Document:

<PAGE>

                                                                    Exhibit 10.1

                              CONSULTING AGREEMENT

The Consulting Agreement ("Agreement") is entered into this 27th day of June,
2002 and sets forth the understanding, which has been reached between Meyer
Capital Partners LLC (the "Consultant") and Predictive Systems, Inc. (the
"Company") concerning certain consulting services.

         I.       PURPOSE AND DUTIES OF THE CONSULTANT: The Company hereby
                  engages the Consultant to assist management in the analysis,
                  valuation and screening process of potential merger and/or
                  acquisition opportunities for the Company. In addition, the
                  Consultant will uncover potential merger and/or acquisition
                  candidates for the Company. Consultant agrees that it will not
                  contact any potential merger/ and or acquisition candidate
                  without the Company's prior approval

         III.     COMPENSATION AND TERMS: In consideration for the services
                  rendered by the Consultant to the Company pursuant to this
                  Agreement, the Company shall compensate the Consultant as
                  follows and under the following terms:

                  A.   The Consultant will be paid a monthly retainer of
                       $10,000 for 3 months with the first payment of $10,000
                       due upon signing. After the initial 3 months, this
                       agreement will be on a month to month basis with a 30
                       day notification period.

                  B.   10,000 options for each month of service the Consultant
                       is engaged. Such options shall be granted on the last
                       of each month of service at a price equal to the fair
                       market value on the date of grant, all according to the
                       terms of the Company's 1999 Stock Incentive Plan. Such
                       options shall be immediately vested and have a term of
                       one year.

                  C.   Reimbursement for all reasonable out of pocket expenses
                       associated with this Agreement, provided, however, that
                       the Company shall not be obligated hereunder unless (i)
                       the Company has agreed in advance to reimburse any such
                       costs exceeding $500 per month, and (ii) Consultant
                       provides the Company with appropriate receipts or other
                       relevant documentation for all such costs as part of
                       any submission for reimbursement.

         IV:      THE CONSULTANTS SERVICES TO OTHERS: It is agreed there are no
                  restrictions on how or whom the Consultant may work for other
                  entities.

         V:       THE CONSULTANT IS AN INDEPENDENT CONTRACTOR: The Consultant
                  shall perform its services under the Agreement as an
                  independent contractor and not as an employee of the Company
                  or an affiliate thereof.

         VI:      APPLICABLE LAW: The Agreement will be governed by and
                  construed under the laws of the state of New York without
                  regard to the conflicts of law provisions thereof.

         VII.     NON-SOLICITATION: During the term of this Agreement and for
                  one (1) year after its termination, Consultant will not
                  personally or through others (i) recruit, solicit, induce or
                  attempt to induce any employee or contractor of the Company to
                  terminate his or her employment or contractual relationship
                  with the Company or (ii) solicit the business of any client or
                  customer of the Company in competition with the Company, other
                  than on behalf of the Company.

<PAGE>

         VIII.    CONFIDENTIALITY: It is understood that Company will deliver to
                  Consultant certain information about its properties,
                  employees, finances, businesses and operations. All
                  information (i) about the Company or (ii) about any third
                  party (which information was provided to the Company subject
                  to an applicable confidentiality obligation to such third
                  party), furnished by the Company to Consultant, whether
                  furnished before or after the date hereof and regardless of
                  the manner in which it is furnished, is referred to in this
                  Agreement as "Proprietary Information." Proprietary
                  Information shall not include, however, information which (i)
                  is or becomes generally available to the public other than as
                  a result of a disclosure by Consultant in violation of this
                  Agreement; (ii) was available to Consultant on a
                  nonconfidential basis prior to its disclosure by the Company;
                  (iii) becomes available to the Consultant on a nonconfidential
                  basis from a person other than the Company who is not
                  otherwise known to Consultant be bound by a confidentiality
                  agreement with the Company, or is otherwise not known to
                  Consultant to be under an obligation to the Company not to
                  transmit the information to the Consultant; or (iv) was
                  independently developed by Consultant without reference to or
                  use of the Proprietary Information.

