Document:

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                                                                    Exhibit 10.2

                              WASTE SERVICES, INC.

                         EXECUTIVE EMPLOYMENT AGREEMENT

This Employment Agreement (the "Agreement") is dated as of February 23, 2004 by
and among WASTE SERVICES, INC., a Delaware corporation (the "Company"), CAPITAL
ENVIRONMENTAL RESOURCE INC., an Ontario, Canada corporation ("Capital") and MARK
A. PYTOSH (the "Executive"):

WHEREAS, the Company desires to employ Executive in an executive capacity and
Executive desires to enter into the Company's employ upon the terms and subject
to the conditions set forth herein.

WHEREAS, as of the date of this Agreement, the Company is a wholly-owned
subsidiary of Capital.

WHEREAS, Capital intends to effect a reorganization transaction (the "U.S.
Reorganization Transaction") pursuant to which Capital will become a subsidiary
of the Company.

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, the receipt and adequacy of which are hereby acknowledged, the parties
hereto agree as follows:

1.       EMPLOYMENT.

The Company shall employ Executive, and Executive shall be employed by the
Company, upon the terms and subject to the conditions set forth in this
Agreement, effective as of February 23, 2004 (the "Effective Date"); PROVIDED,
HOWEVER that as a condition to effectiveness of this Agreement, the Company and
Executive shall have entered into an Indemnification Agreement substantially in
the form of Exhibit A attached hereto.

2.       TERM OF EMPLOYMENT.

The period of Executive's employment under this Agreement (the "Employment
Term") shall begin on the Effective Date and shall continue until Executive's
employment is terminated in accordance with Section 5 below.

3.       DUTIES AND RESPONSIBILITIES.

(a)      Executive shall serve as Executive Vice President of the Company and
         shall report to the Chief Executive Officer of the Company. In such
         capacity, Executive shall have responsibility and authority for
         corporate development, strategic planning, treasury, investor relations
         and human resources, and shall perform the duties necessary to carry
         out those responsibilities and exercise that authority, as may be
         assigned to Executive from time to time by the Chief Executive Officer
         and/or by the Board of Directors of the Company (the "Board of
         Directors") or a duly authorized committee thereof..

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(b)      During the Employment Term, Executive shall devote his full time and
         attention during normal business hours to the affairs of the Company
         and use his best efforts to perform faithfully and efficiently his
         duties and responsibilities; PROVIDED, HOWEVER, that subject to the
         limitations of Section 8 hereof and to the prior approval of the Chief
         Executive Officer of the Company, Executive may serve on corporate,
         industry, civic or charitable Boards or committees as long as such
         activities do not interfere with the performance of Executive's
         responsibilities to the Company. Executive agrees to act at all times
         in the best interests of the Company and to take no action or make any
         statement, oral or written, which could reasonably be expected by
         Executive to injure the Company's business, financial condition,
         results of operations, prospects, interests or reputation.

(c)      Executive agrees to comply at all times during the Employment Term with
         all applicable policies, rules, codes and regulations of the Company in
         effect from time to time, including, without limitation, all applicable
         codes of ethics or conduct and all policies regarding trading in the
         Company's common stock.

4.       COMPENSATION AND BENEFITS.

(a)      BASE SALARY. During the Employment Term, the Company shall pay
         Executive a base salary at the annual rate of $400,000 USD, or such
         higher rate as may be determined from time to time by the Board of
         Directors or a duly authorized committee thereof (such amount, as
         increased from time to time, the "Base Salary"). Such Base Salary shall
         be paid on the Company's regular pay days in accordance with the
         Company's standard payroll practice for executive officers, subject
         only to such payroll and withholding deductions as may be required by
         law and other deductions applied generally to employees of the Company
         for insurance and other employee benefit plans. For all purposes under
         this Agreement, Executive's Base Salary shall include any amount which
         is deferred under any nonqualified plan or arrangement of the Company.

(b)      INCENTIVE COMPENSATION.

         (i)      ANNUAL CASH BONUS. In addition to the Base Salary, Executive
                  shall be eligible for an annual cash bonus (either pursuant to
                  a bonus or incentive plan or program of the Company or
                  otherwise) for each fiscal year during the Employment Term.
                  Executive's target annual cash bonus will be equal to 100%
                  (the "Target Bonus Rate") of his Base Salary in effect at the
                  beginning of the relevant fiscal year. The amount of the
                  annual cash bonus, which may be higher or lower than the
                  Target Bonus Rate, shall be determined by the Board of
                  Directors or a duly authorized committee thereof based upon
                  applicable corporate and individual performance targets
                  established by the Board of Directors or such committee in its
                  sole discretion (the "Annual Bonus"). For all purposes under
                  this Agreement, Executive's Annual Bonus shall include any
                  amount which is deferred under any nonqualified plan or
                  arrangement of the Company.

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         (ii)     LONG-TERM OR SUPPLEMENTAL INCENTIVE COMPENSATION. Executive
                  shall be eligible to participate in any supplemental and/or
                  long-term incentive compensation plans or programs (which may
                  consist of stock options, restricted stock, long-term cash
                  awards or other forms of long-term or supplemental incentive
                  compensation) generally made available to full-time senior
                  executive officers of the Company.

(c)      BENEFIT PLANS. Executive shall be eligible to participate in and
         receive benefits under all retirement, health and welfare benefit
         plans, programs and arrangements which are from time to time available
         to full-time senior executive officers of the Company in accordance
         with the terms and conditions of such plans, programs and arrangements
         in effect from time to time. Such benefit plans, programs and
         arrangements will include family medical, family dental and family
         vision benefit plans and short-term and long-term disability plans, and
         may include, without limitation, life insurance plans, accidental death
         insurance plans, travel accident insurance plans, savings and
         retirement plans and pension plans (all such benefit plans, the
         "Benefit Plans"). At his option, Executive may pay directly the
         premiums for coverage under the above-mentioned disability plans and
         have the Company pay to him, as additional income, an amount equal to
         the amount of those premiums. Executive agrees to submit to a physical
         examination from time to time as requested by the Company to facilitate
         Executive's participation in one or more Benefit Plans. The Company may
         terminate or reduce benefits under any such plans, programs or
         arrangements to the extent such reductions apply uniformly to all
         full-time senior executive officers of the Company, and Executive's
         benefits shall be reduced or terminated accordingly. The Company's
         obligations under this Section 4(c) are expressly conditioned on
         Executive and his family dependents taking all reasonable actions
         (including but not limited to enrolling in all health and welfare
         benefit programs, plans and arrangements which are from time to time
         available to the Company's full-time senior executive officers as and
         when Executive and his family dependents become eligible to participate
         in such programs, plans and arrangements) and providing all information
         as the Company shall reasonably request and as is necessary for the
         Company to fulfill such obligations.

(d)      VACATION. In addition to normal statutory holidays recognized by the
         Company, Executive shall be entitled to the greater of (a) four weeks
         of paid vacation for each fiscal year during the Employment Term and
         (b) such other amount of paid vacation as may be afforded executive
         officers under the Company's policies in effect from time to time
         ("Vacation Time").

(e)      EXPENSE REIMBURSEMENT. The Company shall promptly reimburse Executive
         for travel and other out-of-pocket expenses incident to his position in
         accordance with the Company's customary practices applicable to
         full-time senior executive officers. To the extent that these expense
         reimbursements are reportable as taxable income, they will be grossed
         up to include the tax due on them.

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(f)      REIMBURSEMENT OF CERTAIN TAX EXPENSES. The Company shall, upon written
         demand by Executive accompanied by supporting invoices, promptly
         reimburse Executive for all costs and expenses (including reasonable
         legal, accounting and other advisory fees) incurred by Executive to (i)
         determine, in any tax year of Executive, the tax consequences to
         Executive of any amount payable (or reimbursable) under Section 7
         hereof, or (ii) prepare responses to an Internal Revenue Service audit
         of, and to otherwise defend, his personal income tax return for any
         year during the Employment Term or to defend himself in any
         administrative proceeding or civil litigation relating to any such tax
         return, in each case that is occasioned by or related to any audit by
         the Internal Revenue Service of the Company's income tax returns;
         PROVIDED, HOWEVER, in no event shall the Company be required to
         reimburse Executive for costs and expenses in excess of seventy-five
         thousand United States dollars ($75,000 USD) in any given fiscal year
         pursuant to this Section 4(e).

