Document:

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                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT (together with all exhibits hereto, the "Agreement"),
made as of the 1st day of December, 2001, between B.W. Elliott Manufacturing
Co., LLC, a Delaware limited liability company (the "Company"), having its
executive offices and principal place of business in Binghampton, New York, and
George M. Scherer, the undersigned individual ("Executive").

         WHEREAS, the successor to the Company and Executive entered into an
Employment Agreement, dated January 16, 1996, as amended on March 15, 1996 and
February 19, 1998 (the "Prior Agreement"); and

         WHEREAS, the Company and Executive wish to enter into a new employment
agreement to replace the Prior Agreement.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements set forth herein, the Company and Executive agree as
follows:

         1.       Agreement Term.

                  The term of this Agreement shall be the period ("Agreement
Term") commencing on the date hereof (the "Employment Date") and ending on the
fifth (5th) anniversary of the date hereof, unless sooner terminated by either
party upon one (1) year's prior written notice ("Voluntary Termination") or
pursuant to the provisions of Section 5 hereof.

         2.       Employment.

                  (a) Employment by the Company. Executive agrees to be employed
by the Company for the Agreement Term upon the terms and subject to the
conditions set forth in this Agreement. Executive shall have the title of
President, and report to the Board of Directors of the Company (the "Board").
Executive shall have such duties as may be prescribed by the Company and shall
serve in such other and/or additional position(s) as the Company may determine
from time to time. If so requested, and for no additional consideration,
Executive will serve as a member of the Board or any affiliate.

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                  (b) Performance of Duties. Throughout the Agreement Term,
Executive shall faithfully and diligently perform Executive's duties in
conformity with the directions of the Company and serve the Company to the best
of Executive's ability. Executive shall devote Executive's entire working time,
attention and energies to the business and affairs of the Company, subject to
vacations and sick leave as provided herein and in accordance with Company
policy.
                  (c) Place of Performance. During the Agreement Term, Executive
shall, subject to travel requirements on behalf of the Company, be based at the
Company's offices in Binghampton, New York and, in this regard, Executive shall
maintain Executive's personal residence in such city or such other location
within reasonable access to Executive's place of employment.

         3.       Compensation and Benefits.

                  (a) Base Salary. The Company agrees to pay to Executive for
employment hereunder a base salary ("Base Salary") at the annual rate of
$254,000, based on the calendar year.

                  (b) Bonus. Executive shall be eligible for an annual cash
bonus to be paid within thirty (30) days after the annual audited financial
statements of the Company are delivered to the Company by the Company's
accountants. Such bonus shall be based on a formula set forth on Exhibit A
hereto with respect to Adjusted EBITDA Targets as set forth on such exhibit. As
used in this Agreement, "Adjusted EBITDA" means net income as set forth on such
financial statements, plus interest, taxes, depreciation, amortization, and any
bonuses and management fees. The Adjusted EBITDA Targets shall be reasonably
adjusted by the Board for any prospective acquisitions.

                  (c) Benefits and Perquisites. Executive shall be entitled to
participate in, to the extent Executive is otherwise eligible under the terms
thereof, the benefit plans and programs, including medical and vacation plans,
and receive the benefits and perquisites, generally provided to employees of the
same level and responsibility as Executive. Nothing in this Agreement shall
preclude the Company from terminating or amending from time to time any employee
benefit plan or program.

                  (d) Travel and Business Expenses. Upon submission of itemized
expense statements in the manner specified by the Company, Executive shall be
entitled to reimbursement for reasonable travel and other reasonable business
expenses duly incurred by Executive in the performance of Executive's duties
under this Agreement in accordance with the policies and procedures established
by the Company from time to time for employees of the same level and
responsibility as Executive.

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                  (e) Car Allowance. The Company will provide to Executive the
full-time use of one (1) Company-owned or leased automobile, including all
insurance, fuel, maintenance, repair and related costs.

                  (f) Life Insurance. A personal term life insurance policy in
the amount (death benefit) of at least $50,000. Such policy to be assigned to
the Executive, without cost, upon cancellation of his employment.

                  (g) No Other Compensation or Benefits; Payment. The
compensation and benefits specified in Sections 3 and 5 hereof shall be in lieu
of any and all other compensation and benefits. Payment of all compensation and
benefits to Executive hereunder shall be made in accordance with the relevant
Company policies in effect from time to time, including normal payroll
practices, and shall be subject to all applicable employment and withholding
taxes.
                  (h) Cessation of Employment. In the event Executive shall
cease to be employed by the Company for any reason, Executive's compensation and
benefits shall cease on the date of such event, except as otherwise provided
herein or in any applicable employee benefit plan or program.

         4.       Exclusive Employment; Noncompetition.

                  (a) No Conflict; No Other Employment. During the period of
Executive's employment with the Company, Executive shall not: (i) engage in any
activity which conflicts or interferes with or derogates from the performance of
Executive's duties hereunder nor shall Executive engage in any other business
activity, whether or not such business activity is pursued for gain or profit,
except as approved in advance in writing by the Board; or (ii) accept any other
full-time or substantially full-time employment, whether as an executive or
consultant or in any other capacity, and whether or not compensated therefor.

                  (b) No Competition. Without limiting the generality of the
provisions of Sections 2(b) or 4(a) hereof, during the period of Executive's
employment with the Company, and for a period of three (3) years thereafter but
in no event less than five (5) years from the date of execution of this
Agreement (the "Restricted Period"), Executive shall not, directly or
indirectly, own, manage, operate, join, control, participate in, invest in or
otherwise be connected or associated with, in any manner, including as an
officer, director, employee, partner, member, stockholder, joint venturer,
lender, consultant, advisor, agent, proprietor, trustee or investor, any
Competing Business (as defined below) located in the United States or in any
other location where the Company or any affiliate of the Company which engages
in any business similar to that of the Company or over which Executive exercises
executive or supervisory authority (collectively, the "Companies") operate or
sell their products or services; provided, however, that if Executive's
employment hereunder is terminated by the Company under Section 5(d) below, then
the provisions of this Section 4(b) shall remain in effect only so long as the
Company continues to pay to Executive amounts as severance pursuant to Section
5(d) below.

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                           (i) As used in this Agreement, the term "Competing
         Business" means any business or venture which engages in any business
         or sells or provides products or services that compete or overlap with
         any business in which the Companies engage or contemplate engaging in,
         or the products or services as sold or provided, or as contemplated to
         be sold or provided, by the Companies.

                           (ii) For purposes of this Section 4(b), the term
         "invest" shall not preclude an investment in not more than one percent
         (1%) of the outstanding capital stock of a corporation whose capital
         stock is listed on a national securities exchange or included in the
         NASDAQ Stock Market, so long as Executive does not have the power to
         control or direct the management of, or is not otherwise associated
         with, such corporation.