                           Subject to the immediately succeeding paragraph,
                  unless otherwise agreed to in writing, Consultant (i) except
                  as required by law, shall keep all Proprietary Information
                  confidential, shall not disclose or reveal any Proprietary
                  Information to any person; and (ii) shall not use Proprietary
                  Information for any purpose other than in connection with its
                  performance of the services under this Agreement; and. In the
                  event that Consultant is requested pursuant to, or required
                  by, applicable law or regulation or by legal process to
                  disclose any Proprietary Information or any other information
                  concerning the Company, Consultant shall provide the Company
                  with prompt notice of such request or requirement in order to
                  enable the Company (i) to seek an appropriate protective order
                  or other remedy, (ii) to consult with Consultant with respect
                  to Consultant taking steps to resist or narrow the scope of
                  such request or legal process or (iii) to waive compliance, in
                  whole or in part, with the terms of this Agreement. In the
                  event that such protective order or other remedy is not
                  obtained, or the Company waives compliance, in whole or in
                  part, with the terms of this letter agreement, Consultant
                  shall use commercially reasonable efforts to disclose only
                  that portion of the Proprietary Information which is legally
                  required to be disclosed and to ensure that all Proprietary
                  Information that is so disclosed will be accorded confidential
                  treatment. In the event that Consultant shall have complied
                  fully with the provisions of this paragraph, such disclosure
                  may be made by Consultant without any liability hereunder.

         IX.      SECURITIES LAWS: Advisor acknowledges that Company is a
                  publicly traded company and that the United States securities
                  laws prohibit any person who has received from a publicly
                  traded company material, non-public information may be
                  prohibited from purchasing or selling securities of such
                  company or from communicating such information to any other
                  person under circumstances in which it is reasonably
                  foreseeable that such person is likely to purchase or sell
                  such securities.

         X.       PUBLICITY: Neither party shall publish or use any advertising,
                  sales materials, press releases or other publicity which uses
                  the other party's name, logo, trademarks or service marks
                  without the prior written approval of the other party.

<PAGE>

         The undersigned concur with the matters set forth in the foregoing
Agreement.

                                                     PREDICITVE SYSTEMS, INC.

                                                     By:  /s/ Andrew Zimmerman
                                                         -----------------------
                                                           Andrew Zimmerman
                                                           CEO

                                                     CONSULTANT

                                                     By:   /s/ Eric Meyer
                                                         -----------------------
                                                            Eric Meyer
                                                            Managing Member<PAGE>
                                                                   EXHIBIT 10.23

                              EMPLOYMENT AGREEMENT

THIS AGREEMENT made as of the 1st day of June, 2002.

BETWEEN:

          MICHAEL W. RAMIREZ
          of Missouri City, in the State of Texas
          (hereinafter referred to as the "Employee")

                                                             OF THE FIRST PART;

          - and -

          PHILIP SERVICES CORPORATION,
          a corporation incorporated under the laws of the State of Delaware
          (hereinafter referred to as the "Company")

                                                            OF THE SECOND PART.

WHEREAS, the Company desires to retain the Employee to provide the services
hereinafter described during the term hereinafter set out and the Employee
desires to accept such employment on the terms and conditions hereinafter set
forth;

NOW THEREFORE THIS AGREEMENT:

WITNESSETH, That in consideration of the mutual covenants and agreements herein
contained and for other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:

1.   FUNCTIONS OF EMPLOYEE

Employee shall serve as the Senior Vice President and Chief Financial Officer of
the Company or in such other senior management capacity or capacities as may
from time to time be reasonably determined by the Board of Directors. Employee
will be located at the Company's shared-services facility in Houston, Texas.

2.   DURATION

The Employee's term of employment shall commence on the 1st day of June, 2002
and shall continue until terminated in accordance with Section 3 hereof.

                                   Page 1 of 9
<PAGE>

3.   TERMINATION

     (a) FOR CAUSE. Notwithstanding anything to the contrary herein contained,
         the Company may immediately terminate the employment of the Employee,
         without notice and without severance or pay in lieu of notice:

         (i)   if the Employee commits an act of theft, fraud or material
               dishonesty or misconduct involving the property or affairs of the
               Company or the carrying out of the Employee's duties; or

         (ii)  if the Employee is guilty of a material breach or material
               non-observance of any of the terms or conditions of this
               agreement, provided that the Employee is given written notice of
               any such breach and fails to take all reasonable actions to try
               to remedy such breach to the satisfaction of the Company, in its
               sole discretion, within thirty days of receipt of such notice; or