(g)      FRINGE BENEFITS AND PERQUISITES. Executive shall be eligible to
         participate in and receive benefits under all fringe benefit plans,
         practices, policies and programs of the Company to the same extent, and
         subject to the same terms and conditions, as those arrangements are
         made available to full-time senior executive officers of the Company.

5.       TERMINATION OF EMPLOYMENT.

Executive's employment under this Agreement may be terminated under any of the
circumstances set forth in this Section 5. Upon termination, Executive (or his
beneficiaries or estate as the case may be) shall be entitled to receive the
compensation and benefits described in Section 6 and, if applicable, Section 7
below.

(a)      DEATH. Executive's employment hereunder shall terminate automatically
         upon Executive's death.

(b)      TOTAL DISABILITY. The Company may terminate Executive's employment
         hereunder, by written notice to Executive delivered in accordance with
         Sections 5(g) and 16 hereof, upon a determination pursuant to this
         Section 5(b) that Executive is "Totally Disabled." For purposes of this
         Agreement, For the purposes of this provision, "Totally Disabled" shall
         have the same meaning as it has under the long-term disability policy
         covering Executive pursuant to paragraph 4(c) herein. Executive's
         receipt of disability benefits under the Company's long-term disability
         plan shall be deemed conclusive evidence of Total Disability for
         purposes of this Agreement.

(c)      TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate
         Executive's employment hereunder for "Cause" at any time, by written
         notice to Executive delivered in accordance with Sections 5(g) and 15
         hereof.

         (i)      For purposes of this Agreement, the term "Cause" shall mean
                  any of the following: (A) conviction of a crime (including
                  conviction on a nolo contendre plea) involving the commission
                  by Executive of a felony or of a misdemeanor

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                  involving, in the good faith judgment of the Board of
                  Directors, fraud, dishonesty or moral turpitude; (B)
                  Executive's deliberate and continual refusal to perform the
                  duties and responsibilities assigned to Executive under this
                  Agreement (other than as a result of vacation permitted under
                  this Agreement, sickness, illness or injury); (C) fraud or
                  embezzlement by Executive, determined in accordance with the
                  Company's normal, internal investigative procedures
                  consistently applied; (D) gross misconduct or gross negligence
                  by Executive in connection with the business of the Company or
                  an Affiliate (as defined herein) unless Executive reasonably
                  believed, in good faith, that his acts or omissions were in or
                  not opposed to the best interests of the Company (without
                  intent of Executive to gain therefrom, directly or indirectly,
                  a profit to which he was not legally entitled); or (E) any
                  material breach by Executive of any of the provisions of
                  Section 8 of this Agreement or of any provisions of the
                  Confidentiality and Proprietary Information Agreement (as
                  defined herein); provided, however, that the occurrence of an
                  act or omission covered by clauses (B), (D) or (E) of this
                  paragraph 5(c)(i) shall not constitute "Cause" if Executive
                  remedies such act or omission within ten (10) business days
                  after delivery by the Company of written notice to Executive
                  in accordance with Section 15 hereof specifying in reasonable
                  detail the facts and circumstances believed by the Company to
                  constitute such "Cause."

         (ii)     Any determination of Cause under this Agreement shall be made
                  by resolution duly adopted by the affirmative vote of at least
                  two-thirds of the members of the Board of Directors (not
                  including Executive if Executive is a member of the Board of
                  Directors) at a meeting of the Board of Directors called and
                  held for that purpose; PROVIDED that Executive shall have been
                  given written notice of such meeting by certified mail at
                  least ten (10) business days prior to the meeting and shall
                  have been given the opportunity to be heard by the Board of
                  Directors before such resolution is passed. The failure by the
                  Company to follow the procedures set forth in this Section
                  5(c)(ii) shall result in the termination of the Executive's
                  employment being deemed to be a termination by the Company
                  without Cause.

(d)      TERMINATION BY EXECUTIVE FOR GOOD REASON. Executive may terminate his
         employment hereunder for Good Reason after delivery by Executive of
         written notice to the Company in accordance with Sections 5(g) and 15
         hereof within sixty (60) days after the occurrence of a Good Reason
         Event (as hereinafter defined). For purposes of this Agreement, "Good
         Reason" means the occurrence of any of the following events (each a
         "Good Reason Event") without Executive's written consent during the
         Employment Term:

         (i)      A change in Executive's responsibilities or titles or any
                  other action by the Company which represents a material
                  diminution of Executive's position, status or authority,
                  except in connection with or as a result of the termination of
                  Executive's employment pursuant to any provision of this
                  Section 5 (a "Dimunition"); PROVIDED, HOWEVER that such
                  Dimunition shall not constitute

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                  "Good Reason" or a "Good Reason Event" if the Company remedies
                  such Dimunition within ten (10) business days after delivery
                  by Executive of written notice to the Company in accordance
                  with Section 15 hereof specifying in reasonable detail the
                  facts and circumstances believed by Executive to constitute
                  such Dimunition.

         (ii)     A reduction by the Company in Executive's Base Salary.

         (iii)    A material breach by the Company of Section 4(c) hereof;
                  PROVIDED, HOWEVER that such a breach shall not constitute
                  "Good Reason" or a "Good Reason Event" if the Company remedies
                  such breach within ten (10) business days after delivery by
                  Executive of written notice to the Company in accordance with
                  Section 15 hereof specifying in reasonable detail the facts
                  and circumstances believed by Executive to constitute a
                  material breach of Section 4(c).

         (iv)     (Intentionally left blank)

         (v)      The failure by the Company to pay Executive any material
                  amount of his Base Salary, or any material amount of other
                  compensation, that is due and payable under this Agreement
                  within ten (10) business days after Executive makes written
                  demand for such amount.

         (vi)     The failure by the Company to enter into a written agreement
                  with any entity that purchases all or substantially all of the
                  assets of the Company or any entity into which the Company is
                  merged (each a "Successor") pursuant to which such Successor
                  agrees to assume all of the obligations of the Company under
                  this Agreement at and effective as of the closing of such sale
                  of assets or merger.

(e)      VOLUNTARY TERMINATION BY EXECUTIVE. Executive may terminate his
         employment hereunder without Good Reason at any time during the
         Employment Term after providing thirty (30) days' written notice to the
         Company delivered in accordance with Sections 5(g) and 15 hereof.

(f)      TERMINATION BY THE COMPANY WITHOUT CAUSE. At any time during the
         Employment Term, the Company may terminate Executive's employment
         hereunder without Cause by written notice to Executive delivered in
         accordance with Sections 5(g) and 15 hereof. For purposes of this
         Agreement, Executive's employment will be deemed to have been
         terminated "Without Cause" if Executive is terminated by the Company
         for any reason other than Death pursuant to Section 5(a), Total
         Disability pursuant to Section 5(b), or Cause pursuant to Section 5(c).

(g)      NOTICE OF TERMINATION. Any termination of Executive's employment by the
         Company for Cause pursuant to Section 5(c), without Cause pursuant to
         Section 5(f), or as a result of Executive's Total Disability pursuant
         to Section 5(b), or by Executive for Good Reason pursuant to Section
         5(d), shall be communicated by Notice of Termination

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         to the other party hereto given in accordance with this Agreement. For
         purposes of this Agreement, a "Notice of Termination" means a written
         notice which (i) indicates the specific termination provision in this
         Agreement relied upon, (ii) sets forth in reasonable detail the facts
         and circumstances claimed to provide a basis for termination of
         Executive's employment under the provision so indicated, and (iii)
         specifies the effective date of termination, if such date is other than
         the date of receipt of such notice (which effective date shall not be
         (A) less than ten (10) business days after the giving of such notice in
         the case of termination by Executive for Good Reason or (B) more than
         15 days after the giving of such notice in all other cases). Any
         voluntary termination of Executive's employment by Executive pursuant
         to Section 5(e) shall be communicated by written notice to the Company
         specifying (i) that Executive wishes to terminate his employment with
         the Company pursuant to Section 5(e) hereof and (ii) indicating the
         effective date of termination (which effective date shall not be less
         than 30 days after the giving of such notice).