                  (c) No Solicitation of Employment. During the Restricted
Period, Executive shall not solicit or encourage any employee of any of the
Companies to leave the employ, or cease his or her relationship with, any of the
Companies for any reason, nor employ such an employee in a Competing Business or
any other business.

                  (d) Company Customers. Executive shall not, during the
Restricted Period, directly or indirectly, contact, solicit or do business with
any "customers" (as defined below) of any of the Companies for the purpose of
selling or providing any product or service then sold or provided by any of the
Companies to such customers or proposed to be sold or provided to such customers
during Executive's employment with the Company or at the time of termination of
Executive's employment hereunder.

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                  For the purposes of the provisions of this Section 4(d), the
term "customer" includes any entity that purchased any product or service from
any of the Companies within eight (8) months of the termination of Executive's
employment hereunder, without regard to the reason for such termination. The
term "customer" also includes any former customer or potential customer of any
of the Companies which any of the Companies have solicited within eight (8)
months of such termination for the purpose of selling or providing any product
or service then sold or provided, or then contemplated to be sold or provided,
by any of the Companies.

                  (e) Modification of Covenants. The restrictions against
competition set forth in this Section 4 are considered by the parties to be
reasonable for the purposes of protecting the business of the Companies.
However, if any such restriction is found by any court of competent jurisdiction
to be unenforceable because it extends for too long a period of time or over too
great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of activities
or geographic area as to which it may be enforceable.

         5.       Termination of Employment.

                  (a) Termination. The Company may terminate Executive's
employment for Cause (as defined below) or for any breach of this Agreement, in
which case the provisions of Section 5(b) below shall apply. The Company may
also terminate Executive's employment in the event of Executive's Disability (as
defined below), in which case the provisions of Section 5(c) below shall apply.
If Executive's employment is terminated by reason of Executive's death,
retirement or Voluntary Termination, the provisions of Section 5(b) below shall
apply.
                  (b) Termination for Cause; Termination by Reason of Death or
Retirement or Voluntary Termination. (1) In the event that Executive's
employment hereunder is terminated during the Agreement Term (x) by the Company
for Cause, (y) by reason of Executive's death or retirement or (z) by reason of
Voluntary Termination, then the Company shall pay to Executive, within thirty
(30) days of the date of such termination, only the Base Salary through such
date of termination.

                  (2) For purposes of this Agreement, "Cause" means (i)
conviction of any crime (whether or not involving the Company) constituting a
felony in the jurisdiction involved; (ii) engaging in any act which subjects, or
if generally known would subject, any of the Companies to public ridicule or
embarrassment; (iii) gross neglect or misconduct in the performance of
Executive's duties hereunder; (iv) willful or repeated failure or refusal to
perform such duties as may be relegated to Executive commensurate with
Executive's position; or (v) breach of any provision of this Agreement by
Executive.

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                  (3) In the event the Company desires to terminate Executive's
employment for Cause as defined in clauses (iii), (iv) or (v) of the definition
thereof, the Company shall first attempt to resolve the matter(s) at issue
through a meeting between Executive and the President of Key Components, Inc.,
the indirect parent of the Company ("KCI"). If such meeting fails to resolve the
matter(s), then Executive and the President of KCI will meet with the Board and
attempt to resolve the matter(s). The decision of the Board as to the matter(s)
shall be final and binding on the parties and not subject to review or appeal by
any other person.

                  (c) Disability. If, as a result of Executive's incapacity due
to physical or mental illness, Executive shall have been absent from Executive's
duties hereunder on a full time basis for either (i) ninety (90) days within any
six-month period, or (ii) sixty (60) consecutive days, and within thirty (30)
days after written notice of termination is given shall not have returned to the
performance of Executive's duties hereunder on a full time basis, the Company
may terminate Executive's employment hereunder for "Disability". In the event
that the Company terminates Executive's employment hereunder for Disability, the
Company shall pay to Executive, within thirty (30) days of the date of such
termination, only the Base Salary through such date of termination. During any
period that Executive fails to perform Executive's duties hereunder as a result
of incapacity due to physical or mental illness (a "Disability Period"),
Executive shall continue to receive the compensation and benefits provided by
Section 3 hereof until Executive's employment hereunder is terminated; provided,
however, that the amount of compensation and benefits received by Executive
during the Disability Period shall be reduced by the aggregate amounts, if any,
payable to Executive under disability benefit plans and programs of the Company
or under the Social Security disability insurance program.

                  (d) No Further Liability; Release. Payment made and
performance by the Company in accordance with this Section 5 shall operate to
fully discharge and release the Company and its directors, officers, employees,
subsidiaries, affiliates, members, successors, assigns, agents and
representatives from any further obligation or liability with respect to
Executive's employment and termination of employment. Other than paying
Executive's Base Salary through the date of termination of Executive's
employment and making any severance payment and continuing benefits and
perquisites pursuant to and in accordance with this Section 5 (as applicable),
the Company and its directors, officers, employees, subsidiaries, affiliates,
members, successors, assigns, agents and representatives shall have no further
obligation or liability to Executive or any other person under this Agreement.

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         6.       Confidential Information.

                  (a) Existence of Confidential Information. Each of the
Companies owns and has developed and compiled, and will develop and compile,
certain proprietary technology, know-how and confidential information which have
great value to its business (referred to in this Agreement, collectively, as
"Confidential Information"). Confidential Information includes not only
information disclosed by any of the Companies to Executive, but also information
developed or learned by Executive during the course or as a result of employment
with the Company, which information shall be the property of the Companies.
Confidential Information includes all information that has or could have
commercial value or other utility in the business in which the Companies are
engaged or contemplate engaging, and all information of which the unauthorized
disclosure could be detrimental to the interests of the Companies, whether or
not such information is specifically labeled as Confidential Information by the
Companies. By way of example and without limitation, Confidential Information
includes any and all information developed, obtained, licensed by or to or owned
by any of the Companies concerning trade secrets, techniques, know-how
(including research data, designs, plans, procedures, merchandising, marketing,
distribution and warehousing know-how, processes, and research records),
software, computer programs, and any other intellectual property created, used
or sold (through a license or otherwise) by any of the Companies, product
know-how and processes, innovations, discoveries, improvements, research,
development, test results, reports, specifications, data, formats, marketing
data and plans, business plans, strategies, forecasts, unpublished financial
information, orders, agreements and other forms of documents, price and cost
information, merchandising opportunities, expansion plans, budgets, projections,
customer, supplier, licensee, licensor and subcontractor identities,
characteristics, agreements and operating procedures, and salary, staffing and
employment information.

