise  than by a
written agreement executed by the parties hereto or their respective  successors
and legal representatives.

         (e) Severability.  The invalidity or  unenforceability of any provision
of this Agreement shall not affect the validity or  enforceability  of any other
provision of this Agreement.

         (f)  Withholding.  The Company may  withhold  from any amounts  payable
under this  Agreement  such Federal,  state,  local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.

         (g) Term.  This Agreement  expires three years from the date hereof but
shall  automatically  extend for an additional,  one-year,  successive period on
each  anniversary  of the date hereof absent notice of  termination of automatic
extension  by either the Company or the  Executive  at least six months prior to
any anniversary. Each such extension, if affected, shall concomitantly extend by
one year the then-applicable three-year "Change of Control Period."

         (h) No Waiver.  Neither the  Executive's  nor the Company's  failure to
insist upon strict  compliance  with any provision of this Agreement the failure
to assert any right the Executive or the Company may have hereunder,  including,
without limitation,  the right of the Executive to terminate employment for Good
Reason,  shall be deemed to be a waiver of such  provision or right or any other
provision or right of or under this Agreement.

         (i) Counterparts.  This Agreement may be executed in counterparts, each
or which  shall be deemed an  original,  but all of which taken  together  shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors,  the Company has
caused  these  presents to be executed in its name on its behalf,  all as of the
day and year first above written.

                       Executive:

                       /s/ Robert F. Hartman
                       -------------------------------------------------------
                       Robert F. Hartman

                       CERBCO, Inc.

                       /s/ Robert W. Erikson
                       --------------------------------------------------------
                       Robert W. Erikson, President