6.       COMPENSATION AND BENEFITS FOLLOWING TERMINATION OF EMPLOYMENT.

In the event that Executive's employment hereunder is terminated, Executive
shall be entitled to the following compensation and benefits upon such
termination:

(a)      COMPENSATION AND BENEFITS PAYABLE FOLLOWING TERMINATION FOR ANY REASON.
         The following compensation and benefits shall be payable upon
         termination of Executive's employment under this Agreement for any
         reason:

         (i)      Executive or his beneficiaries or estate shall be entitled to
                  receive, within fourteen (14) days after the effective date of
                  termination, any accrued but unpaid Base Salary for services
                  rendered by Executive to the Company prior to the date of
                  termination, any accrued but unpaid expenses required to be
                  reimbursed under this Agreement, and cash compensation (at a
                  rate per day equal to the Base Salary divided by the number of
                  business days in the relevant year) for any accrued Vacation
                  Time that remained unused by the Executive at the time of
                  termination; and

         (ii)     Any earned benefits to which Executive (or his beneficiaries
                  or estate) may be entitled pursuant to the plans, policies and
                  arrangements referred to in Sections 4(b), 4(c) and 4(g)
                  hereof shall be determined and paid in accordance with the
                  terms of such plans, policies and arrangements. In the case of
                  compensation previously deferred by Executive, all amounts
                  previously deferred and not yet paid by the Company shall be
                  paid to Executive (or his beneficiaries or estate) within
                  fourteen (14) days after the effective date of termination
                  unless such payment is inconsistent with the terms of any
                  payment election made by Executive with respect to such
                  deferred compensation.

(b)      TERMINATION BY REASON OF DEATH. In the event that Executive's
         employment is terminated by reason of Executive's death, the Company
         shall pay Executive's estate

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         the following compensation and benefits in addition to the compensation
         and benefits provided for in Section 6(a) above:

         (i)      Executive's estate shall be entitled to be paid:

                  (A)      Executive's Base Salary at the rate in effect
                           immediately prior to Executive's date of death on the
                           Company's regular pay days for a period of three (3)
                           years from the effective date of termination as if
                           his employment had continued until the end of such
                           three (3)-year period; and

                  (B)      an aggregate amount equal to three (3) times the
                           average of the Annual Bonuses paid to Executive in
                           the three (3) most recently completed fiscal years
                           preceding the effective date of termination, without
                           regard to whether the payment of all or any portion
                           of such Annual Bonus has been deferred (such average
                           being hereinafter referred to as the "Bonus
                           Average"), which shall be paid in equal installments
                           on the Company's regular pay days over the course of
                           thirty-six (36) months from the effective date of
                           termination; PROVIDED, HOWEVER, that if at the time
                           of termination Executive has not been employed by the
                           Company for three fiscal years, the Bonus Average
                           shall be deemed for all purposes of this Agreement to
                           equal Executive's Target Bonus Rate multiplied by his
                           Base Salary at the rate in effect immediately prior
                           to the effective date of termination. The Company may
                           purchase insurance to cover all or any part of the
                           obligations set forth in this Section 6(b)(i) and
                           Executive agrees to submit to a physical examination
                           from time to time to facilitate the procurement or
                           renewal of such insurance. Any proceeds of such
                           insurance paid to Executive or his beneficiaries or
                           estate shall be considered a portion of the payments
                           required to be made to Executive pursuant to this
                           Section 6(b)(i) and shall not be in addition thereto.

         (ii)     Executive's dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to dependents
                  of full-time senior executives of the Company immediately
                  prior to Executive's death for a period of three (3) years
                  from the effective date of termination, or until Executive's
                  dependents become eligible for substantially equivalent
                  employer-provided health insurance benefits from any other
                  person or business entity, whichever occurs first. In the
                  event that participation in any such plan, program or
                  arrangement of the Company is prohibited, the Company will
                  arrange to provide benefits substantially similar to those
                  benefits which Executive's dependents would have been entitled
                  to receive under such plan, program or arrangement for such
                  period.

         (iii)    All of Executive's then outstanding options to purchase shares
                  of the Company's common stock shall be vested and exercisable
                  in accordance with the terms of the stock option plan of the
                  Company pursuant to which such options were granted (the
                  "Governing Stock Option Plan") as then in effect.

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(c)      TERMINATION BY REASON OF TOTAL DISABILITY. In the event that
         Executive's employment is terminated by reason of Executive's Total
         Disability pursuant to Section 5(b) hereof, the Company shall pay
         Executive the following compensation and benefits in addition to the
         compensation and benefits provided for in Section 6(a) above:

         (i)      Subject to Section 6(c)(ii) below, Executive shall be entitled
                  to be paid:

                  (A)      his Base Salary at the rate in effect immediately
                           prior to the effective date of termination on the
                           Company's regular pay days for a period of three (3)
                           years from the effective date of termination as if
                           his employment had continued until the end of such
                           three (3) year period; and

                  (B)      an aggregate amount equal to three (3) times the
                           Bonus Average, which shall be paid in equal
                           installments on the Company's regular pay days over
                           the course of thirty-six (36) months from the
                           effective date of termination.

         (ii)     Whenever compensation is payable to Executive under Section
                  6(c)(i) during a period in which he is partially or totally
                  disabled, and such disability would (except for the provisions
                  hereof) entitle Executive to disability income or salary
                  continuation payments from the Company according to the terms
                  of any plan or program presently maintained or hereafter
                  established by the Company, the disability income or salary
                  continuation paid to Executive pursuant to any such plan or
                  program shall be considered a portion of the payments required
                  to be made to Executive pursuant to this Section 6(c) and
                  shall not be in addition thereto. If disability income is
                  payable directly to Executive by an insurance company under
                  the terms of an insurance policy paid for by the Company, the
                  amounts paid to Executive by such insurance company shall be
                  considered a portion of the payment to be made to Executive
                  pursuant to this Section 6(c) and shall not be in addition
                  thereto.

         (iii)    Executive and his dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to full-time
                  senior executives of the Company immediately prior to the
                  effective date of termination for a period of three (3) years
                  from the effective date of termination, or until Executive
                  becomes eligible for substantially equivalent
                  employer-provided health insurance benefits from any other
                  person or business entity, whichever occurs first. In the
                  event that participation in any such plan, program, or
                  arrangement of the Company is prohibited, the Company will
                  arrange to provide benefits substantially similar to those
                  benefits which Executive would have been entitled to receive
                  under such plan, program, or arrangement, for such period.

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         (iv)     All of Executive's then outstanding options to purchase shares
                  of the Company's common stock shall be vested and exercisable
                  in accordance with the terms of the Governing Stock Option
                  Plan, as then in effect.

(d)      TERMINATION FOR CAUSE. In the event that Executive's employment is
         terminated by the Company for Cause pursuant to Section 5(c) hereof,
         the Company shall not be obligated to make any payments to Executive
         under this Agreement on or following the effective date of termination,
         other than the compensation and benefits provided for in Section 6(a)
         above.

(e)      VOLUNTARY TERMINATION BY EXECUTIVE. In the event that Executive
         terminates his employment without Good Reason pursuant to Section 5(e)
         hereof, the Company shall not be obligated to make any payments to
         Executive under this Agreement on or following the date of termination,
         other than the compensation and benefits provided for in Section 6(a)
         above.