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                  (b) Protection of Confidential Information. Executive
acknowledges and agrees that in the performance of duties hereunder Executive
develops and acquires, and the Companies disclose to and entrusts Executive
with, Confidential Information which is the exclusive property of the Companies
and which Executive may possess or use only in the performance of duties for the
Company. Executive also acknowledges that Executive is aware that the
unauthorized disclosure of Confidential Information, among other things, may be
prejudicial to the Companies' interests, an invasion of privacy and an improper
disclosure of trade secrets. Executive shall not, directly of indirectly, use,
make available, sell, disclose or otherwise communicate to any corporation,
partnership, individual or other third party, other than in the course of
Executive's assigned duties and for the benefit of the Companies, any
Confidential Information, either during the Agreement Term or thereafter. In the
event Executive desires to publish the results of Executive's work for the
Company or experiences with the Companies through literature, interviews or
speeches, Executive will submit requests for such interviews or such literature
or speeches to the Board at least fourteen (14) days before any anticipated
dissemination of such information for a determination of whether such disclosure
is in the best interests of the Companies, including whether such disclosure may
impair trade secret status or constitute an invasion of privacy. Executive
agrees not to publish, disclose or otherwise disseminate such information
without the prior written approval of the Board.

                  (c) Delivery of Records, Etc. In the event Executive's
employment with the Company ceases for any reason, Executive will not remove
from any of the Companies' premises without such company's prior written consent
any records, notes, notebooks, files, drawings, documents, equipment, materials
and writings received from, created for or belonging to such company, including
those which relate to or contain Confidential Information, or any copies
thereof. Upon request or when employment with the Company terminates, Executive
will immediately deliver the same to the Company.

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         7.       Invention and Patents.

                  (a) Executive will promptly and fully disclose to the Company
any and all inventions, discoveries, trade secrets and improvements, whether or
not patentable or whether or not they are made, conceived or reduced to practice
during working hours or using any of the Companies' data or facilities, which
Executive shall develop, make, conceive or reduce to practice during Executive's
employment with the Company, either solely or jointly with others (collectively,
"Developments"). All such Developments shall be the sole property of the
Companies, and Executive hereby assigns to the Companies, without further
compensation, all his right, title and interest in and to such Developments and
any and all related patents, patent applications, copyrights, copyright
applications, trademarks and trade names in the United States and elsewhere.

                  (b) Executive shall keep and maintain adequate and current
written records of all Developments (in the form of notes, sketches, drawings
and as may be specified by the Company), which records shall be available to and
remain the sole property of the Companies at all times.

                  (c) Executive shall assist the Company in obtaining and
enforcing patent, copyright and other forms of legal protection for the
Developments in any country. Upon request, Executive shall sign all
applications, assignments, instruments and papers and perform all acts necessary
or desired by the Company and to enable the Company its successors, assigns and
nominees, to secure and enjoy the full exclusive benefits and advantages
thereof.

                  (d) Executive understands that Executive's obligations under
this section will continue after the termination of his employment with the
Company and that during his employment Executive shall perform such obligations
without further compensation, except for reimbursement of expenses incurred at
the request of the Company. Executive further understands that if he is not
employed by the Company as an employee at the time he is requested to perform
any obligations under this section, Executive shall receive for such performance
a reasonable per diem fee, as well as reimbursement of any expenses incurred at
the request of the Company.

         8.       Assignment and Transfer.

                  (a) Company. This Agreement shall inure to the benefit of and
be enforceable by, and may be assigned by the Company to, any purchaser of all
or substantially all of the Company's business or assets, any successor to the
Company or any assignee thereof (whether direct or indirect, by purchase,
merger, consolidation or otherwise). The Company will require any such
purchaser, successor or assignee to expressly assume 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 purchase, succession or assignment had taken
place.

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                  (b) Executive. Executive's rights and obligations under this
Agreement shall not be transferable by Executive by assignment or otherwise, and
any purported assignment, transfer or delegation thereof shall be void;
provided, however, that if Executive shall die, all amounts then payable to
Executive hereunder shall be paid in accordance with the terms of this Agreement
to Executive's devisee, legatee or other designee or, if there be no such
designee, to Executive's estate.

         9.       Miscellaneous.

                  (a) Other Obligations. Executive represents and warrants that
he is not a party to any other employment agreement and that neither Executive's
employment with the Company nor Executive's performance of Executive's
obligations hereunder will conflict with or violate or otherwise be inconsistent
with any other agreements to which Executive is or has been a party or with any
other obligations, legal or otherwise, which Executive may have.

                  (b) Nondisclosure; Other Employers. Executive will not
disclose to the Company, or use, or induce the Company to use, any proprietary
information, trade secrets or confidential business information of others.
Executive represents and warrants that Executive has returned all property,
proprietary information, trade secrets and confidential business information
belonging to all prior employers.

                  (c) Cooperation. Following termination of employment with the
Company, Executive shall cooperate with the Company, as requested by the
Company, to affect a transition of Executive's responsibilities and to ensure
that the Company is aware of all matters being handled by Executive.

                  (d) Protection of Reputation. During the Agreement Term and
thereafter, Executive agrees that he will take no action which is intended, or
could reasonably be expected, to harm the Company or its reputation or which
could reasonably be expected to lead to unwanted or unfavorable publicity to the
Company.

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                  (e) Governing Law. This Agreement, including the validity,
interpretation, construction and performance of this Agreement, shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts applicable to agreements made and to be performed in such
commonwealth without regard to such commonwealth's conflicts of law principles.
All actions and proceedings relating directly or indirectly to this Agreement
shall be litigated in any state court or federal court located in New York, New
York. The parties hereto expressly consent to the jurisdiction of any such court
and to venue therein and consent to the service of process in any such action or
proceeding by certified or registered mailing of the summons and complaint
therein directed to Executive at the address as provided in Section 9(l) hereof
and to the Company's designated agent for service of process (which initially
shall be which agent may be changed by the Company upon thirty (30) days' prior
written notice to Executive).

                  (f) Entire Agreement. This Agreement (including the Exhibits
hereto) contains the entire agreement and understanding between the parties
hereto in respect of the subject matter hereof and supersedes, cancels and
annuls any prior or contemporaneous written or oral agreements, understandings,
commitments and practices between them respecting the subject matter hereof,
including all prior employment agreements, if any, between the Company and
Executive, which agreement(s) hereby are terminated and shall be of no further
force or effect.

                  (g) Amendment. This Agreement may be amended only by a writing
which makes express reference to this Agreement as the subject of such amendment
and which is signed by Executive and, on behalf of the Company, by its duly
authorized officer.