         (iii) if the Employee is convicted of a criminal offence involving
               fraud or dishonesty; or

         (iv)  if there is a repeated and demonstrated failure on the part of
               the Employee to perform his material duties and the Employee
               fails to remedy the failure to the satisfaction of the Company,
               in its sole discretion, within thirty days of receipt of notice
               of such failure from the Company; or

         (v)   if the Employee or any member of his family derives any personal
               profit or benefit arising out of or in connection with a
               transaction to which the Company is a party or with which it is
               associated without making disclosure to and obtaining the prior
               written consent of the Company; or

         (vi)  if the Employee commits gross negligence, willful misconduct, or
               neglect in the performance of his duties or services as a Company
               employee.

     (b) DISABILITY. The employment of the Employee shall, at the option of the
         Company, terminate immediately in the event of permanent disability
         which is defined as illness, disease, mental or physical disability or
         other causes beyond the Employee's control which makes the Employee
         incapable of discharging or causes the Employee to fail in the
         performance of his principal duties hereunder, even with reasonable
         accommodation, for six consecutive months, in which case notice in
         writing from the Company shall be sent to the Employee or his legal
         representative, provided the Employee shall continue to receive any
         disability benefit coverage he may be entitled to through the Company's
         disability insurance program.

     (c) WITHOUT CAUSE. The employment of the Employee may be terminated without
         cause (i.e. for reasons other than those set forth in Sections 3(a),
         3(b), 3(d) or 3(e)) at any time. For purposes of this Section 3(c),
         termination without cause shall also include, but not be limited to, a
         material change in the duties of

                                   Page 2 of 9
<PAGE>

         Employee, or a reduction in Employee's base salary or other material
         compensation or benefits as then in effect, or a change in Employee's
         assigned principal place of business of more than 50 miles. If Employee
         is terminated without cause, in exchange for a release agreement
         satisfactory to the Company, the Employee shall receive a severance
         allowance equal to six months of his then current annual base salary;
         provided, however, that if any vice president, senior vice president,
         or chief executive of the Company employed in such role after the date
         of this agreement receives a more favorable promise of severance
         benefits in the event of termination, Employee's promise of severance
         benefits in this Employment Agreement shall be automatically modified
         to be no less favorable. The severance allowance shall be paid in
         accordance with the Company's normal payroll practice as if it were a
         continuation of Employee's base salary. In addition:

         (i)   in the event that for the year of termination a bonus is paid to
               Company officers of comparable rank, Employee shall receive, at
               the same time as said bonus is paid to Company officers, that
               percentage of his target bonus that represents the average
               percent of target bonus paid to Company officers of comparable
               rank, pro rated for the percentage of the year Employee was
               employed;

         (ii)  the Company shall pay the Employee an amount sufficient for the
               Employee to continue his medical and dental coverage for the
               period of his severance payments;

         (iii) the Employee shall be entitled to his vested stock options or
               other vested incentive stock compensation to be exercised in
               accordance with the applicable Company plans, but other options
               or incentive stock compensation shall be forfeit in accordance
               with Company plans;

         (iv)  the Employee shall be entitled to any earned but unpaid bonus or,
               as provided by the applicable plan, any deferred compensation,
               short- or long-term incentive compensation, or other material
               compensation, and a pro rata share of his target bonus, deferred
               compensation, short- or long-term incentive compensation, or
               other material compensation for the year in which the termination
               occurs if granted to similarly situated executives generally; and

         (v)   the Employee shall be provided with out-placement services at a
               cost to the Company of not more than $10,000 for as long as may
               be required to obtain suitable replacement employment.

     (d) TERMINATION DUE TO CHANGE OF CONTROL. If there occurs a Change of
         Control (as defined below) and (i) the Employee is terminated, or (ii)
         there occurs a material change in the duties or responsibilities of the
         Employee or a reduction in the Employee's base salary or other material
         compensation or benefits as then in effect or a change in the
         Employee's principal place of employment of more than

                                   Page 3 of 9

<PAGE>

         50 miles and any such change occurs within six months prior to or two
         years following such Change of Control and the Employee elects to
         terminate his employment, then in either such case, the Employee shall
         be entitled to his two times his then current annual base salary plus
         the items listed in clauses (i), (ii), (iii), (iv) and (v) of paragraph
         3(c) immediately above.