(f)      TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY EXECUTIVE FOR GOOD
         REASON. In the event that Executive's employment is terminated by the
         Company without Cause pursuant to Section 5(f) hereof or by Executive
         for Good Reason pursuant to Section 5(d) hereof, the Company shall pay
         to Executive the following compensation and benefits in addition to the
         compensation and benefits provided for in Section 6(a) above:

         (i)      Executive  shall be entitled to be paid:

                  (A)      his Base Salary at the rate in effect immediately
                           prior to the effective date of termination on the
                           Company's regular pay days for a period of two (2)
                           years from the effective date of termination as if
                           his employment had continued until the end of such
                           two (2)-year period; and

                  (B)      an aggregate amount equal to two (2) times the Bonus
                           Average, which shall be paid in equal installments on
                           the Company's regular pay days over the course of
                           twenty-four (24) months from the effective date of
                           termination.

         (ii)     Executive and his dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to full-time
                  senior executives of the Company immediately prior to the
                  effective date of termination for a period of three (3) years
                  from the effective date of termination, or until Executive
                  becomes eligible for substantially equivalent
                  employer-provided health insurance benefits from any other
                  person or business entity, whichever occurs first. In the
                  event that participation in any such plan, program or
                  arrangement of the Company is prohibited, the Company will
                  arrange to provide benefits substantially similar to those
                  benefits which Executive

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                  would have been entitled to receive under such plan, program
                  or arrangement for such period.

         (iii)    All of Executive's then outstanding options to purchase shares
                  of the Company's common stock shall be vested and exercisable
                  in accordance with the terms of the Governing Stock Option
                  Plan, as then in effect;

         PROVIDED, HOWEVER, that if the Company terminates Executive's
         employment without Cause or Executive terminates his employment with
         the Company for Good Reason within the one-year period preceding, or
         within the two-year period following, a "Change of Control", Executive
         shall be paid the compensation and benefits provided for in Section 7
         hereof rather than the compensation and benefits provided for in this
         Section 6(f).

(g)      NO OTHER BENEFITS OR COMPENSATION. Except as may be provided under this
         Agreement or under the terms of any Compensation Plans or Benefit Plans
         in effect and applicable to Executive on the effective date of
         termination, Executive shall have no right to receive any other
         compensation, or to participate in any other plan, arrangement or
         benefit after such termination and all other obligations of the Company
         and rights of Executive under this Agreement shall terminate effective
         as of the effective date of termination.

7.       CHANGE OF CONTROL.

(a)      RESIGNATION FOLLOWING CHANGE OF CONTROL. If (i) the Company terminates
         Executive's employment without Cause or Executive terminates his
         employment with the Company for Good Reason and (ii) a "Change of
         Control" has occurred within the two-year period preceding, or within
         the one-year period following, the effective date of termination,
         Executive shall be entitled to the compensation described in this
         Section 7 in addition to the compensation and benefits provided for in
         Section 6(a) above and in lieu of the compensation and benefits
         provided for in Section 6(f) above:

         (i)      a lump sum amount equal to three(3) times the sum of (A) and
                  (B) below:

                  (A)      his Base Salary at the rate in effect immediately
                           prior to the effective date of termination; and

                  (B)      the Bonus Average.

         (ii)     Executive and his dependents shall be entitled to continue to
                  receive medical, dental and vision insurance coverage at least
                  equal in type and amount to that made available to full-time
                  senior executives of the Company immediately prior to the
                  effective date of termination for a period of three (3) years
                  from the effective date of termination, or until Executive
                  becomes eligible for employer-provided health insurance
                  benefits from any other person or business entity

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                  (whether or not those health insurance benefits are comparable
                  to the health insurance benefits provided by the Company),
                  whichever occurs first. In the event that participation in any
                  such plan, program, or arrangement of the Company is
                  prohibited, the Company will arrange to provide benefits
                  substantially similar to those benefits which Executive would
                  have been entitled to receive under such plan, program, or
                  arrangement, for such period.

         (iii)    All of Executive's then outstanding options to pursuant shares
                  of the Company's common stock shall be vested and exercisable
                  in accordance with the terms of the Governing Stock Option
                  Plan as then in effect.

(b)      DEFINITION OF CHANGE OF CONTROL. For purposes of this Agreement, a
         "Change of Control" shall be deemed to have occurred upon the happening
         of any of the following:

         (i)      the sale or lease of all or substantially all of the assets of
                  the Company to any other person or entity other than a direct
                  or indirect wholly-owned subsidiary or parent of the Company;

         (ii)     a merger, amalgamation, consolidation or other reorganization
                  of the Company with any other entity (other than a direct or
                  indirect wholly-owned subsidiary or parent of the Company) in
                  which the Company is not the surviving entity or becomes owned
                  entirely by another entity, unless at least 50% of the
                  outstanding voting securities of the surviving or parent
                  corporation, as the case may be, immediately following such
                  transaction are beneficially held by the same persons and/or
                  entities that beneficially held the outstanding voting
                  securities of the Company immediately prior to such
                  transaction, and such outstanding voting securities are
                  beneficially held by such persons and/or entities in the same
                  proportion as such persons and/or entities beneficially held
                  the outstanding voting securities of the Company immediately
                  prior to such transaction;

         (iii)    the acquisition of beneficial ownership, as such term is
                  defined in the Securities Exchange Act of 1934, as amended
                  (the "Exchange Act") in a single transaction or series of
                  related transactions (by tender offer or otherwise), of more
                  than 50% of the voting securities of the Company by a single
                  person or entity (other than the Company or any affiliate (as
                  such term is defined in Rule 12b-2 under the Exchange Act) of
                  the Company (each an "Affiliate"), a trustee or any other
                  fiduciary or committee of any employee benefit plan of the
                  Company, or any corporation owned, directly or indirectly, by
                  the stockholders of the Company in substantially the same
                  proportions as their ownership of the stock of the Company) or
                  "group" within the meaning of Section 13(d)(3) of the Exchange
                  Act, whether through the acquisition of previously issued and
                  outstanding voting securities or of voting securities that
                  have not been previously issued, or any combination thereof;

                                      -12-
<PAGE>

         (iv)     the voluntary or involuntary dissolution, liquidation or
                  winding up of the Company, or the adoption of any resolution
                  with respect thereto; or

         (v)      the individuals who constituted the Board of Directors as of
                  the Effective Date (the "Incumbent Board") ceasing for any
                  reason to constitute at least a majority of the Board of
                  Directors; provided, that any person becoming a director whose
                  election or nomination for election was approved by a majority
                  of the members of the Incumbent Board shall be considered, for
                  purposes of this Agreement, a member of the Incumbent Board;
                  and provided further that, notwithstanding anything herein to
                  the contrary, a Change of Control shall not be deemed to have
                  occurred in connection with (i) any public offering of the
                  common stock of the Company for cash; (ii) any transaction
                  with an entity or group that includes, is affiliated with or
                  is wholly or partially controlled by, one or more executive
                  officers of the Company in office immediately prior to the
                  transaction that would otherwise constitute a Change of
                  Control; (iii) any capital raising transaction (including any
                  investment by one or more private equity funds) for the
                  purpose of financing acquisitions specifically identified by
                  the Board of Directors of the Company; or (iv) the U.S.
                  Reorganization Transaction.

(c)      CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. In the event that any
         portion of the payments or benefits provided to Executive under this
         Agreement or pursuant to any other plan, arrangement or agreement
         between Executive and the Company or any Affiliate thereof
         (collectively, "Total Payments") would be subject to the tax (the
         "Excise Tax") imposed by Section 4999 of the Code or any similar tax
         that may hereafter be imposed, then Executive shall be entitled to
         receive an additional payment (the "Gross-up Payment") in an amount
         which, when combined with the net amount of the Total Payments retained
         by Executive after giving effect to the application of the Excise Tax
         and all other applicable taxes on the Total Payments (including any
         interest or penalties imposed with respect to such taxes), will result
         in receipt by Executive of a Gross-up Payment equal to the Excise Tax
         imposed upon the Total Payments.