                  (h) Severability. If any term, provision, covenant or
condition of this Agreement or part thereof, or the application thereof to any
person, place or circumstance, shall be held to be invalid, unenforceable or
void, the remainder of this Agreement and such term, provision, covenant or
condition shall remain in full force and effect, and any such invalid,
unenforceable or void term, provision, covenant or condition shall be deemed,
without further action on the part of the parties hereto, modified, amended and
limited to the extent necessary to render the same and the remainder of this
Agreement valid, enforceable and lawful. In this regard, Executive acknowledges
that the provisions of Sections 4 and 6 hereof are reasonable and necessary for
the protection of the Company.

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                  (i) Construction. The headings and captions of this Agreement
are provided for convenience only and are intended to have no effect in
construing or interpreting this Agreement. The language in all parts of this
Agreement shall be in all cases construed according to its fair meaning and not
strictly for or against the Company or Executive. The use herein of the word
"including," when following any general provision, sentence, clause, statement,
term or matter, shall be deemed to mean "including, without limitation". As used
herein, "Company" shall mean the Company and its subsidiaries and any purchaser
of, successor to or assignee (whether direct or indirect, by purchase, merger,
consolidation or otherwise) of all or substantially all of the Company's
business or assets which is obligated to perform this Agreement by operation of
law, agreement, pursuant to Section 8 hereof or otherwise. As used herein, the
words "day" or "days" shall mean a calendar day or days.

                  (j) Nonwaiver. Neither any course of dealing nor any failure
or neglect of either party hereto in any instance to exercise any right, power
or privilege hereunder or under law shall constitute a waiver of any other
right, power or privilege or of the same right, power or privilege in any other
instance. All waivers by either party hereto must be contained in a written
instrument signed by the party to be charged and, in the case of the Company, by
its duly authorized officer.

                  (k) Remedies for Breach. The parties hereto agree that
Executive is obligated under this Agreement to render personal services during
the Agreement Term of a special, unique, unusual, extraordinary and intellectual
character, thereby giving this Agreement peculiar value, and, in the event of a
breach or threatened breach of any covenant of Executive herein, the injury or
imminent injury to the value and the goodwill of the Company's business could
not be reasonably or adequately compensated in damages in an action at law.
Accordingly, Executive expressly acknowledges that the Company shall be entitled
to specific performance, injunctive relief or any other equitable remedy against
Executive, without the posting of a bond, in the event of any breach or
threatened breach of any provision of this Agreement by Executive (including
Sections 4 and 6 hereof). Without limiting the generality of the foregoing, if
Executive breaches Sections 4 or 6 hereof, such breach will entitle the Company
to enjoin Executive from disclosing any Confidential Information to any
Competing Business, to enjoin such Competing Business from receiving Executive
or using any such Confidential Information and/or to enjoin Executive from
rendering personal services to or in connection with such Competing Business.
The rights and remedies of the parties hereto are cumulative and shall not be
exclusive, and each such party shall be entitled to pursue all legal and
equitable rights and remedies and to secure performance of the obligations and
duties of the other under this Agreement, and the enforcement of one or more of
such rights and remedies by a party shall in no way preclude such party from
pursuing, at the same time or subsequently, any and all other rights and
remedies available to it.

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                  (l) Notices. Any notice, request, consent or approval required
or permitted to be given under this Agreement or pursuant to law shall be
sufficient if in writing, and if and when sent by certified or registered mail,
return receipt requested, with postage prepaid, to Executive's residence (as
reflected in the Company's records or as otherwise designated by Executive on
thirty (30) days' prior written notice to the Company) or to the Company's
principal executive office, attention: Alan L. Rivera, as the case may be. All
such notices, requests, consents and approvals shall be effective upon being
deposited in the United States mail. However, the time period in which a
response thereto must be given shall commence to run from the date of receipt on
the return receipt of the notice, request, consent or approval by the addressee
thereof. Rejection or other refusal to accept, or the inability to deliver
because of changed address of which no notice was given as provided herein,
shall be deemed to be receipt of the notice, request, consent or approval sent.

                  (m) Assistance in Proceedings, Etc. Executive shall, without
additional compensation, during and after expiration of the Agreement Term, upon
reasonable notice, furnish such information and proper assistance to the Company
as may reasonably be required by the Company in connection with any legal or
quasi-legal proceeding, including any external or internal investigation,
involving the Company or any of its affiliates or in which any of them is, or
may become, a party.

                  (n) Survival. Cessation or termination of Executive's
employment with the Company shall not result in termination of this Agreement.
The respective obligations of Executive and rights and benefits afforded to the
Company as provided in this Agreement shall survive cessation or termination of
Executive's employment hereunder. This Agreement shall not terminate upon, and
shall remain in full force and effect following, expiration of the Agreement
Term and all rights and obligations of the parties hereto as and to the extent
provided herein shall survive such expiration.

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         IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed on its behalf by an officer thereunto duly authorized and Executive has
duly executed this Agreement, all as of the date and year first written above.

                                            B.W. Elliott Manufacturing Co., LLC

                                            By: /s/ Robert B. Kay
                                                --------------------------------
                                                Name:  Robert B. Kay
                                                Title: President

                                            /s/ George Scherer
                                            ------------------------------------
                                            George Scherer

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                                    Exhibit A

For Year Ending 12/31/01:

Adjusted EBITDA Targets                                     Bonus(1)
-----------------------                                     --------

$6,000,000                                                  $15,000

$6,300,000                                                  $30,000

$6,750,000                                                  $40,000

Greater than $7,000,000                                     $50,000

Lower than $6,000,000                                       $0

For Years Ending 12/31/02 and beyond, the bonus will be based on achieving
Adjusted EBITDA Targets approved by the President of KCI. The schedule for each
year's bonus plan will be submitted to Executive after the final budget is
approved.

----------
(1)      Bonuses shall be prorated to the extent that the Adjusted EBITDA falls
         within the Adjusted EBITDA Target numbers, except for Adjusted EBITDA
         below $6 Million in which case, as provided above, the bonus is $0.Employment agreement

EMPLOYMENT AGREEMENT

BETWEEN

DEREK BURNEY

AND

COREL CORPORATION

MADE AS OF OCTOBER 17, 2001

EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of October 17, 2001;

B E T W E E N:                            

COREL CORPORATION 

(the "Corporation")

OF THE FIRST PART,

- and -

DEREK BURNEY

(the "Executive")

OF THE SECOND PART.