         Change of Control means any of the following:

         (i)   any person (as defined in the Exchange Act, as defined below),
               directly or indirectly, becomes the beneficial owner (as defined
               in Rule 13d-3 under the Exchange Act) or has the right to
               exercise control or direction over Voting Securities (as defined
               below) of the Company carrying in excess of 40 percent of the
               votes attached to all Voting Securities of the Company then
               outstanding (provided, however, that if such person is an Insider
               (as defined below), such percentage shall be 50 percent);

         (ii)  the individuals who, immediately prior to any meeting of
               shareholders, constitute the Board together with those who first
               become directors subsequent to such time and whose election to
               the Board was approved by a vote of at least a majority of the
               directors then still in office who were either directors as of
               such time or whose recommendation, election or nomination for
               election was previously so approved (other than any directors
               whose initial election was the result of a proxy contest or a
               threatened proxy contest), cease for any reason to constitute a
               majority of the members of the Board;

         (iii) approval by the shareholders of the Company of any business
               combination having the effect that the existing shareholders of
               the Company do not own or control at least 75% of the Voting
               Securities of the resulting entity in approximately the same
               proportion as they owned such securities of the Company
               immediately prior to the business combination; or (b)(1) approval
               by the shareholders of the Company of a liquidation or
               dissolution of the Company, or (2) approval by the shareholders
               of the Company of a sale of all or substantially all of the
               assets of the Company and, in the case of either (1) or (2), the
               existing shareholders of the Company do not own or control at
               least 75% of the Voting Securities of the acquiring or resulting
               entity in approximately the same proportion as they owned the
               Voting Securities of the Company immediately prior to any such
               transaction.

         "Insider" means a person, as defined in the Securities and Exchange Act
         of 1934 as amended (the "Exchange Act"), that beneficially owns or
         exercises control or discretion over, directly or indirectly, more than
         twenty percent (20%) of the Voting Securities of the Company as at
         April 8, 2000.

         "Voting Securities" of any corporation means any securities of such
         corporation ordinarily carrying the right to vote in respect of
         election of directors of such

                                   Page 4 of 9

<PAGE>

         corporation provided that if any such securities shall at any time
         carry the right to cast more than one vote in respect of the election
         of the directors, such securities shall, when and so long as they carry
         such right, be considered for the purposes of this Agreement to
         constitute such number of the securities as is equal to the number of
         votes in respect of the election of directors as may be cast by the
         holder.

     (e) VOLUNTARY TERMINATION. Employee may terminate his employment with
         Company for any reason, in the Employee's sole discretion. Upon
         voluntary termination, all future compensation and benefits (other than
         the benefits to which Employee is entitled and which are vested as of
         the date of termination) shall cease as of the date of termination.

     (f) DEATH. The employment of the Employee shall terminate upon the
         Employee's death.

     (g) EFFECT OF TERMINATION. Upon the termination of the Employee's
         employment pursuant to this Section 3, except as provided in this
         paragraph, this agreement and the employment of the Employee hereunder
         shall be wholly terminated. Provided, however, that the obligations
         under Section 7 of this agreement shall survive termination. Upon any
         such termination, the Employee shall have no claim against the Company
         in respect of his employment for damages or otherwise except in respect
         of payment of remuneration earned, due and owing to the date of
         termination and except for any severance payment and related benefits
         due to the Employee under Section 3.

4.   RESPONSIBILITIES

     (a) The Employee shall devote all of his working time, attention and
         ability to the business of the Company and shall perform those duties
         that may be reasonably assigned to him diligently and faithfully to the
         best of his abilities and in the best interest of the Company and shall
         use his best efforts to promote the interests and goodwill of the
         Company. During the term of this Agreement the Employee shall not enter
         into the service of or be employed in any capacity or for any purpose
         whatsoever by any person, firm or corporation which will interfere with
         the performance by the Employee of his duties and responsibilities
         hereunder.

     (b) The Employee shall report directly to the Board of Directors or as
         subsequently determined by the Board of Directors.

5.   REMUNERATION

The remuneration of the Employee for his services hereunder shall be as set
forth in Schedule A hereto. Other remuneration may from time to time be agreed
upon in writing between the Company and the Employee.