         (i)      Determination by Accounting Firm. Subject to the provisions of
                  Section 7(c)(ii) below, all determinations required to be made
                  under this Section 7(c), including whether a Gross-up Payment
                  is required, the amount of the Gross-Up Payment and the
                  assumptions to be utilized in arriving at such determination,
                  shall be made by the Company's independent auditors or such
                  other certified public accounting firm reasonably acceptable
                  to Executive as may be designated by the Company (the
                  "Accounting Firm"). The Accounting Firm shall provide detailed
                  calculations supporting the Gross-up Payment to the Company
                  and Executive. All fees and expenses of the Accounting Firm
                  shall be paid solely by the Company. Any Gross-Up Payment, as
                  determined pursuant to this Section 7(c), shall be paid by the
                  Company to Executive not later than the due date for the
                  payment of any Excise Tax. Any determination by the Accounting
                  Firm shall be binding upon the Company and Executive. As a
                  result of the uncertainty in the

                                      -13-
<PAGE>

                  application of Section 4999 of the Code at the time of the
                  initial determination by the Accounting Firm hereunder, it is
                  possible that Gross-Up Payments which will not have been made
                  by the Company should have been made ("Underpayment"),
                  consistent with the calculations required to be made
                  hereunder. In the event that the Company exhausts its remedies
                  pursuant to Section 7(c)(ii) and Executive thereafter is
                  required to make a payment of any Excise Tax, the Accounting
                  Firm shall determine the amount of the Underpayment that has
                  occurred and any such Underpayment shall be promptly paid by
                  the Company to or for Executive's benefit.

         (ii)     The Company's Right to Contest Excise Tax. Executive agrees to
                  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. Such notification
                  shall be given as soon as practicable but no later than ten
                  (10) business days after Executive is informed in writing of
                  such claim and shall apprise the Company of the nature of such
                  claim and the date on which such claim is requested to be
                  paid. Executive shall not pay such claim prior to the
                  expiration of the 30-day period following the date on which
                  Executive gives such notice to the Company (or such shorter
                  period ending on the date that any payment of taxes with
                  respect to such claim is due). If the Company notifies
                  Executive in writing prior to the expiration of such period
                  that it desires to contest such claim, Executive agrees to:

                  (A)      give the Company any information reasonably requested
                           by the Company relating to such claim,

                  (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;

                  (C)      cooperate with the Company in good faith in order to
                           effectively contest such claim, and

                  (D)      permit the Company to participate in any proceedings
                           relating to such claim;

                  PROVIDED, however, that the Company agrees to bear and pay
                  directly all costs and expenses (including additional interest
                  and penalties) incurred in connection with such contest and
                  shall indemnify and hold Executive harmless, on an after-tax
                  basis, for any Excise Tax or income tax (including interest
                  and penalties with respect thereto) imposed as a result of
                  such representation and payment of costs and expenses. Without
                  limitation on the foregoing provisions of this Section
                  7(c)(ii), the Company shall control all proceedings taken in
                  connection with such contest and, at its sole option, may
                  pursue or forego any and all administrative

                                      -14-
<PAGE>

                  appeals, proceedings, hearings and conferences with the taxing
                  authority in respect of such claim and may, at its sole
                  option, either direct Executive to pay the tax claimed and sue
                  for a refund or contest the claim in any permissible manner,
                  and Executive agrees to prosecute such contest to a
                  determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as the Company shall determine; PROVIDED, HOWEVER, that if the
                  Company directs Executive to pay such claim and sue for a
                  refund, the Company shall advance the amount of such payment
                  to Executive, on an interest-free basis, and shall indemnify
                  and hold Executive harmless, on an after-tax basis, from any
                  Excise Tax or income tax (including interest or penalties with
                  respect thereto) imposed with respect to such advance or with
                  respect to any imputed income with respect to such advance;
                  and FURTHER PROVIDED that any extension of the statute of
                  limitations relating to payment of taxes for Executive's
                  taxable year with respect to which such contested amount is
                  claimed to be due is limited solely to such contested amount.
                  Furthermore, the Company's control of the contest shall be
                  limited to issues with respect to which a Gross-Up Payment
                  would be payable hereunder and Executive shall be entitled to
                  settle or contest, as the case may be, any other issue raised
                  by the Internal Revenue Service or any other taxing authority.

         (iii)    Repayment to the Company. If, after the receipt by Executive
                  of an amount advanced by the Company pursuant to Section
                  7(c)(ii), Executive becomes entitled to receive any refund
                  with respect to such claim, Executive shall promptly pay to
                  the Company the amount of such refund (together with any
                  interest paid or credited thereon after taxes applicable
                  thereto). Executive shall be entitled to deduct from any
                  payment made to the Company pursuant to the previous sentence
                  the amount of any taxes that Executive previously paid on the
                  amount of such payment. If, after the receipt by Executive of
                  an amount advanced by the Company pursuant to Section
                  7(c)(ii), a determination is made that Executive is not
                  entitled to any refund with respect to such claim and the
                  Company does not notify Executive in writing of its intent to
                  contest such denial of refund prior to the expiration of
                  thirty (30) days after such determination, then such advance
                  shall be forgiven and shall not be required to be repaid and
                  the amount of such advance shall offset, to the extent
                  thereof, the amount of Gross-Up Payment required to be paid.

(d)      Notwithstanding anything herein to the contrary, to the extent that
         Executive has received payments of Base Salary pursuant to Section
         6(f)(i) hereof at a time when a "Change of Control" occurs, such
         payments shall be deducted from the lump sum payment required to be
         made to Executive pursuant to Section 7(a)(i) hereof.

8.       RESTRICTIVE COVENANTS

(a)      COMPETITIVE ACTIVITY. Executive covenants and agrees that at all times
         during Executive's employment with the Company, and during the
         Non-Compete Period (as

                                      -15-
<PAGE>

         defined below), Executive will not, acting alone or in conjunction with
         others, without the prior written consent of the Company, directly or
         indirectly, engage or participate in, assist, render services to or
         for, or have any active interest or involvement in, whether as an
         employee, principal, agent, consultant, creditor, lender, advisor,
         employer, officer, director, stockholder (excluding holdings by
         Executive of up to 3% of the voting stock of any corporation subject to
         the periodic reporting requirements of the Exchange Act), partner,
         proprietor or in any other individual or representative capacity in or
         with, any person, entity or business which competes, directly or
         indirectly, with the Company or any Affiliate in any of the business
         areas or territories in which the Company or any Affiliate then
         conducts business or with any development opportunity being pursued by
         the Company during the Non-Compete Period. (b) NON-SOLICITATION.
         Executive covenants and agrees that at all times during Executive's
         employment with the Company, and during the Non-Compete Period,
         Executive will not, without the prior written consent of the Company,
         directly or indirectly (i) induce, solicit or entice any customer of
         the Company or any customer of any Affiliate to patronize any person,
         business or entity which competes, directly or indirectly, with the
         Company or such Affiliate in any of the business areas or territories
         in which the Company or such Affiliate then conducts business; (ii)
         canvass, solicit or accept any business from any customer of the
         Company or any customer of any Affiliate (other than in connection with
         the performance by Executive of his duties and responsibilities for the
         Company in accordance with this Agreement) in any of the business areas
         or territories in which the Company or any Affiliate of the Company
         then conducts business; (iii) request or advise any customer of the
         Company or any customer of any Affiliate to withdraw, curtail or cancel
         such customer's business with the Company or such Affiliate in any of
         the business areas or territories in which the Company or any Affiliate
         of the Company then conducts business; (iv) contact, communicate with
         or solicit any prospect that the Company is actively pursuing or any
         prospect that any Affiliate is actively pursuing (other than in
         connection with the performance by Executive of his duties for the
         Company in accordance with this Agreement); (v) disclose to any other
         person, entity or business the names or addresses of any customer or
         acquisition prospect of the Company or any customer or acquisition
         prospect of any Affiliate (other than as required in connection with
         the performance by Executive of his duties for the Company in
         accordance with this Agreement); (vi) cause, solicit, entice or induce
         any employee of the Company or any employee of any Affiliate to leave
         the employ of the Company or such Affiliate, or to accept employment
         with, or compensation from, Executive or any person, entity or business
         (other than the Company or any Affiliate) with which Executive is
         affiliated or by whom Executive is employed; or (vii) use any customer
         lists or customer leads, mail, telephone numbers, printed material or
         other information obtained from the Company or any Affiliate or any
         employee of any of the foregoing (other than in connection with the
         performance by Executive of his duties for the Company in accordance
         with this Agreement).