WHEREAS the Executive has been employed with the Corporation since April 4, 1993 in
a variety of capacities, having been appointed as Interim Chief Executive Officer on August 15,
2000 and appointed Chief Executive Officer on October 2, 2000; 

AND Whereas the Executive and the Corporation wish to formalize the terms and
conditions of the Executive's employment as CEO with the Corporation;

THIS AGREEMENT WITNESSES that in consideration of the covenants and
agreements contained in this Agreement, the parties agree as follows:

ARTICLE 1 - DEFINITIONS

1.1   Board

"Board" means the board of directors of the Corporation.

1.2   Change of Control

"Change of Control" means any change whereby less than one-half of the directors of
the Corporation are persons who were directors twelve (12) months previously, unless the
continuing directors and the Executive agree and the directors, by resolution, confirm that there
has been no change of control.

1.3   Confidential Information

"Confidential Information" means confidential information of the Corporation,
including trade secrets, customer lists and other confidential information concerning the business
and affairs of the Corporation.

1.4   Date of Termination

"Date of Termination" means the date on which a proper Notice of Termination
is given to or by the Executive.

1.5   Good Reason

"Good Reason" means:

(a)    the Corporation and its subsidiaries, taken as a whole, cease to operate as a
going concern;

(b)    any action by the Corporation without the Executive's consent that
constitutes constructive termination of the Executive's employment with
the Corporation, including (i) any material reduction in the Executive's
offices, titles, reporting relationships, powers, authority, duties or
responsibilities; (ii) any reduction in the Executive's base salary; and (iii)
any material reduction in the value of the Executive's employee group
insurance or health benefit plans and programmes;

(c)    the Corporation fails to pay, when due, any amount payable by it to the
Executive pursuant to this Agreement;

(d)    a Change of Control (provided that a Change of Control will cease to be
Good Reason six (6) months after the Executive first becomes aware of the
Change of Control); or

(e)    any term of the Executive's employment with the Corporation is changed
without the Executive's consent in any proceedings under any bankruptcy,
reorganization, arrangement, dissolution, winding-up or liquidation statute
or law of any jurisdiction, including the Companies' Creditors
Arrangement Act (Canada).

1.6   Permanent Disability

"Permanent Disability" means the Executive's absence from his duties with the
Corporation on a full time basis for more than six (6) consecutive months as a result of the
Executive's incapacity due to physical or mental illness.

1.7   Severance Period

"Severance Period" means a period of eighteen (18) months from the Date of
Termination, such period to increase by one month for every four (4) months the Executive
serves as CEO after June 1, 2001 and such period not to exceed twenty-four (24) months in total.

1.8   Subsidiary

"Subsidiary" has the meaning ascribed to it in the Business Corporations Act.

ARTICLE 2 - EMPLOYMENT

2.1   Employment

Subject to the terms and conditions of this Agreement, the Corporation will
employ the Executive in the office of Chief Executive Officer and the Executive will have the
powers and authority to perform the duties and functions of the chief executive officer of a
corporation, subject always to the control and direction of the Board. In performing such duties
and functions, the Executive will have direction and control over all other officers and employees
of the Corporation. 

2.2   Review

The Executive and Corporation agree that they will review the terms and
conditions of the Executive's employment every three (3) years and recommend changes, if any,
to this Agreement, subject to Section 7.9.

2.3   Place of Employment

The Executive will perform his work and services for the Corporation primarily at
its head office in Ottawa.  The Executive acknowledges that the board of directors has the
discretion to change the location of the head office of the Corporation, in which case the
Executive will be required to relocate.  In the event that the Executive agrees to relocate, all
expenses incurred by the Executive and his family will be fully reimbursed. In the event that the
board of directors decides to move the location of the head office more than 100  kilometres
away from Ottawa and the Executive refuses to relocate and other mutually acceptable terms and
conditions for continued employment are not agreed to, the Executive's employment will be
terminated and he will be entitled to the payments provided for under section 5.3.  The Executive
acknowledges that the performance of his duties and functions will necessitate frequent travel to
other places.

ARTICLE 3 - REMUNERATION AND
BENEFITS

3.1   Base Salary

The Corporation will pay the Executive an annual base salary of $350,000.00,
retroactive to the date of his appointment as Interim CEO on August 15, 2000.  The Executive's
base salary will be reviewed annually following completion of the Corporation's financial year
ending November 30, 2001, by the Compensation Committee of the board of directors at the time
of the review of compensation for members of the Executive Management Team or other senior
management employees of the Corporation.

3.2   Benefits

The Executive will be entitled to participate in all health, disability, death, pension
and other employee benefit plans and programmes of the Corporation in effect from time to time
in accordance with their terms. 

3.3   Incentive Plans

The Corporation shall pay the Executive an annual bonus if the Corporation
achieves certain revenue, pre-tax operating income and/or development or other targets to be
agreed each year in advance by the board of directors and the Executive.  If one hundred percent
(100%) of the objectives set for a given year are attained, the Executive shall be entitled to a
bonus in the amount of forty-five percent (45%) of his annual base salary.  The amount of bonus,
if any, to which the Executive will be entitled for attaining a lesser percentage of objectives will
be determined by the board of directors.

3.4   Stock Option Plans

The Executive will be eligible for a grant of options, at the discretion of the board
of directors, in accordance with the policy and practice in place for other senior executives of the
Corporation and in accordance with the terms and conditions of the stock option plan in place for
senior executives of the Corporation.

3.5   Vacation

The Executive will be entitled to paid vacation each year in accordance with the
policy and practice in place for other senior executives of the Corporation.  The Executive will
take his vacation at a time or times reasonable for each of the Corporation and the Executive in
the circumstances. 

3.6   Expenses

The Corporation will reimburse the Executive for all reasonable out-of-pocket
expenses properly incurred by him in the course of the Executive's employment with the
Corporation.  The Executive will provide the Corporation with appropriate statements and
receipts verifying such expenses.

3.7   Automobile

The Executive will be entitled to an automobile allowance consistent with that
offered by the Corporation to its senior executives from time to time. 

3.8   Parking

The Corporation will pay for a parking space for the Executive at its place of
business.

3.9   Supplementary Pension Benefit

The Executive will be eligible for enrolment in the pension plan, if any, available
to other senior executives of the Corporation and on the same terms and conditions applicable to
other senior executives of the Corporation, subject to the condition that the Executive's
compensation, as set out in Section 3.1, was determined on the assumption that any pension
contributions made on behalf of the Executive will not result in contribution in excess of current
RRSP contribution limits.  The Executive acknowledges that the Corporation is currently
reviewing the feasibility of a corporate pension plan and no decision has been made, as of this
date, on the availability of a plan for company employees and executives. 

3.10  Membership
Fees

The Corporation agrees to reimburse the Executive for the cost of a membership
at the Rideau Club in Ottawa, for such time as he remains in the position of CEO of the
Corporation, including any minimum use fees which are not otherwise claimed by the Executive
pursuant to Section 3.6.