                                   Page 5 of 9
<PAGE>

6.  VACATION

During each year of this agreement, the Employee will be entitled to 20 days
vacation with pay. Such vacation shall be taken at such times as the Company and
Employee shall mutually agree, acting reasonably, having regard to the
performance of the Employee's essential duties to the Company pursuant to the
terms of this agreement and provided further that such vacations may be taken
only within the year of entitlement thereto and may not be accumulated from year
to year.

7.  CONFIDENTIALITY AND NON-COMPETE

As a condition to the Employee's employment with the Company, the Employee shall
execute and deliver to the Company the Confidentiality and Non-Compete Agreement
attached hereto as Schedule B. The Confidentiality and Non-Compete Agreement
shall survive termination of this Agreement.

8.  NOTICES

All notices, requests, demands and other communications by the terms hereof
required or permitted to be given by one party to the other shall be given in
writing by personal delivery, by reputable overnight delivery service, or by
registered mail, postage prepaid, addressed to the other party or delivered to
the other party as follows:

    to the Employee at:

                  3146 Confederate South Drive
                  Missouri City, Texas 77459

    to the Company at:

                  5151 San Felipe
                  Suite 1600
                  Houston, Texas 77056
                  Attention:  Principal Executive Officer

or at such other address as may be given by either party to the other in writing
from time to time, and such notices, requests, demands or other communications
shall be deemed to have been received when delivered, or, if mailed, seven days
following the day of mailing thereof; provided that if any such notice, request,
demand or other communication shall have been mailed and if regular mail service
shall be interrupted by strikes or other irregularities, such notices, request,
demands or other communication shall be deemed to have been received seven days
after the day following the resumption of normal mail service.

9.  ENTIRE AGREEMENT

This agreement, including Schedules A and B represents the entire agreement
between the parties with respect to the employment of the Employee by the
Company and any and all previous agreements, written or oral, between the
parties hereto or on their behalf relating to the

                                   Page 6 of 9
<PAGE>

employment of the Employee by the Company are hereby terminated and cancelled
and each of the parties hereto hereby releases and forever discharges the other
party hereto of and from all manner of actions, causes of action, claims and
demands whatsoever under or in respect of any such agreement.

10. GOVERNING LAW

This Agreement shall be governed by and interpreted in accordance with the laws
of the State of Texas. The Company and the Employee agree that if there is any
dispute between them with respect to the rights of either party under this
Agreement, excepting any dispute arising out of Section 7 hereof or the
confidentiality and non-compete agreement attached as Schedule B hereto, such
dispute will be resolved by final and binding arbitration before a sole
arbitrator in Houston, Texas pursuant to the rules of the American Arbitration
Association and the judgment of the arbitrator shall be entered in any court of
competent jurisdiction. Any dispute arising out of Section 7 hereof or the
confidentiality and non-compete agreement attached as Schedule B hereto such
dispute will be submitted to adjudication before the Courts of the State of
Texas, and the Company and the Employee attorn to the jurisdiction of the Courts
of the State of Texas, in this regard. In the event that either the Company or
the Employee initiates an action or claim to enforce any provision or term of
this agreement (whether in court or pursuant to arbitration), the costs and
expenses (including attorneys' fees and expenses) of the prevailing party as
determined by the court or arbitrator, as the case may be, shall be paid by the
other, such party to be deemed to have prevailed if such action or claim is
concluded pursuant to a court order, arbitrator's decision, or final judgment
which is not subject to appeal, a settlement agreement or dismissal of the
principal claims; provided that the Employee shall be obligated to pay the
Company's costs and expenses only if the arbitrator or court, as the case may
be, determines that the Employee's position was predominantly frivolous or taken
in bad faith.

11. MISCELLANEOUS

It is agreed by and between the parties hereto that Schedules A and B referred
to herein, which are annexed hereto, shall form a part of this agreement and
this agreement shall be construed as incorporating such schedules.

12. CURRENCY

All dollar amounts referred to in this agreement are expressed in U.S. funds
unless otherwise specifically provided herein.

13. SUCCESSORS AND ASSIGNS

This agreement is personal to the Employee and his interest in this agreement
may not be assigned, pledged or encumbered. The provisions hereof shall enure to
the benefit of and be binding upon the heirs, executors, administrators and
legal personal representatives of the Employee and the successors and assigns of
the Company respectively.