(c)      NON-DISPARAGEMENT.

                                      -16-
<PAGE>

         (i)      Executive covenants and agrees that Executive shall not engage
                  in any pattern of conduct that involves the making or
                  publishing of written or oral statements or remarks
                  (including, without limitation, the repetition or distribution
                  of derogatory rumors, allegations, negative reports or
                  comments) which are disparaging, deleterious or damaging to
                  the integrity, reputation or good will of the Company or any
                  Affiliate or any member of management of the Company or any
                  Affiliate.

         (ii)     The Company covenants and agrees that it shall not engage in
                  any pattern of conduct that involves the making or publishing
                  of written or oral statements or remarks (including, without
                  limitation, the repetition or distribution of derogatory
                  rumors, allegations, negative reports or comments) which are
                  disparaging, deleterious or damaging to the integrity or
                  reputation of Executive.

(d)      PROTECTED INFORMATION. Executive recognizes and acknowledges that
         Executive has had and will continue to have access to various
         confidential and proprietary information concerning the Company and its
         Affiliates which is of a special and unique value. As a condition to
         commencement of Executive's employment hereunder, Executive shall
         execute a Confidentiality and Proprietary Rights Agreement in
         substantially the form of Exhibit C attached hereto (the
         "Confidentiality and Proprietary Rights Agreement"). Any breach by
         Executive of the Confidentiality and Proprietary Rights Agreement shall
         be considered a breach of this Agreement.

(e)      NON-COMPETE PERIOD. For purposes of this Agreement, the term
         "Non-Compete Period" shall have the following meanings:

         (i)      in the event (A) Executive's employment hereunder is
                  terminated by the Company without Cause pursuant to Section
                  5(f), or by Executive for Good Reason pursuant to Section
                  5(d), and (B) a Change of Control did not occur within the
                  two-year period preceding, and does not occur within the
                  one-year period following, the effective date of termination,
                  the Non-Compete Period shall mean the period beginning on the
                  effective date of termination and ending on the second
                  anniversary of the effective date of termination;

         (ii)     in the event that (A) Executive's employment hereunder is
                  terminated by the Company without Cause pursuant to Section
                  5(f), or by Executive for Good Reason pursuant to Section
                  5(d), and (B) a Change of Control occurred within the two-year
                  period preceding the effective date of termination, there
                  shall be no Non-Compete Period;

         (iii)    in the event (A) Executive's employment hereunder is
                  terminated by the Company without Cause pursuant to Section
                  5(f), or by Executive for Good Reason pursuant to Section
                  5(d), and (B) a "Change of Control" occurs within the one-year
                  period following the effective date of termination, the
                  Non-Compete Period shall mean the period beginning on the
                  effective date of termination and ending on the effective date
                  of the "Change of Control";

                                      -17-
<PAGE>

         (iv)     in the event Executive's employment hereunder is terminated by
                  Executive voluntarily pursuant to Section 5(e), or by the
                  Company with Cause pursuant to Section 5(c), the Non-Compete
                  Period shall mean the period beginning on the effective date
                  of termination and ending on the first anniversary of the
                  effective date of termination; and

         (v)      in the event Executive's employment hereunder is terminated by
                  the Company upon Death of Executive pursuant to Section 5(a),
                  or upon the Total Disability of Executive pursuant to Section
                  5(b), there shall be no Non-Compete Period.

9.       ENFORCEMENT OF COVENANTS.

(a)      TERMINATION OF EMPLOYMENT AND FORFEITURE OF COMPENSATION.
         Notwithstanding anything in this Agreement to the contrary, in the
         event that the Board of Directors or a duly authorized committee
         thereof determines in its good faith judgment that Executive has
         violated Sections 8(a) or 8(b) hereof, the Company shall have the right
         to suspend or terminate any or all remaining payments or benefits
         payable pursuant to Section 6 and/or 7 of this Agreement. Such
         suspension or termination of benefits shall be in addition to and shall
         not limit any and all other rights and remedies that the Company may
         have against Executive.

(b)      RIGHT TO INJUNCTION. Executive acknowledges that a breach of the
         covenants set forth in Section 8 hereof will cause irreparable damage
         to the Company with respect to which the Company's remedy at law for
         damages will be inadequate. Therefore, in the event of a breach of the
         covenants set forth in Section 8 by Executive or if the Company has
         reasonable grounds to believe that a breach by Executive of the
         covenants set forth in Section 8 is imminent, Executive and the Company
         agree that the Company shall be entitled to the following particular
         forms of relief, in addition to remedies otherwise available to it at
         law or in equity; (i) injunctions, both preliminary and permanent,
         enjoining or restraining such breach or anticipatory breach and
         Executive hereby consents to the issuance thereof forthwith and without
         bond by any court of competent jurisdiction; and, in the event the
         Company prevails on the merits after all available appeals have been
         exhausted (ii) recovery of all reasonable sums expended and costs,
         including reasonable attorney's fees, incurred by the Company to
         enforce the covenants set forth in Section 8.

(c)      SEPARABILITY OF COVENANTS. The covenants contained in Section 8 hereof
         constitute a series of separate covenants, one for each applicable
         State in the United States and the District of Columbia, and one for
         each province and Territory in Canada. If in any judicial proceeding, a
         court shall hold that any of the covenants set forth in Section 8
         exceed the time, geographic, or occupational limitations permitted by
         applicable laws, Executive and the Company agree that such provisions
         shall and are hereby reformed to the maximum time, geographic, or
         occupational limitations permitted by such laws. Further, in the event
         a court shall hold unenforceable any of the separate

                                      -18-
<PAGE>

         covenants deemed included herein, then such unenforceable covenant or
         covenants shall be deemed eliminated from the provisions of this
         Agreement for the purpose of such proceeding to the extent necessary to
         permit the remaining separate covenants to be enforced in such
         proceeding. Executive and the Company further agree that the covenants
         in Section 8 shall each be construed as a separate agreement
         independent of any other provisions of this Agreement, and the
         existence of any claim or cause of action by Executive against the
         Company, whether predicated on this Agreement or otherwise, shall not
         constitute a defense to the enforcement by the Company of any of the
         covenants of Section 8.

10.      MITIGATION OF DAMAGES; ATTORNEY'S FEES

(a)      Executive shall not be required to mitigate the amount of any payment
         provided for in this Agreement by seeking other employment.

(b)      If any legal action is filed by either party to enforce or interpret
         any of the provisions of this Agreement, the non-prevailing party shall
         pay to the prevailing party, in addition to any other amounts awarded
         in the action, all reasonable attorney's fees and other fees and costs
         incurred by the prevailing party in connection with such legal action,
         the amount of which shall be fixed by the court hearing such action and
         made a part of any judgment rendered.

11.      WITHHOLDING OF TAXES.

The Company may withhold all legally required taxes from any compensation and
benefits payable under this Agreement.

12.      ASSIGNMENT.

Except as otherwise provided in this Agreement, this Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, representatives, successors and permitted assigns. The rights, benefits
and obligations of Executive under this Agreement are personal to Executive and
no such right, benefit or obligation shall be subject to voluntary or
involuntary alienation, assignment or transfer; PROVIDED, HOWEVER, that nothing
in this Section 12 shall preclude Executive from designating a beneficiary or
beneficiaries to receive any benefit payable on his death. The Company shall
require any Successor (whether by purchase of all or substantially all of the
assets of the Company, merger of the Company into another entity, or otherwise)
to assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform if no such
succession had taken place. Upon any such assignment, all references herein to
the Company shall be deemed to refer to such assignee.