3.11         Legal Fees

        The Corporation will reimburse the Executive for legal fees incurred for the
review of this Agreement, to a maximum of $2,000.00.

ARTICLE 4 -  EXECUTIVE'S COVENANTS

4.1  Full Time
Service

The Executive will devote all of his time, attention and effort to the business and
affairs of the Corporation and its subsidiaries and will well and faithfully serve the Corporation
and its subsidiaries and will use his best efforts to promote the interests of the Corporation and its
subsidiaries.

4.2  Duties and
Responsibilities

The Executive will duly and diligently perform all the duties assigned to him and
commensurate with his CEO position while in the employ of the Corporation, and will truly and
faithfully account for and deliver to the Corporation all money, securities and things of value
belonging to the Corporation which the Executive may from time to time receive for, from or on
account of the Corporation.

4.3  Rules and
Regulations

The Executive will be bound by and will faithfully observe and abide by all the
rules and regulations of the Corporation from time to time in force which are brought to his
notice or of which he should reasonably be aware.

4.4  Confidential
Information

(a)   The Executive acknowledges that, by reason of his
employment with the
Corporation, he will have access to Confidential Information.  The
Executive agrees that, during and after his employment with the
Corporation, he will not disclose to any person, except in the proper
course of his employment with the Corporation, or use for his own
purposes or for any purposes other than those of the Corporation, any
Confidential Information acquired by him.

(b)   Any breach of Section 4.4(a) by the Executive will result in material and
irreparable harm to the Corporation although it may be difficult for the
Corporation to establish the monetary value flowing from such harm.  The
Executive therefore agrees that the Corporation, in addition to being
entitled to the monetary damages which flow from the breach, will be
entitled to injunctive relief in a court of appropriate jurisdiction in the
event of any breach by the Executive of Section 4.4(a). In addition, the
Corporation will be relieved of any further obligation to make any
payments to the Executive or provide him with any benefits as outlined in
Section 5.3, except those in Sections 5.3(a)(i) and 5.3(a)(ii), in the event of
a breach by the Executive of Section 4.4(a).

ARTICLE 5 - TERMINATION

5.1  Termination by the
Corporation

The Corporation may terminate the Executive's employment with the Corporation
at any time by giving a Notice of Termination to the Executive.

5.2  Termination by the Executive

The Executive may terminate his employment with the Corporation at any time by
giving 30 days' Notice of Termination to the Corporation.

5.3 Payments on Termination Without Cause or for Good Reason

(a)   If the Executive's employment with the Corporation is
terminated by the
Corporation pursuant to Section 5.1 for any reason other than cause or
Permanent Disability, or is terminated by the Executive pursuant to
Section 5.2 for Good Reason, and subject to and conditional upon the
Executive complying with the provisions of Article 6, the Corporation
will:

(i)   pay to the Executive an amount equal to the salary
earned by him
up to the Date of Termination and any outstanding vacation pay
calculated as of such Date;

(ii)  reimburse the Executive in accordance with Section 3.6
for any
expenses incurred by him up to and including the Date of
Termination;

(iii) subject to Sections 5.3(b) and (c), pay to the Executive
an amount
equivalent to the salary that would have been payable to him, on
the basis of Section 3.1, for the Severance Period, such payment to
be made as a lump sum payment equivalent to twelve months'
salary immediately upon termination of employment, with the
remaining amount to be paid within twelve (12) months of the Date
of Termination at such times as the board of directors shall
determine in its discretion, but in such amounts and at such times
as shall be not less than equal monthly installments and not more
than twelve (12) such installments commencing thirty (30) days
following the Date of Termination;

(iv)  maintain the Executive's benefits referred to in Section 3.2 for the
Severance Period or, if that is not possible, pay to the Executive an
amount equal to the cost of such benefits to the Corporation,
grossed up so that the after tax value of the payments is equal to
the cost of the benefits to the Corporation;

(v)   give the Executive credit under the Corporation's pension plan for
an additional period of service with the Corporation equal to the
Severance Period or, if that is not possible, pay to the Executive an
amount equal to the then present value of the benefits under the
Corporation's pension plan attributable to such service, grossed up
so that the after tax value of the payments is equal to then present
value of the benefits;

(vi)  pay to the Executive an amount equivalent to the amount that
would have been payable to him under incentive plans for the
Severance Period, such amount to be calculated as a percentage of
base salary at the Date of Termination, the percentage to be an
average of the percentages used to calculate the Executive's
incentive payment in the preceding two years;

(vii) permit the Executive to exercise at any time within six
(6) months
from the Date of Termination all options granted to the Executive
on or after October 1, 2001 that would otherwise vest during the
Severance Period and permit the Executive to exercise all other
options vested on the Date of Termination within 30 days of the
Date of Termination;

        (viii)    continue the automobile arrangements outlined in Section 3.7 for
the Severance Period.

(ix)  pay during the Severance Period the membership fees at Rideau
Club pursuant to Section 3.10 of this Agreement.

(b)   Notwithstanding the foregoing, the payments contemplated
by Section
5.3(a)(iii), excluding the lump sum payment described therein, will be
reduced by fifty per cent (50%) during any period when the Executive has
obtained alternate employment or has otherwise mitigated any damages
arising from the termination of his employment. The Executive has a duty
to mitigate his damages and will promptly notify the Corporation of such
employment or mitigation.

(c)   Notwithstanding Section 5.3(a)(iii), in the event there is a Change of
Control, the Corporation will pay to the Executive an amount equivalent to
the twenty-four (24) months' salary, on the basis of Section 3.1, such
entire payment to be made immediately as a lump sum payment, together
with such other payments to which the Executive is entitled pursuant to
Section 5.3(a)(i) to (ix).

(d)   The parties agree that the provisions of Section 5.3 are fair and reasonable
and that the amounts payable by the Corporation to the Executive or for
his benefit pursuant to Section 5.3 are reasonable estimates of the damages
which will be suffered by the Executive in the event of the termination of
his employment with the Corporation in the circumstances set out in this
Section 5.3 and will not be construed as a penalty and such payments will
be deemed to include all termination pay and severance pay owing to the
Executive pursuant to the Employment Standards Act (Ontario) in respect
of the termination of his employment.

(e)   The parties agree that the payments under Section 5.3(a)(ii) or 5.3(c) will
be deemed to include all termination pay and severance pay owing to the
Executive pursuant to the Employment Standards Act (Ontario) in respect
of the termination of his employment.