14. TIME OF THE ESSENCE

Time shall be of the essence of this agreement and of every part thereof.

                                   Page 7 of 9
<PAGE>

15. SEVERABILITY

If any provision of this agreement, including the breadth of scope of such
provision shall be held by any court of competent jurisdiction to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the validity or enforceability of the remaining provisions, or part
thereof, of this agreement and such remaining provisions, or part thereof, shall
remain enforceable and binding.

16. ENFORCEABILITY

The Employee hereby confirms and agrees that the covenants and restrictions
pertaining to him contained in this agreement, including, without limitation,
those contained in Schedule B attached hereto, are reasonable and valid and
hereby further acknowledges and agrees that the Company would suffer irreparable
injury in the event of any breach by him of his obligations under any such
covenant or restriction. Accordingly, the Employee hereby acknowledges and
agrees that damages would be an inadequate remedy at law in connection with any
such breach and that the Company shall therefore be entitled in lieu of any
action for damages, temporary and permanent injunctive relief enjoining and
restraining the Employee from any such breach.

17. LEGAL ADVICE

The Employee hereby represents and warrants to the Company and acknowledges and
agrees that he has had the opportunity to seek and was not prevented nor
discouraged by the Company from seeking independent legal advice prior to the
execution and delivery of this agreement and that, in the event that he did not
avail himself of that opportunity prior to signing this agreement, he did so
voluntarily without any undue pressure and agrees that his failure to obtain
independent legal advice shall not be used by him as a defense to the
enforcement of his obligations under this agreement.

18. COUNTERPARTS

This agreement may be executed in any number of counterparts, each of which when
executed and delivered will be deemed to be an original and all of which
counterparts when taken together will constitute but one and the same
instrument.

19. MODIFICATION

No waiver or modification of this agreement shall be valid unless in writing and
signed by the parties hereto and any such waiver of rights hereunder shall be
without prejudice to any of the other rights of the party hereunder so waiving.

20. SURVIVORSHIP

The provisions of this agreement necessary to carry out the intention of the
parties as expressed herein shall survive the termination or expiration of this
agreement.

                                   Page 8 of 9

<PAGE>

21. WAIVER

Except as provided herein, the waiver by either party of the other party's
prompt and complete performance, or breach or violation, of any provision of
this agreement shall not operate nor be construed as a waiver of any subsequent
breach or violation, and the failure by any party hereto to exercise any right
or remedy which it may possess hereunder shall not operate nor be construed as a
bar to the exercise of such right or remedy by such party upon the occurrence of
any subsequent breach or violation.

22. CAPTIONS

The captions of this agreement are for convenience and reference only and in no
way define, describe, extend or limit the scope or intent of this agreement or
the intent of any provision hereof.

23. CONSTRUCTION

The parties acknowledge that this agreement is the result of arm's-length
negotiations between sophisticated parties each afforded representation by legal
counsel. Each and every provision of this agreement shall be construed as though
both parties participated equally in the drafting of same, and any rule of
construction that a document shall be construed against the drafting party shall
not be applicable to this agreement.

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

SIGNED, SEALED AND                  )
DELIVERED in the presence of:       )
                                    )
 /s/ Diana Arnett                   )       /s/ Michael W. Ramirez
----------------------------------  )       -----------------------------------
Witness                             )       Michael W. Ramirez

                                            PHILIP SERVICES CORPORATION

                                            /s/ Robert L. Knauss
                                            -----------------------------------
                                            Robert L. Knauss, Chairman and
                                            Principal Executive Officer

                                   Page 9 of 9

<PAGE>

                                   SCHEDULE A

1.   Base Salary: As compensation for his services the Company shall pay to the
     Employee while employed a base salary at the rate of $250,000 per annum.

2.   Incentive Compensation: The Employee shall be eligible to participate in
     the Company's incentive bonus plan, as may be in effect from time to time.
     It is agreed that the Employee's target bonus under the current Executive
     Incentive Program shall be 40% of his base salary. The Board of Directors
     shall, within its sole discretion, determine the amount and timing of any
     bonus payment based on the degree of success with which the Employee has
     performed the services required of him and the results of the Company.
     Additionally, for the year 2002, Employee shall be deemed a full year
     participant in the executive incentive program.