13.      ENTIRE AGREEMENT; AMENDMENT.

This Agreement, together with all schedules, exhibits and other documents
referred to herein, shall supersede any and all existing oral or written
agreements, representations, or warranties

                                      -19-
<PAGE>

between Executive and the Company relating to the terms of Executive's
employment by the Company. This Agreement may not be amended, nor any provision
waived, except by a written instrument signed by the party against whom such
amendment or waiver is sought to be enforced.

14.      GOVERNING LAW; JURISDICTION.

This Agreement shall be governed by and construed in accordance with the
internal substantive laws of the State of New York, without giving effect to the
conflict of law principles thereof. The parties agree that all disputes, legal
actions, suits and proceedings arising out of or relating to this Agreement or
Executive's employment with the Company must be brought exclusively in a federal
district court or state court of competent jurisdiction located in New York, New
York. Each party hereby irrevocably consents and submits to the exclusive
jurisdiction of such courts. No legal action, suit or proceeding with respect to
this Agreement or Executive's employment with the Company may be brought in any
other forum. Each party hereby irrevocably waives all claims of immunity from
jurisdiction and any right to object on the basis that any dispute, action, suit
or proceeding brought in any such court has been brought in an improper or
inconvenient forum or venue.

15.      NOTICES.

Any notice, consent, request or other communication made or given in connection
with this Agreement shall be in writing and shall be deemed to have been duly
given if delivered personally, mailed by registered or certified mail (return
receipt requested), or by confirmed facsimile to those listed below at their
following respective addresses or at such other address as each may specify by
notice to the others:

         To the Company or Capital:

                  1005 Skyview Drive
                  Burlington, Ontario L7P 5B1
                  Attention:  General Counsel

         To Executive: At the address for Executive set forth on the signature
         page below.

16.      MISCELLANEOUS.

(a)      WAIVER. The failure of a party to insist upon strict adherence to any
         term of this Agreement on any occasion shall not be considered a waiver
         thereof or deprive that party of the right thereafter to insist upon
         strict adherence to that term or any other term of this Agreement. The
         waiver by any party hereto of a breach of any provision of this
         Agreement shall neither operate nor be construed as a general waiver or
         as a specific waiver of any subsequent breach by any party, unless
         otherwise expressly provided in such waiver.

                                      -20-
<PAGE>

(b)      SEPARABILITY. Subject to Section 9 hereof, if any term or provision of
         this Agreement or application thereof to anyone or under any
         circumstances shall be determined to be invalid, illegal or
         unenforceable by any court of competent jurisdiction and cannot be
         modified to be enforceable, such term or provision shall immediately
         become null and void, leaving the remainder of this Agreement in full
         force and effect.

(c)      HEADINGS. Section headings are used herein for convenience of reference
         only and shall not affect the meaning of any provision of this
         Agreement.

(d)      RULES OF CONSTRUCTION. Whenever the context so requires, the use of the
         singular shall be deemed to include the plural and vice versa.

(e)      COUNTERPARTS. This Agreement may be executed in any number of
         counterparts, each of which so executed shall be deemed to be an
         original, and such counterparts will together constitute but one
         Agreement.

(f)      Intentionally omitted.

(g)      RELEASE. Notwithstanding anything herein to the contrary, the Company
         shall not be required to make any of the payments, or provide any of
         the benefits, to the Executive pursuant to Sections 6 or 7 hereof
         unless and until Executive executes and delivers a release of all
         claims arising out of this Executive Employment Agreement through the
         date of the release, but excluding claims for indemnification from the
         Company under the Indemnification Agreement attached hereto as Exhibit
         A, local, state or federal statutory or constitutional claims, or other
         claims not arising under this Executive Employment Agreement.

(h)      SURVIVAL. Notwithstanding anything in this Agreement to the contrary,
         the provisions of Sections 8, 9, 10, 14, 15 and 16 shall survive any
         termination of Executive's employment in accordance with their
         respective terms.

17.      GUARANTEE. Capital hereby guarantees the performance by the Company of
         the Company's obligations under this Agreement; PROVIDED, HOWEVER, that
         this guarantee shall terminate and be of no further force or effect
         upon consummation of the U.S. Reorganization Transaction. Upon
         consummation of the U.S. Reorganization Transaction, this Executive
         Employment Agreement shall remain in full force and effect and shall
         remain binding on the parties hereto.

                           [SIGNATURE PAGES TO FOLLOW]

                                      -21-
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.

THE COMPANY:

WASTE SERVICES, INC.

By: /s/ David Sutherland-Yoest
    --------------------------------------------
Name:  David Sutherland-Yoest
Title: Chairman and Chief Executive Officer

Date: February 23, 2004

CAPITAL:

CAPITAL ENVIRONMENTAL RESOURCE INC.

By: /s/ David Sutherland-Yoest
    --------------------------------------------
Name:  David Sutherland-Yoest
Title: Chairman and Chief Executive Officer

EXECUTIVE:

By: /s/ Mark A. Pytosh
    --------------------------------------------
    Mark A. Pytosh

Date: February 23, 2004

                                      -22-Amendment Agreement No. 9 Dated May 17, 2004

 

EXHIBIT 4.1(i)

AMENDMENT AGREEMENT NO. 9

TO CREDIT AGREEMENT

     THIS AMENDMENT AGREEMENT (this “Amendment Agreement”) is made and entered
into as of this 17th day of May, 2004, by and among INSTEEL INDUSTRIES, INC., a
North Carolina corporation (herein called the “Borrower”), BANK OF AMERICA,
N.A., a national banking association (the “Agent”), as Agent for the lenders
(the “Lenders”) party to the Credit Agreement dated January 31, 2000 as amended
by the Amendment Agreement No. 1 to Credit Agreement dated January 12, 2001, by
the Supplement to Amendment Agreement No. 1 to the Credit Agreement effective
January 12, 2001, by the Amendment Agreement No. 2 to Credit Agreement dated
May 21, 2001, by Amendment Agreement No. 3 to Credit Agreement dated August 9,
2001, by Amendment Agreement No. 4 to Credit Agreement dated November 16, 2001,
by Amendment Agreement No. 5 to Credit Agreement dated January 28, 2002, by
Amendment Agreement No. 6 to Credit Agreement and Equity Appreciation Rights
Agreement dated May 10, 2002, by Amendment Agreement No. 7 to Credit Agreement
and Equity Appreciation Rights Agreement dated February 18, 2003 and by
Amendment Agreement No. 8 to Credit Agreement and Equity Appreciation Rights
Agreement dated March 24, 2004 (collectively the “Agreement”) among the
Borrower, the Agent, and the Lenders, and the UNDERSIGNED LENDERS.

WITNESSETH:

     WHEREAS, the parties hereto have entered into the Agreement pursuant to
which the Lenders have agreed to make loans to the Borrower as evidenced by the
Notes (as defined in the Agreement) and to issue Letters of Credit for the
benefit of the Borrower; and

     WHEREAS, as a condition to the making of the loans pursuant to the
Agreement the Lenders have required that the Subsidiaries of the Borrower
guarantee payment of all Obligations of the Borrower arising under the
Agreement; and

     WHEREAS, the Borrower has requested that the Lenders further amend the
Agreement in the manner described herein; and

     WHEREAS, the Lenders are willing to further amend the Agreement subject to
the terms and conditions set forth herein;

     NOW, THEREFORE, the Borrower, the Agent and the Lenders do hereby agree as
follows:

     1. Definitions. The term “Agreement” as used herein and in the Loan
Documents (as defined in the Agreement) shall mean the Agreement as hereinafter
amended and modified. Unless the context otherwise requires, all terms used
herein without definition shall have the definition provided therefor in the
Agreement.

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     2. Amendment to Agreement. Subject to the conditions set forth herein, the
Agreement is hereby amended, effective as of the date of this Amendment No. 9
as follows:

     (a) The definition of “Stated Termination Date” in Section 1.1 is
hereby amended in its entirety so that as amended it shall read as
follows:

     ”‘Stated Termination Date’ means June 4, 2004.”