5.4  Payments on Termination by Corporation for Cause or by Reason of
Permanent Disability or on Termination by the Executive Without Good
Reason

(a)   If the Executive's employment with the Corporation is
terminated by the
Corporation pursuant to Section 5.1 for cause or by reason of Permanent
Disability, or if such employment is terminated by the Executive pursuant
to Section 5.2 without Good Reason, the Corporation will:

(i)   pay to the Executive an amount equal to the salary
earned by him
up to the Date of Termination and any outstanding vacation pay
calculated as of such date;

(ii)  reimburse the Executive in accordance with Section 3.6
for any
expenses incurred by him up to and including the Date of
Termination;

(iii) pay to the Executive any amounts owing to him under the incentive
plans  in accordance with the terms of such Plans and based on
service up to the Date of Termination but not after the Date of
Termination; and

(iv)  arrange for the Executive to receive any pension benefits to which
he is entitled pursuant to the Corporation's pension plan. 

(b)   If the Executive's employment with the Corporation is terminated by the
Corporation pursuant to Section 5.1 by reason of Permanent Disability, the
Corporation will:

(i)   continue to pay to the Executive an amount equal to his salary at
the rate in effect immediately prior to such termination for the
balance, if any, of the applicable waiting period for long term
disability  benefits stipulated in the Corporation's long term
disability plan (the "Waiting Period");

(ii)  maintain during the Waiting Period and during any period in which
the Executive is receiving long term disability benefits pursuant to
the Corporation's long term disability plan (the "Long Term
Disability Period") those of the Executive's benefits referred to in
Section 3.2 which are normally continued for the Corporation's
employees who are in receipt of either short term disability
benefits or long term disability benefits; and

(iii) give the Executive credit under the Corporation's pension plan for
an additional period of service with the Corporation equal to the
Waiting Period and the Long Term Disability Period;

(iv)  permit the Executive or his legal representative to exercise at any
time within six (6) months from the Date of Disability all options
granted to the Executive on or after October 1, 2001 and held by
the Executive at the Date of Termination that have vested on the
Date of Termination or would otherwise vest during the twelve
month period following the Date of Termination and permit the
Executive or his legal representative to exercise all other options
vested on the Date of Disability within such six (6) months period;

(c)    The Executive and the Corporation agree that the termination of the
Executive's employment by the Corporation by reason of Permanent
Disability is not contrary to the Ontario Human Rights Code and that
further accommodation would be undue hardship on the Corporation.

5.5   Payments on Death of the
Executive

  (a)  if the Executive's employment with the Corporation is terminated by
death, the Corporation will:

       (i)  pay to the Executive an amount equal to the salary earned by him
up to the Date of Death and any outstanding vacation pay
calculated as of such date;

       (ii) reimburse in accordance with Section 3.6 for any expenses
incurred by him up to and including the Date of Death;

       (iii)     pay to the Executive any amounts owing to him under the incentive
plans  in accordance with the terms of such Plans and based on
service up to the Date of Death but not after the Date of Death; 

       (iv) arrange for the Executive to receive any pension benefits to which
he is entitled pursuant to the Corporation's pension plan; and

       (v)  permit the legal representative of the Executive to exercise at any
time within six (6) months from the Date of Death all options
granted to the Executive on or after October 1, 2001 and held by
the Executive at the Date of Death that have vested on the Date of
Death or would otherwise vest during the six (6) months period
following the Date of Death and permit the legal representative of
the Executive to exercise all other options vested on the Date of
Death within twelve (12) months of the Date of Death;

5.6    Return of Property

Subject to Section 5.3(a)(viii), upon any termination of his employment with the
Corporation, the Executive will deliver or cause to be delivered to the Corporation promptly all
books, documents, money, securities or other properties of the Corporation that are in the
possession, charge, control or custody of the Executive.

5.7   No Termination
Claims

Upon any termination of the Executive's employment by the Corporation in
compliance with this Agreement or upon any termination of the Executive's employment by the
Executive, the Executive will have no action, cause of action, claim or demand against the
Corporation, any related or associated corporations or any other person as a consequence of such
termination.

5.8   Resignation as Director and
Officer

Upon any termination of the Executive's employment under this Agreement, the
Executive will sign forms of resignation indicating his resignation as a director and officer of the
Corporation, if applicable.

5.9   Provisions which Operate Following
Termination

Notwithstanding any termination of the Executive's employment under this
Agreement for any reason whatsoever and with or without cause, the provisions of Sections 4.4,
5.3, 5.4, 5.5, 5.6, 5.7, 6.1, 6.2 and 6.3 of this Agreement and any other provisions of this
Agreement necessary to give efficacy thereto will continue in full force and effect following such
termination.

ARTICLE 6 - NON-COMPETITION AND
NON-SOLICITATION

6.1   Non-Competition

(a)    The Executive will not, without the prior written consent of the
Corporation, at any time for a period of (i) six (6) months following the
termination of the Executive's employment under this Agreement for cause
or (ii) the end of the Severance Period if terminated without cause, either
individually or in partnership or jointly or in conjunction with any person
as principal, agent, employee, shareholder (other than a holding of shares
listed on a Canadian or United States stock exchange that does not exceed
5% of the outstanding shares so listed) or in any other manner whatsoever
carry on or be engaged in or be concerned with or interested in or advise,
lend money to, guarantee the debts or obligations of or permit his name or
any part of his name to be used or employed by any person engaged in or
concerned with or interested in within North America, (i) a business which
is competitive with any business carried on by the Corporation during the
term of employment or during any Severance Period, or (ii) following
termination of the Executive's employment under this Agreement for
cause, a business which is competitive with any business carried on by the
Corporation at the date of such termination.

(b)    The Executive confirms that all restrictions in Section 6.1(a) are
reasonable and valid and that the Executive waives all defences to the
strict enforcement of such restrictions by the Corporation.

6.2   Non-Solicitation

(a)    The Executive will not, without the prior consent of the Corporation,
during the term of his employment or at any time for a period of twelve
(12) months following the termination of the Executive's employment
under the Agreement for whatever reason and with or without cause, either
individually, or in partnership, or jointly, or in conjunction with any
person as principal, agent, employee or shareholder (other than a holding
of shares listed on a Canadian or United States stock exchange that does
not exceed 5% of the outstanding shares so listed) or in any other manner
whatsoever on his own behalf or on behalf of anyone competing or
endeavouring to compete with the Corporation, directly or indirectly
solicit, or gain the custom of, interfere with or endeavour to entice away
from the Corporation any person who:

(i)    is a client of the Corporation at the Date of Termination for
whatever reason of this Agreement and with whom the Executive
dealt during the Executive's employment;

(ii)   was a client of the Corporation at any time during the Executive's
employment at the Corporation and with whom the Executive dealt
during the Executive's employment; or

(iii)  has been pursued as a prospective client by or on behalf of the
Corporation at any time within twelve (12) months prior to the
Date of Termination of this Agreement for whatever reason and in
respect of whom the Corporation has not determined to cease all
such pursuit.