3.   Stock Options: The Employee will receive an initial stock option grant of
     75,000 options to acquire common stock of the Company as authorized by the
     Board of Directors of the Company. The options will be granted at the then
     fair market value of the Company's common stock at the date of grant. One
     third of the options shall vest on the six month anniversary of the date of
     Employee's employment and the balance shall vest in equal amounts (that is,
     options covering 16,666 shares) on the first, second, and third
     anniversaries of Employee's date of employment, provided, in each case,
     that Employee continues to be employed. The terms and conditions of all
     options shall be governed by the Company's Officers' Stock-Based Bonus
     Plan.

4.   Other Benefits: The Employee shall be entitled to participate in, or
     receive, benefits under any employee/employer benefit plan, arrangement or
     perquisite made available by the Company now or in the future, to its
     executive and key management employees, subject to the terms and
     limitations of the relevant plan arrangement or perquisite.

                                     Page 1
<PAGE>

                                  SCHEDULE "B"

                    CONFIDENTIALITY AND NON-COMPETE AGREEMENT

THIS AGREEMENT made as of the 1st day of June, 2002.

BETWEEN:

            MICHAEL W. RAMIREZ of Missouri City, in the State of Texas
            (hereinafter referred to as the "Employee")

                                                             OF THE FIRST PART;

            - and -

            PHILIP SERVICES CORPORATION,
            a corporation incorporated under the laws of the State of Delaware
            (hereinafter referred to as the "Company")

                                                             OF THE SECOND PART.

WHEREAS, the Employee entered into an employment agreement with the Company as
of June 1, 2002; and

WHEREAS, the employment of the Employee by the Company is subject to the
Employee entering into a confidentiality and non-compete agreement in the form
hereof and this agreement is ancillary to the employment agreement; and

WHEREAS, in consideration of Employee's employment with the Company, Employee
will be provided with certain resources that Employee will use in his
employment; and

WHEREAS, in consideration of and as part of Employee's employment, Employee will
be privy to and provided with confidential information of the Company.

NOW THEREFORE, in consideration of the Company employing the Employee, the
Employee hereby agrees as follows:

1.   CONFIDENTIALITY

     (a) The Employee shall not (either during the continuance of his employment
         by the Company or at any time thereafter) disclose any confidential
         information of the Company or any subsidiaries or affiliates thereof
         (and the term "Company" herein shall be deemed to include its
         subsidiaries and affiliates), including, but not

                                     Page 1
<PAGE>

         limited to, financial information or data, contract bidding procedures,
         technical processes and know-how, customer files and information,
         customer lists, service charges, rates and fees, investments plans or
         projections, strategies, technologies, methods, internal business
         records, computer programs, computer files, databases, organizational
         structure, personnel information, research in respect of acquired or
         potential target investments and communications regarding the Company,
         to any person other than as authorized by the Company, and all such
         information, either in electronic, printed or verbal form will remain
         the property of the Company and shall not be used by the Employee
         (either during the continuance of his employment by the Company or at
         any time thereafter) for his own purpose or for any purpose other than
         those of the Companies. For purposes of this agreement, the term
         "confidential information" does not include any information that, at
         the time of disclosure or thereafter, is generally available to and
         known by the public (other than as a result of its disclosure by the
         Employee in breach of his obligations herein).

     (b) The Employee acknowledges that the business of the Company is highly
         competitive and that the Company has agreed to provide and immediately
         will provide Employee with access to the Company's confidential
         information. The Employee also acknowledges that the Company's
         confidential information constitutes a valuable, special and unique
         asset used by the Company to obtain a competitive advantage over its
         competitors. Employee further acknowledges that protection of the
         Company's confidential information is of critical importance to the
         Company in maintaining its competitive position.

     (c) In the event that the Employee is requested pursuant to, or required
         by, applicable law, regulation or legal process to disclose any
         confidential information of the Company, the Employee will notify the
         Company promptly so that, if practicable, the Company may seek a
         protective order or other appropriate remedy or, in the Company's sole
         reasonable discretion, waive compliance with the terms of this
         agreement. In the event that no such protective order or other remedy
         is obtained, or that the Company waives compliance with the terms of
         this agreement, the Employee will furnish only that portion of the
         confidential information that the Employee is advised by counsel is
         legally required.