     (b) The definition of “Term Loan Maturity Date” in Section 1.1 is
hereby amended in its entirety so that as amended it shall read as
follows:

     ”‘Term Loan Maturity Date’ means June 4, 2004.”

     3. Subsidiary Consents. Each Subsidiary of the Borrower that has
delivered a Guaranty to the Agent has joined in the execution of this Amendment
Agreement for the purpose of (i) agreeing to the amendment to the Agreement and
(ii) confirming its guarantee of payment of all the Obligations.

     4. Wilmington, Delaware Facility. Pursuant to Section 5.4 and Amendment
Agreement No. 8, on or before June 4, 2004 Insteel Wire Products Company shall
deliver to the Agent a Mortgage with respect to the Wilmington, Delaware
facility and the related Mortgage Property Support Documents.

     5. Representations and Warranties. The Borrower hereby represents,
warrants and covenants that:

     (a) The representations and warranties made by Borrower in Article
VIII of the Agreement are true on and as of the date hereof except that
the financial statements referred to in Section 8.6(a) shall be those
most recently furnished to each Lender pursuant to Section 9.1;

     (b) There has been no material adverse change in the condition,
financial or otherwise, of the Borrower and its Subsidiaries since the
date of the most recent financials, other than changes in the ordinary
course of business, none of which has been a material adverse change;

     (c) The business and properties of the Borrower and its Subsidiaries
are not and have not been adversely affected in any substantial way as
the result of any fire, explosion, earthquake, accident, strike, lockout,
combination of workers, flood, embargo, riot, activities of armed forces,
war or acts of God or the public enemy, or cancellation or loss of any
major contracts; and

     (d) After giving effect to this Amendment Agreement
(including the waivers by the Lenders set forth herein), no
event has occurred and no condition exists which, upon the
consummation of the transaction contemplated hereby,
constitutes a Default or

2

 

an Event of Default on the part of
the Borrower under the Agreement, the Notes or any other Loan
Document either immediately or with the lapse of time or the
giving of notice, or both.

     6. Amendment Fees. Borrower agrees to pay an amendment fee with respect
to this Amendment Agreement of $50,000 which is due and payable upon execution
of this Amendment Agreement.

     7. Conditions. This Amendment Agreement shall become effective upon the
Borrower delivering or causing to be delivered to the Agent the following:

     (i) five (5) counterparts of this Amendment Agreement duly executed
by the Borrower, the Agent and the Lenders and consented to by each of
the Subsidiaries;

     (ii) copy of resolutions adopted by the Board of Directors of the
Borrower and each Guarantor approving this Amendment Agreement and
authorizing its execution certified by the Secretary or Assistant
Secretary to be a true and correct copy duly adopted; and

     (iii) all other fees and expenses, including the Agent’s fees, due
in connection with this Amendment Agreement.

     8. Acknowledgment; Release. The Borrower and the Guarantors acknowledge
that they have no existing defense, counterclaim, offset, cross-complaint,
claim or demand of any kind or nature whatsoever that can be asserted to reduce
or eliminate all or any part of any of their respective liability to pay the
full indebtedness outstanding under the terms of the Agreement and any other
Loan Documents which evidence, guaranty or secure the Obligations. The
Borrower and the Guarantors hereby release and forever discharge the Agent, the
Lenders and all of their officers, directors, employees, attorneys, consultants
and agents from any and all actions, causes of action, debts, dues, claims,
demands, liabilities and obligations of every kind and nature, both in law and
in equity, known or unknown, whether matured or unmatured, absolute or
contingent.

     9. Costs and Expenses. The Borrower agrees to pay all costs and expenses
associated with the preparation, due diligence, administration and enforcement
of all documentation executed in connection with the Amendment Agreement,
including without limitation, the legal fees and out-of-pocket expenses of
counsel to the Agent. The Borrower also agrees to pay the expenses of the
Agent and the Lenders in connection with Collateral review, field audits and
retention of consultants.

     10. Entire Agreement. This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, conditions,
representation or warranty, express or implied, not herein set forth shall bind
any party hereto, and no one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledges that,
except as in this

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Amendment Agreement otherwise expressly stated, no
representations, warranties or commitments, express or implied, have been made
by any other party to the other. None of the terms or conditions of this
Amendment Agreement may be changed, modified, waived or canceled orally or
otherwise, except by writing, in the manner provided in the Agreement,
specifying such change, modification, waiver or cancellation of such terms or
conditions, or of any proceeding or succeeding breach thereof.

     11. Full Force and Effect of Agreement. Except as hereby specifically
amended, modified or supplemented, the Agreement and all of the other Loan
Documents are hereby confirmed and ratified in all respects and shall remain in
full force and effect according to their respective terms.

[Remainder of page intentionally left blank.]

4

 

     IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed by their duly authorized officers, all as of the
day and year first above written.

	 	 	 	 	 	 	 
	 	 	 	 	BORROWER:
	 	 	 	 	 	 	 
	 	 	 	 	INSTEEL INDUSTRIES, INC.
	 	 	 	 	 	 	 
	WITNESS:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	/s/ Gary D. Kniskern	 	By:	 	/s/ Michael C. Gazmarian
	
 	 	 	 	
 
	Print Name:	 	
Gary D. Kniskern

	 	Name:

Title:
	 	Michael C. Gazmarian

CFO and Treasurer

	 	 	 	 	 	 	 
	/s/ Sheila M. Spencer	 	 	 	 
	
 	 	 	 	 
	Print Name:	 	
Sheila M. Spencer

	 	 	 	 

5

 

GUARANTORS:

INSTEEL WIRE PRODUCTS COMPANY

INTERCONTINENTAL METALS CORPORATION

	 	 	 	 	 	 	 
	BORROWER:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	INSTEEL INDUSTRIES, INC.
	 	 	 	 	 	 	 
	WITNESS:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	/s/ Gary D. Kniskern	 	By:	 	/s/ Michael C. Gazmarian
	
 	 	 	 	
 
	Print Name:	 	
Gary D. Kniskern

	 	Name:

Title:
	 	Michael C. Gazmarian

CFO and Treasurer

	 	 	 	 	 	 	 
	/s/ Sheila M. Spencer	 	 	 	 
	
 	 	 	 	 
	Print Name:	 	
Sheila M. Spencer

	 	 	 	 

6

 

	 	 	 	 	 	 	 
	 	 	 	 	BANK OF AMERICA, N.A.,

as Agent for the Lenders
	 	 	 	 	By:
	 	/s/ Laura B. Schmuck

	 	 	 	 	Name:

Title:
	 	Laura B. Schmuck

Assistant Vice President

	 	 	 	 	BANK OF AMERICA, N.A.,

as a Lender
	 	 	 	 	By:
	 	/s/ John P. McDuffie

	 	 	 	 	Name:

Title:
	 	John P. McDuffie

Senior Vice President

	 	 	 	 	BANC OF AMERICA STRATEGIC

SOLUTIONS, INC., as a Lender
	 	 	 	 	By:
	 	/s/ David H. Strickert

	 	 	 	 	Name:
	 	David H. Strickert

7

 

	 	 	 	 	 	 	 
	 	 	 	 	BRANCH BANKING AND TRUST COMPANY
	 	 	 	 	By:
	 	/s/ Richard C.F. Spencer

	 	 	 	 	Name:

Title:
	 	Richard C.F. Spencer

Senior Vice President

8

 

	 	 	 	 	 	 	 
	 	 	 	 	WACHOVIA BANK, NATIONAL ASSOCIATION,
	 	 	 	 	By:
	 	/s/ Elizabeth D. Morris

	 	 	 	 	Name:

Title:
	 	Elizabeth D. Morris

Director

9

 

	 	 	 	 	 	 	 
	 	 	 	 	PNC BANK, N.A., as successor in interest to

National Bank of Canada, a Canadian chartered bank
	 	 	 	 	By:
	 	/s/ Robert T. Orzechowski

	 	 	 	 	Name:

Title:
	 	Robert T. Orzechowski

Assistant Vice President

10

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