(b)    The Executive confirms that all restrictions in Section 6.2(a) are
reasonable and valid and that the Executive waives all defences to the
strict enforcement of such restrictions in Section 6.2(a) by the
Corporation.

(c)    Sections 6.2(a)(i),(ii) and (iii) are each separate and distinct covenants,
severable one from the other and if any such covenant or covenants are
determined to be invalid or unenforceable, such invalidity or
unenforceability will attach only to the covenant or covenants as
determined and all other such covenants will continue in full force and
effect.

(d)    The Executive, for a period of twelve (12) months following the
termination of the Executive's employment under the Agreement for
whatever reason and with or without cause, will not interfere with or
entice away any person who is an employee of the Corporation at the Date
of Termination of this Agreement for whatever reason.

6.3   Breach

Any breach of the provisions of Sections 6.1(a), 6.2(a), or 6.2(d) by the Executive
will result in material and irreparable harm to the Corporation although it may be difficult for the
Corporation to establish the monetary value flowing from such harm.  The Executive therefore
agrees that the Corporation, in addition to being entitled to the monetary damages which flow
from the breach, will be entitled to injunctive relief in a court of appropriate jurisdiction in the
event of any breach or threatened breach by the Executive of any of the provisions of Sections
6.1(a), 6.2(a) or 6.2(d).  In addition, the Corporation will be relieved of any further obligations to
make any payments to the Executive or provide him with any benefits as outlined in Section 5.3,
except those in Section 5.3(a)(i) and 5.3(a)(ii), in the event of a breach by the Executive of any of
the provisions of Sections 6.1(a), 6.2(a) or 6.2(d)

ARTICLE 7 - GENERAL

7.1   Notices

Any demand, notice or other communication ("Communication") to be given in
connection with this Agreement will be given in writing by personal delivery, by registered mail
or by electronic means of communication addressed to the recipient as follows:

To the Corporation:

  1600 Carling Avenue

               Ottawa, ON  K1Z 8R7

  Attention: Chairman

To the Executive:

  23 Wendell Avenue

            Stittsville, ON K2S 1G8  

or such other address, individual or electronic communication number as may be designated by
notice given by either party to the other.  Any Communication given by personal delivery will be
conclusively deemed to have been given on the day of actual delivery of the Communication and,
if given by registered mail, on the third day, other than a Saturday, Sunday or statutory holiday in
Ontario, following the deposit of the Communication in the mail and, if given by electronic
communication, on the day of transmittal of the Communication if given during the normal
business hours of the recipient and on the business day during which such normal business hours
next occur if not given during such hours on any day.  If the party giving any Communication
knows or ought reasonably to know of any difficulties with the postal system which might affect
the delivery of mail, any such Communication may not be mailed but must be given by personal
delivery or by electronic communication.

7.2   Time of Essence

Time will be of the essence of this Agreement.

7.3   Deductions

The Corporation will deduct all statutory deductions from any amounts to be paid
to the Executive under this Agreement.

7.4   Sections and Headings

The division of this Agreement into Articles and Sections and the insertion of
headings are for the convenience of reference only and will not affect the construction or
interpretation of this Agreement.  The terms "this Agreement", "hereof", "hereunder" and similar
expressions refer to this Agreement and not to any particular Article, Section or other portion
hereof and include any agreement or instrument supplemental or ancillary hereto.  Unless
something in the subject matter or context is inconsistent therewith, references herein to Articles
and Sections are to Articles and Sections of this Agreement.

7.5   Number

In this Agreement words importing the singular number only will include the
plural and vice versa and words importing the masculine gender will include the feminine and
neuter genders and vice versa and words importing persons will include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations and vice versa.

7.6   Benefit of Agreement

This Agreement will enure to the benefit of and be binding upon the heirs,
executors, administrators and legal personal representatives of the Executive and the successors
and permitted assigns of the Corporation respectively.

7.7   Entire Agreement

(a) Subject to Section 7.7 (b), this Agreement constitutes the entire agreement
between the parties with respect to the subject matter of this Agreement and cancels and
supersedes any prior understandings and agreements between the parties to this Agreement with
respect to the subject matter of this Agreement.  There are no representations, warranties, forms,
conditions, undertakings or collateral agreements, express, implied or statutory between the
parties other than as expressly set forth in this Agreement.

       (b) The Executive executed on May 6, 1998, in favour of the Corporation, an
agreement concerning Confidential Information, Industrial and Intellectual Property, and Non-Competition and Non-Solicitation, a
copy of which is attached hereto as Schedule "A". The
obligations and conditions set forth in Schedule "A" continue in full force and effect to the extent
that they are not inconsistent with the provisions of this Agreement, in which case the provisions
of this Agreement shall take precedence.

7.8   Pre-Contractual Representations 

The Executive hereby waives any right to assert a claim based on any pre-contractual representations, negligent or otherwise,
made by the Corporation.

7.9   Amendments and Waivers

No amendment to this Agreement will be valid or binding unless set forth in
writing and duly executed by both of the parties to this Agreement.  No waiver of any breach of
any provision of this Agreement will be effective or binding unless made in writing and signed
by the party purporting to give the same and, unless otherwise provided in the written waiver,
will be limited to the specific breach waived.

7.10  Severability

If any provision of this Agreement is determined to be invalid or unenforceable in
whole or in part, such invalidity or unenforceability will attach only to such provision or part of
such provision and the remaining part of such provision and all other provisions of this
Agreement will continue in full force and effect.

7.11  Governing Law

This Agreement will be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable in Ontario.

7.12  Attornment

For the purpose of all legal proceedings this Agreement will be deemed to have
been performed in the Province of Ontario and the courts of the Province of Ontario will have
jurisdiction to entertain any action arising under this Agreement.  The Corporation and the
Executive each hereby attorns to the jurisdiction of the courts of the Province of Ontario
provided that nothing in this Agreement contained will prevent the Corporation from proceeding
at its election against the Executive in the courts of any other province or country.

7.13  Copy of Agreement

The Executive hereby acknowledges receipt of a copy of this Agreement duly
signed by the Corporation.

IN WITNESS WHEREOF the parties have executed this Agreement.

		Corel Corporation

			
		By:	_______________________________

		Name:
		Title:

			
			
		By:	_____________________________
		Name:	
		Title:	

		
		
		

			
	WITNESS:		
			
			

			

	Signature	Derek J. Burney

			
			

			

	Name (Please print)

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