     (d) Employee represents and warrants that to the date of this
         Confidentiality and Non-compete Agreement, he has not disclosed any
         confidential information of the Company in any manner that is
         inconsistent with subparagraph (a), above.

     (e) Employee acknowledges that all written materials, records, data and
         other documents prepared or possessed by Employee during Employee's
         employment by Company are Company's sole and exclusive property.
         Likewise, Employee acknowledges that all information, ideas, concepts,
         improvements, discoveries, and inventions that are conceived, made,
         developed, or acquired by Employee individually or in conjunction with
         others during Employee's employment (whether during business hours and
         whether on Company's premises or otherwise) which relate to the
         Company's business, products or services are

                                     Page 2
<PAGE>

         Company's sole and exclusive property. All memoranda, notes, records,
         files, correspondence, drawings, manuals, models, specifications,
         computer programs, maps, and all other documents, data, or materials of
         any type embodying such information, ideas, concepts, improvements,
         discoveries, and inventions are Company's sole and exclusive property.
         At the termination of Employee's employment with Company for any
         reason, Employee shall return all of Company's documents, data, or
         other property to Company.

     (f) The Company will provide Employee with immediate access to the
         Company's confidential information and specialized training regarding
         the Company's methodologies and business strategies, which will enable
         Employee to perform his job at the Company.

2.   NON-COMPETE

     The Employee covenants and agrees with the Company that, for a period of
     one year from the date on which he ceases to be an employee of the Company:

     (a) the Employee shall not directly, or indirectly, for himself or for any
         other person or entity:

         (i)   solicit, sell to or contract with any customer or client of the
               Company in connection with any products, services or business
               that competes with products, services or the business of the
               Company. Provided, however, that for the purposes of this
               paragraph, the Company's "customers or clients" shall include
               only those customers or clients whom the Employee solicited or
               contacted or whom the Employee had access to information about
               during his employment with the Company;

         (ii)  attempt to divert any customer or client away from the Company;

         (iii) solicit any employee of the Company to leave the Company or to
               join any other entity.

     (b) Employee acknowledges that the non-competition provisions in this
         Section 2 are necessary to protect the Company's confidential
         information, trade secrets, employee goodwill, and customer goodwill,
         which Employee shall receive or be privy to during his employment with
         Company.

     (c) Employee understands that the foregoing restrictions in this Section 2
         may limit his ability to engage in certain businesses during the period
         provided for above, but acknowledges that those restrictions are
         necessary to protect the confidential information and trade secrets
         that Employee has received or been privy to and shall continue to
         receive or be privy to during his employment with Company, and also to
         protect the Company's employee goodwill and customer goodwill.

                                     Page 3
<PAGE>

3.   INJUNCTIVE RELIEF

     Without intending to limit the remedies available to the Company, the
     Employee acknowledges that damages at law may be an insufficient remedy to
     the Company in view of the irrevocable harm which may be suffered if the
     Employee violates the terms of paragraph 1 or 2 hereof and agrees that the
     Company may apply for injunctive relief in any court of competent
     jurisdiction specifically to enforce any such covenants upon the breach or
     threatened breach thereof, or otherwise specifically to enforce any such
     covenants.

4.   GOVERNING LAW

     This agreement shall be deemed to have been made in and shall be construed
     in accordance with the laws of Texas. In the event that the Company
     prevails in an action or claim to enforce any provision or term of this
     agreement, the Company's reasonable costs and expenses (including
     attorneys' fees and expenses) shall be paid by the Employee.

     The provisions hereof shall inure to the benefit of and be binding upon the
     heirs, executors, administrators and legal personal representatives of the
     Employee and the successors and assigns of the Company respectively.

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

SIGNED, SEALED AND                  )
DELIVERED in the presence of:       )
                                    )
 /s/ Diana Arnett                   )       /s/ Michael W. Ramirez
-----------------------------       )       ----------------------------------
Witness                             )       Michael W. Ramirez

                                            PHILIP SERVICES CORPORATION

                                            /s/ Robert L. Knauss
                                            ----------------------------------
                                            Robert L. Knauss, Chairman and
                                            Principal Executive Officer

                                     Page 4

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